Buy to Charter - Friend of Foe
Keelworm
with various charter firms about buy to charter have had a bit of an impact
into my sub-concious.
I was just wondering, if anyone on the NG has any experience with Buy to
Charter ventures, and if so, is it positive or negative.
Can it be possibel to make a yearly profit (or even break even) against
costs including marine mortgage.
What is the typical charter life of a Buy to Charter Boat... can it indeed
pay for its self, and over what timescale.
My initial thoughts are <dadsvoice>You get no free lunches in this world
kiddo</dadsvoice> But the more I saw people exchanging plastic at the
show, I have to question, are they onto something. The last 24 months I
have paid £2000/year + on sailing holidays for me and the wife, and have
been so bitten by the blue stuff I can't imagine not having at least one
sailing holiday each year. (I'm Not quite 30 yet, so have a few years to
get bored of it I suppose!)
Any views on the above please?
--
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liquid asset.
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Stefan
tr...@REMOVETHECAPSgoldingweb.co.uk says...
> After wondering round the boatshow last month, I have to say, my discussions
> with various charter firms about buy to charter have had a bit of an impact
> into my sub-concious.
>
I haven't done it, but I know people who have.
It can make sense if you have a profitable business, and run the charter
as a sideline of the business. You can then set off your charter losses
against your profits elsewhere, with consequent tax saving. Also, after
running the boat for a few years you can sell it you yourself at a low
price, and again set off the depreciation against profits elsewhere in
your business. The Inland Revenue needs to be convinced you are running
a bona-fide charter business - you can't just run a private yacht with
pretax income.
People I know doing it say that charter income covers most of their
running costs - and they also get some usage out of the boat when it is
not on charter. It would amaze me if you could break even with a marine
mortgage. Think about it - if charter companies could profitably borrow
the money to finance their boats, why would they be looking for people
to buy them for them to operate?
If you are a wage-slave who does not run their own business, I don't
believe it makes sense.
Chris Lowe
I've looked into this and am considering it quite hard
the basic sums for a 34-37 footer are (all figures are gross)
expected income £9,000-£12,000 depending on what restrictions you place
on the boat. (these prices are for the east coast, you might get more
income on the south coast but I wouldn't rely on it)
annual costs are about £5,000 (marina berth, insurance, engine services,
sail services, antifouling, spares, life raft hire, etc)
costs to get a boat coded are about £5,000 (cash up front)
this give you about £5000 per annum towards your purchase cost which
would be enough o cover a marine mortgage of about £40,000 i.e. about
2/3rds of the cost of the boat for a reasonable charterable yacht such
as a Hanse or similar. A more expensive yacht of the same size will not
increase your income by much and getting a single aft cabin yacht would
defiantly reduce it.
If you add the £2000 to £3000 you might spend to charter a yacht over
the season it can work. It is also worth setting up a company to run
the boat and hence get the VAT back (talk to an accountant about this).
One downside of doing this is you need to buy a new (or very nearly new)
yacht of a make that charters well and so are restricted in what you can
look at. The other big downside is you are reliant on the charterer
doing their job well. Most will but if there is a downturn and the
charter revenue drops YOU are still liable for the mortgagee repayments.
Dennis Pogson
The success or otherwise of buy-to-charter depends a lot on your financial
circumstances, as with house buy-to-let. If you can finance the purchase out
of capital, and need no mortgage, then it is possible to cover your running
expenses, but don't think you can use the boat yourself as and when it
suits, since the best season to use the boat is also the best season to
charter it out.
Beware the kitting out-requirements of the Charter Coding regs. These are
very extensive, and expensive, to comply with, and there is no way round
them unless you are chartering strictly off the record, (this is against the
law).
Expect your boat to last about half it's normal life span, 7-10 years is
good, and be prepared for a lot of hastle, unreported damage, scrapes,
complaints etc, etc. Insurance costs aren't too bad, but a deposit of £500
per charter does not go very far when topside repairs to GRP have to be
carried out, or the boat has to be hauled-out.
Would I do it? With the experience I have working for a medium-sized charter
company for the last 4-5 years, not on your life!
Remove "nospam" from return address.
Keelworm
Stefan wrote:
> If you are a wage-slave who does not run their own business, I don't
> believe it makes sense.
I am that self same wage slave, and have the same opinion as you... I found
it hard to believe the level of interest some of these companies (Sunsail
and Moorings) were generating from this scheme.
