Did you know that the typical owner of a 32-foot sport cruiser puts an average of 50 hours on the engine each year? With a boat loan payment of well over $1,000 per month and fixed expenses for slip fees, insurance and routine maintenance adding another $500 or $600, the expenses add up.

For novices who would like to own a boat, but have no boating experience and don’t know where to begin, buying a boat outright seems like a daunting way to learn whether they’re suited to the “life aquatic.”

Timeshares, fractional ownership arrangements and boat clubs are options for solving these problems. They borrow heavily from land-based vacation real estate ventures that began in Europe and have since become a leisure-time fact of life for many Americans.

These non-traditional ways to have access to boats limit some of the hassle and expenses associated with full ownership. These plans can also make it easy for an owner to put his boat to work when he’s not able to use it. But, are they really viable for an experienced boater committed to the sport? Are they a good way for novices to learn the ropes?

The answer is a qualified yes — in the short run, at least — according to several BoatU.S. members who shared their experiences with us.

Timeshares
In a timeshare, a fleet of boats is owned by a management company and the consumer purchases a specific block of time each year to use a specific vessel or a fleet of vessels. Timeshare agreements usually last for one to five years.

The consumer can pay the full price of his timeshare up front or spread payments out over the period of the agreement, while also making monthly payments that cover the cost of maintenance, insurance and storage. Consumers can also expect to pay a refundable security deposit, and they are responsible for paying any deductibles in the event of an insurance claim. Even so, start-up costs will be well under $10,000 for most participants.

“When I moved to Seattle from San Francisco, it was obvious that this is one of the most boating-desirable places on the planet,” said Marty Robins of Bellevue, WA. “I’d never owned a boat and wasn’t sure how to get started.”

The Robins family signed on with YachtLease in Elliott Bay Marina just north of downtown Seattle.

In business for about 25 years, YachtLease maintains a fleet of 30-foot to 60-foot power and sail boats at their Seattle location, as well as in Bremerton and Anacortes. Customers can buy packages of 12, 21 or 40 days of boating per year. Each package includes about 32 hours of training on land and on the water, as well as round-the-clock support for breakdowns, advice and assistance.

The Robins family picked out a 2005 Meridian 368, which they could use for 21 days each year, and paid a $6,000 security deposit in addition to YachtLease’s initial sign-up fee of $1,500. After that, Robins told us their monthly payment to YachtLease was less than $1,000. “Our only additional costs were for fuel and if you chose not to clean the boat yourself on return, there is a cleaning service, which we always chose,” he said.

At the top of Robins’ list of “positives” is the amount of training provided by the YachtLease staff. Remember, they were novices at the start of their adventure and the training helped them feel competent enough to operate a fairly large motoryacht. Next comes boat care. “In general, the boat was cleaned and prepped for us every time we went out on it,” Robins said.

On the negative side, Robins said, “Every time you cruise, you have to load up, then do the reverse when you return. One of the great things about having your own boat is being able to have it stocked and ready to go.”

Lack of spontaneity is another problem, Robins said, since their Meridian had to be reserved weeks in advance. “Although there was never an instance where we wanted to use the boat that we couldn’t, the nature of the program isn’t, ‘Hey it’s a beautiful day, let’s go out on the boat.’ It’s more like, ‘Let’s take a trip in a few weeks.’”

Overall, though, “We had a great experience with YachtLease and wouldn’t hesitate to do it again,” Robins said. The Robinses have since bought a Sea Ray 280 Sundancer and plan to move into a larger motoryacht when their daughter goes to college.

Fractional Ownership

Fractional ownerships are another way to share the cost of a boat. For years, folks have pooled money with their friends to buy boats — sometimes with disastrous results for the friendship — but modern day fractional plans are a bit more businesslike. A brokerage company in the business of buying boats outright or handling sales of used boats for owners, sells shares, called fractions, of a vessel to four or five individuals who form a limited liability corporation (LLC) and are listed on the boat’s title. Because fractionals involve direct ownership, each user has greater control over how the boat is used and maintained and where it is located. Owners can sell their shares after a period of usually five years but, boat depreciation being what it is, they shouldn’t expect anything in the way of profit.

