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What Will It Cost...?

The Most Commonly Asked Question

Copyright 2008 - 2016 Michael Kasten

It is for the most part entirely foolish to even be dragged into trying to answer this seemingly simple question...! However in order to address this question, below is an essay that expands upon an inquiry regarding the cost to build one of my designs...
 

WHAT WILL IT COST...?

Cost to build a boat or to have one built is by far the most common question I am asked. But it is a question for which there is no simple answer.  This might seem odd, but consider the following:

It is very difficult to pre-guesstimate boat building costs, especially prior to a design having been created. Prior to the plans having been developed, the vessel is merely a twinkle in the prospective owner's eye. It would be the height of folly to even attempt a guess at build costs until sufficient detail has been created, ordinarily in the form of Estimating Plans.

The purpose of first developing a good set of Estimating Plans is to thoroughly outline the structure, the layout, the rig, and the intended equipment and outfit so the builder will know what is intended. Without this vital tool, any discussion of eventual costs is nothing more than a pipe dream...! Without sufficient information about what you intend, the builder that you have contacted - even if they may be very familiar with boat building - will inevitably have a different "vision" of the vessel in their own mind than the vessel you actually intend. Without a well-developed set of plans and particulars in hand, there can be no reliable specifics with regard to cost.

In the case of a pre-existing design, even if a completed set of Estimating Plans already exists it is still not possible for me to know the cost to build the boat because a new owner's requirements will always differ.  If a preliminary estimate is offered, it can only be provided in very broad terms, which by their very nature will be at best entirely wrong, or at worst extremely misleading.

Only the prospective Boat Builders themselves will be able to determine the boat's cost.  But they can only generate a reasonably accurate cost estimate after they have been able to review the design in detail, and for that they will require a complete  set of Estimating Plans.  Even then, the builder may still envision a different level of finish than you do. Over the years, we have seen such 'sharp pencil' estimates come in all over the map. We can only attribute this to differences in builder efficiency, builder overhead, local labor costs, builder skill and the like, but also differences in how they may have interpreted your wishes.

Thorough communication is the key to getting an accurate estimate. That is why we take the trouble to provide a detailed Vessel Specification, as well as a 'Designer's Cover Letter'.  Together with the core design drawings, these documents explain to the builder the scope of our involvement in the design process, and to outline the level of support that is available during construction (for example whether there will be NC cutting files, etc.).   Included in our Estimating Plans is an 'Owner's Cover Letter' template, wherein you can outline what you expect of the builder in terms of the scope of completion, your proposed build timing, the level of high finish, and any other factors that might impact the Builder's cost estimate. 

If you'd like to know more about developing Estimating Plans for one of our prototype designs, or a custom design that you have in mind, the process of creating a new design is outlined well at our Custom Design web page.  If you would like to review a list of Estimating Plans for one of our existing designs, please see our Plans List web page.  Please do take the time to read the Introduction on that page so that you understand why there is a wide cost disparity among the plans on offer...!
 

AN EXAMPLE...

In order to illustrate the variables that affect the eventual cost of a boat, I would like to use my Redpath 44 as an example. I designed the 44' Redpath for myself, as a replacement for my own 34' schooner Emerald.   As designed, the Redpath 44 was exceedingly simple.

In way of explanation, I am probably a bit extreme in the pursuit of simplicity. For example, on my 34' schooner Emerald the entire electrical system was contained within my flashlight..!   There was no wiring. The Sabb diesel engine was started by a hand-crank - there was no electric starter.  Running lights each had their own batteries.  A self-contained radio for time ticks and weather. 

In the mid-80's when I completed Emerald, the final price tag was under USD $35,000.  Except for the help of an occasional volunteer, I built the entire boat myself.  I could easily have built the boat for less. I admit I wasted money on stuff that I shouldn't have. For example I added a sealed-cell lead acid battery to run a car stereo. This 'system' was also self contained with a small battery charger to plug in when dockside. I considered the stereo to be an extravagance.

On the other hand, I got a terrific deal on very high quality hand-stitched Dacron sails from Carol Hasse's sail loft in Port Townsend.  The sails would probably cost ten times as much these days, so I cannot complain. In fact, the boat was finished very nicely inside and out. The rigging was simple, strong, and highly effective. Maintenance was no trouble. In all, it was a great deal of fun. Most of the reason for this is that the whole boat was exceedingly SIMPLE.

A lot has changed since then, in particular my age, and of course the value of the US dollar has diminished greatly over the last 30-some years with respect to materials and labor. However if I were to repeat that same adventure now (2016) with my Redpath design, building in steel, using CNC cutting for the structure, and using my own labor for fabrication, I'm quite certain I could achieve a similarly appointed vessel with a bone-simple electrical system (or none) for less than USD $150k or so.

