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post #9 of Old 05-10-2007
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Disclaimer: Charterboat ownership isn't for everybody, and probably not for most people.

Charter boats are typically on a 20% down 15 year loan. I think it is fair to say that you will pay 20% of the total expenses over the life of the boat, including payments, insurance, moorage, etc. So, you are loosing money, but gaining equity. My Catalinas have appreciated over time, so that helps.

Important to note that this is not a tax write-off. It is a passive loss. You basically offset your charter income, so no taxes on the money you use to make your boat payments. You cannot write off the loss against your regular job without inflicting the wrath of the IRS. Mike Kimball is an excellent source (google him).

Think of charter boat ownership as owning a lot more boat that you could normally afford (paying 20% of the cost), and the boat working to make the other 80%.

Other folks play things differently - to each their own. Some friends paid cash for a boat, made improvements, and sold due to medical issues. They came out ahead and did a lot of good sailing in the mean time.

In my mind, building equity means a lot of sweat equity. Pay someone else to work on your charter boat, and you will be out of your own pocket.

Just my $0.02.

Ken Fischer
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