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Many megayachts are chartered when not in use by their owner. So in the end they are investments that produce a return [1] “ It's worth acknowledging that whil

Many megayachts are chartered when not in use by their owner. So in the end they are investments that produce a return [1] “ It's worth acknowledging that while owners will ultimately spend a huge amount for the privilege of having their very own superyacht, they're able to recoup some of these costs by chartering them out. Connor estimates that around 12 weeks of charter represents the annual operating cost of most yachts, which means owners can break even if they hire their boats out for the same length of time they use them during the year.” [1] https://www.cnn.com/travel/amp/hidden-costs-of-owning-a-superyacht/index.html https://www.cnn.com/travel/amp/hidden-costs-of-owning-a-supe...

adhesive_wombat 5y ago
You might break even on running costs, but when do you break even on the outlay? I guess you get some back if you sell it, and you probably never actually laid out for it as such rather than though some mad financial chicanery because simply paying for stuff is decidedly plebian.
- CSSer 5y ago
  I’m not sure that’s the point. I think it’s more about minimizing costs. The rest is just part of the opportunity cost.
- Schroedingersat 5y ago
  Well the yacht is now an 'investment' so you get to claim it on taxes and get an instant 30% refund. Your buddy sets up a special company just to build it and stiffs all his employees and suppliers. Then the quid pro quo gets you another 30% or so back. Renting it out for another 12mo/year earns the remainder back in a decade or two. You can also 'donate' the use of your yacht to have a big party (also known as a charity ball) from time to time if you feel you are paying too much tax. Make sure the 'charity' is one owned by one of your buddies and is primarily used for lobbying or undermining competitors.
  - missedthecue 5y ago
    How do I claim things on my taxes as "investments" for a 30% refund?
  - NavinF 5y ago
    > now an 'investment' so you get to claim it on taxes and get an instant 30% refund I gotta ask, have you ever filed taxes? Cause that’s not how any of this works.
- taneq 5y ago
  Eventually, yeah, I’d think so. I’m not nesting-doll-yacht rich but as I understand it: 1) You don’t buy something for $100+ million out-of-pocket. It’s easy to borrow money when you have money. The purchase would be financed at very close to market interest rates, and the repayments factored into the running costs. 2) The vessel would then be run as a business and chartered out for conventions, luxury cruises etc. Any profits would go to the owner. 3) The owner would then use the vessel as needed, maybe even paying like any other customer (albeit out of the profits generated by the boat itself, I’d imagine.) 4) Any remaining profits could be used to pay off capital, but probably aren’t. Instead, they’d be used to fund new ventures.
- credit_guy 5y ago
  Here's an example: Moonlight II. It's a 300 foot yacht owned by a sheik [1]. The price is $100 MM. You can rent it for "from $705k per week" [2]. Could be more, I guess. If they manage to charter it for 30 weeks a year, that's a nice $21 MM. That more than covers any conceivable financing and operating costs. In fact, you'd be hard pressed to find an investment with a similar return. [1] https://www.superyachtfan.com/yacht/moonlight-ii/ https://www.superyachtfan.com/yacht/moonlight-ii/ [2] https://www.fraseryachts.com/en/yacht-for-charter/moonlight-ii/ https://www.fraseryachts.com/en/yacht-for-charter/moonlight-...
  - fnord77 5y ago
    > If they manage to charter it for 30 weeks a year that's a big "if"
    - objektif 5y ago
      10 weeks would put it on par with Equity returns. Still not bad.
    - TylerE 5y ago
      Something like that probably has a one week turnaround between charters just to deep clean the thing, and reposition for the next trip.
      - adhesive_wombat 5y ago
        Ew, yes can you imagine the mess. I'm surprised no authority has raided one just after an investment banker party cruise, looked for the forgotten baggies and seized the vessel for "drug smuggling".
        vkou 5y ago
        In most localities, the purpose of drug laws is not in constraining the behaviour of people wealthy enough to party on a super-yacht.
  - 5y ago
nerdponx 5y ago
Silly question, but who is renting the superyachts? Is it all just money laundering and tax sheltering back and forth among billionaires?
- Inconel 5y ago
  I assume people worth several hundred million dollars won't spend 10%-50% of their total wealth on a $100+ million yacht, but will still pay $1mil/week to rent one on occasion.
rich_sasha 5y ago
Boats are fantastically expensive to maintain. You can surely recover some costs by renting them out, but I’d imagine it’s still mostly a net negative “investment”.
- oneshot99991 5y ago
  If it floats, flies, or fucks, it's cheaper to pay by the hour.
cduzz 5y ago
It depends on why you've got a mega yacht. If you're a state level actor, you've got state level security concerns. I doubt, for instance, the American or Russian consulate gets rented out for parties where they turn over the whole kit to some other organization. Yes, there is "your" staff on-site to protect much of the yacht / facility, but that doesn't stop a determined actor who's got a week of somewhat unsupervised access from infesting the whole ship with bugs bombs and poisons.

adhesive_wombat 5y ago

You might break even on running costs, but when do you break even on the outlay? I guess you get some back if you sell it, and you probably never actually laid out for it as such rather than though some mad financial chicanery because simply paying for stuff is decidedly plebian.

