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Old 26-08-2016, 07:54   #1
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40' BVI's Charter Cat -Cost of Maintenance

Getting ready to purchase a 5 year old 40' Cat. One of the unknowns that scares the bejesus out of us - How much $ will that 5 year old charter cat require in maintenance each year. Have all the numbers, aside from how many weeks it will actually charter for, but the big unknown is the maintenance $ figure. We're basing our #'s on average of 16 weeks of
charter per year. Anyone have personal experience or insight with a cat in charter (BVI's)? Comments are greatly appreciated!
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Old 26-08-2016, 09:31   #2
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Re: 40' BVI's Charter Cat -Cost of Maintenance

I once owned a boat in charter which I took sole possession of after the charter contract was up (7 years in my case), and later sold it. I've also bought cruising boats never in charter. Here's my thoughts:

1. Chartered or not, any boat is likely to need more maintenance as it ages. One reason charter companies pick the charter time frame they do, is that's when they feel the maintenance is no longer worth it for them.

2. That said, while charter boats get a lot of use, they also tend to get professional maintenance. Most boats for sale by owner I've looked at are more poorly maintained and in need of more repair than charter boats at the end of charter I've seen. People wanting to sell their boats have often gotten behind in maintenance. I think the idea that charter boats will likely be in worse shape than non charter boats for sale simply does not bear true overall. (I think there is much more variance in how boats for sale by owner have been maintained and what condition they are in at the time of sale)

3. The boats coming out of Tui Marine at least (Moorings, Sunsail, Footloose) have a given standard they should be maintained and repaired to coming out of their charter contract. The standard is higher for Moorings than Footloose, at least that was the case when my boat came out of charter.

As with any used boat, hire a reputable surveyor to check the boat over and make sure it is as advertised, so you are making the best possible informed decision. Realize a survey may not include a proper engine or rigging inspection. Chartered or not, be ready to walk away from any potential boat sale at anytime a survey or price point simply doesn't make sense.

4. Some problems or likely future issues may be identified during a survey, but any boat can have unexpected issues come up at any time. You may have a few years with little maintenance costs or you may have a major engine repair come up after just a year of ownership (or less).

5. When I took possession of my boat, I identified several small problems which the charter company fixed because they were not up to the promised standard.(I don't know if this would hold true for a boat sold straight out of charter or not) Cruising it back to the States, I had a problem with crud in the fuel system (which is a common problem). That was the only maintenance issue I had for the year I owned the boat after charter and before selling it. (From what I've heard, the fuel system simply isn't polished to the degree it should be, so crud that has settled nicely to the bottom of the tank and stayed there during charter, gets knocked loose in bigger seas and causes problems)

Obviously, if I had kept the boat longer, things like cutlass bearings, running rigging, and all the things that eventually fail, would have failed and needed attention. I've purchased used boats that in 5 years of ownership didn't need any new rigging. I've purchased boats, where I had to replace all the running rigging and both sails. Other than the fuel problem, the engine worked great on my ex charter boat. Another boat needed a new transmission and exhaust system within a year of purchasing it. When it comes to used boats, I don't think one can say anything is "standard" in terms of what maintenance will be needed.


6. Do your research - what will it cost to slip your boat, insure it, etc? Will there be a time between the sale and time you will take possession and what will that cost? Will you have it delivered? What upgrades will you need depending on your intended use? When I picked up the boat, I brought my own tender, jack lines, Eprib, spare GPS, but otherwise sailed the boat the way it was with no costly upgrades. (cookware, nav equipment, bedding, life raft were included) Obviously more serious ocean cruising would have required many more costly upgrades.
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Old 26-08-2016, 10:35   #3
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Re: 40' BVI's Charter Cat -Cost of Maintenance

Thanks Nautical 62 - lots of info there appreciate it. To clarify, we"ll be purchasing a 5 year old 40' Moorings charter cat and putting it into a 2nd tier charter company. In Tortola I understand they get used a lot and was hoping to get an approximate cost for Maintenance on 40' cat while in charter. We have firm #'s on all other expenses (dockage, insurance, etc.) except the # for maintenance. I know this is a hard one to come up with but hoping someone in our situation can shed some light on the approx. cost.
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Old 26-08-2016, 10:55   #4
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Re: 40' BVI's Charter Cat -Cost of Maintenance

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Originally Posted by louielouie View Post
Thanks Nautical 62 - lots of info there appreciate it. To clarify, we"ll be purchasing a 5 year old 40' Moorings charter cat and putting it into a 2nd tier charter company. In Tortola I understand they get used a lot and was hoping to get an approximate cost for Maintenance on 40' cat while in charter. We have firm #'s on all other expenses (dockage, insurance, etc.) except the # for maintenance. I know this is a hard one to come up with but hoping someone in our situation can shed some light on the approx. cost.
Sorry, didn't quite catch that. I was in Footloose after the Moorings and they paid all maintenance. The list they gave me of work done each year was fairly extensive and I'm sure would have been a bit had I paid it myself.

