Why do we know this subject inside out?
- We have been owners of several charter boats, in several fleets.Â
- Michel, Sailonline's owner, founded and presided for 10 years of the Moorings Owners' Group, the world largest charter yacht owners association.Â
- Michel and his partners (all with equal unmatched experience on charter yachts) have implemented hundreds of transactions involving charter boat sales - new and pre-owned - all over the world.
- We operate independently of charter companies and so we are free to write and say anything we need/want to - good and bad - in order to help charter boat buyers. So we are totally unbiased.
The general perception about the purchase of a used charter boat is this: a boat that has been on charter for 4 to 6 years and has seen anywhere from 80 to 100 charter weeks is bound to be a beat-up boat. Therefore it can never be a good idea to consider buying one. I very often heardÂÂ people state:" I will never buy a used charter boat, they must be trashed."
Well, let's face it, there is some arguable truth and logic about this reasoning. You can be sure that among the large number of second hand charter boats on the market, you will find some "dogs" or potential wrecks. However, this is proving less and less true. If you give this concept a more elaborated thought, you will understand why and how one can make an excellent purchase of a used charter boat. Smart boat buyers, familiar with the charter industry, know this very well.
Let's get into the details and explore this concept. But be forewarned: this can be a minefield. And by the way, the reward of finding this gem implies that you do some homework. You won't get something for nothing!
The Bad, the Ugly and the Good
The shape of a used charter boat may vary tremendously. What are the factors?
It mainlyÂÂ depends upon which charter company's fleet the boat belonged to. If the coveted boat was not managed by a company known for extensive maintenance program, chances are your survey may yield a horror story (by the way, a professional survey is an absolute MUST). So before anything else, do not even think about boats which were not managed by rock-solid charter companies.
Also -again, the survey will tell you that- if the boat has been damaged by an accident (grounding, T-boned, fire, etc.) it's a no-no. You see, those boats work a lot in their charter life, so there is higher probability that such incidents will happen to them rather than to a private boat. Always bear in mind that charter boats sail more in 4/5 years than most private boats do in their entire life!
Remember also that, unfortunately, bareboat charterers are not always careful or even competent sailors. Therefore, some boats do not have an easy life, to say the least. So, do not bother with dubious vessels. With the vast choice of boats on the market, you can afford to be very picky and go only for the cream of the crop.
Now, here is where the good news come into play for you, potential buyer: Most charter companies do a very good job at maintaining their fleet, and at phasing-out their boats. For those of you not too familiar with the industry, theÂ phase-outÂ is the maintenance procedure involved when a charter boat leaves the fleet and is handed over to her owner. Reputable charter companies perform a thorough checkup of the yacht, major and minor components, and systematically replace damaged items with new parts, or fix them in a very acceptable manner, so they are "serviceable". All after a professional and independent survey.
It is important to understand a concept used by charter companies to define the extent of the work they will perform on a phasing-out boat. It is calledÂÂ "fair wear and tear". It means that the owner cannot expect a back-to-new boat at the end of his 5 or 6-year contract. Therefore, although everything should be inspected and in working or serviceable condition, the boat will not receive new upholstery, new sails, a new engine, etc. unless they are unquestionably beyond fair wear and tear.
However, torn sails, non-working electronics, thick black smoke out of the exhaust, cracks in the rigging, large blisters in the hull, etc. areÂÂ notÂÂ fairly worn and torn items andÂÂ should be properly fixed. Get the idea?
More good news -this is important: Because you are buying a charter boat, you should inherit the complete charter equipment inventory that originally came with the boat. Plus some fixed improvement features especially ordered and designed by the charter company for better ease of use and reinforcement of failure-prone areas. This is worth a lot of money.Â
Here is a sampling of items you would typically find. Those are usually optional and not included in a boat standard private version (list will vary with charter company.)
- Oversized fuel/water tanks, oversized winches, self-stacking mainsail system, extra cleats, oversized alternator and batteries, high-capacity and redundant bilge pumps, electric windlass, auto-pilot, GPS - and chart plotter - shore power system, CD/MP3 player, inverter, bimini, dodger, tools, navigation tools, docking lines, fenders, safety equipment and gear, binoculars, bedding and linens,. etc., the list is very long.
Of course, not everything will be in tiptop shape. But, at phase-out, the same way the boat is overhauled, the original equipment is replaced if it is missing. So you should get an almost complete inventory.
What Are We Getting At?
At this stage, you certainly understand where we're heading. Completely to the opposite spectrum of the general belief, there are quite a few great opportunities to find used charter boats that have been completely overhauled, inspected, surveyed, etc., sitting at the dock waiting for you -Â IFÂ you do your homework and research properly.
