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Old 27-04-2015, 18:22   #46
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Re: Buying a boat in Charter Management: The final numbers

What a great thread! Want to thank everyone for sharing their experiences and insights ... tremendously helpful. Cheers!
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Old 29-04-2015, 18:46   #47
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Re: Buying a boat in Charter Management: The final numbers

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Originally Posted by henryv View Post
Sorry - your numbers are overly optimistic. Generally charter boats only make sense if you value the personal use. If they could turn a true profit after depreciation the charter companies would own their boats.
Henry

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+1. Ive been around the charter industry since 1994 as boat owner, charter captain, and partner in charter companies. Owners do not end up making significant net profits as projected (the charter companies do). Looks nice on paper, as many business plans do, aint gonna happen in reality. You can however significantly defray the cost of ownership and maybe on a good year make a modest net.

Depreciation is an often overlooked financial plus, it applies to your adjusted income and can have a nice positive benefit to the bottom line of taxes owed.
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Old 29-04-2015, 18:49   #48
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Re: Buying a boat in Charter Management: The final numbers

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I think the budgeted depreciation number is way too low. Four cabin ex charter boats do not hold their value very well and there are usually enough boats for sale to make it a buyer's market.
...
Keep in mind that what really has a positive short term financial impact is depreciation for tax purposes as determined by the deprciation schedule used, which is not the same thing as market value depreciation.
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Old 03-05-2015, 18:55   #49
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Re: Buying a boat in Charter Management: The final numbers

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Keep in mind that what really has a positive short term financial impact is depreciation for tax purposes as determined by the deprciation schedule used, which is not the same thing as market value depreciation.
Following the aboves comments, i'd like to know what amount of market depreciation should I use for a 400k$ vessel? I also would like to know if 20 weeks of rental income is too optimistic (as for right now, i don't intend to use the boat personnally very much).

thx
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Old 03-05-2015, 19:36   #50
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Re: Buying a boat in Charter Management: The final numbers

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Originally Posted by philduval1 View Post
Following the aboves comments, i'd like to know what amount of market depreciation should I use for a 400k$ vessel? I also would like to know if 20 weeks of rental income is too optimistic (as for right now, i don't intend to use the boat personnally very much).

thx
On market depreciation:
Over what time frame? I'm sure there is a curve, more or less the first few years and eventually reaching a point of little market depreciation, and over the long term possibly right down to the point of salvage value.
From what I've observed, the model of the boat and it's reputation, founded or not, will make a big difference in market depreciation.
But just to throw some numbers and a random time frame out there to look at... How about 25-50% over 5 years.
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Old 03-05-2015, 20:17   #51
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Re: Buying a boat in Charter Management: The final numbers

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On market depreciation:
Over what time frame? I'm sure there is a curve, more or less the first few years and eventually reaching a point of little market depreciation, and over the long term possibly right down to the point of salvage value.
From what I've observed, the model of the boat and it's reputation, founded or not, will make a big difference in market depreciation.
But just to throw some numbers and a random time frame out there to look at... How about 25-50% over 5 years.
Here is a one of many examples of what i'm look at:
2014 Lagoon 450 Sail Boat For Sale - www.yachtworld.com

So, from what i've read, this boat would sell in five years for about 318 000$ to 212 500$. The problem is that today, I can find just a few 2009 examples at around 320k$(one at 299k$), none under that), 2010 begining at around 370k$. That mean; no boat under 25% of depreciation on a 5 years term. Worst case is 20 000$ of depreciation/year (excluding heavy damage).
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Old 03-05-2015, 20:37   #52
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Re: Buying a boat in Charter Management: The final numbers

When I looked at the numbers for a smaller boat (Bene 35 or similar), it was pretty clear that the only way charter boat ownership makes financial sense is if you go with a large chartering company and use your owner's time to go sailing all over the world.
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Old 04-05-2015, 06:14   #53
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Re: Buying a boat in Charter Management: The final numbers

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Originally Posted by philduval1 View Post
Here is a one of many examples of what i'm look at:
2014 Lagoon 450 Sail Boat For Sale - www.yachtworld.com

So, from what i've read, this boat would sell in five years for about 318 000$ to 212 500$. The problem is that today, I can find just a few 2009 examples at around 320k$(one at 299k$), none under that), 2010 begining at around 370k$. That mean; no boat under 25% of depreciation on a 5 years term. Worst case is 20 000$ of depreciation/year (excluding heavy damage).
But you are talking about a boat that has already had a year or maybe close to 2 years of depreciation already. Wasn't that about a $600,000 boat to begin with?
Or are lagoons really that cheap? .
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Old 04-05-2015, 08:09   #54
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Re: Buying a boat in Charter Management: The final numbers

Keep in mind that the true depreciation is the net of your investment less the net you receive when you sell. Your investment will include some significant costs such as delivery that are immediate write offs. On the sale end you need to consider that boats rarely sell for the asking price and ten percent of the sale price goes to the brokers.

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Old 04-05-2015, 08:34   #55
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Re: Buying a boat in Charter Management: The final numbers

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Originally Posted by RedHerring View Post
When I looked at the numbers for a smaller boat (Bene 35 or similar), it was pretty clear that the only way charter boat ownership makes financial sense is if you go with a large chartering company and use your owner's time to go sailing all over the world.
I agree. It allows one to go on sailing vacations more economically than chartering or normal ownership would cost. It's unlikely to turn a profit.
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