On a forty footer, moorings were quoting Ł16k/year income and a refit and
new motor after (I think it was) 6 years.
What they wouldn't discuss at the show, was the age at which a boat is
deemed too old to charter.
Anyway, an interesting topic, just thought I'd throw it open to the floor!
PG
ALTERNATIVE SAILING TERMS: Points:
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Mark
news:c1kiu0$28i$1...@titan.btinternet.com...
> After wondering round the boatshow last month, I have to say, my
discussions
> with various charter firms about buy to charter have had a bit of an
impact
> into my sub-concious.
>
> I was just wondering, if anyone on the NG has any experience with Buy to
> Charter ventures, and if so, is it positive or negative.
>
> Can it be possibel to make a yearly profit (or even break even) against
> costs including marine mortgage.
>
> What is the typical charter life of a Buy to Charter Boat... can it indeed
> pay for its self, and over what timescale.
>
This has been thrashed around here before. Try :-
<http://groups.google.com/groups?hl=en&lr=&ie=ISO-8859-1&q=buy+to+charter&me
ta=group%3Duk.rec.sailing>
Stefan
cj...@nospam.art-render.com says...
> the basic sums for a 34-37 footer are (all figures are gross)
>
> expected income £9,000-£12,000 depending on what restrictions you place
> on the boat. (these prices are for the east coast, you might get more
> income on the south coast but I wouldn't rely on it)
>
> annual costs are about £5,000 (marina berth, insurance, engine services,
> sail services, antifouling, spares, life raft hire, etc)
> costs to get a boat coded are about £5,000 (cash up front)
>
> this give you about £5000 per annum towards your purchase cost which
> would be enough o cover a marine mortgage of about £40,000 i.e. about
> 2/3rds of the cost of the boat for a reasonable charterable yacht such
> as a Hanse or similar. A more expensive yacht of the same size will not
> increase your income by much and getting a single aft cabin yacht would
Expected income is plausible, but I think your annual costs are far too
low for keeping a boat on the South Coast. To get good charter income it
has to be at a good marina location. I was spending at least £5k on my
24 footer - recently sold. Several people I know running 38 footers in
the Solent all reckon on spending £10-12K a year on running costs. A
boat used for charter is going to need more maintenance than a private
one - fact of life. And a lot of that maintenance is going to have to be
done professionally because the boat needs to be constantly ready to
charter.
Also, I don't think you have counted depreciation. New boats depreciate
considerably.
JimB
Chris Lowe <cj...@nospam.art-render.com> wrote in message
news:403de166$0$17836$fa0f...@lovejoy.zen.co.uk...
Chris
You've left out two costs.
1. Lost opportunity cost - the interest or return you could
have got from your equity in the boat (the bit not covered by
marine mortgage), say 5% on your £20,000, £1,000 pa.
2. Depreciation, 10% on the remaining value; £6,000 first year,
£5,400 second year, etc etc.
As a round figure, running and finance costs for a 6 month a
year operating boat serviced by third parties will be about 20%
of it's capital cost pa. For £60,000 that's £12,000 pa. The
charter business is a close call, profitability rests completely
your ability to fill those weeks.
The charter companies in their deals are usually handing the
depreciation element to the 'owner'. That's how it pays them for
others to finance their vessels. The other way is to keep running
the boats for ten years, and look after them very well - the
technique used by Sailing Holidays and Neilson, both of whom have
new yachts, but also older vessels earning them good cash.
My (now) £100,000 boat has cost me £15,000 a year for 7 years.
And I do all the maintenance. If I added my labour, I'd be up to
the 20%. She does sail a lot - 6/7 months a year.
JimB
Yacht Rapaz, sadly for sale:
http://homepage.ntlworld.com/jim.baerselman/Specification.htm
jim(dot)baerselman(at)ntlworld(dot)com
Dennis Pogson
I can second that. Quite often we had to switch the new charterer to another
boat as we simply had no time to clean and inspect, then repair, the
incoming charter. This did not go down too well with the new charterer, who
wanted what he had paid for.
If the owner cannot maintain the boat himself, the charter company has
little option but to put urgent repairs out to professional repairers, and
charge the owner where the deposit does not cover the costs of repair.
Buy-to-charter must be one of the riskiest investments around, too many
things to go wrong, and no assurance of income-per-season.
