SO for fun I thought I'd do some math to see what the difference between liveaboard yacht club 'housing' and cheap apartment would look like as an interim housing option.
Not very exotic stuff, but in my mind, the boat HAD to come out ahead. I mean you can pick up a cheap houseboat for close to $10,000 this time of year (case in point -
http://tinyurl.com/k2vbof7) cruise it home, and then plug in and you're done. Since the boat is not intended to leave the slip, we aren't too worried about condition of propulsion, but are concerned with the hull and interior. Yacht club equity sign up here is about $5,000 and a slip is only $250 a month. Since dock rent includes Wifi and electric (which heats and cools the boat) there would be no utility costs.
The upfront is high compared to an apartment, but that would come out ahead over a very short time - right?
Keeping costs strictly to housing/utilities/communications - the stuff where you would see a saving being a liveaboard, and ignoring the obvious pains of living on a dock (long walks to the bathroom, small storage spaces, winterizing the boat, etc.) and assuming a minimal maintenance budget, I found that in about 16-24 months the boat and apartment would equalize. This assumes that the tenant invested the upfront savings month over month at 6%, and that the liveaboard invested the rent savings month over month at 6%. My budget below is based on what I could find in local CL/Kijiji listings, and a healthy dose of guesswork. I have never paid renter's insurance, and when I had a boat it was insured for recreational use. I also have no idea what utilities cost in a rental apartment compared to a detached home.
Budgets looked like this:
Renter:Upfront costs:First/last month rent - 1700
Damage Deposit - $1000
Upfront Total: $2700
Monthly housing CostsRent (one bedroom basement) - $850
Utilities - $200
Wifi - $80
Renter's Insurance - $30 (A guess - I've never rented)
Monthly Total - $1160
Liveaboard:Upfront Costs:Cost of Boat - $8500
Yacht Club Equity Fees - $5000
Boat transport to slip - $600
Upfront Total - $15,600
Monthly Costs:Slip Fees - $250/mo <-- Yacht club for 40 ft boat. (Marinas have higher slip fees but don't charge equity buy-in)
Utilities - $0
Wifi - $0
Insurance - $30 (Based on Pre-Mustachian experience for Lake Ontario in the Toronto area)
Maintenance - $200
Monthly Total - $480
So Since the monthly cost of living aboard was so low, I thought the window for the Yacht club to catch up to the apartment would be really quick. I was surprised that it was about 2 years, but the equity is what causes that, so it makes sense.
Differences look like thisMonth 12 - Total Cumulative Cost of housing
Boat - $20,680 Apt. - $15,846
Breakeven - Month 19 - Total Cumulative Cost of housing
Boat - $23,625 Apt - $23,493
Month 24 - Total Cumulative Cost of housing
Boat - $25,719 Apt - $28,946
Month 36 - Total Cumulative Cost of housing
Boat - $30715 Apt - $41996
So based on this, if someone were to get a 36 month contract to work in this area (east side of Toronto), it would be a better investment to buy a crappy boat and join the local yacht club than it would be to rent an Apartment. Downside is that living in a yacht club is a little less than comfortable and cramped quarters could drive you stir crazy. I don't know if that's worth $10K over 3 years.
I have not acccounted for cash-out/depreciation in this math since by the time the $10K boat has been lived on for 3 years, you'll be giving it away anyhow, and most landlords around here seem to just keep the deposit money at the end of term.