Alternatives to Traditional Boat Ownership

Douglyss Giuliana

www.sailtime.com www.advantageyachtsales.com

www.blackrocksailingschool.com

Outline

• Ownership Pros & Cons• Goals for an alternative• Various alternatives• Comparison grid

Ownership – How It Works

• You pay the bills• You do the work• You enjoy the boat

Owner

Sample Ownership Costs – New ~35ft Sailboat• Mortgage Payment• Slip Fee• Insurance • Winter Storage• Maintenance • Fuel & Cleaning Estimated Monthly Cost: $2500Assumes slip in Boston, $1MM insurance, professional maintenance. Many less-expensive

alternatives are available.

Ownership Pros & Cons

Pros:• Boat/option customization selected by owner• Usage flexibility• Location flexibility – put it where you want• Privacy/exclusivity • Equity in the boat

Ownership Pros & Cons

Cons:• Pay 100% of cost• Do 100% of work• Possible lack of “efficiency” w/low usage• Full commitment to the boat• Location specificity – can only use it from one

location

Ownership - Profile

• Uses boat a lot• Enjoys extended cruising• Doesn’t like to share• Wants specific/exotic boat• Boating is THE summer activityCost: ~$2500/month

Goals for an Alternative

• Decrease total cost• Minimize work required• Eliminate “hassles”• Get sufficient time aboard

Alternatives to Consider

• Sharing• Fractional Ownership• Charter Ownership• Fractional Member/Owner Programs

Sharing – How It Works

• Split costs• Split work• Equity for owner only• Divide calendar somehow• Informal agreement

Owner Friend

Sharing

• Very good flexibility of usage• Location-specific• Careful of legal/financial issues if no written

contract• Clarify insurance coverage for both parties• Doesn’t help financing

Sharing - Profile

• Good buddies or family• Good sharers• Strong commitment???

Is friend really committed?

Cost: $625-1250/monthDepending on sharing agreement

Fractional Ownership – How It Works• You own 1/nth of the boat• Share all expenses equally• Share all work (do vs. pay)• Legal/financial issues managed centrally• Divide calendar equally• Formal agreement, legally binding

Owner Owner

Management

Fractional Ownership

• Very good flexibility of usage• Equity, sell to get out (liquidity issues?)

Is there a market to re-sell shares?

• Location-specific• Commitment: moderate term

• Comparison with ownership…Is it less risky or more risky? I think more risky.

Fractional Ownership - Profile

• “Financially-savvy”• Mediocre sharers• Med. commitment (3-5+ yrs)• Sails avg of 3- 7 days/month• Cost: ~$45,000 + $450/month

Charter Ownership – How It Works• You own the boat• No operating expenses or work• Monthly income• X weeks/year usage (6-12 weeks)• Use other boats/bases too!

Owner Charter

Charter

Charter

Charter

Charter

Charter

Charter

Charter

Charter

Charter

Charter

Charter

Management

Charter Ownership

• Full equity (if there is any)• Really yours? Not really.• Location flexibility• Heavy wear & tear decreases boat value• Possible repurchase and secondary markets

Charter Ownership - Profile

• Lots of vacation timeReally pre-paying for future vacations.

• Not possessive • Not really looking to

“own” a boatCost: $36,000 down

Fractional Membership

• 2 options – own or join• Not responsible for operating

expenses or work• 1/nth usage: X days/month

usage• Use same boat each time

Owner Member

Member

Member

Member

Member

Management

Member

Member

Fractional Membership

• Good flexibility of usage• Guaranteed sailing time• NEW, loaded boats• Low, fixed cost• Low commitment• Legal/financial centrally managed

SailTime Benefits

• Location flexibility (PLUS program – use boats at any base)

• Online scheduling in real-time• Largest base network (50+ bases globally)• High quality, good value boats

Fractional Membership – Profile

• “Busy” sailors, pre-addicts, financially intelligent, try-before-you-buy

• Good sharers• Desires flexibilityCost: $650/month

Fractional Membership – Owners • You own the boat (down payment + financing)• Manager pays expenses + an income• Free membership, maybe two memberships• Accrue equity

Fractional Membership – Owners Profile• Financially intelligent, budding

addicts, soon-to-retire, step-ups• Good sharers• Moderate commitment (3-5 yrs)Cost: $36,000 down, $300/month

Comparison

HighCost

LowCost

Low Hassle High Hassle

Ownership

SharingFractionalOwnership

FractionalPrograms

CharterOwnership

Size of circle is amount of sailing time afforded.Key is to compare how much sailing time you can do to amount offered, and find the lowest-cost/lowest-hassle option.

SailTime is the global leader in fractional boating, offering membership and smart ownership programs, as well as charters, lessons, and events from 50+ bases worldwide on both sail and power boats.

http://www.sailtime.com

By Douglyss GiulianaSailTime Boston

dougg@sailtime.comhttp://www.sailtime.com/boston