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."