I will say I have heard of some bad experiences from people who have boats in charter on a commission basis and have to pay the maintenance themselves. Often the charter income falls short of "predicted" and maintenance is more. As an absentee owner it's also hard to know whether or not any given maintenance or repair is truly needed. Does they boat really need a new headsail, or are they just saying so, so they can have a new, shiny one are your expense?

Hopefully someone else will come along who has actually owned a cat in charter in such charter agreement and provide you more than I was able.
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Old 26-08-2016, 12:07   #5
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Re: 40' BVI's Charter Cat -Cost of Maintenance

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Originally Posted by louielouie View Post
SNIP
Have all the numbers, aside from how many weeks it will actually charter for, but the big unknown is the maintenance $ figure. We're basing our #'s on average of 16 weeks of
charter per year. Anyone have personal experience or insight with a cat in charter (BVI's)? Comments are greatly appreciated!
Never owned a charter boat but I would guess the cost to maintain would be a function the number of weeks in charter, and even to a greater extent how it was used in charter. Some folks run both engines at max while others run a single engine at 2/3s max. Same for how the sails are used; not to mention things like over working fridge or improper use of head.

Another thing to remember is often times the worst thing you can do to a boat is not use it. During the off season when I semi lay my boat up for hurricane protection I make sure to run the engines every couple of weeks or so, same goes for running water through tanks and system. Plenty of other examples of stuff on boats rusting, rotting, whatever due to lack of use.

Bottom line is some folks who live on a boat are able to spot little problems and prevent them from turning into big problems that will cost big bucks while folks who only see boats at long intervals often over look things that can cost big bucks later.
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Old 26-08-2016, 14:02   #6
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Re: 40' BVI's Charter Cat -Cost of Maintenance

I have a former Moorings 372 PowerCat (Leopard) that I bought 5 years out of charter in The Abacos. Maybe not a direct comparison to the BVI's because the water is flatter and more protected in Marsh Harbor. My real world expenses for Florida-based professional maintenance at $65-95/hr (I did nothing myself) was $26k to get it really good and ready, and then another $20k for regular maintenance after 8 weeks of charter in 1 year, and 4 weeks extra of my use. Most expensive stuff was bottom paint and prop work at about $3k and some generator work that was about $2k, as well as full compounding/ wet sanding for $1600. I think it will usually range $16-20k per year moving forward. I don't have rigging and sails, but I do have bigger motors. It will want a new chart plotter next year for about $3k.


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Old 26-08-2016, 17:57   #7
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Re: 40' BVI's Charter Cat -Cost of Maintenance

16K-20K per year would be a deal breaker for us. Is a large percentage of your cost attributed to the fact it's a power cat? This is a sailing cat and maintenance is billed at $45. per hour. Would you say 8K - 10K would be in the ballpark?Thanks!
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Old 26-08-2016, 18:08   #8
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Re: 40' BVI's Charter Cat -Cost of Maintenance

I would think at that lower labor rate and being a sailing cat that your estimate of $8-10k would make sense.
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Old 27-08-2016, 06:27   #9
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Re: 40' BVI's Charter Cat -Cost of Maintenance

Quote:
Originally Posted by louielouie View Post
Getting ready to purchase a 5 year old 40' Cat. One of the unknowns that scares the bejesus out of us - How much $ will that 5 year old charter cat require in maintenance each year. Have all the numbers, aside from how many weeks it will actually charter for, but the big unknown is the maintenance $ figure. We're basing our #'s on average of 16 weeks of
charter per year. Anyone have personal experience or insight with a cat in charter (BVI's)? Comments are greatly appreciated!
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Originally Posted by nautical62 View Post
Sorry, didn't quite catch that. I was in Footloose after the Moorings and they paid all maintenance. The list they gave me of work done each year was fairly extensive and I'm sure would have been a bit had I paid it myself.

I will say I have heard of some bad experiences from people who have boats in charter on a commission basis and have to pay the maintenance themselves. Often the charter income falls short of "predicted" and maintenance is more. As an absentee owner it's also hard to know whether or not any given maintenance or repair is truly needed. Does they boat really need a new headsail, or are they just saying so, so they can have a new, shiny one are your expense?

