New boat yacht-shares as done by one large broker: any experiences please?

[Povremeni pomorac]

Dear All,

I imagined there must be threads about this, but couldn't see them. Feel free to direct me if you know of them.

I look at the postings here with interest and despair at the various tales of woe about things going wrong, breaking, failing, needed renewal. Often at great expense. I really don't want to buy a new yacht on my own: a lot of money for a mortal like me, the depreciation is terrible, and a used one looks like it can be a nightmare.

So, I have seen many adverts for schemes whereby one parts with c £30k for a part share in a new boat. There are then monthly outgoings of the order of £1400, but this allegedly covers everything including some payment off the loan involved to buy the boat. Well, I'm sure you've seen it too. I worked out that one needs to budget around £1k a month for a boat of one's own on the S coast in a decent marina, insurance, annual service, and a sinking fund for replacement parts.

My main concern is what one tends to be offered at the end of a three year contract as a "guaranteed buy back".
A trivial thing for most, but a bit of a pain for me, is that one cannot leave all one's clobber on the boat. (OK- a first-world problem. I get it.)
I'm not so worried about wanting to have the boat at the same time as the others in the group; we don't need to have school hols and are pretty flexible. Given that most people who own a boat tend to use it for a fraction of the year, it's probably a fairly efficient way of using a boat.

So, has anyone had experience or known of chums who did? I appreciate many may have opinions on it, but I'd like to know of real-world experience.

Thanks PP

 

[benjenbav]

As with any enterprise undertaken with other people, understand your exit before you sign up.
By which I mean not only that the arrangements for the common ownership should be properly documented and deal with issues that will come up during its currency, but also that you should be clear as to how you can get out of it if you want to, for example, what is the process and what will it cost to do so?
Lots of other considerations, of course, but - if it doesn’t work out - it’s helpful to know that, if the worst comes go the worst, you can at least put it all behind you at an acceptable cost.

 

[Povremeni pomorac]

As with any enterprise undertaken with other people, understand your exit before you sign up.
By which I mean not only that the arrangements for the common ownership should be properly documented and deal with issues that will come up during its currency, but also that you should be clear as to how you can get out of it if you want to, for example, what is the process and what will it cost to do so?
Lots of other considerations, of course, but - if it doesn’t work out - it’s helpful to know that, if the worst comes go the worst, you can at least put it all behind you at an acceptable cost.

Oddly, they do seem to have that side of it sorted, but I think one is tied in for 3 years at least but can get out then. The problem is, as you say, at what cost.

 

[chris-s]

£1400 per month could be quite a bit of chartering with easier exit routes and less
sleepless nights. Depends on what you expect your usage to be.

 

[Povremeni pomorac]

£1400 per month could be quite a bit of chartering with easier exit routes and less
sleepless nights. Depends on what you expect your usage to be.

INdeed: masses of chartering, which is why I shall almost certainly not be buying a boat in 2022 but doing much of the C word, all being well.

 

[Tranona]

If having a boat for you is only about the time spent on it sailing(hopefully!) then these schemes have attractions. However for most people that is not enough, particularly in the UK when the available time for full time sailing in your allotted periods is very unpredictable. You are paying for a third or quarter of the full cost of the boat plus the cost of someone to manage it and are foregoing the balance of time available. Historically these schemes have a very chequered history for because experience shows for most they are poor value. For many people owning a boat is an all consuming activity and they get their value out off having access whenever they want and are answerable to nobody.

If you just want sailing time without the ownership commitment then chartering is the way to go. No up front payment, far greater choice of time, location and boats. If you want a combination of the two - ownership, but not exclusive use, nor bear the full cost then purchase through a charter management agreement comes into the frame, although these are not as attractive as they once were. That is how I bought my first new boat and it worked very well for me. However, you have to be clear about your long term objectives and stability/security as it is very difficult to exit. Stick with it, though and you can get your boating (and eventually the boat) for substantially less then sole ownership.

Don't dismiss buying a new boat. The old bogey of depreciation has gone away, at least for the foreseeable future in the UK . I am in the process of selling the boat I bought new in 2015 and expect the selling price to be close to 90% of the original cost. This is a major change from the last 20 years or so - but conditions have changed. Between 2000 and 2016 new boat prices were static or even fell in real terms, particularly pre 2008 and volume sales increased dramatically. Secondhand prices fell and on volume production boats you would expect a drop of 40% over the first 5 years, not the 10-20% it is now. Since 2016 new boat prices have risen (in the UK) by approx 40% and both choice and supply have shrunk. There are virtually no new boats available for delivery in the UK until 2022.

