The Moorings - boat ownership
Posted by Good-Cantaloupe4622@reddit | sailing | View on Reddit | 55 comments
Hey all!
My family and I have chartered boats from The Moorings every other or so for the last 15 years. Now that the family is growing, the boats are getting bigger and the cost is insane. This coming trip to the BVI is pushing $20K just for boat. So, we’re kicking around the idea of buying through them, for charter service.
I should add, I’m 100 ton capt and have run boats commercially up and down the west coast, and now east coast for almost 20 yrs (I’m 40). I know ins and outs of boat ownership.. the lows of seein how charter boats get treated. Not goin in blind. Also, not sure what our end goal is.. the boat will probably be sold through their brokerage at the end of the contract.
My curiosity is more contracts and numbers. Worth it in the end? Anyone here with ownership experience?
Thanks in advance!
CleanLight6707@reddit
We did 3 charters with Dream Yacht prior to buying a boat with the Moorings. Hands down the Moorings wins… the newest and most comfortable fleet in the business. The Leopards are great boats all around. No blackout dates makes it also awesome if you have to travel on school holidays (we always use Christmas week). My only regrets are not putting it into a smaller base instead of the BVIs and I think next time I would add a partner to my contract and split the time so we don’t burn out on sailing..
Extreme_Map9543@reddit
Why not just buy your own boat outright?
Good-Cantaloupe4622@reddit (OP)
We have one. But it’s a catalina 34 from the 80’s sittin in san diego. Good, but not ideal for a crew of 8 for 10 days. And the whole point of The Moorings in places like the bvi or croatia is to live outside your normal means for a week or two.
AskMeHowIMetYourMom@reddit
I feel like you haven’t touched on this point more: How often are you actually going to use the boat? How much is it going to cost to lug your whole family back and forth multiple times per year? You might be saving on the charter costs, but I imagine travel costs increase significantly if you’ll want to use the boat more often than you would be doing a charter. If not, why even get it?
SorryButterfly4207@reddit
Just back from a charter two weeks ago in the bvi. Family of 4, two young kids,. Went with just about the smallest/cheapest monohull I could find (37 feet from Horizon, based on great reviews - my five other bareboat charters have all been with Sunsail, but their smallest boat was 43 I think). Flights to EIS were significantly more than the boat cost. Dinner ashore most nights, a mooring ball each night, and provisioning (just basic stuff, no meat, no seafood, no liquor), were probably 50% the charter coat. So all in, the cost of the charter was really only about one third of the trip total. With a larger, more expensive boat that percentage will increase, but still, the cost of the boat is only a small piece of the whole.
mike_alexander_smith@reddit
How much did that whole trip set you back?
These-Republic3679@reddit
Look at TMM in Tortola for charter - much cheaper and great service. Their ownership program may be a lot better, as well.
Unholy_Racket@reddit
As a charterer I resent the assumption that all charter boats are badly treated and in poor condition. I have chartered all over the world, from Moorings, Sunsail, Horizon and many smaller companies. I am always extremely careful with the boats I charter, and not only because my deposit is on the line. I do agree that the maintenance carried out by the charter companies can be sketchy but I do not accept the criticism of charterers. It is true that boats that have been in charter have had more days use than most privately owned boats (look at the engine hours!) but use is not abuse.
bigmphan@reddit
Spoke to a guy who has owned through both Moorings and TMM Tortola. At Annapolis Boat Show
He said hands down TMM was the better experience. His biggest problem with Moorings was “the nickel and dime emails” after every charter eating away at his revenue stream. Little things - a belt. A shive. Whatever. Just what I’ve heard from one captain.
