Fractional/Shared Catamaran Ownership
Fractional Ownership, an old idea with a new, refined spin.
People have been forming partnerships to co-own expensive things like yachts and airplanes for a long time. However, they have had to figure out the logistics themselves. The benefits of shared ownership are very appealing, but it’s been too cumbersome for most to set up. Finding partners, setting up partnerships, and managing the logistics of owning a shared vessel can be time-consuming and difficult. Brenda and I wanted to create a program that makes the entire process easier and makes shared ownership available to everyone.
Imagine owning and sailing your own luxury catamaran for a fraction of what conventional crewed yacht charters cost. Not only does it save you money if you charter each year, but it eliminates the waste of an asset sitting idle for months, collecting dust and problems. Additionally, the new corporation will benefit from US tax laws, discussed here. (sunny put a link to yacht ownership)
Fractional Yacht Ownership gives you the opportunity to enjoy the benefits of yacht ownership for a fraction of the cost of conventional ownership or even charter! Shared yacht ownership is exactly what it sounds like—you buy a fraction of a yacht, typically 20% to 33%. It is not a timeshare where you only purchase the rights of usage for a certain amount of time and end up with nothing when the term expires. With shared ownership, you legally own the fraction of the asset and hold the title to the yacht, and the asset is held in a newly formed corporation controlled by you and the other owners.
It holds the answer to hassle-free and financially smart boat ownership. It’s a simple concept— up to four co-owners can enjoy the benefits of owning a yacht while splitting the cost of the vessel and its management. It is the simplest way to realize your sailing dreams sooner than you otherwise could and with the least hassle.
Number of Owners
2 to 4 depending on the yacht.
Duration of The Program
Duration of the program is 5 years. The boat will be sold at the end of the program. Upon the sale of the asset, the owners recover a percentage of their initial cost and will be proportionally refunded from the net proceeds. The owner is free to sell their ownership interest at any time. Since our fractional yachts are well maintained and serviced by iYachtClub, the value of each owner’s share may not devalue as rapidly as an average yacht’s value.
Owners get up to 2 weeks of scheduled time on the yacht and an agreed upon a number of weeks on the last minute, space available basis.
Fractional Yacht Owner Use
The average cost to use the yacht per week, including food, drinks, crew and all expenses will be around $6,000 per week. Chartering a comparable all-inclusive crewed yacht from a charter company, the cost would range from $12,000 to $30,000 per week. If the owner is qualified to handle the yacht without crew and does not wish to have the crew aboard, the owner only needs to cover accommodations for the crew, his/her expenses and bring the yacht back full of fuel.
Owner use is shared equally between the owners according to the number of members. Owner access is allocated fairly to ensure that all owners can optimize the use of the yacht and that all the owners get quality time on the yacht to meet their needs or desires.
When not used by owners, the yacht will be in iYachtClub’s crewed charter fleet, with a permanent crew assigned. The annual operating costs such as insurance, dockage, annual haul out and scheduled maintenance will be offset or covered by income from chartering the yacht for a maximum of 25 weeks per annum. In the likely event that profits are generated above the operating cost of the yacht, those funds will be distributed proportionality to the owners.
The vessel will be professionally managed and maintained by iYachtClub to ensure that you enjoy your use of the boat with minimum hassle – boats are maintained in turn key condition and ready for you to step aboard.
In order to explain how the program works and what the benefits are, I’ll use Bella Vita, a leopard 4600 as an example of how the financials would work.
Bella Vita value 2018 $399,000
3 Owner Modelowner’s equity $133,000 each
Each owner uses Bella 2 weeks per year spending
$6,000 per week instead of $14,000 $16,000 value per year
Estimated profit from Bella Vita charters per year,
After expenses and operating cost $40,000 – $13,000 per owner
Estimated value of Bella Vita after 5 years $325,000
Doing the math, if you invest $133,000 today, your return will be about $65,000 from charter profits, you will save $80,000 if you take two yacht vacations per year, you will get the tax advantages from rapidly depreciating the yacht, and the yacht will only drop in value about $75,000 over the five-year span.