Buying ex med charter boat and chartering in Solent

[farquart]

Thinking of buying an ex charter boat jeanneau 42i in the med, sail it back and then charter in the Solent for a few years before heading off over the Atlantic.

thoughts and opinions wanted
1) is this financial viable or better options
2) who offers chartering in the Solent to ex charter boats
3) I’ve looked at older Moodys and they are money pits unfortunately

TIA

 

[Ink]

Surely 'older' Moodys were never designed to be charter boats unlike recent Jeaneaus.

You are comparing apples and pasta.

Ink

 

[farquart]

Surely 'older' Moodys were never designed to be charter boats unlike recent Jeaneaus.

You are comparing apples and pasta.

Ink

Apologies
We are looking to go long term liveabord again. Looked at Moody 425 and total money pit.

so now looking at ex charter and puting back into charter for a couple of years before the off. Hope that makes more sense

 

[farquart]

Surely 'older' Moodys were never designed to be charter boats unlike recent Jeaneaus.

You are comparing apples and pasta.

Ink

Apologies
We are looking to go long term liveabord again. Looked at Moody 425 and total money pit.

so now looking at ex charter and puting back into charter for a couple of years before the off. Hope that makes more sense

 

[KeelsonGraham]

VAT will be your first big expense with the Jen.

 

[farquart]

VAT will be your first big expense with the Jen.

I’m ok with the vat, I’ve factored that in to the purchase price.

Was thinking of 1 season in Greece, 1 in Balearics before sailing back to UK. There by hoping to Paying vat on a lower value than initial purchase price.

But yes agreed vat definitely worth taking into consideration

 

[JumbleDuck]

Tranona is your man for this, but I think the standard answer is that it is almost impossible to make a one-boat chartering operation pay. The costs are significant and you are up against companies with lots of boats and economies of scale. That's before you even start working out who wants to pay money to charter an old boat when there are plenty of new ones available.

 

[Tranona]

Hard work bringing a charter boat back from the med - particularly eastern end. Need to be able to treat it as a holiday or just bash back in delivery mode. Best done early season (before end May) to avoid adverse winds and currents up the Iberian coast. Most charter boats being sold now will be well worn, unlike 10 years ago when fleets were changed every 6 years or so (for all sorts of reasons). Now rare to see such young boats for sale.

Unlikely you will be able to charter out for just one year in either Greece or the Balearics as in both countries you will need to comply with local rules and get a local licence to operate which effectively means having a local partner. Also both markets are currently experiencing oversupply of boats and having an old(er) boat and no marketing a one off operator has little to offer. Also you don't say what your situation is in relation to Schengen rules with regard to living and working in the EU.

Much the same in the Solent. nobody with a single boat makes any money, or even covers costs again because there has been supply far exceeding demand - although this may change if the restrictions on overseas holidays continues, but even then there is plenty of slack in the current supply. For these reasons I really doubt you will be able to convince HMRC that you have a viable business from scratch to enable you to import a boat without paying VAT. Different if you were already operating a successful VAT registered charter business and wanted to add a boat to your fleet.

Many non EU buyers have successfully bought ex charter boats in Greece and turned them into liveaboards, primarily Americans and Antipodeans (plenty of youtubes available based on their experiences) BUT it means doing the prep in Greece and then sailing off. While the boat has 18 months in the EU if you are UK resident you can't bring it VAT free into the UK.

These comments are based on my experience of owning a charter boat in Greece and bringing it back to the UK for my own use. My last year in Greece with a full season, I cleared 3000euros. Before buying that boat I spent a lot of time looking at various ways of owning a charter boat in the UK for similar reasons to you - to pay off a big chunk of costs before becoming full time liveaboard. The only type of scheme that worked at all was buying a boat under management where your reward was "free" weeks on the boat. Owning a boat as you intend is simply not viable because you cannot get enough paying weeks to even cover costs. The season is not long enough and there are too many boats chasing a limited number of customers - and many of those boats are privately owned and just looking to get some contribution to costs.

Sorry to sound so negative, but if you want to liveaboard then buy a boat for that purpose in the UK, spend a year or 2 getting it ready and then go. Unfortunately this is no longer easy. There is an acute shortage in the UK of suitable boats - the old staples (as you have found) are getting old and worn out such that the cost of getting them up to scratch is out of proportion to their value and newer boats that are suitable more limited in supply with prices rising. Brexit means that effectively the European market is now cut off for UK residents unless they want to keep their boat in the EU.

