Chartering Your Boat?

[Budds Outlet]

I am interested in a boat that is currently in charter.* I would be very interested if I could leave it in charter for a few more years to help cover*costs.*Any thoughts on what I might expect?

 

[Carey]

Budds Outlet wrote:

I am interested in a boat that is currently in charter.* I would be very interested if I could leave it in charter for a few more years to help cover*costs.*Any thoughts on what I might expect?

Personally, I would rather go without than put a boat in charter. Save your money until you are ready to own without the charter.

My moorage is on a dock occupied mostly by charter boats, and seeing the lack of skills exhibited regularly, made it apparent to me long ago that there is not enough done to verify skills before handing over the keys. Yes, the boat is insured, and major repairs are made to cover those major damages. But, the minor damages done to all aspects of the boat will accumulate, and will not be identified and covered by anyone but you.

Another big downside is that you must remove all food, personal supplies, clothing, etc. All those items you don't want to have to haul to the boat every time you go out. Items such as handheld VHF, quality binoculars, CD's, DVD's, etc. must be removed, or you risk them disappearing a little at a time.

Charterers do not treat your boat like you would, and they don't know how your systems work.

And finally, by the time the charter company gets done charging you for every little thing, your savings will be much less than you imagine.

Wait to buy, and charter a boat yourself when your vacation comes around.

 

[sunchaser]

What location are you hoping to put a boat into charter?

 

[Budds Outlet]

The boat is already in charter in the Pacific Northwest, Puget Sound to Desolation Sound.

The boat appears to be in better condition then the non-chartered boats of this model and age.*

That is my* plan, to wait until I am ready to own full time rather tha buyng the boat too soon.* However, if chartering would seal the deal for me now on something that would not be available to me in the future I woud go for it.

-- Edited by Budds Outlet on Sunday 14th of November 2010 10:41:12 PM

 

[Carey]

Budds Outlet wrote:

The boat is already in charter in the Pacific Northwest, Puget Sound to Desolation Sound.

The boat appears to be in better condition then the non-chartered boats of this model and age.*

That is my* plan, to wait until I am ready to own full time rather tha buyng the boat too soon.* However, if chartering would seal the deal for me now on something that would not be available to me in the future I woud go for it.

-- Edited by Budds Outlet on Sunday 14th of November 2010 10:41:12 PM

There will always be another desirable boat. There is no need for urgency. Are you considering a Grand Banks from Northwest Explorations?

*

 

[Budds Outlet]

Carey you are so right. In this market there will be other desirable boats.

 

[FF]

A friend of mine ran a large Sail charter fleet in Tortola for over a decade.

His problem , mostly 40-50 ft sail boats was the boats were not robust enough to be chartered.

The concept was they would stay chartered till they were "free" to the owners , however after 2 years ( 80 weeks in service) most were so beat they had to be replaced , the local talent could not keep up with the repairs.

The CSY fleet were designed and then built as bricks , but even with far heavier construction and better gear only an extra year or so was gained.

Weather this would be a problem in the PNW with marine motorists is a question.

 

[Marin]

W chartered a GB36 before we bought our own. When we decided to buy we had the option of buying a boat and putting it in charter with the company Carey mentioned. We elected not to do that for a variety of reasons. There were all the reasons Carey mentioned, plus the real biggie was that there is no guarantee that the charter income will cover your own costs. Or even begin to cover your costs if the demand for your particular boat is low or if the economy takes boating off a lot of people's "things to do" lists. And charter companies want relatively new (aka expensive) boats in their fleet because those are the kind of boats people want to charter.

The owner of a charter boat is in essence a charterer him/herself. You can only use the boat so often each year. You generally want the boat to be available during the best cruising months for paying customers, so your boating season tends to be the not-so-nice months. We actually prefer fall, winter, and spring cruising to summer cruising because it's not crowded, but between my work schedule and the weather, which seems to be getting windier with each passing year, we don't have as many opportunities to go out during the off-season as we used to. BUT..... we continue to use our boat year round, staying on it almost every weekend even if we don't go out.

What that means is that, like a getaway cabin in the woods or whatever, we have the boat fully outfitted for our use. Clothes, food, books, and on and on and on are all on board all year round. If we had the boat in charter, all that stuff would have to go onto the boat when we used it and come off the boat when we left. Every time.

So we opted to get a very old Grand Banks that we own outright and can do anything we want any time we want rather than finance a much newer and much more expensive Grand Banks and hope to cover all or most of the ownership cost by chartering, which would mean that our own use of our boat would be somewhat limited.

