[rjcaudle]

I'm looking for advice regarding owning a boat in a charter fleet. I know that there are negatives, but it's very appealing to me to be able to visit a boat in the
BVIs or elsewhere for 5-7 days several times a year.

I would want a catamaran 38-44 feet. I currently own a monohull in NC. Any suggestions or direct experience would be welcome.

rjc

 

[benesailor]

bump, interested in the response as well, just curious to why someone would buy into this.

 

[tomandchris]

I have owned a boat in charter, but in the north..not the BVI's.

To me this decision would be one of simple math. You say 5-7 days several times a year. How many is several? If the cost of chartereing the boat for those days is equal to the purchase option (revenue minus all costs...not just initial) then you charter and don't worry about the boat when you are not on it.

Certainly there are as many benefits to charter ownership as there are problems with it. Talk to your tax advison and see all of the benefits and issues.

Good Luck.

 

[night0wl]

The best account of the dynamics of owning a boat in charter that I've seen online are here: The Usual Suspects - Caribbean Sailing Adventures

The guy owned a boat in Barefoot (second or third tier charter) for 7 years. He lost money on the deal overall, but didn't seem too dejected by the financial aspects of it. Basically, my takeaway is that it will *NOT* make financial sense...but when does boat ownership EVER make sense by the #'s

 

[Subaqua]

..... but it's very appealing to me to be able to visit a boat in the BVIs or elsewhere for 5-7 days several times a year.
.......
rjc

we own in a charter co. and this is exactly the reason my wife wants us to stay in the program. Using a boat in different ports around the world without having to actually sail there has it's pluses! 'Course, you could do this even without being an owner, just by chartering. It has worked well for us, but wouldn't for everyone.

 

[FarCry]

I'm looking for advice regarding owning a boat in a charter fleet. I know that there are negatives, but it's very appealing to me to be able to visit a boat in the
BVIs or elsewhere for 5-7 days several times a year.

I would want a catamaran 38-44 feet. I currently own a monohull in NC. Any suggestions or direct experience would be welcome.

rjc

I work for a charter company. Full disclosure completed.
What are your goals? Are you trying to decrease the cost of ownership? Are you trying to actually make money (nearly impossible)? Are you trying to sail more and decrease the cost to do so? What are your plans in five years, or so, when a boat would come out of charter? Have you looked at the cost of a 40' foot cat new and seen what the same one sells for after being in charter for 5 years?

I know quite a few people that have boats in a variety of charter fleets. Some have been doing it for 15 years. I know people that have more than one boat in a fleet. I know owners that haven't ever used their boat but send clients/business associates down and write it off. I know others that use their boat more than 6 weeks a year. I know non-boat owners that charter 6-8 weeks every year and have no desire to own a boat. The system works great for some and is a disaster for others. I think the difference is knowing what you are trying to achieve and keeping your eyes wide open as you get further into the options.

 

[rjcaudle]

My goals are not to make money, or end up with a boat of my own in 5 years. My desire would be to travel to the boat or other locations 4-5 times a year and decrease the costs of chartering.

I think if I had my own boat in a fleet I would make those trips more often. I have not checked into the loss of value in 5 years after chartering. That's what I actually was curious about.

rjc

 

[FarCry]

If you are going to sail 5-7 weeks a year then it might start, and I do mean "start", to make sense for you. If you wish to charter in many far away places then there may be even more advantages.

 

[yachtownershipgirl]

Hi all, this is Christine Joseph, yacht ownership rep based here in Tortola, BVI for the Moorings and Sunsail. If you send me your contact information, I'll be happy to send further info on the program along with spec sheets and pricing for the Cats we currently have available to own into the program. Cheers!

 

[hellosailor]

Christine, why don't you comment on those questions publicly, here on a public forum? Instead of soliciting private business?

If there are good points to be made, they will remain here for all to see. And this is not the first or only time that someone has come to a public forum asking if buying into a sailboat charter makes any kind of sense, the topic comes up every year.

Obviously it makes sense to some people, but perhaps you can tell us all when it will or won't be profitable, or advisable, in general. Does it work for people who make under a million a year? Over a hundred grand? Need a tax shelter? Please, do tell us all.

 

[rgscpat]

Maybe while we have some experts looking at this thread, it might be good to turn the question around and ask,
What factors make someone a good candidate for charter ownership/who will get the most out of it, and what factors would make it make less sense?

 

[sony2000]

I imagine all contracts require that if you use your charter boat, you have to pay the same rate as everyone else. Only at the end of the year, you are able to get some money back,
assuming there is a profit.

 

[Subaqua]

I imagine all contracts require that if you use your charter boat, you have to pay the same rate as everyone else. Only at the end of the year, you are able to get some money back,
assuming there is a profit.

Not quite the way it works.. at least not in our case.. and probably not in many cases. If you are on a guaranteed pay program, you may pay a very nominal fee if you use your boat, a turn around fee for linens, etc. , and still get paid by the charter company no matter what.. whether your boat is rented out or sits at dock. You may not even get charged for fuel, water, ice... whatever when you use your boat.. or anyone elses boat that is in the same program.

