Can you buy and run a secondhand 105ft superyacht for the same annual outlay as a brand new 57ft sportcruiser? Two experienced boat owners decided to give it a try…
When two experienced boaters looked into buying a boat together for holidays afloat in Florida, their plans took an unexpected twist.
With a budget of up to $3 million, their initial idea had been to buy and run a brand new Sunseeker Predator 57 as a privately owned boat but with both of them being based in the midwest and limited to around four to six weeks use each per year, their new pride and joy would be left unused for the remaining 40 weeks of the year.
However, if they used the money to buy an older used superyacht with a seasoned captain and crew, they could charter the vessel out to mitigate the costs when they weren’t using it and have the benefit of a much larger, more luxurious boat for them to enjoy when they could.
This would also ensure the boat was being professionally maintained and managed, reducing the workload for the two of them and ensuring it was in top condition whenever they wanted to use it.
If they’d done their figures correctly, the boat could earn its keep when they weren’t onboard so that the costs to them would be no more than running a smaller boat privately.
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Both the would-be owners already had a financial background and knew that keeping a good handle on the operating costs would be just as important as finding a boat that would be a desirable charter prospect as well as a suitable craft for the two of them.
Their broker, a former charter captain from FYI Yachting in Miami, came up with several candidate boats but gradually the choice whittled down to a 2004 Sunseeker 105 named Kefi being offered for sale at $2.75 million.
This 105ft, four-cabin craft already had an excellent charter record with a full year of financial information to back it up, a slick website, a holding company to run it and an experienced crew of five. Chartering at $45,000 to $50,000 per week, it was a proven business as well as a lovely boat.
The purchase price also included two jet-skis, an extensive inventory of water toys including paddleboards, Seabobs, inflatable sundecks and sofas, and to top it off a twin-engined 27ft Sea Hunt chase boat that could offer guests the option of game-fishing, snorkelling trips and rapid transfers to remote beaches and sandbars for picnics and parties ashore.
The boat itself was based in Nassau, in the Bahamas, but was registered under a Floridian corporation, making the purchase much simpler than a Bahamian-registered boat. However, it would need to be returned to Florida for a survey, sea trial and the actual closing of the sale.
Boats of this size are rarely registered to an individual owner, so due diligence was also required on the acquisition of the holding company to make sure there were no issues hidden within its accounts and all assets were clear of any liens.
With this in mind and the extensive help of their broker, the new owners put the wheels in motion to start the pre-purchase process of acquiring the corporation holding the Sunseeker, the Sea Hunt and its assets, including the two Jet Skis.
This meant a total of four vessels requiring inspection and registration transfers. Fortunately, Florida has a cap of $18,000 on the sales tax of any vessel – a substantial saving on the $190,000 or more that would be levied in most US states on a boat of this value.
Safe Harbor Yacht Center in Fort Lauderdale was appointed to take care of the lift out, survey and engineering checks, and a date set for Kefi’s arrival.
Despite a five-day delay caused by bad weather, Kefi arrived in Fort Lauderdale on 9 March 2022, only to ding a propeller on a submerged obstruction on its way up the intracoastal waterway.
With Kefi in the sling and safely blocked off, the inspections began. The bent propeller was immediately removed and whisked away for an overnight re-work and balance at a cost of $3,000 plus $500 for the diver to refit it in the water the following day; a big hit for most of us but just a drop in the ocean of the annual running costs of a superyacht as large as this.
With shafts and hull checked while Kefi was in the slings, it was relaunched and guided back into a temporary berth by a pair of tug boats.
With the next charter booking due to start just nine days later, Kefi would need to be turned around and cruised back to the Bahamas ready for the guests to arrive on 18 March or risk forgoing the new owners a $49,000 charter fee plus a $20,000 pay out to the guests as compensation for the late cancellation.
