Moving On Up (With Apologies to M People!)
Moving from this… …to this There comes a time in the life of every boater when they decide it is time for a change. You have had your boat – and it’s been great while it lasted. However, now you may want a faster, younger or bigger (or possibly smaller) model. Or perhaps simply move from sail to power, or power to sail. Why move? Your motives may be many. Possibly you are no longer as active as you once were and now is the time to move from sail to power. Maybe you bought your first boat with limited knowledge and now have a better view of what exactly suits you. It could be that your first boat was simply a trial – to see if you liked boating – and you have now decided that you do and want something better (= more expensive!). Possibly the ‘joys of berthing’ have convinced you that you now need a boat with greater and easier manoeuvrability in crowded marinas using features such as a bow thruster, twin engines, joystick control and automatic fenders. Perhaps you want to cash in part of your pension, have just sold your business, have won the lottery or received a great inheritance. Whatever your source of finance, you want to enjoy the benefits of it. Making the move – sell and buy, or buy and sell? The first question is – do you have to sell your current boat first – or can you buy your next boat without having sold your first one? This is primarily a question of finance. If you have the funds, there is no need to wait until your current boat is sold. However, don’t forget that you then have expenses on two boats, not one, until your current boat is sold. Of course, you could try and do a part-exchange. This might work for you – however part-exchanging is far more problematic than part-exchanging a car. If it’s a private sale and purchase, you are very unlikely to find someone who has a boat that you want and who also wants the boat you currently have. If it’s via a broker, then usually the broker would have to take your boat into stock. Most brokers are reluctant to do this, as their business model is a broking one, unlike most motor traders. They rarely take into stock and sell on their own behalf. For those brokers that are willing to take boats into stock, they are often only willing to do so if the boat you are buying is of much higher value than the one you are selling. Also, you won’t be surprised to hear, they often don’t give great prices for boats they buy. Therefore, you usually get best value by separating out the selling part and the buying part of getting your next boat. Making the move – what do you want, really really want? (with apologies to The Spice Girls!) Next, consider exactly why you are making the move. If it is for space on board – then this is the most common reason why people move. However, there is an unfortunate rule of thumb about this – the price of a boat is (very roughly) proportional to the cube of its length, everything else being equal. So – to move from, say a 25 footer to a 50 footer, this doesn’t just double the cost – it multiplies it by a factor of (maybe) about 8 times. This ‘cubing rule’ is logical if you think about it – you are increasing not just the length, but also the beam and the height. Bottom line – if you want to move to something significantly bigger, you have to be prepared to spend the money. However, at Go Earth our speciality is boat procurement, so we can help you save at least a proportion of that extra cash. That’s what we do. Some factors to take into account include: Budget – capital expenditure and ongoing expenses Will you be travelling further afield – in which case, this impacts: Boat size and ocean-going capability Storage requirements on board Specialist kit, such as water-makers Boat category Insurance Communications – such as satellite radios The wishes, experience and capabilities of your crew Internet access- such as the need for your daily fix of Facebook? For a superyacht, you may not be able to get into some local marinas and harbours. So you would anchor off and use a tender to get ashore. You would therefore need to budget for a decent tender – one that will get you comfortably ashore even if the weather is a bit ‘dodgy’. You may be using a crew for the first time. Getting good advice WHERE TO GET ADVICE Having had a boat already, you already know a bit about boating. However, if you are moving up, you may be moving into a different league, with different issues, different technologies, a different mix of good and not-so-good brands with different makes and models. In particular, you may be spending more than you did on your current boat. Indeed, it is not uncommon for our clients to spend substantially more on their next boat than their current one. You need to get it right. At Go Earth, we argue that you still need unbiased advice from a trusted representative that is acting on your behalf – on the buyers behalf, not the sellers. This is a service that we provide. When we first started the company, we expected the majority of our clients to be people buying their first boat. In fact, we have had roughly a 60/40 split in favour of people buying their second or third or even fourth boat. We have often heard the comment “we wish that we had known about you when we bought our first boat!”. Our initial consultations are free – that is, free of cost, free of hassle, free of any commitment. We have
Buying a Superyacht
