Want To Successfully Invest In Yachts? What We Learnt at the Cannes Yachting Festival
At the Cannes Yachting Festival (CYF) last month, something occurred to us. As always, a wide range of yachts were on offer, with this year’s edition welcoming boats from 2.4 metres to 50 metres in size. Whilst general consensus is that anything over 30 metres is a superyacht, even these impressive vessels seem to pale into insignificance next to some of the gigantic 80 or 90 metre boats on display at Monaco Yacht Show (MYS). So does this mean that smaller yachts are now less in demand? Certainly amongst the yachting industry’s biggest players, there seems to be an obsession with ever-larger boats. However, for the majority of us looking to invest in yachts or yacht co-ownership, a smaller vessel will provide more than enough of a venture.
With that in mind, here’s why you should invest in yachts under 30 metres, as confirmed by the boats we saw and companies we met at CYF.
Why should you invest in yachts of a smaller size?
Pay fewer crew salaries
Last year, YPI CREW reported that deckhands were recorded as earning between €2,100 and €3,000 per month, depending on the yacht and their experience. And obviously, the bigger the vessel you own, the bigger the crew you need to keep. You may be tempted to try employing minimal crew onboard a larger vessel to save money, but any experienced owner will tell you that all this leads to is an overworked and disillusioned crew, impacting the service you receive onboard.
Employing a complete crew to serve a decent sized vessel, such as the 22 metre Sunseeker Predator 74 which was on display at the show, is a much better option. It means securing a perfect service for you or your charter guests whilst avoiding sky-high employment costs. And if you wanted to maximise on your investment further, you could even consider splitting ownership and therefore hiring costs on a smaller yacht.
At Cannes we met with yacht financing company SmartYacht, who offer shared ownership schemes for yachts under 30 metres. Buying a fractionally owned yacht through them means never having to worry about hiring, as the company sources all the crew themselves and includes this cost in the share price of the yacht. Though this may not appeal to everyone, for those who want to invest in yachts but don’t want to use their boat all year round it makes sense.
Cut down on ongoing costs
Yachting has a lot of continuous outlays that can be daunting to a first time investor, with berth price, upkeep work and boat management all key expenditures. Though berth price is largely dependent on your desired location, choosing a smaller vessel will mean you are able to base your yacht in many more places, bringing down your cost through higher availability as well as through the size of berth needed.
Then there are the ongoing costs that are required to keep your yacht running, including but not limited to fuel, equipment upkeep and fees paid to your yacht management company or charter agent to maintain and advertise for the vessel. Bigger boats tend to be disproportionately more expensive to run thanks to complex systems onboard, larger engines and higher electricity costs. Why bother, when at Cannes there were so many exciting smaller yachts launching?
These outlays are crucial to consider before you invest in yachts, as they will help you work out how much you can actually afford. Often, although bigger yachts seem more attractive, you will have just as much fun with a smaller boat for a fraction of the price. And again, utilising a shared ownership vessel takes away any of these ongoing stresses, with packages which combine all-season management including maintenance, mooring, cleaning and repositioning with provisioning and laundry services.
Smaller yachts: A solid investment
Especially when starting out as a yacht investor, there is no need to send yourself nearly bankrupt buying the biggest vessel you can afford. Look for a boat that suits your needs, whether that be family holidays cruising around the Med, romantic jaunts with your beloved in the Caribbean, or a part-time vessel that is looked after by a yacht financing company when you’re not using it. Remember: when it comes to yachts, small is mighty.
| All photos courtesy of Muriel Penoty