Eric Stahl was working on his master's degree in business at the University of Colorado when he figured out a way to live his dream of owning a boat.

He and his girlfriend at the time, Jacque, liked the idea of a life on the water, making money by offering charters on the side. He wrote a business plan as part of his coursework, outlining how they could buy a boat, charter it, and spend their 30s tanned and toned in the Virgin Islands.

Now married and graduated, they turned the plan into a reality last year. Their 47-foot sailing catamaran, Tachyon, was purchased in July and completed nearly a half-dozen charters in the Virgin Islands by the end of 2006. Heading into the spring/summer 2007 season, it was fully booked as part of the fleet with Virgins-based Regency Yacht Vacations.

As the Stahls–and countless boat owners like them–are learning, putting your boat into charter is far more than a quick way to monetize your favorite hobby. Chartering means entering an established industry, with inherent benefits and challenges, and to do it successfully requires a well-thought-out plan.

Indeed, the boat itself is just the beginning when trying to determine whether chartering is a viable option to realize your goals. You also have to consider location, local competition, whether you can or should hire a crew, insurance costs, management company demands, maintenance issues, compromises in terms of using your own boat and much more.

The Stahls figure that they'll break even on expenses after 10 or 11 charters a year. Everything else they earn will be income, less the maintenance expenses that will come up periodically, as they do with all boats.

Tachyon, actually, was previously part of the fleet at The Moorings, one of the biggest charter management companies in the world, which used it for Signature Vacations that come with skippers. Its previous owner never even had to step foot onboard in order to generate charter income. The Stahls are far more hands on with the boat, but they don't mind because they are growing a business.

"We don't just want to go sailing for a little while, or fill in the gaps in our own cruising lifestyle," says Eric, who is 33. "We want to succeed, buy another boat within the next few years, and build up a clientele to become a larger company."

WHAT IS YOUR GOAL?

While no official statistics are available, experts estimate that some 300,000 to 350,000 weeks of bareboat and crewed charter vacations are booked worldwide each year. Boat owners within such a large group obviously operate in many ways, but most fall into three general categories.

First is the owner who uses his boat extensively and wants to charter in his own backyard. This owner might want to offer the boat just enough to write off expenses for tax purposes, and many of these owners go without the help of a major management company.

Second is the owner who is willing to put his boat in a more popular destination in the hope of generating more charter income, and in exchange is willing to give up control over the boat's use and upkeep. Owners who put their boats into big fleets like The Moorings or Sunsail fit this description.

Last is the full-time owner-operator, who uses charter as a means to change his lifestyle. Owners in this category live onboard their boats and move them to the most lucrative charter destinations on a seasonal basis.

If you're thinking about chartering your boat, a good place to start is to consider which profiles best describes you. The experiences of experts and owners within each will help you better understand the benefits and pitfalls of each model.

YOUR OWN BACKYARD

Hope Swift is not your typical charter broker. Yes, she attends boat shows. Yes, she books boats worldwide. Yes, she is a member of the Charter Yacht Brokers Association, one of the industry's largest professional organizations.

But the bread and butter of her business at Swift Yacht Charters during the past 20 years has been knitting together a fleet of about 25 boats in the 30- to 65-foot size range, all owned by New Englanders who want to offer their boats for bareboat charter while retaining complete control.

"I work a lot with people who want to use their boat for a summer, but they want to defray some of the expenses," Swift explains. "For somebody who has a boat that's in nice shape, and they want to keep it in nice shape or even upgrade things like the electronics, they can put it in charter with me and dictate how many weeks they want. It can be three weeks a season or thirteen. And they have full right of refusal about which charters they accept or turn down, unlike with a big management company."

As with most charter business plans, Swift says, her owners aim to offset their expenses, rather than earning a profit. But she did say that a few end up pocketing some cash.

Photo courtesy of Hope Swift Hope Swift (at the helm) runs a charter business with about 25 boats, all owned by New Englanders.

"Say they charge $4,000 a week," she explains. "Out of that, they lose 15 percent to me to book the charter, and they have to have bareboat insurance, which they can get as a rider every time the boat goes out for about $150 or they can pay $600 or $700 a year for a blanket policy. They keep the boat where they normally keep it, they do their own maintenance and cleaning, and I just literally send them a charterer." Swift said that even smaller boats in her fleet do well. "I have a 1968 Alberg 30, and his location is at Woods Hole, Massachusetts, and people come back every year. He makes $1,000 a week."

The downside to this method is the loss of your time. You are responsible for the things a management company would otherwise handle, from cleaning the boat to doing the systems checkouts with clients (usually on sunny summer Saturdays) to inspecting the hull for cracks upon the completion of every charter. Yes, you can pay people to do these jobs–Swift estimates about $25 an hour to clean the boat, about $50 to dive for hull inspections and about $45 an hour for checkouts–but those numbers will quickly erode your financial benefits.

The other cautionary note in this arrangement is to carefully choose the broker you work with. Swift's client base is about 70 percent repeat customers, so the odds of getting a random lunatic charterer are slim. With less stringent brokers, however, it can be a concern .

