Ownership via Sunsail

[angelsson]

Had a look at the ownership scheme of Sunsail, sister company to Moorings. Boat becomes yours after 5.5yrs of guaranteed income, enough to pay the finance if approx 50% deposit of original cost, plus up to 10 weeks personal use, anywhere they operate in a similar boat, and no on going expences.

Anyone had any experience with them or any first hand knowledge of any snags that are not apparent at begining.

many thanks

 

[[3889]]

Search the forum, there are many threads showing the poor economics of these schemes.

 

[morsundy]

what's mean

 

[bluedragon]

I've looked long and hard at these schemes over the past 10-12 years, and have met quite a few people who've just taken over their boats after 5 years. I've also looked at ex-Sunsail and Moorings yachts both in the Med and Caribbean with a view to purchase. If you would otherwise charter for say 6-10 weeks a year anyway, the deal is probably quite good. In the economics they give you, the residual value of the yacht at the end of the term is almost always over-inflated and don't assume it'll sell easily. The market was / is flooded with these ex-charter boats. If you want to take ownership and keep the boat in say Greece, then so long as you can use the time every year for the first 5 years it's worth considering, and the people like this I met were generally happy with the deal. As a rule the boats were in very good condition considering their use, but poor levels of inventory and equipment. In the Caribbean, Moorings boats were better looked-after than Sunsail IMHO. I didn't compare the two in the Med. Things might have changed in the last few years since I last looked at this, but I suspect the same comments still apply.

 

[houldsworth]

Before you commit yourself just take a look at any Sunsail boats for sale after 5 yrs they are only worth 50% of their original value! Moorings may be better.
Charles

 

[jeremyshaw]

Always worth asking the question "WHY?".

Why, if you are in the charter business, do you not buy your own boats? Should not be hard to raise loans against the asset etc.

SO, the answer is, because it's cheaper to get punters to buy them for you, and use their capital. You then get the disposal problem after 5 years. And I'm think I'm right in saying that with Sunsail you don't even get "your" boat. You get any Whatsit 38 that they choose to release.

Remember, these guys are buying the boats at a big discount in the first place, as they are ordering in bulk, and charging you full retail.

As others have said, it only makes sense if you really use up all your charter allowance.

An alternative is to buy a boat and put it into charter to mitigate its costs. You have more risk, but also more control. And if you buy nearly-new, at a discount, the economics are better. There are some good charter companies around who charter out private boats on a fully maintained basis.

 

[Sailfree]

Been following these threads for years and consensous is charter a boat where you want for the years of the scheme and buy an ex-charter boat of your choice at the end of the specified period is best and far cheaper.

Therefore it follows the only advantage to not buying a cheap ex charter boat immediately is that you miss the chartering in various places.

 

[angelsson]

Many thanks for all your generous and enlightening replies.

The figures for chartering say a Beneteau 43 over 5.5 years for 28 days a year, or 6 seasons comes to £46,000.
Buying one after 6 seasons use is around £55,000, a total cost of some £100k+
The loss over 5.5 years works out at around £8k based on 28 days per year personal, but which can be as much as 10 weeks per year with the option to rent it to others privately for the weeks you dont use yourself, fully approved.

The partnership cost is £112k, less than you would pay from a broker I understand, with contracted guaranteed monthly income, regardless of the amount of charter of £746.00 per month, and up to 10 weeks personal use. This could offset a considerable amount of loan over 5/6 years.

I think the point made about seeing a 5 year old charter boats condition is very valid, and something I would want to do, also the point re which boat you get at the end of the term, I would expect to receive the one registered in my name as I would own the title to it.

The above is based on due diligence done so far, would appreciate any further help or advice.

Many thanks

 

[Whitelighter]

I am interested in your figures. I can't see two key points though, how much do you pay for the boat, and what is the price you buy it back for after 5 years and 6 months?

 

[bluedragon]

Just to re-iterate. To make sense you need to a) use all the owner's time every year b) want to keep the boat after 5 years and continue to use it. Oh...and ask about VAT if in the EU. That'll be payable by you at the end if you take ownership...they sometimes forget to mention that /forums/images/graemlins/smile.gif

 

[angelsson]

Boat cost £112,000, thats discounted from £119,000.

As an example deposit £62k.

Income from charter £50k guaranteed which pays the loan.

You have 10 weeks per year usage, all cost paid for except your travel and food of course.

The boat is then yours no further payments.

No operating expenses over the last 5.5yrs

 

[angelsson]

That would be my intention, a) to use or rent all time available to me over the period, and to keep the boat at the end, in effect i get a 5 yr old boat at half price, usage for 10 weeks, anywhere in the world they operate, not confinded to original location. very tempted /forums/images/graemlins/cool.gif
The Vat is someting not yet explained to me, thank you for your foresite.
welcome more comments please

 

[Sailfree]

I have followed many of these threads and the only way you can justify it is if you would really use all the owner weeks and if you didn't do this scheme you would be payoing full charter rates for those weeks.

If you want a cheap boat in your name and not interested in visiting various charter bases all over the world look at buying (what you are proposing as a desirable ex charter boat) straight away and cost that for your 10 weeks use!

I speak as one who has had 3 boats in charter over the last 10 years and would have no problems buying an ex charter boat providing it had been well maintained.

 

[WowdyWebel]

I had a very quick look at this.

- as people have pointed out the financial sense or otherwise is very sensitive to residual values and swings make a big difference. A 5 year old boat with a realisable value of less than the loan would be slightly less than amusing.

- if one is being strictly financial about you need to add the opportunity cost on the deposit in calculating the value of the "free" weeks. At 6% its about £3700 p.a so they might not be as free as they look.

- you are taking the interest rate risk.

In my experience of other industries most of these schemes revolve around big business borrowing cheap money from private punters and allowing them to take the capital risk. If you have ambitions to go into the leasing business here is your chance!

 

[jeremyshaw]

Have you looked at how HMRC regard the income? Pay 40% on that and....

 

[brianhumber]

Leaving aside money what are you getting?
A 5 year old boat that has had enough miles under her keel that normal use would take 20-30 years to get to. Remember anything that can wear will be worn so as well as needing new sails look carefully at standing and running rigging, engine, gearbox,shaft, winches ,rudder bearings etc etc.
A visit to Portsolent during Cowes Week to see the Sunsail T bone crash repairs in full swing might also be of interest.

 

[angelsson]

Thanks again for the many good points raised for consideration.
Where in Port Solent at Cowes week, do you mean charters being damaged due to busy waters?

 

[jonathankent]

[ QUOTE ]
do you mean charters being damaged due to busy waters?

[/ QUOTE ]
More likely the lack of experience of some of the charterers

 

[Seven Spades]

As a business venture I believe that income can be offset against the interest payable on the loan.

 

[Guest]

I looked at this many moons ago .... and came away feeling that there had to be a catch ... but I couldn't find it then.

It all sounded too easy ... too good to be true.

I am a great believer that nothing in this world is free .... and any Charter Company offering Charter to Buy schemes as this effectively is must have sums in it's favour.

I do not recall any claim that I would have expense free boat for the period before handed over to me out of charter ... I seem to remember a lot of clauses and splits or responsibility etc. There were also management fees and deductions for all sorts of "required services" that were not even optional to refuse.

Maybe it's all changed now ? Cuase I had distinct impression that I was paying out more than I would if I bought the boat myself.