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Old 23-02-2012, 00:44   #1
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Can We Afford a Catamaran ?

Hi everyone! I am new to this forum but thought it would be the perfect place to find answers to the questions I can't find anywhere else. We just got back from the Strictly Sail show in Miami this past weekend where we got to tour plenty of beautiful catamarans and even got to sail one in a beginners course for the first time. I've been getting books at the library and searching online, and it just seems impossible to get the answers we're looking for.

Here is our dream that we are trying to see how realistic it is for us: We want to buy a catamaran, likely a used one to be more affordable, sell our cars and move out of the house we are renting and make the boat our new home. Since it will be our only place of residence, we see it as being like buying a house. And better than a house, we can live on it AND make money by doing day and week long charters around FL and the Caribbean.

If you can't answer all the questions, just answer whichever ones you can. Thanks!

Question 1: I've read somewhere that you can't charter Catamarans based in the US unless they were made in the US. Is that true? Most seem to be made elsewhere so that seems like a ridiculous rule.

Question 2: We are in our mid 20s so obviously we don't have the cash to buy a boat outright. The only way it seems like a realistic alternative to buying a house is if you can make similar payments on it as a house. ie smaller payments over 20 or 30 years instead of big payments over 5 or 10 years. Is that possible?

Question 3: I've read you need to pull the boat out of the water yearly and have it resurfaced or something. Is that true? And including that, what kind of maintenance costs can we expect to budget for?

Question 4: About how much does insurance on a catamaran cost?

I have a ton of other questions but this mostly covers the costs questions and is long enough. Thanks everyone!
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Old 23-02-2012, 01:02   #2
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Re: Can we afford a catamaran?

One issue you have not considered is that you need a marine skippers qualification to run charters.(take paying passengers)

Can't speak for the states in detail but in Australia one needs 4 years seatime and pass the relevant marine examinations to achieve such qualifications.

I am sure you will recieve replies to many of the issues mentioned.

Q1 would not be an issue although there will be survey requirements to bring any vessel up to charter requirements of the juristriction.

Good luck
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Old 23-02-2012, 02:02   #3
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Re: Can we afford a catamaran?

Quote:
Originally Posted by ColonelK View Post
Question 3: I've read you need to pull the boat out of the water yearly and have it resurfaced or something. Is that true? And including that, what kind of maintenance costs can we expect to budget for?

If you don't know what bottom paint is then i guess your maintenance costs are going to be higher than the average live aboard/cruiser
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Old 23-02-2012, 03:25   #4
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Re: Can we afford a catamaran?

Short Answer: No.
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Old 23-02-2012, 04:57   #5
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Re: Can we afford a catamaran ?

Welcome aboard, Colonel K! Q1: Never heard of that. You would need a Captains License ("six-pack") to run a charter, and you need experience to get the license, plus you will have get an insurance policy that covers chartering the vessel, which is a whole different animal than regular insurance. Q2: Yes, you can get a mortgage on a boat, if you can qualify. Q3: You'll need to paint the bottom regularly, but not necessarily yearly. Maintenance costs will depend mostly on the size, systems and condition of the boat. Q4: Insurance will depend on a lot of factors: the vessel's worth, where and when you sail, your experience level. As noted above, Insurance will be much more if it covers chartering the boat.Hope this helps.
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Old 23-02-2012, 05:12   #6
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You do indeed need a licensed OUPV "6pack" capt to take paying guests in the us. 6 pack meaning 6 paying guests . It would take you a year of being on the water every day and then sea school or online and lots of tests incl drug and background to even consider your OUPV license. Insurance is higher on charter boats. Guessing 150-200 month. Every two years haul out bottom paint so set aside another 200-300 month for maintain and upkeep. Slip fees near Miami or the keys guessing for a cat large enough to charter im guessing 1000-1500 month then yes they do 20-year notes on newer boats so you might get your payment down to 1500 month or so. So unless you have 4-5k month to spend on just the boat expenses and more to pay a capt. Advertising etc you would have to have it booked most weeks at a dec rate to make ends meet. Never heard of the us built only rule as there a tons of foreign built boats in service In the us. There was a power sail cat think it was a kit cat for sale in the miami few months ago. It was a fully operational charter company with lots of the year booked already. Think they were asking 200k inc the 40' or so cat. Not saying it can't be done but you better have some very deep pockets.also consider this paying overnight charters can be very fussy picky bitchey whiney demanding drunk stupid and a pain in the butt. Sounds fun having guests filling your boat week in and week out?
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Old 23-02-2012, 06:06   #7
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Re: Can we afford a catamaran ?

