Defraying cost when buying a yacht isn’t a new idea; shared ownership with friends and family has always been one option. Another option that’s gathered steam in the past few years is fractional ownership. Unlike a time-share where you only purchase the rights of property usage for a certain amount of time, with fractional ownership you buy a piece of the yacht. You legally own the asset.
We recently sat down with an Estate Manager in the Hamptons to discuss the pros and cons of fractional yacht ownership.
JKC: I imagine that the main attraction in fractional ownership is cost?
Estate Manager: It’s cost and time. Not only does fractional ownership cut costs, but it also cuts down on your time investment. Most arrangements include the yacht’s management, so you don’t have to worry about lining up contractors or dealing with maintenance.
JKC: How do you staff a yacht in this situation? Is there a full-time crew?
Estate Manager: Yes, our ownership arrangement has a full-time crew. It was a bit of a problem for my principal, because he likes to captain his boat and his friends enjoy being the crew. He lost this aspect of yachting to some degree because he’s paying for the crew no matter what.
JKC: Is it possible to sell your share?
Estate Manager: Yes, you can sell your share of ownership at any time. But, your boat could be sold out from under you as well. Different agreements have different stipulations. But in most cases, if the majority of the owners want out, the yacht gets sold and the proceeds get divided.
JKC: I didn’t think of that. Are there any other disadvantages that you have come across?
Estate Manager: Well, your time aboard is pre-scheduled. That means those spur-of-the-moment boat rides at sunset may not be possible… and you can’t personalize your yacht, so if you want to name your yacht “The Monkey Business” you would need all the owners to agree.
JKC: Are there any specific details that you can share about the percentage owned and the cost?
Estate Manager: In general, for an eighth share of a 63-foot yacht with four cabins based in the Mediterranean. The cost of the share would be around $180,000.
JKC: And how much time would each owner get in this arrangement?
Estate Manager: A total of five weeks per year.