COST CONSIDERATIONS WHEN BUYING CATAMARANS

I often get asked abut THE COSTS OF BUYING CATAMARANS. Since this video was made prices have increased so check with me about this.
These costs vary by location, supply and demand, "build quality" and condition of the cat so there aren't any accurate "Rules of Thumb". I try to cover all of the usual costs we encounter and in some cases must generalize to keep this video "short and sweet". In summary, for a typical 40'-45' catamaran here are the typical costs to consider:
- The cost of the yacht varies by location, supply-demand, time of year, desirability of the yacht. See my video with my Top 5 Tips To Save Money When Buying Catamarans.
- Financing usually requires 25-30% down payment, 740 minimum FICO score, debt to income ratio max 35% and can be amortized over 15-20 years so monthly payments at current interest rates (3.75%-4.3% fixed simple interest) are roughly $6/$1000-borrowed. So, if the loan amount is $300,000 the monthly payment would be $1800.
- Insurance costs 1.5% of the hull value IF you shop! shop! shop!!! So, a $300,000 yacht costs $4500/year. If the value of the yacht is over $500k then we can sometimes get a premium equal to 1.2%. If you become a client of my company we share the contact details of the most competitive insurance companies.
- Registration in the tax-free State of Delaware is $300 for the company and $100 for a 40' yacht...there are some limitations on "state registered" yachts when circumnavigating so a "Federal Registration" such as US Coast Guard "Documentation" costs $600 plus $300 for the LLC....Foreign flags usually get you out of paying taxes but cost more ($3k-15k).
- Delivery on it's own bottom usually costs $2-3/mile. Shipping on a freighter usually costs 2-3 times more EXCEPT lately (June 2020) shipping rates have crashed and we can sometimes find a rate that is equal to delivering on its own bottom!
- Dockage varies widely by location. I the high demand/low supply area of South Florida a 40' catamaran costs $1600/month currently (for live aboard docks) and storage only docks are around $700-1100. In North Carolina I understand you can find live-aboard docks for as little as $400/month in a nice facility with pool, chicken hut bar, business center (to use printers), etc.
- Hurricane season storage varies widely between $450/month to $1,000/month in the low-medium demand areas..
- Surveys currently cost $18-25/foot in the Western Hemisphere (higher in Europe)...so a 40' cat is usually $800-1100.
- Haul-out fees for the bottom inspection vary widely depending on supply-demand factors ...usually $300-800 for a "short haul"
- "Add Ons" like solar panel arrays (1600 W for $6k), generators ($8-20K), air-conditioning (20k for a full 48,000 BTU's to do an entire 42-45' cat..., watermakers ($1600-10000) and tenders ($2500 used to $10k new) vary widely and If you become one of our clients we can show you how to get wholesale pricing.
- Depreciation usually varies by type of layout and hull configuration....similar to automobiles but it tends to level out after year 5 IF you take proper care of the yacht. But repair costs mount after year 5 and you usually do not get this back.
- Annual maintenance must be done and the cost is different for each boat/location...Here are rough estimates for a 40-45' cat....service engines ($1000/engine if 40-50hp), service sail drives ($400 each), haul out fees vary widely but lets say $350-700, bottom paint renew $3-4k, compound and wax hull and smooth deck parts ($800-1000)...as the yacht ages, repairs will go way up in year 5 and continue thereafter.
Go to my website LargeCatamaransForSale.com for more information and contact me via eMail for lists of recent actual selling price histories that show initial asking price and date-listed, date sold and selling price, full photos and specs, location, etc. This is the smart way to understand the market.

[@bill2292]

PLEASE do a video on repairs. Maybe two.

[@michynature]

Well shiiiiiiiit, I’m so glad I found this channel! Going to your website etc too. Suuuuper info, much appreciated!

[@simonball3067]

Great content many thanks for sharing.

[@erbrock1]

Hi. I'm really enjoying your videos. I have certainly learned some things. If you haven't done so already would you consider doing a video comparing and contrasting a catamaran and a trimaran - cost, cost of ownership, sailing, comfort, etc. Thanks again for all the information.

[@bill2292]

Best broker in the business!

