If your dream of life is on the water, you should know you have other choices besides buying a boat. You can choose chartering a boat, or fractional ownership of a boat.
Which one should you choose? buying a boat vs chartering a boat vs fractional ownership?
You should choose based on your budget and how often you use the boat. You should buy a boat if you want to use it whenever you need it and prefer the boat layout to fit your lifestyle. if you use the boat once in a while then chartering a boat or fractional ownership be a better choice.
What is buying a boat?
When you buy a boat then you have full ownership of this boat. You own this boat completely, and at the same time, you are responsible for all costs completely.
Below list of advantages and disadvantages of whole ownership of a boat
- Pros
- You can use the boat whenever you want it.
- You can customize your boat the way you want it. Whether you choose a big gallery or install one more cabin on your yacht for your guest, it is totally up to you.
- Cons
- You need a big sum of money upfront to purchase the boat.
- Besides purchase costs, operation costs, and maintenance costs also take subsequent amounts of money.
- You stuck with the original boat design you choose many years ago, even if your life changed or your circumstance changed.
- Whether you use it or not, maintenance costs and storage costs occur.
Is buying a boat a waste of money?
Some people say that a boat is a terrible investment, but I do not agree with it.
I do not believe that buying a boat is a waste of money. If your dream is to own a boat and you have a budget for it, then go for it. After all, happiness can not be measured by money.
A memorable moment with your family or your friends is worth the money and effort.
However, you need to be aware that owning a boat is costly. Besides the purchase capital, maintenance cost, fuel cost, insurance, and slip fee should all be considered.
When is a good time to buy a boat?
The majority of people will suggest that when you have enough funds, I would add one more condition which is when you have plenty of free time.
Every time when I walk around the dock, I see many many boats that’s covered for a long time and probably have not been used for half a year.
It is a pity if you have the money to buy it but seldom find time to enjoy it.
What is chartering a boat?
When you charter a boat that means you paid to have the right to use the boat for a period of time.
- Pros
- You do not need to pay a big amount of money up front to own the boat.
- You can choose different boats or yachts that fit your vocation plan. If you are fishing, you can charter a fishing boat. If you bring family and friends with you, then you probably go on a big boat with 2 or 3 cabins and a fully furnished gallery.
- You can charter a new boat with the most modern design instead an old one.
- You only need to pay the crew or any amenities during your chartering period.
- Do not need to worry about boat maintenance, storage cost, etc.
- Cons
- Sometimes you may not find the exact boat you like to charter.
- Chartering prices fluctuate with the market demand. When the demand is high, you need to pay a high price to get the boat.
- Chartering prices are normally not cheap.
Buy vs Charter
If you have enough funds and plan to use the boat a lot then buying a boat is a good choice.
If you either do not have enough funds or do not have plenty of time to use the boat, then chartering a boat/yacht will be a better choice for you.
Chartering a boat/yacht is a smart choice, especially if you are new to the boat. You can use this period of time to get to know boating. Your boating experience will help you to make a better purchase decision and also prepare you to own a boat/yacht.
Rent vs Charter
Generally speaking rent and chartering are the same. However many times people prefer to use rent small boats and charter on big ships.
Rent is associated mostly with small personal watercraft, such as renting a fishing boat, renting a sailboat, etc. The rent fee is normally a small amount of money, maybe a couple of hundred dollars to rent a small boat.
Chartering is associated a lot with commercial ships or big yachts. It is common to cost thousands or millions of dollars to charter a ship or a yacht.
During 2018~2020 many wholesalers like Walmart, and Target chartered cargo ships to ship their merchandise from Asian countries to the US. Amazon also chartered different cargo ships during this time period to ship their products from china to the US. The average chartering cost of a cargo ship (which can carry roughly 100~200 containers) is $10,000 per day.
The average chartering cost for a yacht (which can hold 10~15 guests, 100 ft~165ft long) is approximately $64,000~$17,5000 Per week.
Related post– 11 Things You Should Know About Cargo Ship check this article to know all about cargo ships.
Is it cheaper to rent or buy a boat?
It is much cheaper to rent a boat if you do not use it regularly.
If you plan to use your boat a lot and like to do the work on your boat, then you will have more fun owning a boat.
- Here is a list of common costs associated with owning a boat
- Purchase price
- Tax
- Trailer
- Boat Insurance
- Boat registration fee
- Slip fee or marina fee
- Maintenance
- Boat equipment & accessories
Here is a good video to compare buying or rent a boat https://shipguruusa.com/boatrent
What is fractional ownership?
Fractional ownership of a boat means you own some shares of the boat. You only need to pay the fractional price to own part of the boat asset.
Fractional ownership can be a good idea if you find like-minded friends to purchase an expensive boat/yacht together. You and your members can share the cost and responsibilities.
- Pros
- You can own a fraction of the boat with a small amount of money.
- You have fewer burdens and stress to shoulder all responsibilities.
- You have fewer financial burdens to cover all the costs.
- You have the freedom to go anywhere during your contract time.
- You can sell your share when you do not want it.
- Cons
- You can not use the boat whenever you want
- You can only use the boat based on your agreement with your shareholders.
- You are a fractional owner of the boat/yacht, and at the same time, you need to share the fractional cost.
Final thought
Personally, I would choose to rent/charter or buy a boat. When I rent or charter a boat, I do not need to worry about maintenance costs, storage costs, purchase costs, and all kinds of costs associated with a boat owner. I can rent different boats to meet my vocational plan, either fishing one day or sailing another day. I have choices.
Buying a boat may be my choice too when I retired and have more free time to enjoy boating or sailing.
I probably will not choose fractional ownership of a boat/yacht. if I have to wait a certain time to use the boat, I might as well rent a boat. Renting/chartering gives me more freedom and flexibility than fractional ownership.
Final tip: Join a boat club. A boat club will provide you many practical informations on training, boat trade, events, etc.