Hopefully someone else will come along who has actually owned a cat in charter in such charter agreement and provide you more than I was able.
Not sure if I pasted and copied but - Would you happy with Footloose? I assume you were in there guaranteed income program? Starting to think guaranteed program the better option but can't actively manage which is the drawback for tax and liability reasons.
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Old 27-08-2016, 09:29   #10
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Re: 40' BVI's Charter Cat -Cost of Maintenance

May I ask which company you've decided to go with for chartering your Cat? I've been thinking about doing exactly what you're doing, although my timetable is 2017, and I'm just starting to do research. I'd love to know what you've discovered.
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Old 27-08-2016, 09:31   #11
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Re: 40' BVI's Charter Cat -Cost of Maintenance

I can share with you our expenses. We purchased a 2005 Leopard 43 out of the Footloose fleet and put it in charter in the BVI. We put our boat in charter at the end of 2012 and kept her in charter until the spring of 2015 when we moved her to Seattle, WA. If you don't count dockage and insurance our expenses were $37,586. This included large items like a new genoa down to small items like a new flashlight. It included normal maintenance like replacing impellers, fixing cabinets, etc. It also included turnaround fees that are charged each time the boat comes back from charter and dingy rental fees, again for each charter.

When you include the costs of insurance and dockage and all the expenses we came out about $19K ahead at the end the of the year. This did not include any loan payments. I'd say 2014 was a pretty average year for us. We seem to have a few big $$ repairs each year. In 2013 it was cleaning out the holding tanks. In 2016 it was replacing the holding tanks. Next year we will need a new mainsail.

My impression is that we purchased our boat at the right time. Charters really started picking up in 2013 and have continued through this year. In a slow year you will probably lose money.

Good luck with your purchase.
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Old 27-08-2016, 17:10   #12
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Re: 40' BVI's Charter Cat -Cost of Maintenance

Thanks for the hard #'s rfadler. Just to clarify, I assume your expenses of 37K are for 3 years not per year correct? So as I understand it, adding in the dockage and insurance at roughly 12K per year, your total expenses for 3 years were approx. 75K or 25K p.y. and you cleared 19K over the 3 year period? Mind if I ask on average how many days she chartered per year? Not sure if names are taboo but would really like to know who the charter company was (if allowed on this forum)? All this info is greatly appreciated as we are very close to buying at the moment, thank you!
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Old 27-08-2016, 17:39   #13
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Re: 40' BVI's Charter Cat -Cost of Maintenance

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May I ask which company you've decided to go with for chartering your Cat? I've been thinking about doing exactly what you're doing, although my timetable is 2017, and I'm just starting to do research. I'd love to know what you've discovered.
We're planning on Conch, we chartered with them over the winter and we were very impressed with their operation. The unknowns are how many weeks a 40' cat will actually charter and the maintenance cost per year. On another forum I've had several experienced people mention 20K -25K p.y. for maintenance which I'm hoping is high.
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Old 06-09-2016, 10:05   #14
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Re: 40' BVI's Charter Cat -Cost of Maintenance

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Originally Posted by louielouie View Post
Thanks for the hard #'s rfadler. Just to clarify, I assume your expenses of 37K are for 3 years not per year correct? So as I understand it, adding in the dockage and insurance at roughly 12K per year, your total expenses for 3 years were approx. 75K or 25K p.y. and you cleared 19K over the 3 year period? Mind if I ask on average how many days she chartered per year? Not sure if names are taboo but would really like to know who the charter company was (if allowed on this forum)? All this info is greatly appreciated as we are very close to buying at the moment, thank you!
Sorry for the delayed response, was out of cell coverage...

All dollar figures were for the calendar year 2014 only. Our dockage and insurance was about $13K for that year. Our gross expenses were about $50K and our gross revenue was almost $70K. I don't have a simple way to figure the number of days chartered. Each statement gives me a date range of charters. There's also the complexity of calculating the "cut" of the charter, if the charter was through a brokerage then that reduced our "cut" but if we referred the charter to the company it increased our "cut".
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Old 06-09-2016, 10:13   #15
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Re: 40' BVI's Charter Cat -Cost of Maintenance

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Originally Posted by louielouie View Post
We're planning on Conch, we chartered with them over the winter and we were very impressed with their operation. The unknowns are how many weeks a 40' cat will actually charter and the maintenance cost per year. On another forum I've had several experienced people mention 20K -25K p.y. for maintenance which I'm hoping is high.
I think $20K - $25K is pretty reasonable. In the numbers I reported above (which was for one year) included many charter-related costs. There were turn fees, hull inspections, dingy & outboard rental, etc. These costs were directly influenced by the number of charters so in a slow year the costs would be lower.
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