Med-based mobo syndicate business idea?

[Mileholm]

I’ve been thinking — initially purely as a boating consumer — about what I’d ideally want from a shared ownership/syndicate setup if I didn’t want the full expense and hassle of sole ownership for a boat in the Med.

Here’s what I’ve come up with as my “ideal” model - i.e. what I would like to buy in to if it was out there:

• Brand-new, affordable, 2-cabin boat – something like a £300k Sealine C335 or similar, so you start with warranty, reliability and low maintenance.
• Mediterranean base - somewhere like the Balearics, Cote d'azur or Liguria — easy access from the UK and northern Europe, good marinas, great cruising grounds.
• Six owner syndicate – keeps it affordable while still allowing decent access for anyone not needing more than 8 weeks per year. I get that anyone wanting less might be better off chartering and many would not want to share with 5 others.
• Usage – split fairly across the calendar - everyone should get 2 weeks in peak season and 2 weeks in spring and autumn. You know your allocated weeks in advance, but can swap with others if you prefer different dates.
• Agent management – someone local handles weekly management, insurance, maintenance (hopefully minimal on a brand new boat), guardiannage, marina liaison and the syndicate account; so owners largely just show up and use the boat.
• Fixed 5-year term – after 5 years the boat is sold and proceeds split by ownership share. This is key as there would always be a guaranteed out. Owners can still sell their share in the interim of course.
• Fair usage and care rules – boat returned clean and refuelled; any damage logged promptly; basic etiquette agreed from the outset and managed by local agent.
• Optional local skipper support/training – for owners who initially need training and/or occasionally want crewed days.
• Annual running costs - maybe £5-6k per owner per year, covering:
– Berthing
– Insurance
– Cleaning and turnaround
– Maintenance, servicing, repairs etc. (hopefully low with boat being under warranty and brand new at the start).
– Guardiannage
– Local agent management (likely a good chunk of the budget).

What I want is a relatively turn key, affordable and low-hassle boat for my 4-person family with school-aged kids and working parents, while it still sort-of feels like my boat.

So here’s my question:
Am I the only one looking for this kind of setup, or do the learned masses here think there likely be appetite from others?

I get some of the details above cold be tweaked (i.e. boat could be a £500-600k boat instead, but my current budget isn't £100k), but at the core, I am looking for a new, reliable boat (not a 20 year old one) which I can use 6-8 weeks per year for a sensible cost. If I was to charter the same brand new 35ft boat in any of these locations I'd be spending £30k+ per year.

Given I haven't been able to find anyone offering something like this, my next thought was; could I make this a business myself. Am I the only one with an appetite for something like this, or is it something worth looking in to?

 

[ontheplane]

I wouldn’t even consider it on a new boat when a 5 year old boat is just as good and significantly cheaper. Reliability- we hear on here horror stories of badly made new boats!

A 5 year old boat is a new boat to me !

 

[jrudge]

The boat is far too small. We are in the med. they are your house when you are there.

We did it with small kids and a targa 40. You don't want to go any smaller.

Ideally you need be a circa 50 ft fly bridge.

 

[Mileholm]

I wouldn’t even consider it on a new boat when a 5 year old boat is just as good and significantly cheaper. Reliability- we hear on here horror stories of badly made new boats!

A 5 year old boat is a new boat to me !

You mean a 5 year old boat is likely to be as or more reliable after new kinks have been addressed? Seems odd to me that most wouldn’t prefer a brand new boat for a fixed 5 year ownership when depreciation is shared 6-ways. Based on how market behaves for nearly new boats, I’d have thought it would keep in excess of 2/3 of its new value after 5 years. So if I have a £60k share, it should be worth at least £40k after 5 years - meaning £4k depreciation per year.

The boat is far too small. We are in the med. they are your house when you are there.

We did it with small kids and a targa 40. You don't want to go any smaller.

Ideally you need be a circa 50 ft fly bridge.

Yea - I appreciate a bigger boat is better. But if the budget is £50-60k (£300-350k boat), then the choice might either be a 20 year old 50ft+ fly or a new(er) low maintenance smaller boat.

