What's an average yacht program look like?

First, we're very different from most "Yacht" owners, noting I prefer the word "Boat". Where our boat goes, so do we. I know repositioning is the norm and if one is working and has little time it likely makes sense, but we don't do it. The repositioning to Michigan could have been a wonderful, enjoyable trip as could have the return trip. Likely we would have seen half the sites on the way and the other half returning. made a list of places to stop and visit and done half on the way up and half on the return, still leaving many for the next time we did it. You put hours and wear on your boat and you didn't get to enjoy it. It passed so many wonderful places.

The boat with us starts the year in FLL and ends it there but may spend much time away. Our cruising pattern is to cruise for six weeks, ending up somewhere we can dock for a while, flying home for three weeks, then back to the boat for the next six. When we leave the boat at these destinations only two crew members stay with it. Typically crew splits the time so they all get at least a week and a half at home.

Buying the Michigan boat likely does make sense. We have multiple boats for different uses. As we put in similar annual hours of around 1000 it spreads that out. Now we do likely cruise faster than you. We cruise Westport's at 20 knots the majority of days cruising. We have other boats for real speed so our average 1000 hours a year typically turns into 18,000 nm or so.

We spend about 240 days a year cruising and another 40 day boating locally. Now, this past year it was down as we got involved with some schools. This current year is low as we're on a air and land trip in Europe (oh next time will be on the water) for a month which includes a stop to try to finalize a boat order.

Caribbean is out next major trip after we return and settle in for a bit. Our patterns are not unlike your years 2 and 3. One year might focus on the East Coast including the Chesapeake, NYC, Cape Cod, Nantucket, Martha's, and Boston. Another year the west coast of FL and the Gulf Coast. Another year the Caribbean. Another time, the Bahamas. One or two major areas a year.

We do enjoy our destinations and plan our stays at each. Our typical cruising pattern is a day of travel on the water followed by one or two days at a destination. We might move 8 to 10 hours on the water day, but then sit for a day or two.

Now I don't know the size or experience of your crew. Most would say we overpay but we have the best and no turnover in over 7 years of doing this. We also have more crew than needed but we want our crew to enjoy the travel as well. They can get what they need to do done quickly on each stop and then enjoy the same things we plan to see. One of our real joys is seeing young stews enjoying places they only imagined going. In fact, we couldn't bear this trip and them not enjoying it so our crew is with us in Europe. They're like family, like our kids, the closeness far beyond owner and crew but then they eat at the table with us, go to restaurants with us. We're not going to make them eat in the "basement" or crew lounge. our best friends work and perhaps two can join us at a time on our trips but our crew always makes great friends along with us. We also plan so all our crew can have a minimum of 140 days a year, home in FLL. I'll remind you that crew doesn't leave a boat or the career typically over pay, but over how they're treated and over the struggle to have a personal life, a home, relationships. We do provide our crew condos and cars in FLL.

Now, I'm trying to relate to normal ways of doing things and I'll encourage you to play with the tools on this site, https://www.luxyachts.com/yacht-cost-calculator

That said, we'd expect on a 112 to spend nearly $400k on crew with salaries, payroll taxes, insurance, travel, meals, and uniforms. Fuel and lube and diving $100k. Dockage $30k. Maintenance an average (and this includes building allowances for refits and for painting and for rebuilding engines) at least $100k, owners food, beverage and provisions plus sightseeing and entertainment for 90 days assuming two guests, $50k. Insurance, customs, licensing, crew training $50k. So, I'd see $700-800k as more the norm on this boat. For us, it would be higher.

Don't get your numbers from those trying to sell you a boat. The $400k number is just outrageously low to me. The $600k is possible with limited cruising with a crew of 3, perhaps only 2 permanent, with minimum benefits and modest pay, and with anchoring rather than marinas and low cost dockage at home. If someone asked me out of nowhere the annual cost to expect, I'd toss out $800k to $1 million and if they came in less that would be great. Now that includes allowances for all the periodic work as I said above not just the costs you incur every year.

Now, sounds like you're learning what works for you. We have friends who are one month cruising, one month at home. Everyone finds what works for them. I'll toss you some future destinations. Don't stop at Boston or in Maine, continue to Montreal. Don't stop at Key West or Galveston, head to Cancun, but don't stop there, head to Alaska. Go to the West Coast some time and keep the boat there a couple of years. Then after all that, sometime you can ship it to Europe and enjoy a summer there. There are always more places to go, but always more to see in all the areas you've previously cruised.

