Evaluating whether to buy a motor yacht

[Jonny TVR]

I'm considering buying a Pershing 50 probably a 2008 model at around £300K.

I would charter it out when I'm not using it.

Thinking about mooring initially in Palma but haven't looked at costs yet.

I have my own business so wondering if I can get the business to purchase it and run it as a charter business. Is this actually possible/ worthwhile?

What do I do with it during the winter? take out of the water?

What are peoples experiences/ advise?

[psi310398]

I really don't want to pee on your chips but may I suggest that in your normal line of business, you would not dream of entering any market without having a very shrewd idea of the answers to the kinds of questions you are asking?

In less enlightened times, I believe the general advice was "If you can fly it, sail it or f**k it, don't buy it, rent it". For the first two categories, this remains sound advice...if you believe those neighbours of mine who have such things. Most are trying to offload without massive loss (and that is another problem, it is not the most liquid market).

Yachts are money pits and whatever number you come up with on a spreadsheet may be subject to 50-100% variance in any given year. As with a vintage Rolls Royce, buying the thing is the least of your issues...

The boat will normally have to come out of the water each year, there will be registrations and certifications to maintain, antifouling to perform, engines to rebuild, scheduled maintenance, insurances, mooring/marina fees, fuel, not to mention fees to brokers/agents and possibly staff costs. Most of these are fixed costs, regardless of the number of hours you or any charters actually spend onboard.

If you can afford a yacht, then chartering it out when you are not using it may be a good way of defraying some costs, provided that you do not need to rely on the income to do so.

To run it as a bona fide business is another thing altogether. The Med is awash with unchartered yachts and yours would need to be cheap or very special to stand out.

If you do decide to run it as a business, I'd urge you to keep it separate from any existing one or you might well end up with neither yacht nor business.

Sorry to be so gloomy but reality/realism might better bite before commitment. But I suspect there is nothing here you didn't know already.

[Huntsman]

Contrary to the above, owning your own boat is fabulous, if you have the time to use it lots its tremendous value.

We typically stay onboard, overnight, for about 50 days a year, Work out the cost of that in a hotel!

The 50ft white plastic motorboat market is flooded with stuff for sale, most of it leggy knackered cheap rubbish.

Log onto to YBW mobo forum, start reading and learning and asking questions.

[Simpo Two]

My boat-ownership is not in that league but all of what PSI says will be correct. However, they are all the negatives with none of the positives. Sometimes an experience is worth paying for, or a box worth ticking so you know you tried it and didn't go the grave unfulfilled. Boat owning is not a practical decision. If it was, nobody would own boats because they make no practical sense - you don't need one and it will cost you money. Mine costs me about £2K a year, way less than what the OP is considering, but then again, way more than many people I know could afford or spare. Luckily I can, and it buys me a lot of pleasure, escape, fun times, funny times and valuable social times. I think a siginificant part of the pleasure of boat-owning is to say 'This makes no practical sense but I love it and I'm prepared to pay the bill'.

[psi310398]

Simpo Two said:

My boat-ownership is not in that league but all of what PSI says will be correct. However, they are all the negatives with none of the positives.

I think a siginificant part of the pleasure of boat-owning is to say 'This makes no practical sense but I love it and I'm prepared to pay the bill'.

Simpo Two,

I entirely agree with you that there are positives as a leisure proposition if you have the cash, and a decent cushion of it, but the question was about the yacht as a business (and a "side" business to all intents and purposes).

P

[R8Steve]

Jonny TVR said:

I'm considering buying a Pershing 50 probably a 2008 model at around £300K.

I would charter it out when I'm not using it.

Thinking about mooring initially in Palma but haven't looked at costs yet.

I have my own business so wondering if I can get the business to purchase it and run it as a charter business. Is this actually possible/ worthwhile?

What do I do with it during the winter? take out of the water?

What are peoples experiences/ advise?

Do you have any experience with boats firstly?

Pershing 50 is a very nice boat so you can't go wrong with getting one of them.

Mooring costs in Palma, expect anywhere between £10-£20k, most likely the higher end of that.

You can purchase through a business to charter, yes.

In the winter, leave it in the water and winterize (if that's even necessary in Palma), to take it out the water and store a 50 foot boat would be rather expensive (but possible).

