Fractional Boat Ownership 101

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When it comes to buying a boat there are a lot of big decisions to be made, which may have long term implications. And while buying a boat can be surprisingly affordable (check out our Boat Loan Calculator to see how the monthly payments might shake out for a boat you’re considering), you may not be able to afford the specific boat that meets your needs and wants. This is particularly likely if you’re most interested in large cabin cruisers, motor yachts, sportfishing yachts, and other large, expensive boats. In this case, fractional ownership may be a good option. $what is fractional boat ownership$

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What is Fractional Boat Ownership?

Fractional boat ownership is just what it sounds like—you own a fraction of a boat. You may own half, a quarter, or a smaller percentage, but this isn’t like renting a boat or joining a boat club. You have partial legal ownership of the vessel.

Fractional ownership has been an option that boaters have used as long as there have been boats, usually when good friends or family members pooled their resources and bought a boat together. What’s different these days is that there are companies that create formalized fractional ownership arrangements which can include people from all around the world. Companies like SeaNet, AvYachts, and Monocle Yachts put together like-minded owners who are each willing to purchase anywhere between five and 50 (or more) percent of a boat.

Benefits of Fractional Boat Ownership

The biggest benefit to fractional boat ownership is also the most obvious: you get to split the cost of buying the boat with others, which means you can afford a much larger, more expensive vessel than you might otherwise consider. Beyond that, however, there are often some additional benefits.

In many cases, the fractional ownership company will manage the boat and take care of the usual ownership issues like performing boat maintenance and storage. In the case of larger boats and yachts, the management team may include a professional captain and/or crew. Though this sort of management naturally does add some additional ownership costs, they’re predictable expenses.
In most cases if you buy into fractional ownership via a company that specializes in it, you’ll be given a budget that details exactly how much you’ll have to pay over time. When you own a boat individually, the cost isn’t always so predictable.
Another benefit of fractional ownership is that it tends to offer a lot more flexibility than purchasing a boat outright. It may allow you to “get your feet wet” before making any decisions, by chartering a boat with available ownership interest to see if it’s as ideal as you think. Some other companies allow you to trade your time aboard for time on a different boat in a different place, so you can have fractional ownership in Miami but then also enjoy the boating lifestyle on a trip to Monaco.
And if your situation changes, you can sell your ownership interest at any time. Some fractional ownership companies even offer “exit points” after a number of years, so you can sell your ownership interest back to the very same company without having to worry about finding a buyer.

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Disadvantage of Fractional Boat Ownership

Once again, the biggest factor in this case is pretty obvious: since you have partner owners, they also get time on the boat. In most cases schedules outlining all of each owner’s time aboard are formed well in advance, and the opportunities for spur-of-the-moment trips on the boat are limited at best and nonexistent at worst.

But there are also some other drawbacks to consider.

Personalizing the boat usually isn’t possible, and you may have to make some sacrifices or go along with the group when it comes to equipping and outfitting the boat.
You also may have less flexibility in where the boat is kept, and if or when it’s pulled and stored for the off-season.
Finally, in the case of very large boats and yachts, you may be unable to serve as captain yourself, should you so desire. Some fractional ownership companies will allow it if you’re properly qualified and insured, but others may stipulate that you leave it to the professionals.

Is Fractional Boat Ownership Right for You?

Fractional boat ownership certainly isn’t for everyone, but in some cases it’s well worth considering. Particularly for those who have yacht-level taste but a boat-level budget, it’s a way to own a piece of their dream—a very large and very expensive dream.

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