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Ownership - 1 Year Anniversary Report for printing.
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June 15, 1999
1999 was the day I lost all my marbles.
On that day, I marched into my bank and signed a form
that authorized them to wire a six-figure sum of money to the
bank account of someone in the UK I had never met.
This payment was for a boat that I had never seen
located somewhere in the Caribbean that I had been to only
once. Despite the
fact I had conducted one year of research into charter boat
ownership, I was a bit nervous.
I talked to thought I was nuts.
I had heard all the standard horror stories about
charter boat ownership. Charter
guests were going to trash the boat at their first
salt water was going to eat through the hull and rigging in 24
would be nonexistent. Bills
would be measured by the pound.
Repairs would be omnipresent.
The charter company was going to rob me blind.
I heard it all.
One Year Later
year has elapsed since that fateful day.
I have safely lived through one complete business cycle
as a charter boat owner.
The mast is still upright.
The seawater still has 999 years to go before it
completely dissolves the hull.
Charter guests have failed to scuttle her. Money has changed hands.
General Condition of the Boat
One of my
main concerns up front was that charter use would result in
measurable wear and tear on the boat.
I had read some rather critical remarks on the Internet
on the topic, and was concerned that they might be accurate.
Acquisition would be a very bad financial move if
revenue was more than offset by a huge drop in value due to
wear and tear.
were categorized in three specific areas:
and loss caused by Charter Guest
– This includes breakage or loss due to specific actions
of the guest, accidental or intentional.
To date, I have yet to see a charge on my monthly
statement for a single item that may have been lost or
broken by a charter guest. The last time I used the boat in April, all inventory items
were present and accounted for, and the boat was in better
shape than the day it bought it.
So, if any charter guests were smashing things and
throwing them over the side, it’s not showing up
anywhere I can see. If
I didn’t see it, then it didn’t happen.
Charter guests leave a $1,000 cash deposit in the hands of
the Charter Company before taking the boat.
A detailed inventory is checked by the guest on
departure, and is verified by the Charter Company on
anything is missing, it is deducted from the $1,000
deposit. Again, if anything was lost or broken over the past year,
it’s been repaired or replaced.
and tear of replaceable items
– This includes breakage and failure due to normal wear
I accept the fact that a certain amount of wear and tear
is inevitable, given that the boat is being used.
Things such as sails, lines, and mechanical
equipment will need to be replaced.
Barefoot has provided an estimated maintenance
budget to be set aside from charter revenue, based on
their experience with similar boats.
This budget is designed to cover replacement and
repair as a result of normal wear and tear, which in
effect, “replenishes” and “renews” the boat, as it
gets older. So,
down the road, the boat might have aged, but will be
sporting brand-new sails, lines, sheets, bimini, heads,
stove, refrigerator, pumps, cushions, etc, all financed by
For reasons unknown to me, I accidentally picked a great
boat from Sunsail. It
was well-chartered, but the darned thing never had any
major problems during its five-year tenure.
This good fortune followed me last year as very few
things went wrong. Consequently,
I stayed well within my maintenance budget, and replaced
the following items:
player – The one that
came with the boat would operate for about 30 seconds
before quitting. After
three failed attempts to repair it, I hurled it to the
bottom and ordered a new one.
strip on the
roller-furling genoa – the sail was in excellent
condition, but the red U/V strip was faded and worn.
I had it replaced it with a new blue one, which
had a positive effect on the cosmetic appearance of the
mounts – This was an
expensive, but necessary repair.
It added no cosmetic improvements, but prevented
the motor and drive shaft from causing major damage to
the hull. You
can’t win them all.
windlass motor – Anchor
windlasses are the number one complaint of charter
never work. Mine now does, for a while.
– The stove is situated directly underneath a side
vent that lets in rainwater and absolutely no air.
After 5 years, this water rusted out the stove.
Future guests will enjoy preparing their dinner
on a shiny new unit.
and tear of non-replaceable items
– Wear and tear items that accumulate and slowly cause
the boat to look beaten up include gelcoat damage and
scratches, dents and scratches to the cabin woodwork,
staining due to salt exposure, and fading due to sun.
These items are more difficult to correct because
they cannot be simply replaced.
A substantial refurbishment project is required.
Here is where Barefoot really does an excellent job. While most charter outfits turn the boat over to
the next guest on the same day, Barefoot insists on 24 –
48 hours. While
this has a slight impact on revenue, they use the time to
really clean and inspect the boat.
It is thoroughly polished for every new guest, and
as a result, maintains a new look at all times.
Small items that may need attention are promptly
don’t seem to get behind on the maintenance of the boat.
I was thoroughly impressed with the condition of the boat
during my April 2000.
The hull and decks glowed bright white.
