how do people afford bigger boats

Re: astardB Bankers.

Even worse Oldgit, is that the mortgage protection premium offers you no protection at all. If you go skint and default the bank gets paid out by the insurance co, but the insurance co will continue to pursue you as you are still legally liable for the debt.
 
I used the equity in my house to get an interest only mortgage, keeping the monthly payments low, but not paying back the capital. The mortgage is flexible, so every time I take a bonus or dividend from work I pay off a chunk of it. I make sure the amount left on the mortage is comfortably less than the value of the boat, so whenever I sell I wont be left owing anything. I also make sure its well insured.

I hear all the comments about "save up" and "don't borrow", but then I wouldn't have the lovely boat we get so much fun out of.
 
I see, So all the new boats are owned by the poverty stricken and all the old boats are owned by the rich. Maybe we should get a council house if we really need to impress.! /forums/images/graemlins/confused.gif /forums/images/graemlins/confused.gif /forums/images/graemlins/smile.gif
 
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Do what a lot of folk do - put it through your business as "corporate entertaining" and let the tax man pay for it.

[/ QUOTE ]Dear 1stboat - do note how many ignore my comments above - you wil find a considerable number of the "big boats" are not owned by the bloke or blokette sailing them but rather by a company. It is legal (barely) and the tax man pays for a very large chunk of the costs.

Go on own up - how many of you out there have put the boat through the business?
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hammer.thumb.gif
"Artificial intelligence is no match for natural stupidity"
 
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Go on own up - how many of you out there have put the boat through the business?

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What benefit does that give you? How do you tell the tax man that a boat is essential for a computer programmer?

S.
 
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Do what a lot of folk do - put it through your business as "corporate entertaining" and let the tax man pay for it.

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I looked at this option last year. I run it by the accountant. His words "if you want to invite the inland revenue to do an investigation go ahead"

Also if you do go this route you need to proove that it is actually used for the purpose you indicated and that you don't use it privately....cos that bit is taxable. You've got to be careful in what you do and don't tell the revenue when it comes to "toys"
 
Doubt that many boats are funded by this route despite appearances.Would also seem that the boats paid for by this method have owners who by virtue of their work,never ever get to set foot on the thing from one season to the next.
 
Buying a boat and writing it off as corporate entertaining is not possible but what you can do is set up a VAT registered subsidiary of your main business to buy a boat for chartering purposes. This is an entirely legitimate operation and you would have to show some chartering income and any personal use would have to be paid for as a benefit in kind. However, it would allow you to reclaim a proportion or all of the VAT back on the boat and any other costs. The charter company will make a loss because the boat will be subject to a capital allowance of maybe 25% pa and that loss could be set off against the profit of your main business
My guess is that a lot of the charter boats are financed in this way. In fact Trader even offer the scheme to potential new customers as a means of buying one of their new boats
 
Mortgage youself up to the hilt. If you owe enough money no one is going to be stupid enough to malke you bankrupt if they have no chance of getting their money back if they do.

Why use your own money when you can use someone elses?
 
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My guess is that a lot of the charter boats are financed in this way. In fact Trader even offer the scheme to potential new customers as a means of buying one of their new boats

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Trader ? Got any more info?

I am in the process of setting up a brand new boat charter business with a colleague. We are intending our first step to be buying a single motorboat* and chartering it though another charter company. This gives us the time to get our yachtmasters etc that will allow us to charter boats ourselves. ( Currently got the dayskipper/ICC )
To do this we will obviously need a reputable charter company to work with. I have a number of contacts in the industry already but I am always keen to make more.
We do not intend giving up our dayjobs until the business has become able to sustain us, so all we need to do initially is make enough money to break even.
Just need to convince a bank manager of that. /forums/images/graemlins/smile.gif
Business proposal is currently being formulated. ... Can't loose IMHO. /forums/images/graemlins/laugh.gif

* Current thinking for a first boat is the new S42 from Sealine. A hell of a lot of boat for £250,000 and something that should provoke a lot of charter interest.


...
Do you mean Tarquin Trader Yachts of USA ?
 
Nope its the people at Trader Med in Mallorca who are punting the scheme. Take a look at Charter Management . They have a booklet which explains the arrangements in more detail but what they are proposing is not anything particular to them. Its just a way of purchasing any boat

I am surprised if you can make owning a charter boat work as a business especially if there are 2 of you. Its very seasonal and IMHO, you'd have to do training as well in which case the boat will get shagged out quickly and cost you a load of depreciation. Owning a boat and offering it for charter is a really a way of defraying some of the cost rather than a profitable business in itself IMHO.
 
\"can\'t lose\"

Um, can't lose? I wouldn't bet on it. You need to code the boat for starters, and then let people out with the thing presumably bareboat - or (as soon as you get your RYA YM commercial) as crewed charter.

Rightyho, now you have those things - now what? A charter agent company will want to charge 10-20% of the charter fee to advertsie and find the charter. Or you'll have to add to all expenditure so far with some advertising.

Fee-wise, if the boat is in the med it's worth more than in the UK. UK you can expect about £1500 a day, ish, med perhaps £2k max in august. Most of these will be single days, and lots of other boats compete for the same business.

Mooring and depreciation and insurance plus the mca stuff means you need about 50k in the first year to stand still. That's about 40 days or 20 weekends - all season - cos you have proper jobs and mortagages innit?

I don't see how chartering can work part-time unles you use it to merely supplement your use of the boat, OR if you are ok to do it full time but starve from september to may OR have a decent sized boat that can take loads of people or charge more OR if you rent out cheap sailing boats bareboat a week at a time OR if you're the agent taking the 20%. I'd love to be proved wrong.
 
Re: \"can\'t lose\"

It is all early days yet and we are really still realising all the facts from the dreams.
The eventual hope is that we will be moving to somewhere with a year round season and running a charter/training/"Personal Luxury Cruise" service wth 2-3 boats. Still... Early days.

I am VERY grateful for all the advice/help/criticism that you guys come up with. You've been here longer that I have.:)

(PS. Sorry to hi-jack the thread. )
 
Re: \"can\'t lose\"

Have you seen the 'Living the Dream' programme about this from a year or so back? It'll help you, I'm sure.... I think I still have it on DVD somewhere.

Rick
 
Re: \"can\'t lose\"

Spot on. I looked at this a couple of years ago for a typical 45 footer and I calculated the breakeven at around £50k pa once you'd factored in the agency costs, depreciation and loss of interest on the capital and other running costs
It does'nt stack up as a business unless you're going to do year round training as well but I suspect the depreciation would wipe out most of the profit even then. Maybe better to start with a good secondhand boat bought at a knock down price which is not going to depreciate so much when its sold with 5000hrs on the clocks
 
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