I would say that about 70% of charterers are caring, capable, concerned
sailors who really look after the boat, the rest will vary from the
unconcerned to the downright destructive, and there is no way of sussing-out
the latter in advance of the charter.
If you are the sort of guy who cares about his boat, avoid chartering like
the plague, but if you see the boat only as a source of income, try it out,
but don't bank on covering your costs, and allow at least 20% for
contingencies, and 20% for weeks when there is no charter, and therefore no
income.
>
> Also, I don't think you have counted depreciation. New boats
> depreciate considerably.
--
Chris Lowe
Stefan wrote:
The £5000 per year running cost is based on an east cost boat (marina
cost of about £2500) and is based on actual costs from a local charterer
> Also, I don't think you have counted depreciation. New boats depreciate
> considerably.
correct, but after 5-7 years when the boat is no longer up to charter
standards you should have sufficient residual value to cover the amount
you have to put into the deal to make the sums add up. In no way do I
consider this a way to make money, simply a way to purchase a boat for
reduced outgoings.
I my opinion the question is if the boat you have after N years would be
worth the cost and effort you have had to put into it. There is no way
(like many others) I could fund a new boat but I could chose to go down
this route. The upsides is I get a (possibly) better boat than I could
otherwise afford, the downsides are the potential liability if things go
wrong and the fact that when the boat is full paid for it would have had
several seasons of hard use.
Its up to you to decide if its worth it, personly I think I can't take
the risk at present
Sandy Morton
<dennisnos...@ntlworld.com> wrote:
> If you are the sort of guy who cares about his boat, avoid
> chartering like the plague, but if you see the boat only as a
> source of income, try it out, but don't bank on covering your
> costs, and allow at least 20% for contingencies, and 20% for weeks
> when there is no charter, and therefore no income.
And allow for at least a day a week to do turnrounds.
--
A T (Sandy) Morton
on the Bicycle Island
In the Global Village
http://www.millport.net
Stefan
cj...@nospam.art-render.com says...
>
> The £5000 per year running cost is based on an east cost boat (marina
> cost of about £2500) and is based on actual costs from a local charterer
>
All I can say is I've owned and run a boat on the S Coast, and I know
plenty of other people who have, and we are all spending much more.
To generate good charter income you need to keep the boat at a marina
with non-tidal access and good access to cruising grounds i.e. Solent
(mainland) or Poole. Berthing a 34-37 footer at that sort of marina is
going to cost a load more than £2500. That is what I paid for a 24
footer. Ring around a few marinas at Hamble or Lymington if you want to
check.
Graham Frankland
"Dennis Pogson" <dennisnos...@ntlworld.com> wrote in message
news:Hin%b.1119$6l4.918@newsfe1-win...
> Stefan wrote:
> > In article <403de166$0$17836$fa0f...@lovejoy.zen.co.uk>,
> > cj...@nospam.art-render.com says...
> things to go wrong, and no assurance of income-per-season.
>
involve punters in the business. If it's so lucrative, they wouldn't have
any problems obtaining finance to buy the boats themselves and keep all the
profit.
In some cases, the charter company is a sales agent for the manufacturer and
as he pockets a nice commission from every boat sold, needs the private
investor to boost his income.
Maintenance cost is an unknown quantity, as is the annual hire period and,
at the end of the contract, you are left with a well used boat worth far
less than a privately owned/sailed equivalent.
Graham.
Guy Fawkes
In the case of sunfuck they have such buying power with the french yards
that they can specify an *allegedly* equivalent model to that on offer to
joe public at the boat show, but with *loadsa* corners cut, end result is
the price the "charter owner" pays actually exceeds the purchase cost of
the boat, sunfuck make a profit even before the boat is delivered, they
then have a totally free boat to smash to pieces over the next few years
while trousering a few hundred quid a week per boat....
trust me I have seen this from the inside looking outwards.
--
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Terry Spragg
> After wondering round the boatshow last month, I have to say, my discussions
> with various charter firms about buy to charter have had a bit of an impact
> into my sub-concious.
>
> I was just wondering, if anyone on the NG has any experience with Buy to
> Charter ventures, and if so, is it positive or negative.
>
> Can it be possibel to make a yearly profit (or even break even) against
> costs including marine mortgage.
>
> What is the typical charter life of a Buy to Charter Boat... can it indeed
> pay for its self, and over what timescale.
