Whitsunday Charter Investment
If you have plans of buying a catamaran to go cruising in say 5 years but just can’t wait that long to get out on the water and start learning the ropes and living the cruising life, then you should really consider a charter investment. Not only can you enjoy cruising in an idyllic location like the Whitsundays within the safety-net of a fully managed charter fleet, but charter investments also offer an economical path towards accelerated boat ownership. How? Well the Whitsundays for many years has been Australia’s favourite destination to ‘bareboat’ charter sailing yachts and catamarans, with the magnificent islands, anchorages, beaches and resorts that this world heritage area has to offer. As a result, the destination is a major drawcard for charterers from Australia and around the world, who pay good money for the privilege of chartering someone else’s sailing boat. This revenue is collected by charter companies and distributed with approximately one third spent on sales and marketing, one third for the cost of turnaround and maintenance and one third returned to the owner as gross profit before interest payments and taxes. The investor may use the boat privately provided they document their time and adjust their tax return accordingly. Typically two or three weeks annually are allowed for in the charter agreement plus unlimited standby use when the boat is not being chartered. The charter companies take on management of a fleet of charter boats that cater to various segments of the charter market and operate under tax ruling TR2003/2004, requiring each vessel to operate as a separate stand alone business with a realistic expectation of profit during its life. The investor is entitled to a GST rebate and depreciation up to 30% per year. (Note: Independent tax advice is required). The charter fleets that operate in this area are well established and professionally run after decades of refining their maintenance systems, building new and repeat business through international marketing programs and ultimately selecting reliable and quality boats that will stand up to additional use that charter boats endure. Seawind have been a favourite choice of charter fleets over the years, due to their robust cruising designs built for Australian conditions, which also happen to make excellent charter vessels – this is an important difference to other brands, as a Seawind catamaran will continue to be a great cruising boat after its initial charter life and historically shows strong resale values as a result, as opposed to a ‘vacation style’ charter boat with the typical four cabins and four bathrooms. These boats will make returns in the short term, but they are simply not practical for cruising and therefore offers little appeal to a long term owner or future used boat buyers. Seawind remain the dominant brand for charter catamarans in the Whitsundays with more Seawind bareboat charter vessels than any other, while sailing catamarans in general are rapidly becoming the most popular type of charter vessel in the world. Currently five bareboat charter management companies offer the opportunity to obtain a good return on investment for Seawind sailing vessels in the Whitsundays. Here is a current example of projected charter revenues and expenses for the 4 Cabin Seawind 1160. | 4-Cabin Charter Seawind 1160 | $513,477 | | Number of Days on Charter per Year | 180 | | Number of Charters per Year | 26 | | Average Charter Rate | $660 | | Total Revenue | $118,800 | | Charter Management & Marketing | $41,580 | | Turnaround & Maintenance Costs | $35,247 | | Operating Profit | $41,973 | | Return on Investment | 8.3% | | (Note: All figures exclude GST) | |
The prices above are for a charter ready bareboat, which is a charter vessel fully equipped with all the modern conveniences necessary to provide a self contained holiday afloat. They have all the safety equipment and approvals from Queensland Transport for operation in the partially smooth waters of the central Whitsundays region. The bottom line is that the Seawind 1160 operating profit is equivalent to an asset worth $560,000. In these uncertain financial times the 4-Cabin Seawind 1160 in Whitsunday Charter is a tangible asset that is arguably better than shares or housing. Finance for commercial bareboat charter is available from Finlease currently for 50% to 70% of the total capital value. A fully equipped 4-Cabin Charter Seawind 1160 with 50% finance after interest payments would return around $21,000 annually. There are also opportunities for the entire range of the Seawind catamarans, including the new Seawind 950, the ever popular Seawind 1000XL2 and the luxurious Seawind 1250, providing various sizes of boats and levels of commitment for investors to consider for their personal circumstances and cruising goals. In summary, a bareboat charter investment is an excellent way of having your own fully maintained boat so you may enjoy your private sailing NOW – not in 5 years! And between now and when you plan to go cruising, charterers help to pay your way towards outright boat ownership and your future cruising life beyond the Whitsundays. Furthermore, you have a tangible asset providing a positive return in these uncertain financial times. To obtain a charter investment plan including financial data and charter boat prices, contact Seawind’s resident Whitsunday sales representative, Graeme Nolan on 0419 255 957 or graeme@multihullcentral.com
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