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Old 04-08-2008, 20:36   #1
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Would you do this?

Would you buy a boat 4-5 years ahead of your departure date and put it in charter?

Theory is you could spread the expense of getting the boat ready over a few years. Some revenue to offset the mooring, etc.....

Or is just too much wear and tear and not worth the hassle?

DW
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Old 04-08-2008, 20:43   #2
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Read the messages compiled at this web-site address. They certainly confirmed my own thoughts on the strategy of putting a boat into charter.
Paul
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Old 04-08-2008, 20:43   #3
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Now with the link !!!
Chartering Out A Boat You Own
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Old 04-08-2008, 23:17   #4
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Whether putting a boat into charter makes economic sense depends on how the deal is structured and also on the tax laws.

Back in the heyday of the Privilege 39 catamaran, French owners could put a boat into charter and deduct the value of the boat from their French taxes in a single year. That worked really well for rich people who wanted big single year deductions.

Unfortunately, things don't work that way in most other countries. I looked at putting a boat into charter, and for me it did not make sense.

When you get a new boat, you have a grace period that lasts about five years. There are no major problems with critical systems for the first five years - at least that's the way it worked on our Privilege 39. That meant the first five years of our circumnavigation was pretty much trouble free. After that, I had to put more money and work into keeping to boat in good shape to complete our circumnavigation.

I would like a new yacht to start a circumnavigation just to make it easier and more trouble free in remote destinations around the world. But if I was doing just local cruising, I would be happy with a used yacht because I wouldn't really need that 5 year grace period before things start to break and wear out.
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Old 05-08-2008, 00:03   #5
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Maybe... depending on how you view the plan...

Putting a boat into charter is a form of risky investment. If your investment works out the boat will mostly pay its mortgage while it is in the business, and at the end of the contract you will have a somewhat worn boat in need of upgrades to prepare for private cruising.

Or you can sell it and get a sizeable chunk of cash back with which to purchase a boat more specific to your cruising plans. Or as your cruising kitty, if you got your cruising boat while the charter boat was paying its way.

My opinion is most great charter boats are not great cruising boats. So I'd plan on using it as a special form of savings account, building up some equity and maybe, in some situations, giving you other financial benefits. Better return than bonds, but still just a buy and hold investment scheme. Unless, of course, there's a deep down turn in the economy and you can't sell it for much at all when it comes due.
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Old 05-08-2008, 09:31   #6
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Thanks for the info and answers. It is in line to what my thoughts were. Just antsy about getting a boat a little sooner than needed.

DW
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Old 05-08-2008, 10:33   #7
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Duckwheat,
Do you want a bunch of folks you don't know, with questionable sailing, anchoring and docking skills using your boat? Much of that itme under the influence of alcohol? Not me.

If you want to cruise, there are so many solid boats available for a fair price. I think the depreciation on a charter boat would be pretty hard to outrun. I certainly would not expect to have a chunk of equity in the boat should you decide to sell it after 5 years. If you're going to have a new boat, seems like you should be the one enjoying the benefits.

Just my opinion.
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Old 05-08-2008, 10:48   #8
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My advice is buy the boat now, start paying it off. Cruise on weekends. Think and plan about the around the world trip in the present, while enjjoying the boat locally. My brand new to me, old boat, is taking up quite a bit more time and planning than was initially estimated. Having the boat a year or two ahead of your trip is a good thing. As far as reducing costs on the boat, by part timing it out to charter isn't a good idea. Making more money or working harder at your normal job oftentimes provides a better return on any investment, including a boat. Anywho, that's my two cents.
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Old 05-08-2008, 11:14   #9
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I know from experience people dont treat charter boats as they would their own. Ive been sailing with people that strictly had charter boat experience and been called a wuss for reefing at the appropriate time.
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Old 05-08-2008, 11:18   #10
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Old 05-08-2008, 12:15   #11
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You need at least a year to do all the preps prior to departure.
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Old 05-08-2008, 14:29   #12
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A rental house would make more sense, and provide you with more appreciation than a savings account, and if you wait for a market peak to sell, you will have a nice chunk of change to invest in the boat of your choice. The down side is that rental (or two) will have to be close enough for you to maintain yourself. Get a small boat in the mean time, just to maintain your sanity.
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Old 05-08-2008, 14:46   #13
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I would do it if I could get a decent return on my money. I would not want to end up owning a charter version of a boat with four heads and four cabins. I also would not want to own a boat that needs a lot of money put into it after five years of hard service in order to make it safe, reliable and suitable for offshore cruising.
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