Originally Posted by BWB75
Regarding your questions:
The possible scenarios they give often use a 15-year loan and show a positive monthly cash flow. Personally, given that a boat for me is a luxury that will depreciate, I'd never take out a loan that long. In the case of a charter-owner arrangement, I'd prefer to structure the loan so I own the boat outright at the end of the program. Impossible to be upside down that way, no matter how bad the market is. (I respect some people are happy to buy boats having little equity in them, but that's not my philosophy)
My guess is my boat will be valued at less than their projection, but I think this is because of what the boat market has done over the past 6-7 years. I don't think they were being overly optimistic.
No hidden costs. They paid for all maintenance
, all repairs
, all insurance
and all dockage as promised. I paid the owner's fee/ turn around fee as stipulated. The boat has been used hard, but I feel they have maintained it well.
I've always found it easy to trade
time at other bases, but realize their seasonal requirements may come into play. I tend to trade
during low season.
Personally, I would not buy into a charter management program just to own the boat in 5 years. If that's your primary objective, just buy a 5-year old boat in 5 years. I'd buy into the program because you want to "charter" 4+ weeks per year and because you are happy to own the boat at the end.
Potential risks or problems (or negatives) I see with buying into a charter management program:
1. You are committed. You are essentially paying for use regardless of whether or not you use that allocated use or don't value it. Am I really happier "chartering" for 5 weeks per year instead of actually chartering for 2? Other vacation
options are now off the table because I'm invested in this.
2. For good and bad you own the boat at the end. If at the end of the contract
you start paying slip fees
and a delivery
fee, that could add up. In my case, many potential buyers and not going to travel to the BVIs to shop for 50K boats. Obviously this would be true of any boat you own, not just an ex-charter boat.
3. You face all the negatives that come with chartering vs. private ownership
. You can't go sit on the boat any evening you wish, or just take it out for a day sail. You can't just decide to go cruising on it for 3 months.
4. Compared to chartering, you are bearing all the costs yourself as the owner. If I was chartering with friends, we'd be splitting the costs evenly. As an owner, I'm largely paying for everyone that sails
with me. That's irrelevant if it's just you and family
, but for me sailing with friends, that's a big difference.
One thing that has changed the comparison to owning since I got into the program is the change in boat prices. When I started 6 years ago, one could buy one of their boats for under 120K. Now it's more like 180K. (or more) During that same time, used boat
prices have dropped notably. Depending on one's situation, that may make buying a used boat
, less expensively comparatively more appealing.
I think owning a charter management boat you will use 5 weeks per year or more will be much cheaper than chartering a similar boat for that same time. But if chartering 5 weeks per year is not what you would otherwise do, the comparison gets much more complex.