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Re: Do you own the boat you charter?
[Re: StormJib]
#67470
09/08/2015 03:16 PM
09/08/2015 03:16 PM
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Joined: Sep 2010
Posts: 5,720 Massachusetts
maytrix
Traveler
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Traveler
Joined: Sep 2010
Posts: 5,720
Massachusetts
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If you want to own a boat and have it rented out to help cover the costs of ownership and help pay it off, then ownership can be great.
We've had two goals -
1. Charter frequently (pretty much - until this year) we've taken all our vacation time chartering. Only reason we had a change this year is due to our son who is 7 months old now and us taking time off earlier this year after he was born. Still got one trip in though and are planning another in November.
2. We want to spend time living on a boat in the future. So we've got the boat and a good portion of it is being paid off by it being in charter.
We've used our boat once - for 2 reasons. Our boat is in St. Lucia and we enjoy sailing and diving in the BVI and we have made great use of our owner benefits and have upgraded to a Catamaran about 80% of the time we've chartered.
As George said, check out sailonline - lots of great info there.
StormJib is correct, its not a way to make money, but the same could be said of home ownership yet lots of people look very highly at home ownership. So figure out if it works for you and if it does, go for it.
The one thing I woudl have done differently is to have put a larger down payment on it and to have had the loan for fewer years. In our case the revenue is guaranteed, so we could have had it be a bit higher and just known we'd be contributing each month. This would give you a much lower balance at the end of the program.
Feel free to PM me with any specifics.
Matt
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Re: Do you own the boat you charter?
[Re: maytrix]
#67471
09/08/2015 07:24 PM
09/08/2015 07:24 PM
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Joined: Jan 2012
Posts: 482
706jim
Traveler
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Traveler
Joined: Jan 2012
Posts: 482
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Just remember that when you charter your boat, it just might be treated like a rental car: Last year we saw a convoy of four 474 PC's pull into Leverick. One of them smashed into the dock so hard that he tore some of the dock stanchions free. And then laughed about it! So it could be pretty disheartening when you see your investment battered up from incompetent handling when you yourself are sooooo careful.
Last edited by 706jim; 09/08/2015 07:25 PM.
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Re: Do you own the boat you charter?
[Re: Twanger]
#67473
09/08/2015 09:02 PM
09/08/2015 09:02 PM
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Joined: Sep 2010
Posts: 5,720 Massachusetts
maytrix
Traveler
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Traveler
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Posts: 5,720
Massachusetts
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With the number of people here that charter frequently - someone should see about putting together a TTOL LLC for boat ownership. If we didn't own already, I'd look into seeing who was interested myself.
Matt
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Re: Do you own the boat you charter?
[Re: hallucination]
#67476
09/08/2015 10:09 PM
09/08/2015 10:09 PM
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Joined: Sep 2010
Posts: 5,720 Massachusetts
maytrix
Traveler
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Traveler
Joined: Sep 2010
Posts: 5,720
Massachusetts
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Don't forget - not all charter companies are equal. What hallucination says is accurate for many companies, but not for Moorings/Sunsail (and perhaps others) as you pay nothing during the charter contract. They take care of all maintenance..etc. The only downside to this is that you can't customize your boat - you can choose from the models they offer, but they all have the same features.
Personally, I don't see that as a big drawback since the more extras you have, the more things people can break, so you can just add the extras once it comes out of charter as the majority aren't needed when chartering.
The other thing to consider is having your boat be a crewed boat - these get taken care of much better.
Matt
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Re: Do you own the boat you charter?
[Re: StormJib]
#67478
09/09/2015 02:30 AM
09/09/2015 02:30 AM
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Joined: May 2004
Posts: 2,429 Villa Euphoria Leverick Bay, P...
mdoyle9999
Traveler
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Traveler
Joined: May 2004
Posts: 2,429
Villa Euphoria Leverick Bay, P...
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We have had a very good experience owning. After sailing with TMM for 10 years we took the plunge and bought a Beneteau 40 CC with Sunsail. We went for the guaranteed income plan which more than covered our mortgage. After five years, Sunsail fully restored the boat to a very high standard. We then moved her to BVI Yacht Charters for another five years. They too did a great job maintaining her and it was relatively pain free to sell her after 10 years. We got all of our money back from the original deposit and made a small profit. The best part was that we sailed on average three weeks a year in the BVI for ten years for nothing, and enjoyed a modest tax advantage because of depreciation. After being without a boat for a year, I missed having one built to my specs so we took the plunge again. This time with TMM and our boat is a Mahe 36 catamaran. In both instances, I purposefully selected boats suited to two couples, but easily handled by just two of us. I did this because I didn't want a party boat. More cabins equals more people, more damage, more parties. So far it has worked. Pick the right boat ane think about keeping it in charter for 10 years. If you have other questions, feel free to PM me. Good luck.
