Yacht purchase and charter management

been sailing for lot of years but chartering costing a fortune now (just done RTI ... v expensive) lookin at setting up charter facility with husband down on south coast ... anyone recommend useful sources of 'how to' info so we dont fall foul of any laws, tax issues etc?? want to sail it ourselves but realise will be when its not chartered .... all advise/links/book recommendations etc welcome
cheers
 
Over last 7 years I have owned 3 charter boats on South Coast. PM me if you want to discuss.

I have heard all the arguments and some people do some creative accountancy but if you do it legally you are really just reducing the cost of yacht ownership and losing the pride of ownership. Some people have their own car and are proud of it ,some have a company car, and some drive a "pool" car. Owning a charter yacht is having a "pool" yacht.

There are risks as charter companies rarely take on repair costs (they arrange the necessary repairs but don't pay for them! - other than those they can recoup from the charterer) and a number of charterers hide anything they break that may not be obvious. If the boat is reliable (I found out the hard way that Volvo Penta were not!) and fairly robust (it may go aground!) you can seriously reduce the cost of ownership but don't look at it as an investment. If it was such a good investment Charter companies would not be chartering your boat out but buying their own ones to make more money! The repair risk is a double wammy as you not only pay for the repair but loose the income during the repair. While a security deposit is normally required it covers the insurance excess but not the loss of no claim bonus at next years renewal.

If you ever want to buy a new boat you won't get better unbiased advice than from a charter company (that is not linked by cheap purchase deals to certain makes) on which boats are reliable and take the heavy wear of chartering. It certainly ruled out one make of boat during our last purchase.

With regard to Sunsail if your holiday choice every holiday over say a 5 year period was to charter a boat it may prove cost effective to buy. As an investment though it plain silly and a gamble at best. Its fine if you can afford the gamble and as I said it can seriously reduce the cost of boat ownership but please go into it with your eyes open.
 
Wud def love to know more ... we're not looking to retire early on this one but merely to reduce cost of boats we keep hiring 2/3 times a year down there for races and various other trips/hols. We have boat on windermere but having done that for few years looking to move south which is where we always seem to charter and where demand seems to be also.
Looking to provide break even on costs ie to pay for mooring fees etc ... anything else is a bonus - def not in it for profit. Have reliable skipper we use and hub is also skipper to use so not looking nec at bareboat market to try to provide some stability and quality of boat users!

Its really our boat that we will choose/not choose to rent out as and when ... any guideance would be most grateful - above board and legal definitely way for us to go - it all seems bit of minefield at the min Sailfree
Cheers
 
Sailfree ... or anyone what also meant to add was that am planning to set up charter company ourselves - so boat not nec left in care of others charter company ....
all guidance welcomed! gratefully! and any reading guidance/ref books too ... thanks
 
The problem is that both the inland Revenue and the VAT have had numerous attempts by people who state they want to set up a charter company and seek to claim tax relief and VAT back but fail to make it a going concern and one suspects they never intended to. The IR now approach this area somewhat understandably sceptically.

If you intend to set up your own charter company how are you going to advertise and have you seen the costs!

You can recover your annual costs by chartering a boat out but you have to be very successful to also recover depreciation unless you do it for more than 7 years.

Currently the VAT are very difficult about registration and may only allow VAT refund for the specific business periods. All other period can be considered personal benifit. IR may take similar view. We invoice ourselves at market rates for any periods of own use. Record keeping is essential to demonstrate Income and own use.

The boat you want for your own use may not be the best one for charter and while you can charge a little more for quality boats you cannot charge a lot more.

I was recently sorely tempted to buy a 6 year old charter 414 Gibsea for about £80k. It had a excellent history with repeat charters, sailed well with a good handicap and the 6 yr old ones were solidly built with many going on the charter market. I could accept the replace standing rigging at 7 yrs and other repairs but it was the overall tired look that finally put me off. However if I had just looked at the economics it would probably have been a more profitable buy than the new 43 Jeanneau! This is where the IR are right as an element of emotion entered what should only have been a business decision.

In the 43 ft range a Bavaria will set you back about £130k a Jeanneau about £170k, an X boat £260k, HR about £320k up to a Swan about £600k.

PM me if you want to discuss further but if you are really serious I recommend you first speak to a charter company and see what boats they advise they could easily charter out and get an income for.
 
50% is a more likely value for a monohull at the end of a 5 year period in the Sunsail/Moorings fleet. Also the Inland Revenue won't accept that you are running a business if you are in a guaranteed income scheme. If you are not in a guaranteed income scheme then you need a long season to have any chance (slim at best) of making any money

My Privilege 435 cat is the most successful boat in the Tortola Marine Management (TMM) fleet in the BVI. I get something like 32-35 weeks charter a year and some MASSIVE maintenance bills. Income pays the finance cost and maintenance but probably not the depreciation. However, if the Dollar ever strengthens against the Pound, I may just come out ahead in a few years time.

It is fun though except during hurricane season /forums/images/graemlins/frown.gif
 
Have just bumped this thread up as I have been asking questions in another thread about this same idea.

Unlike others on this thread, I don't want to run this as a commercial venture - I just want to acquire a boat at the end of it, for a cheaper price than normal.

My question is simple: do you think that a 5 year old boat with the wear and tear associated with being on charter for five years is worth the reduced amount you would pay by buying it through a sunsail charter programme? Is it a sensible 'long-term' purchase?

For someone who can 'only' afford perhaps £20-25,000 to spend on a boat, if Sunsail only ask for 20% from the purchaser at the outset, with the rest of the balance being paid by charter income, it seems like a good deal.

Unlike others, I don't want to sell the boat at the end of it.

Go for it?
 
Just a point of information. Non-Greeks who are EU citizens can now own charter businesses. There is a new type of company M.C.P.Y. (N.E.P.A. in Greek) which allows any EU citizen to own charter yachts in Greece.

However, I'd still suggest having a Greek director (who doesn't need to be a shareholder in the boats) to help you with the paperwork.

Regards
 
As I think others have said, you would be very lucky to have had the boat mortgage fully paid off within the 5 years. I have looked at the numbers a few times over the last few years, and every time I do it just does not seem to make financial sense either as an investment or as a way to own a boat without really paying for it. If you are entering the program to own a boat at the end, you have no idea what condition the boat will be in after five years.

Personally I have come to the conclusion that there are better investments, and if the goal is to own a boat in five years' time, it is better to save your pennies for five years and then buy an ex-charter boat. That way you can be sure that you will own a boat that has not been run hard aground etc.

Others must have a different POV, as there are clearly many who feel there are benefits of being a charter owner. Perhaps different use patterns, and the ability to use boats in different locations for "free" tips the balance in favour of owning a charter boat. But not for us.
 
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