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Old 01-01-2016, 09:26   #16
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Boat: Looking to buy a catamaran, approximately 40 ft
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Re: What condition is a boat in, after five years of chartering?

I am also looking to buy, trying to learn more about boats and what I want. I agree with other replies - sail as much as you can on as many different boats as possible. Make lists of questions you have and try to find sailing opportunities that will help answer. I am also pretty focused on cats, but I will spend some time on at least a couple monos that would be on my list if I did not go with a cat. The monos would be longer than the cat as I'd be looking for comparable space and it seems to me that for $xx you can get a longer mono (in general, but there are many variables).

I would probably not buy and put in charter mostly because your preferences are likely to change over the 5 charter years. I don't know the economic details, but, if it were me, I doubt I would save enough to make the "lock in" worth it (compared to buying a well surveyed ex-charter at that time). If you do decide to buy ex-charter, think about bringing in your own surveyor, someone who mostly does business in other locations. You don't want a surveyor who is concerned about what it will do to his business if he/she is tough on the charter company.

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Old 01-01-2016, 09:55   #17
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Re: What condition is a boat in, after five years of chartering?

Every time I read postings about charter business, as someone who has been in this business, ı start laughing..
Let's start with 9 % return, simply impossible. I have seen boats achieving 7-8 % but very rare. The only way is to ignore the routine maintenance but then in 5 years you get a wreck with no second hand value. That's probably why ex charter boats have such a bad reputation. I personaly don't guarantee any return to anybody but I guarantee that the boat after 5 years would be in such condition that she could be sold min. to 50 or 60 % oh her purchase value.
It's true that the weekly maintenance is done in a bit of rush but in off season all the boats are hauled and carefully inspected, some pieces are changed, etc.
We have 30 boats in charter and each year 40-50 private boats that are coming for wintering or refit, various repairs. I can tell you that most of the private boats were in much worse shape than charter boats.

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Old 01-01-2016, 11:02   #18
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Re: What condition is a boat in, after five years of chartering?

Assumptions are based on the word assume. You know that word when broken down is that assumptions can make an 'ass out of u and me'.

You are doing the right things in trying to understand what you are getting yourself into. Yeloya's response is on the button. Charter companies do not buy their own fleets and sale them when the lease is done. There is a fiduciary reason for that. If they could turn a 7-9 percent return on their money they wouldn't need suckers to buy their fleets for them.

Boats, like private jets, are not only status symbols to some people they are very seductive. They have this power to lure you into the hinterlands of our minds where we muss, ponder, dream away, and slake our thirst for escape from the realities of life. I am very prone to that sickness.

Sit with an accountant for awhile. Pay him a couple of hundred dollars to analyze what they are proposing. Ask someone who has a boat in a charter fleet to reveal the purchase price, the funds returned from rental, the fees involved with chartering, and the exit price (worth of the boat), and what sales price they got when they sold it (ask how much money they had to put in to restore it to saleable price).

Keep in mind that the advice offered to you is good. Keep your mind open and do not settle in on one boat. Try monos, cats, or tris. There are so many boats available in so many different cruising areas. When the time comes to plunk your cash down you will be able to find a boat that was well maintained. As your knowledge and experience grow you will have a much better idea what is doable and better fits your ideas what is needed to enjoy your "new life".
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Old 01-01-2016, 11:44   #19
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Re: What condition is a boat in, after five years of chartering?

Its like buying a car & giving it to Hertz for a few years. It will be well used, but usually decently maintained. We chartered from Footloose, which gets the older Moorings & Sunsail boats, & it was in just as good condition as some of the Moorings boats we chartered. Like some people have mentioned , if you use the charter company for all of your vacations, the costs look very attractive. We looked at it hard, but in the end, bought our own new 42' monohull.
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Old 01-01-2016, 12:15   #20
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Re: What condition is a boat in, after five years of chartering?

Stop and think, what does the charter co. Want to do? They want to keep the boat Sailing and making money! If it's not in good shape it's not out earning. When they move it They need it it in good shape to get buyers. Private owners may do little or nothing to Assure the boat is right! You may be better off With a former charter boat!
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Old 01-01-2016, 12:16   #21
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Re: What condition is a boat in, after five years of chartering?

I'd be curious how this compares to simply buying the boat outright after charter.

Remember also the future value of your money.
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Old 01-01-2016, 13:22   #22
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Re: What condition is a boat in, after five years of chartering?

In our case we bought a Beneteau 40 and put it in charter service with The Moorings (they designated it M405) in Grenada. After four/five years, it was mustered out. At that time it was in excellent condition--the oil had been changed on schedule, rigging tuned as needed, etc. Probably maintained better than many owners would do. We then gave it to another charter service for a couple of years, with less than stellar maintenance, but still OK. We had applied all excess income while with The Moorings to pay down the loan, so we were able to pay off the loan balance when we sold it a couple of years later. So I guess the answer is, it depends on the charter operator, and probably the base, too. Yes, charter with the company and at the base you have in mind, and talk with the maintenance people.

Good luck!

Bob Divine
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Old 01-01-2016, 14:10   #23
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Re: What condition is a boat in, after five years of chartering?

I was shlepping around Florida last year and put together a spreadsheet that compared different approaches for 12yrs. I compared moorings, sailtime, owner, partial member. Each has its merits and still couldn't make up my mind very easily, but did decide to pursue ownership.
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Old 01-01-2016, 14:48   #24
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Re: What condition is a boat in, after five years of chartering?

Originally Posted by lesterbutch View Post
Private owners may do little or nothing to Assure the boat is right! You may be better off With a former charter boat!
Wow. That's what you'll be advocating when you sell your boat?

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Old 01-01-2016, 17:01   #25
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Re: What condition is a boat in, after five years of chartering?

