clutters
Member
I'm looking at pruchasing a family cruiser and chartering it out to contribute to the costs of mooring and upkeep, does anyone have any first hand experience of this?
Chartering your boat - Any experience/advice
- Thread starter clutters
- Start date
Tranona
Well-Known Member
Dont! First you have to get your boat coded, then you have to find clients, then you have to service the boat.
There is no shortage of professional charter boats that you will be competing with, so unless you have something really different (not just a nice family boat) the chances of getting any business are very small on your own. If you employ an agent you will be at the bottom of his list - those who are any good have more boats listed than demand and commission will eat up a big chunk of you income.
Just to give you an idea I used to charter my boat in the Med with a very well established manager. In the last year I did it he got 16 weeks use and I made 3000 euros. In the UK even a well established boat is unlikely to get more than 6-8 weeks a year and can get a real beating as it is rarely "families" but groups who use the boat hard. So, your costs of maintenance, replacements etc are potentially much greater than private use.
There is no shortage of professional charter boats that you will be competing with, so unless you have something really different (not just a nice family boat) the chances of getting any business are very small on your own. If you employ an agent you will be at the bottom of his list - those who are any good have more boats listed than demand and commission will eat up a big chunk of you income.
Just to give you an idea I used to charter my boat in the Med with a very well established manager. In the last year I did it he got 16 weeks use and I made 3000 euros. In the UK even a well established boat is unlikely to get more than 6-8 weeks a year and can get a real beating as it is rarely "families" but groups who use the boat hard. So, your costs of maintenance, replacements etc are potentially much greater than private use.
Lon nan Gruagach
Well-Known Member
Too right. You need a special boat in a special place to cover the costs and hassle. Although bringing a boat up to MCA coding makes a whole bunch of sense even if its just to point out the dodgy bits that might bite you one day.
Costs:
What boat, how long (15m is a serious break point)
How many berths (12 or maybe 16 is an expensive barrier)
How far off shore.
cagey
Well-Known Member
Agreed dont
Apart from the obvious downsides it will have a bad effect on its re sale ,both value and desirability
Apart from the obvious downsides it will have a bad effect on its re sale ,both value and desirability
Sailfree
Well-Known Member
When I chartered my boats out (had three one after each other) the biggest cost was the berthing that had to be at the charter companies base.
The tax laws that let you only claim against operating losses not depreciation effectively killed the business for me.
The tax laws that let you only claim against operating losses not depreciation effectively killed the business for me.
Uricanejack
Well-Known Member
It really depends. On a lot of variables.
Where?
What kind of boat?
What sise of Boat?
What age?
New or old?
For some people, the sunsail, moorings plan works out. You by a boat of their choice, put it in their fleet, at one of their locations, and you will loose money but it will cover a significant percentage of your total cost.
Some people on here have found this worked for them. Not for me.
Some years ago I worked for a charter outfit. Not in UK. West Coast Canada. Similar in some ways though. Bottom line is sailing season is to short. Caribbean or Med its about twice as long.
Its not impossible to make money. Just very hard.
Most people who charter, want to charter a nice new boat in nice sunny weather.
You need to make enough to cover insurance, moorage and maintenance. before you start to pay for the boat.
So very simple arithmetic
Insurance per month much higher than my non charter boat insurance.
Moorage depends where. good location here over 10 dollar a foot per month. the bigger the boat the more over 10.
Maintenance depends on age new boat not so much a few years old it starts to climb. In any case high use means high wear and tear. Who does the maintenance? You, the charter company, or contractor?
The newer boats get more business. the older boats only when its really busy.
How much do you want to use your boat.? the more you use it the less opportunity to earn. So it cost you revenue to go sailing in peak season.
Do you charter yourself as a single operation small business? Or do you put it in a managed fleet? Manager takes up to 50 per cent.
Most of the nice boats don't even come close to break even. there is just some cost recovery.
To make money you have to be special, very nice, very good service, interesting very good location, lot of repeat business.
Or very cheep. Rent a wreck. really basic, nothing fancy, sailing school, mile builder. low payments, same moorage, higher maintenance, (Kept lower by being very basic)
The only profitable boats in the fleet were a couple of old beat up Catalina's which did nothing but day sailing instruction. Owned by a couple of instructors.
Best advice is don't by a big boat you cant afford. Hoping charter revenue will help.
By a smaller boat you can afford and go sailing.
My family and I had a great time on a 24ft beater. I kept on a mooring sometimes and occasionally in a marina.
Where?
What kind of boat?
What sise of Boat?
What age?
New or old?
For some people, the sunsail, moorings plan works out. You by a boat of their choice, put it in their fleet, at one of their locations, and you will loose money but it will cover a significant percentage of your total cost.
