Understanding Yacht Valuation Methods Used by Professional Brokers

Approach one: comparable sales

The dominant method for production motor yachts, sailing yachts and catamarans, where similar vessels change hands often enough to create evidence. The valuer assembles comparables matched on type, length, year, builder tier and specification, then applies adjustments for the differences.

Adjustments typically cover engine hours, refit history and date, equipment fit, cosmetic and structural condition, location and delivery cost, and flag or fiscal status. Each should appear as a separate line. When adjustments are hidden inside a conclusion, the client cannot test the reasoning — and neither can a lender, an insurer or a counterparty.

The method’s weakness in Indonesia is evidence quality: most transactions are private, so much of the available data is asking prices rather than sale prices. A disciplined valuer down-weights asking-price evidence and says so in the report.

Approach two: depreciated replacement cost

Used where comparables are scarce or absent — one-off builds, heavily converted commercial hulls, expedition vessels, and locally constructed tonnage. The valuer estimates what it would cost to build an equivalent vessel today, then depreciates for age, condition, obsolescence of systems, and remaining useful life.

The trap is that replacement cost frequently exceeds market value, particularly on older vessels. That gap is exactly why the basis of value must be stated: a replacement-cost figure is appropriate for an insurance conversation and misleading if presented as what a buyer will pay.

Key facts at a glance

Approach three: income capitalisation

Where a vessel’s value derives from what it earns, the valuer works from sustainable net operating income rather than from hull characteristics. Inputs include historical occupancy, achieved rates, operating cost structure, and — critically — whether the operating licence and booking relationships transfer with the vessel.

A commercially licensed liveaboard whose permissions do not survive a change of ownership is worth materially less than an identical hull whose do. Buyers routinely miss this because it does not appear in the specification sheet.

Reconciliation: the step amateurs skip

Running three approaches produces three numbers. Reconciliation is the valuer’s reasoned judgement about which carries most weight for this vessel, in this market, for this purpose — and why. A report that presents three figures without reconciling them has handed the judgement back to the reader, who is usually the least equipped person to make it.

How to read a valuation critically

Ask six questions. Is the basis of value stated — market or replacement? Is the report dated? Are comparables identified with enough detail to check? Is each adjustment shown separately? Are assumptions and limiting conditions declared, including whether the valuer inspected the vessel or relied on documents? And does the valuer disclose any interest in the transaction? A broker-prepared pricing appraisal is perfectly legitimate — as long as it is labelled as one. How we handle that is set out on our valuation and appraisal page.

Valuation versus survey

A valuation is an opinion of value; a pre-purchase survey is a technical examination of condition. Good valuations use recent survey findings as an input and say which findings they relied on. Neither substitutes for the other, and a buyer who commissions only one is making a decision with half the information.

Frequently asked questions