Have you ever wondered what goes into operating and owning a yacht? While the costs can be unpredictable based on a variety of factors, we've outlined things to consider when looking into purchasing a yacht as an individual or through a co-ownership or fractional ownership scenario. Of course, we are also going to compare ownership to other boat clubs and Artizia Yachts membership.
As a rule of thumb, just to maintain a boat with an "average use" each year costs around 10%-15% of the boat's value each year of ownership. For simplicity, if you own a $5M yacht, plan on spending around $500,000 to $750,000 every single year.
If you're buying new, expect to have a 20%-30% depreciation within the first two years and then around 5%-10% depreciation every year thereafter.
Why is it so expensive to maintain a yacht?
Let's take a look at what is included in that price tag for operating a boat with a price tag of around $5M. Whether you take on the costs, split the costs, or avoid some of the costs through a club, a yacht still incurs the below fees.
Boat slip, where you primarily keep the boat - $60,000 per year
Fuel - $150,000 per year
Electrical, water, cable, and marina utility fees - $8,000 per year
Reserve for mechanical and electrical maintenance - $50,000 per year
Reserve for haulout bottom paint and maintenance (every 2-5 years) - $15,000 per year
Interior cleaning - $15,000 per year
Exterior maintenance, washing, cleaning, and wax - $20,000 per year
Captain portion or maintenance company for coordinating services - $60,000 per year
Additional captain fee if full-time and managing maintenance - $60,000 per year
Additional crew - $75,000 per year
Black and grey water pump out and cleaning - $10,000 per year
Bottom, hull, cleaning - $7,000 per year
A low estimate of maintenance and operating costs of $530,000 each year!
Options for Yachting
There are a few different scenarios for enjoying a yacht. that have pros and cons for each.
Individual Owner
Pros
It's your boat! Available any time provided there are no mechanical issues
Hire your own crew and make the boat your own from top to bottom
Cons
Incur all costs
Requires downpayment and loan if financing
Depreciating asset
Unforeseen costs, issues, and downtime
Need to operate yourself and/or hire a captain and crew
Responsible for fuel and all other provisions
Co-ownership / Fractional Ownership
Pros
Split the purchase and maintenance costs between three or more owners
Cons
Getting a consensus on things such as where to keep the boat, cleaning service, maintenance technicians, crew, captain, etc.
Incur fraction of costs
Scheduling conflicts and prioritization among owners
Requires downpayment and loan if financing
Depreciating asset
Unforeseen costs, issues, and downtime
Need to operate yourself and/or hire a captain and crew
Responsible for fuel and all other provisions
Yacht Club
Pros
Low cost of entry
Low membership fees
Not responsible for maintenance fees
No ownership, no depreciation
Cons
Difficult to find availability due to a large number of members
Do not offer/cannot accommodate overnight stays
Designed for quick minimal hours on the water
No cabins or luxuries that are typically found on a yacht
Small boats, 28' or smaller, that only accommodate around six people
Older boats that show their wear
Bareboat charter and in charge of operating and/or finding captain and crew
Responsible for fuel and all other provisions
Artizia Yachts Membership
Pros
Hospitality-focused captain and crew are included
Not responsible for maintenance fees
No ownership, no depreciation
A limited number of members to ensure availability
Fuel, food, and drinks (yes, even beer, wine, and spirits) are included
Ability to book longer trips and stay overnight in addition to short half-day trips
Proprietary technology to book trips, manage reservations, plan your itinerary, and manage add-ons
Dedicated concierge to accommodate your requests
Membership gives you access to all boats at all locations
Larger 65"+ yachts at all locations
Newer updated boats at all locations
Cons
None, unless you are not a member!
As a recap, what are the expected costs for the first two years of owning a boat, by the time you factor in depreciation and operating costs, you are looking at a minimum of $1M for operating and depreciation of $1M for a total hit of $2M.
Curious about how Artizia Yachts compares to standard charters, check out this article which also outlines how much a typical four-hour yacht charter costs.