>
> My initial thoughts are <dadsvoice>You get no free lunches in this world
> kiddo</dadsvoice> But the more I saw people exchanging plastic at the
> show, I have to question, are they onto something. The last 24 months I
> have paid £2000/year + on sailing holidays for me and the wife, and have
> been so bitten by the blue stuff I can't imagine not having at least one
> sailing holiday each year. (I'm Not quite 30 yet, so have a few years to
> get bored of it I suppose!)
>
> Any views on the above please?
>
>
How much? If you calculate the fact that you were not paid for the
two weeks you went sailing, that's, what, 500 pounds right there?
The cabs, the flights, the tips, the hotels, the resuraunt meals,
the other expenses and actual costs to you might be a bigger
surprise than 2000 pound a year, especially if you had to absorb
that little ding in the paint you got away with:-0
If it's the sailing you want, that's one thing. If it's the locale
and climate and food in the Med that appeals, that's good, too. What
do you really want? The hotel meals? Salt water swimming? Who cooks?
What size boat do you think qualifies as a sailing experience? Is it
the birds, the weather, the scantily clad deck crew you really want?
C'Mon! Admit it! ;-)
To get an idea of what a new sailboat eventually becomes, invest a
little in a small used boat, use it, park it, fix it, rent it out,
then sell it. Then see what you spent, and decide which part of the
experience you really prefer. If you want it to go on forever, ask
the frau how she likes cooking on a little boat on a dock in an area
where you only wish you could get air conditioning while you do the
taxes in french. See what I mean? You sir, are playing with
poisonous fire, which may consume you.
Big business gets wholesale prices and tax write offs on everything,
including lawyers' wages. As a small contributing retail customer
time share investor, you get screwed coming and going and insuring.
Then you gotta pay tax on what you need to earn to support and
maintain a boat to rental standards, then you gotta pay tax on what
the boat earns. You will be very happy to pay that tax, if you ever
make a dime over expenses, long term.
Now, go away and think for a while. Think about boat-divorces, home
learning for children at sea, with no cable, no satellite dish, no
doctors, no macDonalds, no hair dressers, no walking around the block.
If you want a nice cheap weekend sail, come to Canada for a week.
Take your chances on a breezy day over here. Be free!
Check out Grand Lake on the St. John River in New Brunswick. Weekly
tidal freshwater shoreside private housekeeping cottages with
showers and indoor plumbing start at 500 Canadian Dollars a week
plus food, with fishing dinghy and captained sailboat cruise
included. Weiners and KD cost a dollar a day per person. A beer is
about a dollar at the power store, a pint of whiskey is 10. Full
crew or bareboat extra. Mind you look after local travel expenses
well. A rented vehicle can be as little as 39 bucks a weekend, or a
lot more. Daily bus delivery might be available quite cheap. A 49cc
motorbike needs no license, no insurance, only identification plates
from the registry and a safety helmet.
Secluded, private estate, mountain beach resort (Fjiord style) 2 - 3
bedroom cottages rated private enough for nudity are a little more,
including pick up and drop off at the airport an hour away. Hell,
you can buy a beach cottage for 50K Canadian, and rent it out in the
summer for fishing and sailing and in the winter for icefishing and
skidooing, or ice sailing. Yearly tax would be about 500 bucks,
electric heat 300 bucks in the winter, or gnaw down some of your own
birch weeds, you beaver toothed biter, you. Sell re-newable time
share leases for the price of a damage deposit, and invest the
deposits. Retail the time shares.
Maybe it ain't all shiney and new any more, but it was once, and
it's clean and servicable and affordable now, with no long term
entrapments. At least real estate won't sink on you and require you
to clear the channel of wreckage.
With any chattel you rent out, one unwiped sneeze, whatever, can
sicken the renter's family, and you could wind up in court
explaining why your cleaning lady should pay instead of you.
I advise you to travel and shop and investigate and calculate for a
while before contracting long term debt against promises of
co-operative profit making. They do not plan to make you rich, but
themselves. You will carry the liability, they will skim expenses.
'Course, if you are a big enough player, the cashflow you help
generate will provide good opportunity for skimmers, and that's what
it's all about, really. Do it yourself, or pay someone else to play
with your money for you.
How big a boat? Advertising will be the linch pin. You can rent a
million dollar boat out for 100 grand a month, and get rich or go
broke, but how do you meet the millionaires who want to rent it?