Strict_Hair_7091@reddit
Former yacht broker here for 35 years, still dabble. I have been involved with more than one ex charter boat from the moorings who against my advice bought same. They have all suffered from extreme abuse and lack of care and maintenance. The boat owner ended up spending more money in fixing than if he had purchased a privately owned boat. This was the last one I was involved with. The boat smelled like an outhouse. In spite of every attempt to steam clean and use every chemical known to ,man the boat yard and I made the executive decision to throwing the tank and all associated plumbing in the garbage and starting anew. That was just the beginning. The head shower faucets were broken and being held together with 5200. The 5200 is what was holding it to the shower bulkheads. It took me a day to dismantle and get rid of the 5200 with help from a kid in the yard. It had an inverter which didn’t work and couldn’t be fixed item 354 in the trash. It took 6 weeks to get the boat ready for owners and the final yard bill including my time was over 120k. Enough said. They charge their owners maintenance fees but the maintenance is awful.
Difficult_Limit2718@reddit
Moorings has outright pissed me off as a charter company. I don't understand why they have such repeat business.
DuderBugDad@reddit
Because they are huge. There are much better charter companies, but they are pretty much the biggest and easiest to charter through...
Difficult_Limit2718@reddit
I've had a hell of a time trying to charter with them, but I get sometimes customers just slip through the cracks
edhead1425@reddit
Would you consider starting an LLC/business and having the business buy the boat that goes into charter?
There might be better tax advantages to that.
I think MarineMax also has a charter program you could look at.
ydbd1969@reddit
I owned via SunSail, same company with same ports from 2016-2021. The yacht was a '47 Jeanneau in the BVI. Round numbers: Paid $300k outright (1 year older model in service), earned $130k in 5 years, sold in 2022 for $180k. I would have traded back in and do it again but after Covid they were reducing inventory and had very few boats for sale at the locations I wanted. It worked well for me, we chartered in Bahamas, BVI and Croatia twice. Tried Corfu during Covid but got cancelled. Some areas handle the owners finances different (discounted price with no earnings is common in Greece and Italy) The charters save you the charter fee (usually around $5k-$10k per 7 days) of the same size boat. If you use the system wisely it will save you every year thousands of dollars, if you don't it's your loss. I do wish we chartered more during that time. I've contacted them several times in the last few years still looking for one in the areas I want-specifically no Typhoon/Hurricane area-Dot 'n' Fran was damaged badly in a hurricane but was repaired with no cost to me and put back into service. DM if you want more info.
Good-Cantaloupe4622@reddit (OP)
The transparency is appreciate.
infield_fly_rule@reddit
If you charter 7-10+ days per year it can make financial sense, IF (and only if) you set it up correctly to take advantage of the tax and depreciation benefits.
eastendjim@reddit
Aren't you eventually taxed on the depreciation when you sell it or trade it in?
gc1@reddit
This is what I'm interested in. What are the conditions under which those benefits have a bunch of value, and how do you utilize them?
It seems to me if this was such a good deal, the charter companies wouldn't actually sell the boats; they'd carry the costs themselves or at the very least run their own separate leasing holdco.
thebemusedmuse@reddit
My understanding is it’s a way for them to get you to carry the debt and risk.
gc1@reddit
That's my point -- if it were not risky, they wouldn't need anyone else to carry the risk. If there were good returns on the debt, they would be able to borrow money against these assets themselves, and/or create a company to do exactly that and lease them back to the charter operating company (which is exactly what they're "hiring" OP to do in the buy/charter setup).
zob_mtk@reddit
Looked at what happened to the charter flats during Irma and Maria. Countless total losses and you as the owner are paying the major storm deductible instead of Moorings. Back then 20% of vessel value was pretty common. Now it’s even higher if you can even find someone to insure it during hurricane season.
gc1@reddit
Yep to all of this. I guess my point is, why would anyone walk into a deal like this thinking it's potentially a good deal, when the large-scale, full-time base operator has decided it's not a good enough deal for them to take, and not only that, they're the reseller to you and will certainly take a markup on it.
thebemusedmuse@reddit
I think the point is they are distributing the debt and risk, and making money on the cream. From a capital PoV, it allows them to open up more bases in more locations and distribute more low-risk debt.
