For yacht owners looking to placing a boat into charter, it can be a challenge to navigate the industry. What types of financial agreements are available? What are the benefits? What are the potential risks?
If you’re considering putting a boat into charter, you likely have asked these questions and many more.
Essentially, the process starts by working with a yacht management and a charter management company. Depending on the type of management agreement you use, a third-party manager takes care of all the details of owning a luxury charter yacht, like securing insurance, dockage, hiring a crew, and marketing your yacht.
Wondering what the process is like? Here are some answers to the most commonly asked questions of placing a boat into charter.
How a Yacht Management Company Helps
One of the first steps is to work with a yacht management company. Third-party managers do it all for yacht owners; they provide sales and marketing advice, they help market and book charters on the yacht, they provide crew hiring help and ultimately, they oversee maintenance and operations.
In other words, if you want to place your boat into charter, you’ll want to find a charter management company you can trust. Here are a few ways these companies help:
- General Oversight – A good management company will oversee day-to-day operations, as well as technical upkeep.
- Financial Advising – Management companies help owners determine budgets, tax schedules, and earnings estimates.
- Crew Hiring – Crew hiring and payroll is commonly managed by a third-party management company.
- Scheduled Maintenance – Managers typically schedule maintenance, as well as help plan for refits and haul-out.
- Insurance – Managers work with insurance companies to help you secure the best policy for your yacht.
- Charter Management – Your manager will market and book travel on the yacht. A good manager will have a plan for marketing your yacht to charter guests.
Why Place Your Boat Into Charter?
Ultimately, placing a boat into yacht charter offers a number of financial benefits. Here are a few of the most significant:
- Reducing Purchase Price – A guaranteed income agreement would return 45% of the purchase price over the five-year term, while a successful performance-based program might yield 60%. Therefore, at the end of term, you can significantly reduce the cost of purchasing a yacht.
- Reducing Cost of Ownership – Owning and operating a yacht is very expensive. Charters help to greatly reduce annual costs. In a successful Caribbean charter season, a charter yacht might earn enough to cover all yearly costs, resulting in a net profit.
- Potential Tax Advantages – Placing your boat into charter can result in tax benefits. Equipment and even the purchase price up to $1 million may be deducted, depending on the type of charter agreement you use.
- Peace of Mind – Ultimately, the greatest advantage is peace of mind. Your yacht will be placed under the watchful eye of experienced managers, ensuring maintenance, charters and operation is all done to protect the safety and integrity of the boat.
Now Is a Great Time to Place a Boat in Charter
Every year, the luxury yacht charter market grows, and chartering continues to be one of the fastest-growing segments of the travel industry. It’s a great time to put a boat in charter.
But whether your goals are to turn a profit, or to reduce the cost of ownership, it’s important that you have a plan in place. Working with an experienced yacht management company is one of the smartest decisions you can make. It will help you maximize revenue, keep your yacht in demand and make smart purchasing decisions.
Have questions about putting your vessel into charter? Contact the team at Worldwide Boat today to learn more.