Large companies benefit from enonomy of scale, here, and that is
probably the best analysis route I can think of. Try one local
newspaper advert to test market response. "Sorry, we're sold out,
but what did you want, perhaps next year?" is perfectly OK, and can
yield valuable marketing information. Do you want to trust some one
else to run your wiener packing machine? Do you want to be a booking
agent?
Advertise a fishing dinghy to get started. Write an as-is, damage
deposit, no liability rental agreement, and hope he doesn't fall
off, causing his widow to sue you for not requiring a competence
certificate, inescapable life jacket, and blood alcohol test...
Have a lawyer read it over. Ask questions, they are free in a first
interview. Think some more.
Canada's summer heat is bearabley moderate. I don't know why we
don't get Southern heat refugees, here. Maybe because we don't
advertise?
Good luck.
Terry K
Jeff Richards
can fund the project. To work out whether or not it's worthwhile you have
to calculate profit or loss on a taxable basis, which will include
depreciation as well as interest and operating expenses (which is why it's
probably a tax loss). There may also be a 'private use' adjustment for
expenses, which will reduce your loss. Then calculate the impact of that
taxable loss as an allowable deduction against your other income. This tax
saving on the reduced taxable income is then counted as an additional
benefit. If that all works out, and if it enables you to reduce your
periodic tax contributions, then that affects your cash flow and you can
look at the funding question again (typically, increasing the amount
borrowed).
--
Jeff Richards
"Chris Lowe" <cj...@nospam.art-render.com> wrote in message
news:403de166$0$17836$fa0f...@lovejoy.zen.co.uk...
>
>
> Stefan wrote:
> snip <
Keelworm
lot of tangents to digest there! may take a while.
Incidentally, the canada thing... been considering that also... have the
oppertunity to buy a 50% share of a newly built cabin on a lake at Shuswaps
(B.C) with a canadian relative. Am also considering that.
Back to sailing though. was thinking about a charter from Vancouver for
next year. There's a family wedding over there and I'd consider tying in a
weeks sailing beforehand. Anyone sailed around this area, and if so, any
views or advice. Local charter info or suggestions of companies (other
than sunsail!!!) who run charters from Vancouver or Victoria?
Cheers in advance.
PG.
Terry Spragg wrote:
Terry Spragg wrote:
--
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Navigational instrument that ... indicates the presence of machinery and
magnets on board ship by spinning wildly.
JimB
Guy Fawkes <lo...@my.sig> wrote in message
news:F_r%b.47613$7o6....@fe06.usenetserver.com...
> "Graham Frankland" <gdfltdatnospamglobalnet.co.uk> wrote:
>
>
> In the case of sunfuck they have such buying power with the
french yards
> that they can specify an *allegedly* equivalent model to that
on offer to
> joe public at the boat show, but with *loadsa* corners cut, end
result is
> the price the "charter owner" pays actually exceeds the
purchase cost of
> the boat, sunfuck make a profit even before the boat is
delivered, they
> then have a totally free boat to smash to pieces over the next
few years
> while trousering a few hundred quid a week per boat....
>
> trust me I have seen this from the inside looking outwards.
What did they do that rattled your cage? Anyway, your prejudice
shows, which makes trusting your statements as dodgy a deal as
financing a charter boat . . .
First, whenever you buy a boat you're paying someone, somewhere a
sales commission. Nothing different.
Next, the charter spec will differ from the spec sold to a
private buyer, mainly to fit more people in. Also many charter
companies specify fittings that are standard across their
fleets - to reduce maintenance costs. They'll also specify small
changes to improve the durability of the boat while chartering.
Only fools would suggest changes to reduce costs which also make
the boat more expensive to run. Whatever, when buying any boat,
anywhere, you have to assess the specification in detail - some
20% of value is tied up in the nitty gritty of what's on board.
As for smashing the boat to pieces, they wouldn't be able to
charter it unless it was in good order, and you'll find many of
the deals guarantee a boat standard on handover, in some cases
new sails and engines.
Charter companies make their money on these deals by handing
depreciation to the owner. Simple as that.
JimB, Yacht Rapaz, sadly for sale so I can pay for that lovely
new house in Greece
http://homepage.ntlworld.com/jim.baerselman/specification.htm
jim(dot)baerselman(at)ntlworld(dot)com
Stefan
says...