You would probably get a good amount chartering this size of boat, probably about £2k per day but you would have to have a captain i would have thought. I certainly wouldn't be letting someone with an ICC loose on a 50 foot motor yacht.

Then you have cleaning, maintenance and any damage to think about.

You are probably looking at £4-500 an hour in fuel for this kind of boat as well.

[Jonny TVR]

psi310398 said:

Simpo Two,

I entirely agree with you that there are positives as a leisure proposition if you have the cash, and a decent cushion of it, but the question was about the yacht as a business (and a "side" business to all intents and purposes).

P

I meant that I could put it through my business to reduce the costs of personally owning it. I don't expect to make a profit on it.

[donutsina911]

Jonny TVR said:

I'm considering buying a Pershing 50 probably a 2008 model at around £300K.

I would charter it out when I'm not using it.

Thinking about mooring initially in Palma but haven't looked at costs yet.

I have my own business so wondering if I can get the business to purchase it and run it as a charter business. Is this actually possible/ worthwhile?

What do I do with it during the winter? take out of the water?

What are peoples experiences/ advise?

Am in the early stages of launching and running a charter business with a similar type of MY, age and price point, although a very different location, so hopefully I can help a little.

Aside from having a big slush fund for running costs, the key point made by psi is location. The med is not short of charter yachts, so you'll need to be offering something unique, better or cheaper than the rest. Or be much better at targeting/reaching a fairly niche audience. Take a look at someone like:

http://www.marina-balear.com/en/category/motor-yac...

They run a number of boats on behalf of owners and show daily and weekly prices. Looks like about €2,000 a day less their commission and it would probably be worth seeing what demand is likely to be for a Pershing 50 over the course of a season.

Anyway, in terms of costs, the boat will probably need some form of coding to be legally able to be chartered - speak with Duncan who is a member on here (http://www.saundersmorganharris.com/) and he'll be able to advise on the ins and outs in Europe.

Back of a fag packet, I'd allow £10k to get a typical privately owned 50 footer through the process including kit and inspections. A compliant liferaft alone is circa £3k. The MCA is the UK authority and would imagine there's a Spanish equivalent, but you'd need to check.

I looked at a similar vintage MY earlier this year and the owner showed us invoices from a Dutch yard of €110,000 for engine work (MAN 1050s), prop/glands etc, some grp tidying, reupholstering and routine servicing. The 10% of boat value in running costs is a conservative one, but should give you a very rough idea. A decent surveyor will help you avoid or mitigate against some of these big bills with a robust survey.

No idea on Palma berthing costs but a boat we looked at in Port Grimaud was costing the owner €16,000 per year in berthing. A quick google threw up this page, which appears to show purchases of berths, but probably worth dropping the Palma yacht clubs/marinas a line:

http://www.aml-mallorca.com/Moorings/Berth/berth.p...

We have always taken boats out of the water for winter for maintenance and been charged for lift outs, regardless of the type of berthing contract.

Gut feel on a Pershing 50 in Palma would be fairly modest - if charter income could cover the cost of an annual service on a pair of MAN V8s and a lift out, then I'd probably see that as success..

[Jonny TVR]

R8Steve said:

Do you have any experience with boats firstly?

Pershing 50 is a very nice boat so you can't go wrong with getting one of them.

Mooring costs in Palma, expect anywhere between £10-£20k, most likely the higher end of that.

You can purchase through a business to charter, yes.

In the winter, leave it in the water and winterize (if that's even necessary in Palma), to take it out the water and store a 50 foot boat would be rather expensive (but possible).

You would probably get a good amount chartering this size of boat, probably about £2k per day but you would have to have a captain i would have thought. I certainly wouldn't be letting someone with an ICC loose on a 50 foot motor yacht.

Then you have cleaning, maintenance and any damage to think about.

You are probably looking at £4-500 an hour in fuel for this kind of boat as well.

Thanks for this.

I think if chartering it out could cover the mooring costs then I would be happy.

[Ziplobb]

A quote from my uncle who over the last 50 years has owned a number of boats such as Fairey Huntsman, Moorakers, Fairlines , Sunseekers and the like:

'there are only 2 good days when you own a boat - the day you buy it and the day you sell it'

nevertheless lovely toys to have and from the Isle of Wight a trip to France for the weekend is very pleasant

[R8Steve]

Jonny TVR said:

Thanks for this.

I think if chartering it out could cover the mooring costs then I would be happy.