 

[Irish Rover]

You mean a 5 year old boat is likely to be as or more reliable after new kinks have been addressed? Seems odd to me that most wouldn’t prefer a brand new boat for a fixed 5 year ownership when depreciation is shared 6-ways. Based on how market behaves for nearly new boats, I’d have thought it would keep in excess of 2/3 of its new value after 5 years. So if I have a £60k share, it should be worth at least £40k after 5 years - meaning £4k depreciation per year.



Yea - I appreciate a bigger boat is better. But if the budget is £50-60k (£300-350k boat), then the choice might either be a 20 year old 50ft+ fly or a new(er) low maintenance smaller boat.

You might get a decent 7/8 year old powercat for your budget.

 

[ontheplane]

You mean a 5 year old boat is likely to be as or more reliable after new kinks have been addressed? Seems odd to me that most wouldn’t prefer a brand new boat for a fixed 5 year ownership when depreciation is shared 6-ways. Based on how market behaves for nearly new boats, I’d have thought it would keep in excess of 2/3 of its new value after 5 years. So if I have a £60k share, it should be worth at least £40k after 5 years - meaning £4k depreciation per year.



Yea - I appreciate a bigger boat is better. But if the budget is £50-60k (£300-350k boat), then the choice might either be a 20 year old 50ft+ fly or a new(er) low maintenance smaller boat.

I mean that whilst a new boat THEORETICALLY has better reliability - in practice from what I see on here, they aren't much better!

If you buy a 5 year old boat that initial depreciation has gone, the new boat kinks are sorted and so on - you basically get a boat that is at least as good for 2/3rds of the money - plus minimal or almost no depreciation.

I am about to take it to the extreme and buy a 28 year old Sportscruiser - it's going to cost me about £22,000. The same boat brand new is about £134,000 !

I realise that's not the same thing at all - but I just don't see the point in brand new - they are not always more reliable but the cost / depreciation vastly outweighs the increased maintenance cost no matter where you are on that curve.

So, I very much doubt I'll spend £110,000 MORE on my boat on Maintenance than the guy who buys one brand new.....

I think, if you can afford it that the best purchase pattern on cars is buy about 2-3 years old - sell at about 5-6 and on boats - buy around 10 years old, sell at 15....

I can't afford to do that, so I am buying much older as that's the only way to get the boat I want in budget - but I'd not ever buy a share in a new boat.

 

[ylop]

You are not the first person to have kicked around a business model for shared ownership. There are informal syndicates around and some "shared ownership clubs" run as businesses - although perhaps not for the exact size of boat you are looking at.

I think your maths are off - 6 owners 6-8 weeks a year usage is essentially year round usage, with little time for maintenance etc.

We decided not to go down a syndicate route because we couldn't leave "our stuff" and so it wouldn't feel like out boat - more like a charter boat with less flexibility.

 

[petem]

The boat is far too small. We are in the med. they are your house when you are there.

We did it with small kids and a targa 40. You don't want to go any smaller.

Ideally you need be a circa 50 ft fly bridge.

We manage quite nicely on our shared 34ft boat but a lot of people do prefer something larger.

Problem is, that brings much hight costs. For example, an acquaintance of mine bought into a well known 60ft Princess syndicate (based in Antibes) and they were spending £150k to run it (that's first hand from him and not a typo). Plus fuel costs will be much higher for owners.

 

[Mileholm]

You are not the first person to have kicked around a business model for shared ownership. There are informal syndicates around and some "shared ownership clubs" run as businesses - although perhaps not for the exact size of boat you are looking at.

I think your maths are off - 6 owners 6-8 weeks a year usage is essentially year round usage, with little time for maintenance etc.

We decided not to go down a syndicate route because we couldn't leave "our stuff" and so it wouldn't feel like out boat - more like a charter boat with less flexibility.

Good points.

There does seem to be quite a few owner-managed syndicates around, but the boats invariably seem to be quite old. And there is no planned exit strategy - as a buyer I'd quite like to know it'll all end in 5 years so I am only committed to 5 years depreciation. Assuming depreciation of no more than £5k and £5k in ongoing yearly fees, I'm paying £1250 per week (or £2k per week if I only use my 5 best weeks) for up to 40 weeks. That seems excellent value for a new 35ft 2-cabin boat. A Beneteau Antares 11 Fly could just about come into it as well.

