Interested in owning a yacht? Unfortunately, the reality of paying for dockage, insurance, regular maintenance and annual haulouts on top of monthly loan payments discourages many from saying “yes” to that question.
Interested in owning a yacht? Unfortunately, the reality of paying for dockage, insurance, regular maintenance and annual haulouts on top of monthly loan payments discourages many from saying “yes” to that
question. Many potential owners also realize they won’t use their yachts enough to justify the cost or hassles.
Owning a yacht in charter can provide solutions to the financial and practical drawbacks of traditional yacht ownership. It can enable you to offset the cost of financing or upgrading to a yacht model you couldn’t otherwise afford, minimize maintenance and operating expenses, and make the most of your sailing vacations.
There is a wide array of charter management options, from small family-owned local businesses to medium-size fleets of 20 to 100 boats to large companies with worldwide fleets. The Moorings is one of the largest charter companies, with more than 800 power and sailing yachts at more than 25 locations.
The Moorings offers monohull and catamaran sailboats from 32 to 62 feet for sale, many with air conditioning and generators, and luxury power yachts from 38 to 47 feet. Most of the yachts go into bareboat charter, but some models can be staffed with a captain and personal chef. Here’s how the ownership program works.
You purchase your yacht — bareboat or crewed, sail or power — and place her into The Moorings charter fleet. In return, The Moorings takes care of all maintenance, dockage, insurance and operating expenses. Every month The Moorings gives you a guaranteed monthly revenue check to cover your loan payment. The guaranteed revenue is established in advance, so you know exactly what to expect from start to finish, regardless of charter activity. The Moorings takes care of all aspects of maintaining and managing the yacht, guarantees your revenue, and leaves you to enjoy worry-free cruising aboard a new yacht for up to nine weeks each year.
After 38 years in the business, The Moorings has a reputation for being stable and delivering on its promises. The company offers a wide choice of yachts, a high level of maintenance, and many charter bases worldwide. A major benefit of The Moorings ownership program is reciprocal use. This allows you to use a sister yacht at any Moorings base. For example, you can cruise the Caribbean on one vacation and shoot over to the Mediterranean and the French Riviera for your next adventure. And you don’t have to worry about the details of ownership.
At the end of the ownership program, you might wish to keep your yacht for personal cruising or living aboard, but The Moorings offers other options, as well. You may be able to keep the yacht in managed charter in The Moorings’ second-tier charter fleet, Footloose. If you decide to sell your yacht, The Moorings offers brokerage services, as well as trade-in options if you wish to continue in the program with a new yacht.
In addition to the recreational appeal of owning a charter yacht, there are certain business advantages, as well. If your yacht operates outside U.S. waters, your purchase isn’t subject to state or local sales tax. Working in U.S. waters as a business with a proper tax identification number, your vessel may be exempt from sales tax. For larger vessels, you also could be eligible to write off the loan interest expense as interest on a second home. Operating your vessel as a business, you can offset its depreciation against your charter revenues, reducing taxes on your revenues. If you are personally involved in your charter business and can document it, you may qualify for active income and write off any losses from your charter operation against other revenue. (Seek advice from your accountant or tax advisor to see which formula suits you.)
To help you choose a charter management company, you should consider the following:
• Are you flexible on the model you wish to purchase, or do you have a specific yacht in mind with particular options and layout?
• Do you want your boat to be based locally, where you can have frequent access to it, or is the opportunity to enjoy worldwide sailing more appealing to you?
• Are you chartering your yacht just to offset the bills, or are you seeking full management?
• Do you mind paying unplanned operating and maintenance costs in return for variable revenues, or would you appreciate the security of a guaranteed payment with no expenses?
If you decide that owning a charter yacht isn’t for you, The Moorings’ Fractional Ownership Program offers membership shares on luxury yachts over 78 feet. This program allows you to purchase a luxury yacht for a portion of the cost. The yacht is owned by a limited liability corporation and divided into weekly memberships. Each membership gives the owner one week of cruising time per year for five years, and owners can purchase one or multiple memberships.
For more information about The Moorings’ yacht ownership program, call (888) 952-8603, or go to www.moorings.com/yachtownership.aspx . For information on fractional ownership available at (800) 675-7996 or www.mooringsfractional.com .
Steve Long, of Tampa, Fla., is on the yacht sales marketing staff at The Moorings.