Other contracts you may not have to pay at all to use your boat, but if you are using it when it could be chartered out to a paying customer.. you're losing that potential income.

Depending on the contract, you may get paid every month no matter what, or the payment could be an annual deal. Just depends on the contract.
Some programs require that you share in the expenses of your boat, other programs you have absolutely no expenses at all.

 

[FarCry]

Maybe while we have some experts looking at this thread, it might be good to turn the question around and ask,
What factors make someone a good candidate for charter ownership/who will get the most out of it, and what factors would make it make less sense?

I sure don't fit the title of "expert" but I have been employed by a charter company for more than five years. Christine is an expert and maybe she will come back.

Good candidates--
Money, lots of it
Understanding that they will most likely loose money
Savvy enough to understand that if they finance a boat for a zillion years that in 5 years when it comes out of charter, they will be upside down!
Funds and time to make enough trips to take advantage of ownership usage as opposed to charters
Business or other situation in which some, maybe all, expenses can be written off taxes
Wants to travel the world and sail in numerous locations (only with bigger charter companies)
Likes to sail and not "fix" and not concerned with paying for it

Poor candidates---
Just about the opposite of all things listed above
Not worried that others are beating up "your" boat. It's not really yours until the contract is up...
Lots of obligations making travel difficult
Poor health
Limited experiences, there isn't a West Marine and 50 tradesmen down the road that can fix you up. It's de ilons and tings go sloooooow mon....

All things are my impressions/opinions. I've only got direct knowledge of two charter fleets. Within each there are exceptions. My comments are generalities. I don't sell charters or boats and thus have no dog in the fight.

 

[yachtownershipgirl]

Hello All inquiring about yacht ownership. The program is designed for those who make sailing part of their lifestyle, want to travel to exotic worldwide locations to sail, and possibly own a yacht at the end of the tenure. There is no large return on your investment, after all, it is a yacht. The yachts are brand new ranging from monohulls 41-54' to our ever-popular Catamarans from 39-58'. The initial investment is 25% down and for U.S. citizens, we offer excellent financing. Every month you get a guaranteed income check based on a 9% return. The yacht stays in the charter fleet for 5 years. We handle all of the operating expenses - maintenance, dockage, insurance, etc. The ownership use is very flexible - similar to a time share - you get points which equals sailing days. You get up to 12 weeks of low season/5 weeks high season use per year. No blackout dates. And there you have it in a nutshell! Let me know what further questions!

 

[jsaronson]

So for a hypothetical $200,000 boat (I know that's low) let me see -
$50,000 down
12 year loan @ 5.5 % = 1450 month
ROI of 1500 month
plus registration and insurance.
After 5 years I'd probably be upside down another 20,000. So it cost me $70,000 over 5 years. If I take 18 charters over 5 years worth $4,000 a charter I break even. For a more expensive boat I need to take more charters to cover the additional expense.

 

[hellosailor]

"Every month you get a guaranteed income check based on a 9% return."

So the eager buyer might hear that they are getting a 9% return, when in fact they are getting...what? What does "based on" mean?

Sounds like the "Buy One Get The Second at 50% off" offers, which really mean "Not more than 25% off when you buy two". One sounds way better than the other.

 

[yachtownershipgirl]

Hellosailor: The 9% return is 'based' on the price of the yacht. It is a GUARANTEED 9% return every month. We have been selling the yacht ownership program for 45 years now and it works well for most.

Bottom line is you need to go sailing! If you average cost for chartering approximately 3-4 weeks per year over the next 5 years, combination of seasons, you will see those charter fees would be equal/greater than the 25% down you put on the yacht so that is how you determine if the program is for you.

jsaronson: you're pretty close... I'll be happy to email a proforma/spec sheet depending on the yacht you're interested in but here's one for a Sunsail 41 (Jeanneau Sun Odyssey 409), fully equipped for charter.
Yacht price: $250,000
25% down: $62,500
Financing based on 4.35% fixed rate over 15 years
Guaranteed 9% income per month: $1,875 (your mortgage payment based on 4.35%-15 yrs is $1,420 so a small positive cash flow per month)
If you apply ALL of the funds we send you over the 5 years, loan balance would be $113,433. Estimated net resale after 5 years around 50-55% residual so around $125,00-$135,000.

 

[SailBeat]

Hi all

I'm starting a yacht charter comparison website locations, yachts, things to know and do. I was wondering if any of you would be interested in writing an article about charter ownership progrmas for my visitors. In return I can link to your blogs etc.

It would be great to have some insider knowledge for my customers

Cheers Luke

EDIT: Removed Link that is in violation of forum rules. Jeff_H Sailnet Moderator.

 

[Night_Sailor]

Chartering is a great deal for the charter companies and a bad deal for the boat owners. Would you like an article on how the charter companies screw over their customers? I didn't think so.