How Do Bareboat Charter Yacht Programs Work?

Let's talk about charter management...I have been involved with this for 24 years and was the Managing Director of a charter company in the BVI. There are two ways to do this:

1. Buy a new boat from a charter company and get a guaranteed income... You will ONLY get income guarantees if you buy a new boat. Their programs normally last 5.5 years or 66 months. The boat will earn between 8%-10% per year of whatever you spent to buy the boat. So, for example, if you buy a 300,000 Euro boat you will get 8% (or 24,000 Euros/year payable monthly for 5.5 years) if it is an Owner's Version catamaran (because it will not get as much business) ... or you can get up to 10% Guaranteed Income if you buy a "Charter Version" catamaran which will work more weeks/year so they can afford to pay you more.....but these "Charter Versions" depreciate more rapidly than Owner Versions so you have to factor this into your "exit strategy" (when you go to resell your boat)....You will have no expenses in the Guaranteed Program because the charter company pays all of those. You will get some "Owner Use" (but sometimes only 2-3 weeks in the high season) and you get "Reciprocal Use" which means you can use a similar boat at another location if you prefer...so you can cruise all over the world at the various bases...What other investment will pay you 8-10% guaranteed and you can have fun with it!?!  I do recommend doing the 8% program because when you resell your boat it will be in high demand and you won't be competing with 40 other owners who HAVE to sell. 

There are also "Variable Programs" but I'd never recommend this because you could get left "holding the bag" and end up with nothing, or worse, owing the charter company money and having your boat beat to death.

2. If you buy a used boat and place it in charter there are NO GUARANTEES. Every charter company that will take used boats has a different program. Some give you 70% of the gross charter income and charge you for every possible expense...others split 50-50 and split some of the expenses...But it's all meaningless because a creative charter company accountant can charge a lot of expenses to your account and you can end up with nothing or even owe them money!...so don't get all wrapped up in comparing charter company programs. It is mostly fiction and it will drive you crazy. Instead, ask the charter company for some Owner references and contact some owners who have boats in their fleet like what you have....and ask the owners what they are actually netting every year. Usually placing a used boat in a charter fleet is only going to cover some of your expenses and there will not be much of anything left over for you at the end of the year. And there will be "wear and tear" on your boat. But you may cover the cost of insurance, dockage and maintenance...and the boat is professionally maintained...so that's why owners place their used boats in charter.

I can talk for hours about this subject and invite your questions.