And remember: The boat owner has been involved him/her/self in the phase-out process, and most probably, he/she's made quite sure it was done properly. Why? Because charter boat owners who do not roll over to a new boat with the same company, have 2 options at the end of their contract: either keep the boat for personal use or sell her. In either case,ÂÂ they want to get a boat in as good a condition as possible.
With a little luck, you can even find a boat with new sails, new engine, new rigging, etc!
TIP: Look preferably for boats that are sold by their owners, and not by charter companies. The latter are usually boats that have been taken in trade against a new boat; therefore, they have not necessarily been through the phase-out process described above. The Charter Company might have taken the boat in trade and simply put her up for sale. Not what you are looking for.Â
How Do You Go About This?
Know what you want, but be flexible.ÂÂ Large charter companies usually concentrate their fleet on a few selected builders because it allows them to negotiate better prices on large buying volume, and on carefully selected models because it makes the maintenance easier. Therefore, you might not necessarily find the exact boat of your dreams. The good news is, you will buy a boat that has usually been proven and tested by the charter company.
Lastly, in terms of size, you might even afford a larger boat than you originally anticipated since you probably will get an excellent deal,ÂÂ price wise (see below).
Gather your data. Go to charter companies' web sites, to charter boat owners associations, Internet forums, boating web sites, etc. They are abundant and full of useful information, tips and classifieds.
Call yacht brokers: We, at Sailonline.com, are licensed and bonded yacht brokers in Ft. Lauderdale, and we have a huge experience in locating and transacting on pre-owned charter boats, worldwide. We set up and follow the entire process, from locating the right boat, to be present at the survey, to follow-up on all items that are listed by the surveyor and which need to be fixed, etc...
Read why it is extremely important for a boat buyer to beÂÂ represented by a professional yacht brokerÂÂ (for starters, it's free to the buyer, since the entire commission is paid by the seller only!)
Once you have located a few boats in your range, start your work as for any other boat. Of course, with the help of your broker, you will start with an extensive, professional and independent survey, both for the hull and the engine (they are not necessarily the same surveyors.)ÂÂ View useful survey links.
As an alternative to buying a boat outright for your private use, you can (few buyers know this) buy an owner out of his existing contract with a charter company. How does it work? Some owners want (for various reasons) to sell their yacht before the end of the management contract. Let's say there are 2 years left on a management contract. You will buy the boatÂÂ andÂÂ the contract, and you will leave the boat in the managed fleet for the remaining 2 years. Note that this is not always possible, and remains at the discretion of the charter company. There are several benefits in this:
- You receive income on the charters, as defined in the contract, which will help covering the mortgage.
- You enjoy the use of the boat for the number of weeks (usually 8 to 12 a year) defined in the contract.
- You benefit from the boat overhaul at the phase-out at the end of the contract.
What price you should pay. Let's face it: selling a used boat, and especially a used charter boat is rarely an easy experience for the owner/seller. It can take months, sometimes more, to find a buyer and reach an agreement with him/her. I am an owner myself so it does not make me happy to say this, but it is a fact that in the used boat area, it is definitely a buyers' market.
Therefore, once you have found your boat and are satisfied with your survey and work, chances are the seller will considerÂÂ anyÂÂ reasonable and 'bona fide' offer, especially if the boat has been on the market for a while, and if the seller feels the pressure of time and money, with all the expenses running every month. If you find yourself in such a buying position, you will definitely make a nice purchase.ÂÂ
Buying A Pre-Owned Crewed Yacht
Note: We are talking here about boats which were in aÂÂ managedÂÂ charter fleet, within a range of 45 to 60 ft. and with a permanent live aboard crew. This section is not about a privately managed crewed vessel, usually a larger unit, the management and the economics of which are completely different. If you are considering the purchase of a crewed boat, we encourage you to read the discussion on this site about Bareboats Vs. Crewed BoatsÂÂ by clicking on this link.
But mainly, what you want to know is this: It's easy to understand that a live-aboard professional crew will attend the day-to-day maintenance with a much better efficiency than a land-based staff would episodically do on a bareboat. In effect, the crewÂÂ livesÂÂ on board, and therefore the boat becomes like their home. As a result, a good crew will (or should) maintain the boat as impeccably as they would maintain their own house. For technical upkeep, a good skipper will attend the repairs as needed, every day, or at least as soon as he gets off a charter week. Therefore, with the exception of parts on order, all maintenance items should always be under control. Similarly, all the boat log books will be updated on an ongoing basis.
Thanks to the crew's presence and handling of the boat during charters, the yacht will not be damaged, or mishandled by careless charterers. A comforting thought for the owner, since, unfortunately, bareboaters' sailing competence can often be questioned!
For those reasons, a crewed boat willÂÂ usuallyÂÂ be in better shape than a same-age bareboat.