Yacht Buyers Worldwide Should Ask These Questions!
- Why Yachting?
- Where to Go?
- Why a Yacht Broker?
- What Should I Look for in a Yacht Broker?
- What is the Process of Buying a Yacht?
- What Can I Expect to Spend in Ownership?
- Does Chartering My Yacht Make Sense?
- What is Going On with Marine Insurance?
- What About the High Cost of Fuel?
- What About Boat Shows?
We live in a day and age where the ability to freely navigate the wonderful oceans of the world is one of the true joys! Having your own yacht to call a temporary home and roam the islands and ports of the world is a satisfying lifestyle that few lucky souls can choose. So much to see… so little time! Yachting is the Ultimate Lifestyle!
With the growing demand, many new marinas and destinations are being built throughout the world, and especially:
- Florida and the Florida Keys – The United States offers a variety of destinations which are so much fun to visit and stay! Any yacht buyer will certainly want to cruise the US coast. The Florida coast is home to the finest yacht support worldwide with Fort Lauderdale as the hub of the Universe for yachting services. The Bahamas are only 50 miles away! Key West is an unforgettable place of non stop fun and tropical lifestyle staged as a ‘Conch Republic’ – try on the Dry Tortugas sometime! The US gulf coasts and the US west coasts offer more variety than any person can possibly enjoy!
- The Bahamas – 800+ islands with some of the most beautiful, clear water and diving in the world. Yacht friendly resorts are springing up all over. Ditto for the Turks and Caicos Island group.
- The Caribbean – not only the Windward and Leeward Islands but areas such as Dominican Republic, Puerto Rico & Jamaica are getting new yacht resorts. This is a fine and very diverse area with diverse island cultures and landscapes only a day’s cruise away from each other. One can spend a lifetime in the Carribean and never see it all!
- East Coast US – South Carolina is getting to be the place to stay. Better make reservations in New England –way in advance.
- Cuba – Forget it for now. Most insurance companies won’t cover you there or in some Central American countries. It’s going to be beautiful cruising and diving when it opens – so keep on the look out!
- Costa Rica – A few, really nice resorts are opening up in this gorgeous country (mostly on the Pacific side) filled with volcanoes and unparalleled tropical beauty! Costa Rica is also “hurricane free.”
- Pacific Northwest – transporting is making the San Juan Islands around Seattle, British Columbia and the Inside passage to Alaska is now a reality for many smaller yachts. Spring and Summer cruising through this wonderful and remote mountainous area is a transcending experience!
Most boats under 40′ feet don’t require the services of a yacht broker, as the fact gathering and registration is typically fairly easy and straight forward. For yachts above this landmark, many variables come into play. A competent yacht broker is a necessity!
Few yachts above 40′ are not represented by a yacht broker, therefore you might as well protect your own interests by taking advantage of a yacht broker’s expertise. It’s kind of like going to court without a competent attorney, doing your own corporate taxes, or doing surgery on yourself.
Most people who can afford yachts know from business experience that experienced and trustworthy advice is the best way to stay ahead of the game – and yachting can be a very complex activity, full of pitfalls for the inexperienced. Buying an expensive yacht without representation is for the very knowledgeable or very foolish.
- One who is attentive (and listens) to your needs
- A yacht broker who is qualified particularly in your market
- A yacht broker with industry credentials and background
- A yacht broker with an honest track record and historically referred
- A yacht broker who is not overburdened and has time to do a good job!
Conversely, yacht brokers look for clients who are sincere and are worthy of the huge time investment that it takes to sell a boat. Professional yacht brokers believe in long-term relationships and will devote their time to ensuring your total satisfaction!
- Finding the right one at the right price (sometimes with financing)
- Presenting an offer accompanied by a deposit into an escrow account
- Negotiating the offer successfully
- Engaging a surveyor(s) to investigate the yacht systematically and offer professional advice on any defects found
- Accepting the Yacht (or rejecting the yacht for a full return of the deposit in escrow).
- Closing and registering the yacht with a favorable registry to the yacht buyer.
