charter incom

[johns]

is it possible to make a profit from buying a boat and puting it to charter ,
would it at least pay for its self

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[whiskerstay]

Re: charter income

I'm not so sure. It feels to me rather like renting your daughter to a rugby club.


<hr width=100% size=1>"Stop mucking about, darling, and get the bloody mud weight over."

 

[aod]

Yes, I think so but it all depends who you put it with under what terms. Different companies operate different business cases. Some take 30% some 40% and some operate off a fixed monthly fee. All can cover costs depending on whether you buy a boat that is sought after for charter.

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[trainer]

The nearer the boat is based to the sun would help as the charter season gets longer, don't know much about this other than to charter a 32ft Sun Odesey off Mallorca ranges from £1300 up tp £2000 per week in summer. The sums look good but the boats are prety well worn after 3 years (apart from the sails that is), I've been looking at some. Some info from Salty on this in 'UK or Med' 3 days ago.
mark

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[Sybarite]

Re: charter income

When I looked into this some time ago in France I was told by a tax expert that the French tax authorities usually allow you not to declare charter income. The reasoning is that although boats could make a smallish cash surplus, when they applied depreciation to the balance this gave them invariably a deficit which they could then apply to other tax income.

Therefore you need to see what the real and notional depreciation would be.

John

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[Sailfree]

First think of you boat as a car. Do you have your own pride and joy or is it a company car or do you have to use a pool car. A charter boat is the same as a pool car. How will you feel when you go on board and find further scratches and the odd broken fitting that human nature being what it is "we have paid enough for this charter anyway!" is not reported. I have not found that people abuse the boat it is more the extended use simply puts more wear and tear on the boat. Alternatively if you really want a boat for occassional use it will deteriorate less being used than sitting on a mooring.
Secondly consider the income it is never enough to make a profit. If it was all charter companies would own their own boats and others would purchase them as investments. All it does is contribute or pay for the running costs. When I use the boat with friends the invoice for use (to myself) is financially nuetral but I always forget to cost the VAT which I end up paying myself. You can try to be clever but records exist of when the owner used the boat and its the first thing the VAT inspector looks for, so during my two VAT inspections I was glad I was honest. You do not want the VAT man as an enemy! Income can be maximised by chartering through a sailing school but don't be suprised if it sails from the solent to Belgium on Yachtmaster prep courses as some need to get their milage up to the 2500Nm. Also Sailing schools are on a tight budget so don't expect them to willingly replace items for which they can't recoup the cost. In the last 6 years a number of sailing schools have gone bust and do you think the charter income was fully paid up and the repairs completed before they went bust.
Thirdly the cost, if you want the boat to charter well some goodies like chart plotter and Radar helps. I take the headline price at boat shows and say for a 36' add £25k for equipment and £10k for charter coding. I personally would not question the need for any of the items required for the coding I am concerned that many sail without! Likewise replace the boat at regular intervals (unless people change and Hertz advertise a demand for people wanting to hire 20 year old Ford Sierra's). It would also need a marina berth (no cheap mooring for you!) next to the charter organisation - for a 36' in the Solent say goodbye to another £6k.
Finally the boat, it's bad enough to have your new toy treated as a pool car, how would you feel if it was a quality car - therefore it is most likly to restrict your choice to production boats that people on this forum speak so disparingly about.
Me - I decided I wanted a boat to start to build up experience and accepted it would be a "pool" boat and with work commitments I would not sail it as often as I liked. I also accepted the £100k or so would be locked up in the boat and be better invested in property.
The up side - I am sailing a bigger boat (in addition to the previous Dinghy racing) and the shares I sold continued to rise in value - until they crashed and I lost less money on the first boat than I would of if I had kept the investment!
Advice - get sailing and enjoy it any way you can but for a lot of people it is probably cheaper to charter boats when they want them! Just look at the vast number of infrequently used boats parked in the Hamble let alone other places in the Solent. For my first boat my penname was valid but for correctness I really should change it now to "Sail the pool boat at less cost than some!"

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[rhinorhino]

Well yes and no, after all as Terry Pratcett said "everything is true for a given value of true."
Seriously, in the UK I would say the answer is mainly no. Consider the following;

Cost of 36' boat (coded and properly equipped) say £100,000. If bought for cash interest forgone say £5,000 if on mortgage say £12,000p.a. repayments. 36' is the most popular for charter in UK and cheap boats will not stay the course nor would most reputable companies accept an older boat unless something special.
Mooring, no cheap swinging moorings you will need to be in prime marina, say £5,000 or more on south coast.
Insurance £1,500-£2000
Increased maintaince / servicing (although boats benefit from regular usage things do break and no customer paying £1000 for weekend will come back if you bill £30/40 for breakages at the end of weekend) £2000-£3000. New charts every year to cover entire cruising area, liferaft £400p.a. to hire £200 to service. engine service every 100 hours etc, etc....
Charter income, say £20,000 - 40% = £12,000. (40% is the industry standard - schemes that offer fixed monthly fee are mostly dubious)

So overall the best you could realistically hope to achive would be cheaper sailing. A bad year ( or a bad charter company) and you might be very lucky to see £20,000 in charter income.

You can factor in depreciation and the return of VAT but then charter income is taxable as well.

However if seriously interested send me PM.


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[Peppermint]

Re: It is possible

to achieve 12% to 15% return on investment by putting a modern AWB in managed charter in the UK.

The main factors to consider revolve around the choice of the boat, preferably new with many berths, anything over 8 is good 10 is great. Good basic equipment to include hot water and heating. Safety equipment to code levels. Then the choice of charter company. Some are brilliant at boat maintenance and cleanliness some are less so. This is important in winning repeat business. When shopping around you need to consider location, Hamble really does win. Look at their range of boats to see where yours is going to slot in. Try to meet other owners with boats under management by the companies your considering. A good company will let you poke around to your hearts content. This is likely to be a tricky relationship so pick someone you can get on with.

If you pick well, both boat and charter company, don't expect to sail your boat much. It'll most likely be out working for perhaps 30 to 40 weekends of the year.

The downside is the wear and tear and the fact that personal gear can't be left onboard. But if it gets you a bigger boat with better equipment levels, perhaps with a mooring somewhere that normal mortals have to wait for years to get in, maybe it's OK.



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[rhinorhino]

Re: It is possible

I would be truely amazed if you could make a 15% return on your investment in the UK. Care to enlighten me how it is done, have you done it or is this theory?

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