The running costs you mention £1000 a month are much the same whether you own a new boat or an old one of the same size as over half of the costs are fixed - berthing, winter maintenance and insurance. In fact a new boat would be less in the first 5 years based on my experience. Nothing significant has gone wrong and my only boat expenditure has been a cruising chute and this year a new main - both discretionary. I am a great believer in buying new IF you can finance it yourself and keeping it a long time (10 years). Same with cars. I have had 3 new cars in the last 30 or so years, 6 years, then 9 and last one 15 - look after them service properly and live with driving an obsolete model most of the time!

For the reasons given above, you might find it difficult to buy new at the moment so the next best thing is a late model one owner used. Also in short supply, but they are there with people like me possibly getting out or taking advantage of the high prices. In my experience new boats of proven design are largely trouble free, usually come well equipped with proper factory installed gear and are much closer to modern cars in this respect.

Happy to answer any other specific questions.

 

[Frogmogman]

I too looked at various charter management schemes, and it was always the soaking you took at resale that put me off. To really get value out of such set ups, you need to be able to take 10 -12 weeks holiday a year, to make full use the available owners’ weeks. With my business, that would be tricky.

Another alternative to defray the costs is to share the boat with a friend or two. If it’s people you know and trust, and their sailing programme dovetails well with yours it can be a great solution; it cuts down on the capital outlay, and defrays the annual running costs. It certainly works for the friends who own the Swan 43 I race on. For the right group of people it’s a sweet deal.

Alternatively, if you haven’t got any friends (possible, as from your remarks about Southampton you appear to be from Pompey), you could buy into an existing syndicate. There are brokers and sites that deal in this sort of thing; try having a look at yacht-fractions.co.uk

At the end of the day, I’ve followed Tranona’s advice (tho’ to be fair I did so before he dished it out), and bought a 5 year old but unused boat. I want to be able to pop down and use it when I have a day or three free without answering to anyone else.

Tranona is right in that new boat prices have shot up in the last 5 years. The guy who is selling to me, having ticked every expensive box on the order form, paid €185000 all up back then (including a substantial discount, as it was the 3rd boat he’d bought from the same dealer) . I’m buying it for €120000; to buy a new one to the same spec now would be about €225000, and you wouldn’t get it before mid 2023 at the soonest.

I’m pretty confident that I won’t lose much money on this boat.

 

[KompetentKrew]

If you desire to sail in the UK then there are some boat co-ops which might be worth considering: Brighton Belle, Overlord and Phoenix Yacht Club.

 

[Fimacca]

I had a sailing buddy who signed up with a like scheme, he got out after 3 years but would never speak about it after that. I suspect he did not get on with it. I didn't ask further when I had the fob off twice about it !
I have also known a few folk share boats. It worked for some, and not others. You have to be picky with that.

~For me, I like sailing my boat, I also like maintaining it and tweaking things about it. I guess that is a 60/40 (which fits with british weather imho !)

 

[Povremeni pomorac]

If having a boat for you is only about the time spent on it sailing(hopefully!) then these schemes have attractions. However for most people that is not enough, particularly in the UK when the available time for full time sailing in your allotted periods is very unpredictable. You are paying for a third or quarter of the full cost of the boat plus the cost of someone to manage it and are foregoing the balance of time available. Historically these schemes have a very chequered history for because experience shows for most they are poor value. For many people owning a boat is an all consuming activity and they get their value out off having access whenever they want and are answerable to nobody.

If you just want sailing time without the ownership commitment then chartering is the way to go. No up front payment, far greater choice of time, location and boats. If you want a combination of the two - ownership, but not exclusive use, nor bear the full cost then purchase through a charter management agreement comes into the frame, although these are not as attractive as they once were. That is how I bought my first new boat and it worked very well for me. However, you have to be clear about your long term objectives and stability/security as it is very difficult to exit. Stick with it, though and you can get your boating (and eventually the boat) for substantially less then sole ownership.

Don't dismiss buying a new boat. The old bogey of depreciation has gone away, at least for the foreseeable future in the UK . I am in the process of selling the boat I bought new in 2015 and expect the selling price to be close to 90% of the original cost. This is a major change from the last 20 years or so - but conditions have changed. Between 2000 and 2016 new boat prices were static or even fell in real terms, particularly pre 2008 and volume sales increased dramatically. Secondhand prices fell and on volume production boats you would expect a drop of 40% over the first 5 years, not the 10-20% it is now. Since 2016 new boat prices have risen (in the UK) by approx 40% and both choice and supply have shrunk. There are virtually no new boats available for delivery in the UK until 2022.