Chartering works for some owners, no question.* A number of the GBs in the charter fleet that Carey mentioned are owned by wealthy people who live out of state.* Their use of a boat is limited anyway, by time, distance, etc.* So having a nice newish boat that they can use the few times a year they have available for boating and that earns its keep at least to a degree during the rest of the year is a good deal for them.

But for someone who lives in close proximity to their boat and wants to take full advantage of having it, chartering would, I think, prove to be a rather* frustrating experience.

-- Edited by Marin on Monday 15th of November 2010 04:18:52 PM

 

[FF]

Also private use RINGS THE BELL !! for the IRS to look very closely.

However payments , insurance , docking , advertising are deductible as business expenses.

Spend a week , get a 6 pack ticket , and take THEM for the boat ride.

Even pretend to be a Skool to get a few more aboard.

 

[markpierce]

You'll never see me chartering*any boat of mine.* If I'd wanted to have occasional use of a boat, I'd charter someone else's.* Almost no one treats a chartered boat as well as their own.* And I don't welcome the complexity of record keeping and tax reporting.

 

[koliver]

We chartered our first boat for a few years. It was a brand new 30 foot sailboat that we put into a local fleet. In hte first couple of years we had no problems, but in the third year ( also the last year) one charter party put too much emphasis on the Party aspect and left us with a very messy and soewhat damaged boat. The deposit was insufficient to cover the cast of proper repairs, and the charter Co refused to chase the charterers for the excess. So we paid and took our boat out of their fleet. We only did referral charters after that, and only a few, till the economic necessity faded and we were able to affort the boat without the help.
I wouldn't recommend chartering, as keeping all your personal stuff off the boat was a real PITA, repairs all had to be done at the high cost of trades that were called out on an urgent basis, there were a lot of hidden costs, all of which came out of our bottom line, and there was always the fear that the boat wouldn't be there when you wanted to use it yourself, due to maintenance or repair issues that were none of your doing.

 

[Budds Outlet]

I really appreaciate all the good advice. We live within 7-8 miles of several south Puget Sound marinas and I would want the boat moored down here rather than up in the charter markets of Anacortes or Bellingham.

As some have suggested, better we charter their boat then someone charter ours. And, I should be clear, we are not without a boat now. Its just that the size of the current boat is such that a 10 day cruise is about all we want to be aboard at one streatch. We are wanting a larger boat.

Another consideration for me is that I believe the value of this yacht will continue to depreciate and I will be able to acquire it for somewhat less in 3 years than I can now.

-- Edited by Budds Outlet on Tuesday 16th of November 2010 08:59:29 PM

 

[Marin]

There is a saying in the film industry, "Trash the rental." This often holds true in the boat charter world, too.

 

[Budds Outlet]

Carey wrote:

Are you considering a Grand Banks from Northwest Explorations?


*

No, we are considering a Tolly 43 listed with Bellingham Yacht Sales.* It is currently in the charter fleet with Par Yacht Charters in Bellingham.* But unless we were going to charter it also, we won't be buying this much boat until I retire and can use it enough to make it worthwhile.

I agree with the comments about chartering out one's boat.* To me boating is too much about my relationship with the boat.* I don't think we would be happy renting it out.

 

[Phil Fill]

We bought the boat as a charter and chartered, took people out and for charity, to off set some of the cost. Six Pack charter, so I had to get a Miranda waiver for the boat.* We use to go to many of the boat events around the Puget Sound my wife sold specialty quilts and bedding, and I sold dink rides and day/event charters.* On Lake Union/Washington Seattle there where event year around so day/evening chartering was easy to get.* Also we were moored across the street from FredHutchCancerCenter so we did some charity cruises.* That was really tough as many times it was the person last event.* We did a couple of weddings, and we raffled off day/dinner cruises for the church which was one of the hot items, so it was not just one but several.* Also good advertizing!*


*
I would never bare bone charter my boat, but charting was fun and interesting.* When we retire we probable will do some chartering/charity again.* The boat is still registered as a charter.* Also being a charter help get discount at marine stores, fuel docks, marinas* but the best part was being able to go through the locks before all the pleasure boats.* Very seldom did we have to wait.* Also if you buy the boat as a charter you do not have to pay state sales tax.* So you save on tax, get discounts, get to go through the locks, and off set some of the costs.*

 

[FF]

"so I had to get a Miranda waiver for the boat."

Tax fraud may have you using your Miranda rights soon enough ,

but its the Jones Act that keeps offshore built vessels from commercial use.

 

[Phil Fill]

I knew it was somthing like that!*Jones Act Waiver.* Anyway what ever its called it was not difficult to get, cost a couple hundred bucks, but has saved us thousands.***So you might want to look at buying the boat as a charter but not a bare bones charter!

