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Old 10-04-2013, 17:37   #1
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Owning a yacht in charter ??

I currently own a boat which has been specced to cross oceans but is probably overkill for leisurely coastal cruising. I can see that after I've ticked off a few big trips, including one planned to the Med, I will probably be content to stick to the East Coast of Australia where I reside. At the boat shows the Whitsunday charter companies promote the idea of buying a yacht to put in their fleet as a business proposition. I'm well aware of the ATO's skepticism about these schemes as a business venture, but it might be a good way to acquire a big cat that will suit me in 5 years time, have it paid for and just cash out of my current boat when I'm ready.

Can anyone else relate their experiences of owning yachts in charter, particularly in the Whitsunday area. How has it worked out for you?
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Old 10-04-2013, 18:17   #2
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Re: Owning a yacht in charter ??

If it was cost effective, charter companies would have bought a fleet of boats. Stay clear from this money-losing proposition. No one ever comes ahead in a charter, except the charter company as their risk is minimal. Mauritz
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Old 10-04-2013, 18:28   #3
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Re: Owning a yacht in charter ??

Quote:
Originally Posted by Teknav View Post
If it was cost effective, charter companies would have bought a fleet of boats. Stay clear from this money-losing proposition. No one ever comes ahead in a charter, except the charter company as their risk is minimal. Mauritz
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Old 10-04-2013, 19:02   #4
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Re: Owning a yacht in charter ??

While there is some truth to the above, it also comes down to how much you can use the boat. There is plenty of value in owning a charter boat, especially if you intend to keep it and also make use of it while its in the program. We own in moorings and love it and get tremendous value out of it.

Likely one of the biggest reasons the charter companies want owners rather than owning it all themselves is the capital involved. It also allows them to replace the boats every 5 years or so which would be more complicated if they owned them all outright.
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Old 10-04-2013, 19:18   #5
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Re: Owning a yacht in charter ??

A charter boat is not an investment. They make a lot of sense if you use your owner's time. When I worked worked for the ran charter bases I never could understand owners who never used their boats, and was always extremely jealous of the owners who were using all of their owners time.
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Old 10-04-2013, 19:21   #6
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Re: Owning a yacht in charter ??

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Originally Posted by Teknav View Post
If it was cost effective, charter companies would have bought a fleet of boats. Stay clear from this money-losing proposition. No one ever comes ahead in a charter, except the charter company as their risk is minimal. Mauritz
Been around the charter biz in the USA and Carib for many, many years. And, have owned boats in charter. I have never seen an owner (including myself) come out ahead in the end. As said, if it was such a great deal the charter companies would own boats...and not a one of them does.

That said there are some advantages to owning a boat in charter: revenue does help offset expenses, but don't believe the fantasy that it will pay for your boat. Two, depreciation, not sure about your tax laws or situation, but under USA laws the depreciation (for tax purposes) can amount to a nice chunk of change off your tax bill each year. This works out well if you have a high income to offset.

The biggest issue I have seen with boats in charter is maintenance. It is a piece of rental gear and the charter company does not own it...so maintenance tends to suffer.
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Old 10-04-2013, 19:28   #7
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Re: Owning a yacht in charter ??

Well said, FLLC... my barber has chartered for a number of years out of Florida and is thinking of buying a boat and putting her in to the company through which he charters. He would have to have a couple of partners who he has sailed with on several charters before and they are all keen to invest. My advice was if you can fill out owners time with a reputable charter company and plan on the buyout at the end of the vessels charter life you would probably break even. The charter company keeps the boats he has been aboard in pretty good condition so your advice seems sound to me. I will pass it along to him... thx... Phil
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Old 10-04-2013, 19:37   #8
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Re: Owning a yacht in charter ??

With the exception of moorings/sunsail all other charter companies I know about do it on a variable program. Normally a 60/40 split to help cover your dockage, maintenance, haul out, etc etc etc. If I were to consider going into a variable type program that doesn't try to make every transaction a profit center.

In my opinion the best variable type operation down island is Horizon Yacht Charters. Their main goal is running a nice charter operation that makes the experience not only amazing for their guest, but very positive for their owners. Some of the variable companies out there turn everything into a profit center (charge the owner of the boat US mechanic rates, but pay their mechanics basic EC salaries...)
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Old 10-05-2013, 08:49   #9
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Re: Owning a yacht in charter ??

Some great comments you've received. Many of the yacht owners use charters to offset operating expenses, and if you own a 175' super yachts and operating costs are $2 million a year I don't think you are going to make a profit from chartering. Any yacht bacht broker worth their salt should be working for their client finding the best boats and crews for them and with the yacht agents (managers) and owners to make sure the charter experience for the client will create memories for a lifetime.
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Old 10-05-2013, 17:34   #10
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Re: Owning a yacht in charter ??

We are very happy with our experiences having our Lagoon 400 in charter for two and a half years and now our Lagoon 450 in charter at SailCaribe. I am very happy with their maintenance, we had our choice of profit share or set payment amount, and they are all around great to work with.


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