Deck shoes, salty air, the wind, sea, and sunshine. There’s nothing like the sense of freedom of being on the water. Often though, time constraints mean you won’t be sailing your boat as much as you’d like. Your boat could be making you money when it goes unused. This makes chartering your yacht to offset ownership costs, an attractive prospect.
The charter market is a thriving industry. Chartering boats for private use is a great option for those who’d like to experience the thrill of sailing without the commitment and costs, and people are willing to pay good money for it.
There can be ways to structure yacht ownership that allow you to write-off the purchase price of the yacht and deduct many expenses (dockage, maintenance, and insurance etc.) so you can receive tax benefits. Instead of a personal asset, the boat is a business asset, in an equipment rental business. You can still have your vessel available for personal use, while lowering your tax liabilities, and growing your net worth. You’ll want to consult a tax advisor to find out the tax and income benefits available as well as specific tax law guidelines. When purchasing a vessel for businesses purposes, there are unique financing options available too. Benefits can include lower interest rates than typical marine financing, flexibility on loan structure and payment to keep an owner’s assets intact, and letting the boat revenue pay the note so owners can continue to grow their personal net worth.
Chartering your yacht can present both benefits and drawbacks. Outside of financial advantages, chartering ensures regular professional maintenance as yachts need to be serviced after every charter. A perk because when it’s your time to sail, you don’t have to spend personal time on service tasks. Additionally, it may seem counterintuitive, but yachts that have less usage tend to have more issues so having it on the water routinely is a good thing. Disadvantages can include the costs of insurance going up significantly, some owners uncomfortable with strangers using their boat, and the inconvenience of not being able to keep many personal items on the vessel.
Choosing to charter your boat yourself is an option to save on commission costs however boat charter management agencies are a great hire if you prefer them to do the business dealings on your behalf. They take care of all duties such as exposure and booking, serve as a liaison with charterers, source professional crew (if needed), and make sure things go smoothly.
Not every yacht will be eligible for chartering. If this is something you’re interested in, make sure to bring that up during the buying process with JFA. In order to successfully charter your yacht, it is favorable to look for yachts that can sleep more than one couple, boats in the 40’ to 54‘ range, and well-known makes or models.
Everyone’s personal financial situation is different, and the pros and cons of potentially chartering your yacht can be complex. JFA can help with deciding the right course of action for you based on your needs and how much you’re willing to invest in ownership of the boat over time.