 

[Tranona]

Tranona is your man for this, but I think the standard answer is that it is almost impossible to make a one-boat chartering operation pay. The costs are significant and you are up against companies with lots of boats and economies of scale. That's before you even start working out who wants to pay money to charter an old boat when there are plenty of new ones available.

On cue - typing as you posted!

 

[JumbleDuck]

On cue - typing as you posted!

You da man.

 

[farquart]

Hard work bringing a charter boat back from the med - particularly eastern end. Need to be able to treat it as a holiday or just bash back in delivery mode. Best done early season (before end May) to avoid adverse winds and currents up the Iberian coast. Most charter boats being sold now will be well worn, unlike 10 years ago when fleets were changed every 6 years or so (for all sorts of reasons). Now rare to see such young boats for sale.

Unlikely you will be able to charter out for just one year in either Greece or the Balearics as in both countries you will need to comply with local rules and get a local licence to operate which effectively means having a local partner. Also both markets are currently experiencing oversupply of boats and having an old(er) boat and no marketing a one off operator has little to offer. Also you don't say what your situation is in relation to Schengen rules with regard to living and working in the EU.

Much the same in the Solent. nobody with a single boat makes any money, or even covers costs again because there has been supply far exceeding demand - although this may change if the restrictions on overseas holidays continues, but even then there is plenty of slack in the current supply. For these reasons I really doubt you will be able to convince HMRC that you have a viable business from scratch to enable you to import a boat without paying VAT. Different if you were already operating a successful VAT registered charter business and wanted to add a boat to your fleet.

Many non EU buyers have successfully bought ex charter boats in Greece and turned them into liveaboards, primarily Americans and Antipodeans (plenty of youtubes available based on their experiences) BUT it means doing the prep in Greece and then sailing off. While the boat has 18 months in the EU if you are UK resident you can't bring it VAT free into the UK.

These comments are based on my experience of owning a charter boat in Greece and bringing it back to the UK for my own use. My last year in Greece with a full season, I cleared 3000euros. Before buying that boat I spent a lot of time looking at various ways of owning a charter boat in the UK for similar reasons to you - to pay off a big chunk of costs before becoming full time liveaboard. The only type of scheme that worked at all was buying a boat under management where your reward was "free" weeks on the boat. Owning a boat as you intend is simply not viable because you cannot get enough paying weeks to even cover costs. The season is not long enough and there are too many boats chasing a limited number of customers - and many of those boats are privately owned and just looking to get some contribution to costs.

Sorry to sound so negative, but if you want to liveaboard then buy a boat for that purpose in the UK, spend a year or 2 getting it ready and then go. Unfortunately this is no longer easy. There is an acute shortage in the UK of suitable boats - the old staples (as you have found) are getting old and worn out such that the cost of getting them up to scratch is out of proportion to their value and newer boats that are suitable more limited in supply with prices rising. Brexit means that effectively the European market is now cut off for UK residents unless they want to keep their boat in the EU.

Thanks for the response, it’s very detailed and pretty much what I was thinking.

Re chartering I was thinking more along the lines of putting it into management company and just using it when free. So not for profit but to cover some cost of ownership. The boat would already be charter ready.

Do you know if this is possible on the Solent?

I guess if not will just wait as you say and buy in 2 or 3 years time, get it live aboard ready with solar, water maker, wind pilot. Then head off to Caribbean

really appreciate your thoughts you’ve been very helpful

 

[Deleted member 36384]

Charter Ready - the boat will have to be coded and that will have a time and cost element to it. Most of the requirements I believe are very similar to what was in place before Brexit in the EU, but I am not sure on this point, there could be more or less items. You will be required to have fire extinguishers, lifejackets to have a valid certificate and the liferaft as well. Depending on age, liferaft may be a yearly inspection or 3 yearly. Likely your stability certificate will be valid but an associate with a known boat, with a stability certificate that was over 10 years old and the boat out of code, had to have the measurements and calculations carried out again for a new stability certificate, to put the boat back into commercial use. That person ended up buying new lifejackets as the cost was less and new fire extinguishers for the same reason. They also had to replace some hoses that were previously wrapped in heat resistant cloth with fire rated hoses and re run the toilet hoses to give syphon loops that reached the deck head, despite them being the same as the last time the boat was surveyed. From what I can tell, everyone wants a slice of the pie if you code a vessel. Insurance quote they received this year was just over a grand / year, probably more if the value is higher as that was based on a 60k boat value.