The real benefit of a fractional ownership comes up front because the brokerage company, which may get a discount for buying several boats at a time, can pass some of the savings along to shareholders. While the brokerage company profits by charging the owners a monthly fee for managing, scheduling, maintenance, repairs, storage and insurance, the costs are still a fraction of what a single owner would pay.

Because only four or five people share the boat, scheduling is more flexible. Owners are more likely to get their fair share of the “good days” each boating season. Fractional ownership plans are probably most user friendly and cost effective in places where it’s possible to boat year-round.

A BoatU.S. member in Portland, OR, owns a quarter share of a 40-foot Mainship kept in Florida. The other three owners live in Tampa. “Since they only use it in the summer and we only use it in the winter [during Portland’s rainy season], it’s a great setup,” he told us. “I paid $45,000 up front and just one quarter of the expenses each year.”

Ownership costs can be defrayed even more by putting the boat into charter service for a portion of the year.

Chartering

Jeff Nicholas, a BoatU.S. member in Spartanburg, SC, told us that he and his wife started sailing in 1971 as newlyweds. Their first boat was a 12-foot daysailer. After moving into progressively larger boats during the next 25 years, he said, “We wanted a trawler but decided we really couldn’t afford one, so we researched putting a boat in charter service to help defray the costs.”

The Nicholases bought a 35-foot Senator and put it in charter service in North Carolina. “The trawler cost me $1,000 each month. I earned $10,000 the first year,” Nicholas said. “The trawler was not abused by the folks who used her, but we started having trouble getting money from the charter company. I finally sold the trawler and came out in the black despite problems with the management side.”

Consult your tax advisor before putting your boat into charter. Federal tax laws apply when recreational boats are used commercially.

Boat Clubs

With a boat club, the consumer has neither equity in a specific boat nor a fixed schedule for boat usage. Instead, he or she pays for access to a fleet of vessels in a specific port, as well as boats owned by the club in other locations. Usually, scheduling is pretty flexible because club members can choose from a number of vessels, rather than being locked into one. Unlike timeshares and fractional ownership, boats can be reserved only a few days before they’re used. Boat club memberships are less expensive than timeshares or fractional ownerships, but the vessels in the fleet might be smaller in size and overnight boating time may be limited.

Freedom Boat Club, which began in Sarasota, FL, in 1989, now consists of 45 franchises and 10 other “store” locations on the East Coast and the Gulf of Mexico.

“We have about 4,000 members and over 500 boats,” said Jeremy Kelley, the Club’s franchise development manager. He said Freedom Boat Club’s members consist of avid fishermen who want to fish in different parts of the country, the “aging demographic” that doesn’t want the responsibility of maintaining a boat and families that participate in many different recreational activities.

BoatU.S. member Don Cotton, his wife and two young daughters of Vero Beach, FL, are one such family. “My wife, our two daughters and I bought a membership with Freedom Boat Club in West Palm, FL. The three-year deal was something like $4,900 up front and then it was about $500 a month thereafter with less expensive renewal fees after the three years. We thought it was a fair deal.

“The club had 38 boats and on most days you could be certain of getting a boat,” Cotton recalled. Even so, he says, “Our family wants to ‘camp’ on our boat two to three nights per month and take some week-long cruises. The club allowed overnights, but only from Monday to Thursday. Not so good for a working family. Also the cruising range did not allow for trips to the Bahamas, or even the Keys.

“Some people would ask, ‘Well, how often are you really going to go to the Bahamas anyway?’ That is very true, but you want to know that you can, if you want to,” Cotton said, adding that his family is now shopping for their first boat.

The Bottom Line

Non-traditional boat access arrangements like timeshares, fractional ownerships and boat clubs are excellent for novice boat owners or for individuals with limited time to devote to the sport. Families that enjoy outdoor recreation and don’t want to commit to one activity are also good candidates.

Hardcore boating enthusiasts are probably less likely to appreciate their benefits. One BoatU.S. member in Alexandria, VA, summed it up this way, “Anytime I want to use my boat 24/7 it’s ready to go. I don’t have to make a reservation, I just go. The only positive I can see is that you get to try out different styles of boats before you actually buy.”

(c) Copyright BoatU.S. Magazine, July 2007