Buy a sailboat with professionals and get a good return on investment

Beginner's investment guide to buying a sailboat

Buying a sailboat

Have you thought about buying a sailboat? How big an investment would such a boat purchase be? What business benefits can you draw? Is it time to buy a new sailboat? Or should you perhaps focus on buying a used one? There are many questions and considerations when you are a beginner, and it is only right that you should do proper research before such a big purchase. You have to investigate, gather information, analyze, draw conclusions and make decisions. As we have extensive experience and knowledge in the boating industry, we felt like taking a professional approach and so we put together a simple investment guide to buying a sailboat. One or more.

Whether it's a one-off event or we're talking about a long-term strategic boating investment plan, this guide should answer the basic questions. Our hope is that if you're thinking about investing in a beauty that floats on the world's oceans, you'll find our investment guide useful in planning your eventual purchase. Whether you live in Stockholm, Gothenburg, Malmö, Uppsala, Kiruna or Linköping, you have the same opportunity and the same fair conditions to buy a sailboat abroad.

We have thought of all the most important aspects and are at hand to answer any questions you might have when the time comes for you to buy your first sailboat. Take the opportunity to get in touch with us and we'll help you make a more informed purchase decision!

Sailboat as an asset

Buying a sailboat can mean many things and can be done Buy a sailboat

for many reasons. However, investing in a boat as an asset can be more specific. When you put a boat purchase in the perspective of an investment, you have specified the meaning and reason for the purchase decision. The natural thing is that you want to make a good deal, a deal that is beneficial and provides a good return. When you want to buy a sailing boat for rental, you have secured an annual return from rental income. As a bonus, you also get to bring your loved ones along for a wonderful and relaxing experience, to enjoy the best of the sailing trips that your yacht can offer. What a bonus!

"You get a good return every year according to a fixed or variable model and of course we help with financing if you want help with this."

-Einar Halldin, founder of More Sailing

Partnerships with boat rental companies

Buying a sailboat and renting a sailboat are profitable, but also resource-intensive activities. That's why it's good for you as an investor that there are boat rental companies that are always looking to add more boats to their fleet. You can make partnerships with them, where you own the boat, sail it and receive income from it via your partner.

You own the boat and let your partner take care of it when you are not using it yourself. This makes boat ownership both easy and financially smart for you. The principle is win-win, you own the boat and your partner takes care of all the administration, service and rental of the boat. Income and expenses are then split, based on business terms and programs agreed between you and your partner.

Professional assistance when it's time to buy a sailboat

If you are a newcomer to the yachting industry and feel insecure in the role of a yacht buyer, as it is a more advanced and complex buying process, especially if the purchase is made abroad, you can always agree with your partner that you will receive help and professional assistance throughout the yacht buying process.

You should consider that your partner should have well-established business relationships with the major shipyards to ensure that you get the best value for your investment. Since you are negotiating on a joint basis, your negotiating position is better than if you were negotiating on your own behalf. However, the elements that govern the requirements for negotiating the purchase of a sailboat should include information on the following:

• Your investment budget
• Pay-off time
• Revenue targets
• Specification requirements of the boat
• Best quality
• Preferential price
• Resale value
• Charter Market demand
• Boat Market supply
• Sailing weeks

"Either pay 100% and get a good return every year or pay 55% of the boat, the rest is then financed by rental income."

-Niklas Engstrand, boat salesman at More Sailing

Form of ownership

When buying a sailboat, it is good to know that you can own your sailboat fully or partially, directly or indirectly. However, you need to be aware of strange pledge or deposit agreements, as well as "forward sales" where you are in practice not the owner until many years later. Instead, make sure that you really own the boat from the start. Your boat needs to be owned through a company when it is rented out. As a buyer, you should be able to benefit from a consumer guarantee and have access to the preferential financing that a dealer can offer. When the seller is a private individual, the Consumer Purchase Act does not apply, only the Contract Act, which does not provide the same security in the purchase and rental of your sailboat.