Another associate has been making a living out of this with just one boat. However that boat is on a swinging morning owned by them and they live a low cost life with low overheads, being in a position to do that, plus partner works full time and they do all the work themselves and have been at this for decades, with good reputation and large loyalty customer base, so not managed charter.

See information here for coding five-minute-briefing-mca-coding
MGN 280 (M) Construction standards for small vessels in sport use

Good luck with your endeavours.

 

[Laysula]

I thought that all boats were moneypits.

 

[farquart]

I thought that all boats were moneypits.

Some more than others ??

 

[Nina Lucia]

Apparently its shortage of sailing boats for charter this year, I have been told...

 

[Tranona]

Thanks for the response, it’s very detailed and pretty much what I was thinking.

Re chartering I was thinking more along the lines of putting it into management company and just using it when free. So not for profit but to cover some cost of ownership. The boat would already be charter ready.

Do you know if this is possible on the Solent?

I guess if not will just wait as you say and buy in 2 or 3 years time, get it live aboard ready with solar, water maker, wind pilot. Then head off to Caribbean

really appreciate your thoughts you’ve been very helpful

There are different kinds of management companies - at one end there are companies like Fairview who operate a bit like the big charter operators overseas, buying new boats on behalf of owners in return for an agreed amount of usage. Otherwise they look after everything and use them as much as they can. However such outfits are not interested in taking existing boats. Then there is a range of managers and agents who offer their services to find clients, deal with the changeovers, maintenance etc leaving the owner to pick up the main bills - berthing, coding, maintenance etc. Typically they might charge a %age of the charter fee, maybe 20-30%. They may or may not have boats of their own which will of course have priority, using client's boats to cope with high demand periods. They like to have a good range of boats on their books to give charterers a choice.

That is the type of arrangement you would be looking at and it is quite possible, say, to offset your annual berthing fees with the surplus from your income after costs (annual coding inspections, insurance, management fees) from perhaps 6-10 weeks a year. However, this would not be considered a charter business by HMRC, so you would be back to the basic problems of importing a boat from the EU - paying VAT, Recertification under the new rules and as BOB says re-equipping for MCA coding. Greek coding is notoriously lax and focusses on just having the right gear, which is less than UK both in coverage and quality. No stability requirement - they just accept the RCD category. Once you do the sums pretty sure there is no advantage in buying a boat in Greece for use in the UK, whether for private use or occasional chartering. Appreciate these are strange times as the market is adjusting to the effects of Brexit and Covid, but unlike most disruptive events I can't see anything that indicates good boat buying opportunities at the sort of level you are considering.

The other thing to consider is how you view the boat. From my experience once you start chartering you have to forget it is "your" boat, so strip it of any personal bits and accept that it is likely to get damaged or ill treated. Some people find this hard and one of the key reasons so few people do it - the small return does not offset the loss of proprietorial rights over the boat. With my boat I went into it with eyes wide open, well aware that for 6 years or so others would be enjoying "my" boat, and in return I would get "free" holidays every year, not necessarily on my own boat. At the end I got my boat for far less than it would cost to buy one in the market in the location I wanted. So for me it worked and is still for some a good way of getting a cut price boat - but you have to take the long view as during the life of the contract it is not a liquid asset, and even at the end it is not easy to sell on if you don't want to take it over.

 

[Tranona]

Apparently its shortage of sailing boats for charter this year, I have been told...

Probably, just as there is a shortage of holiday cottages in Cornwall, places at Butlins, golfing holidays at Gleneagles and so on. come mid September the shortage will turn into a glut.

 

[Bajansailor]

@farquart what do you think will be your probable budget when you buy your boat?
It might be worthwhile considering buying a boat already in the Caribbean?

