At Catamaran Central, we’ve been fortunate to have helped clients buy and place boats into crewed yacht charter for almost a decade. We’ve seen what works and what doesn’t work. We’re often asked, “Is buying a catamaran for charter use a good investment?” With everyone’s individual financial situation different, there isn’t a simple “yes” or “no” to this question. Here are three reasons why it can make sense to buy a catamaran for a crewed yacht charter.
There can be serious tax advantages for buying and placing a catamaran into a crewed yacht charter program. The tax advantages can vary from interest cost, marketing cost, operating expenses, and most attractively accelerated depreciation. Discussing any tax savings with a trusted accountant or tax attorney is highly recommended.
Most of our clients that buy catamarans to place into charter can depreciate the cost of the yacht, which can help significantly reduce their tax liability. The Tax Cuts and Jobs Act of 2017 allows for an accelerated depreciation of 80% for equipment placed into service in 2023. The bonus depreciation allowable in 2024 will be 60% and ramps down to 0% in 2027. This does not mean a buyer is unable to write off the depreciation, it simply reduces the amount of accelerated deprecation a catamaran owner can claim in the year the vessel is purchased.
In addition to depreciation, a boat owner who places a boat into charter use could also deduct the cost of maintenance, dockage, fuel, provisioning, and any other operational cost associated with the vessel.
We are not tax or accounting experts, please do not consider this tax advice. It is highly advisable you speak with your accountant or tax attorney.
A lot of charter catamaran owners started out as charter guests and then fall in love with vacationing on a yacht. We personally charter a couple of times a year and can attest to the fact it is the best type of vacation in the world. For a lot of our clients that take the leap into ownership, they like to spend anywhere from 3 to 8 weeks a year onboard their boat. With the cost of a 7-night charter ranging from $25,000 to well over $100,000 owning a catamaran in crewed yacht charter can significantly offset the cost of use. In the case of a boat like a Lagoon 620 which charters out for $40,000 a week, this can easily add up to well over $100,000 in savings annually.
Having a catamaran can be costly, and the expenses escalate significantly when you step into ownership of a larger catamaran. Placing your catamaran into a charter operation will significantly help offset the cost of ownership. The goal for any owner is to hit the breakeven number of charters and depending on a number of factors, this can be anywhere around 12-18 weeks of revenue charters.
If you are interested in placing a boat into charter or have any questions on the business side of owning a charter boat, please don’t hesitate to reach out. We have extensive knowledge in the crewed yacht charter space and are always happy to share our knowledge with potential charter catamaran owners.
