The charter industry and its yacht dealers have opted to standardise the terminology for the different management agreements when purchasing a yacht for charter management into Yacht Ownership; Yacht Charter Management, or Yacht Charter Investment Programs.
The options and the variations are driven by availability of yachts from the ship yards, the available financing in the different charter destinations, and hugely on the charter demands for models and layouts.
The charter industry is taking over traditional yacht ownership and is intensely driven by demands of fleet renewal because of the fierce competition among the big charter operators to have a newest fleet and flag ships.
Yacht-Match offers tailored made investment options for you and compares them to the markets options – so you have the best deals in front of you when making your decision for the best yacht charter ownership investment.
Here is an overview of the common investment programs you will find on the market
Full Finance – (“Guaranteed Prgm”, “Fixed Income”, “Variable Income”)
In the Full Finance investment program, the down payment required by most operators is 20-40% at the time of signing, and the rest of the amount when the yacht is being delivered.
If you invested 100% of the yacht price and you are most often given options on fixed return on investment from 8-13% and a variable (flexible) programme with 6% guaranteed yield, plus a variable part without limits.
Contracts varies from 3 seasons to 7 seasons, where you at the end of each season can exit the fleet and withdraw the yacht from charter.
Common practice is to add the cost of delivery, registration and pledge on the yacht’s sales price.
Some operators offer extensions for charter management, either year-by-year, or with re-fitting packages and then 2-3 years extensions in the same charter fleet, often with variable/flexible income structure for the investor.
Part Finance – (“Leasing”, “ Part-Investment”)
These vary in form and are inherently more complicated with more undisclosed risks for the investor.
The most common offers on the market would be yacht investment programs set up for you where it’s leasing a yacht in charter or its part financed by the yard (manufacturer of the yacht) or sometimes, the yacht financing is held by third party financing institute specialising in handling credit and loans for the yacht charter market.
The investment structure and down-payments vary depending on what the seller offers you. You will however almost always end financing 45-60 % of the yacht. With this model you tie up less capital but don’t receive any return on investment. Like any other annuity or leasing, there follows a “Bail-Out Plan” that illustrates the cost of existing the loan before its end.
Yacht-Match offers the investor a second-to-none comparison of the different financing options available. Apart from the financing options held by the yard, we offer our Yacht-Match Investor unique financing as part of the Yacht-Match consultancy.