Not unlike timeshare.
That doesn't mean that becoming an owner of a Moorings yacht is an inherently BAD investment - depending on your ability to deduct taxes.
Sweaty-Seat-8878@reddit
I would look at it less like an investment than an efficient/inefficient use of discretionary capital.
If it fixes your costs and increases the availability or convenience of the boat it probably makes some sense if you are going to spend the money anyway. And it might open up some trades of time/bases etc.
I mean, time shares work for very specific vacation desires, not really as investments
SorryButterfly4207@reddit
Also, if the Moorings needed to raise the funds to own those boats, they'd be competing vs every other investment opportunity out there. With their current model, they're essentially raising the funds by "selling a lifestyle", which is a much easier sell.
thebemusedmuse@reddit
Good point. Also all those would-be yacht owners that can't convince their wife to dump $1m but can convince them of a tax depreciation scheme :-)
Difficult_Limit2718@reddit
Well hell I charter 14+... Need to talk to the wife
gc1@reddit
PS great username!
jeffeviejo@reddit
Most famous quote heard on charter boats. "....it ain't my boat so......".
Good-Cantaloupe4622@reddit (OP)
Obviously. I wouldn’t be “buying myself a boat”. Id be offsetting the cost of future vacations and dumpin it when the contract. My expectations are managed.
SorryButterfly4207@reddit
I always wonder how easy it is to sell a boat coming out of a program like that.
Sondemon@reddit
Price set low enough and most things sell easily ;)
Optimistic-Stacy@reddit
I’ve looked at this extensively. You have to be able to take the depreciation as a loss against your income. That can be iffy if you’re offsetting w2 income, due to IRS rules, especially with Moorings guaranteed income program. Lots of people do it but it’s more gray area than I’m comfortable with. If I do it I’d lean toward a more profit share model based on utilization. There are several other programs that have worldwide bases, that while not as universal and easy as the mooring, are definitely workable and safer bet if audited.
Affectionate-Toe3583@reddit
First, look at more than the Moorings, they are big and maybe a smaller operation is a better fit. Are you a mono hull or a catamaran? I have had friends own through the Catamaran Company which offers more options for boat builders. When I looked at it it did not work unless I could do 3+ weeks a year and it really worked if I could do last minute when the boat was free for the week. So lots of sailing in the off season or shoulder season.
You can also look at firms that can move boat to a lower cost option, Cat Company as the Festia Company where they move some boats.
Your cost sounds like high season, owners tend to not sail the. As that is prime money making time, so think about are you really going want to sail it or rent it out in high season.
Good luck, I could not make the numbers work, I rent 45-52 ft cats, every year I bring different friends and family and we split the cost so it’s not that any more than a resort. (BVI)
Good-Cantaloupe4622@reddit (OP)
We’re in the 48-58’ cat range and usually rent at the down turn because its cheaper (aug-sept in the bvi). This year we wanted better weather for once and are goin in may. The sticker shock is what started all this.
Definitely will look at the cat company. Thanks
Affectionate-Toe3583@reddit
Great. We have rented Nov-Aug in the BVI, Feb-mid-May is the most money. We did mid-Aug once and it was empty! But lots of the bars and restaurants were closed , like Norman Island.
I would shop around, I have never rented from the Moorings because they are always more money.
Good luck, have a great sail, we just did a week in March and the wind blew 20-28 all week. Lots of swells, still had fun.
pab_guy@reddit
I always look at these things like this:
If it was a good deal to own a charter boat, Moorings would own them and not have an owners program. I get that there is a risk reduction aspect to it, but that just means you are taking on risk for the Moorings.
ceciltech@reddit
This isn’t necessarily true, it could be a win/win situation. Not everything is a zero sum game. Take Amazon AWS model, win/win for both them and the customer.