The thing looked sharp!
I thought that it actually was in better shape than
when I purchased it.
The dinghy however, looked more weathered from sun and
salt, and I’m not real sure how long it will last.
The door to the anchor locker broke off when the
dinghy accidentally overturned, but was repaired.
I guess that’s what happens when you use
One area of ongoing annoyance is the continued loosening
of the bolts that hold the cockpit lockers hinges and
cabinet doors. Despite
the use of double bolts and lock washers, these darned
things continue to work themselves loose.
Yes, there are annoyances in paradise.
of 2000 was not a good one across all sectors of the Caribbean
tourist industry. Bookings
were way down for resort hotels, airlines, and all bareboat
charter outfits. You
could tell by the amount of advertised discounts during high
season that demand was below normal.
I think that this was partially a result of Y2K, a very
mild winter in Canada and northeast U.S.A., and a busy season
the year before.
In the end,
the boat was chartered for 12 of the projected 20 weeks last
season. The low
and mid season bookings were almost on target.
It was the high season that failed to materialize.
Again, this was not a problem specific to Barefoot or
The Grenadines, but the entire tourist sector.
representatives have advised me that such cycles are normal in
the business, and that the 20-week forecast is an average over
many years in operation. The previous year was a blockbuster year for them, and I can
attest to that because I kept an eye on their advertised
discounts – there weren’t any.
Next year appears to be shaping up quite nicely, as
I’ve already had 2 bookings in July, typically “no
season”, and it is already fully booked from October through
are January, February, and April bookings as well.
condition of the boat translated into lower maintenance costs.
In fact, I finished the year at 80% of the budgeted
amount, and had not touched any of the Reserve Fund set aside
for major repairs. Maintenance
dollars were directed at a new stove, motor mounts, anchor
windlass, and CD player, which should provide years of
In total, I
still managed to collect a net income that was 30% of the
original projected amount, and with only 12 weeks of charter.
Previous calculations estimated that it would take 15
weeks to break even. The
excellent condition of the boat and lower maintenance costs
allowed me to see a positive cash flow in a slack year.
I hope that this is as bad as it gets.
you could consider some of the items I classified under
maintenance as one-time start-up items. The CD player,
U/V strip, outboard motor crane, and a number of other items
added up to over $1,700. If you were to remove them from
the operational budget, maintenance would have come in at 60%
of the budgeted amount, and net income would have been
52%. I lumped them in with maintenance because I could
afford to finance them out of that budget, given that it was
well under forecast.
bought the boat in June 1999, the bank that provided the
financing required that the boat be documented and a lien
registered with the documentation.
No problem, I thought.
I could not have been more wrong.
(If you want to avoid a lot of pain, skip over this
originally advised that registration in the USVI was the
easiest and cheapest. I
knew somebody who did it.
When my deal closed, I learned that USVI registration
required that the boat physically be in the USVI.
I had always expected to buy in the BVI, so I never
gave this any thought. When
Travel With Tin Tin was purchased in St. Vincent, I now
had a problem. Delivery
would cost $3,000 US, plus I would have to be there in person.
There had to be a better way.
documentation required that I be an American, so that was out.
I looked at other countries processes.
Most were based on the British system (Turks and Caicos,
BVI, St. Vincent, Cayman Islands, and of course Canada) that
involved some very complicated paperwork performed to some
very stringent standards.
Required was a Certificate of Survey, a Certificate of
Gross Tonnage, notarized Bill of Sale, proof of
de-registration, and a whole lot more.
Some countries even required that you set up a
good ole Canada because it was no more complicated than any
other country, and would actually be cheaper in the end.
A swell of national pride ran through me as I
envisioned my boat flying the Maple Leaf.
Unfortunately I underestimated our national appetite
for useless bureaucracy.
Canada insisted that a physical survey was required for the
Gross Tonnage calculation, despite the fact that it was a
production boat, and the required information was readily
available from the builder.
They further insisted that it be conducted only by
surveyors certified by Transport Canada, and of course the
list did not include any St. Vincent residents.
The best I could manage was Lloyd’s Registry out of
Trinidad for $3,000 US – and I would have to provide the
blueprints and block coefficient calculations.
After screwing around with these people for 2 months, I
began to look for alternatives.
previously had a Rhode Island State Registration.
I contacted the State, and they confirmed that I could
in fact “transfer” the existing registration.
Unfortunately, the original Certificate of Title had
been misplaced, so I was told.
The State required that the previous owners (now
working in various cities all over Europe) sign an application
for another Certificate of Title (notarized of course, to
maximize the inconvenience factor).
A note from my mother would not do in this case.