Some people on here have found this worked for them. Not for me.
Some years ago I worked for a charter outfit. Not in UK. West Coast Canada. Similar in some ways though. Bottom line is sailing season is to short. Caribbean or Med its about twice as long.
Its not impossible to make money. Just very hard.
Most people who charter, want to charter a nice new boat in nice sunny weather.
You need to make enough to cover insurance, moorage and maintenance. before you start to pay for the boat.
So very simple arithmetic
Insurance per month much higher than my non charter boat insurance.
Moorage depends where. good location here over 10 dollar a foot per month. the bigger the boat the more over 10.
Maintenance depends on age new boat not so much a few years old it starts to climb. In any case high use means high wear and tear. Who does the maintenance? You, the charter company, or contractor?
The newer boats get more business. the older boats only when its really busy.
How much do you want to use your boat.? the more you use it the less opportunity to earn. So it cost you revenue to go sailing in peak season.
Do you charter yourself as a single operation small business? Or do you put it in a managed fleet? Manager takes up to 50 per cent.
Most of the nice boats don't even come close to break even. there is just some cost recovery.
To make money you have to be special, very nice, very good service, interesting very good location, lot of repeat business.
Or very cheep. Rent a wreck. really basic, nothing fancy, sailing school, mile builder. low payments, same moorage, higher maintenance, (Kept lower by being very basic)
The only profitable boats in the fleet were a couple of old beat up Catalina's which did nothing but day sailing instruction. Owned by a couple of instructors.
Best advice is don't by a big boat you cant afford. Hoping charter revenue will help.
By a smaller boat you can afford and go sailing.
My family and I had a great time on a 24ft beater. I kept on a mooring sometimes and occasionally in a marina.
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Bobc
Well-Known Member
Yes. Don't.
clutters
Member
Wow, there's little ambiguity in the messaging; thank you all.
[70521]
Well-Known Member
You can have a family cruiser or a boat for chartering not both.
[163233]
...
Do you mean he chartered it out for 16 weeks or that he had it available for 16 weeks and just couldn't find customers? Just wondering where all the money went in that. It sounds like someone got a good deal.
JumbleDuck
Well-Known Member
You got €187.50 per week? How much was the manager charging?
Tranona
Well-Known Member
Just checked it was actually 12 weeks of paying customers. Demonstrates how competitive the market is and how difficult it is to make a profit. Management fee 20% of income. other costs include berthing for the year, annual survey and replacement costs such as liferaft service, 3 engine oil and filter changes, various running repairs, insurance, charter licence, cleaning and domestic services, transfer from one way charter. So net income after management fee, approx 13000, expenses just under 10000 (euros) in 2006.
[163233]
...
Looks like management is where the money is.. With those numbers a dozen or so boats under management and you're laughing.
But the o/p asked about offsetting the cost rather than turning a profit, and while you only got 3k back in cash, the marina and insurance was paid and the boat properly maintained. That does amount to a pretty hefty reduction in the running costs.
Tranona
Well-Known Member
If only that were true! To earn that share you have to find the client, provide the infrastructure to manage the activity and do the weekly turnaround.
As for offsetting costs on a private boat, as several here who have tried it will tell you, it is even less worth it. You need to be in a South coast marina if you want any chance of volume, and marina charges eat up a big chunk. In addition to management fees you have turnaround costs, and annual coding costs, increased insurance and greater maintenance. Unlike the nice sunny Med where I had my boat you will be lucky to get 4 or 5 weeks a year and the net income from this is unlikely to cover the additional costs. In addition, I know from my experience that a history of charter use devalues the boat, although in my case I was aware of that when I first got involved.
You need to be very clear about what is involved in the charter business and what you will get out of it, and it is not for everybody. The very worst scenario is "do a bit of chartering to offset costs" as suggested here, which is why so few people do it.
JumbleDuck
Well-Known Member
Thanks. Not the best path to riches then, though I suppose it might be argued that you'd have had to pay berthing anyway.
Baggywrinkle
Well-Known Member
I bought an ex-charter boat which had been in charter for 11 years .... it has had a hard life.
It wasn't the one I originally put the deposit on though. To cut a long story short, in April 2011 I chartered my target boat for a week. I checked it out thoroughly, had it hauled out, got it surveyed, got a second opinion and put down a deposit of 5K with the agreement to take delivery at the end of the season. I photographed every inch of the boat I could gain access to.
In September I went to check it before paying the final payment (27K) and as soon as I lifted the floor it was obvious the boat was trashed. Someone had run it aground and there were splits in the furniture and the structural frame bonded to the hull. I rejected the boat and was offered another from the fleet which was slightly nicer for the same price. The charter company hadn't found the damage and didn't know it was there, nothing was visible from the outside.
