Fractional Ownership

Hi Brett, and welcome to YF. You might want to check these:
http://www.yachtforums.com/forums/g...5497-fractional-yachting-success-failure.html
http://www.yachtforums.com/forums/general-catamaran-discussion/3965-time-share-yachting.html

Personally I think it's a great idea in theory. The problems arise with how the boat is managed and the fact that everyone wants it on the sunny holiday or weekend, and nobody wants it mid-week, rainy days or mid-winter. Then there's the problem of all owner wanting to use it in different locations or one group being slobs. So basically it comes back down to how the boat is managed and maintained. No easy task.

I was skeptical at first, but ended up getting involved with a fractional ownership deal in Costa Rica. There were six owners- some owned 25%, others like myself owner 12.5%, which equated to one week every two months. The captain and mate were managed by the mgmt company, but paid by the owners.
All the owners were fisherman for the most part, so when it came time to by stuff there wasn't much of an issue. The schedule was put out a year in advance, and the owners gladly traded weeks, days, etc.

I would recommend it if you have a good mgmt company running it.

How is down time for maintenance and service scheduled on your boat? That would be one of my major questions if considering one.

The theory is great just as it was on timeshares. The execution is another thing and it took decades and much regulation for timeshares to find something approaching a good basis. How major work and refits are handled would be a challenge. Also the resale of ownership and what kind of market there is for that. Are maintenance and management fees being billed high enough in the early years to provide an adequate reserve for engine rebuilds, bottom paints, interior renovations. That typically has been an issue as the companies try to keep initial costs down, that suddenly the money had to be collected on a special billing or huge increase down the road.

I don't see the scheduling as a big problem. Yes, there are certain weeks everyone wants but that's something understood going in. As long as the management company remains neutral then it shouldn't be an issue.

The boat got hauled every year in Oct. Thursdays were blocked as maintenance days. So we'd fly in on Thur, spend the night and start fishing on Fri.

As the boat aged, the amount put into reserve was greater. Towards the end ( 5 yr run), before I sold my share, my 1/8th was running about $1500/month just sitting there (42 boat, capt and mate). The boat was new and the CATS had ESC so there weren't very many BIG surprises.

The mgmt company had 6 or so boats in it's fleet. If your boat was down, another boat would be available if "ok'd" by the other ownership group. This happened one time in 5 years.

Ok, one observation. That's what I anticipated as to the maintenance increasing and not adequate reserve in the early years. CATS or anything a rebuild will happen at some point. That has to come as a one time assessment if adequate reserve not built.

Now, a question. The crew? Were they rotated or kept the same? If the boat is being used constantly, would seem like a crew killer, working seven days a week for weeks and months.

Also if and when the situation hits one owner doesn't pay his fee, what is the contingency then? Could be big if that's a 25% owner.