- Making repairs/improvements
- Outfitting the yacht and selecting crew
- ENJOYING THE YACHT AND CRUISING!
What Can I Expect to Spend in Ownership?
The rule of thumb is 10-15% of value per year which includes dockage, insurance, crew, repairs, maintenance, some fuel and depreciation. Naturally, this is a variable number depending on the yacht and usage. Cutting corners on things such as maintenance, crew, repairs and such tend to bite much deeper in the long run.
- You don’t mind other people using your boat.
- The yacht buyer wants to offset the cost of ownership (estimate 12-14 weeks of charter per year will cover the cost of owning it, less depreciation and financing costs.)
- You don’t need to use your yacht during peak periods (holidays and such). However as a yacht buyer and owner, you always have the choice of when you want to use the yacht!
To be successful at chartering, the yacht owner needs to look at it as a business with long-term goals in mind. The boat is only a part of the operation. The crew and itinerary is the part which will keep charterers and their friends coming back year after year. If you want to charter, consider looking at a boat or boat type with a successful charter history (and maybe buying an existing charter operation). A good charter broker is essential to bringing charters on board. Charter brokers are very cautious until the charter ability is proven!
Due to the stack of claims from our busy hurricane season in 2005, the marine underwriters re-examined their policy making and with a knee-jerk type reaction and so made harsh adjustments. However, the last relatively quite seasons have brought common sense back into the picture. Two major concerns are:
Experience – If you are new to the scene, it only makes sense to engage a professional captain (perhaps even part-time) to work with you and your boat so that you and your insurance company will feel better about your ability to navigate safely.
Storm Exposure – With today’s modern forecasting, it is usually a matter of taking early precautions to avoid being in the destructive paths of storms. Usually being 50 miles on either side of a hurricane eye makes a big difference. Even being in a target zone, there are many things that can be done to minimize damage, not only to your boat, but to the things that your boat can do once free of its tethers. We see our customers getting good coverage all up and down the east coast.
Cost has gone up, but it is still relatively a good value.
Perhaps the relatively storm free central American countries and islands will enjoy prosperity with the advent of modern marinas and cruising grounds.
The idea is to make the insurer feel comfortable with your abilities and common sense.
Warning: It is not a good idea to “shop” insurance with more than a few agents- as they can lock you out of underwriter markets with respect to other agents whom you might want to do business with. Look for a good agent who will be there and work for you at claim time.
One suggestion is to plan trips for slower cruising and take your time. Most experienced yachters find the “sweet” spots for maximum efficiency. Assuming this is a yacht with a semi-displacement hull, an extended range cruise speed (typically less than 10 knots), a displacement speed that is comfortable (somewhere between 11-12 knots) and a fast cruise speed (usually around 300 rpms below wide open throttle). Yachters who cannot handle the cost of fuel should consider sailing yachts. Sailing yachts take more time between destinations, however the joy is in the ride and the fuel savings!
South Florida has a plenty of dockage available which is relatively easy to find. Most dockage is behind homes at a fraction of the cost of marinas. That is for yachts that aren’t lived aboard. For full time live aboards, there are public and resort marinas which tend to fill up during the winter. Beware boat shows times! Dockage gets tough.
Boat Shows are a great way to see a variety of yachts in order to determine what suits you best. The two BIG shows every year are the Fort Lauderdale International Boat Show (FLIBS – in late October) and the Miami Brokerage Show (mid-February). The Palm Beach show (Easter time) is a breath of fresh air and quite enjoyable. If you come to these shows, you should be aware that only a fraction of available brokerage yachts are displayed and many are within easy driving distance.
Let your broker know in advance and he/she will gladly make arrangements to show you others on your list. Also, these shows are quite expensive to the sellers, so making a deal before ahead of time can usually discount the cost of going into a show – despite the banner tag “Special Boat Show Price” The best day to do these big boat shows without the crowds is the last day of the show.
Another advantage to developing a broker relationship, is that they will get you onto yachts that you want to see much easier and without having to register at every booth, or wait during busy periods. Plus, a good broker will “map” out your itinerary – making it a breeze to see the good stuff in a much shorter period of time.