Good-Cantaloupe4622@reddit (OP)
If you’re super smart with business entities and tax write offs and have the balls to play those games with such big numbers.. probably be ok. But that aint me. Yet. 🍻
pab_guy@reddit
I mean, that's just a bunch of effort when you can probably find investments that have a better return. This is why I don't bother with things like rental properties, my other investments bring much greater returns.
If you wanted to run your own charter company in FL or something, with your background it would make total sense.
Good-Cantaloupe4622@reddit (OP)
For this kinda thing a good return isnt really expected, id be excited about a net zero and ok with a “cheaper family vacations” scenario. I just don’t want to get hosed.
But we’re talking about boats here.. which i guess, answers my own question. Damnit.
eastendjim@reddit
Seems like the true cost is more on the backend: a) carrying cost after the charter program ends before you are able to sell it and b) how far below their projected value the sales price actually is. If that's less than what you'd spend in cash chartering during that period it probably pencils out.
Good-Cantaloupe4622@reddit (OP)
That’s what I’m gatherin, all is fine an dandy during.. your boat rentals are free, your monthly payment is covered, you might even make $2k a month. But after the contraxt is up, and youre left to carry the $7k/month payment all on your own. You sell. But realistically.. you owe $700k on a boat thats only worth $350-$400k mkt value, that no one would buy anyway because its been a charter boat.
These are the conclusions and the advice i come here for. Thanks everyone!!
timeonmyhandz@reddit
Had a friend that was in this program for a good number of years.. I think the game is that you buy another boat at the end of a 2-3 year period and roll in the balance and keep going. Likely a bigger boat too. The traded boats go to their 2nd tier charter group.
Eventually on their third boat they just kept it and did private charters.. Then eventually sold it.
CleanLight6707@reddit
I’m an owner. It’s not perfect, but if you can get your use out of it, it can be a great way to sail cheaply all over the world with no hassle. Run it as a business, put in an LLC, do some marketing and you can depreciate the asset. I sail prob 6 weeks a year, sell 2 weeks and even with massive depreciation at the end will be fine. Many owners just trade in an and get another boat to avoid dealing with the sale. Some bases are better than others but you can’t get too attached to your own boat. We love Greece in the summer and the Caribbean in the winter. What’s the alternative — owning a boat in a marina and dealing with it all the time? It’s not like that’s a winning strategy either.
Good-Cantaloupe4622@reddit (OP)
That was my perspective before asking the question. And….. now I’m torn again.
Blue_foot@reddit
You have to plan on using the boat annually.
It’s nice because you can swap weeks in another moorings location.
I don’t know if it makes financial sense, really.
And you run Hurricane risk that may not be paid by insurance. And the vagaries of the used boat market when your time is up.
shrunkenhead041@reddit
If you're lucky, it's a break even proposition in the end.
RikkiLostMyNumber@reddit
As others have noted it can be hit or miss while you own it, but selling it post charter career is the trick. When you hang the word "charter" off a boat listing you scare people away, rightly or not.
Stormin_333@reddit
I investigated it in depth a while ago. It can go either way. It is generally cheaper total out of pocket than chartering and you gain some flexibility on destinations. But is also dependent on the economic climate at the time. A serious downturn in tourism can hit you hard.
There are some credible resources out there to help you do the math.
switch8000@reddit
There's a FB group that I follow where owners talk about their experiences somewhat.
The summary seems to be that it can be great while you're 'in' it, but at the end you're stuck with a 300-400k asset at the end of it that might take 3+ years to sell.
I've considered it, I've also looked more at local marinas who are looking for boats to just increase their fleet size. It kinda depends on what you want exactly, do you want to be able to really leave stuff behind and it be 'your yacht' or is it purely a business asset?
Good-Cantaloupe4622@reddit (OP)
Interesting. I’ll check fb. Thanks!
Sterling_____Archer@reddit
It’s a great program that would fit your situation perfectly: experienced captain, understands what “charter”means, high utilization.
Perfect usage case in my eyes.
aurora-73@reddit
I'd be surprised if the math supported ownership over chartering