Moorings Lease Arrangement

[BWB75]

I, too, would love to hear some specific, even anedotal, information. For example, how do the program boat prices compare to buying a similar vessel privately? For owners who chose to sell at the conclusion of the lease, have the boats sold at prices near the initial estimates? Are some companies willing to offer boats a little more, "your way" rather than just max berths + max heads type layouts?

It seems like a lease program could be great for some working people - military for example - who move often and worldwide and could benefit from a few weeks sailing, where ever they happen to be...

[Cotemar]

Originally Posted by BWB75

I, too, would love to hear some specific, even anedotal, information. For example, how do the program boat prices compare to buying a similar vessel privately? For owners who chose to sell at the conclusion of the lease, have the boats sold at prices near the initial estimates? Are some companies willing to offer boats a little more, "your way" rather than just max berths + max heads type layouts?

It seems like a lease program could be great for some working people - military for example - who move often and worldwide and could benefit from a few weeks sailing, where ever they happen to be...

This shows an example of price and resell.

http://www.cruisersforum.com/forums/...ml#post1139948

[BWB75]

Thanks - I reviewed that post. However, the questions I asked were not about the seller's projections, but about the real life experiences of people who have tried it.

For example, a Beneteau 34 costs about 200k through a lease company. 20k of that is commissioning. If you went to the local yacht dealer on a good day, would you still pay the full retail and 20k commissioning?

Also for example, the boat will allegedly be worth 100k when you go to sell. You will have spent 50k to buy the boat and enjoyed approximately 80k worth of charter activity. Now you still owe 100k for the boat. The agreement does not include the seller buying the boat back for the estimated resale value from 5 years ago... how realistic was that estimate when it actually came time to assume the note or sell the boat?

I have seriously considered an agreement such as the example presented (different company but similar terms and even format). I, and perhaps others, would like to hear if real life played out like the numbers on the lease agreement.

[denverd0n]

I'd be interested in real-world examples, too, especially of someone whose boat came off charter in the past 5 years or so (in other words, during this time of depressed boat sales prices). My guess is that the estimate that the charter companies quote, when they are trying to lure you into their deal, is quite optimistic. But I am more than willing to be proven wrong.

[nautical62]

Originally Posted by dergon

Hi all -

Performing a bit of necromancy on this thread because I am also trying to find detailed information about the Moornings ownership program.

I am hopeful that some of the people "in the know" would be willing to share extensive details in the public forum rather than taking it to PMs.

I think this is a topic in which there is a great deal of interest and a dirth of information from participants.

Happy to share here - what specifically would you like to know?

Also might want to send me a PM, just so I know to come back here.

[BWB75]

PM sent.

[nautical62]

Originally Posted by BWB75

PM sent.

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, insurance 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.

[dergon]

Thanks for that.

Really good info. I'm still a few years away from backing off work enough that 4+ weeks of cruising + other travel vacation would be a reality.

I really like the logical presentation of the info here though ..... really helps tighten up some concepts in my brain,

[BWB75]

Thank you, Nautical62, for your specific and informative answer. This answers many questions. I am impressed with the wisdom of your philosophy of having the boat paid off by the end of the program. Also very important is your point about the lack of cost sharing with a charter management program. (Even if I intended to ask my friends to pay their way at the outside, I know I would never really do that.)

The bottom line appears to be that the arrangement itself is likely to work as promised, but that the real value depends on the specific circumstances of the person, with special emphasis on whether he or she really would charter sufficiently to warrant the investment.

Happy sailing!

BWB

[TEE]

I had a boat with the Moorings a few years ago. It was based in Tortola. I think a wiser choice for me at least when I want to use a bareboat, is to just rent one. If I wanted to buy a catamaran, I wouldn't buy one through the Moorings. What I would do would be go to South Africa, buy one from the manufacturer, and hire a skipper to deliver it to the US at a substantial savings, or sail it back myself. Since my experience with Moorings was from 2000 - 2005, and Moorings was under different ownership then than it is now, I don't think my negative views of the experience of owning one of their boats would necessarily be fairly cast on present management. I would not, however, opine that their program is a good one for the owners without knowing how many, if any owners, actually buy a second boat from them after having owned a prior boat. As far as the rental experience is concerned, I have found the people at Moorings bases over the years to be very good at what they do.

[nautical62]

Originally Posted by BWB75

The bottom line appears to be that the arrangement itself is likely to work as promised, but that the real value depends on the specific circumstances of the person, with special emphasis on whether he or she really would charter sufficiently to warrant the investment.

BWB

I would agree, and well stated.

I would also re-emphasize something TEE above said, and that is don't expect a boat, especially a smaller one to easily sell at a charter base at the conclusion of the contract. I think one needs to plan on taking it to keep or sell elsewhere. I'm planning to sail mine back to the U.S. for that very reason.

[Christae]

We are close to closing on a Moorings Cat 4800 and I have an owner usage question for anyone who knows about the program.

Does Moorings report an owners usage time as income to the owner??

I know the monthly payments I would recieve are considered income but
I am leary of having to claim income on my usage time so that Moorings can report a loss.

I would appreciate any comment from someone (preferrably a current owner). I don't want to get caught off guard with this.

Thanks

[maytrix]

In the guaranteed program, it wouldn't matter since you'd get the same check every month. You wouldn't even see the value of the charter time, just the last name and number of days - at least that's how ours is.

[Christae]

Okay great Rhank you. That is what I was hoping to hear. Better to be safe than sorry. Especially when the value of my usage would be close to the price of the boat.

[nautical62]

Your usage time is simply sailing your own boat. It's not a waiver of a charter fee.