November 6th, 2008 
admin Yacht Charter Time-Share – A Verdict on the Scheme
By John Routledge
In five years, you could sail 2,500 miles in 12 beautiful cruising grounds across the world. You could sail 11 different types of boat – and not do a single piece of maintenance! The key to this sailors’ dream might be signing up for an ownership scheme.
Yacht charter
Photo: wwp.greenwichmeantime.co.uk
Look at taking beginner’s keelboat sailing courses and then have a look at your options…
Under an ownership scheme, the company charters your yacht for five and a half years (six seasons), and during this time you get a percentage of the charter income. You are of course also entitled to a number of weeks sailing each year – either on your own boat or on an equivalent one anywhere in the world, which includes the most popular cruising grounds in the world.
So why join the scheme? You can a) spend holidays sailing in Turkey and the Greek Islands, b) develop your sailing skills, c) explore the Med and decide where you want to base the boat long-term, and d) purchase the boat over time.
There are various ownership programmes. The basic economics are similar: the company charters the yacht and provides you with an income that roughly covers the repayments on an 80% marine mortgage on the yacht. The major difference is the number of days sailing (and the places you can go). Its important to decide on what you want before joining one of these programmes.
Sunsail and The Moorings give you sailing all around the world, but you are limited to two yacht manufacturers with charter company standard specifications. Top Yacht and the Sailtime schemes cater for single-location sailing (Turkey and the UK), but you can choose the specification and, with Top Yacht, you can choose the yacht manufacturer. Sailtime’s programme, for example, is targeted at the typical UK sailing pattern – weekends, overnights and channel hopping.
Unlike a property mortgage, the monthly repayments on a loan are fixed, and any variation in interest rates results in either extending or shortening the repayment period. A fixed monthly repayment certainly helps budgeting, and over the period of the contract, income from chartering more or less funds the repayments. Costs for holidays, therefore, are air fares, provisioning and restaurants.
WHAT HAPPENS AT THE END OF THE CONTRACT?
A contract often has an additional week at the end of the contract to inspect the yacht before accepting her. Get any defects put right, apart from reasonable wear and tear.
A major concern is the condition of the boat. Do have surveys. It MAY save you a big bill and it WILL give you peace of mind. Be there during the survey. Follow the surveyor around, ask questions, take notes – unless you’re already an expert, you’ll learn a lot. Putting the boat in slings for an hour is half the price of a full haul-out – useful if she is going back in the water anyway.
Be systematic – walk the boat from bow to stern and try everything. You will probably be faced with a combination of repair jobs and missing inventory items. Therefore, don’t plan to sail off into the sunset at the end of the week. There could be lots of boats going through’end of contract’ at the end of the season – there will inevitably be a list ofjobs to be done over the winter.
http://www.boatpartsdatabase.com has lots of resources for the boating trade and public alike.
The web is a vast source of information. Boatpartsdatabase collects the leisure marine industry into one huge database of contacts. leisure marine articles give helpful advice and product info.
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OK – I am gung ho for the charter fleet programs – save one issue. They make sense ONLY if you value the charter time – and I do not have 7-12 weeks available to spend sailing every year. So, it seems cheaper to simply buy a used boat when I am ready to retire.
Then I got to thinking – if I could keep 2 weeks of charter time every year only, I would need only a 1/4 ownership of the deal. Moorings extends owner privileges to no more then 4 families. What a great approach. I pay 1/4 of the cost of the boat, do the accounting and legal paperwork for 3 others, keep 1/4 of the sailing time points – then after 5 years, buy the partners out (or not, if they wish) and sail away.
So, I have solicited all my friends – no takers. Most sail, but none share my mindless enthusiasm.
If you read this and are interested, I can provide details – basically, you end up with 2 weeks a year for less than 1/2 the normal Moorings charter cost – and you make a 5 year commitment. e-mail me at wsmith@wellspringwireless.com
OK – I am gung ho for the charter fleet programs – save one issue. They make sense ONLY if you value the charter time – and I do not have 7-12 weeks available to spend sailing every year. So, it seems cheaper to simply buy a used boat when I am ready to retire.
Then I got to thinking – if I could keep 2 weeks of charter time every year only, I would need only a 1/4 ownership of the deal. Moorings extends owner privileges to no more then 4 families. What a great approach. I pay 1/4 of the cost of the boat, do the accounting and legal paperwork for 3 others, keep 1/4 of the sailing time points – then after 5 years, buy the partners out (or not, if they wish) and sail away.
So, I have solicited all my friends – no takers. Most sail, but none share my mindless enthusiasm.
If you read this and are interested, I can provide details – basically, you end up with 2 weeks a year for less than 1/2 the normal Moorings charter cost – and you make a 5 year commitment. e-mail me at wsmith@wellspringwireless.com
I’m not so sure about this. Sunsail sent me some numbers for a Sunsail 44i(nice boat). Purchase price $289K. I could put $72K down and take a 15 year 6.25% loan. My monthly payment is %1,858 a month, but I get $2168 a month of guaranteed charter income. Fine, the difference puts 18,600 more in my pocket over the 5 year charter period. BUT, I still owe $165K on the loan after 5 years. Could I sell this 5 year old boat for $165,000 – $18,600 = $146K? Maybe, maybe not. Call it a wash. I got 6-10 weeks sailing time in exchange for tying up my $72K down payment.
Now I could have put that $72K down payment in T-bills and made about $11K over the 5 years. Or, I could have put the money in a simple money market account and joined my local boat club ($2500/year) and spent $13K a year on tropical charters each year for five years…and come out the same as above. Lots more sailing time, and no risky boat to sell at the end.
Someone please tell me I’m wrong. I don’t have $72K anyway, so…
I’m not so sure about this. Sunsail sent me some numbers for a Sunsail 44i(nice boat). Purchase price $289K. I could put $72K down and take a 15 year 6.25% loan. My monthly payment is %1,858 a month, but I get $2168 a month of guaranteed charter income. Fine, the difference puts 18,600 more in my pocket over the 5 year charter period. BUT, I still owe $165K on the loan after 5 years. Could I sell this 5 year old boat for $165,000 – $18,600 = $146K? Maybe, maybe not. Call it a wash. I got 6-10 weeks sailing time in exchange for tying up my $72K down payment.
Now I could have put that $72K down payment in T-bills and made about $11K over the 5 years. Or, I could have put the money in a simple money market account and joined my local boat club ($2500/year) and spent $13K a year on tropical charters each year for five years…and come out the same as above. Lots more sailing time, and no risky boat to sell at the end.
Someone please tell me I’m wrong. I don’t have $72K anyway, so…