Buy a boat for free??

[Dave_Snelson]

I have been looking at an advert in MBY which is offering Trader boats on a deal that is somewhat similar to Sunsail. Basically you buy the boat and give it to "TraderMed" to charter for a number of years, and provided you don't want to see too much of it, you can cover your costs and get the boat paid in 2-4 years. TraderMed claim that they can charter your vessel and easily recoup loan, marina, servicing, and other associated costs. This may be the case, and in no way am I doing them down, as I have no experience on these matters - and thats the point of this post.

Now this sounded, at first glance, like it would be OK for someone like me, who already owns a boat outright and therefore wouldn't mind investing in such a scheme, and awaiting its "maturity" and then using the proceeds to upgrade for my own use.

There appear to be spin off benefits in the reclamation of personal tax and VAT.

Once again, oh learned panel, I call upon your advice and experience in these matters. Thanks in advance.

BTW - remember to be careful what you write as we are discussing a viable and operational company here, who undoubtedly will want to protect their reputation.

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[EME]

Dave

A few companies ( associated with manufacturers) run similar schemes - invariably Med-based .. I understand that Sunseeker, Carver and Broom do something similar although I have no idea on the relative merits of each or any comparison betweeen them , but surely you must ask which marque/model charters the most easily ? I am sure there are many get-outs in all the small print around boookability. Not sure what the term is but 2/3 years seems to be the life of a charter vessel from mainstream (you and I ) builders ..

If you go this route you have to ask is this lifestyle or an investment ? I tend towards the latter from what you have written, and then I ask ... so is this the best way to leverage capital/risk? Could I not do better by buying UK or Med property for which there is a bigger market ??

Just a thought from someone who thinks he has explored every cheapo angle !

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[PaulF]

Dave, I am probably being dense here, (no change there then!) but if this is such a deal why doesn't the company do it themselves, or are they using your ace credit rating to further their chartering business with no capital expenditure? You would stand the depreciation, they get the use of a new boat without paying for it.
Maybe they have a few boats themselves but could not raise any more capital. I am sure somebody will enlighten us.

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[Roy]

Dave

I tend to agree with Paul here for the most part. My own view in business matters is : First feeling usually is right and this don't seem right to me. Golden rule of 'Free' is ... When someone offers you something for nothing, the something is usually for them and the nothing is invariably for you.

Ask yourself if they will still be around when the lease ends? Ask to see their latest financial report and future intentions and if you have doubts then stay clear.

<hr width=100% size=1>What does this mean then?

 

[Deleted User YDKXO]

I think they neglect to mention the biggest cost of running a new boat and thats depreciation. How much more money would a shagged out chartered Trader with 1000hrs on the clocks lose compared with a well maintained private one with 200hrs?
I reckon its worth considering some light charter work for your boat if its not being used for long periods as a way of offsetting some running costs but it will never be an investment.
Trader's charter business is just a way of shifting more boats and reaping some charter commission and maintenance charges

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[Peppermint]

Re: Simple principle for simple people

The charter company use your credit to buy the boat.

Charter fees pay the running costs and help you with the re-payments.

Liabilities are then divided on the same footing. They have to try to keep the boat chartered and operational and you pay the HP.

The interesting part of all of these agreements is in the clauses and caveats. Or what if's as you might call them.

What if they don't get enough income?
What if they go bust?
What if you don't make the payments?
What if you go bust?

What happens at the end?

These are all easy enough things to cover in a contract.

Why you'd buy a boat that you can't use when you want to and which will be in need of a major refit (the wear of one year in charter is at least four years of private use) when you finally own it I don't know. You could buy a 10 year old boat and have the refit instead.

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[Dave_Snelson]

Re: Simple principle for simple people

Well thank you Peppermint for pointing out my simplicity

Actually, I do see things in fairly simplistic manner, which is why I am cautious in such matters. The reason for posting is that my over cautious manner causes me to dismiss such things out of hand - but I thought that someone here abouts might have tried this route and as such could have corrected me. Not so. Armed with all this information, I will avoid like the plague.

BTW - the reason for wanting a boat I cant use was the potential for upgrading mine (which I own outright) in a few years with the proceeds of any sale (as was stated in the original post).

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