A Captain's Berth
Buying or Building Your Own Yacht is a Risky Venture that Requires Long Months of Investigation
From the Print Edition:
Tom Selleck, Winter 95/96
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After mooring here for months, these yachts will eventually change hands and move on to different ports. Yet, since so many new buyers are entering the market (relatively low fuel costs and an end to the luxury tax are feeding the frenzy), abandoned slots at Derecktor will soon be filled, often by other mistakes, the handiwork of untutored buyers unwilling to heed educated advice.
"I hear about these overpriced, badly conceived boats every week," says Jeff Ferguson, vice president of sales for Christensen Shipyards, Ltd. a boatbuilder based in Vancouver, Washington. Shaking his head as he decries a series of design faults in these Florida-docked yachts, Ferguson continues, "Guys with big egos, the entrepreneurs, think they know everything about building a boat. Instead of surrounding themselves with seasoned people, they stubbornly plunge ahead, without paying due diligence to brokers, the financial condition of yards, what features are hot in the market. So what happens? They wind up with headaches. Boats with design flaws. Boats that become like small businesses to maintain. Yachts which are virtually impossible to sell."
So how does the first-time buyer, often not knowing a thing about beam, draft and composite hulls, avoid taking a bath on his investment? One safe rule of thumb is to initially forget that glitzy custom design, the "statement" of a new yacht, and to enter these waters with an already sea-tested used boat, whatever the design.
Consider this strategy as a trial run, a less expensive way to separate your true needs from the myriad fantasies that surround yachting. Many of us dream about ocean crossings and piloting a hi-tech boat befitting James Bond. But owners are rarely this hands-on (meaning sufficient crew--and quarters for them--are needed). And, if sailing in a sheltered bay is a more likely weekend destination, this reality check will also greatly affect such variables as hull design, draft and engine size. Maintenance is a major consideration: The upkeep of a $20 million yacht can easily cost $2 million a year. These are all factors that will affect your investment.
One way to assess desired features in a yacht is by following what I call the Odysseus route. Strictly for heroes, this approach means combing through newspaper ads, then wandering from one marina to another. Would-be buyers might get lucky and land a fairly priced boat. Then again, by steering such an independent course, they may also be shipwrecked.
Consulting with a broker makes far more sense. But beware of those known as "superman" brokers--newcomers known for ignoring clients' real needs and selling them every flashy feature imaginable. You are better off dealing with veteran agents (recommended by yacht owners, naval architects and others in the industry), brokers adept at writing contracts, assembling crews and most importantly, finding yachts that suit a client's realistic needs.
"I first determine whether a client wants a motor or sailing yacht, and what they're going to do with the boat," says Gerry Hull of Fraser Yachts in Ft. Lauderdale. "If someone is crossing the ocean, the yacht needs a lot of fuel and stability--a deep draft boat. It's easy to get taken in this business. Often a client is just going from Nantucket to the Keys, and only needs a coastal boat."
Brokering boats for 15 years, Hull has a long checklist for prospective buyers. He first wants to know how many guests will typically be on board, so only yachts with a suitable number of staterooms will be considered. This also has an impact on a yacht's chartering potential, for while a 150-footer typically has five luxurious staterooms, it is far more problematic to lease a 70-footer with three staterooms.
The "operational style" of a yacht, whether it is going to be "military fashion"--formal--or more relaxed and open, is equally critical to determining what size yacht to buy. As Hull says, "If an owner wants cordon bleu service, this usually means a larger crew. That raises the issue of where they'll be housed. What type of amenities and quarters? How separate will they be from the owner, guests and staterooms? These concerns are extremely vital, for the crew makes or breaks the yachting experience. A great boat with an unhappy crew makes for a very bad vacation." To ensure that these matters are adequately considered, it's a good idea to hire a captain and travel with him during a search for a yacht.
Once the budgetary issues are resolved, the hunt for a yacht actually begins in earnest. Sitting in his office amid a stack of brochures and next to a computer generating listings of used yachts priced from $200,000 to $50 million, Hull insists, "Today is a great time to be coming into the market. Prices are very realistic. From inflated levels in the 1980s, they've come down to a very attractive range. There are some great boats out there, trading at prices which, if not bargains, will be easily recouped later on."
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