Are Yachts A Good Investment?

There are many reasons people invest in boats, for the lifestyle, the love of the sea, the freedom to roam the ocean, the ability to sail across to private beaches, even just to get from A to B in some style. They also invest looking for a financial return, either through buying a run down boat in winter and doing it up for resale in the summer or aiming at the charter market. Some companies even invest in boats as water taxis.

So are boats a good investment, well it really depends how you measure it and what you are looking for?

Boats depreciate roughly at around 10% each year, especially true for mass produced boats. So they are more akin to a car in that an average model will depreciate with time, however a well-known brand, a particularly prized make, or a limited edition with great heritage, unique provenance and perhaps celebrity association can do very well. The last few years have seen the price of some classic cars sky rocket upwards, and with a classic boat that is rare, then you will see it keep its value and in some cases even rise if the prevailing market is good.

With a little clever thinking a boat can be a useful source of income, with the charter of a good luxury yacht ranging from a few thousand to hundreds of thousands of dollars a day for the larger super yachts, even the super-rich have delved into the charter market since 2008. Now everything is considered an asset and put to work raising capital. Many boat owners were relieved to have a physical asset such as a yacht that did not fall as calamitously as shares in the market crash of 2008.

Boats must be well maintained and looked after to prevent the usual wear and tear that occurs on the water. A professional yacht management company is often the best way to preserve the boat in good condition and keep its value as you can show that it has been properly serviced and they can even save you money when it comes to dockage and other operational costs.

Unique British brand Hunton yachts second hand value fared better than most due to the exclusivity factor during the recession. They didn’t have lots of stock, old or new, hitting the market unlike many other brands out there and they have a great pedigree and legendary racing history. They specialise in producing bespoke, quality, luxury yachts, handmade in England. Hunton was founded in 1979 by legendary offshore powerboat racer Jeff Hunton. He won the British Offshore Powerboat Championship six times, a hugely impressive feat. The hull is made of Kevlar composite for world beating stability, comfort, performance and handling in all conditions. The classic deep V hull and top-decks are flawless; teak rolls across the exterior, from the broad swim platform, up the stylish walkway into the cockpit, and extending to the foredeck. Stainless steel work gleams brightly, and high-grade marine leathers upholster the aft sun-pad, C-shaped cockpit banquette and race style seats with double stitching on the exterior upholstery which all exudes a meticulous sense of quality. It is this quality, craftsmanship and bespoke specifications that will all contribute to the return on your investment.

The CEO of Hunton yachts Fiona Pool remarks “Our bespoke one-off builds still form an important part of the Hunton offering,” she adds: “We have many clients who do want that totally bespoke product and we are one of the very few production yards that can offer this.”

A high end yacht supplier in Ibiza, Ibiza Delivers, recently purchased a Hunton to ferry their clients to and from their super yachts. This has raised the value of their offering and brand as they reward their regulars with such a prestigious water based taxi service. It also signals their success to their competitors and peer group alike in a particularly stylish way.

Of course if you really want to make a huge return on your investment, don’t just buy the yacht, buy the yacht company!

In 2010 FL Partners invested in Sunseeker on behalf of their clients and then Wang Jianlin, the chairman of Dalian Wanda, bought Sunseeker for £320 million in 2013. This obviously made FL Partners’ clients very happy. Golfer Rory McIlroy is reported to have made around £2 million on his investment.

Wang Jianlin was originally looking at buying around thirty Sunseeker boats for a series of marinas he was building in China. So he figured it would be cheaper to buy the company. FL Partners are said to have made 10 times their original stake in the deal. This is clearly the way to go if you really want to make the big bucks. British brands are particularly well regarded in China who admire British engineering and innovation and their consumption of luxury goods is still growing in the aviation, boat and car sectors.

In the end the real investment return on a yacht is the peace and serenity you get on the water, the pleasure in driving an incredible piece of engineering, and the joy in the sheer speed, exhilaration and experience that such a boat brings. The purchase of a boat is very much a lifestyle choice and you only have to attend the proliferating boat shows to see how passionate people become once they join the yacht owning community. A community that is a private wealth network in itself, often used for business as well as leisure!

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