Here is a Jeanneau 42 (albeit a deck saloon, which can be hot in the tropics) for sale in the BVI's (or sale pending rather), for US$ 109,000 -
2008 Jeanneau Sun Odyssey 42 DS Sloop for sale - YachtWorld

Or an older 42 for sale in the USA for US$ 70,000 (also sale pending - they do seem to shift 'em fast now).
1999 Jeanneau 42 Sloop for sale - YachtWorld

 

[farquart]

Charter Ready - the boat will have to be coded and that will have a time and cost element to it. Most of the requirements I believe are very similar to what was in place before Brexit in the EU, but I am not sure on this point, there could be more or less items. You will be required to have fire extinguishers, lifejackets to have a valid certificate and the liferaft as well. Depending on age, liferaft may be a yearly inspection or 3 yearly. Likely your stability certificate will be valid but an associate with a known boat, with a stability certificate that was over 10 years old and the boat out of code, had to have the measurements and calculations carried out again for a new stability certificate, to put the boat back into commercial use. That person ended up buying new lifejackets as the cost was less and new fire extinguishers for the same reason. They also had to replace some hoses that were previously wrapped in heat resistant cloth with fire rated hoses and re run the toilet hoses to give syphon loops that reached the deck head, despite them being the same as the last time the boat was surveyed. From what I can tell, everyone wants a slice of the pie if you code a vessel. Insurance quote they received this year was just over a grand / year, probably more if the value is higher as that was based on a 60k boat value.

Another associate has been making a living out of this with just one boat. However that boat is on a swinging morning owned by them and they live a low cost life with low overheads, being in a position to do that, plus partner works full time and they do all the work themselves and have been at this for decades, with good reputation and large loyalty customer base, so not managed charter.

See information here for coding five-minute-briefing-mca-coding
MGN 280 (M) Construction standards for small vessels in sport use

Good luck with your endeavours.

@farquart what do you think will be your probable budget when you buy your boat?
It might be worthwhile considering buying a boat already in the Caribbean?

Here is a Jeanneau 42 (albeit a deck saloon, which can be hot in the tropics) for sale in the BVI's (or sale pending rather), for US$ 109,000 -
2008 Jeanneau Sun Odyssey 42 DS Sloop for sale - YachtWorld

Or an older 42 for sale in the USA for US$ 70,000 (also sale pending - they do seem to shift 'em fast now).
1999 Jeanneau 42 Sloop for sale - YachtWorld

looking at about 80k including vat

I’ve thought about buying in the US

but I’ve always wanted to sail the Atlantic, so will probably purchase in Europe

 

[farquart]

There are different kinds of management companies - at one end there are companies like Fairview who operate a bit like the big charter operators overseas, buying new boats on behalf of owners in return for an agreed amount of usage. Otherwise they look after everything and use them as much as they can. However such outfits are not interested in taking existing boats. Then there is a range of managers and agents who offer their services to find clients, deal with the changeovers, maintenance etc leaving the owner to pick up the main bills - berthing, coding, maintenance etc. Typically they might charge a %age of the charter fee, maybe 20-30%. They may or may not have boats of their own which will of course have priority, using client's boats to cope with high demand periods. They like to have a good range of boats on their books to give charterers a choice.

That is the type of arrangement you would be looking at and it is quite possible, say, to offset your annual berthing fees with the surplus from your income after costs (annual coding inspections, insurance, management fees) from perhaps 6-10 weeks a year. However, this would not be considered a charter business by HMRC, so you would be back to the basic problems of importing a boat from the EU - paying VAT, Recertification under the new rules and as BOB says re-equipping for MCA coding. Greek coding is notoriously lax and focusses on just having the right gear, which is less than UK both in coverage and quality. No stability requirement - they just accept the RCD category. Once you do the sums pretty sure there is no advantage in buying a boat in Greece for use in the UK, whether for private use or occasional chartering. Appreciate these are strange times as the market is adjusting to the effects of Brexit and Covid, but unlike most disruptive events I can't see anything that indicates good boat buying opportunities at the sort of level you are considering.

The other thing to consider is how you view the boat. From my experience once you start chartering you have to forget it is "your" boat, so strip it of any personal bits and accept that it is likely to get damaged or ill treated. Some people find this hard and one of the key reasons so few people do it - the small return does not offset the loss of proprietorial rights over the boat. With my boat I went into it with eyes wide open, well aware that for 6 years or so others would be enjoying "my" boat, and in return I would get "free" holidays every year, not necessarily on my own boat. At the end I got my boat for far less than it would cost to buy one in the market in the location I wanted. So for me it worked and is still for some a good way of getting a cut price boat - but you have to take the long view as during the life of the contract it is not a liquid asset, and even at the end it is not easy to sell on if you don't want to take it over.

Ok need to sit down and digest all of this info. Thanks really been very helpful ?