If that had been my pride and joy I would have been gutted. I'd never charter my boat to anyone I didn't trust as being 100% competent and honest.
It wasn't the one I originally put the deposit on though. To cut a long story short, in April 2011 I chartered my target boat for a week. I checked it out thoroughly, had it hauled out, got it surveyed, got a second opinion and put down a deposit of 5K with the agreement to take delivery at the end of the season. I photographed every inch of the boat I could gain access to.
In September I went to check it before paying the final payment (27K) and as soon as I lifted the floor it was obvious the boat was trashed. Someone had run it aground and there were splits in the furniture and the structural frame bonded to the hull. I rejected the boat and was offered another from the fleet which was slightly nicer for the same price. The charter company hadn't found the damage and didn't know it was there, nothing was visible from the outside.
If that had been my pride and joy I would have been gutted. I'd never charter my boat to anyone I didn't trust as being 100% competent and honest.
stuartwineberg
Well-Known Member
OK, lets be a bit more positive. We chartered our new Bavaria 32 for a few years about 10 years ago so I accept I may be a bit out of date. As has been said, coding is a requirement but it does bring the boat up to a very high standard of safety which I found reassuring anyway. You have to treat it like a proper business. We had a limited and VAT registered company anyway so we added the boat to it as a separate and visible arm of the business - so to be clear we did not own the boat, the business did. We did this completely legitimately by having a dedicated website promoting the boat for hire, using a professional charter management company and by charging ourselves something close to market rate whenever we used the boat privately with proper invoicing of every transaction where we did this. This allowed us to reclaim the purchase VAT and gave us a reasonable income stream that covered the costs of ownership (at least) - don't ask me what we earned cos I cant remember. Downsides were the fact that someone else often had our boat when we wanted it but the really big one that caused us to pack it in was the need to empty the boat of our belongings after every trip - this just became too much of a hassle. Don't think you can charter casually - the VAT people and HMRC keep a very close eye on this. As for boat size, I reckon a 36 foot AWB will do OK, my 32 footer was fine but probably not optimal. Talk to the potential management company before buying, they may only take specific brands and sizes as some companies like to build up a fleet of the same model of boat.
choppy
Well-Known Member
As a manager of several yachts in charter most of the real experiences above ring true to a degree.Depending on your needs the arrangement can work well and deliver a relative return.
1st thing to say is that you want to make money there are probably better ways of doing so than owning a boat.
However if you own and are going to keep a yacht in a beautiful part of the world - particularly if you live some distance away - then chartering can offset some or all of the costs and may/will/should deliver a return on top with the right management.
The balance is to be found as the cost of purchase and ownership would have had to be paid anyway, Management delivers a well maintained yacht, fuelled with non manky water & with any problems sorted whenever you wish to use her. Step aboard on Saturday and go sailing leave a month later and she will be ready next time you visit. (We look after storage boxes for each owner) Most would agree that Boats are better used and the bigger the systems the more this applies. This is why many bigger mobos and super yachts are available to charter. She is there systems up and running, needing I to be checked (and with crew paid) so might as well be earning/used.
When you factor in depreciation, greater cosmetic wear and tear(sometimes surprisingly little) and the return the capital may have earned elsewhere -again at present possibly very little - then as above there Are better ways of making money. .
1st thing to say is that you want to make money there are probably better ways of doing so than owning a boat.
However if you own and are going to keep a yacht in a beautiful part of the world - particularly if you live some distance away - then chartering can offset some or all of the costs and may/will/should deliver a return on top with the right management.
The balance is to be found as the cost of purchase and ownership would have had to be paid anyway, Management delivers a well maintained yacht, fuelled with non manky water & with any problems sorted whenever you wish to use her. Step aboard on Saturday and go sailing leave a month later and she will be ready next time you visit. (We look after storage boxes for each owner) Most would agree that Boats are better used and the bigger the systems the more this applies. This is why many bigger mobos and super yachts are available to charter. She is there systems up and running, needing I to be checked (and with crew paid) so might as well be earning/used.
When you factor in depreciation, greater cosmetic wear and tear(sometimes surprisingly little) and the return the capital may have earned elsewhere -again at present possibly very little - then as above there Are better ways of making money. .
jac
Well-Known Member
We looked at a few years ago, mainly from the financial perspective and in choosing between slightly older boat and newer one but sometimes in for charter.
We realised fairly quickly that on pure financial terms it would be borderline. Sure - a nice new boat will be popular to charter but against that she needs to be in a popular ( read expensive) marina.
