A Drop In The Ocean
2007 has been a wonderful year for sail and power yacht owners and all other people enjoying a life on the ocean waves. Watching the America's Cup in Valencia or the Super Yacht Cup in Palma could only make it harder to postpone the decision to purchase or upgrade to that beautiful yacht of your dreams.
Taking that decision is only the beginning of a long road, a list of items that have to be handled before you can experience the extraordinary fulfilment that can only be achieved by taking your personal yacht onto the high seas. What questions should you be asking yourself that will allow you to find the best way to fund the purchase of your new yacht, to find out what is best for you and your financial situation?
What will be your personal horizon? How long do you think you will you keep your yacht? Is it for just a few years, maybe while your young family matures, or is it for the next 15 years to take you well into your retirement? Historically ownership of a vessel lasted for an average of six to seven years, now it is closer to 3! As you can imagine, just this question alone has a massive influence on how you wish to finance your yacht.
Also will you purchase the yacht for private use only or also allow it out for charter to help with some of the running costs? To charter a yacht to third parties through a professional charter broker is a completely different story to that of a privately operated yacht. It is not only the number of crew you have to take care of but also the fickle needs and wishes of the charter market? This affects the number of guest and VIP rooms your yacht may need and in what waters it needs to operate etc. to be successful. Charter can generate a contribution to the running costs of the yacht but the costs themselves, especially maintenance, will also be higher than those of a privately used yacht. What should you expect from charter, will it be a fully booked season on an 'in demand' brand new yacht, or will you go for a yacht that already has a charter track record of say six weeks during the summer season? What will be the charter area, the Mediterranean, Caribbean or maybe you are thinking of a world cruise with chartering along the way? Is it true that the annual costs will be approximately 10% of the value of the vessel? Running costs and percentages of value do not tie up!
Should you go for a new build or a yacht on the second hand market? Or will you go for a brand new yacht to be built according to your partners or your own personal wishes? What about the owning structure, the flag, VAT, MCA, ISM, crew?
There really are numbers of questions to be addressed before even entering the front door of a respectable broker, dealer or yard to start negotiating the potential purchase.
