Will Bruton looks at the pros and cons of buying an ex-charter yacht, and speaks to a number of brokers for advice on what to look for

Yacht charter companies increasingly own new yachts for only a few years, selling off sooner to ensure they can offer the latest models to customers. Meanwhile an older, heavily used ex-charter yacht can be listed for sale at very low prices. Does either option represent a good buy for the private owner?

Visit any charter destination around the world and you’ll find yachts that have suffered the punishments of a life for hire. Scratches and bent stanchions are par for the course on something that is used for a week or two, then handed back. But unlike many yachts on the used market, charter boats are used regularly – meaning maintenance is regular. If you’re considering buying an ex-rental boat, understanding the charter business is key.

Business models

Stephen and Estelle Cockroft run catamaranguru.com, a community site for catamaran buyers that has evolved into a successful international brokerage, acting on behalf of both buyers and sellers. They have dealt extensively in ex-charter yachts over the past 20 years.

“Understanding the two major types of ownership programmes charter businesses run is important,” explains Stephen.

“They are quite different. ‘Guaranteed income’ programmes give the owner of the yacht a cheque at the end of the month at an agreed rate. On these yachts, owners have much less control over maintenance and the charter company oversees decisions.

On ‘shared revenue’ programmes, the income is not guaranteed to the owner, but they have more control over maintenance. “Standards vary a lot between charter operators, so it’s important to ask the question: ‘Who was motivated to keep this yacht maintained up until now?’” thinks Stephen.

An ex-charter yacht which has been updated often

Charter models are updated frequently – this is the new Leopard 50/Moorings 5000. Photo: Adam Rohrmann

Phasing out

‘Phase out’ is generally something offered by the larger charter companies and covers a period of time up to a year in which the yacht is made ready for sale to private owners at the end of its time on charter.

Neil Bingham is a broker for charter company Sail Ionian’s in-house brokerage SIP. “Quite a few of our yachts are sold on to charter clients. We like buyers to use the yacht, and most are sold while they are still in service on charter.

“They’re offered for sale during the last planned season – this allows the yacht to be checked while in use and to make sure all the equipment is working properly.”

Most Sail Ionian yachts are sold at around the five-year mark and Bingham is straightforward about what this means in terms of wear to the boat. “We see yachts that are five years old like a car with 60,000 miles on the clock. It’s still good and transitions into private use without major problems.

“Sails will still be in good condition, still retaining good shape, but upholstery and canvas work might need replacing. The dinghy might need replacing too. At the seven to eight year point an ex-charter yacht will start to need significant money spent on it and will naturally have more problems to fix.”

Managing expectations

Stephen Cockroft explains that, even when purchasing from a large operation, buyers shouldn’t expect to see comprehensive maintenance records. “Due to the nature of how charter yachts are used, not much time is spent keeping records. When there’s a problem between charters it’s fixed quickly so the boat can go back out.

“As a buyer of one of these yachts you can only rely on your own survey and, in our view, it must be truly independent. We have seen supposedly surveyed yachts with undeclared hurricane damage, evidence of hard grounding, and all manner of major undeclared faults.”

Because charter yachts are used regularly, mechanical maintenance standards can be surprisingly good on younger yachts, despite cosmetic damage. Photo: Denys Vinson

In the case of yachts with a phase out period being sold from a charter programme, there’s sometimes scope to survey the yacht while it’s still being chartered.

“A pre-phase out survey will help you negotiate what is fair wear and tear and what needs to be fixed before a final price is agreed. You can then stipulate that this work will be checked by another survey once it’s complete. This makes a boat that’s being phased out a much more attractive prospect and helps you manage your exposure to risk,” he explains.

Number crunching

Because the ex-charter yacht market is so varied, it attracts a broad range of customers, explains Bingham. “Yachts do come on the market that have been chartered for 20 years or more. That I think attracts some [people] who want something for nothing, so we do see people that aren’t realistically going to buy from us. What we tend to sell, at the five-year point, is a clear prospect and the yacht still has a significant value in it.”

However, he points out that charter companies are not immune to the increased demand for new yachts that other sectors of the market are experiencing. “Due to our own supply of new yachts being restricted in 2022, we are also hanging onto some a bit longer than we used to.”

The business model charter companies use, not owning yachts but instead relying on external owners, largely dictates the ex-charter yacht market, explains Estelle Cockroft. “With returns up to 9% per annum, buying a yacht from new and putting it into charter is an appealing prospect, but the value of the investment returned at the end of the agreement varies a lot. If an owner from new gets 55% of the invested value back when the yacht is handed back to them, or it is sold onto the ex-charter market, I would say they are probably doing quite well.

“However, some charter companies are working on a 20-year agreement, which is unlikely to stack up for the original investor. This all influences ex-charter yacht sale prices, and you shouldn’t be paying over 60% of the new yacht value – although in these times where the market is starved of supply, plenty are!”

Skye has been chartered with Sail Ionian since 2017 and is now for sale. Photo: Sail Ionian

Good used condition

Pete Green, managing director of Halcyon Yacht Delivery, regularly moves ex-charter yachts, and sees significant variations in how well they have been looked after.

“Charter yachts are generally used week-in, week-out throughout the season. They are often skippered by relatively inexperienced sailors and are worked hard. This means that the risks of bumps or even groundings are much more likely than with a privately owned yacht. A full and thorough survey should highlight any potential structural or mechanical issues, which must then be rectified before the boat goes back to sea.

“Superficial damage will be obvious to the naked eye but do look out for scratches or dings and get a quote if you will want to rectify these. On the plus side, the fact that the yachts are well used means that the systems are usually all working well. Fuel issues like diesel bug are much more common with privately owned yachts that have been stood for longer periods.”

Halcyon skippers are used to dealing with faults on charter yachts they move and have encountered both basic maintenance neglect and more serious problems, Green reports:
“Some charter yachts are only used by day. We have turned up to yachts to deliver and found that none of the navigation lights work!

“Moving a boat for a flotilla company in the Med, the toilet outflow was calcified and almost like a stone version of arterial sclerosis. Whacking the tube on the quay for half an hour did the job. This affects all the yachts in their fleet – replacing the tubes every couple of years could save a lot of hassle.

“There’s a greater chance a charter yacht may have been misused, for example grounded and taken a knock on the keel, and this not being reported when a client handed the yacht back.”

ex-charter yacht as purchased

The Leopard 58 was popular with charter companies. Photo: Kelagopian

I bought an ex-charter yacht

Gabriele Fantini recently went through a handover from Sunsail of a 2015 Leopard 58 catamaran which he is now delivering to the Caribbean.

“The yacht I took over, at six years old, has been heavily used but you can also see it has been really well-maintained underneath. Component choices, like deck gear for example, will perhaps not be what you would specify as a private owner as they have a close eye on budget and it’s worth bearing in mind that the whole set-up has really been thought through for coastal sailing.

“Sunsail were extremely professional throughout the survey and handover, but they obviously don’t do more than they need to. One thing I was struck by, having skippered brand new catamarans, is that this process was perhaps easier than tackling a yard while a brand new yacht is under warranty. That can be a very protracted process.”


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