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Good Idea, or maybe not

I know it is too late now and I admit I know nothing about living on boats, but wouldn't it have been easier for you to just rent a house boat for the few months you go to California?
 
This sounds like a good opportunity for VRBO (Vacation Rental by Owner) or Home Away.

http://www.vrbo.com/

Not sure how the numbers would work out, but it would be in addition to all the fixed costs you will incur thru a charter and retaining a local "Captain".
 
Ex husband owns a very nice sailboat for the last 18 years and another trawler yacht a year ago. Keeps the sailboat in California and this boat has seen a fair share of the world. He keeps the trawler up in Seattle for summer use. He made me develop an aversion to boating. I think I was one of the folks who told you not to buy a boat but then I am biased.

I believe there is market for vacationers who want to rent a boat, either with a captain that comes with a boat or if they have captain license themselves, want to captain it on their own. But you will have to ask yourself if it is worth the hassle and wear and tear on your boat. I don't know the legal elements of doing so, license fees etc.
 
Personally, I like the VRBO option better. I think that tourists would love to stay on a sailboat, and it will be a lot lower cost - no captain, no diesel. I would think that your insurance costs would also be lower. I wonder if your marina would allow it? I'm not sure how that works.

Either way it would be a business based in CA so you'll have the LLC fee if you place the boat in a CA LLC. In the state of CA if you have an LLC you need to pay a gross receipts fee, which is a minimum of $800 per year, which is paid with a CA LLC tax return - simple enough to prepare if you want to DIY. You'll also have to file a CA individual tax return to report the income that passes through to you. Again, probably a nominal amount of tax (I would assume that you won't net all that much after expenses).

Personally, I think that you will find a crowded market for charters. And timeshare vacationers would be a price sensitive group, imo.
 
mpumilia said:
I know it is too late now and I admit I know nothing about living on boats, but wouldn't it have been easier for you to just rent a house boat for the few months you go to California?
Click to expand...

sure, or I could have rented a vacation condo. but easier wasnt the goal. My goal was to own a home in California, since I couldnt afford that the boat was the fall back position...

And own is the operative word there. I would rather own the property as long as I can afford it, than rent it, I know thats not always the best way to do things from a financial perspective, but its what I prefer
 
mpumilia said:
But now with using the boat as a charter, won't there be that much more wear and tear on it, as well as the fuel costs and the Captain's salary, liability insurance?

I don't know....how much would you be charging people for this? To me, boats are a big hassle..
Click to expand...

Too late to consider the hassle factor... Im already in, and I went in with eyes opened. I spent most of my adult life in Annapolis, and even worked on the water for a while. I know what a boat is (a hole in the water that you throw money into) and I know what BOAT stands for (Bring On Another Thousand)

Im an old real estate guy, Ive been buying and selling and renting for a long time. and now Im doing vacation rentals using timeshares to provide inventory. Renting is what I do and its no more hassle than any other job. My question goes to the market...is there one for short charter cruises among the folks that vacation in San Diego and particularly among the folks that stay at the 6 Wyndham/Worldmark timeshare properties there

Ive already considered using the boat as a vacation rental My marina wont go for the vacation rental thing, but there are several captains that operate charter businesses here .

http://www.lilleypadcharters.com/yacht-charters
 
klpca said:
Personally, I like the VRBO option better. I think that tourists would love to stay on a sailboat, and it will be a lot lower cost - no captain, no diesel. I would think that your insurance costs would also be lower. I wonder if your marina would allow it? I'm not sure how that works.

Either way it would be a business based in CA so you'll have the LLC fee if you place the boat in a CA LLC. In the state of CA if you have an LLC you need to pay a gross receipts fee, which is a minimum of $800 per year, which is paid with a CA LLC tax return - simple enough to prepare if you want to DIY. You'll also have to file a CA individual tax return to report the income that passes through to you. Again, probably a nominal amount of tax (I would assume that you won't net all that much after expenses).

Personally, I think that you will find a crowded market for charters. And timeshare vacationers would be a price sensitive group, imo.
Click to expand...

I already own the boat personally so I dont think Ill transfer ownership to the LLC (more closing costs and sales tax) unless I can make some real money doing this which I doubt)

and my Marina wont go for the vacation rental thing , and we arent moving. There are too many pluses where we are for my wife and I to consider moving.

If I make any money it will be another schedule C on my 1040, income less expenses will probably be less than zero so as you suggest nominal additional income tax, if any,

I didnt consider the cheapskate nature of timeshare owners, especially Worldmark owners, so thanks, but remember if they bought from the developer they paid at least $15000 for a weeks ownership. This group has money and is not afraid to spend it on vacations
 
sptung said:
Ex husband owns a very nice sailboat for the last 18 years and another trawler yacht a year ago. Keeps the sailboat in California and this boat has seen a fair share of the world. He keeps the trawler up in Seattle for summer use. He made me develop an aversion to boating. I think I was one of the folks who told you not to buy a boat but then I am biased.

I believe there is market for vacationers who want to rent a boat, either with a captain that comes with a boat or if they have captain license themselves, want to captain it on their own. But you will have to ask yourself if it is worth the hassle and wear and tear on your boat. I don't know the legal elements of doing so, license fees etc.
Click to expand...

Im not considering allowing anyone to drive the boat themselves even if they are licensed captains..

One of the problems I had with this boat, and one of the reasons I could have turned this one down is that these old diesels like to be run, In fact its a bad thing not to run them. The previous owner didnt run the boat for the 3 years he owned it.. It just sat at the marina. and he didnt have a complete set of maintenance records form before he owned it. I bought it knowing this and negotiated a price that left me some money to catch up with all the deferred maintenance, So this first year Im spending a lot of time and money catching up with the deferred maintenance.