> On Fri, 27 Feb 2004 10:42:28 -0000, "JimB"
> <jim.sees...@ntlworld.com> wrote:
>
> >Charter companies make their money on these deals by handing
> >depreciation to the owner. Simple as that.
>
>
> The play a similar roll to agencies that let holiday cottages.
Except that property generally appreciates while new boats invariably
depreciate!
Sandy Morton
<do...@spam.me> wrote:
> Except that property generally appreciates while new boats
> invariably depreciate!
I'll agree on the property but I haven't seen too many real boats
depreciatev - have you any figures?
Sandy Morton
<tr...@REMOVETHECAPSgoldingweb.co.uk> wrote:
> Back to sailing though. was thinking about a charter from
> Vancouver for next year. There's a family wedding over there and
> I'd consider tying in a weeks sailing beforehand. Anyone sailed
> around this area, and if so, any views or advice. Local charter
> info or suggestions of companies (other than sunsail!!!) who run
> charters from Vancouver or Victoria?
Absolutely beautiful sailing area with lots of islands and secluded
anchorages.
Very OT but if you go to Victoria the Natural History Museum is an
absolute must.
And if you get near Chemainus (sp) try fishing for salmon - they
are/were so thick in the water you can almost walk on them.
And if you get to Nanaimo - oops - better stop in case swambo reads
this :-)
I would charter from Sunsail in Vancouver - I think my niece trained
the manager!
--
T h e - e x t e n d e r ! ! ! !
Sandy Morton
<m...@privacy.net> wrote:
> >Charter companies make their money on these deals by handing
> >depreciation to the owner. Simple as that.
> and by avoiding capital investment and passing the risk to the
> owner.
> The play a similar roll to agencies that let holiday cottages.
Anybody want to buy a bike for 5/10 years and get it back in good
condition?
Sandy Morton
<m...@privacy.net> wrote:
> >Anybody want to buy a bike for 5/10 years and get it back in good
> >condition?
> On the bicycle island? :-)
The bikes are OK - it's the hirers who are knackered :-)
Mike James
e.g. Port Hamble a 24 footer is £3k+.
We are prepared to pay the cost because we live in walking distance from
Port Hamble : If we lived further afield the marina would be 60% of the
cost even on the south coast : Lymington Yacht Haven is one of the most
reasonable for smaller boats.
Our angle on this was we loved sailing in Greece but we worked out that
if we bought a small boat in the UK and kept it for our own use we could
win out.
So we have a £6k boat, spent about £10k on doing it up 8 years ago and
probably over 4k per annum on keeping it.
A problem that nobody else seems to have raised is that if you buy the
boat and charter it out you stand a good chance that the best weeks
/weekends of the year will be those when you have to charter it out, or
if a racing boat then you wont be able to race in any of the big events
unless you want to lose the charter fees.
With a lower cost boat, without a need to charter out, kept in the
marina we can just decide to take the boat out for a sail any time we
like - probably 10-15 weekends or day sails + 2 week holiday + 30
evening and weekend club races + sit on the boat in the marina sessions
+ reactive DIY sessions to keep water out of it.
The boat only gets worn out when we use it (or crashed into by the
adjacent Charter punters).
We also never put water in the diesel tank or undertake other more
extreme forms of charter boat abuse.
With a family of 4 the marina fees compare with 2 week holidays overseas.
Stefan
> In article <c1nh8h$hbt$1$8300...@news.demon.co.uk>, Stefan
> <do...@spam.me> wrote:
> > Except that property generally appreciates while new boats
> > invariably depreciate!
>
> I'll agree on the property but I haven't seen too many real boats
> depreciatev - have you any figures?
>
Well mine for starters, recently sold. To respect the buyer's privacy,
I'm not going to quote the figure here. But I follow prices for a number
of boat types quite closely and they certainly depreciate. You have to
have some idea what 2nd hand boats actually sell for, not what their
optimistic owners think they are worth. The two are often radically
different, as many owners are in denial about depreciation. The
unpleasant truth is new boats depreciate as fast as new cars. Unlike
cars, well-respected designs do reach a point after 5-10 years where the
decline is slow.