For many people, buying a superyacht is the culmination of a dream. For others, it must remain just that – a dream. This article is intended to help you – either in reality or in your dreams! Definition It is difficult to define what is meant by ‘superyacht’. You can define it in many ways – by size, by the possible need for crew, by cost, by design. Although this article focusses on superyachts, many of the points are equally relevant to lower value transactions. Why buying a superyacht is different There are many more factors to consider when buying a superyacht compared to a smaller boat. These factors can be practical, logistical, financial, location, size, design (interior and technical), self-drive and/or crewed, foreign exchange, regulations in other countries. None of these are problems in themselves – provided that you do it properly, with proper consideration and professional advice. A project The key thing is to realise that buying a superyacht must be treated as a project, not a simple transaction. The complexities of purchase exceed those of even a high-end car or property. If it helps, think of your superyacht as a property combined with a high-powered car that floats and can move between multiple locations and jurisdictions; and then multiply those complexities together. Put simply, do it right and you will end up with a superb, enjoyable, luxurious, asset. Alternatively, buy it on a whim, and spend time and money regretting it. So – how do you manage the purchase process successfully to maximise the pleasure and minimise the cost and your time? At Go Earth, we break the process down into multiple stages, which at a very high level are: • Initial requirements specification• Boat search (refining the requirements if necessary)• Boat negotiation• Validation (survey, legalities, finance)• Completion Initial requirements specification To state the obvious, think about what you want. Initially, perhaps you only have a general idea. This may be an iterative process, where you define and refine your exact requirements as you go along. Some things to think about include: What uses will you make of the boat? Will you want to stay on board? If so, just for weekends or for longer? How far will you want to travel? Will you want to work on board? How many friends and family will you want to accommodate? Do you want a luxury machine or a speed machine or perhaps both? What engines – or sails – do you need? How about the galley? What electronic systems are needed? Does the keel type matter? What about contractual matters when purchasing? What types of surveys do you need? What is viable within your budget? Are you going to charter it out? Will it need coding? It’s your money, and you want to spend it on what suits you. A professional buyer’s agent (yes, such as Go Earth!) can assist in all this. Boat search – refining the requirements if necessary This can also be an iterative process. You search (possibly, we hope, with the help of Go Earth), find a number of superyachts that seem to fit the bill. The process may highlight features that you had not thought about. Adjust your requirements accordingly. Hopefully you then end up with a ‘long list’ which can be whittled down to a ‘short list’ of serious contenders. A key initial question is ‘new or used?’. Whilst a new yacht may seem attractive, you need to be aware of the pitfalls. Firstly, if it is a new build, (as opposed to a boat in stock), then you will be spending a lot of money for a significant period of time before you can even begin to enjoy your purchase. There is also the risk of the yard going into liquidation mid-build. It does happen – and, while rare, happens more frequently than is desirable. Of course, the contract might provide you with a degree of protection – but even if you get ownership of the half-built hull, that is of limited consolation. The big advantage of a new build is of course that it is built to your taste and specification. The degree of customisation can vary. Most yards offer a certain degree of customisation, while others will take on a semi-custom or completely bespoke project. Ironically, the advantage of a used boat is that you know exactly what you are getting – or at least you do after a comprehensive survey and sea trial. Also, just like cars, a used vessel can be significantly better value than a new one. Let someone else take the depreciation hit. Of course, if you then want to make changes to the décor, you can do so – just ensure that you have budgeted for this. Industry knowledge is essential when looking for your first, or next, superyacht. Although many superyachts are advertised widely, some are not for personal or business reasons. In the superyacht world, confidentiality is essential. Certainly, Go Earth, through its bespoke boat search service, can assist you in this search process. If you are ‘time-poor’, a good buyer’s agent can pre-visit a selection of boats for you, take numerous photographs, and even provide a virtual reality walk through of the superyacht for you. Whilst such activities are not cheap, you may be making better use of your time running your business; and only personally visiting a short list of those vessels that appear to suit you and that you like the look of. Boat negotiation Price negotiation is an essential part of the process. Brokers do prefer to be able to tie you down to a price as soon as they can. This is not surprising. It’s their job, after all. Negotiation can become very emotional, especially considering the sums involved. Buyer’s agents such as Go Earth can provide a buffer and enable negotiations to be conducted so that that you end up with the best viable deal. Brokers like to ‘qualify’ potential buyers. Is he/she a serious
