Let’s dig in to the different types of yacht ownership programs!
Owning a yacht is a significant financial investment. For a long time, private yacht ownership was restricted to very wealthy people.
Since sailing has become more accessible to a wider range of people, there is increased demand for new ways to make it possible for more people to experience yacht ownership, for both motor and sailing yachts of all sizes.
Whilst there are many marine finance options available for individuals wishing to make an outright purchase, there is also a range of innovative, smarter yacht ownership solutions now available. Each of which take a different approach to providing the benefits of ownership at a lower cost.
Yacht rental or chartering is a well-established industry. It’s the perfect way to get out on the water and explore a new location on a sailing holiday for a week or two.
However, for sailors who like to spend several weeks afloat every year, it may be more convenient, and even more cost-effective, to consider some form of smarter ownership solution.
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 solutions available. Which offer alternative means to enjoying the benefits of ownership at a more affordable cost.
So in this article, we’ll provide an overview of these different types of smarter yacht ownership solutions!
So, what types of yacht ownership programs are there?
There is a wide variety of smart yacht ownership solutions.
We decided to group them into four different categories.
Let’s dig in!
The first two programs described below (shared access and shared ownership) aim to reduce the financial burden of ownership by enabling the sharing of costs.
The second two programs (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 Programs
Shared access programs include various types of timeshare, membership programs or boat clubs. The ‘boat club’ owns and maintains a number of different boats.
Also, 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 programs, the individual enjoys the benefits of ownership, like regular access throughout the year. Also the flexibility to sail to their own timetable, and an opportunity to become familiar with the handling of a the yacht.
But on the other hand, the member never actually has legal ownership of the boat. 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 % off the vessel. The management company will usually arrange maintenance, berthing, insurance and so on.
But keep in mind that the co-owners are responsible for sharing the costs in a pre-agreed proportion.
Furthermore, 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 Programs
It’s the established, global charter operators operators that typically runs the Yacht charter ownership programs. In these programs, the would-be yacht ‘buyer’ pays an upfront cost during a contracted period (typically 5-7 years).
Then the buyer 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.
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.
Therefore is usually only a limited selection of yachts available to buy on these programs; 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 the buyer a choice of Ownership Programs. 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.
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.
Last but not least, each Charter Business will design its own charter management arrangements. 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.
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