[@Jacob-pr5cd]

A lot of great information. We are preparing to be sailing full time within 10 years and there is a lot of questions we keep coming up with! Thanks for the video!

[@Catamarans]

Glad it was helpful!

[@PaulBeauchemin]

Great video Gary!

[@hoticesteve]

so HELPFUL

[@jimcarlson1781]

wow!!! so much info, thank you!

[@kimdoss1868]

Thanks very much, a totally different aspect, to buying a Cat regards and Thanks. Kad

[@fruiteeplanet3125]

Awesome information! Thanks

[@Catamarans]

Glad it was helpful!

[@justfly2525]

Wow... Awesome video. It's difficult to get ahold of this kind of information.

[@Catamarans]

Glad it was helpful!

[@marcstaffanell1377]

Awesome information! You will be my broker.

[@craiganderson7482]

hello, thanks for making informative videos. I plan on retiring on a Cat. I will be in the market in 2024, ill be 55 yrs old and have about $125,000 to spend. I have no intention of selling and plan on taking my last breath on board :). SE Asia will be where i plan spending most of my time.

[@Catamarans]

CRAIG, IT'S REALLY HARD TO FIND GOOD CATS FOR $125K...I'D LOOK AT 5-6 YEAR OLD MONOHULLS WITH A REFIT GUARANTEE. THAT WAY, YOU KNOW EVERYTHING IS IN GOOD WORKING ORDER AND THE YACHT IS RELIABLE.

[@kotro88]

Thank you, thank you for the depreciation schedule in particular. Looking at possibly making an investment to buy a full-time cruiser "for a few years" right after I retire and before we buy a retirement home. Looks like I might be able to do this knowing I might lose a little money, but not lose my shirt if we buy right. It's given new life into the possibility of full-time cruising after I had kind of written it off as a bad idea due to "throwing away" money in depreciation. I know it's still a risk, but hopefully a controlled or known risk at this point. Thanks again!

[@mikewilliams4947]

The depreciation discussion added to an already miraculous piece of insider information:). I share your sentiment. I want to get a fast cruising cat and warm up in the VI. Then go trans Atlantic round trip. Maybe through canal and go that way. Have seen the Schionning designs?

[@kotro88]

@@mikewilliams4947 I haven't but I will check them out!

[@sartwelljl]

Hi Gary, I'm tuning in to watch every video you publish.... I liked your idea to walk through the Marina to look at some yachts in the water. What I'd love to see a video on is ways that I could use a cat to generate income and move from the fulltime/part-time work I do now to a Cat based Yachting income. We've emailed before and you've told me about AirBnB'ing a Cat etc and some other ideas.... And I know the way most people make money is by chartering etc, hosting live aboards, or day cruises, etc.... but if a person is new to the Cat sceen, like me (always having dreamed about it but still haven't taken the leap of faith)... it's hard to learn about chartering without just jumping in and doing it... So I'm still close to making my decision to buy, but - as you know we've talked about Charter Management programs like Dream Yacht and Moorings, etc... I'd buy through a broker, like you, if I knew how I could quickly begin making passive income from use of the Yacht while I'm still working and then from time to time use the yacht myself; or, If I knew how to make enough money from an income generating scheme to support all the costs of ongoing ownership and use, etc maybe I could quit the other work I'm currently doing, and jump full time into Cat life.. :-) But without having confidence in my ability to make an income from the Cat, and not being independently wealthy - such that the Yacht is a toy, etc... I'm still not ready to buy, because once you buy (as you know and are teaching us) the costs start mounting up. So my request is, do you think you would have enough material to make a video on ways to generate income from Cat ownership? Maybe a lot of people won't talk about this, because if they are currently making money from their Cat, they don't want to let their secrets out so other people will come along and try to copy their idea and take part of their market share.... Thanks again for sharing your vast amount of knowledge....

[@Catamarans]

Good idea... there is a lot of mis-information about this too and I will develop a video on this. It is a sensitive subject so if you want a briefing now just call me.