An Interview with Boat Trader
The leisure marine industry has many different companies in many sectors selling a wide variety of goods and services to boaters and potential boaters. In this special interview, we talk to Boat Trader and explain why ‘Go Earth does it differently’. Something different Boat Trader: Martin, can you tell us a bit about why you started Go Earth Martin: There are two main elements to this; a link with the water and wanting to do something different – some ‘thinking outside the box’ – if you will forgive the cliché! Firstly, we have had a link to the water in one form or another for many years. We been boaters ourselves for over two decades, and I have been a scuba diver for four decades. Our daughter and son-in-law are both qualified PADI scuba diver instructors. I am also a dinghy sailor – or at least attempting to be! So, we got to know the vast variety of companies in the broad leisure marine industry. Next we decided to form a company – with something to do with boating. Initially we were not sure what exactly was wanted. One thing we were sure of – we did not want to do the same as everybody else. In a nutshell, we wanted to do something different that would ‘add value’ to the boating community. Boat Trader: What do you mean by ‘something different’? The art, craft and science of boat buying Martin: Frankly, at first we were not sure. So, we indulged in (cliché alert!!) some out of the box, blue-sky thinking. (Well, I did warn you about the clichés!) What we eventually realised was that we needed to do things that were of genuine value to boaters, which were not currently being done, and which we could deliver successfully. We did not want to be just another chandlery or another boat sales company or another training school. One thing that we kept on hearing was of people who were not quite sure what they wanted when they were buying a boat and how to go through the whole process. Brokers help, of course. However, they have to act for the seller, not the buyer. Therefore, a key element of our business is helping people with buying a boat, acting on behalf of the buyer, not the seller. Boat Trader: How do you do this? Martin: By becoming experts in boat buying. The concept is simple enough. Most people only buy one, two or three boats in their lifetime. They simply do not do it often enough to know all the things that should be considered when buying a boat. We go through the process time and time again with multiple clients, multiple brokers and multiple types of boats. As a company, we aim to be the expert ‘port of call’ (another cliché ?) for boat buyers. Requirements analysis Boat Trader: Is that all there is to it? Martin: No, not quite! As well as expertise, you need processes, tools and data to support the activity. As an example of a process, for our boat search, we typically spend some time with the client developing a ‘Requirements Analysis’. We talk to the client, find out what they are looking for, offer advice, and iteratively develop and improve the requirements analysis. This does require a bit of time and work up front; but – very importantly – it helps ensure that the client ends up with a boat that really does suit them and their needs. Note that this is the polar opposite of ‘Oh –I have just seen a nice boat – let’s buy it’. We start with the client, not the boat! Boat Trader: So the first step is the requirements analysis. What do you mean by iteratively? Martin: Sometimes, the client is not quite sure what they want. So – in our enhanced service – we might for example develop a requirements analysis, then do a boat search. After getting our written report, the client will think about it, might develop their thinking further, and might realise that they need something slightly different, or simply change their mind about some aspects of their requirements, or have a change in the budget they are willing to spend. We then (at absolutely no extra charge) change the requirements analysis and re-run the search for them. Boat Trader: What if they change their mind again? Martin: No problem. With the enhanced search, we will run the requirements analysis / boat search a third time, again at absolutely no extra charge. The important thing for us is that the client should not be locked into their initial thoughts. We want them to end up with a boat that really does suit their needs. Software tools Boat Trader: Earlier on, you mentioned that you used some ‘tools’ in your work. Martin: One of the tools that we use is some software that we developed in house. It holds an enormous database of brokers and others – UK and global – covering a vast range of budgets, boat types, locations and so on. During a boat search, we can input some key parameters from the requirements analysis and use that to query the database to identify the brokers that are likely to have boats that match the requirements. This database also includes, for example, user forums that sell boats, brokers who don’t advertise on the internet, some private sources, some not-so-well-known auction sites and so on. If you are searching for a superyacht, then you clearly need to focus on those brokers, not ones selling, say, narrowboats or river boats. The software helps us to this effectively and efficiently. Data Boat Trader: What about the ‘data’ bit? Martin: Easy – We accumulate masses of data inside our software. We use that
