Sailing off on your own luxury yacht is the dream of many individuals. Yet, when expenses like yacht insurance and more are factored in many feel it may not be the best use of their capital. There is a way you can feel like your have your own luxury yacht – fractional ownership. So how is fractional ownership changing all of this, and opening the opportunity of buying a yacht up to a much broader spectrum of sailors and luxury lovers?
The Desire to Set Sail
The desire to hit the seas is the lifetime dream of so many people. For some it is full time life on the water that turns them on. For others it is just the opportunity to chart their own course and cruise new destinations. Then some simply want to have a boat to brag about, and live it up on for the weekends.
There are many benefits of yacht ownership too. There’s no need to deal with the crowds on commercial cruise lines. There can be significant tax advantages for many yacht owners, and the experience itself can reel in a world of rewards.
However, it’s no secret that yacht ownership can be financially challenging.
The Costs of Owning a Yacht
Expenses include:
• Yacht insurance
• Travel insurance
• Fuel
• Dockage and storage
• Regular painting
• Crew
• Stewards
• Chefs
• Captains
• Engineers
These are not to be dismissed or overlooked. They can add up to millions quickly. Yacht World notes you’ll definitely want a full time staff to be on call, if not on active duty year round.
Business Insider recommends factoring at least 10% of the yacht purchase price in annual operational expenses. Others would argue that those considering buying a yacht should account for 20% to 25% to ensure they aren’t caught by surprised.
Forbes quotes the director of operations at Fort Lauderdale’s International Yacht Collection as saying “It’s so much more expensive than any home you can imagine.” However, fractional ownership can really change the game.
What is Fractional Ownership?
As the name suggests, ‘Fractional Ownership’ is a structure which allows luxury yacht buyers to participate in ownership by purchasing a fraction of ownership. For example; this may be splitting a luxury marine vessel three ways, five ways, or ten. Each owner is then entitled to use in accordance to their share. So five owners might get ten weeks per year each, with a couple weeks off for crew vacations and maintenance.
Buyers may pool together with friends and family in their own arrangements, or take advantage of established fractional ownership programs.
The Benefits & Practicality of Fractional Yacht Ownership
This not only makes buying a boat far more affordable, but also the maintenance and annual expenses. Everything from crew salaries to repairs, and yacht insurance can be split, and reduced to just a fraction of what it could require going solo.
This isn’t just for the financially frugal. It makes sense. While full time yachting life might be within easier reach of many individuals today, the majority simply don’t have more than a couple weeks a year to enjoy their marine vessels. Why pay for 52 weeks of costs, when you only use it for 2?
It’s a principal which has long been applied to jet ownership, and even the most luxurious vacation homes and international investment properties, and is well worth investigating whether you are on a budget or have infinite disposable cash.
Where will you sail to next?