Pete Styles
Stefan wrote:
Ah, but yours was a pure racing class. As with your recent posting on racing
dinghies, if you need the ultimate in performance you need the ultimate in
gear (including sails) and so racing boats of whatever size are almost bound
to depreciate fast, at least to start with. Have you also looked at cruising
boats? I could also be in denial, but my Bavaria which is about 2 years old,
seems to have lost very little (if you believe that the broker's adverts
are, lets say, within a couple of grand of the selling price). This has been
helped by a strengthening of the Euro which, together with natural
inflation, has increased the price of a new boat by some 10%.
Stefan
says...
Have you also looked at cruising
> boats? I could also be in denial, but my Bavaria which is about 2 years old,
> seems to have lost very little (if you believe that the broker's adverts
> are, lets say, within a couple of grand of the selling price). This has been
> helped by a strengthening of the Euro which, together with natural
> inflation, has increased the price of a new boat by some 10%.
>
Based on experience, I don't believe brokers' asking prices are likely
to be within a couple of grand of the selling price. Nor do I believe
brokers' advice to clients on the price they are likely to get is always
good. They know that if they say the boat will fetch X, but their
competitor says they can get X+10%, you will probably go to the second
broker even if both know perfectly well X-10% is the likely value.
I do accept that the change in exchange rates could have helped in your
case, but they are equally likely to move the other way at some point in
the future.
Graham Frankland
news:c1pg93$2np$1$8302...@news.demon.co.uk...
No way do privately owned boats depreciate like cars. The general rule
quoted by many brokers & manufacturers is that a new boat should resell
after about 5
years, for close to the original purchase price. However, this doesn't take
account of all the "extras", often totalling thousands of pounds, which have
been added - radar, life raft, heater, windlass, GPS and of course there's
the brokers 4% - 8% + VAT charged on sale to take into account.
Over a much longer term, NOT taking into account inflation, well built boats
sell for much more than their original price - look at 1970's classics like
Centaurs and Berwicks selling at £14,000+ & £25,000+ these
days! The Moody 346 I sold recently, also sold for more than it's original
1989 purchase price.
Whether the modern mass-produced boats will hold their value as well is
debateable as there will be far more to choose from on the second hand
market, which will obviously have a bearing on price.
Graham.
JimB
martin <m...@privacy.net> wrote in message
news:v19u30litfa78pe30...@4ax.com...
> >depreciation to the owner. Simple as that.
>
owner.
The bigger companies didn't pass risk to the owner five years
ago. I haven't checked their small print recently, but the method
used to be that they operated and marketed the vessel, guaranteed
a small return which depended on the number and timing of weeks
reserved for owner's use (4 weeks, no return?), and guaranteed a
standard of vessel at the end of the contract.
The financial effect was very similar to receiving a loan to the
value of the new yacht, secured on the yacht, then repaying the
loan by handing the security back to the owner (rather than
repaying the debt).
> The play a similar roll to agencies that let holiday cottages.
As you see from the above, not necessarily. There are small
companies and individuals who act solely as agencies for yacht
charter, and there are also some small companies who operate and
market (outside owned) charter yachts for a fee, with profits (or
losses) going to the owner.
JimB
Yacht Rapaz, sadly for sale, to help pay for that lovely Greek
seaside house we've just bought.
http://homepage.ntlworld.com/jim.baerselman/specification.htm
jim(dot)baerselman(at)ntlworld(dot)com
JimB
Sandy Morton <sa...@millport.net> wrote in message
news:4c87741...@millport.net...
> In article <c1nh8h$hbt$1$8300...@news.demon.co.uk>, Stefan
> I'll agree on the property but I haven't seen too many real
boats
> depreciatev - have you any figures?
For a cruising boat, think 10% pa real cost (ie, allowing for
inflation) on the residual value. This assumes good maintenance -
keeping the boat in good sailing order.
For a race boat it'll be closer to 20%.
For a classic boat (lets say 20 years or more old, and of a very
durable and marketable design) it won't depreciate, but
maintenance costs will replace depreciation.
-- JimB
Pete Styles
martin wrote:
> On Sat, 28 Feb 2004 08:17:32 +0000, Pete Styles
> <pst...@bioch.ox.ac.uk> wrote:
>
snip
> I could also be in denial, but my Bavaria which is about 2 years old,
> >seems to have lost very little (if you believe that the broker's adverts
> >are, lets say, within a couple of grand of the selling price). This has been
> >helped by a strengthening of the Euro which, together with natural
> >inflation, has increased the price of a new boat by some 10%.
