Owning a Boat Individually or
Owning a 10% Share in a Fractional Yacht
In our example Smith owns a 50’ 3 stateroom boat that cost him $700,000 new. The boat is docked at a marina and Smith has a part time maintenance man that checks the boat twice a week. Smith uses the boat on occasional weekends taking short trips with his friends and family. The boat is now five years old and requires some major mechanical and cosmetic work.
Smith is considering selling his boat and purchasing a 10% interest in a brand new 4 stateroom fractional yacht for $495,000. Smith likes the idea of owning a brand new yacht complete with warranties, competent management and a professional crew. He also resents being tied to the helm while his guests enjoy themselves on his boat.
Cost of ownership for his 50’ boat:
|
Investment |
$700,000 |
|
Annual expenses: |
|
|
Dockage |
$18,000 |
|
Maintenance checks |
20,000 |
|
Repairs |
15,000 |
|
Supplies |
6,000 |
|
Insurance |
10,000 |
|
Miscellaneous |
6 ,000 |
|
Total annual expenses |
$75,000 |
Cost of owning a 10% share in a brand new fully outfitted 100’ 4 stateroom yacht complete with a top deck Jacuzzi, 2 jet skis, a 25’ Wellcraft tender, and a professional crew of 4 to serve him and his guests 4 weeks annually in exotic locations.
Cost of owning a share of a new 100’ yacht:
|
Investment |
$495,000 |
|
Annual Expenses |
40,000 |
|
Responsibilities |
NONE |
|
Aggravation |
NONE |
|
Enjoyment |
ALL |
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