What's an average yacht program look like?

Very interesting thread and an eye opener for me as to costs. Thanks for sharing

Comment from the smaller-boat audience, and pardon if I didn't understand you comment: Your Captain shouldn't be made to feel like that at all. Should be a mental partnership between owner and Captain. Of course that means the onus is on both to make that happen.

And FWIW, that likely doesn't always mean complete agreement during the analysis phases. I, for example, as both owner and Captain... often don't completely agree with myself while I'm trying to work out a way forward.

-Chris

A fun little tool to play around with.

https://www.luxyachts.com/yacht-cost-calculator

I did a 112' boat there with 10 weeks of owner usage and the low end was $847k and the high end was $3.8 million with the middle ground being around $1.4 million so $1-1.2 million seems achievable. The $1.4 million number does include a $200k reserve for capital repairs, $20k for interior, $86k for exterior, $66k for "engineering"/equipment rebuilds, and $30k for other equipment such as AV, Tender and Electronics.

That tool gets exaggerated if used outside the 20-80% range. I couldn’t imagine a 112 being $3.8M yearly even when you consider that includes fairly high reserves.

Yes, it does, as the instructions advise.

So we have a fair number of very seasoned captains on the forum, I think. Can one or more of you give us first hand knowledge of the average annual costs of operating a recreational vessel in the 110-120 foot range in a similar manner as described by the OP? Maybe another owner?

Heh... don't feel like the Lone Stranger... almost nobody is born knowing everything about boats and boating.

Heard of a Captain the other day -- who was also acting as broker for a boat some friends were looking at, who didn't know, when asked, where the watermaker was.... There are many circumstances where that might not have been a surprise response, but in this case it apparently didn't lead to instant trust.

-Chris

How long is a piece of string? There are so many variables to consider. Such as age of the boat, owners usage level, distances traveled, geographical location (ease-of-shipping for spare/replacement parts), construction material (fiberglass is much less expensive to maintain than metal).
As an average I would suggest a range somewhere in the neighborhood of $100K-$130K/month. This is an all-in number, including insurance, payroll, dockage, maintenance, etc. It does not, however, include Capital Improvements.

5 years ago a very heavily used WP 130 was about 1.7 million

Thanks gentlemen. At least its some real world info to add to this discussion. Seems the operating cost exceeds $1.2m by all measures, so anyone who is thinking it might be $750K is in for year end sticker shock?

These number are way out of my wheelhouse! I'll keep my little Post....

Broker said "400k to run boat"
Time to find another broker.
I've had many an argument with brokers about this. To them they always low ball running costs, they want to sell you the biggest boat possible, if he told the truth, you might buy a smaller boat for less money.
Honest question: If he told you 1 million a year, would you still have bought the boat?

I'm a longtime forum lurker, and until now, a never poster. My family and I have been chartering boats from 112' thru 170' for almost a decade. Over the past several years we have been contemplating the purchase of yachts of similar size. On each occasion, the numbers do not work in comparison to chartering. We frequently charter W112's at $45k/week and w130's at $90k/week. We have spent more for larger boats, but have found that the extra space and extra crew to be more of a liability than an asset to our enjoyment. Our typical load is 2 adults and 5 kids. Even as we approach 5-7 weeks of charter a year, it still makes great financial sense for us to continue "renting" in lieu of ownership. I think as we head towards retirement and the ability to spend 8-10 weeks on board, we will still charter. Based on our particular needs, the best captains and brokers always seem to whisper in our ears.........."never purchase".

Regards,

David

One little thing can make a significant difference too. Many do bottom paint annually. We average 2.5 years. However, we clean the bottom every three to four weeks and never scrape it. We do prop speed annually. We use hard rather than ablative paint.

Your usage likely determines how much of your crew is full time and how much you fill in.

I've attempted to normalize our costs, removing extras we provide such as condos for all our crew and treating the crew as full time assigned to the boat, when in reality we save on the 130 because our crew works on other boats we own. I've also eliminated meals when at home and put only the costs when cruising. Ours is still quite high as we often take everyone aboard including crew to five star restaurants. However, we save on beverages as we very seldom consume or serve alcohol. Our marina costs are high as we very seldom anchor. Also, we include all costs for entertainment, for us, guests, and crew. We've also adjusted dockage to leasing rather than owning.

Here's our adjusted average on a 130

Food, provisions, entertainment. $220k
Transportation to and from boat $65k
Crew salaries $720k
Fringe benefits including payroll taxes, health insurance, 401K $170k
Uniforms, licensing and training $60k
Insurance $70k
Regulatory, Legal, Accounting, Administrative $24k
Dockage $100k
Customs and port fees $20k
Fuel and lubricants $150k
Maintenance (including bottom paint, diving, consumables, chart subscriptions, equipment, tenders) $120k
Communication (satellite phone, internet, tv) $50k
Total average operating expenses $1.769 million

Now that reflects no refits, no rebuilds, nothing major as we haven't yet done anything major. It also doesn't include depreciation.

Our capital reserve started at $200k per year but has been reduced since no expenditures so now an average of $170 per year.

Depreciation about $1.5 million per year on average over the first five years with more at first and starting to depreciate less now.

To change that to a 112':

Reduce salaries and fringes by $150k
Reduce dockage, fuel and insurance $50k
Reduce other $20k
At our level would be around $1.5 million

While I do think it's beneficial to look at others information, you then need to go through and do your own line by line based on your usage and your hiring and your details.

Something like the calculator on luxyachts is a good place to start as it gives you detailed numbers against which to compare and argue. It's hard to argue with a lump sum of $1.8 million but if it shows uniforms of $31,000 then you can quickly say what you think you'll spend or say you don't use uniforms so it's $0. At least it tells you many things you need to budget and helps you not overlook any.

They casually toss out those numbers. Go back and bill him for the excess. See the reaction. That's not a misjudgment or mistake, that's a gross misrepresentation. Either the broker or captain or whoever knows no better in which case they're incompetent or they're intentionally misrepresenting in which case they're dishonest. Neither incompetent or dishonest is good. The potential is ruining the experience, which I'm glad you haven't let it do to you.

Another place I've seen serious misrepresentation is telling one the size crew required and the pay for various crew positions. Now, in my numbers for crew costs, you could reduce those costs if not flagged US and using a US crew if that was one's choice.

We chartered WP 130's, 112, PM 85, Hatteras, Burger etc for over a year and absolutely is less expensive for any normal usage. We chartered a total of 30 weeks in one year, 36 weeks in 15 months. Even at that level, by the time you figure depreciation, chartering is less expensive. We spent nearly $3.6 million chartering in those 15 months (including expenses and tips and other), an annual rate of $2.9 million. That compares to an operating cost of $1.8 million without depreciation and capital reserves.

Financially, chartering, partial ownership/timeshare, and many other arrangements make sense. However, we still chose to and will continue to own. We like being able to personalize, to keep stuff aboard, to have our own, to have our own crew, and all the other aspects of owning, but would never profess it makes sense financially.

If you spend as many as 20 weeks a year using a boat, then I'd likely recommend owning. Fewer than 10 weeks, then absolutely chartering. In between one must look at all the factors.

Now, of course, the other option is to own and then put your boat into charter to recover some costs but that has it's own pluses and minuses.

But then we own cars we drive 4000 miles a year and a house we're in 120 days a year and wouldn't change a thing. I don't let the CFO in me run my life.

And just like that, you're now speaking like an educated and seasoned boat owner.

Here's the engineering side of the program.