The yacht world is certainly buzzing lately. There are the seizures of boats owned by Russians with ties to Vladimir Putin and the war in Ukraine. Other big-picture issues include supply chain issues for parts and new add-ons. And, of course, the stories about families riding out the pandemic at sea.
The industry is the apex of luxury for the rich and super-rich. Nonetheless, those with millions or billions of dollars worth of assets in their investment portfolio still want to know how much a vessel should cost – no successful businessperson ever wants to make a bad deal or pay too much. So, it still is essential to put an accurate value on the vessel before buying it to spend next summer in Portofino or Saint-Tropez.
Paying to play
Here is a rough guide to what folks pay and what they get:
$9 million: This is the fee that goes to the broker selling you that $300 million boat. The money goes towards the expertise of someone who knows boats and their value. It also includes an introduction to the seller or a major shipyard (many are booked years in advance right now). The broker also handles the transaction, leaving the buyer anonymous until a photographer catches them frolicking on the new purchase.
$300 million: This is for about a 300-foot ship. The labor expenses include hundreds of workers and subcontractors spending years building the vessel. Raw materials also add up, with the hull costing $28 million. Engines and related equipment can total $21 million. The deck is $24 million, and the paint will cost $18 million or more. Interior designers will charge $4 million for their services, which includes spending $1 million on gold bar hardware for bathrooms and doors, $2 on a stylish disco with all the trimmings or a movie theater. The interior breaks down to about 20% of the building costs.
The accessories: $80,000 is the high end of what mortals spend on a new boat, but the super-rich spends that on dinghies to move staff back and forth to shore. The cost of a fancy limousine boat for cruising around the harbor in style start at $2 million. Fishermen pay another $110,000 for a standard fishing boat or $20 million for a professional-level luxury vessel used for deep sea fishing. The helicopter on the ship’s pad costs $3 million, and submarines (the latest accessory of choice) cost about $2.5 million.
Using it is not cheap
Paying top dollar means maintaining it. Experts say upkeep generally involves about 10% of the sticker price annually. Fuel bills can top $1 million if the boat makes transcontinental trips. The annual payroll for the crew operating a $300 million boat would be about $3 million for 30-40 crew members, with the captain getting about 10% of the total.
Is it a good investment?
They say that the two happiest days of owning a boat are the day you buy it and the day you sell it. The average boat depreciates quickly and still requires a lot of maintenance. However, super-yachts run counter to that wisdom. Like large one-of-a-kind real estate properties, large luxury boats also hold their value, particularly when (like now) the shipyards are backed-up. The trick is to find the right buyer, which is where that broker comes in.
