Yachting is becoming a favorite past-time for many people; yachts of all sizes, shapes, styles, and brands are flooding the market for Sale to facilitate the growing demand for Yachting. Is it a good idea to place your privately owned yacht on the charter market after a purchase? Let’s see.
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‘Rent the Yacht, Own the Feeling.’
The Great Appeal of Yacht Chartering is a hot topic with celebrities year after year flooding tabloids with images of the ‘good life’ aboard and ashore, especially in these times where exclusivity, privacy and safety are of highest regard.
Certainly, it is the owner’s decision and desire that plays the most important part of that decision. Some clients do not have the need to offset their costs and do not want others using their yacht – that is a personal desire. There are numerous pros and cons to review before deciding to place your private yacht on the charter market.
Yachts, no matter what size are usually a luxury item in one’s life and therefore not a necessity. It is an added expense and can greatly impact one’s living costs. The outright purchase of the yacht is the first cost incurred. That is only the start. Then comes the insurance costs (usually about 1.5% of the yacht’s value) the berthing costs, the maintenance cost, and then hiring crew if the owner does not handle the yacht themselves.
Smaller self-captained yachts do not fair well on the charter market so we will address yachts of over 60 feet in length or larger with crew aboard.
Chartering your yacht, when she is not being used privately, can bring in extra income to offset the costs of ownership and at least bring down the cost, and depending on the number of charter days sold out, may make money. So added income is a marvelous plus. It is actually the number one reason people do choose to charter their yachts.
Having idle crew aboard, which are hired full-time anyway, is a waste of money and also, not good for enhancing their performance. A working crew is a happy crew; they also get a chance to make more money in tips from the happy charterers.
Placing the yacht on the charter market requires the yacht to be in tip-top shape, therefore insuring a well-maintained yacht. Often, tending to the details is one of the last priorities of the owner in terms of expenses and therefore maintenance can suffer. A yacht lying idle is not good for the yacht; non-use can lead to more maintenance problems and develop large bills in repair. Keeping her machinery moving and well maintained is key to smooth-running engines. One thing for sure, keeping a well-running yacht with professional maintenance will in the overall picture be more cost-effective. Offering the yacht for charter helps ensure a well-groomed yacht, all year round. As a bonus, when it’s time to sell the yacht, much less work and expenses will be needed to get it into sell-worthy shape.
Putting a yacht on the charter market brings in income and can be listed as a business. Items bought for the yacht will be tax-deductible. The owners of a charter yacht can deduct the same amount of the net income brought in by chartering. That can be a huge additional plus. Speak to a lawyer, an accountant, and a yacht charter broker to kick off discussions of the process.
Hiring a brokerage firm to manage the yacht provides you with an agent to do all the work – yacht maintenance, hire and communicate with the crew, pay the bills, schedule maintenance, and dry-docking, market, promote, and charter the yacht. This allows the owner not to be worried about all the everyday issues incurred in ownership. Now they can sit back and enjoy their special times when aboard in a carefree manner. Those who keep a yacht for private use will often just rely on the captain to run things.
There is a sense of pride knowing that you are developing a name for your yacht, your pride and joy. Having it listed on the charter market makes the owner feel good it is in use and appreciated by others.
Now the owner gets to sit back and spend their time aboard cruising and not worrying about the cleaning, dry-docking, crew, maintenance, and repairs. Set sail and enjoy the joys of yachting with none of the headaches of owning and cut the costs of ownership down drastically.