Mike "The journey is the thing." Homer
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Re: Do you own the boat you charter?
[Re: maytrix]
#67479
09/09/2015 09:06 AM
09/09/2015 09:06 AM
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Joined: Oct 2004
Posts: 1,956 St. John, USVI
RickG
Traveler
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Traveler
Joined: Oct 2004
Posts: 1,956
St. John, USVI
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Capt. Jay and I went the USVI LLC route for our non-charter boat ownership. The Reef Song have a different approach. You need to pick your partners carefully. There's nothing keeping you from creating a partnership to go the traditional charter ownership route.
Cheers, RickG
S/V Echoes, 2003 Beneteau 423 Grenada
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Re: Do you own the boat you charter?
[Re: maytrix]
#67480
09/09/2015 11:01 AM
09/09/2015 11:01 AM
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Joined: Jul 2013
Posts: 19
donsellsyachts
Traveler
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Traveler
Joined: Jul 2013
Posts: 19
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Please be aware that all charter companies are not the same and there are vast differences in the programs they offer. As an employee of TMM Yacht Charters I am very confident in our simple, straightforward, time-tested program. I realize this forum is not to induce sales but I welcome any potential charter boat owners to contact me for honest answers regarding being an owner in our fleet. cell 284-340-6393 email don@sailtmm.com
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Re: Do you own the boat you charter?
[Re: moonhat]
#67482
09/09/2015 12:41 PM
09/09/2015 12:41 PM
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Joined: Sep 2010
Posts: 5,720 Massachusetts
maytrix
Traveler
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Traveler
Joined: Sep 2010
Posts: 5,720
Massachusetts
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So what made it sound appealing to you in the first place?
In addition to gathering some more info, you should also reach out to some of the companies to get more info as well.
Matt
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Re: Do you own the boat you charter?
[Re: GeorgeC1]
#67485
09/09/2015 03:29 PM
09/09/2015 03:29 PM
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Joined: Sep 2010
Posts: 5,720 Massachusetts
maytrix
Traveler
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Traveler
Joined: Sep 2010
Posts: 5,720
Massachusetts
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The loan can vary - Most quotes I've seen from Moorings are 15 years. But you can come up with other financing options as well. With their options, their payment to you over the 5 years is equal or greater than your mortgage payment. IF you want to see real numbers, reach out and get a quote on a boat you are interested in.
Only using 10 days a year though, it may not be worth it, but that's really a personal decision. If having a good portion of the boat paid off by charter use is what you want, then it could benefit you still. You'd just want to sell as much time as you can (maybe see if you can negotiate more) and put that towards the mortgage..
Matt
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Re: Do you own the boat you charter?
[Re: Knotthead]
#67488
09/09/2015 07:32 PM
09/09/2015 07:32 PM
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Joined: Apr 2004
Posts: 10,999 Macon, Georgia
GlennA
Traveler
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Traveler
Joined: Apr 2004
Posts: 10,999
Macon, Georgia
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One advantage of a 10 year over a 15 year mortgage is that you wil be less upside down after it comes out of Moorings charter at year 5.
Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. - Mark Twain
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Re: Do you own the boat you charter?
[Re: jphart]
#67489
09/09/2015 11:49 PM
09/09/2015 11:49 PM
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Joined: Sep 2010
Posts: 5,720 Massachusetts
maytrix
Traveler
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Posts: 5,720
Massachusetts
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jphart said: No deal works for just 10 days a year. Rent it, don't buy it. I know guys who have done Two five year deals with Moorings and Sunsail. They only make it work with 10+ Weeks of time...maximized with the short booking window.
Most owners are never on "their"boat. They exchange for different location and different size/type of boats. It could work from a financial aspect of having someone else pay it off - all depending upon the boat. Take a Cat - you can sell time pocketing about $6k per week. So that's an extra $12k a year to go towards principal on the loan giving an extra $60k towards principal while in charter. So in addition to having 1/3 to 1/4 of the boat paid off in the charter, you get that extra $60k. Plus (again assuming a cat) $10k in charter time a year (based on 10 days) - another $50k savings.. Gotta compare to what it would cost to buy the same boat just coming out of charter, but I think it could be feasible depending on the circumstances.
Matt
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Re: Do you own the boat you charter?
[Re: maytrix]
#67490
09/12/2015 11:18 AM
09/12/2015 11:18 AM
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Joined: Dec 2000
Posts: 283 Miami, FL
Michel_Benarrosh
Traveler
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Traveler
Joined: Dec 2000
Posts: 283
Miami, FL
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Hi all: this is Michel Benarrosh from sailonline.com. This is probably one of the 2 or 3 oldest topics in the charter forums. I will try to post more on this as i do every 2 or 3 years when the topic surfaces -again.
