Charter Management/Ownership. Is it worth it?

[FullCircle]

I have just been reading an article in the Telegraph outlining the pros and cons of buying a boat through Sunsail's scheme. Telegraph Charter Purchase scheme article

I have read it twice, done the sums and, for the life of me, I dont understand how it is a profitable or worthwhile enterprise, especially as flights to the destinations are definitely not cheap when you buy them 4 at a time, plus your own transfers etc.
Having watched the Sunsail fleeets in action in the Ionian this year, they have scant regard for the gelcoat in mooring, and the engines seem to be wide open throttle when in use.
Can this really be a viable option, and how do you disguise the boat when it is liveried in Sunsail stickers everywhere.

What do they do to the boat to refurbish it on handback, and what is the crossover mortgage rate that makes it not worthwhile (if it is anyway)?

Your in head scratching wonderment......


Anyone want to charter a Jeanneau 35 in the East Coast Ooze for vast sums? No? I thought not.
/forums/images/graemlins/grin.gif

 

[sailbadthesinner]

YM did an article on this not too long ago
I Agree about the flot boats being bashed.
It can also be expensive to use the sea miles offered as you may want to upgrade to a bigger boat. or have to in the case of the Caribbean as I don't remember many 30 odd footers out there for charter. It was said this was not always made clear and could creep up the cost.

I think it lets you have access to other boats.
It also helps out on the maintenance side,
And it does offset the cost of ownership. Maybe the overall deal is not fantastic but it can make it affordable to many people who want easy entry without the hassles and a bit of security about the cash flow in and out.

I think with bigger boats it tends to make more sense as they tend to be chartered by more experienced sailor and are hopefully less likely to end up in the Ionian being flogged by novices from May to September every week.


The couple in the article from memory said their steepest learning curve was having to start to fix things themselves and being outside the security blanket of being a sunsail boat and able to get assistance as and when from bases dotted around. Lots of advice about inventories and lists and check EVERYTHING with a surveyor before taking boat back.

I also remember a story about buying a retired charter boat from I think sunsail via their brokerage on the web. The guy bought boat (ocenais 400 or somesuch)only to find the thing had been seriously pranged on a rock or t boned. he found out on a lift after purchase and a big crack had been patched up. In the end sunsail offered to take boat back and refund costs and expenses or foot repairs and expense, (cannot remember) an amicable settlement was reached anyway (although no mention was made as to whether a bit of publicity prompted this.)

Personally I think there are better bargains to be had on the brokerage route as you can pick the less used specimensa nd as long as you get a good surveyor you will pick up the ones that have the harder lives and need serious cash.


As for badging etc that looks pretty hard to get off and the logo ‘’shadows’’ can still be seen on boats round Greece that have left the fleet.

One observation, purely my own seems; to me it seems quite a good way for swmbo to approve boat purchase. as I said even though the figures are not brilliant on scrutiny on the first pass it is normally a better plan than persuading swmbo to let you get big marine mortgage and then saying ''yeh and for cowes week we could make two grand chartering it out.'' Which bears even less scrutiny.

i think swmbos like the idea of husband having the back up that as and when idiot husband prangs boat, forgets to connect batteries before trying to start engine, etc. there will be a nice man at the base who will step aboard and fix it with no sarcasm and no bill.

 

[MoodySabre]

A friend of mine did it and when he got the boat back last year after 5 years he was surprised what great condition it was in. Hardly a scratch, new set of sails, engine fully serviced. He has now sold 3 shares and reckons that he got his share for free.

In the meantime plenty of usage of their boats from BVI to Thailand. Very happy.

He thinks the deal may have changed but another friend has just signed up.

 

[ParaHandy]

as you wus orra pleased wi' ma penshun stuff, thush is ra present value orra both options ...

Yacht cost £100,000, RPI 4.5% discount rate 6.75% (MLR+1) & mortgage interest 8%. Mortgage for both options is a repayment mortgage with 6 year term.

The Single Payment option with a mortgage for 63% of the yacht's cost gives a PV of £91k (oops!!). The Guaranteed Income option with a mortgage for 100% of the yacht's cost and annual income of 8% gives a PV of £63k.

For each option, you own the boat free of finance after 6 years and if the yacht has a residual value of £50k, it has a PV of £34k

So .... you could have a blast of a holiday on each year and with the money you've saved, go buy a secondhand yacht in 6 years time .... irrespective of which option you chose ...

 

[TiggerToo]

[ QUOTE ]
YM did an article on this not too long ago


[/ QUOTE ]

it was in the February issue. I remember because an exhibitor at LIBS told me: "I have seen your face in YM ... " I did not know the interview had been published! /forums/images/graemlins/blush.gif

Still, my youngest son was damn proud to see the photos he had made actually published in a glossy mag that comes through the post /forums/images/graemlins/smile.gif

 

[ParaHandy]

Jings .. for the cost of the guaranteed income option, you can afford to have 4 weeks bareboat charter in the caribean in summer and still have enough cash to buy the boat second-hand. For cost of the single payment option, you can live on it for a bluidy year .. well, almost.

 

[Chris_Robb]

I seem to remember that the depreciation element has been quietly forgotten in the sales pitch. a forumite did a detailed costing following the YM article which really blew the deal apart.

Perhaps you can be lucky, but I was on one Ionian flotilla with Sailing Holidays. The leader said to "be sure to be around when the Sunsail fleet comes in - remember the reef in the center of the bay - place your bets as to how many hit it flat out!"

Come the time - 4 of the leading boats hit hard! Quite unbelieveable - And it used to happen EVERY time the flotilla came into this bay.