Deciding What You Want From Your Boat
Deciding what you want from your boat One of the challenges when buying a boat, especially if it is your first boat, is deciding what you want. At Go Earth, we call this process “Requirement Analysis” – a term unceremoniously nicked from project management and software development. Breadth of choice So – you know that you want to buy a boat – but what sort of boat? There are more varieties of boat than, say cars. This means that – if you are to make best use of your money and get a boat that you will enjoy for a long period – you need to give it some thought. Let’s look at some of the variety of choices you need to make. All cars, for example, have 4 wheels – unless you are Del Boy! (And for the younger readers, do a Google search on ‘Del Boy car’!!). Boats on the other hand can have one, 2, 3 or even more hulls. In fact some racing yachts hardly use their hulls, as they are on foils. What about motive power? In cars, the choice is between petrol, diesel and electric. However, they are all broadly similar in that their output is rotary power – turning wheels. The differences between the main ‘power units’ on a power boat (engines) and on a sailing yacht (sails) could not be more stark. What about Price range? Again, the differences are massive. No matter how hard you try, it is really very di ffi cult to spend more than (to take an extreme) £2 million on a car. It’s dead easy to do this for a boat. Trade-offs The main trade-offs to consider when purchasing a boat of any type are: Size Age Price Subsidiary trade-offs are Condition, including service history Brand Other factors, such as the inventory seem to pay only a very minor part. Sometimes, great electronics or the availability of a dinghy and engine may be a minor factor. As a purchaser, you need to decide on the relevant importance to you of these factors. Age matters In respect of these trade-offs, boat are similar to cars. The older the car, the cheaper it usually is. There are exceptions – some classic cars (what we used to call ‘old bangers’!) may appreciate in value. However, the general rule still applies – there is a depreciation curve showing how price falls at the boat gets older. At Go Earth we have records of asking, and sold, prices for many models; so let’s take one random example, the asking prices for a Fairline Targa 48. We did an analysis of average asking prices for this model, and this is what we found. Illustrative Prices – Fairline Targa 48 In the table, the first column is the year, the second is the asking price, and the third is the annual depreciation compared with a model a year younger. These prices may be only approximately typical, but they illustrate that (as with cars) the newer the boat the larger the depreciation hit. We find that once you get to the older boats, and if you buy wisely (using Go Earth’s negotiation services!), you can suffer zero depreciation for several years. Size matters There is, however, one big difference between cars and boats. Cars are all very broadly the same size. Even the largest SUV is probably only twice the size of the smallest micro car. The size difference in boats is immense. This leads to a major impact on price. As a very approximate rule-of-thumb, the price of a boat increases as the cube of its length (as a boat increase its size in all 3 dimensions). So, a boat that is twice the length of an other one, could be 8 times the cost. Given that all boats shrink when you put them in the water (yes, I know that does not literally happen – I just mean that a boat on hard-standing always looks bigger than when it is in the water), deciding on the size of boat is a very important part of the decision making around defining your requirements. Flybridge or Sports Cruiser? Let’s take just one specific example of the sort of decision you need to make. Suppose that you are in the market for, say, a power 38 to 42-footer. Two of the main styles of boat are flybridges and sports cruisers. Which suits you best? If you are going to do this comparison, it may be helpful to know the typical main characteristics of each type. This is a summary: Flybridge Depending on the brand, there may be a limited range of models. By having a flybridge, this usually gives you more overall deck space, as you have a deck on top. Easier to manoeuvre in a marina, as you can see mostly around you from the flybridge. Two helm positions. Arguably, more traditional looking. Need to cover the flybridge with a tonneau cover in inclement weather. Flybridge is a nice space to entertain in good weather. However, the steps up to the fl ybridge can be steep, though. Better view of the scenery and surroundings from the flybridge. Slightly more susceptible to side wind, owing to higher windage. Can make berthing the boat slightly trickier in open marinas with high wind Slightly more susceptible to side wind, owing to higher windage. Can make berthing the boat slightly trickier in open marinas with high wind Cruising in warm weather from the flybridge is very pleasant. At larger sizes, flybridges tend to be the most popular choices. Higher – therefore bridge clearance can be an issue, primarily in inland waterways. More expensive per foot length, owing to an extra deck (i.e. the flybridge); but possibly cheaper per square metre of deck space. Flybridges tend to have better galleys. Sports Cruiser Possibly a more extensive choice. Less deck space. Fixed point to steer from – possibly limited visibility at some angles. One helm position. Sleeker,