That said, I am probably no longer willing to do 100% of the work myself as I had done on Emerald, so I would likely hire the hull built professionally, or would at least hire helpers to assist with fabrication. Assuming a North American venue for construction, and assuming the structure would be NC cut, that might add something on the order of USD $50k to $125k or so for the fabrication labor, plus maybe $15k or so for the blasting and painting labor. At that point I'd still have the fun part ahead of me, i.e. the joinery, the rigging, and the other (simple) system installations.

This means, roughly speaking, that I could probably build the Redpath 44 for around $150k + $50k to $125k + $15k, or approximately USD $215k to $290k. That is for a 100% brand new vessel, fully outfitted, but very SIMPLE. This cost assumes I will provide all of the labor to finish out the completed and painted hull, deck and house.  Since that cost is considerably more than I could possibly afford, I would do my best to beat that price, for example by providing more of my own labor during fabrication and painting.  But as a rough guide it is about right for what I'm certain could be achieved.

If the hull were built in a lower cost venue it would reduce the overall cost - possibly by a lot - and could possibly allow me to actually afford it. The result would lack nothing in terms of elegance and grace!

If the Redpath 44 were to be professionally built to a 'turn-key' stage of completion the cost would of course be greater. One Redpath 44 was built in New Zealand in steel during the early 2000's to a very high standard of construction, an extremely fine finish, and just about every bell and whistle imaginable including flat screen TV and all the latest navigation and communication equipment. The price tag..? It was offered by a broker on the US East Coast for over $800k, which was presumably less than its original construction cost. A few photos of that boat are on the Redpath web page.  It is an extraordinarily fine yacht - and no doubt worth every penny..!

However... if built with a vastly simpler approach to equipment and outfit (but no less elegant a final result) I have little doubt that I could get Redpath professionally built in the USA for somewhere south of $500k and the result would still be stunning. It is possible that I would participate to some extent in the construction in order to achieve that price, say to do some of the interior joinery and all the interior varnish and paint. Every item would be only what it needs to be, rather than what I might wish for in my wildest dreams. It should go without saying that there would be no fancy electronics or flat screen TV..!

If I were to take the opposite tack, I have no doubt that with no holds barred if I were to build Redpath to an equal or higher degree of finish as that of the New Zealand built vessel, I could easily spend a million or more.

But why...?

Believe me, I am in no way disparaging the wish to have only the finest yacht available. What I wish to illustrate here is the extremely wide cost variation that is possible even with the same design.  This is precisely why the cost question cannot be answered without first obtaining or developing a set of Estimating Plans that outline the intent, scope of completion, equipment, finish, and so forth.   To find the right combination and the right venue, it is a matter of balancing the owner's budget vs. the approach taken, the equipment spec'd, the venue selected, and the level of high finish required, and the consequent amount of labor required to achieve the intended result.

If we first develop a detailed set of Estimating Plans and submit them to a hand-picked selection of builders, we can then obtain their firm quotations for construction. 

Along with the Layout and Structure Drawings, the Estimating Plans include a complete Vessel Specification and detailed Equipment List in order to outline the owner's unique requirements. The intent of the various documents, drawings and cover letters is to clearly outline the owner's intent so that the builder can land reasonably close to the mark.  Only then will we have even the faintest clue with regard to vessel costs. 

Without the Estimating Plans package, a builder can only provide his best guess, which is likely to be to be extremely misleading, if not entirely wrong.
 

BUILD VENUE

Despite the ever declining value of the US dollar versus the materials and equipment required, we have found several offshore venues to still be quite a good value in terms of labor.  Presently, Turkey tops the list due to its proximity to the EU and having a legal framework that has moved closer to the EU standards. Thailand is also at the top of the list, as are the Philippines, Taiwan, and other parts of SE Asia.  For example, Myanmar has recently opened its doors for business...! Good!  

 It is possible that China will become important as well, however as of 2016 access to Chinese yards is still somewhat awkward for the small one-off player, and of course China has very weak legal protections of the sort we are accustomed to in the West.  Naturally that picture is changing, and I am certain that China will become less 'inscrutable' in the years to come. In the not so distant future, China may well be knocking on the door of other countries to outsource the cost of their labor...!  It would not surprise me if one of those countries were the USA.

Today, if I were to build a boat for myself and I were willing to venture into a foreign venue, If the vessel were a metal boat, CNC cutting would definitely be employed to pre-cut all of the structure. With that done, I'd first get a good idea of the cost of a "power-away" fully weather tight package from the Netherlands. I would then compare that to the same level of completion in Turkey, Thailand, and the Philippines.  My rationale is that even though I know for certain that the Asian venues can offer a better value due to having much more favorable labor rates, I also know that Dutch builders are extremely skilled with metal boat building, and therefore offer very high efficiency even though labor costs are much higher. Prior to making a final decision, I would then check out the cost to build in the US, especially in the South. These days, I would not be at all surprised to find the US to actually be competitive.