 

[Appleyard]

To add to the topic..we were moored in Kalamos last year ,when a Sunsail charter with 4 blokes aboard was coming in stern-first beside us..no fenders,no lines ready and going like the clappers.I quickly put out fenders and politely asked him to do the same. Back came the reply "It's not my fu**ing boat mate.I don't give a monkey's "He crunched to a stop on the quayside and tied up. We had the last laugh however..one of them lost his balance and fell off the gangplank,unfortunately not seriously injured.

 

[Sailfree]

Not disagreeing with you but many people charter boats why does it always seem to be sunsail punters attract the comments - is it their size or do they accept lower standards in charter skippers?

 

[FullCircle]

Well, on a survey of one holiday for 2 weeks, I observed
Neilson (us)
Sunsail
Sailing Holidays
Kiriacoulis
SailIonian?

I have to say that the only Reps urging the boats to moor 'as fast as possible, get a move on' was=Sunsail
The mooring reversing speeds were encouraged to be very fast
The boats looked well scraped, and I witnessed 2 big bumps, from guess where?

I didnt see anyone else behaving like that. Sorry, I will look again next time....

 

[andymcp]

Is it worth it? IMHO, only if you plan to use your boat for 6 weeks a year, or more.

You won't make money out of it. You won't (if you go via Sunsail) get the boat spec'd the way you want. You'll have no control over who uses your boat, and what they do to it.

We looked at this last year. If I did ever decide to go for it, I'd certainly avoid Sunsail. Nisos, Sailing Hols and Sail Ionian were the ones we shortlisted for consideration, before binning the idea for a variety of reasons.

 

[peterb26]

You could perhaps sum it up in one phrase:-

"Theres no such thing as a free meal......." (or boat)

 

[jimbaerselman]

Through this scheme the investor is taking the cost of depreciation and the lost interest on your capital for the years of waiting for ownership - which is a major cost element of running a charter fleet. So, the reason this scheme is offered is because it pays the operator.

Now, if 'it' pays the operator to offer the scheme, it's worth asking who the 'it' is in this equation . . . dear punter . . .

Much better to wait until the ex charter vessels are offered on the market. Some very good value is available there.

 

[krevetka]

I had a boat with one of the Sunsail programs and generally was pretty happy. Got it back after 3.5 years in pretty good shape. Financially it seemed to work quite well, as far as I remember I paid total cash about 80k for a 110k boat, with all the maintenance, mooring, insurance paid for during the 3.5 years, plus got to use owner's weeks in different parts of the world. I didn't look at the finances too scientifically though, for me probably the biggest thing was getting the boat at the end of it whilst having someone else looking after the boat, maintenance, mooring, insurance etc for the time I was paying for it. I also got to sail in Croatia, Turkey, Australia and used a few of my owner weeks in their sailing clubs as well. It is not very everyone and it is not perfect (I wasn't for example very happy with the HQ admin team) but overall it worked for me. You would spend less money chartering each year but you wouldn't get a boat at the end of it. I can't comment though on comparison with other companies doing a similar structure. The Moorings though is now owned by Sunsail...

 

[andymcp]

[ QUOTE ]
You would spend less money chartering each year but you wouldn't get a boat at the end of it.

[/ QUOTE ]
A very good point, especially if yoou take many weeks holiday a year to sail abroad. If I totalled up what I expect to spend over the coming 5 years going sailing abroad, it's going to be nudging £50K. I could easily spend a lot less (circa £30 - £35K) to purchase under one of these schemes and have a boat with less finance outstanding at the end of it than value remaining in the boat. That price includes the flights I'd need to buy.

The value-for-money part of the equation really hinges on whether you already spend large amounts going sailing abroad (in which case you can easily pay less under management schemes). If you enter the scheme to own a boat, I think it's the wrong way to do it. If you enter the scheme to reduce already large holiday costs then it starts to make some sense.

 

[bbg]

[quoteThe value-for-money part of the equation really hinges on whether you already spend large amounts going sailing abroad (in which case you can easily pay less under management schemes). If you enter the scheme to own a boat, I think it's the wrong way to do it. If you enter the scheme to reduce already large holiday costs then it starts to make some sense.

[/ QUOTE ]

We looked at it a couple of years ago and this is exactly the conclusion we came to. It is not a good investment (in terms or % return); it is not a cheap way to buy a boat (better to wait until the end of the term and then buy 2d hand from Sunsail etc.). It is a good way to reduce the cost of chartering, if that is money you were going to spend anyway - and you are going to do a lot (8-14 weeks) of chartering every year.

 

[Davy_S]

I will shortly be commenting on Sunsail, I(and two others) have been hit by one of their yachts this week. We were moored up at the time!
I do not want to prejudice my case yet.

 

[andymcp]

[ QUOTE ]
I will shortly be commenting on Sunsail, I(and two others) have been hit by one of their yachts this week. We were moored up at the time!
I do not want to prejudice my case yet.

[/ QUOTE ]
It wasn't a Sun Ody 43DS, was it? We watched in horror as one came into a bay we were anchored in at the bottom of Ithica, dropped around 5 metres of chain in 10m of water, drifted around despite our yelling at them (those on board had gone below for a kip) and managed to somehow avoid all the other boats in the bay before blowing out to sea. Having come alongside and pointed out their predicament, we then watched them come into Kalamos, completely unable to berth stern-to, hitting a livaboard and only getting moored when another flotilla's lead crew jumped aboard and did it for them....

Astonishing..... /forums/images/graemlins/frown.gif

 

[Davy_S]

It could well have been them by the sound of it!
It happened in Agia Efimia on Tuesday evening, we have witnesses plus the name of the yacht concerned, I am in contact with Sunsail, hence no comment yet /forums/images/graemlins/frown.gif