A few months ago someone posted the question here " is buying a yacht a good business decision". I wanted to answer then but did not have time. Well... plenty of time now.
By Derek Hunsinger, Owner Operator
Obviously, it depends. It depends on your tax/wealth situation. It depends on how often, and for how long, you want to use your boat personally. It depends on market timing, where you want to put your boat, and, more than any other factor, it depends on who you choose to do business with.
I could write a book on those topics and each one is so personal, that it would be impossible to really get to an answer. So, instead of debating all of those points, I’d like to present a real-life example. Ours. Because I really don’t know if buying a boat and running yacht holidays on it is a good idea, or a bad Idea, but I know how it worked out for me.
My wife and I had one too many glasses of wine at the Miami boat show in 2008 and purchased a leopard 4600 for $520,000. She actually said to me “if we owned a catamaran, she would live on the water with me”. It took me about 10 seconds after that to tell the sales lady that we were buying the boat. We had just sold our small IT company in North Carolina, so we were at a cross roads in life anyway, so for us, it just felt right.
We picked up the catamaran in Tortola 9 months later and started running sailboat trips as an owner operator in the Caribbean sailing holidays industry. We put $104,000 down and took a mortgage for the rest, on a 15 year amortization with a five year balloon. Our payments were about $3,800.
To help pay for the boat, we ran yacht vacations for paying passengers for about 5 years, between 18 and 22 trips per year. In that time, we were able to make our mortgage payments, accelerate the loan and take 3 months off per year to go play on our boat. All paid for by the Caribbean sailing adventures that we were delivering.
After 5 years, mostly because we were tired of having party animals on our boat, we put our Bella Vita in a managed crewed yacht program and had her continue to deliver yacht holidays. This time with a paid crew on her. This was less profitable, but we were able to continue paying the mortgage, and accelerated the payments to a point that, after 9 years, the loan was paid off.
Now, 11 years after we purchased Bella Vita, we keep her on the Dutch side of St. Maarten. She is completely paid for, remodelled and refitted and is basically like brand new. She is currently worth somewhere between $335,000 and $380,000, depending on who you ask. We live on her 6 months out of the year.
At this point in time, the only cash I have in her is the $104,000 that I initially put down. But, what money we put in the bank during the last few years of doing sailing trips was spent on upgrades and making her beautiful again, so moving forward, I’ll start going further in the hole to her.
I think that $104,000 for what is essentially a 3 bedroom, 3 bath, floating winter home in the Caribbean is a great deal. I don’t know what the $104,000 would have been worth in the stock market or real estate over the same period of time. But, you also can’t measure the amount of joy that my wife and I have experienced while owning Bella Vita for the past decade.
So, was buying a yacht a good business decision? I’m not sure. It depends But, looking back at the past 10 years, I would not have changed a thing. I’m glad I bought the boat. And, I’m very glad that I discovered and to part in the business of delivering Caribbean sailing vacations.
Derek is the owner of IYachtClub Bareboat Solution based out of St Thomas, US Virgin Islands. I felt his contribution on the topic of boat ownership and changing directions in life was an interesting read worth sharing here.
Yes, it’s all about timing but it is as much about taking a risk and giving it a go. Well done Derek, see you on the water again soon.
When you buy a boat you should not be charged over 20k in warranty items. We bought a brand new boat from him, and he decided to charge us all warranty. We have not been reimbursed.
We learned three months after we owned the boat that Derek Hunsinger did not file a claim to inform them of warranty issues. We would like to share our experience as an owner of a yacht purchased from Derek Hunsinger so that you can be a more informed consumer and make up your own mind.
When you buy a boat you should not be charged over 20k in warranty items. We bought a brand new boat from him, and he decided to charge us all warranty. We have not been reimbursed.
We learned three months after we owned the boat that Derek Hunsinger did not file a claim to inform them of warranty issues. We would like to share our experience as an owner of a yacht purchased from Derek Hunsinger so that you can be a more informed consumer and make up your own mind.
Hi Patty,
That sounds all very disappointing. This blog is exactly about sharing these types of experiences (good and bad), to provide a broad spectrum of information for newcomers to this business. I would appreciate if you could provide just a few more details of what exactly happened. Maybe name and type of boat, where it was based and how it was used. Was it a managed contract with the dealer, crewed? It’s always better for the readers to have of a complete picture of what happened to make the best informed decision. I am sure you have exhausted every avenue with Derek to come to a solution? I look forward to hearing more from you and at the same time am disappointed to hear of your negative experience. Kind of puts a dampener on a dream.
Hi Nils
I posted the same thing twice by accident. Here it is updated. Feel free to remove the other two.
Owners Perspective Review – Yes we bought the boat!!! Thrilled as ever, but our first tryout wasn’t a great situation.
We didnt want a bareboat situation because we wanted her (our boat) to be taken care of.
We opted for a fully crewed experience with hopes that it would be taken care of, as we were informed the boat would be better taken care of with a managed crew. (((That’s only IF you have the right crew and management company)))
Firstly, nobody twisted our arm to put it with Derek Hunsinger owner of IyachtClub. It was our own decision and below are just a few situations that came about while under their management.
Red Flags
Kinda quickly we saw red flags on wrong charges, charters going out under 18k/week, misc fees, maintenance, (lots of trip advisor 5 star reviews… alittle too many), lots of issues with crew, but we gave Derek Hunsinger the benefit of fixing them, however even with statements of him saying that he will make this right … we were let down again and again.
Wrong handling of Warranty by Iyachtclub
We incurred charge after charge of over 20k in warranty due to Derek charging us for warranty on a brand new boat.
We own a company and how we handle warranty is simply, we dont charge the customer. If its warranty then we will put in the claim and handle the cost ourselves so that we can then be reimbursed by the factory. Thats how warranty should of been handled. That’s not at all how Derek Hunsinger handled warranty.
It was close to the third month of ownership when we found he didnt put in claims to the factory! The factory had no idea what was going on. Not the factory’s fault. Derek was charging us for everything. Iyachtclub had us believing we were an open owner’s wallet to be a part of their management.
Unscheduled Charters??
The iyachtclub Crew took pictures of our boat on charter yet she wasnt on the books for charter!
Had I not seen the Facebook posts of her sailing and Chef photographing food then I wouldnt of known she went out on charter. That I had to pay for lol. Reimbursed (after we voiced up) but to me, it was sneaky. We had AIS on the boat and it “went out”. Again, thanks to Instagram/Facebook I wouldn’t of known.
I texted the Chef and his response was to the tune of I thought you knew or something in relation to that.
Us
This is an opinion from a yacht owners perspective who bought a gorgeous DuFour 48’ 2021 Catamaran from Derek Hunsinger and placed it in his management crewed iyachtclub fleet. She was in the Miami Boat Show and the Annapolis Boat Show. Seeking demurrage from Annapolis currently.
Results
We snipped the tie and let IyachtClub go. We are very well taken care of currently by new management.
This is our review. Other owners might have a better experience. I sure hope they do because the dream was almost squashed.
Boat or yacht ownership is like learning a new language when you first approach it. We’ve been in the business for nearly 30 years and I’m approached with this question all the time. My best advice is to build some relationships in the industry and get to know some charter captains. Through that process you’ll learn all of the hangups and potential expenses and get a real education that will help inform your buying decisions. Every boat can have unexpected costs and you’ll want to plan for as much as possible from the start to avoid surprises.
Randy, I totally agree. Thank you for your feedback