However, I MUST say something hugely important - probably my rule #1 in the process of purchasing - or not - a charter boat. Whatever you do, DO NOT CONTRACT A MORTGAGE THAT IS MORE THAN 10 YEARS (12 is already a stretch). As a matter of fact, in France where the banking system is much more controlled, you cannot get a marine mortgage that has more than a 7-year term. Here, some charter companies suggest 15 or even 20 year-mortgage. That, IMHO, is equivalent to financial assassination, for the sole purpose of making a sale to an unsuspecting buyer. Here is why: Say you purchase a boat with the intention of keeping the boat for 10 or 15 years. You contract a 15-year mortgage. It SEEMS to make sense so far. Now, say after 4 years, a totally unexpected event (health, financial ... whatever) occurs in your life. Because of that event, you are FORCED to sell the boat. That is when all hell breaks loose: because of the way the boat resale market works (trust me on this), you are absolutely GUARANTEED that the REAL market value of your boat (not some wishful thinking value the original salesman made you believe) will be so much upside down with mortgage payoff amount, that you will find yourself in a terrible predicament. With no way out if you don't have the cash in hand to cover the difference MORTGAGE PAYOFF - BOAT SALE PROCEEDS
I have seen this happen too many times to even count in my marine business (brokerage, consulting, new boat sales etc...) and the outcome is very, very ugly for these families.
A boat is never EVER a reason to face a financial crisis. A boat purchase has to be a happy event, done with a full understanding of all components. So like in any other large purchase, be financially wise and use your common sense. And I promise you it will be the platform to a great lifestyle.
Cheers to all!
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Re: Do you own the boat you charter?
[Re: StormJib]
#67492
09/12/2015 05:57 PM
09/12/2015 05:57 PM
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Joined: Dec 2000
Posts: 283 Miami, FL
Michel_Benarrosh
Traveler
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Traveler
Joined: Dec 2000
Posts: 283
Miami, FL
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Stormjib:
You are absolutely correct, except for one detail: this is a pleasure and a lifestyle that is second to none (i know, I have owned 3 charter boats). You cannot equate this to investing or home ownership. I am struck by the fact that nowadays, 95% of boat buyers I meet or advise or transact with, think about the financial aspects first. What about sailing and pride/pleasure of ownership?? What about the dream??
Again, it is a pleasure, and all pleasures have a price. If not there would be no luxury cars (think they make sense?), 1st class traveling, luxury clothing etc... You get the idea. Each one of us puts a different price on our pleasure, granted, but the rewards, when the whole process is done correctly, are absolutely beautiful.
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Re: Do you own the boat you charter?
[Re: Michel_Benarrosh]
#67493
09/12/2015 06:11 PM
09/12/2015 06:11 PM
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Joined: Sep 2010
Posts: 5,720 Massachusetts
maytrix
Traveler
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Traveler
Joined: Sep 2010
Posts: 5,720
Massachusetts
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There's a simple reason the charter companies don't own the boats - the capital expense needed up front.
Matt
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Re: Do you own the boat you charter?
[Re: sail2wind]
#67498
09/13/2015 01:00 PM
09/13/2015 01:00 PM
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Joined: Apr 2006
Posts: 1,450 Napa, California
Teammac
Traveler
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Traveler
Joined: Apr 2006
Posts: 1,450
Napa, California
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Remove the emotion from your decision, take a calculator and sit down with your banker or advisor. The decision to put a boat into charter becomes very clear.
It's not what you've got, it's what you give, it's not the life you choose, it's the life you live.
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Re: Do you own the boat you charter?
[Re: warren460]
#67500
09/13/2015 04:47 PM
09/13/2015 04:47 PM
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Joined: Apr 2006
Posts: 1,450 Napa, California
Teammac
Traveler
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Traveler
Joined: Apr 2006
Posts: 1,450
Napa, California
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We did not miss out on any sailing. It was simply better for us to continue to charter, then purchase when the charter boat we wanted to own came out of charter. Saved a ton of money and we were able to get the pick of the litter. Also, from the time we would have put a boat into charter, and the time to purchase arrived, our boat choice changed. We were not stuck with a boat we thought we wanted six years previous. Now we will keep this boat on a ten year plan, then re-evaluate our position and decide to sell it or continue to sail. We bought it near the bottom of its value so even in those ten years we should not lose more than 15%, as long as we do our due diligence with maintenance, etc.
It's not what you've got, it's what you give, it's not the life you choose, it's the life you live.
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