Is Charter Yacht Ownership Right for You?

Owning a yacht on charter sounds exotic and is enticing and it has probably crossed your mind. Maybe you’ve heard stories of good experiences or bad ones, or maybe you haven’t heard any stories but you’ve romanticized the idea into the perfect lifestyle.

Owning a yacht in the charter can be an excellent investment—for the right sailors.
Photo courtesy of Peter Nielsen.

Before you even speak to the first company about their ownership programs, you may want to see if you fit the mold. Here are 10 ways you may be the ideal owner.

1. You have a flexible schedule and can travel on short notice.

As an owner, you’ll earn time to sail your boat. Some companies work on a points system while others offer a combination of high and low season weeks. Most also offer last-minute owner bookings where you get extra time but have to travel within 16 days of the free date. For both the Caribbean and Europe, it helps if you live on the East Coast so you can get to your yacht within one or two flights. It also helps if you’re self-employed, have few competing interests like golf or tennis, and have few family obligations. Taking advantage of your owner's time optimizes the value of the program so if spending three months on the water doesn’t thrill you, this may not be the right choice.

2. You love to travel.

If you go with a company that has reciprocals around the world, you should love to travel and experience different cultures and languages to take full advantage of your owner weeks. If getting on an airplane has you wincing, look to local options.

3. You have the time to treat this as an active investment.

Some people opt for an ownership program that allows them certain tax benefits but only if they treat the program as an active versus passive investment. This means that you (as well as the charter company) regularly market your boat in the charter. You’ll need a website, business cards, the time to attend boat shows, and more. It’s estimated that you’ll need to dedicate 500 hours per year to this venture. If your work time is already stretched, consider a guaranteed (passive) income option or none at all.

4. You want to sail more/better.

You and/or your spouse want to learn to sail beyond the basics. In some couples, one may already be a strong sailor while the other wants to work on skills and maybe bring a group of friends without the spouse. Charter ownership can be like captaining with training wheels with peace of mind provided with the company’s assistance. 

5. You want to mini-cruise.

For those with large blocks of time (like teachers), ownership in some programs allows for long charters. If you have two months and want to explore a swath of the Caribbean, you can do it on your “own” boat. This works particularly well if you charter during the low season when the boat isn’t earning much money anyway.

6. You want to eventually take that boat long-term cruising.

If you and your spouse want to cruise in retirement and you want to work down some of the cost of a new boat, ownership is excellent. However, this is a long-term plan so both of you must be honest about wanting the same and one isn’t just pressuring (or selling) the other on the idea. 

7. You have the necessary financial resources.

Yacht ownership should never stretch the family budget no matter how good the program sounds. At the very least, you’ll need 20% of the cost of a new boat for a down payment. Depending on the boat, the company, and the economy, the vessel may not sell as well at the end of the program, leaving you short.

8. You want some handholding as you buy a new boat.

Buying a new boat can be daunting. There are decisions on outfitting, financing, warranties, and more. Charter companies can handhold new owners through the process and possibly also provide factory-direct pricing as well. 

9. You have friends who can go with you.

This may sound ridiculous but it’s hard to get people to go sailing. No matter how much your friends may want to go, they too have family and work commitments that may not mesh with your schedule. Also, as much as they want to go, not everyone will have the money to travel often or on short notice. 

10. You’re young enough to still contemplate cruising in five or 10 years.

This one kind of hurts – are you too old? If you put a boat in charter for five years and then see yourself cruising for another five, how old will that make you? Cruising isn’t easy. It’s not at all like a charter vacation. You need to be able to care for your boat and yourself in ways you don’t have to on a week-long getaway. More honesty now will serve you well later.

Unlike in popular online quizzes, there is no magic formula of “fit into five of these and you’re the right type.” You may fit one or all and it still may or may not work out. If you fit none of the above, stick with the flexibility of chartering.

Source: Sail Magazine
Written by: Zuzana Prochazka