Investors Turn to Yachts for Investment Opportunity

A yacht is an expensive acquisition, however with the right tools and knowledge it can be a profitable acquisition that results in a generous return on investment (ROI). Many wealthy investors from across the globe are looking to obtain yachts as both a luxury purchase and an investment opportunity. One of the most widespread methods of making an investment with a yacht purchase is by chartering the vessel, whether via a yacht chartering company or in setting up an independent yacht charter business.

yachts for investmentWhen operating a yacht there will be high running costs and maintenance fees. In an attempt to mitigate these expenses many vessel owners choose to charter their vessels, whether privately or through a yacht chartering company.

The last decade has witnessed increasing global interest in luxury yacht chartering – namely, leasing or hiring a vessel for a specified period of time. Individuals who do not have the knowledge or time to purchase a yacht select chartering as a way of enjoying a luxury boating holiday or business trip in an exclusive, private destination without additional responsibilities. Although chartering is typically regarded as an extravagant and costly activity, for affluent individuals, it combines convenience, luxury, privacy and cost-efficiency that is simply not attainable from the purchase of a yacht.

Yacht chartering comes in two varieties: crewed and bareboat. While a crewed charter is accompanied by a crew and provisions, a bareboat charter involves renting a vessel without the arrangement of a crew or provisions. According to reports, there has been an increase in demand for chartering, particularly bareboat chartering, with many people regarding it as a convenient and economical way to enjoy the exclusivity of a luxury vessel.

In light of heightened interest, a growing number of high-net-worth individuals are purchasing yachts for the purpose of offering chartering services. Yacht chartering enables buyers to make a significant return on invested capital whilst giving them the opportunity to cover the mounting operational and maintenance expenses that naturally come with the acquisition of a yacht.

Yacht Chartering via a Yacht Chartering Company

Investors acquiring vessels for the purpose of offer chartering services, can either establish their own charter boat business, or charter through a yacht chartering company. In selecting a yacht charter company, the individual can either purchase a yacht outright with a contract (stipulating that the operator can charter the vessel and pay out a percentage of the purchase price annually); or can pay a percentage of the cost price (usually 50-60%) and receive no annual payments.

In both cases, all running costs, maintenance fees and other obligations are covered by the operator, while vessel owners are entitled to a number of weeks of vessel usage annually, free of charge. In addition, the vessel is subject to monthly revenue checks, along with professional and rigorous maintenance services. Furthermore, some contracts are available with a full crew, providing complete convenience and peace of mind to contractors.

Nevertheless, the process of selecting a yacht management company can significantly impact on the level of service experienced by the investor. When selecting a yacht company, the size of the company is a significant factor as the smaller the company, the greater the focus is on providing owners with specialist support. On the other hand, larger companies offer a greater scope of information, expertise and support, although the services are far less personalized.

The particular type and size of company selected will depend on the needs of the customer and their desires as a vessel owner; however this decision can greatly influence one’s overall yachting experience and more importantly, their profitability.

Independent Yacht Charter Business

yacht charteringYacht chartering services can be offered by vessel owners independently by setting up their own yacht charter business with the aim of providing the ultimate getaway for wealthy holidaymakers and business moguls. Yacht charter businesses can be relatively straightforward to establish although initial start-up costs are particularly high. In order to be legally operational, investors need to obtain a captain’s license and business insurance along with the relevant qualifications and permits.

Further to the above, the vessel acquired will considerably influence one’s success as an independent yacht chartering service. In chartering, most individuals look for newer, more recent models, as they are considered far safer, dependable, and impressive than older vessels. In this respect with the acquisition of a newer vessel the chances of a successful charter are far greater, enabling vessel owners to effortlessly reap financial rewards.

Finally, the vessel must be fully stocked with the relevant charter supplies and safety equipment. The particular equipment required will depend on the type of vessel being chartered, thus, if vessel owners plan to offer snorkeling facilities, they will need to stock their vessel with certified snorkeling equipment, fins, medical equipment and food supplies.

With the correct implementation of the above factors, an independent yacht chartering business can prove to be an incredibly lucrative investment opportunity. The yachting industry is a notoriously fruitful one, with daily chartering rates extremely expensive. Therefore, only individuals of a significant net worth tend to adopt boat chartering, thus enabling charter-business owners to place considerable rates on their services; making the potential for a sizeable ROI very high.

An independent yacht charter business also offers an unsurpassed lifestyle opportunity for the vessel owners, provided they are committed to spending their lives sailing waters and hosting guests. Not only will vessel owners be in a position to network with some of the most highly accomplished and empowered people, but they will be able to effectively cover the costs of their vessel, including operation, docking, insurance, and routine maintenance checks.

Therefore, choosing to offer chartering services as a way to offset running costs is the ideal solution for those who wish to simultaneously own a vessel and operate it for both commercial and recreational gain. If correctly managed, yachting can be a serious business.

Yacht chartering maintains investment stance

Despite international financial gloom, the desire to charter yachts remains popular as an increasing number of people find the yachting world to be an attractive and appealing prospect for leisure and business purposes. Whether for sporting purposes, as a venue for a corporate event, social gathering or luxury getaway, if you wish to make a generous return on investment through the purchase of a vessel, offering chartering services is the most ideal and profitable solution that can result in bountiful financial rewards.

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Category: Investment Ideas

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