The reality is...

Getting money for a boat is always difficult, but right now it's like being flayed alive. It's so very not like purchasing a house, as far as the banks are concerned.

You'll need to be liquid for about 2x the value of any boat you're interested in, and have 20% to put down. And your credit rating in the very high numbers

That said, it is a buyer's market. If you've got money, there are hellacious deals out there.

You can, though, look into charter-purchase (buy the boat, have it in charter ergo Moorings etc), but you won't be able to live on it. Alternatively, you could consider an older boat, but then the banks aren't interested in loaning on anything older than 15 years. A smaller boat, maybe, but then you won't have the space to charter. People are building their own boats, but that's rather painful. Alternatively you can purchase a part-finished boat.

Feelin' the pain myself, good luck with it.

PS. Do you have sailing experience?
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Old 23-02-2012, 06:18   #8
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If you don't know about haul outs and bottom paint, I am going to assume you don't have much experience with boats. This means that you have a lot to learn, which men's you have a long time to go to be licensed for charters. Since that seems to be a big part of your financial plan, I am going to say that no, you can not do this at this time.

You may, however, be able to get a much smaller boat in order to get the learning process in motion, with goal of moving aboard and running charters at another stage.
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Old 23-02-2012, 06:48   #9
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Re: Can we afford a catamaran ?

There is that law that only allows US built boats to navigate within US waters. That's why you don't see forign freighters up th Mississppi. The key word is for hire as engages in in commerce. So if you are engaged in business like a charter then that's for hire. If you leave US waters then it gets more open like cruise ships. I see a lot of US built boats advertised that they can qualify for a charter business in the US so this must be the case. Still need that captains license. For private use you don't need any certification at all. Read Bumfuzzles and start at the beginning.
There are cheaper cats and especially tris.
Under $100,000 Multihulls
Just get a cheap boat and live on it.
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Old 23-02-2012, 07:08   #10
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Re: Can we afford a catamaran ?

Lot's of rules and regs and changes ($) required to make the boat comply. This is the doc that covers it all.
http://www.uscg.mil/pvs/docs/UPV%20J...V5%20OCT07.pdf
Rules may be different in USVI.
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Old 23-02-2012, 07:30   #11
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Re: Can we afford a catamaran ?

Quote:
Question 1: I've read somewhere that you can't charter Catamarans based in the US unless they were made in the US. Is that true? Most seem to be made elsewhere so that seems like a ridiculous rule.
What you're referring to is the "Jones Act" which, over the years, has been the focus of many a political debate and to be honest I'm not an expert on that particular subject. I know of many boats that were not built in the US and have been used by charter companies, but whether they were violating the Jones Act or not, I couldn't say.
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Old 23-02-2012, 08:07   #12
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Re: Can we afford a catamaran ?

That's it. USVI is exempt.

Guam, American Samoa, and the Northern Marianas in the Pacific and the U.S. Virgin Islands in the Caribbean are exempt from provisions of the Jones Act because so little shipping goes to those ports that requiring American cabotage would cause hardship.

Merchant Marine Act of 1920 - Wikipedia, the free encyclopedia

I do see US made boats as charterers and offered for sale as a potential charterer. There was a Maine Cat, Manta, and lots of customs. Must be a reason. Are there any FPs or Lagoons being offered as charters in the US?
I believe that boats that fall under the 6-pack rule are not required to be "inspected" For boats that carry more passengers then that requirement must be met. I wonder if that is the difference.
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Old 23-02-2012, 09:54   #13
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Re: Can we afford a catamaran ?

ColonelK, embedded specific answers in your original post below.