As a business, I was thinking that if I could sell 12-18 shares per year in 2-3 boats with a set-up fee/margin on top and possibly do the subsequent management, it could be a living. Even better if there is a market for £600k boats sold in £100k shares.

 

[petem]

Good points.

There does seem to be quite a few owner-managed syndicates around, but the boats invariably seem to be quite old. And there is no planned exit strategy - as a buyer I'd quite like to know it'll all end in 5 years so I am only committed to 5 years depreciation. Assuming depreciation of no more than £5k and £5k in ongoing yearly fees, I'm paying £1250 per week (or £2k per week if I only use my 5 best weeks) for up to 40 weeks. That seems excellent value for a new 35ft 2-cabin boat. A Beneteau Antares 11 Fly could just about come into it as well.

As a business, I was thinking that if I could sell 12-18 shares per year in 2-3 boats with a set-up fee/margin on top and possibly do the subsequent management, it could be a living. Even better if there is a market for £600k boats sold in £100k shares.

That size of market doesn't exist for 34 boats.

How will you market the shares that you're trying to sell?

And what kind of ownership structure are you proposing?

 

[petem]

Another couple of thoughts...

Trying to get six people in place to purchase the boat will be impossible. You will need the funds to purchase it yourself outright and then sell the shares.

A fixed term is a mixed blessing. We've had our syndicate boat for eight years now and don't have an end date. Personally, I think you'll struggle to get people to commit to fixe years of ownership but they should be able to sell their shares at will under your syndicate agreement.

 

[Mileholm]

You don’t think there is a market for shares in a new £300k vessel? Maybe not, but I’d personally be interested if I could find what I outlined. I might be the only individual of course.

If there is a market, I’m sure there would be ways to find the buyers.

I was thinking straight co-ownership agreement similar to what you likely have in place for your boat, albeit with commitment to professional management and the 5-year exit.

 

[Mileholm]

Another couple of thoughts...

Trying to get six people in place to purchase the boat will be impossible. You will need the funds to purchase it yourself outright and then sell the shares.

A fixed term is a mixed blessing. We've had our syndicate boat for eight years now and don't have an end date. Personally, I think you'll struggle to get people to commit to fixe years of ownership but they should be able to sell their shares at will under your syndicate agreement.

Fair - I get it is horses for courses on the fixed term.

In terms of the purchase mechanics, I don’t imagine it is impossible to have a 3-6 month marketing window to sell the shares with the boat lined up for taking on after that when it is ready out of production. I’d sign up now for a new boat ready for March from the factory with my money going into a client account along with other co-owners a few weeks ahead of delivery. I could be wrong of course.

 

[jrudge]

Mallorca ( and likely other places ) do have properly managed syndicates - but for bigger boats.

You might be able to make a small markup but bear in mind the buyers will know how much the boat will cost. They won't pay a large margin over cost. I do know a friend who syndicated his boat and his logic was my share is free. But he also runs it without payment.

As above having 48 weeks for use is all well and good but the med is cold in winter ! Mallorca is warmer than Antibes. Antibes is damn cold in Jan and February so don't think people will actually want to spend those there let alone on a small boat on winter. A large boat maybe.

You need a contracted cleaning company who will ask do laundry and a friendly maintenance company.

I don't see there is a business for a boat that small. Small bills = small margins in cash terms !

Syndicated make sense if you are an employee as your time on the boat is naturally limited. And of course it costs less !

 

[roa312]

Given I haven't been able to find anyone offering something like this, my next thought was; could I make this a business myself. Am I the only one with an appetite for something like this, or is it something worth looking in to?

Just my two cents below:

1. Boating consumer route:
I’d say it absolutely makes sense from a financial perspective to go the shared/syndicate route. Many owners probably don’t get much more than 6-8 weeks of use per year anyway, and if that’s the case, shared ownership (or even chartering) makes the most sense financially. I don’t think there’s even much debate to be had about that, regardless of boat size, age, or location.
To gauge interest from others, you could search Facebook groups related to the specific boat type/model or the marinas you have in mind - I’ve seen quite a few relevant discussions in various FB groups.