The State would then send them another Certificate of
Title that they would sign over to me (notarized again, of
would take months, and the Bank was waiting…
On a hunch,
I contacted Sunsail’s U.S. office in Annapolis and learned
that they in fact had the original Certificate of Title.
It was not lost. I
had them courier it to the previous owners for notarized
took a further two months to get them together in the same
city with a Notary Public to sign the document.
It took a
further month for my lawyer in Toronto to locate a lawyer in
Rhode Island to handle the paperwork there.
Once secured, that lawyer assured me he could run the
paperwork through in one afternoon.
This went on for a further month.
I guess he didn’t specify which afternoon.
The Bank was still waiting patiently, and I had used up
every possible excuse by now.
“The dog ate it” was the only one I had left by
December; six months after the ordeal began.
over some gruesome details that consumed a further two months.
I cannot even bear to recall them.
It was March 25, 2000, nine months after the paper
chase began, that the registration and Certificate of Title
was completed. Folks, don’t try this at home.
Incidents and Other Perils
past year, there were only two incidents to report:
- The outboard motor was stolen off the boat while on
is a rare event but it nonetheless happened.
Unfortunately for the charter guest, the insurance
deductible was taken from their damage deposit.
The motor was replaced with a more powerful one,
all without my involvement or knowledge.
- I monitored and tracked the progress of every hurricane
that formed in the Caribbean last year.
Not that there is anything I can do about it, I was
simply interested in determining if my choice of St.
Vincent as a charter base was sound, on the basis of its
relative safety from hurricanes.
All hurricanes that formed in the Atlantic passed well
north of St. Vincent, although Jose threatened at one time
to produce a direct strike.
I am satisfied that St. Vincent is in fact a
relative safe haven from direct hurricane threats. This location has further advantage in that the boat could be
sent easily to the hurricane hole in Tyrrel Bay Carriacou
or to Venezuela if necessary.
Barefoot Yachts additionally has hurricane moorings
and bridles in the relatively protected Blue Lagoon.
Several excellent options are available, and
Barefoot actively monitors storm progress and makes
I no longer think about this.
Hurricane Lenny last November was a bit of a surprise in
that it originated from the west, causing massive 15-foot
storm surge. Because hotel, restaurant, and dock facilities are built on
the water on the normally protected leeward side of the
islands, they were subject to severe damage as a result of
waves and erosion.
Barefoot Yachts suffered no damage during Lenny, as their
base is protected by a reef that surrounds the Blue
boats were on their storm moorings in preparation, and the
event passed without incident.
I happened to be on my boat in Martinique at the time,
safely tucked into the well-protected harbor at Le Marin.
While we were never in any real danger, we were
concerned that we might unwittingly find ourselves in the
path of this unpredictable storm. My experience there provided a valuable lesson in
understanding the real danger of hurricanes.
Basically, you have to be within 30 – 50 miles of
the center before the wind strength increases to perilous
you’re in deep s**t!
generally very pleased with Barefoot Yacht Charters as a
business partner. I
find the personal level of attention I receive from Seth
creates a level of trust, and with that, peace of mind.
I simply do not think about the boat when I’m not on
was in absolutely perfect condition when I used it in April
2000. It glowed
bright white as a result of the polish it had been given.
Everything worked, as it should.
I’m not sure if Barefoot placed a special focus on my
boat as a result of my arrival, but who cares.
If the boat continues to show no visible signs of
deterioration as a result of charter use, charter guests are
happy with the boat, and my account shows no major expense as
a result, then who cares how they do it?
has not treated me any different since I signed on.
Seth responds to my E-Mails almost instantly, and with
the same level of detail and precision that I enjoyed as a
prospective owner. I cannot stress enough how important this is to your peace of
Use of the
what it’s all about, baby!
I managed to get down 3 times over the past 12 months.
Each time, Barefoot treated me like a king, the boat
was in excellent shape, and I had a real enjoyable time.
might make better financial sense to simply charter a boat
when you want one, there is an additional feeling of being a
part of the local community that ownership brings.
As well, having the boat down there provides additional
incentive to use it. I’m
certain I would not be making 3 trips per year if I had to
trick 3 other people into paying for a charter, booking it,
and all that hassle. Now,
I simply send an E-Mail, and an adventure is born!
am completely satisfied with this program so far.
When I’m not on the boat, I don’t think about it.
When I am, which is fairly often, I really enjoy it.
I am satisfied that the boat is being properly
maintained, and it shows.
While the past year was not a banner year financially,
I did not have to put any money into the program.
Next year appears to be shaping up well.
* * *
Adobe Acrobat (PDF) formatted version of
Ownership - 1 Year Anniversary Report for printing.
[129 KB, 7 pages]
Last Updated: September 1, 2000
Copyright © 2000