>
> ... but the euro has been in decline against the pound for the last
> three months, the euro has dropped in value by around 5%.
> http://www.ecb.int/stats/eurofxref/eurofxref-graph-gbp.html
> --
> Martin
Yes, but the local agents for Bavaria buffer the shortish term exchange rate by,
I believe, forward buying currency (not that I understand the details). I was
lucky to buy my boat towards the end of a longish period of weak Euro.
I would guess that berthing, depreciation and loan interest (if you need finance)
all contribute approximately equally to the real cost of owning a newish boat,
with maintainance adding something smaller. Altogether, and including inflation
in the calculation, you probably don't get too much change out of 20% pa for a
loan-purchased boat moored in a marina on the south coast (gulp!).
Pete
Stefan
says...
> I would guess that berthing, depreciation and loan interest (if you need finance)
> all contribute approximately equally to the real cost of owning a newish boat,
> with maintainance adding something smaller. Altogether, and including inflation
> in the calculation, you probably don't get too much change out of 20% pa for a
> loan-purchased boat moored in a marina on the south coast (gulp!).
(which did not include any finance) but as you said it was a race boat
and a good proportion of that went on new sails every year.
Stefan
<gdfltdatnospamglobalnet.co.uk> says...
>
> No way do privately owned boats depreciate like cars. The general rule
> quoted by many brokers & manufacturers is that a new boat should resell
> after about 5
> years, for close to the original purchase price.
But they want to sell you a boat. It is hardly in their interest to
point out all the costs involved. It's not like you have any comeback if
you can't sell it after five years for that kind of price.
It's fascinating how people who are hard-headed in their other dealings
are willing to persuade themselves that boat-ownership is far cheaper
than it really is.
Richard Faulkner
<pst...@bioch.ox.ac.uk> writes
>I could also be in denial, but my Bavaria which is about 2 years old,
>seems to have lost very little (if you believe that the broker's adverts
>are, lets say, within a couple of grand of the selling price). This has been
>helped by a strengthening of the Euro which, together with natural
>inflation, has increased the price of a new boat by some 10%.
My father bought his Moody 44 last year for £125000, it was advertised
at £139950, having been reduced from £145,000. (I know that a survey of
1 is not conclusive <g>)
You might find the brokers take on anything, at any price the owner
wants to ask, because if it isnt on the books, they've go NO chance of
earning a fee.
--
Richard Faulkner
Faulkner & Faulkner
Tel: 0161 881 6087 Fax: 0161 861 7636 web: www.estate.demon.co.uk
Graham Frankland
Depends on what kind of boat you buy, buy crap and get crap prices when you
come to sell. My personal experiences have been quite good but I've always
considered the resale possibilities before buying:-
Our first boat, a 1979 Centaur, sold 7 years ago for £14,750, I would guess
about double what it cost new.
The next boat, a 1979 Berwick, sold for £25,000, £7,000 more than cost when
new.
We bought a Moody 376 in September for £66,000 - cost new in 1988 (I have
the original bill of sale) was £63,000.
We sold the Moody 346 just before Xmas for £53,000 (no broker involved)
which, although I can't remember the exact new price, was certainly more
than it cost in 1989.
A friend has just sold a Jeaneau 342 for £60,000ish, around 4 years old -
that's about what it cost new but without the extras he fitted such as radar
& windlass. Again, no brokerage fee and very little depreciation.
Hallberg Rasseys are often advertised at ,and sell, for more than the price
of a new boat because people have added equipment and buyers don't want to
wait 2 years for a new one.
Boats have maintenance costs but this applies to any sport where expensive
equipment is involved, try owning an aircraft for instance and see how much
you pay out every year. At least we're not throwing money away chartering
every year. Inflation as far as I'm concerned isn't a consideration and
neither is bank interest lost - money's there for spending and if I haven't
blown most of it before I get really knackered, the state won't pay for the
rest home.
Graham.
A-MAze
>
> ... but the euro has been in decline against the pound for the last
> three months, the euro has dropped in value by around 5%.
> http://www.ecb.int/stats/eurofxref/eurofxref-graph-gbp.html
>
but it's back to where it was a little over a year ago, before it
started to gain on the pound (making me a profit over 5000 euros, as I
bought my boat in England last January but paid for it in May :-))
Exchange rates are rarely a good source of comparison in the long run.
Victor