With the survey still in full swing, the crew set to work cleaning and preparing the boat for the 100nm crossing back to Nassau. An MTU specialist was called in to inspect every hose and clamp before undertaking a full diagnostic test of the engine.
Before he’d even got to that a quick oil check revealed a higher than normal level in the port engine. With no water or coolant visible in the oil, the initial assumption was fuel in the oil.
A sample was taken and rushed off to a lab for further analysis. The captain and engineer were also able to supply meticulous engine logs, suggesting the issue had arisen during the crossing a couple of days ago.
It was a tense wait for everyone as replacing one of the big MTU V16s would mean cutting a hole in the hull and lifting it at a cost of several hundred thousand dollars. The MTU specialist reassured the new owners that these engines are easily capable of 25,000 hours and had known some to log over 50,000 before needing a major re-build.
However, if the oil had become contaminated with diesel, it could cause excessive piston wear or worse so the engine was not to be run until the problem was found. In the end the issue was traced to a faulty injector pump that was easily remedied without significant cost.
However, to put some perspective on the issue, each engine has 16 injectors and 16 injector pumps, which require replacement every 2,000 hours at a cost of around $30,000, while a replacement engine alone is around $250,000 plus the cost of installation.
Kefi’s Captain Newell, who had already run 13 successful charters in his first year on Kefi, generating an impressive $600,000 in revenue, also gave an insight into the fuel costs of a boat like this.
At 11 knots, Kefi burns 30 US gallons per hour (113lph), whereas turn the taps up to 21 knots and that soars to a whopping 185gph (700lph) pushing the costs of a typical 250nm charter itinerary up from $3,500 to $11,000. Nor does this account for the fuel used by the two 40KVA Kohler generators running night and day when the yacht is at sea.
And a night or two in the exclusive Atlantis superyacht marina in Nassau can add another $800 per night, so charter planning is also an exercise in cost management for the captain and guests.
With the surveys giving an all-clear to the hull and the engineering checks completed to the satisfaction of the MTU specialist, the purchase went ahead as planned and Kefi is now well into her first season under new ownership.
It will take a while before the full year’s figures are complete and the new owners can confirm whether their plan to buy and run a second-hand 105ft superyacht for the same cost to them as a new 60ft sportscruiser has come good, but it appears that way. You can see how the numbers work out in the table below.
These are of course a simplified version of the actual figures and don’t take into account the increased chance of a major unplanned expenditure on a much larger, older boat, but in theory, with an average of 17 weeks charter per year at around $49,000 per week, even with a 20% management fee from charter specialists Denison Yachting, the new owners should be able to own this superyacht for roughly the same $60,000 running cost of the new Predator 57 they had originally considered buying.
Clearly, the risks are higher as the running costs are roughly ten times that of a typical 60-footer, so a few unsold charter weeks or unexpected expenses can make a massive difference to the annual profit or loss of the holding company.
However, the new owners have a clear vision of how to mitigate the expense and the opportunity to enjoy a whole new level of ownership.
In the meantime, if you like the idea of enjoying a week on board Kefi without the financial risk of owning it, it is available through Kefi Charters from $49,000 per week plus fuel, provisions and crew tips.
Typical charters out of Nassau visit Norman’s Cay where guests can snorkel over one of Pablo Escobar’s sunken planes, Exuma National Park, Compass Cay and Staniel Cay with its pink sand and famous swimming pigs.
An elegant Ken Freivokh interior, four staterooms for up to eight guests and vast array of toys, ensure it is one of the most comfortable and enjoyable charter yachts of its size with an experienced crew to help you get the most of your time on board.
How do the numbers stack up?
Approx annual running costs
Crew of 5 including captain: $350,000
Insurance (including hurricane cover): $30,000 – 60,000
Incidentals (replacement water toys, linens, provisions): $60,000
Total approx: $730,000
Approx annual income
17 weeks charter at $40,000p/w (after 20% management fee): $680,000
Total cost to owners: $50,000
First published in the October 2022 issue of MBY.
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