I*will probable be using my Maranda*Waiver*also!***0-;
*
**

 

[Norwester]

We've had our present boat about 18 months and have had it in charter in Anacortes this year.* That's too limited a time to know whether it is a good idea or not, but I do have some opinions about the experience.*

I wouldn't put a boat in charter in order to afford a bigger/more expensive boat.* If I couldn't have paid for this boat and expenses without chartering I wouldn't have bought it.* There are just too many variables in chartering to be able to depend on an income flow from it.

You have to assess whether you can stand having someone else use your boat.* I know some people that would rather charter their wife than their boat.* So far we haven't had any noticable damage from being in charter, but it is disconcerting to have other people move things and set your electronics differently that you do.* We established an owner's locker where we keep most of our personal gear.* It is kept locked.* We have charter stuff that is used by the charterers.* Old charts, cheap binoculars, etc.

If I could be at the boat at least twice a month, I wouldn't have it in charter.* The reasons chartering has worked for us (so far) is that we have low income expectations and limited ability to use the boat.* We live four hours away from the boat over a mountain pass that can sometimes be impassable in winter.* Our business keeps us from having much time to use the boat in June, July and August when other people want to use it.* We need other people that have a reason or interest watch out for the boat.* We have found some good reasonably priced trades people that help keep up with maintenance.* We don't really want the boat to charter much, if it pays for moorage, insurance and some extra wear and tear I'll be satisfied.

I noticed that you're looking at a 43 Tolly.* Our boat is a 2006 Westcoast 46, it was built in Canada using the 43 Tolly molds with 3' added to the cockpit.* Just an updated version of an early 80's Ed Monk Jr. design.
Lyle

 

[Carey]

Budds Outlet wrote:

*
Carey wrote:

Are you considering a Grand Banks from Northwest Explorations?

*

No, we are considering a Tolly 43 listed with Bellingham Yacht Sales.* It is currently in the charter fleet with Par Yacht Charters in Bellingham.* But unless we were going to charter it also, we won't be buying this much boat until I retire and can use it enough to make it worthwhile.

I agree with the comments about chartering out one's boat.* To me boating is too much about my relationship with the boat.* I don't think we would be happy renting it out.
*
The Tolly 43 is a great boat. There are quite a few in the NW, so you will likely find one when your'e ready.


*


-- Edited by Carey on Wednesday 17th of November 2010 05:27:42 PM

 

[Arctic Traveller]

Phil Fill wrote:

*
We bought the boat as a charter and chartered, took people out and for charity,

So, Phill, I wasn't aware you had a USCG capatains license.* If you don't, you might just need your Marinda rights.....................Arctic Traveller

*

 

[FF]

"But unless we were going to charter it also, we won't be buying this much boat until I retire and can use it enough to make it worthwhile."

Don't be fooled buy todays "asking price", make an offer , even if its $50 ,000 or more below asking.

The method is to sign an offer and give a check for 10% of your offer to the broker.

At once you will have an advocate for a rapid cash sale.

Recently here, a nice 31 ft cruiser asking $14,500 SOLD for $2,300.

Even good boat prices are crashing as housing continues to decline.

 

[JD]

FF wrote:

The method is to sign an offer and give a check for 10% of your offer to the broker.

At once you will have an advocate for a rapid cash sale.

Alternative method is give your broker (mine was in Ft. Lauderdale and I was in North Carolina)*a check for $20k*and a list of the boats you have found (in my case with the brokers help), in the*order that you would like to make an offer on.* Then give the broker your "Shame offer" (as Swedish friend calls it) for the first boat with a signed*contract for same.* I had the brokers contract on my computer and just filled in the spaces, signed it, scanned it and email it to my broker.* He then called the selling broker and told them he had a $20k check*and a signed contract in his hand.* We bought the third boat on the list.* The first was a pie in the sky boat that I didn't expect the folks to take our offer*but we did get close.* The second was an owner that had the boat for sell at a high price even when the market was good two years ago and the third was somewhat the same but this owner saw a need to get the boat gone and wasn't stupid about it.

In each case my broker told the selling broker*exactly*what*we were doing and that we would move to the next boat if the seller wasn't interested but we were going to buy a boat in the next couple of days and that*his client*was pre approved well above the asking price so*his client*could close with in a three or four week period.

Bottom line is I got*a four year old 2006 year*model*boat,with 84 total hours on the engine*for a price that was 20% less than the asking*price and less than half the cost of a new 2009 (last model year) that was on the market at the time.

It works with the right broker helping you.* BTW this was done at*my brokers*suggestion as to how we should proceed.

 

[Budds Outlet]

I like your brokers approach JD. No body has to take the offer if they don't like it but it gives a motivated seller an opportunity in this market and of course it gives you the best boat deal available.

