Yacht Management Explained Part 2: Ownership Options & Cost Structure
- By Captain Greg
Yacht Management Explained
Part 2: Ownership Options & Cost Structure
The unique and rewarding experience of luxury boating is within reach through Yacht Solutions programs and services. In particular, the fractional ownership program allows you to enjoy the freedom and comfort of a multi million dollar yacht without the full burden of ownership.
New boat owners often discover the true cost of ownership quickly. In addition, ongoing expenses such as maintenance and day to day upkeep can become significant. Rising costs for dockage, insurance, financing, and storage further increase the total investment. As a result, many owners begin to look for more efficient and flexible ownership solutions.
Consider Your Financing Options
Cash
While some boat purchases are made with savings, this is not the most common option. If you have the money set aside, with higher interests rates affecting the cost of borrowing, people consider a cash option simply because they don’t want another payment. Most boat purchases are financed through one of the other methods.
Line of Credit
If you elect to put your boat purchase on your personal credit line, you’re really self-financing the purchase. The advantage of this option is the quick access to funds without having to apply for financing and waiting to be approved. The minimum payment may be just the interest or a percentage of the outstanding balance.
Bank Loan
If you approach one of the banks or credit unions, their typical approach to a boat loan is to provide you with a secured credit line with the security being your home. Homes are what the banks are comfortable with, they know how to do well, and once again you’re borrowing against your largest asset and limiting your future funding options. Your local branch will typically not finance older boats and will not typically go up to a maximum of 25 years amortization.
Marine Financing Through a Dealer
This may be the preferred option for several reasons. As your marine dealer, we work with specialized brokers who connect clients to multiple lending institutions. As a result, buyers gain access to dealer financing programs that are not available to the public.
These lenders use computer approved loan systems. Because of this, the process moves faster and typically offers more competitive rates without requiring direct bank interaction. In addition, this approach simplifies the experience for the buyer.
Loan terms can extend up to 25 years on new boats. In most cases, the boat itself serves as the only collateral. As a result, the structure remains straightforward and accessible. The typical down payment is approximately 25 percent.
Fractional Ownership
Because the fractional interest is usually equal to the down payment of 25%, your outlay is the same however, there are no monthly payments to pay down the principle or interest. Loans may be taken out for the fractional interest, however the boat cannot be used as collateral.
Leasing Your Boat
This may be a preferred option for sole ownership. In many cases, it follows the same logic as leasing versus financing a vehicle. As a result, the decision often comes down to accounting strategy and can allow the purchaser to offset HST.
YACHT Solutions provides a complete service for boat buyers, including sourcing the most suitable financing options. Our goal is simple, to help clients save time, reduce costs, and enhance their lifestyle. In addition, yacht management introduces key benefits, especially for new owners. By co owning and sharing costs, the luxury boating experience becomes far more accessible. As a result, owners can enjoy the lifestyle they want at a fraction of the price.
From entertaining guests to cruising the coastline with friends, the experiences created on the water are unmatched. Ultimately, the value extends far beyond the vessel itself.
Your turnkey ownership experience is fully managed by our concierge team. We handle everything, including insurance, dockage, maintenance, cleaning, and crew coordination. As a result, you avoid the common challenges of ownership and spend more time on the water. You also have the flexibility to sell your share at any time, giving you full control over your investment.
Avoid The Headaches
For those seeking the luxury yachting lifestyle without the extra costs and headaches, we offer the perfect solution. Our Fractional Ownership Program creates an easy yacht ownership experience that reduces maintenance costs, docking fees, insurance fees and more.
- You can enjoy a turnkey yacht ownership experience
- You are free to sell your ownership interest at any time
- Your yacht is fully equipped to ensure that it becomes your home on the water
- Your excursions are personalized down to the smallest detail to ensure a memorable experience
- Maximum use of your yacht: full-time yachts are better maintained, have a higher life expectancy, and hold a higher value
- Your yacht is professionally managed by YACHT Solutions
- You are provided with an annual budget outlining the expenses over the coming year
- You are provided with standard, transparent quarterly financial statements
- A captain and crew ensures excellent service and an inviting atmosphere on board
- Your yacht is ready to set sail as soon as you arrive
- YACHT Solutions concierge service allows you to explore and experience some of the best destinations in the Great Lakes
- Migration to Florida and Bahamas in winter is an option available on the larger boats
Schaefer 510 GT
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Yacht Financials
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Sole Ownership (100%)
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Shared Ownership (50%)
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Shared Ownership (25%)
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|---|---|---|---|
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Initial Investment (New)
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$2,000,000
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$1,000,000
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$500,000
|
|
General Operating Expenses
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$100,000
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$50,000
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$25,000
|
|
Annual Usage
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Unlimited
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12 weeks
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6 weeks
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Subject to itinerary plans, budget, maintenance downtime, crew and repositioning.
Rates do not include variable costs such as fuel, transient dockage, commissioning, food consumed.
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