The hidden cost of buying your own yacht
Think buying your own yacht is a ticket to a stress-free paradise? Think again…Peter Iantorno March 1, 2015
Buying your own boat. Many see it as a ticket to unlimited leisure time, free travel and a world of luxury and relaxation out on the high seas.
A boat-owner lives the high life, he has no worries. What could possibly go wrong? He has his own boat! However, those who have taken the plunge and bought their own vessel will know that the reality isn't quite as worry-free as the glossy brochures would have you believe.
In fact, they have a couple of old sayings in the boating world that sum up the groundswell of opinion rather well. "A boat is a hole in the water, into which you throw your money", and "There are two happy days in a boat-owner's life - the day he buys his boat and the day he sells it".
OK, so maybe there are a few hidden costs that ramp up the price slightly, but if you've got enough money to buy your own yacht, why should a bit of extra expense put you off? It's a valid point, and it is true that for the super-rich, a little added expense isn't a big deal at all - the only problem is, the added expense isn't in the slightest bit 'little', it's verging on exorbitant!Take a quick look at the estimated running costs and you'll soon realise that the boat-owners prophecy is coming true. After the initial day of happiness at owning your own boat, that feeling of triumph will quickly be replaced by one of impending doom, as you find that the apparently 'insignificant' amount required to keep your pride and joy operational is a bigger drain on your account than a divorce from Heather Mills.
Think we're exaggerating? Let's break it down. According to insurance company Towergate, around 10 per cent of the yacht's initial value goes on operating costs every year. That means Chelsea FC owner Roman Abramovich, who bought his opulent 162.5-metre vessel Eclipse for an astronomical $500 million, pays $50 million a year in operating costs.
Slightly less eye-watering but still well beyond the realms of most mere mortals' bank accounts, the research gave statistics for the average usage of a 71-metre yacht (so just slightly smaller than the 79.25-metre Venus, owned by the family of Steve Jobs). If you've got a 71-metre vessel, expect to pay around $400,000 a year in fuel, $350,000 a year in dockage (depending on where you leave it), $240,000 in insurance, $1 million in maintenance and repairs, $1.4 million on the salary of the crew and a mammoth 15-25 per cent of the vessel's value on V.A.T.
And even away from the super yachts of Abramovich and Jobs, at the lower end of the boat-owning scale, the figures are no more comforting. Even a 30-metre boat will require an experienced captain who'll take home around $100,000 of your hard-earned cash every year, and that's not just the start, with taxes, maintenance, fuel, insurance and docking fees sending your annual budget spiralling out of control.Of course, if you didn't listen to the warning and bought your boat anyway, there is always the possibility of recouping some of your investment by chartering it out to other people while you're not using it. For your 30-metre yacht, you can realistically expect to rake in around $30-$35,000 per week, depending on its condition.
Sounds pretty good, right? But with thousands of other yacht-owners having the same idea, you're going to need to provide a pretty comprehensive list of amenities to make your boat stand out against the stiff competition. Think jacuzzis, satellite communication systems, jet skis and a crew large and skilled enough to provide flawless service to an extremely demanding clientele. It's not an easy task to prepare your yacht for charter, but unless money truly is no object, that's the only way to make it even close to financially viable.
So while you're stressing out about paying crew salaries, taxes and maintenance fess, all the while someone else is sailing around the Med on your pride and joy, you may well ask yourself, is owning a boat truly worth it?
They have another saying within the boating fraternity which, while we certainly don't endorse, it does give a rather succinct answer: "If it flies, floats or f***s, it's cheaper to rent than buy."