My garage/shop is sadly out of space though I have most of the larger tools
that I need for now. One is missing though and that's a bandsaw. A friend
of mine is interested in buying one but was thinking of a 14" saw. I am
considering working something out so that we split the cost of a 16" bandsaw
(which I consider better for resawing) and keep it in his garage. We need
to work out the details but I was curious as to how this equipment typically
depreciates. This way, if one person wants to buy the other one out, we
would have some idea to base the cost on.
The best advice I can give for this is not to do it.
The closer you are now, the more likely this will come between you.
Perhaps you could save some money ans adopt an old machine
or save your money and buy new saw of your own.
Thanks Myx. I understand what you're saying and would hate to see a saw
mess up our friendship. But the problem isn't money, it's space. If I
only had enough space I would find ways to save up the money. However, I'm
concerned that time saw time may become difficult to obtain but I think it
would be a stretch to have an agreement that says I get to hang in his
garage x number of hours a month. Maybe we could do without the dining
room so I can expand the garage/shop ;-))
In my opinion, assuming we are talking reasonably good quality equipment, it
depreciates about 25 to 35% upon leaving the dealers store. It might then go
down slowly over the next 5 or 6 years until it reaches approximately 50% of
original cost. It then retains about that value as long as it is in good
The best system I have ever seen for this type of deal is an agreement that at
any time either of you can make an offer to the other to buy him out. The other
one then can either accept the offer and sell or turn around and buy the other
out at the offered price (he MUST do one or the other, he can't simply refuse).
This eliminates one or the other trying to lowball because they will just end
up screwing themselves - it tends to make any buyout offer reasonable and also
tends to discourage buyout offers unless the buyer is serious.
I discussed this with my friend and we seem to like your idea.
There are still a few minor details to work out but that's just another
excuse to go out for a few beers.
I think after we've had a few, we can also talk about visitation rights...
I always liked the idea. When I first saw it it was between two large
companies that were partners in a joint venture to build a $75 million
office/hotel complex in Downtown Pittsburgh in the mid 1980's (I was auditing
the joint venture, not either company). These two firms grew to hate being in
business together in what was a deeply depressed office space market and the
building was barely 40% occupied 3 or 4 years after completion. One (an
insurance company) was cash rich and appeared constantly on the verge of making
a lowball offer to buyout the other, believing (correctly) that it was cash
poor and (incorrectly) would find it difficult to scrape up enough to counter.
Unbeknownest to the insurance co., the other firm had lined up another investor
that was just itching to buy in on the cheap and the two of them were lying in
wait for the insurance company to lowball. It was a standoff for a couple more
years, but finally the insurance co. screwed up and lowballed and were bought
out in a steal - just in time for the office market in the Steeltown to take
off. Hopefully someone lost their job over that, but more likely you and I just
got a couple of cents added to our car insurance bills ;)
Good luck and hope you work out the custody and visitation schedules.
Properly maintained, and not used 24/7, why should it depreciate?
I have always favored the concept of "you set a price and I get to chose
whether to buy or sell my half".
The pleasure of being the first person to rub their fingers
across it is typically worth 25-30% of the retail price.
After another man's fingers have been on it the price goes
That's why I buy used. I don't mind you taking the retail
hit and as far as I'm concerned you can finger the Hell out
of it. Just don't let the magic smoke out of the motor.
While there is certainly a diminished value associated with a used
tool that occurs over time, "depreciation" is not the right term,
that's an accounting term, and there is straight line depreciation,
accelerated depreciation, and a whole bunch of rules around these
calculations and their tax impact that I don't understand - that's for
the bean-counters to figure out. My view is that figures lie and
All I can say is when I upgraded to an 8" jointer and 15" planer, I
sold my Grizz 6" jointer and Delta 12.5" benchtop planer for about $50
less than I paid for both of them (I bought the Grizz used, the planer
new) after using them for 9 and 5 years, respectively. Sold in one
day, one ad in the paper, to the first guy who showed up at the shop.
I would suggest to the original poster Woody that he have a simple
written agreement with his buddy that if either one wants to sell the
saw, they put an ad in the paper and each has the right of first
refusal on other offers, or can bid more, for the saw - that way you
get a market price and nobody's feelings are hurt. Caveat, however,
is that the guy with the most free cash wins....
When I was a student, I bought a boat with a buddy of mine. We both
knew that we would one day want to end the relationship, so the way we
set it up was that when one of us wanted out he would name a price,
and the other would decide if he wanted to buy half or sell half at
that price. Worked out well, when I knew I was moving out of state,
I named a price which I felt was below half the value of the boat, my
buddy sold me his interest in the boat at that price, and I sold the
boat for a nice profit.
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