Overseas Radio Network – Yacht Buying Tips, Seasonal Pricing & Charter Program Phase Out Effects
In the Overseas Radio Network Show 5, Segment 1, we will share tips from experienced yacht brokers. We start with these insider secrets to buying yachts:
- Yachts have seasonal prices
- Charter program phase-out timing affects yacht prices
GARY FRETZ: Ahoy, mates! You’ve tuned into “Yachts: The Perfect Escape Vehicle”. This Gary Fretz and I have my co-hosts here today, Stephen and Estelle Cockcroft. You might be wondering why yachts make the best escape solution. Well, it is because you can find live aboard yachts for $15,000, $15-million, and everywhere in between. They serve as your home and they provide inexpensive transportation around the world.
For a transcript of this podcast, click “read more” below.
GARY: Yes, it’s possible to sail around the world for next to nothing using windpower. And if you would like to know how to do that just stayed tuned.
ESTELLE COCKCROFT: Today we will be revealing insider secrets to buying boats. These are valuable tips we learned over 23 years of buying and selling boats for profit. By following a few simple rules, you can save thousands of dollars if you buy and sell smartly.
Gary, do you have some tips for our listeners that they can benefit from understanding these tips?
GARY: Yes, in 23 years of buying and selling boats I noticed that there are certain great valuable tips that can be used to save money. Or if you are buying and selling boats for a living, it helps you make more money. And I would say that the biggest factor in saving money is to utilize seasonal price tendencies.
Yachts Have Seasonal Prices
It’s possible to see very large swings in boat prices. In just six months’ time, I have seen incredible price changes from year to year and I think understanding this factor alone can save you many thousands of dollars. Now the price of yachts varies in the manner somewhat to that of commodities. For example, heating oil is always more expensive in the winter when everybody wants it and in the summer you can give it away. So there is always price swings and yachts follow similar trend.
So consider this, every year we see the most buying when the Europeans and North Americans are getting ready for the winter high season. And that’s in Florida the Bahamas and the Caribbean. These types of boats would be sailing yachts, trawlers, cruisers and sportsfish type yachts. These buyers generally start shopping in late August and the buying activity ends in December. So we normally see the lowest priced best deals selling first in the summer. That’s in June, July and August. And the highest priced, worst deals occur later on like October November December. But this can vary by one or 2 months in a given year
Also, when the hurricanes are churning up the Atlantic Ocean in July to October, this helps weaken prices in October and in all the eastern seaboard and Caribbean markets. So every year we typically see the highest prices for a given model in December or maybe January. And I am absolutely amazed at the number of people who fail to plan ahead and ended up paying 10 to 15% more at the last minute.
In fact, I used to make a living doing this. We’d buy boats and the summer hold them for 3 to 5 months. We’d sell the exact same boats and make 15 to 35% just playing this one tip. Now in other markets like in the Great Lakes, the northern United States, Pacific Northwest peak buying season is in the Spring. So it is actually the opposite of the Caribbean and Florida. So when Fall arrives there is not much buying in those areas so you may be want to buying up in that area in the fall that is when nobody else is buying up in there.
So you need to know what the peak buying season is for your type of boat and then consider buying when demand is lowest.
ESTELLE: So it is all about doing the homework and deciding when it is the best time for you. Thank you, Gary. Stephen, do you have anything to add to this?
Charter Program Phase Out Timing Affects Yacht Prices
STEPHEN COCKCROFT: There is a related factor which we called flooding the market factor. Most Caribbean charter yachts finish their programs and are phased out around May of each year and are put up for sale in around that time. Sometimes the phase outs go through the hurricane season, but essentially these boats every year are phased out.
Once you have this huge phase out taking place, the market is flooded with a lot of charter boats that are very similar. In fact, in most times, they are identical. So you have a lot of boats all competing for the same buyers and, of course, when you have a surplus this drives the price down. So it is always good to look at when the market is flooding to try and figure out when you would be able to have the best or lowest possible offer accepted.
These yachts are mainly berthed in the summer hurricane zone and many owners are concerned about paying hurricane preparation and dread earning a boat during this period. There is a lot of exposure when you owning a boat in hurricane because obviously you paying high insurance premiums. And, also, you are having faces to do hurricane preparation and if hurricane comes along.
Other owners like travel agencies and Europeans who are not emotionally attached to their yachts like most individuals starts the boats at a relatively cheap price after he income stops around May. Prices usually hit bottom around July of each year. As Gary said, there are speculators who buy yachts in the summer and hold them until later in the year. So you have to watch for these guys because obviously they are trying to get it at a low price and sell it at high price latter, there are definitely are deals when the market is flooded.
ESTELLE: Excellent, guys. So far, we have explored seasonal price indices. And what was the other one, Stephen? Flooding the markets. So in a few moments we will discuss some more tips.
GARY: And we are also going to give you a fantastic tool that the speculators use and smart buyers and sellers use. It is a private data base which has all the recorded yachts sales since 1998. So there are hundreds and thousands of yacht sales recorded year and each entries shows the boat specs and photos they also give the original listing price and the date listed.
It will reveal the actual selling price and the date sold so we are going to talk a little bit more about that when we get back from out short break. You are listening to “Yachts: The Perfect Escape Vehicle” only on the Overseas Radio Network.