CSSer 5y ago
I’m not sure that’s the point. I think it’s more about minimizing costs. The rest is just part of the opportunity cost.
Schroedingersat 5y ago
Well the yacht is now an 'investment' so you get to claim it on taxes and get an instant 30% refund. Your buddy sets up a special company just to build it and stiffs all his employees and suppliers. Then the quid pro quo gets you another 30% or so back. Renting it out for another 12mo/year earns the remainder back in a decade or two. You can also 'donate' the use of your yacht to have a big party (also known as a charity ball) from time to time if you feel you are paying too much tax. Make sure the 'charity' is one owned by one of your buddies and is primarily used for lobbying or undermining competitors.
- missedthecue 5y ago
  How do I claim things on my taxes as "investments" for a 30% refund?
- NavinF 5y ago
  > now an 'investment' so you get to claim it on taxes and get an instant 30% refund I gotta ask, have you ever filed taxes? Cause that’s not how any of this works.
taneq 5y ago
Eventually, yeah, I’d think so. I’m not nesting-doll-yacht rich but as I understand it: 1) You don’t buy something for $100+ million out-of-pocket. It’s easy to borrow money when you have money. The purchase would be financed at very close to market interest rates, and the repayments factored into the running costs. 2) The vessel would then be run as a business and chartered out for conventions, luxury cruises etc. Any profits would go to the owner. 3) The owner would then use the vessel as needed, maybe even paying like any other customer (albeit out of the profits generated by the boat itself, I’d imagine.) 4) Any remaining profits could be used to pay off capital, but probably aren’t. Instead, they’d be used to fund new ventures.
credit_guy 5y ago
Here's an example: Moonlight II. It's a 300 foot yacht owned by a sheik [1]. The price is $100 MM. You can rent it for "from $705k per week" [2]. Could be more, I guess. If they manage to charter it for 30 weeks a year, that's a nice $21 MM. That more than covers any conceivable financing and operating costs. In fact, you'd be hard pressed to find an investment with a similar return. [1] https://www.superyachtfan.com/yacht/moonlight-ii/ https://www.superyachtfan.com/yacht/moonlight-ii/ [2] https://www.fraseryachts.com/en/yacht-for-charter/moonlight-ii/ https://www.fraseryachts.com/en/yacht-for-charter/moonlight-...
- fnord77 5y ago
  > If they manage to charter it for 30 weeks a year that's a big "if"
  - objektif 5y ago
    10 weeks would put it on par with Equity returns. Still not bad.
  - TylerE 5y ago
    Something like that probably has a one week turnaround between charters just to deep clean the thing, and reposition for the next trip.
    - adhesive_wombat 5y ago
      Ew, yes can you imagine the mess. I'm surprised no authority has raided one just after an investment banker party cruise, looked for the forgotten baggies and seized the vessel for "drug smuggling".
      - vkou 5y ago
        In most localities, the purpose of drug laws is not in constraining the behaviour of people wealthy enough to party on a super-yacht.
- 5y ago

nerdponx 5y ago

Silly question, but who is renting the superyachts? Is it all just money laundering and tax sheltering back and forth among billionaires?

Inconel 5y ago
I assume people worth several hundred million dollars won't spend 10%-50% of their total wealth on a $100+ million yacht, but will still pay $1mil/week to rent one on occasion.

rich_sasha 5y ago

Boats are fantastically expensive to maintain. You can surely recover some costs by renting them out, but I’d imagine it’s still mostly a net negative “investment”.

oneshot99991 5y ago
If it floats, flies, or fucks, it's cheaper to pay by the hour.

cduzz 5y ago

It depends on why you've got a mega yacht. If you're a state level actor, you've got state level security concerns. I doubt, for instance, the American or Russian consulate gets rented out for parties where they turn over the whole kit to some other organization. Yes, there is "your" staff on-site to protect much of the yacht / facility, but that doesn't stop a determined actor who's got a week of somewhat unsupervised access from infesting the whole ship with bugs bombs and poisons.