Boatlife 101: boat co-ownership - How to finance your sailboat?
Why we think boat co-ownership can help you realise your boatlife dream.
Buying a boat is, at the same time, the most exciting and financially most important step you will take towards boatlife. Many people decide to save up for years until they have enough money to buy their dream boat. But some of us do not want to wait. So, what other possibilities does one have?
You could ask for a loan, either from a bank or family. We tried that, but not having a stable income and not owning any property, it was not possible to get a loan to buy a boat in Italy . It might be possible in other countries, but this solution did not work out in our case. So we decided to try another way.
How we financed ForTuna
We decided to double our budget by seeking joint boat ownership - also referred to as fractional yacht ownership, shared sailboat ownership, yacht syndication, fractional boat ownership, and sailing yacht co-ownership. Which in simple terms means we bought the boat together with someone else. It is not a new concept but has become more relevant in the last years due to the rise of the sharing economy. And we can totally understand why.
Co-ownership is a possibility for many investments, which are notorious for going unused for long periods of time, such as boats, airplanes and vacation homes. Looking at the costs involved in those investments, the reasons for joint ownership become clear very quickly. A closer look at the boat market shows that shared ownership is now common to cut down on costly maintenance and overall unjustifiable expenses for dockage, storage or insurance.
How much does it cost to live on a boat?
This does not mean that co-ownership of a boat is easy. You need to get along very well with your co-owners and establish strict rules from the beginning, for the tiniest things, to avoid misunderstandings along the way, which could ruin your boat experience. But it shows that co-ownership of a sailboat can be your ticket to boatlife.
1. Purchase
The boat you purchase should reflect the boat wishes of all the owners and meets the agreed-upon purposes: fishing, skiing, wakeboarding, overnighting, etc. Most importantly, it should be a vessel that all owners can handle and drive safely. In our case, we needed a suitable boat to live on, but it should also be a great space for friends to hang out and spend their holiday together. It needed to be equipped for longer passages while offering comfortable living space. Our Beneteau Oceanis 393 ForTuna was the perfect choice for us. She provides a well build hull and sail set-up for intensive sailing days and enough space in the cockpit and galley to comfortably fit 6 people for more extended periods of sailboat holidays.
15 ways to make money while sailing
2. Legal aspects
The legal side of co-ownership might vary from country to country, so please check the legal aspects in your country. In the case of Italy (and I guess most of the European countries), we outlined a contract between two individuals and all owners were stated in the boat registration. The contract was vital because it explained in detail the % of the ownership of the boat, how the co-owners would handle incidents, who had to pay what for boat maintenance, how possible future investments would be handled and what would happen if one person or all wanted to sell the boat.
In our case, we also defined an end of the contract. After 2 years, both owners were allowed to sell their share. Hereby, the co-owner would have the chance to buy the second half of the boat for a predefined amount before a new co-owner would be approached.
What exactly you want to include in the contract depends on the joint owners. We learned that the more detail the contract has, the less arguing happens later.
Most importantly, the contract should establish the usage of the boat. Simply said, who can use it when and where. In our case, we outlined our sailing plans to our co-owner and we found an agreement on where he wanted to take over the boat. To get a better idea about how we decided on the usage of the boat download our free e-book "Boat co-ownership notes"
3. Personal aspects
Sharing a boat comes with quite some mental stress.
These whole aspects are heightened the moment you live on the boat. The boat becomes your home, and with it, you establish routines and rules, which might be not respected by your co-owner, who might view the boat as their holiday escape where rules and routines have no place. In our case, we could clearly see this evolve. The first time we left ForTuna to our co-owner, we only had lived there for 2 months. Everything was still new to us, and it did not feel like home yet. We had no problems packing up our things and going on a home visit for a few weeks. The second time was different. We had lived on ForTuna for over a year. This was our home now. It was so strange to put away our personal belonging and make space for the holiday home of our co-owner.
Interestingly also, our co-owner felt the change. He told us the boat just felt different. You could see now it was the home of someone. It's like going into a hotel room or a sleepover at your friend's apartment. Even if your friend is not there and he gave you his bedroom to sleep in, it still won't feel like a hotel.
free e-book to learn how to outline a co-ownership contract
Co-ownership Conclusion
We luckily got along very well with our co-owner. Sure we had some disagreements, but we both got what we wanted from this deal. We got an easier start into boatlife, and the co-owner saved on maintenance cost, the need for storage space during the year as we were living on it 24/7 and insurance charges. However, at the end of the 2 year contract, it was clear it made no sense to go on. The boat had become our home.
We definitely can recommend a boat co-ownership to start your boatlife. Just be aware that this might be working out only for a certain amount of time, and you will have to give away your home for a specific time a year.
