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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Many new owners, the "entrepreneurs" as they're called in the business, will immediately try to sell their boat to turn a quick profit. The advantage here for the next buyer is that the boat is already in the water. But again be wary. If a boat is badly reviewed by the brokerage community, a new $8 million to $9 million yacht may end up being pedaled for $7 million.
Owners such as Florio, who had previous ownership experience and sought comprehensive advice from numerous sources, take delivery with quite different aspirations: the sheer enjoyment and excitement of cruising from port to port.
During those passages, he'll often reflect upon going the customizing route, and savor one of boating's great pleasures. "I'll retreat to my little cockpit," he says, "watch the sun set, and light up a cigar."
Edward Kiersh is a writer living in Florida.
The Charter Trap
Many new buyers enter the market believing in the great myth of yacht chartering, that false assumption of confusing a yacht with a piece of property that can be regularly leased to generate cash flow.
It does make financial sense to "rent" your yacht during those periods of the year when you are not using it. The receipts from these charters will help defer the substantial upkeep costs of a large yacht, and also have the tangential benefit of keeping your crew happy. For every time a boat is chartered, the crew typically receives handsome tips from the people onboard.
Yet you shouldn't buy a yacht thinking it's going to be a cash cow. The reality is that a yacht has a limited "window of opportunity" for charters (Christmas, Easter and the summer months), at best 12 to 16 weeks out of each year. But during that period there's also the "transition" time between charters, when yachts are serviced and prepped for a new group of guests. So even an active boat (popularized by brochures and agents) is only chartered 10 to 12 weeks annually. What this means is that a 150-foot boat, if chartered for $50,000 to $115,000 a week, typically grosses between $500,000 to $1.2 million yearly, a sum that still falls short of covering all upkeep costs.
As one broker says with a laugh, "You invest in a yacht for pleasure, not to make money. If you think you can make money, think again. You'd be better served if you stuck your money under a rock in the backyard."
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