I don't want to dampen your enthusiasm, but I have watched many people come and go here in the NW Carib with the same dream.
Boats with this background story liter the Carib (I can think of about half-a-dozen right here in Belize/Guatemala). Like you they typically have little or no experience with boats and therefore do not know how horrendously expensive it is to own and operate a mid-sized boat. Nor do they know the harsh realities of running a single boat charter business -- it all sounds like a dream, but can easily turn into a nightmare.

More specifics below:

Quote:
Originally Posted by ColonelK View Post
Hi everyone! I am new to this forum but thought it would be the perfect place to find answers to the questions I can't find anywhere else. We just got back from the Strictly Sail show in Miami this past weekend where we got to tour plenty of beautiful catamarans and even got to sail one in a beginners course for the first time. I've been getting books at the library and searching online, and it just seems impossible to get the answers we're looking for. Here is our dream that we are trying to see how realistic it is for us: We want to buy a catamaran, likely a used one to be more affordable, sell our cars and move out of the house we are renting and make the boat our new home. Since it will be our only place of residence, we see it as being like buying a house. And better than a house, we can live on it AND make money by doing day and week long charters around FL and the Caribbean.

Quote:
Originally Posted by BelizeSailor
Re boats vs. houses: About the only similarity is that you can live in either one and that's pretty much where the similarities end. A house may appreciate -- a boat won't -- at best it will hold its value. Cost of ownership is much higher for a boat -- a widely accepted anecdotal approximation is 10-15% of appraised value per year (this does not include cost of capital). This has certainly been approximately my experience. Note this does not include any upgrades you make the the boat and most boat owners spend significant sums on upgrades. Money spent on upgrades not only increases your cost of ownership but is just money spent -- you will never get it back -- so be sure you enjoy the upgrades to the fullest. When it come times to sell a boat the best you can realistically hope for is to get your original purchase price back -- all that money that flowed out while you owned it just gone. If you buy a new boat it will depreciate somewhat (but nothing like a car) and then
typically hit a price plateau where it may hold for years, even decades, if well maintained.

Re running charters. I've worked in and around the charter industry since 1994. If a charter boat is sitting at the dock you are losing money. If you want to make a profit in the charter biz then you need to busting your hump 364 days a year. If you get into the charter biz, and are making money at it, then you will find yourself doing "back-to-back" charters with
sometimes less than 24 hour turnaround time in between (after a few weeks straight of that your dream may seem more like a nightmare). And, at best, you will just make a modest income after boat and charter expenses.

Re venues (FL and the Carib). Assuming you are US citizens then you can pretty easily run charters in the US or US territories (once you get an appropriate USCG License and other other legal matters taken care of). However, you can't legitimately just pop into another country and start doing business. You can of course, as some people do, run illegal charters. But, not only do you risk having your boat impounded (which your insurance won't cover) but operating "under the radar" significantly impedes your ability to make much revenue. Getting set-up to legally run charters in a developing country can be a very frustrating, expensive, and time consuming effort (be there, done that).
If you can't answer all the questions, just answer whichever ones you can. Thanks!

Question 1: I've read somewhere that you can't charter Catamarans based in the US unless they were made in the US. Is that true? Most seem to be made elsewhere so that seems like a ridiculous rule.

Quote:
Originally Posted by BelizeSailor
To operate a foreign vessel (catamaran or not) commercially in US waters you must get an MRAD waiver. There is a waiver program just for small vessels. The process is not difficult, at least not the last time I did it years ago, but your application can be denied. Denials usually happen because someone else in the charter biz objects. See Small Vessel Waiver Program for more details.
Question 2: We are in our mid 20s so obviously we don't have the cash to buy a boat outright. The only way it seems like a realistic alternative to buying a house is if you can make similar payments on it as a house. ie smaller payments over 20 or 30 years instead of big payments over 5 or 10 years. Is that possible?

