Top ten things to consider before buying an ex-charter yacht.
As boats under ten years old with one private owner and a full-service history become almost as rare as rocking horse sh…t, you might find yourself considering the purchase of an ex-charter yacht. After all that is said about working boats, an ex charter yacht can offer a better level of equipment for the same price than the one used privately.
This is my list of top ten things to consider before buying an ex-charter yacht.
As you shop around and consider what you might have to pay for a one-owner none charter version of the yacht you want. Try to find out what the same yacht would have cost when it was new, and then deduct the value of navigation electronics.
Depending on the manufacturer, you will not be a million miles out evaluating its current value, providing it is in excellent condition. Put another way, privately owned yachts in good condition are not falling in value. A few one owner Yachts with an impeccable service history have gone up in value over the last ten years. So an ex-charter yacht in good condition might not be as cheap as you think, but generally, an allowance for wear will be made by the seller.
Consider this, before buying an Ex-Charter yacht from a popular charter location, how much that yacht has been used. It sounds an obvious question but put it another way. If you see an ex-charter yacht for sale in a place that is off the beaten track, you might have stumbled on a hidden gem! Many people have a dream of buying a yacht to earn a living in a remote location. The reality is this often results in a failed business adventure. The yacht sits unused but carries the lower value badge of ex-charter, so it might be a bargain just waiting for you.
Before you part with any money, if a reputable broker is selling the yacht for a client, ask for details of past ownership. If a company owns the yacht, you will be able to investigate its history easily. If a private owner is operating as a charter company, my advice is to get a yacht broker involved to check out the paperwork.
Almost a subject worthy of a separate blog post. I would always recommend a decent broker to inspect yacht paperwork. Often VAT is not paid when a boat is first put into service but, worryingly this lack of payment is sometimes not recorded correctly.
British Part One Registration is good. Being British, I would like to discuss how solid part one registration is as a form of evidence that all the paperwork, including tax status for a yacht, is in order. Unfortunately, a yacht’s VAT or Tax status is not within the scope of British flagged ship registrations. Spanish registration offers more information, as does registration under a French flag but they are not perfect.
No flag registration guarantees that all taxes are paid unless it says they are in black and white. Certainly, the Dutch registration system is not even recognised in Spain, Italy or Portugal for none residents.
Before you make an offer on a working yacht, do make sure it’s out of charter contract. I had known cases when the sale and purchase negotiations drifted into the charter season without a contract. Suddenly the buyer put the price up saying the yacht is not now available until the charter season finishes. As a buyer, this is very frustrating. If you agree on a price, get a holding deposit down subject to an approved sale and purchase contract.
Remember, before you pay a deposit connected to a time limiting contract, a seller can change his/her mind any time they want. Not a great situation to find yourself in if you travelled thousands of miles to look for a yacht.
Try not to employ a surveyor who exaggerates acceptable wear in his report. Not so easy if you do not know a lot about boats. You could ask to see a selection of reports they produced in the past? If you do this, make sure the comments balance with final recommendations. I have seen reports that reasonably describe yachts only to condemn them in summing up.
So you have a survey report, and sure it will recommend replacing things that you might not have budgeted for. From a sellers perspective, you are buying a used boat. Do not expect it in new condition for the price of a used boat. This is where a good surveyor can help to explain reality.
If you plan to set off on an ocean journey that will take you days from land, a Yacht must be in tip-top condition. Things will need to be renewed that perhaps had years of serviceable life in them. Try to understand and balance the risk if a component fails on a boat while you are using it. Sure, if a component stops working, you need to replace it. But replacing a component that offers no risk to or crew just because it is old is a waste of money. An owner is unlikely to negotiate a further price reduction on that basis.
The day has come to collect your yacht. Very obviously, when you own a yacht, you must pay for the parking space. It is always good to ensure the space that the yacht occupies is available for a short time after purchase. Delivery to its new home by road or sea is a well-trodden route. If the journey is long, I would always pick the by road transport option over a delivery skipper if at all possible. At least you are in with a good chance of receiving a yacht in the same condition you last saw if you received it by truck.
Back Into Charter
Many boats end a working life as a level one charter boat immediately going back into service at a second level. A re-rig and proper service to boats over ten years old represent good value for money. They make a good rental income for an owner at a lower premium for many years.
The above post is a general opinion only of the top ten things I consider before buying an ex-charter yacht based on a typical yacht being under 15 metres purchased in Europe.