INTRODUCTION
AS AN ALTERNATIVE TO PRIVATE OWNERSHIP Why these alternatives? There
will always be that group of yachtsmen who will own yachts privately and commercially for their own personal/corporate satisfaction.
I applaud them and look forward to working with those individuals in finding the right yacht to meet their specific needs!!
What we are finding though is that the cost of ownership continues to spiral as Marina properties turn toward Real Estate
developers, insurance costs continue to increase in attempts to cover losses due to over active hurricane seasons, a downsizing
of our economy limits available cash for un-essential assets and potential owners find that they have less and less time
available to manage the requirements of yacht ownership and still have the time for owner usage. With this in mind, for those
who wish to explore this alternative I am going to break the offering into specific groups. If you are interested please feel
free to contact me either by phone or email. john@jgayachting.com or 954-821-6450
FRACTIONAL OWNERSHIP
A true fractional is simply a group of individuals who have a common interest coming together in ownership
and usage of an asset under a corporate umbrella. This group can be family and or friends, clubs and or business oriented
associations. It can also be done by using a professional broker who has, through client association, individuals who have
the same interest.
There are a few key points that need to be reviewed as you consider
the different offerings:
1. COSTS, generally each fractional program consists
of Capital Cost, monthly maintenance and management as well as potential variable costs typically related to usage, i.e. fuel,
transient dockage, provisioning, possibly the Captain depending on the yacht and size. Ownership is generally in shares of
an LLC and usually has an end of term date where the vessel is sold and residual returns are distributed back to the shareholders.
Each program identifies the number of shares per the LLC agreement, this can vary from typically (4) to as many as (10) based
on yacht size.
2. USAGE, this will vary depending on the number of shares,
downtime for maintenance and delivery time if to be operated out of multiple locations, usually established in the offerings.
Usage in some arrangements may be sold for income where a charter opportunity exists within the program.
3. LOCATIONS, typically pre-defined for booking purposes by the owners.
4. YACHT
TYPE, Typically new yachts, though there are the possibilities of a used yacht where there is an agreed upon Fractional
opportunity to present. As noted above I am focusing the opportunities primarily around the Catamaran Marketplace.
These are the basics. Each offering needs to be considered in detail in that very few are operated in the
same fashion. There are potential finance options, there is the potential of tax advantages. Each must be taken into consideration
separately and legal and tax advise is recommended in any case prior to proceeding to any purchase. In that the trick is to
fill a complete yacht by the parameters of the offering, most offerings are presented without an ordered or pre-purchased
yacht, therefore refundable deposits, time dated are often taken be sure that these terms are understood and what the requirements
are once a complete group of shareholders have been assembled.
Fractional Hunter Sailboats
Fractional Catamarans