Quote:
Originally Posted by BelizeSailor
Sure you can saddle yourself with a boat mortgage and be tethered to a shore-side job to pay it (I know many people who've taken this route and are never going anywhere), but my suggestion is don't burden yourself with a vessel you really cannot afford. To paraphrase Lin & Larry Pardey "Go Simple, Go Small, Go Now". As I said, a boat is almost always a bad financial decision -- burdening yourself with a boat mortgage just makes it worse. Maybe a better idea in today's deeply depressed housing market -- first buy a house at a very favorable price (they can't go much lower in many venues) then sell it at a good profit later when the market recovers (presumabley) and pay cash for an affordable boat that still leaves you with a good "crusing kitty". It is possible to make a really good profit on a house, but highly unlikely to ever make any profit on a boat.
Question 3: I've read you need to pull the boat out of the water yearly and have it resurfaced or something. Is that true? And including that, what kind of maintenance costs can we expect to budget for?

Quote:
Originally Posted by BelizeSailor
Again, expect about 10-15% cost of ownership per year excluding cost of capital (do the math using a typical mid-sized cat cost -- its ugly!). How often you need to paint the bottom depends on the venue and other factors, but typically every 1 to 3 years. There are also other maintenance reasons to haul -- I just dropped about US$2,000 total to just to haul and replace the sail drive bellows -- ouch! And that was only one maintenance item of a long list for this season.
Question 4: About how much does insurance on a catamaran cost?

Quote:
Originally Posted by BelizeSailor
Can vary quite a bit depending upon the value of the boat, navigation waters, type of use, captain/crew credentials, and liability levels, but for commercial use coverage on a typical mid-sized (35-45 ft) cat you can expect about US$4K-6K per year. And, commercial use coverage for mid-sized vessels is getting hard and more expensive to find.
I have a ton of other questions but this mostly covers the costs questions and is long enough. Thanks everyone!
OK, now that I've pissed all over your parade, let me say something positive...you're in your 20's...you presumably have lots of lead time. My suggestion, work at getting yourself into a financial position where you can do this before you get too damn old to enjoy it. Don't saddle yourself with all the typical financial burdens etc if you want to achieve this goal. While doing this build your sailing experience (no you don't need to buy a boat to do this -- in fact it is better that you don't). Take a cruising sabbatical or two along the way.

This is the plan that worked for me, but I literally started with this objective in my 20's, punched out at 40, and now teach sailing and run charters in the NW Carib on a part-time basis. The extra income defrays most of my boat expenses and that's it. I don't have to bust my hump 24x7 just to pay for a boat, and thus actually have lots of time just to enjoy living here and go cruising!

My suggestion is to think through a plan that works for you. Digging yourself a deep hole with a large boat mortgage right up front is probably not an effective plan.
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Old 23-02-2012, 10:29   #14
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Re: Can we afford a catamaran ?

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Originally Posted by Sand crab View Post
That's it. USVI is exempt.

Guam, American Samoa, and the Northern Marianas in the Pacific and the U.S. Virgin Islands in the Caribbean are exempt from provisions of the Jones Act because so little shipping goes to those ports that requiring American cabotage would cause hardship.

Merchant Marine Act of 1920 - Wikipedia, the free encyclopedia

I do see US made boats as charterers and offered for sale as a potential charterer. There was a Maine Cat, Manta, and lots of customs. Must be a reason. Are there any FPs or Lagoons being offered as charters in the US?
I believe that boats that fall under the 6-pack rule are not required to be "inspected" For boats that carry more passengers then that requirement must be met. I wonder if that is the difference.
Note the Jones Act restrictions on foreign built vessels do not apply to "bareboat" charters. A boat can be "rented" to someone and it is not a violation of the related Jones Act provisions. The party renting the boat can then hire a captain under separate contract (provided they do so totally independently of the company from which they chartered the boat) and not be in violation of the Jones Act. However, if it a vessel is used to provide a commercial service (such as any form of captained charter) then it must comply with these Jones Act provisions.

The primary reason this all seems like such a boondoggle where small to mid-sized boats are concerned is that it was not originally written with them in mind -- it was written for the larger commercial shipping industry to protect US ship building. Subsequently, a waiver program was put in place for smaller vessels. See Small Vessel Waiver Program.

Whether the vessel is categorized as an inspected vessel or not, the Jones Act still applies (two separate matters).
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Old 23-02-2012, 10:47   #15
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Re: Can we afford a catamaran ?

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Originally Posted by belizesailor View Post
...Subsequently, a waiver program was put in place for smaller vessels. See Small Vessel Waiver Program.
Excellent info, thanks for sharing.
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