Cruisers Forum

Join CruisersForum Today

Thread Tools Rate Thread Display Modes
Old 26-01-2016, 10:54   #1
Registered User

Join Date: Jan 2016
Posts: 5
Purchase to charter

I'm considering purchasing a powercat for charter, with the idea of assuming ownership in 5 years when I'm ready to retire. In the meantime, I'd perhaps use the boat for 2-4 weeks per year. Would I be just throwing money into a pit in some tropical location or can I actually make money/earn equity doing this? Is it generally better to buy a new or used boat?

Xenophon1 is offline   Reply With Quote
Old 26-01-2016, 11:05   #2
Registered User

Join Date: Dec 2010
Location: W Carib
Boat: Wildcat 35, Hobie 33
Posts: 8,842
Re: Purchase to charter

At least several threads on this subject already...give them a look.

Boats are depreciating money pits. If they were ultimately profitable then charter companies would own them directly. My 2c from 20+ years involvement in the charter industry as both a charter captain and a boat owner.

You can get some "benefits to owner", but making a profit wont be one of them.

Generally, new boats depreciate more than used boats. Well made, well maintained used boats tend to hit a value floor and hold it for a long time.

belizesailor is offline   Reply With Quote
Old 26-01-2016, 11:21   #3
Registered User

Join Date: Jun 2008
Location: California Coast
Boat: Beneteau Oceanis 331
Posts: 681
Re: Purchase to charter

How much does a new boat cost? How much does a charter company sell their used boats for at the end of 5 years? What is the difference? Is that difference more than, equal to, or less than 2 weeks of chartering times 5 years plus the 5 years of boat payments (mostly interest anyway) that the charter revenue is paying?

Would you buy a new car and let Hertz rent it out for five years and then take whats left of it?
Do charter companies spend less on maintenance than an actual owner would? Do they spend even less at the end of the term?
What is the cost of bringing a charter boat up to top condition at the end of 5 years?
Liam Wald is offline   Reply With Quote
Old 26-01-2016, 12:11   #4
Registered User

Join Date: Jan 2015
Location: Seattle
Boat: '76 Bristol 27
Posts: 174
Re: Purchase to charter

Originally Posted by Liam Wald View Post
What is the cost of bringing a charter boat up to top condition at the end of 5 years?
That is a question I've wondered for quite some time
chowdan is offline   Reply With Quote
Old 26-01-2016, 15:14   #5
Registered User
David Hughes's Avatar

Join Date: Sep 2015
Location: Atlanta, GA and Cape Coral, FL
Boat: 2009 Leopard 37 Powercat
Posts: 154
Re: Purchase to charter

I bought a 2009 Leopard 372 powercat at its 5 year departure point from The Moorings. Boat was $450k new. I bought for $230K. It took $25K (all work done by pros, not DIY) to bring it back to very high quality.

I'm chartering it out now at Southwest Florida Yachts in Cape Coral. It only made sense for me because of the large Section 179 tax deduction of a boat business LLC, whereby the whole purchase price and capital upgrades were written off against my other sources of income. Those tax savings became the "kitty" by which to mostly fund the negative cash flow each year. I have found that I only need to fund about 2 weeks of my old charter costs but now am using the boat for 4-5 weeks.

In my case this was a winning situation, albeit only 7 months into it. I don't see anyway that a one boat business would ever generate even break even cash flow. After 5 years I should be able to sell and walk away without being upside down. I have very detailed spreadsheets on all the income/ expense/ tax calculations if someone is seriously interested.

Sent from my iPhone using Cruisers Sailing Forum
David Hughes is offline   Reply With Quote
Old 27-01-2016, 11:21   #6
Registered User

Join Date: Jan 2016
Posts: 5
Re: Purchase to charter

Thanks for the info. David, I'd love to see those spreadsheets. Anyway you can email those to me? Thanks.
Xenophon1 is offline   Reply With Quote
Old 28-01-2016, 08:39   #7
Registered User

Join Date: Aug 2015
Location: Tortola, BVI
Boat: 2017 Lagoon 42
Posts: 121
Re: Purchase to charter

Only makes sense based on using the boat and hoping to come close to breaking even on actual money side. If not going to be using it more than 2 weeks or so a year, then stay far away. As the timeline approaches where you will be able to start using it more, reconsider and look for owners, who for various reasons (such as health/finances/divorce), want to sell there 3-5 year old boat. Those boats may be able to come closer to being in good shape vs price. The biggest depreciation of a boat is on the second day that the boat is owned. And we all know what the 2 happiest days of boat ownership are.

DeepCut is offline   Reply With Quote

charter, purchase

Thread Tools
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Foreign Boat Purchase john g Rules of the Road, Regulations & Red Tape 18 10-10-2015 01:17
Charter....Purchase by the Berth beiland Other 0 06-01-2012 09:06
Looking to Charter, then Purchase, a Cruising Catamaran David M Multihull Sailboats 36 05-09-2009 14:00
Wanted to purchase or charter catamaran in Caribbean 1stspitfire Meets & Greets 2 02-01-2009 13:27
I need advice for a first purchase MrShankmmz Monohull Sailboats 34 16-03-2007 19:39

Copyright 2002- Social Knowledge, LLC All Rights Reserved.

All times are GMT -7. The time now is 23:08.

Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.
Social Knowledge Networks
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.

ShowCase vBulletin Plugins by Drive Thru Online, Inc.