If that's all you are looking to do i'd say you'd comfortably be able to do so.

On a different level but i used to rent my yacht out to a sailing school twice a year which covered most of the yearly costs.

[R8Steve]

Ziplobb said:

A quote from my uncle who over the last 50 years has owned a number of boats such as Fairey Huntsman, Moorakers, Fairlines , Sunseekers and the like:

'there are only 2 good days when you own a boat - the day you buy it and the day you sell it'

nevertheless lovely toys to have and from the Isle of Wight a trip to France for the weekend is very pleasant

The days in-between can't have been that bad if he owned a number of boats so that quote as always makes zero sense.

It's just like a quote that seems almost obligatory for someone to roll out whenever someone mentions buying a boat along with the Felix Dennis quote of course.

Selling my last one was one of the worst days, nearly every day i owned it from the day i bought it was a good day and most other people i know that own boats think the same so i'm not sure who thinks that, if anyone.

[Simpo Two]

Jonny TVR said:

I think if chartering it out could cover the mooring costs then I would be happy.

A good approach might be to say 'Well this is the likely cost if I don't get any charters, and any return is a bonus'.

It's interesting how these threads polarise. People who've enjoyed boat ownership say 'do it', and those who haven't trot out The Quote. But there will be a lot to learn, and a boat is nothing like a car to maintain, so keep a clear head; I'm sure you will.

[psi310398]

BTW, the number of high ticket boats is increasing in the Western Med as it sees quite a few Italian yachts leaving Italian shores and taking up residence elsewhere as the Guardia di Finanza crack down on the national pastime of tax evasion.

There have been some high profile confiscations (Flavio Briatore's boat being one a few years ago) and the police have been asking hard questions of people with expensive boats and cars but modest tax returns.

As a result there is more pressure on moorings/berths further west and the laws of supply/demand will operate on all things related to the market.

[Esceptico]

Can you hire/lease/charter a MY for 6/12 months to see whether you get enough use out of it/enjoy it enough to suffer the costs? Might be more expensive than owning it yourself but at least the cost should be fixed and you don't have to worry about selling it at the end. If there are lots of MYs in the Med then OP could find someone willing to do a long term deal at a good price.

[anonymous-user]

Ziplobb said:

A quote from my uncle who over the last 50 years has owned a number of boats such as Fairey Huntsman, Moorakers, Fairlines , Sunseekers and the like:

'there are only 2 good days when you own a boat - the day you buy it and the day you sell it'

nevertheless lovely toys to have and from the Isle of Wight a trip to France for the weekend is very pleasant

I'm pretty sure that every uncle has said that

I've had a couple of boats on the South Coast over the years and as long as you use them, and go in with eyes open about the costs, they are fabulous fun. They are a relief when you sell them BUT within a very short time you are back buying again if it's something you enjoy!

[essayer]

Find out how much a 'day out' in the boat will cost you, think about how many days you'll do a year, add in the overheads and genuinely think: can I stomach this cost and enjoy owning the boat without dreading/hating it. The costs can be collossal

Balearics are a good place though, lots to do. You should be able to use the boat in the winter, I'd have thought. We could in the south of Spain.

Also.. think about who'll crew it with you. Family? Not everyone may share your enthusiasm

[ClaphamGT3]

As others have said, you should own a boat because you love it and see any way of defraying the running costs as a happy bonus.

As a bit of an example, my father bought his Halberg Rassy 36 brand new in 1989. Last year was a landmark year as the whole-life running costs clicked over the £1m mark....

[SeeFive]

ClaphamGT3 said:

As others have said, you should own a boat because you love it and see any way of defraying the running costs as a happy bonus.

As a bit of an example, my father bought his Halberg Rassy 36 brand new in 1989. Last year was a landmark year as the whole-life running costs clicked over the £1m mark....

Wow! An average of around £36k a year on a 36 foot sailing boat? How the hell did he manage to spend that much?

[ClaphamGT3]

SeeFive said:

Wow! An average of around £36k a year on a 36 foot sailing boat? How the hell did he manage to spend that much?

An expensive marina in the U.K., a 'want for nothing' approach to maintenance and An awful lot of passage-work - multiple trips to the Caribbean and back, a few circuits of the Med, a big trip down to New Zealand a trip to Alaska via the West coast of the States - if you keep on top of the boat it soon racks up.