Legal requirements for buying a sailboat

When you want to buy a sailboat abroad, different rules apply in different countries, but there is a framework requirement that you as a boat buyer should consider. The more in-depth knowledge you have, the more control you have over your boat and your purchase. Make sure you have up-to-date documentation that tells you when all repairs and other services have been carried out on your sailboat. At the end of each season, with the payment of your rental income, you should receive a summary covering all aspects of your boat. You should also consider taxes, safety regulations and country-specific regulations.

Financing

The biggest challenge when buying a sailboat can be financing. Today, there are entities that specialize in financing boats, mainly through banks that have an in-depth understanding of the subject and also offer competitive interest rates. You can check with Einar Halldin at More Sailing regarding more specific details and financing options, but he can also go through the different parts of the checklist with you or with you, completely free of charge. Welcome to book a free meeting with us at More Sailing!

Checklist for the first purchase of a sailboat abroad for all newcomers to the boating industry, can be summarized as follows:

• Form of ownership
• Legal requirements
• Financing
• Charter Management Program
• Overhead Costs
• Revenues

Charter Management Program

Terms for the rental of your sailboat are determined and controlled via the Charter Management Program, which includes the obligations and rights of the boat rental business. The two most common charter management models in the industry are the fixed guarantee model and the performance-based model. The guarantee model is usually offered on a limited number of boats and with specific requirements, while the performance-based model tends to be more flexible.

Overhead costs

Operating costs can vary depending on the boat model and of course on the contractual terms agreed between the parties involved. Some of the most common overheads are taxes and fees, fuel, staff, cleaning, consumables, etc. As a first-time boat buyer and future boat owner, you should consider all potential costs in order to have a reasonable basis for your investment calculation. You want to know how much revenue the purchase of your sailboat will need to generate in order for the investment to break even and provide a return.

Revenue

As we mentioned in the section on charter management programs, you can usually choose between a guaranteed or performance-based revenue model. Revenue is probably the biggest reason for deciding to buy a sailboat.

The guaranteed income is usually based on a percentage of the boat price. This income is usually the net amount you will receive and there is no extra cost to your ownership, meaning you are not responsible for the boat's expenses. The income is usually paid monthly to match the lease payments for the yacht, if any.

Performance-based income is usually based on a breakdown of weekly rental income for the boat. The income is usually divided into three categories:

• Brokerage commission
• Charter base commission
• Owner's share

Percentages tend to vary, but the owner's share ends up at 60-70%, according to industry standards. The broker's commission is the portion received by the company that has the end customer, usually a travel agency or tour operator somewhere in the world. The charter base commission is the fee charged by charter companies. In simple terms, the split can be explained as a 35/65 split which is a common term in the industry.

"The boat is bought and owned in a company that you own. The boat is VAT-free in the company."

- Niklas Engstrand, boat seller at More Sailing

Advantages and disadvantages of buying a new or used sailing boat

If you have a limited budget to be able to buy a sailboat that is new, you probably think about buying a used sailboat instead. It is a very common situation that a boat buyer can find himself in and we have therefore listed the advantages and disadvantages of buying a new or used sailboat. Go through the table below and read about the advantages and disadvantages you can expect from each type of boat. Use the information as part of your decision-making process, as the features we have listed in the table will help you know which are the most important boat features you need to look at and research when buying a sailboat.

New sailboat

Advantages

• Latest in design
• Better functionality
• Tailor-made solutions
• Overall price is reliable
• System maintenance minimal

Disadvantages

• Higher price
• Longer delivery time
• Greater loss of value

Used sailboat

Advantages

• More boat for the money (if equipment is recently updated)
• Tested and customized boat
• Good boat for reasonable price

Disadvantages

• Less boat for the money (if old systems need to be replaced)
• Poorer selection
• Unforeseen costs may be more likely to occur

Next steps for buying a sailing boat

We recommend that you use external sources of information to find relevant facts that will help you answer questions that have arisen while reading our investment guide on buying a sailboat for beginners. You should do proper research and have a solid foundation at your disposal when making the decision to buy a sailboat. Take the opportunity to get in touch with us for a short conversation or a meeting, and we will help you close the deal!