"The clients have to be incredibly well screened, or you're going to end up damaging your boat," Swift says. "And your insurance rates are going to skyrocket up after just one claim."

FULL-TIME MANAGEMENT

At the other end of the spectrum is New York City businessman Michel Bennarosh, who has been putting his boats into charter with The Moorings since 1995 and runs a web site that offers charter information (see link below). It's one of the biggest charter companies in the world, arguably the biggest that handles boats in the 30- to 55-foot size range, with bases everywhere from the Virgin Islands to the Turkish Coast.

Overall, Bennarosh says, his experience has been very good. But he also notes that he has no emotional attachment to his boats, he is willing to give up control of them, and has stayed with The Moorings for a dozen years, using its system in a way that some boat owners may not enjoy or find financially feasible.

The way The Moorings system works, he explains, is that you buy a boat from the company and they agree to take care of it–maintenance, insurance, everything–while giving you a guaranteed charter income check each month. "The amount varies depending on the interest rate of money in the United States," Bennarosh says. "If you buy a $300,000 boat, the interest is about 8 percent now, so you get $2,000 a month, rain or shine. They try to give you, monthly, the amount of money you'll need to pay your (boat) mortgage provided that you put 25 percent down."

The deal does come with strings attached, of course. For starters, you have to buy a boat exactly as the company is selling it. You can't put in upgraded electronics, change the fabrics or add any other personal touches. You also have to keep your boat at a base The Moorings controls–and the ones where you might want to use your boat aren't always an option.

"If you want to buy a boat in Tortola, which is a very high-demand destination, sometimes there is a waiting list on some boat models," Bennarosh explains. "If you want to buy a boat and put it in La Paz, Mexico, they'd give you a great deal. Not a lot of people want to put a boat there."

On the other hand, the interchangeability of boats in a major fleet like The Moorings does give you the opportunity to use a boat like yours in a lot of places. Bennarosh's contract gives him the right to use any Moorings boats for six weeks a year during off-peak times, or two weeks a year each during peak and off-peak times.

"Plus you have three weeks of what they call walk-on privilege," he adds. "If your own boat is not booked, you can sail it for up to three weeks with two weeks' notice."

In total, then, Bennarosh can cruise "for free" nine weeks a year–a nice option if you're retired or have a flexible work life, but not one that all boat owners can use. And if your schedule is not flexible, you may not be able to get the dates you want in your chosen destinations, because the boats may be booked.

Those are realities, but not necessarily disadvantages, Bennarosh says. He says that the main disadvantages in working with a big company like The Moorings is that there is little wiggle room for the owner's wishes, and that so many of the boats are the same, they can be hard to sell later on. His opinions are based not just on his own experience, but on the experiences of countless other Moorings owners and clients who communicate on his website.

"What charter companies do not say is how difficult it is to sell the boats," he says. "I have some boats that have been on the market for two years. It's a nightmare for some people."

For him, the system has worked well, allowing him to trade up to bigger boats over a period of 12 years, without the hassles of hands-on maintenance. But none was necessarily the boat of his dreams, kept in a place where he would, ideally, like to use it.

FULL-TIME OWNER-OPERATOR

Capt. Johan Tordhag owns a Beneteau 46 sailboat that he offers for charter in his home waters off the coast of Sweden. They're cold waters, which has bothered him for years, not to mention that there really isn't much demand for charter in Scandinavia. He dreamed of sailing in the heart of Europe's chartering community along the south of France and western Italy, the most popular charter destination in the world. His 46-footer was a nice boat, and he assumed clients would love it as much as he does.

He did some asking around, though, and to his disappointment was told a boat like his isn't always a good bet in the western Mediterranean, where charter clients typically request bigger yachts. Tordhag realized he either had to leave his Beneteau in Sweden and take what few charters he could get there, or buy a bigger boat that would stretch his personal resources but let him enter his chosen charter market with better prospects.

In Tordhag's case, the solution was to take a partner and buy the 76-foot CNB sloop INXS, then sail it to Genoa, Italy, where it entered the 2007 summer charter season with six pre-booked weeks of business as part of the fleet at BCR Yachts. Tordhag has a silent partner who takes a piece of the 19,800-euro-per-week about $26,500 charter rate, less the typical 15-percent booking commission paid to BCR. Tordhag himself stays onboard, offering free labor all summer as captain of a three-person crew.

His hope is to make enough money to pay his crew and cover the expenses of his new lifestyle. If his first season goes well, he'll be able to enjoy his chosen lifestyle for many years to come, just like the Stahls and Bennarosh and all of the owners in Hope Swift's New England fleet. He's picked up his first clients in early June in Croatia.

"This is my life savings and my dream come true to have a big boat like this," he said on a sunny, 80-degree day. "And now I'm in a warm spot where you don't have to worry about cold weather."

Kim Kavin is editor of www.CharterWave.com and author of Have the Whole Boat: The Insider's Guide to Private Yacht Charter Vacations.