2. Business route:
I think you have to be realistic about what the service is you’re providing and the income you can generate from that. Setting up a syndicate, handling the paperwork, and providing upfront capital for the purchase is perhaps comparable to the service level of a typical yacht broker sale(?) and should generate the same (maybe a little more) commission.
If you also offer a guardiennage/maintenance service, then the syndicate agreement could be a great way to secure a 3–5 year contract - provided the owners agree. But I wouldn’t expect to generate higher revenues than other guardiennage competitors, and having only a few ~35ft boats under contract likely wouldn’t sustain your business long-term.

 

[Sticky Fingers]

When I saw the headline I was interested but the details put me off. Boat is way too small, I’d want at least 50-60’ and it has to be a Flybridge; the new-boat depreciation isn’t worth the comfort of the warranty, so as suggested above I’d think 5-8 years old is the sweet spot; 6 shares is 3 too many; 4 weeks a year maintenance is nothing like enough; and a fixed term is too restrictive, what if I want stay in, or bail out early?

As for the idea of making a business out of this, look at Sunsail or Moorings and see if you can match their offer.

 

[ontheplane]

I may have misread this - but you want someone to pay £1250 a WEEK for some use of a 34’ boat????

For that sort of money I would want a much bigger better boat.

For £1000 a month I might consider it…..

Again, for me it’s that purchase cost - a new 34’ boat is £300,000 thereabouts - but in my head that would buy you a nice 50’ flybridge a few years old.

The maths don’t work for me sorry.

The only people who will spend 60k a year for a few weeks use are the very rich and they want large and luxurious not 34’


And those that would be happy with a £34’ boat are not going to pay anything like that much for it.

 

[Sticky Fingers]

It’s 1250 per week of use, so 8 weeks in the example offered.

 

[ylop]

Good points.

There does seem to be quite a few owner-managed syndicates around, but the boats invariably seem to be quite old. And there is no planned exit strategy - as a buyer I'd quite like to know it'll all end in 5 years so I am only committed to 5 years depreciation.

Most sensible syndicates have some mechanism to “escape” before other people. A fixed exit could see your boat being liquidated just at the point it’s most interesting to you, or the market is in a slump and you loose the most.

Assuming depreciation of no more than £5k

Is £150k a realistic resale price for a heavily used 5 yr old boat?

and £5k in ongoing yearly fees,

What happens if there’s a major expense - like a blown engine in yr 4? Or a drive problem that sees her out the water for 6 weeks over prime season.

Who is liable if the day before you arrive I hit a rock.

I'm paying £1250 per week (or £2k per week if I only use my 5 best weeks) for up to 40 weeks.

The fun with any syndicate is always allocating weeks etc.

That seems excellent value for a new 35ft 2-cabin boat. A Beneteau Antares 11 Fly could just about come into it as well.

I don’t know the prices well enough - but are there prices real, ready to go costs?

As a business, I was thinking that if I could sell 12-18 shares per year in 2-3 boats

A 1/18th share of 3 boats actually seems an interesting idea.

with a set-up fee/margin on top and possibly do the subsequent management, it could be a living. Even better if there is a market for £600k boats sold in £100k shares.

One day 1 you are already doing what every other charter management business does.

Fair - I get it is horses for courses on the fixed term.

In terms of the purchase mechanics, I don’t imagine it is impossible to have a 3-6 month marketing window to sell the shares with the boat lined up for taking on after that when it is ready out of production. I’d sign up now for a new boat ready for March from the factory with my money going into a client account along with other co-owners a few weeks ahead of delivery. I could be wrong of course.

Problem is if I am ordering now I either need a lot of faith in you finding 5 others and none of them backing out or the deal might be off and I’ve wasted 6 months.

 

[petem]

It’s 1250 per week of use, so 8 weeks in the example offered.

The original suggestion was £5k per annum. So 4 weeks use would work out as £1250 per week. An 8 weeks use would work out as £625 per week.