FRACTIONAL YACHT OWNERSHIP vs SOLE OWNERSHIP
Smith owns a 64’, 4 stateroom yacht that cost him $1,200,000 when it was brand new. The yacht is docked at a marina near Smith’s home and he has a part-time maintenance man that checks the yacht twice a week. Smith uses the yacht on occasional weekends to take short trips with his friends and family. The yacht is now five years old and requires some major mechanical and cosmetic work.
Smith is thinking about selling his yacht and purchasing outright a 5% interest in a 4 stateroom fractional yacht for $89,980. Smith likes the idea of owning a luxury yacht complete with warranties, competent management, and a professional crew. He also resents being tied to the helm while his guests enjoy themselves on his yacht. To compare the two options he creates the following table:
The total five-year cost advantage of purchasing a Saveene share compared to sole ownership can be as high as $1,236,396 despite the purchase of a smaller yacht and shorter trips close to home with sole ownership*