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Sharing the fun of sailing

Comparison between Used yacht for sale Vs. New fractional ownership boat

This article discusses searching for a used sailboat for sale versus buying into a fractional ownership of a new sailboat. You'll find that this article is quite biased to fractional ownership however the numbers do back up the discussions. The one variable that is not biased is the time you plan to spend on the boat. So in that sense the article becomes quite useful as it gives you a good balancing tool.

When considering getting into ownership of a sailboat there are a few things to think about.

  1. The initial outlay
  2. The depreciation of the vessel and the associated cost
  3. The on-going costs of slip, insurance and maintenance
  4. The time you have for maintenance
  5. The percentage of time you want to dedicate to maintenance vs sailing
  6. And the realistic amount of time you'll actually spend on your boat sailing.

So - the first thing that will knock fractional ownership out of the park is #5. If you plan to live on the boat or spend every day of every weekend on the boat then fractional ownership is obviously not for you. You'll need to go down the solo ownership route and pay accordingly.

However - take a serious think about #5 to see if it is a reality. If your concerns are just around "sharing" then please continue to research the reality of modern fractional ownership. If you've researched the Atalanta Yachts fractional website you'll now know that fractional ownership is different from time share or sharing a boat in a partnership. Fractional ownership has a structure that is controlled by third parties and is much more formal. It removes all the questions of "what if the others are messy?" and concerns of "I won't get enough time".

However, one of the funny things are that I see at boat shows many times is that people say that fractional ownership is not for them because they want the whole boat for themselves. That's a fair comment, yet many of these people never actually get into a boat. They spend season after season just dreaming. It's because they bring with them preconceived ideas of time share or simple sharing and continue to look for the bargain used boat that never shows up.

Now lets go back in order and look at the other considerations and we'll take a 30 ft size boat as an example. You can extrapolate from there for your size needs.

Initial Outlay
The initial outlay of a decent 30ft used sailboat is anywhere from $30k to $60k depending on the age. $30k would be about 15 yrs old and $60k would be about 7 years old. Comparatively, a quarter share in a Beneteau 31ft new sailboat is about $38k. With the First Again financing option that is $zero down and $582 per month (on a 7 year payback schedule). Consequently, a significant portion of the $582 is going into principle payments. Ok - so about same same here.

Depreciation.
Newer boats depreciate faster than older boats. In the first three years many brokers will quote a 25% depreciation in a boat. After that the depreciation is assumed to go fairly constant at about 4% per year. Lets take 5 years as a norm. A second hand boat would depreciate then about 20% while a new boat would be about 33%. In our 30 ft example, a $40k second hand boat depreciates $8k while the fractional portion depreciates about $12k or $750 more per year.

Ongoing costs of slip maintenance and Insurance
Slip cost vary widely but we'll use an average of $400 per month for a marina rental fee for a 31 ft boat. Over 5 years this is $24k. For fractional ownership this is divided by 4 at $6000.

Maintenance on a 10 year old 30 ft boat obviously depends on its condition but an allowance of $400 per month would be sufficient. This includes bottom jobs, electronics replacement once, a few upgrades along the way to newer equipment, new winch, upholstery repair and gel coat touch ups etc. Over 5 years this is $24k. For fractional since most items are covered by warranty for the first few years and they are all new an allowance of $200 for the boat or $50 each is realistic. This then is about $3k over 5 years. Fractional ownership however typically overlays the cost of a professional to do all the maintenance for you. This service is relatively expensive due to the use of shop rates and it typically comes in at around $200 per month per person. So the real maintenance number to use is $250 per month or $15,000 over the 5 years.

Insurance is about 1.5% of the value of the vessel so this is about $3000 over 5 years for a used sailboat of $40k value or the same $3000 for a quarter share of a $160k valued boat.

In a financial summary then:

 

Used Sailboat

New Fractional Ownership Sailboat

Slip

$24k

$6k

maintenance

$24k

$15k

Insurance

$3k

$3k

depreciation

$8k

$12k

total

$59k

$36k

total/yr

$12

$8k

So that's the numbers - not a huge difference at about $300 per month in favor of Fractional Ownership over buying a used sailboat for sail. Or think about it this way - take the $300 savings and upgrade your car into a new BMW or Mercedes and come out even.

Now, where some real benefits come in are:

  1. NEW vs USED. In our example the used sailboat was about 10 to 12 years old. One on which you really wouldn't take clients or significant others out to impress. Taking people out on a New Beneteau - now that's impressive.
  2. Maintenance time. Maintaining a 12 year old boat is going to take some serious time. Many people I meet say they spend every weekend out on their boat. When asked how much time they spend out of the marina sailing rather than tinkering they quickly realize the burden. With Fractional ownership a concierge professional is constantly maintaining the boat for you.

And finally, one needs to fully appreciate the efficiency of the online scheduler implemented by Atalanta Yachts. The scheduler is designed to as best as possible make you feel like you control all of the time and be able to sail the boat in a fashion that you normally would if you owned the sailboat out right. With the online scheduler and with only 3 other owners, you can take your sailboat out for just a morning, just an afternoon, just an evening or combine them for a full day - or combine full days to get up to a week - in a row every month. There are even provisions to take the boat for longer. You can book up to a year in advance and with our 24 hour rule you can use the boat as much as you like when you book within 24 hours. In this manner you can use the boat much like you owned it outright. You control the time and it is as flexible as you want it to be.

So it would seem then the real decision comes down a series of trade offs.

·         New vs Used

·         No maintenance vs significant bilge cleaning and mast climbing

·         The value of your time with family, friends vs bilge time

·         and trading the huge advantage of the above vs 3 or more other people in a closely managed situation using the time that you weren't going to use anyway.

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