I'm just a little old 50'. My program depends on what my family and I wish do to that year. If I had to fit my program to my boat's actual expenses or my desired expenses, I'd say I had too much boat, or excessive expectations as to what a realistic program is for me. When I bought my vessel, I figuratively booked it at zero on my personal asset side, and determined it to be a variable expense on the other side with a sustainable cap. I calculated what my annual operating and depreciation cost (maintenance and repurchase)) would be, added a percentage and adjusted for inflation. I haven't been surprised except pleasantly. I believe in running a balance sheet in order to project your annual capital contributions., since there is no income component. I do not mean to sound sarcastic, because that's not my point, I couldn't afford $1M. $800K or $600K in capped expenses which have no off setting income - so I wouldn't own that boat., lovely as it is. Just saying.... If Michigan was or is an important trip, too bad you had to cut it out of your program to control costs. Everything is relative, I guess. We are the fortunate few of the world to have these woes.

I appreciate the kind words. I'm not a technical guy either, just a boat owner who loves to boat.

Our crew are contracted to work 220 days a year. Now, we could working at home, working on the boat, and days not working when away from home on the boat. All days away from home count. Maritime Labour Convention says crew shall be limited to 14 hours per day and to 77 hours per week. We make sure they have at least one eight hour period every 24 for sleep. We try to insure they have at least one day per week with no work duties even though we count it as work since they're away from home. Now the stews have found that rather than having days off they'd rather all jump in and finish faster and then go explore together. We also have occasion when we don't need them all but knowing where we're headed they all want to go. Up the East Coast and around to Montreal was a great example, everyone wanting to go.

We have a cruising crew of 10 (we also have 2 land based who take care of a total of 7 boats, which includes 2 boats of family/friends and 1 center console). Our largest boat requires 7. We will cruise with 8 to 10. Also, our chief stew is only 140 days rather than 220.

However, our other boats require 3 (we generally have at least 5), 2 (we generally have 3 to 5) and 0 (although sometimes we'll have 1). Our work for crew is also reduced as we're both Captains and we take the helm a lot of the time.

As to your standing by, which you've changed, being on call is the same as working. We schedule our larger boats well. Smaller is somewhat weather and seas dependent so when home we'll have days that are known we won't boat and other days that vary from possible to probable. However, we'll have only 3 or 4 crew members prepared.

As to your $1.2 million and 10% old maid's tale. 10% of what? Certainly doesn't decline with age and what is included. 10% on todays price would be about $1.5 million. Overall we run under 10% including depreciation. Without depreciation we run about 8%. That's a little misrepresentative though as we own our docks so would need to add something for them.

As to cost, we budget, but we don't focus on it otherwise. It's typically run well under our budget but that's my school of very conservative budgeting. I di agree with Beau that I'd never want to own a boat that made me stress over it's costs or the finances. That destroys the pleasure. We was encourage, including by people here, to build a boat that we just weren't comfortable with the cost of, not out of the range we could afford, but out of the range we were comfortable with and beyond anything we really felt a need for.

A couple more crew comments. We don't have a chef on board although excellent cooks including one who could be. However, we don't eat white linen service or five star. We eat good food when aboard but not fancy. We leave that for eating out. We also don't vacuum the entire boat daily. We vacuum as needed and otherwise weekly. We don't change bed linens daily like a hotel. We do it weekly unless needed more often. We do things much like home although we have a chef there, but still don't go formal. We just don't treat our boat like a hotel, but rather like a vacation home.

Gulfer , no need to be nervous that's for sure. I like your story about the engine hours on the two similar boats. I never really gave that much though before. For me , I just learned something.
Anyway I have no more to add to this eye opening conversation other than we all on here share the need for getting out on the water no matter how or where we might be. And we always must count our blessings , for what we have got.
Good luck on the refit.

I personally hate to hear stories like this. This is why we have too many one and done yacht owners. They are sold a dream by the broker and then when it doesn't meet expectations they get a sour taste in their mouth and get out. I am sure there are faults to go around on all sides, yours, the brokers and your Captain. The important thing is that you are recognizing it and taking steps to make your yachting more enjoyable.

I am really glad you are seeing it through, and finally seem to be having a good time with your boat. OB has a lot of good things to say on crew retention and how to use your yacht. Meeting other yacht owners is another good step. Another good avenue of advice is to notice other well run boats and talk to their Captains. Over the years I have been asked by owners to help guide them or their young Captains to make their programs more successful.

As to the money, there is a happy medium to how you handle it. Tighten down to much on expenses, and your vessel and crew will suffer. Loosen up to much and money will be flying out the window with no control. I had one owner that I worked for many years with, and it wasn't until 4 years in that he finally asked about what was being spent. I assumed the CFO was keeping him informed, and he told me the only way he could own a boat was by not asking how much was being spent, it was an eye opener when I showed him the books. I had another owner that would watch the books like a hawk, no problem with this, but it made me a much better bookkeeper and really made me pay attention to what I was spending and my budgets. Somewhere in between there is a happy medium, do what makes you comfortable.

There is a wealth of information on this site, with several experienced owners and Captains that are on here. Good luck in the future and enjoy your Westport, they are great boats.