The running costs you mention £1000 a month are much the same whether you own a new boat or an old one of the same size as over half of the costs are fixed - berthing, winter maintenance and insurance. In fact a new boat would be less in the first 5 years based on my experience. Nothing significant has gone wrong and my only boat expenditure has been a cruising chute and this year a new main - both discretionary. I am a great believer in buying new IF you can finance it yourself and keeping it a long time (10 years). Same with cars. I have had 3 new cars in the last 30 or so years, 6 years, then 9 and last one 15 - look after them service properly and live with driving an obsolete model most of the time!

For the reasons given above, you might find it difficult to buy new at the moment so the next best thing is a late model one owner used. Also in short supply, but they are there with people like me possibly getting out or taking advantage of the high prices. In my experience new boats of proven design are largely trouble free, usually come well equipped with proper factory installed gear and are much closer to modern cars in this respect.

Happy to answer any other specific questions.

Thank you. that's very helpful. I am not at all an expert in finance. Whereas I have been about 100% accurate in how Covid would behave as a disease in the UK, I have been almost 0% accurate in how it would affect the economy. WIth the exception that we would not have a recession, as such, as the problem was a disease and not subprime loans. I think this coming year will be interesting. For example, will there be masses of second hand AWBs for sale still in the spring? There are masses now. I think I shall charter this year; hopefully just in Croatia. I already have a week booked at the end of May from Mali Losinj. Another chum of mine, who is an "old salt" says, like you, that buying new can make sense if, like with a car, one decides to keep it for 10 years. Certainly, the guarantee period is a great reassurance.

 

[Povremeni pomorac]

If you desire to sail in the UK then there are some boat co-ops which might be worth considering: Brighton Belle, Overlord and Phoenix Yacht Club.

I was with one in the Hamble for two years. It was OK, and, to be fair, very good for a relative newbie like me, in that I got to skipper various boats,and availability was pretty good. BUT, the downsides were that, having arranged to book a boat for a few days, the people who had said they would come with me all dropped out one by one with various excuses, making longer trips impossible. The management expected the boat to come back, not just in a reasonable state, but pristine. (Which is not what theiur adverts say, of course.) One chum, in a different scheme on the Hamble, got an accusatory email after his return saying that "The cushions had been left in disarray" !!!! If need be, I want to be able to leave a boat in a reasonable state, as I'd wish to find it, and not be put off by the odd piece of seaweed. WIth one's own boat, one can leave it as shi**y as one wants, and put off cleaning till the next day, or week.
Another downside was that if one wanted to have more than about 35 days of use a year, then it got very close to costing the same as one's own boat.

 

[Povremeni pomorac]

I had a sailing buddy who signed up with a like scheme, he got out after 3 years but would never speak about it after that. I suspect he did not get on with it. I didn't ask further when I had the fob off twice about it !
I have also known a few folk share boats. It worked for some, and not others. You have to be picky with that.

~For me, I like sailing my boat, I also like maintaining it and tweaking things about it. I guess that is a 60/40 (which fits with british weather imho !)

Yes, I know a chap who, along with 3 others, bought a Bavaria 40, new, and kept it in Croatia. He said that on the whole, it worked very well. However, being a very experienced sailor (RYA examiner and Ex-RN officer) if there was a problem, people would tend to phone him instead of using their own brains. He was too polite to tell them to "Be fruitful and multiply."

 

[Tranona]

I too looked at various charter management schemes, and it was always the soaking you took at resale that put me off. To really get value out of such set ups, you need to be able to take 10 -12 weeks holiday a year, to make full use the available owners’ weeks. With my business, that would be tricky.

Yes, they suit only a very narrow group of people, Some use them just like PCP schemes for buying cars - just rolling over to a new boat every 5 years or so. Fine if you have the stability to look that far ahead. For that type of person the crunch comes when you want to get off the roundabout. The other sort are people like me who use such a scheme to purchase a retirement boat and get 2free" holidays in the meantime. The interest cost on the capital to buy my boat was equal to about 2 weeks charter a year and I got 7 years of that before taking the boat over, then a further 6 years use before selling it for not much less than I paid for it. I would never have been able to justify buying a new boat of that size and type without using such a mechanism. The trade off is the limited use during the charter contract and the potential loss if you have to exit by selling back to the management company at the end of the contract.