It is worth noting that if a vessel is built inside the EU but is not for ownership within the EU, then the added costs for obtaining a CE Mark (possibly 15%) and for VAT (around 25%) do not apply.  And if the vessel is owned and used outside the EU for five years, it is my understanding that neither will apply on being imported to the EU. 

Of course if only the best will do, and if it will be a metal boat, then I would consider the Netherlands first. Nowhere else in the world will you find such a concentration of highly skilled metal boat builders with a well developed network of suppliers and sub-contractors to support them. In fact, boatbuilding is very nearly a national passion in the Netherlands.
 

REGISTRY

For a vessel built for ownership or use within the US, I would seriously consider flagging the vessel in the Marshall Islands. Another favorable venue is Palau. In both cases there are no taxes, no annual reports, excellent privacy of ownership, a body of corporate law inherited directly from the State of Delaware, and a 'Most Favored Nation' relationship with the US. This latter status means not having to formally enter and depart from each US port when cruising, plus having extended stay privileges in the US without being hassled. More importantly, your vessel will carry the Marshall Islands or Palau flag, and will therefore be less of a 'mark' when traveling elsewhere worldwide as compared to a vessel carrying the US flag.

For a vessel built for ownership and use within the EU, the boat will usually carry the flag of the country where the vessel is kept. That said, there are other flags of convenience which may provide an advantage regarding fees and taxes. Examples are Gibraltar, Malta, the Cook Islands, the Cayman Islands, the Isle of Man and the Channel Islands, among others.

Unless there is an extreme tax benefit though, I regard most of these as being flags of "inconvenience" due to the restrictions on movement. For example, not being able to stay within the EU for more than six months without incurring the full cost of VAT (value added tax) plus other registration and regulatory requirements.

All of these wild games, despite their intrigue, may in the end cost as much or more than simply playing by the rules..!
 

FINDING A BUILDER

While we will always help with builder recommendations, we do not provide builder lists or any builder contact information until an Estimating Plans set has been developed, or in the case of a stock design, purchased.

Why. . . ?

There are quite a few reasons:

The builder recommendations we offer are based on a number of considerations:

Without a good set of Estimating Plans, a builder will be in the unfortunate position of "attempting to apply a fudge factor to a variable based on an assumption about an unknown." In absolute terms they can only end up with. . . an unknown!

Further, our builder recommendations will be made on the basis of the builder's suitability to the project being considered.

Why is this 'suitability' consideration important. . . ? Some builders prefer to only build the metal hull / deck / cabin structures, while others prefer to build the whole boat. Some can build only up to a certain size of boat. Some do not want to fool with power boats, nor others with sail boats, some have a specific suitability to being able to provide the owner's expected level of finish, and so forth.

Essentially, for each design and each owner there will be several qualified builders, and there will be others that are neither suited to the project nor possibly even interested.  So, while we most definitely do make builder recommendations, we will only do so when we have also supplied the prospective boat owner with sufficient information in the form of actual Estimating Plans so that those builders can accurately determine construction costs .

In this way an owner will not be wasting their own time.

Just as importantly, an owner will not be wasting the builders time, nor ours...!
 

WHAT ARE ESTIMATING PLANS...?

In order to be able to determine a 'completed vessel' cost or even a 'power-away' cost, there must necessarily be a well defined plan. In other words, the owner must present sufficient information to the builder so that the builder can actually sharpen their pencil and provide a firm quote for construction. At the very least the builder must be provided with what we call an 'Estimating Plans' package. This consists of the first few drawings of the actual "Building Plans" plus a few preliminary design documents, as follows:

Drawings

Documents

The Equipment List includes all the various mechanical and electrical equipment items. The Vessel Specification outlines the intent of the design, gives the vessel's proposed scantlings, construction materials for the hull and the interior joinery, the proposed paint schedule, and a preliminary indication of power, range, tankage, performance and stability. With the Estimating Plans, Vessel Specification and Equipment List in hand, one can then approach builders to inquire about actual construction costs.

A complete list of our available Estimating Plans and Building Plans will be found on our Plans List page.
 

WHY BUILD. . . . ?

Although I don't keep track of what new or used production boats are selling for, I do know that a yacht broker's commission is ordinarily 10% of the entire cost of the yacht. This seems a heavy price to pay simply as a finder's fee.

Even when an entirely new Custom Design is created, the cost of the design work will usually be less than a yacht broker's commission - often much less - and no small amount of actual work will have gone into the process...! We are not in any exclusive arrangements with builders, and we do not solicit any finder's fees from them.  Our aim is simply to connect a boat project with the right builder.

Of course if a Stock Design has been used, the cost of entry is considerably less.  For more information on this subject, please see our web article on Yacht Design Costs.

Why build. . . ?

Why not. . . !

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