Owning your own yacht, sounds like a dream, right? Well, it may just be easier and more affordable than you think, thanks to Croatia Yachting and Charter Management programs.
Since working on yachts and now writing about yachts, the idea of ownership has of course come into mine and my husband’s mind, but we simply do not have the capital to buy a yacht outright. At the Split Boat Show at the beginning of the year, I got chatting to a few Charter Agencies and the term ‘Charter Management’ was thrown around, I initially thought it was a program set up to manage someone’s yacht once it was already owned. Turns out, there is a whole lot more to it and it makes the idea of yacht ownership, not so far removed.
I met with a well-established charter agency – Croatia Yachting, to find out more.
What is Charter Management?
If you like the idea of owning your own yacht, but are not sure you can finance it, maintain it or you simply don’t have enough time to enjoy it as you would like, Charter Management could be your solution. The program is designed to help people find the easiest way to finance the purchase of the yacht and its maintenance with the lowest investment possible; the financing is supplemented by the income the yacht will make in charter.
Simply put, the yacht is purchased at a minimum payment rate and is entered into the charter market and managed by Croatia Yachting (in this case), so the rest of the yacht is paid off and eventually begins working towards making a profit.
How is it financed?
The investor purchases the yacht in his or her name or in a company name and all that is required is at least a 30% + VAT down payment, while the rest is financed by leasing. The charter income should cover the leasing annuities and the costs of maintenance, insurance and berth while, depending on the down payment amount, the investor can expect additional profit.
Do I get to choose the Yacht?
Yes, and you can choose between Hanse Yachts or Bali Catamarans.
Hanse Yachts
Hanse is one of the largest builders of production yachts in Europe. All Hanse yachts are designed by Judel/vrolijk & co, the world´s leading naval architects who are responsible for defending the America's Cup title with Alinghi. Even though Hanse yachts have only recently entered the charter market they already have proven success with bookings – they are superb easy-sailing yachts, while still providing comfort at sea. From Hanse 315 to Hanse 675, they each have the same quality characteristics and an excellent price/performance ratio.
Bali Catamarans
Bali Catamarans, while apt for sailing, offer extraordinary comfort at sea – I have always likened them to an apartment on the water. The saloon and forward cockpit are generously spacious allowing different areas for enjoying, entertaining and relaxing; the forward deck also allows plenty of space for sunbathing (or for children to play). They also have practical features which owners and charter guests will love, like large cabins, large fresh water and fuel tanks and plenty of ‘unseen’ storage and fridge space.
And yes, you get too choose the yacht or catamaran you prefer; however, it will pay to listen to the guidance and advice of Croatia Yachting as they have many years’ experience in the charter world so can recommend which yachts fare better in charter and they will be able to give you a detailed calculation of cost vs income.
If it is in Charter, how do I get to Use the Yacht?
You can use your yacht as much as you like, but for most, the reason they opt for a Charter Management program is because they don’t have many weeks free to be able to use their yacht, so it is a win-win. To use your yacht, you just need to block out the times, so it does not get booked; however, Croatia Yachting recommend using it for a maximum of 3 weeks – 1 week during peak season and 2 weeks out of, this gives the best return on your investment and ensures all costs are covered. But, you can also use the yacht whenever it is not booked for charter.
How does Registration Work?
The yacht needs to be registered in the EU and have an EU flag, including Croatia, therefore you will need to set up a company in the EU in order to be able to claim VAT reimbursement (which will have a dramatic effect on the price of the yacht as well as maintenance costs etc). This all sounds complicated, but Croatia Yachting can aid through the entire process, to set up a company in Croatia, you are looking at costs of around €3,500 – of which €2,500 is capital that can be used afterwards.
Yacht Maintenance?
Unlike buying and taking care of a yacht yourself, being in a Charter Management program has massive benefits for the owner – one of the most obvious, being that your yacht maintenance is completely taken care of by a professional, experienced team. The majority of yacht owners are not necessarily yacht experts and yacht maintenance is more often than not, overlooked by private owners – who typically have a motto of ‘fix it when it’s broken’. While, proper maintenance of a yacht requires ongoing care and check-ups to PREVENT any issues or malfunctions, BEFORE they arise. This also ensures a better price during charter and a higher market value if and when you decide to sell your yacht.
Damage and Insurance?
All yachts in the Croatia Yachting Fleet are covered with a full CASCO insurance policy. Damage repairs are either covered by CASCO or the charter client is responsible for any damage and repairs are taken care of by Croatia Yachting (official Hanse representatives) or a specialized third-party service. Loss of income is also covered from the first day of any damages.
What profit can I expect from my yacht in Charter?
Income from Charter is shared at 65% - 35% to the owner. The 65% also needs to finance annual berth, risk insurance and yacht maintenance. Out of the 35% the charter company finances agent commission, booking, marketing and promo, coordination, support and care for charter guests.
Depending on the yacht model, as the owner, you can expect between roughly €12,000 - €65,000 profit before financing costs.
What if I want to sell my yacht afterwards, what condition will it be in after charter?
There is no denying, that having a yacht in charter puts a lot of strain or wear on a yacht, however as mentioned above, most yachts in a Charter Management program get taken care of better than privately owned yachts. So, your yacht will still be in a great condition and you are able to sell (or upgrade). According to Croatia Yachting’s experience, after 5 years in charter the market value is roughly 65% of original purchase price.
What are the Key Benefits of buying a yacht through Charter Management?
- - Ownership and use of a yacht without the hassle of maintenance
- - More financially viable to own a yacht
- - Support from an experienced team
- - Support or chance to on-sell or upgrade
- - Potential to make a profit through owning a yacht (rather than it just costing you money)
- - Excellent support and results in chartering (fleet average of around 21 weeks booked in charter)
So, there you have it.
Owning a yacht, it may not be or everyone, but for the passionate and sea-lovers, this is definitely an option which makes owning a yacht – simpler and more financially viable. I will very possibly start harassing my husband and I will leave you with these images to think about...
To find out more, visit Croatia-Yachting here, or LIKE their Facebook page for regular news and updates.
To see more about Hanse Yachts click here, or for Bali Catamarans view here.