So what are the thoughts about where this boat market is going to be in 3 years? I'm thinking that if the real estate market continues to remain flat or even go down more, the value of used boats will continue to fall. I'd be really bummed to find in 3 years that the boat I bought today could have been bought for 20-30% less then. Meanwile I've been paying moorage, insurance, loan interest, zincs, haulout, bottom paint and oil changes and was only able to use the boat about 6-9 weeks during that 3 year period.

Does anybody have a crystal ball handy?

-- Edited by Budds Outlet on Thursday 18th of November 2010 08:46:36 AM

 

[JD]

Budds Outlet wrote:

and was only able to use the boat about 6-9 weeks during that 3 year period.

Does anybody have a crystal ball handy?

-- Edited by Budds Outlet on Thursday 18th of November 2010 08:46:36 AM

No crystal ball but if that is all you can use it then Charter one when you can*for the time being.

If the market heats up a bit then jump in and take your chances as they say.

One other thing to consider is that if you do your research it will take you two to three years so settle on the proper boat so start now.

BTW this was from my broker as well.* He says that he fully doesn't intend to sale a boat to someone for at least two years from the time they start looking.* Anything less is a bonus.



*

 

[Moonstruck]

Budds Outlet wrote:

I like your brokers approach JD. No body has to take the offer if they don't like it but it gives a motivated seller an opportunity in this market and of course it gives you the best boat deal available.

I did something like that back in '89.* The owner of the boat I wanted refused my offer.* There was no counter.* The broker said that he would send the deposit back.* I said that he should just hold it and let the seller know that he had it.* The seller came back later and accepted the deal.* Time and patience can win out.

*

 

[Pineapple Girl]

JD wrote:

One other thing to consider is that if you do your research it will take you two to three years so settle on the proper boat so start now.

BTW this was from my broker as well.* He says that he fully doesn't intend to sale a boat to someone for at least two years from the time they start looking.* Anything less is a bonus.

My husband and I decided in maybe May that we'd buy a trawler after we got back from sailing to Hawaii in July (versus another sailboat).* We did a LOT of looking online and looked at three boats in person.* We made an offer in August*and closed on Sept 2.* We*are happy as could be!* We use the boat every weekend, whether "using" is spending the weekend on it at our marina, being race committee for our yacht club, toodling around the bay for a couple of hours or taking a weekend trip!

Budds if you can only use the boat 2-3 weeks a year for the next three years I'd have to agree on doing some chartering!* It might be fun to not only try different boats but also charter in different locales??*

 

[Budds Outlet]

Pineapple Girl wrote:Budds if you can only use the boat 2-3 weeks a year for the next three years I'd have to agree on doing some chartering!* It might be fun to not only try different boats but also charter in different locales??*

My issue with chartering for my own use is that 2-3 weeks chartering equals $7-10K per year which means $21-30K I've spent in three years and don't have for the boat purchase. I do need to spend the time researching and going aboard.*

I just need to show some self control and keep boating in our current boat for three years.* It does have the ability to take us out for a few days, it just won't take us comfortably to the Broughtons and all those other exotic place I read about.

 

[Marin]

On the other hand,with chartering you don't have the annual ownership costs of a boat, which never stop until the day you sell or sink the boat. The rough rule of thumb for a boat typical of what most of us on this forum have is ten percent of the purchase price (or value) of the boat per year. This does NOT include boat payments if you've financed the boat. But it inlcludes moorage, insurance, fuel, maintenance, repairs, upgrades, etc. Some years will be less, some more, but we've found over the last twelve years that the ten percent per year figure is pretty accurate.

So you buy the boat for x-tens of thousands of dollars, and then you get to pay for the privilege of owning it*for x-thousands of dollars a year whether you're using it or not.

While this is a very rough estimate, if you buy a $60,000 dollar boat, your annual ownership cost will be in the neighborhood of $6,000. How does that compare to chartering?

If a person only uses a boat three weeks of the year, I think it's pretty hard to make a case for buying a boat of the type we're talking about on this forum. Unless one has the money to burn, in which case anything goes.

If we did not use our boat year round, if not going out on it every few weekends at least going up and staying on it almost every weekend, it would be hard to justify the never-ending expense.



-- Edited by Marin on Thursday 18th of November 2010 09:20:04 PM

 

[Danny34]

Take your time buying , I just picked up a tricabin CHB 34 for 34k with gen set and bow thruster . 1400 hours on the Ford Lehman 135 . Just a very nice kid

 

[FF]

I'd be really bummed to find in 3 years that the boat I bought today could have been bought for 20-30% less then.

You mean like your car?