[@netsultants7286]

Hey, great videos, I've watched a bunch and I have a couple of questions... 1. As a fiscally conservative guy, looking to buy right, I've found the market today is crazy (and has been for awhile). It seems cat sellers are asking crazy prices for these depreciating assets. I mean, looking at your chart regarding depreciation, I find it nowhere close. In fact some boats are asking over what I think they sold for new back 4-5 years ago. It seems the manufacturers have raised the new prices so much that the depreciation graph works in comparison to a new cat today...(as an example I could have bout a new 450F around $550k in '16 (I think) That boat today in the US for $300K?) So, after all this...haha...do you feel the market be crazy? Do we have such unsophisticated buyers that have more money than sense and when will reality set in? Haha 2. You mention the sweet spot of 4-5years and I understand your logic..new= good (def. wider beam hulls)...But, don't you feel the build quality is deteriorating? I've been lurking in some owner groups of some new cats and listening to the chatter about failed components, hulls cracking, etc...Seems the factories are rushing these boats out the door... You've been in the industry a long time...Been there, done it...So are you scratching your head about what you see in today's market? 3. While I think your argument is good and based on experience, why do you think these older (8-12 yo) vessels are holding value when they are just money pits? Thanks... BTW - Who am I? just a guy that's been watching this for the past five years sitting on the sidelines trying to find the right deal....Until then, I'm fine on my "bought right" 45' SeaRay

[@scottbrowning6434]

Hi Gary, If you buy a boat outside the US and register in DE, do you also have to pay import duty?

[@Catamarans]

Hey Scott, if you buy outside the US and bring it back then Duty is owed. There are ways for anyone to remain totally tax-free but there are conditions to follow. There are a lot of distortions and mis-interpretations about Registration and Taxes I'll do a video on this.

[@JibeTalking]

Gary can you do a video on Leasing and how it works in the Cat business.

[@Catamarans]

Hi Ron, leasing is very very rare. There is a way but it must be done through a new yacht dealership (mostly in Europe) and only for a very few models....so I will think about how to put this into a video, Best, G

[@JibeTalking]

@@Catamarans Gary, as I am new to this, I think I am confused. I thought it was leasing to own you might have been talking about in your video. Other than purchasing/financing a boat out right, are there other programs i.e. charter to own?

[@Catamarans]

@@JibeTalking Yes, there are "Seller financing programs" to own but they are rare and the selection of yachts is very limited. You essentially put down 35%-40%, they pay all expenses for 5 years (loan payments, insurance, dockage, maintenance) and you make a balloon payment at the end...usually 25%-30%. You get some "Owner Use" privileges in these 5 years but you must keep the boat where they specify. These programs just help make it a bit easier to buy BUT when you run the numbers be sure to look at the residual value because depreciation becomes your problem and the yacht may not be worth what you think at the end of the 5 years.

[@JibeTalking]

​@@Catamarans Gary thanks for the information and insight. Listening to your videos has been educating to say the least. I have made notes about everything you have talked about. We are maybe about 1 1/2 years from actually purchasing a cat. I am retired Army and we looked into the requirements for financing/insurance etc from USAA. It was funny they said they weren't lending any money because the country was in a recession. We just did a our first lesson/charter in San Diego on a Lagoon 42 owner version and fell in love with it. I will continue to do research and of course we are going to get ASA certified. I don't think the Seller financing program is our cup of tea. Appreciate everything you are doing and we continue to follow you. Great job on the videos.

[@abel2travel591]

When is the best time to buy?

[@Catamarans]

The best time in the Western Hemisphere is during the summer months especially June-July and early August.

[@rightright6582]

How do we avoid Brokers-flippers that: 1-practice illegal flipping as they have inside info as to how much the buyer will take due to the condition of the boat or a personal situation with the true seller: divorce etc. 2-Modus operandi or scheme: with small "good faith deposit" to the seller from an xyc LLC in Delaware, the broker becomes the new seller for a term of 90 days. 3-the broker will make an offer with a small deposit of 50% market value to the true seller and resale for market value.

[@Catamarans]

Hmmm, I've never seen this happen in 31 years of being in this business...did you see a case like this? If so, where/who?

[@rightright6582]

I have seen it with planes and medical equipment. Now that i come to think about it, this practice probably happens in the mayority of goods and services in the market. Hence the saying "caveat emptor, buyer be aware"