Charter Management

• It is a stable platform underway and at anchor so charterers love them. Especially for those prone to seasickness ….they don’t get seasick!  
  
  
• Each sleeping cabin is located in the corner of the boat so walls are not shared between guests. This gives more privacy and a feeling of spaciousness.
  
  
• With engines spread wide apart, anyone can look like a pro when docking because it’s so much easier in a catamaran. And twin engines are safer.
  
  
• Large, bright, airy salons function like a “great room” in a house and it makes for a better gathering place for groups than a monohull’s cave-like salon.
  
  
• Catamarans have shallow draft, which gives more choices when anchoring.
  
  
• Catamarans can carry larger groups so you can charge a higher charter rate. I know some couples making $120,000/year doing captained charters for 10 weeks a year. How would you like to work hard for 10 weeks and take off the rest of the year?

Here Is How Charter Management Typically Works

  

There are a number of charter management plans available, but in our experience the safest plan is a “Guaranteed Income” plan because there are no financial “surprises”. Essentially, the owner is paid a percentage of the selling price of the yacht and all operating expenses are covered by the charter company (like dockage, insurance, maintenance). So, the owner will not have any out-of-pocket expenses to pay. That “guaranteed percentage” is typically 9%. So, a $500,000 yacht would return $45,000/year to the owner for 5-7 years and the owner would have no expenses unless he has a loan payment. The $45,000 could be used to pay the loan and if the down payment had been 25-30% then $45k should easily cover the loan payments and leave something left over.

Owner Use

The Owner gets 4-6 weeks use/year and he can also take his weeks on comparable boats in other charter base locations. The main reason many people invest in these programs is because they can “sail around the world”. We are don’t mean circumnavigating. We are mean that they can take a week of free owner’s use in the Virgin Islands, a week in St. Maarten/St. Barts, a week in the South of France, a week in Greece, a week in Fiji, a week in Tahiti, etc. … And that’s just in the first year! One company we recommend has 30 bases worldwide, so you can sail in all the best places in the world in 5 years while your boat is under charter management. It’s like sailing around the world and just focusing on the best cruising grounds without the long time-consuming passages.

There are also plans whereby the charter company finances half the cost of the boat, which may work well for buyers who can’t get traditional yacht financing. Contact us for specific details on the model you prefer.

Beware of Variable Income Plans 

Beware of charter management plans that are “variable income plans” and not “guaranteed income plans”…. Because if you are responsible for the yacht’s expenses, you can get “nickel and dimed” for every little thing and, before you know it, you are sending more and more money to them.

Some small “variable income” charter companies were caught pulling the following scam or a variation on this: they’d call the yacht owner and say that the main bilge pump was bad and it was urgent to have a new system installed to avoid sinking!……(this usually happens in the “off season” when the charter company income is at its lowest and they still have employees to pay). So, naturally most owners would authorize this repair. And the owner would get billed $375 labor and parts. But no work was ever done. The charter company knows that the owners rarely look in the bilges…. And if this little scam was going on, what bigger ones were going on?

Some charter fleets like this have a large turnover of boats because after the owners lose money for too many months they take their boats away.

We used to Manage of two major charter companies operating worldwide and we can refer you to honest, competent charter managers.

Tax Benefits for Charter

U.S. taxpayers have several ways to get tax benefits… Most Americans take the deduction related to the mortgage interest they pay….some others who are actively involved in the charter business can take substantial depreciation deductions as well as operating losses. Contact us about how to qualify.