I've done both. Our Owner used to sail with us for only for 3 weeks a year around the Med. The other one took us around the World twice. It's all about choices.

Interesting as I'm comfortable running it accounting wise just like our businesses. We budget, have monthly financial statements and our managing captains and chief engineer explain the major variations vs. budget monthly. We use purchase orders and all expenses are run through our corporate accounting system with our boat entity billed for accounting services. I have access to going down to see every dollar but typically just review at a higher level. Our managing captains have decades of experience but still have been trained further. Our senior captain under them, and ultimately their replacement when they retire, is an accounting major in college as family tradition even though she had her captain's license and knew her chosen career. So basically have all information available, only occasionally look in detail.
One complaint I've heard is to the effect that the captain does a lousy job of bookkeeping. I asked an owner what training their captain had received. "I don't know." Then I asked how many accountants and bookkeepers did he have working for him in his business. "I don't know but quite a few." Now where this led is so logical, "Couldn't you have one of them work with your captain a little and help him do better?" Answer, "I guess."
As an owner you must determine what you need and want but then provide any training necessary to get it.
Now, our boat financials don't change a thing we do, just enable us to budget more accurately in the future and project longer term. We've accumulated data we can use going forward. Much of it is to educate my wife and myself. However, some concepts have been new to our captains. For instance, they always projected refits and painting and even rebuilds of equipment. They never before charged to the financials on a monthly basis an allowance for those future expenditures though. Accrual accounting was new to them. They never saw depreciation before. We look at aging for boats and replacement just like capital assets in a business. What we do would be overcomplicating things for most, but for me it's second nature and simple.
One of the most challenging questions for me was how to depreciate boats. If we were doing taxes involving them we would be limited as to methods but we're not as they aren't involved in any income tax scenarios. So, do you figure a useful life and use straight line? Do you do it based on hours of use? Does it even matter? Well, not if you never intend to replace the boat. However, if you do intend to do so, it's helpful to keep awareness of it's depreciated value. We use a declining rate so much more in the early years. Then annually we compare our depreciated value to market and adjust. Depreciation is a very real cost of ownership.
You mentioned an owner's CFO, but many owners never use their CFO or others to advise them. They also don't use sound business practices in purchasing boats. They do things they would have never done in business such as an advance multi million dollar payment to an entity that has zero assets.
Elsewhere on this site you see the case of Anodyne. Can you imagine the owner running his business so carelessly, yet he did the business aspect of boating.

One other crew comment. Have job descriptions and discuss them. Responsibilities should be clear as should be chain of command.

For my simple calculations, depreciation was included in its actual sense not a tax fiction. I included operating cost, maintenance, cost of replacement for items at the end of useful life, etc. I did not include replacement of the vessel with a new, since my scenario has no income side, so there is no way for me to create that sinking fund. My operating analysis was just that: can I afford to run the boat over a period of time with no economic encroachment on use. Cost of acquisition was not booked. I from time to time adjust my calculations and keep a very accurate accounting on QB's. I can graphically view my annual expense curve and forecast for replacement equipment (which is funded out of my pocket, but at least gives me a planning tool)a little folksy, but it seems to work for me. With this system I can tell what I paid for boat soap in june of 2014. Of course I do not have nearly the complication or size of the annual costs of the OP

Yes, but the principles you follow can do well for anyone. Size of the costs don't change that. We have no income or revenue on our boats either. However, do have projections of replacements and what we're willing to spend over time. To me the purpose of what you're doing or we're doing is to understand where the money is being spent and what the cost is.

Indeed,

Thus, we decided it was a good time to REFIT the boat. It's been in dry dock since August and will come out in March for the Bahamas. April/May, shipyard... Finish what we started. June another trip to the Bahamas, then in shipyard for a full paint job. Plan is to be complete in mid-November.

If your boat has already been in refit for 7 months, and it has not been painted yet, something is definitely wrong. I can't imagine a full refit on a 112 taking more than 6 months, including paint. You are not going to have your boat for a year and a half, except for a few weeks? Although I do not know your refit list, this seems to be quite a lot of time. Now maybe you purposely put it on a slow track, if so, I take what I said back.

Another practice you may want to adopt is to require your captain to provide an annual budget with a corresponding column for actual expenses with as much detail as you'd like, and provide that simple spread sheet to you monthly. Some of the costs may not commit themselves to monthly reporting ( like insurance, which may be paid annually or semi annually). But a note section along the horizontal comparison can note any timing issues. or other explanation for anomalies. You'll have a good handle as to where you are expense wise at any given point. If you haven't already done so, maybe you can reconstruct the prior years for comparison/control. This sheet would also show you where you might cut costs, like replacing some dock fees with anchorage fees - a big savings.

This thread perfectly illustrates the immense value of yachtforums.com.