For our present mooring - moving a 36 footer into the marina 200 yards away would add about £5k p.a. to our mooring costs. ( possibly more) That's a large chunk of your income gone just to moor the boat somewhere where it can earn income. You really need to look at the additional ongoing fixed costs that charter will incur before you can even think of it contributing to your running costs.
If you were planning on keeping a brand new boat in the nearby top flight marina then financially you may get a contribution. If you were happy with a boat a few years old moored somewhere cheap then forget it.
if you then factor in the risks, the wear and tear, the loss of your boat for spontaneous trips then it becomes a no brainer.
We realised fairly quickly that on pure financial terms it would be borderline. Sure - a nice new boat will be popular to charter but against that she needs to be in a popular ( read expensive) marina.
For our present mooring - moving a 36 footer into the marina 200 yards away would add about £5k p.a. to our mooring costs. ( possibly more) That's a large chunk of your income gone just to moor the boat somewhere where it can earn income. You really need to look at the additional ongoing fixed costs that charter will incur before you can even think of it contributing to your running costs.
If you were planning on keeping a brand new boat in the nearby top flight marina then financially you may get a contribution. If you were happy with a boat a few years old moored somewhere cheap then forget it.
if you then factor in the risks, the wear and tear, the loss of your boat for spontaneous trips then it becomes a no brainer.
dslittle
Well-Known Member
Two separate experiences
We bought our first boat from charter with the agreement that it would remain available for chartering when we weren't using it (not Sunsail but the same on a less formal scale). We owned the boat and could have sailed her all year but would have obviously lost income and goodwill - the 'Company' became good friends. Over seven years, the boat did not cost us anything and we had seven weeks a year sailing in the Med. When we got to our boat, she was always ready to go and a joy to board (including welcome package...). All moorings, insurance and maintenance were covered. When we eventually sold the boat, we actually recouped our initial outlay. So, about 49 weeks FREE sailing - we were very lucky.
Not so when we bought our new boat in the UK. Originally we didn't intend to live aboard and I had time on my hands. After our previously good experience with chartering, I got the boat fully coded, got commercially endorsed, set up a Limited Company and thought that I would try to make the boat pay it's way. The very first charter put paid to that!!! With little advertising we had interest, mostly from people with whom we had sailed in the past. As they were 'friends', the first charter was negotiated at a very fair price for the fortnight. The two blokes had day sailed with me on numerous occasions but this was the first paying holiday. It is amazing how two people who you know can change from coming out for a jolly for the day to planning a fortnight's holiday. Surfice to say that the fortnight made me realise that I did not want to charter MY yacht to others (as a skippered charter). To add insult to injury, at the end of the charter, they stated that there had been a misunderstanding of the costs and didn't pay...
It was a hard lesson but just showed me the very real difference between chartering a boat remotely with professional people and trying to do it yourself. If you are prepared to dispassionately let someone use your boat, it can be worthwhile but not massively lucurative. If you have ANY emotional attachment to your boat DON'T DO IT!!!
We bought our first boat from charter with the agreement that it would remain available for chartering when we weren't using it (not Sunsail but the same on a less formal scale). We owned the boat and could have sailed her all year but would have obviously lost income and goodwill - the 'Company' became good friends. Over seven years, the boat did not cost us anything and we had seven weeks a year sailing in the Med. When we got to our boat, she was always ready to go and a joy to board (including welcome package...). All moorings, insurance and maintenance were covered. When we eventually sold the boat, we actually recouped our initial outlay. So, about 49 weeks FREE sailing - we were very lucky.
Not so when we bought our new boat in the UK. Originally we didn't intend to live aboard and I had time on my hands. After our previously good experience with chartering, I got the boat fully coded, got commercially endorsed, set up a Limited Company and thought that I would try to make the boat pay it's way. The very first charter put paid to that!!! With little advertising we had interest, mostly from people with whom we had sailed in the past. As they were 'friends', the first charter was negotiated at a very fair price for the fortnight. The two blokes had day sailed with me on numerous occasions but this was the first paying holiday. It is amazing how two people who you know can change from coming out for a jolly for the day to planning a fortnight's holiday. Surfice to say that the fortnight made me realise that I did not want to charter MY yacht to others (as a skippered charter). To add insult to injury, at the end of the charter, they stated that there had been a misunderstanding of the costs and didn't pay...
It was a hard lesson but just showed me the very real difference between chartering a boat remotely with professional people and trying to do it yourself. If you are prepared to dispassionately let someone use your boat, it can be worthwhile but not massively lucurative. If you have ANY emotional attachment to your boat DON'T DO IT!!!
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