Now to your point about wear and tear on the boat. The boat goes out now for about 2 hours a month to exercise the engines. Im paying for that now. Thats one of the expenses Im trying to offset with a charter once in a while. Also part of my budget is a reserve fund (like a timeshare budget) to re build the engines in 10 years. Given current costs I figure I need about $50000 so $5000 a year plus current maintenance (budget) $5000 per year plus dockage and insurance $12000 per year So lets call it $2000 a month

all I want to do is to offset some of that, so just one 3 hr harbor cruise a month would make me happy more than that would be great



or maybe I should stick to what I know and do 4 more more timeshare rentals each month, That would cover all my boat costs.
 
ronparise said:
all I want to do is to offset some of that, so just one 3 hr harbor cruise a month would make me happy more than that would be great



or maybe I should stick to what I know and do 4 more more timeshare rentals each month, That would cover all my boat costs.
Click to expand...

My first thought is to say do both. I think if I owned a boat, I'd hire out a charter company to run it and make me some money when I'm not using it. If I thought of it as a home, maybe I wouldn't be so inclined. It just depends on how annoying it would be to see little wears and tears on my home when I go home to it. Of course, if it covered my cost of owning it, I'd just suck it up and be happy that I had a "free" vacation home.

If you can handle doing more rentals, then do that, too. It would be nice to have some extra cash for upgrades every time that you came home to your boat.
 
presley said:
My first thought is to say do both. I think if I owned a boat, I'd hire out a charter company to run it and make me some money when I'm not using it. If I thought of it as a home, maybe I wouldn't be so inclined. It just depends on how annoying it would be to see little wears and tears on my home when I go home to it. Of course, if it covered my cost of owning it, I'd just suck it up and be happy that I had a "free" vacation home.

If you can handle doing more rentals, then do that, too. It would be nice to have some extra cash for upgrades every time that you came home to your boat.
Click to expand...

I just noticed something under your name

"Tug review crew"

I can guess and I think Im right but to be sure, Ill ask.... whats that??
 
ronparise said:
I just noticed something under your name

"Tug review crew"

I can guess and I think Im right but to be sure, Ill ask.... whats that??
Click to expand...



The tag line changes based on how many Resort Reviews the user submits. I think mine says the same thing.

Dave
 
ronparise said:
I already own the boat personally so I dont think Ill transfer ownership to the LLC (more closing costs and sales tax) unless I can make some real money doing this which I doubt)

and my Marina wont go for the vacation rental thing , and we arent moving. There are too many pluses where we are for my wife and I to consider moving.

If I make any money it will be another schedule C on my 1040, income less expenses will probably be less than zero so as you suggest nominal additional income tax, if any,

I didnt consider the cheapskate nature of timeshare owners, especially Worldmark owners, so thanks, but remember if they bought from the developer they paid at least $15000 for a weeks ownership. This group has money and is not afraid to spend it on vacations
Click to expand...

I was thinking that the boat would go into the LLC strictly for liability reasons. I think that it's pretty straightforward to set up the LLC and transfer the boat. FWIW.

I always forget that us tuggers aren't a true representation of regular timeshare owners. This group (and I include myself) works hard to squeeze the value out of every penny. I know that there are others out there who just spend their money without worrying too much, but I have no personal experience with that. :D
 
So based on what Ive read so far, here and also on a post on Facebook and reading the websites of real charter companies, I think Ive seen enough to decide there is a market..

How to find that market and how to market to it is a task for another day,

I just got a quote from a GEICO's boat insurance company (charter boat division). Turns out I can insure for personal pleasure boating and for "6 pack" charters up In Pacific waters, up to 50 miles off shore for less than Im paying for just personal pleasure now. I can goose up the liability to a few million and still stay under $200 a month,

As far as the boat, If I stay under 6 paying passengers, there is no special coast guard inspections. Generally, operations that carry 6 or fewer passengers for hire are referred to as Uninspected Passenger Vessels (UPV), 6 Passenger (pax), or 6 Pack operations. These are your typical charter boat fishing guide or tour boat operations that may use a state numbered boat. UPV operations traveling on navigable waters of the United States under U.S. Coast Guard jurisdiction are not required to be inspected by the Coast Guard. They must comply with minimal federal standards for safety, navigation, pollution prevention and the vessel operator must hold (minimally) an Operator Uninspected Passenger Vessel (OUPV) license issued by the Coast Guard.

So the next step is to research the business license requirements, My first thought is that I dont need to do anything here. I would make my boat available to a "real" charter company with the understanding that my share of the money would be more if I find the customer, and less if they find the customer. The business is their business not mine. Obviously still work to be done here. But Im already thinking about the next step...marketing
 
ronparise said:
So the next step is to research the business license requirements, My first thought is that I dont need to do anything here.
Click to expand...

That is my first thought, too. Choose a charter company that you want to be in business with and they will tell you everything that you need to do. It may be as simple as adding them to your insurance and signing an agreement.
 
presley said:
That is my first thought, too. Choose a charter company that you want to be in business with and they will tell you everything that you need to do. It may be as simple as adding them to your insurance and signing an agreement.
Click to expand...

Exactly. But I want to negotiate a deal whereby if I find the customer I pay the charter company a reduced fee, or no fee at all beyond the captains pay

It happens that my captain has his own charter company with just one boat ... his and he has the ok to operate out of the marina we are both in
 
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