Anyone can buy a boat. Only a select few people are privileged enough to own a yacht. If you’re in a position where you’re financially capable of buying a yacht, let the fun begin! But before getting started, take some time to familiarize yourself with the process.
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The Benefits Of Yacht Ownership
There are a variety of motiviations for purchasing a yacht and your situation is unique from that of anyone else. Having said that, some of the general benefits of yacht ownership include:
- Cost-effective. As anyone who likes to yacht knows, renting a yacht for a week or two can be extremly expensive. If you do it more than once or twice per year, it’s almost certainly more cost-effective to buy your own boat. You can even rent it out when you aren’t using it.
- Preferences. There’s nothing worse than spending thousands to rent a yacht only to be dissatisfied with the boat and the expereince. When you own your own yacht, you get your preferred boat every single time.
- Explore the world. There’s no better way to see the world than by taking your yacht to exotic locations. (And you’ll never have to worry about finding suitable accomodations.)
- Time with loved ones. When you own a yacht, your friends and family will drop what they’re doing to accept an invite. This gives you the opportunity to spend time with the people you love.
You have a long list of ways you could spend your money, but investing in a yacht is something that will continue to yield value for years to come. The challenge is finding the right yacht for your wants and needs.
How To Buy The Perfect Yacht
The yacht buying process isn’t nearly as challenging as it once was. Competition and accessibility have both increased, which is good news for buyers. Here’s a glimpse at what the process looks like from a bird’s eye point of view:
1. Research Features
The process begins by researching the various features that are common on yachts and developing a list of needs and wants. Knowing the difference between the former and latter is key. A need is something that must be present in order for you to purchase the yacht.
A want is something that’s nice to have, but isn’t a deciding factor. Unless you have an unlimited budget and a willingness to design your own yacht, you’ll end up purchasing something that meets all of your needs and checks off a few of your wants.
2. Find Inventory
Once you have an idea of the type of boat you’re shopping for, you can jumpstart the process by finding inventory. There are a couple of options here:
- You can shop around on your own and see what sort of inventory exists online.
- You can shop with specific yacht builders and resellers who have inventory on hand.
- You can shop with a yacht broker to find a selection of pre-owned yachts from a variety of sources (both online and offline).
If you want the absolute best look at what yachts are on the market, a broker is the best option. You’ll gain exposure to far more inventory than any one company can offer, while simultaneously benefitting from the expert knowledge that a broker provides.
3. Negotiate Price
Yachts are always up for price negotiations. In fact, buyers often have a ton of leverage (particularly for yachts on the upper end of the market). While it may take time for the seller to negotiate a price down, a buyer who is willing to play the waiting game can get a good deal. There’s a very limited buyers market – particularly in economic downswings – and sellers are highly sensitive to fluctuations in demand.
4. Determine Financing
When it comes to purchasing a yacht, high net worth individuals have plenty of financing options. While a hefty down payment will be required, financing solutions can absorb the rest of the purchase. As banker Edgar Montanez explains, “Interest rates for yacht loans can vary from floating-rate to fixed-rate loans with payment options and amortizations up to 20 years.”
The key is to use a lender that you have a preexisting relationship with. Yacht financing carries considerable risk for the lender and you’re more likely to get favorable terms if you already have some rapport.
Wait For The Right Fit
You don’t want to rush into buying a yacht. Regardless of your net worth, this is a major investment that calls for discipline and discernment. Take your time and wait for the right boat. You’ll know it when you see it!
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