An Overview of Smarter Yacht Ownership Solutions Available

Traditional yacht ownership, involves an individual purchasing a yacht, possibly outright but usually with some form of boat mortgage, loan or similar finance arrangement.

There is now, however, a wider range of smarter yacht ownership programmes available which offer alternative means to enjoying the benefits of ownership at a more affordable cost.

There is an wide variety of smarter yacht ownership options, but they can be grouped into a few key types which we will consider here.

The first two programmes described below (shared access and shared ownership) aim to reduce the financial burden of ownership by enabling the sharing of costs. The second two programmes (yacht charter ownership and yacht charter management) have a different focus; they aim to generating an income through charter to offset some of the costs.

Shared Access Programmes #

Shared access programmes include various types of timeshare, membership programmes or boat clubs. The ‘boat club’ owns and maintains a number of different boats, and each individual member pays a membership fee which enables an agreed amount of access to one or a selection of boats throughout the year.

In these programmes, the individual enjoys the benefits of ownership i.e. regular access throughout the year, flexibility to sail to their own timetable, and an opportunity to become familiar with the handling of a particular yacht, however, the member never actually has legal ownership and the responsibility for arranging insurance, berthing and maintenance remains with the boat club.

Shared Ownership Programmes #

There are various options for private or managed syndicates which enable shared, fractional or co-ownership arrangements. In this option, each individual does have a legal ownership status of a fixed % of the vessel. The management company will usually arrange maintenance, berthing, insurance and so on, but the co-owners are responsible for sharing the costs in a pre-agreed proportion.

In some syndicate arrangements, the management company may even facilitate the boat being chartered out for a few weeks each year to generate a contribution to the running costs.

Yacht Charter Ownership Programmes #

Yacht Charter Ownership programmes are typically run by established global charter operators. In these programmes, the would-be yacht ‘buyer’ pays an upfront cost and during a contracted period (typically 5-7 years) receives an annual income equivalent to approximately 6-9% of the purchase price, or they pay a lower upfront cost but receive no income.

Throughout this contracted period the charter operator is responsible for and pays for all the boat maintenance and management costs and the buyer simply has a pre-determined amount of access to their nominated boat, or to a selection of similar boats within the same company, possibly in different locations.

There is usually only a limited selection of yachts available to buy on these programmes; carefully chosen by the charter operator to be most the popular with the charter market.

At the end of the contracted period the buyer takes legal ownership of the yacht. Different operators provide different options at this stage; the buyer may take their boat away or they can accept a cash alternative, or they can even re-invest in another ownership programme.

A charter operator may offer a buyer a choice of Ownership Programmes, but each is fixed in design and structure and there is rarely any opportunity to customise the nature of the programme to suit the individual buyer.

Yacht Charter Management Arrangements #

With Yacht Charter Management, a private individual purchases the boat of their choice and then enters into an agreement with a Charter Business who will add the yacht to their fleet and promote the yacht to secure yacht charter income. Some Yacht Management Agencies also offer Charter Management services to help generate an income.

The Charter Business is responsible for marketing, administration of bookings including handovers, cleaning and yacht preparation and takes a commission from each booking to cover these costs, typically 30-40%. The Owner receives 60-70% but remains responsible for most of the costs of ownership. The Charter Business can often provide services including berthing and maintenance at favourable rates.

Each Charter Business will design its own charter management arrangements, and the levels of responsibility placed on the owners will vary in line with the commission structure These arrangements are often flexible in design and can be tailored to suit the individual owner.