Make money with your own boat? In addition to the general considerations of “buying or chartering a boat”, the boat market also offers so-called purchase-charter systems. These (financing) models, also known as charter purchase or yacht investment, are united by the basic idea of owning a boat, covering the costs by chartering it if possible and ideally even making money from it. These special forms, which can be found in a wide range of approaches and concepts, can be a real alternative to the classic boat purchase – or years of yacht charter. However, in addition to the emotional decision in favor of a boat, important points and requirements must also be clarified in advance:
Reliability and trust
Putting a boat into a charter company is always a matter of trust, because in addition to the serious investments and returns to be planned, it is also a matter of maintaining or losing value when making the investment, not to mention tax aspects that can only be clarified with a tax advisor.
Various charter companies and specialized yacht investment firms offer a range of different purchase-charter models, which may differ in terms of financing, repayment, cost recovery and the enticing prospect of making a profit. Usually, the owner is also allowed to use the floating investment, with a certain number of weeks per year reserved for the owner. However, this time must also be paid for and taxed.
The charter partner is responsible for administration, rental and maintenance. Ideally, the charter partner can demonstrate many years of successful business activity in the purchase charter business and also has a good grasp of the technical and legal requirements for the boat/yacht in the promised charter country, because despite the EU, in practice not all technical and tax requirements for the commercial chartering of a boat are uniformly regulated.
Precisely because of the financial aspects – and in order to be able to take advantage of the tax benefits of such a business model if applicable – in addition to the know-how of a reputable charter partner, your own tax advisor should also be brought on board. However, their support often ends at the national border, since charter income must be taxed in the country in which the charter takes place. Local help is needed here, because the requirements of the charter country can lead to the establishment of a separate company or at least a branch office; then it is not enough just to apply for a foreign tax number and one or two obstacles have to be circumnavigated.
Changed market behavior
To ensure that the long-held dream of owning your own boat does not become a bottomless pit even in such a charter boat constellation, emotions must soon give way to a cool head. SeaHelp founder Wolfgang Dauser has also been observing the charter market for many years. He uses extensive practical examples to highlight facts and points out the problems that do exist when buying a charter, because market and price developments have changed enormously since the turn of the millennium – in other words, for almost 25 years:
For charter yachts, approx. 1/50 of the new yacht price was considered the benchmark for the weekly charter price in the high season. At that time, the purchase price for an Azimut 46 motor yacht was around €500,000 excl. VAT, with a weekly charter price of €10,000 in the high season. By comparison, the purchase price of a fully equipped Bavaria 42 sailing yacht was €120,000 excluding VAT, with a charter price of €2,400 in the high season.
Twenty-five years ago, the annual mooring in Croatia cost €5,800 (Azimut 46) with total costs of around €35,000, since charter yachts in the marinas and at the insurance surcharges had to be paid; the usual service costs were/are also higher compared to a privately used yacht. With just five charter weeks (minus agency commission, base fees, etc.), the running costs could be covered. Further charter weeks then also provided valuable “contribution margins” for financing and the imputed depreciation. In the 2001 season, a new motor yacht achieved an average of 14 paid charter weeks and a sailing yacht 24 paid charter weeks.
For the same yacht, “Model 2024”, €1.1 million is now to be paid, the running costs amount to approx. €70,000, whereby the charter price has hardly risen and is less than €15,000 per week. Thus, the above-mentioned key has deteriorated to about 1/75 for motor and sailing yachts – i.e. by a third – in a 25-year comparison. The situation is similar for smaller boats: during our research, we also came across an annual mooring fee for a Bayliner 2855 Ciera (length 9.3m). In 2001, €480 was charged for this in Croatia; today, an annual mooring there often costs ten times as much!
So no charter purchase?
The situation is similar for a sailing yacht and, from a cost-benefit perspective alone, such charter purchase models no longer work. Charter prices are rather too low for that and the “return” on a charter purchase yacht actually only amounts to the owner’s own use.
Only the sales revenue from the decommissioned charter yacht will determine whether the whole thing was a “business” for the owner or whether the project was concluded with a minus sign. If a yacht with a new price of approx. €500,000 is chartered, you currently pay about €6,700 per week for it. The running costs for this yacht are about €2, 5,000, so you could theoretically charter for about four weeks before an owner’s yacht pays for itself, not counting the time spent before and after each season for winterizing and de-winterizing and the loss in value.
Furthermore, you should always be aware that a yacht of this type can also be purchased as a used boat for €300,000; in this case, the loss in value is significantly reduced and, depending on the current used boat market and the popularity of the yacht model, there may be no loss in value at all when selling.
When selling the boat/yacht, the attainable price depends not only on the market situation but also on the state of maintenance and the fact that charter yachts can only be sold at a discount of up to 30%. Experience shows that a yacht is profitable if it is used for at least five weeks a year. However, one thing must always be clear: in many cases, having your own yacht means that your vacation will regularly take place on the boat and in the same area, which means that other types of vacations could be largely avoided.
SeaHelp advises: If you are considering buying a charter, ask (yourself and others) and check (everything)! How long has the company been on the market, and can repairs be carried out by your own craftsmen/mechanics? What reputation does the charter company enjoy?
Does the charter partner have several bases, so that, if necessary, he does not have to stay in the same area over the years? The charter business is now more than ever a highly competitive market, and a charter boat is not a money-making machine! Boating and yacht ownership are and remain hobbies and are not essential, even for us boating enthusiasts.