I have a boat in the largest charter fleet in Vancouver for the last 4 years and I am generally impressed with the maintenance that has been performed on my boat.
There may be a bit of quick turn around in the summer when there is high demand on the time, however if not completely fixed then it is usually looked at again later when there is time.
Lots of time in the winter months when the mechanics have time on their hands.
If they need extra help there are usually good trades available and they do call on them.
I know as I get the bill.
The problem with the charter boats is you can't personalize them.
They are like taking a different rental car home every day.
When I want to use it I have to take ALL of my stuff down to the boat.
Everything from sailing boots to salt and pepper.
They even remove my hand cream if I leave it behind and sunglasses.

I would have a good survey done as you would any other boat but I would have no additional concerns about buying a boat that has been chartered.
They are certainly kept up to date with all the safety equipment which I would challenge with a private sale boat.
If you are looking at a Mexican or Caribbean charter company then that could be a different matter but up here in the PNW charter companies have a reputation to maintain and they are very keen to do that.
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Old 02-01-2016, 03:22   #26
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Re: What condition is a boat in, after five years of chartering?

Wow - you have generated some interest. 10 years charter boat operation in Whitsunday Islands & working for many other commercial charter outfits too. As competition builds the 30% $$ allocation Charter Co's put to marketing tend to climb at the expense of maintenance - especially preventative. This results in boats being patched up and big ticket care items being overlooked which has long term consequences for the investor. Boat/equipment manufacturers also reduce or void warranties for charter ops. However, I ran a successful business for 5 years as a private contractor responsible for the operational component only of chartering - here the investor had the confidence of dealing with just me. I'd say with confidence my ex-charter vessels were in top order with the benefit of full survey specs. So there is no across the board principal here - depends on reputations and business model. Makes for interesting research. My advice talk to the manual labour staff/tradespersons, not the carter Co. managers/owners.
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Old 02-01-2016, 09:04   #27
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Re: What condition is a boat in, after five years of chartering?

I am also studying this issue, with a mind towards buying a cat within the next year. I raced offshore sailboats for decades, and have spent lots of time working with fiberglass and having all kinds of stuff repaired.

I haven't sailed on a Gemini, but I have had 4 charters on Leopards. As best as I can see, everything important on a Leopard seems nicely done, and overbuilt, except for little cosmetic things like the fitting the shower heads attach to that pull right out of the head wall with very pressure. Chainplates, bulkheads...critical elements that significantly impact the safety of the boat and crew, seem well thought out, and fairly bulletproof. I think it's reasonable to assume that a qualified surveyor will discover major issues that need to be addressed regarding the hull and gelcoat.

I'm going to assume that items like generators, A/C, and engines will be issues, and will need to be repaired/replaced, so I'm going to budget accordingly. Navigational electronics shouldn't be impacted by charter use, so they'll have their normal useful lifespans. Sails will probably also need to be replaced.

I've also been studying the mathematics of the depreciation of a new boat vs the tax advantages accrued by buying a new boat and putting it into charter, and I just don't think I want to endure the depreciation. It does increasingly look like I can get some of the same benefits by buying a used cat out of charter, putting it into a lower tier charter program for a year or two, and then taking it out, but I'm going to let my CPA make that call.
I'm also going to be looking at FP's...there seems to be some disagreement on the forums as to their relative durability vis-a-vis Leopards, but I'll only be looking at newer ones, and at first glance they appear to be well built also.
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Old 03-01-2016, 06:38   #28
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Re: What condition is a boat in, after five years of chartering?

My DH and I just retired and purchased a used monohull. Wish we had done it 5 years earlier. Unless you really love your job 😉 consider cashing in that Roth and buying a smaller boat and retiring now. In five years the housing market may tank again and you may not get the money you want for your home and your sailing dream may not be realizable. Just my opinion - recognizing now we should have done this years ago. Not getting any younger ya know!
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Old 03-01-2016, 07:48   #29
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Re: What condition is a boat in, after five years of chartering?

I think you are making many assumptions. Where there are many variables one cannot get a reasonably reliable chance at guessing the outcome. The range of possible outcomes, so to say, is just too wild.

As for charter boats after 5 years of charter, they are in retirement condition. That's why charter companies retire them. It is not a zero game and someone will lose. Charter companies are well thought out business plans and they are not likely the ones to lose.

So, in a pill, at your age, when it is no longer the game of getting huge returns but more of not letting go what you have managed to collect: stick to your guns and, if anything, structure your basket so that should you still think of retiring to a boat in 5 or 10 years, you could do so without (e.g. tax) penalties. Then decide if and what to buy when you get there.

The market is FULL of all sorts of boats, do not worry. If you want a boat, you have pretty unlimited choice of styles, qualities and sizes to chose from. Do not over-plan this part yet. Just keep on grinding and make sure you have good health so that should the world still be as we know it today, you can actually get yourself a boat and go sailing or/and cruising.

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Old 04-01-2016, 05:04   #30
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Re: What condition is a boat in, after five years of chartering?

The boats that I've chartered on that were made for the charter trade appeared to be made to a much lower standard than those made for private owners. I believe it was a Beneteau that we chartered last and the settees appeared to be made with particlboard. I own a cabinet shop and have replaced most of the cabinetry on my old 79 ketch so I'm pretty good judge of building materials and I was shocked. It almost appeared as though a complete refit was standard.
I believe the person who said the leaseback/charter deal is only valid if you plan on using that ownership to charter anywhere in the world at a discount rate. When I looked into the deal myself I was told that is what most charter boat owners do: they own the boat but sell it immediately and buy a new one when the 5 years is up.
Do your homework and buy a good, solid used boat from one of us guys who lavish way too much time and money on their boat until they age out of the lifestyle!
Find a boat that's been loved, not sailed by strangers.

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