Chartering and Fractional Ownership

Chartering. For many first-time yacht buyers, the process begins when they charter a yacht. Here, the flexibility and the cost of chartering make this a sensible first step. When you charter a yacht, you can spend a week or a month living aboard something along the lines of what you’d like to purchase. This will help you settle on what’s important to you in a way that you just can’t do from a catalog, a viewing or a visit.

Chartering will also allow you to check out yachts of different sizes, from different builders as well as exploring different regions. While you’re chartering, you’re only responsible for the operating costs of the yacht.

The downside to chartering is that the coast guard statutes in most major yachting areas tend to be very restrictive regarding the maximum number of guests allowed on a charter. So, if you’re looking to entertain large groups, you may be out of luck. Then, there’s the fact that the yacht you want may not be available when you want it. It may come as no surprise that often, the most popular yachts are booked several months in advance, particularly during the seasons when people like to play and party.

Fractional Ownership. This concept involves someone called a yacht manager who arranges a yacht purchase, then splits the cost of the boat across several owners. Each owner has a financial (equity) stake in the yacht, and is allowed a set number of days they’re able to use it each year. The owners pay an annual maintenance fee to the manager, who manages the calendar, crew and maintenance of the yacht.

Obviously, one of the major upsides of fractional ownership is that the upfront and upkeep costs are only a fraction of what it would cost to purchase a yacht outright. Having a professional manager handle all of the crew, maintenance and upkeep is also extremely convenient. Unlike chartering, with fractional ownership, you can have as many guests on the boat as you like, as long as it’s within the legal safety margins. Finally, most fractional ownership agreements allow you to sell your stake to another owner if you decide that you no longer wish to be a fractional yacht owner.

The downsides to fractional ownership? Well, your yacht may not be available for the particular dates you’re looking to use it, since you’re splitting the boat among several owners. Many yacht owners like to take their excursions at the same time of year, and there’s a good chance that more than one fractional owner will want to use the boat when you do. 

Then, if you want to relocate the vessel from one area to another—overseas, for example— for an extended period, you may have to get the other owners to agree. If you had chartered the yacht, you’d simply need to pay a relocation fee, and if you owned the boat outright, you’d only have to advise the captain to set a course and arrange for dockage.

In the end, whether you purchase your yacht from a California yacht broker outright, or opt for chartering or fractional ownership will be a factor of many things, including financial flexibility. The above guide should serve as a great starting point for your research. Whichever route you take, just remember that Ullman Yacht Sales is here, ready and waiting to make your dream of yacht ownership come true!