Buying a boat in Charter Management: The final numbers

[nautical62]

GTom, great thoughts! Personally I found owning a charter boat to be far less stressful than traditional ownership because it was constantly being looked after and maintained, but I think the important thing is individuals objectively look at the circumstances they actually face rather than make decisions based on overly simplistic ideas like. “Don’t buy a charter boat because it gets more wear and tear”.

I find myself often defending charter ownership because I feel the arguments against it are often short sighted, but it’s certainly often not the best for most people. It’s only been the right fit for me one out of four times. The best fit for me right now is to not own a cruising boat at all.

Your circumstances are not mine, the circumstances when I bought a charter boat are not the circumstances now. There’s no one size fits all answer to this issue.

[nautical62]

Originally Posted by timinfla2

Ah yes! Well, I was remarking upon the state of the 3 year old (dead) thread, not suggesting the demise of its participants, but I am glad to hear you are doing well just the same :-)

I do have a few questions but before I ask them, I believe I can find the answers myself by going through the tons of links there are on this site about all things chartering - out of respect for these fine folks' time, I won't ask those until I know I can't answer them myself.

However, I did have one idea I wanted to vet... One of the commenters mentioned that they sold (or perhaps it was bought) owner time at a 30% discount. Am I to understand that in certain circumstances if an owner finds themselves unable to use their 'owner time' in a given vessel, that they are free to re-sell that time to a 3rd party without any hatemail from the beancounters at the charter operation?

If that is true, why is there no secondary marketplace where owners list these opportunities? I envision sort of an ebay for unused owner time.

If it's all the same, if I'm going to get 7 days on a Moorings Cat, I'd prefer to do it at a 30% discount while helping the owner monetize his unused time.

Does any of that make sense?

I know many contracts allow owners to sell their time. You can find examples in this forum (not this thread) of that happening. If you are looking at buying a charter boat, I suggest you ask that company about the policy they have in effect at the time.

[GTom]

Originally Posted by nautical62

There’s no one size fits all answer to this issue.

Absolutely agreed! From my side, two conditions steered my decision towards a normal ownership: I wanted a solid classic boat, rather than a modern one and I wanted to sail Northern Europe as well, not just the usual sunshine destinations. Also, we like to be off the grid, which is also given in the tropics but obviously not served by charter companies (otherwise wouldn't be off the grid, would it?).

[captainjay]

So I was involved in a similar conversation on a facebook forum last week. I am just going to copy and paste. I took the names out.

MycommentI have spent the last eleven season managing charter boats. When we talk to prospective new owners this subject comes up on a regular basis. Any operator that does not talk about wear and tear. Or the possibliltiy of accidents is selling snake oil. How your boat is maintained, who is allowed to rent it., what is the checkout process and who pays for damage when it occurs. All of these are just as important as revenue projections. They directly effect you net bottom line in sixty months when the boat leaves. If you keep it and don;t have to repair or replace a bunch of broken bits that is a net to you. If you sell it and it is in better shape than other boats of similar vintage and useage. That is a net to you as well. The year before last we took hull number 2 of the Helia. Wide Ranger to the Annapolis Boat show and parked it inbetween brand new boats. She was a three year old charter boat at that point. We did it to prove that very point.


Facebook User I'm curious why Charter Boat companies don't buy their own boats, IF the business model is so good.

I looked at the Moorings program and it did not make sense.

$100m down. 5% return ( projected )

Huge amounts of risk. Market, rental damage, etc

Huge depreciation

My analysis showed I would have been better off

Renting new boats with friends and putting the money in a diversified stock portfolio.

I'm an old commercial loan officer.
Manage
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My Comment Anyone buying a boat as an investment is kidding themselves. I have and continue to tell buyers this. The reason to buy is because you want a boat. There are multiple reasons to do it in charter. Tax advantages and charter revenue that help offset some of the costs of ownershiop. There are no free boats. Anyone that says otherwise fall into the snake oil sales people category mentioned above.. Also do not discount the ability to fly into St Thomas be on your boat after a ten minute cab ride sail it for a few weeks then hand the keys and laundry back to a professional operator. Most people pre retirement simply do not have the time or skillset to properly maintain a complex yacht and use it enough to justify owning it for private use while still working. A large portion of our owners fall in the category of three to five years from retirement and using this a springboard to cruising either full or part time.

[GTom]

"My analysis showed I would have been better off renting"

said your discussion partner - of course, there are scenarios, where "rental" (charter) is the viable route, but that depends very much on how many weeks he wants to sail. For 2 weeks a year, it's obvious, "rent" (charter) a boat regardless of its type and location, full stop. When you want to sail 4 weeks or more in a year, an ownership model start to become interesting.

Certainly none of the boat ownership options are goldmines, otherwise investment banks would have already jumped on the bandwagon. It is about optimizing the overall cost of cruising, amount of headache and time invested. This optimum depends very much on the

- type/design of the boat (some designs not to mention makes are not available in charter)
- skillset and willingness to work on the boat (some have this "second hobby" besides sailing)
- location: especially mooring costs covered by the charter company: if marinas in the preferred sailing grounds are expensive, like the Western Med or Croatia, this is a huge plus for the charter model. Also, some charterers offer their global network - which is the fastest, most economical way of sailing one year in the Med, the other in French Polynesia...