Owning a boat is undoubtedly expensive and that last check you sign before driving your new boat home is just the tip of the iceberg. Budgets are in the eye of the beholder as operating costs can vary greatly depending on how many days, weeks or months the boat will be in use and also how extensive your travel or tournament participation will be.
A lot of people dream of owning a lavish sportfishing yacht and touring the world chasing billfish, but few have the financial backing to coax that dream to life.
Keeping a large sportfish, or even a small charter boat, up and running through an entire season can be challenging. Any little hiccup can cost thousands of dollars in repairs and it is important to prioritize a realistic long-term budget for time and finances.
“There are three operating expense categories. The first are fixed costs. You incur these even if you never leave the dock. These include insurance, crew, dockage, painting, etc. Next there are daily costs that arise when you use the boat. These include fuel, ice, bait, food, drinks and everything related to running the boat. Finally, there are hourly costs,” says owner of Maverick Yachts and a principal of Maverick Costa Rica, Larry Drivon.
For the hourly cost category, Maverick Costa Rica uses two inputs—hours between oil changes and an engine reserve.
For a 36-foot Maverick walkaround entered in his Costa Rica management program, the oil change figure comes out to $2.00 per hour. The engine reserve, which factors the average hourly cost between engine rebuilds, is $8.75. Accordingly, the factored cost is $10.75 for every hour that the boat runs. Not surprisingly, these costs can vary greatly depending on the age and condition of the boat and its location.
Once you are aware of the total operating costs, it’s time to decide if you need to offset the expenses to keep the dream afloat. While it’s not an easy task, there are a select group of individuals who are able to consistently use their boats to generate income, while deriving substantial tax benefits. To determine how much a boat needs to work in order to break even simply compute your fixed costs.
Next, determine an average expense rate per day of boat use. Then you can assign an average number of engine hours per day of charter fishing, generally 10 hours, and multiply it by the hourly expense rate. This will give you the daily input for your hourly expense category. Finally, assign the rate that you charge clients for a day of charter.
With the annual fixed cost number, inputs for the average daily cost and average hourly cost, and the charter rate, you can begin multiplying everything by the number of days chartered. For simplicity’s sake, see what it would look like if you chartered 75 days, 100 days and 125 days.
At some point on the curve there is a breakeven—at which time the money you bring in chartering equals what you shell out paying for all the expenses. From here, each day chartered generates income. Once you’ve got a handle on all of the financials, think about your objective. Are you trying to run a business or simply looking to offset some expenses?
Allowing other people to charter your boat is not for everyone and using charter as a tool to ease the cost of ownership requires careful consideration for all parties involved.
The following total cost of ownership estimate is based on a $2 million, 60-foot sportfish averaging 300 hours per year and incurring no major malfunctions. Fuel has been excluded as there are just too many variables that affect annual consumption.
Total Cost of Ownership
Oil Changes, 3@$2,500 (every 100 hours) $7,500
Transmission Oil (every 200 hours) $750
Oil Leaks Repaired $2,000
Heat Exchanger/Aftercooler Cleaning $5000 ($10,000 every 2 years)
Raw Water Pump Maintenance $3,000
Fuel Injectors Replacement $9,333 amortized over 3 year injector replacement (1,000 hours $28,000)
Annual Engine Maintenance: $27,583
Oil Change $750
Generator Impellers $250
Annual Generator Maintenance: $1,000
Cutlass Bearings $3,000
Bottom Paint and Prep (20 coats) $8,000
Propeller Balancing $3,000
Full Hull Wax and Detail $3,500
Annual Boatyard Maintenance: $17,500
Annual Policy: $12,000 – $18,000
Captain Salary $70,000 – $120,000
Mate Salary $50,000 – $70,000
Annual Crew Costs: $120,000 – $190,000
Year Round (South Florida) $20,000 – $23,000
Electric Cost $2,400 – $3,600
Annual Dockage: $22,400 – $26,600
Electronics Upgrades & Subscriptions
Sirius XM Radio, Weather & Fish Mapping $600 – $840
Satellite TV $1,200
Updates and Upgrades $15,000- $33,000 amortized over 3 years ($45,000 – $100,000 level of replacement every 3-5 years.)
Annual Electronics Costs: $16,800 – $35,040
Registration and Documentation
Registration (State of FL) $128
Coast Guard Documentation $26
Annual Documentation Renewals: $154
Miscellaneous Costs, Repairs & Maintenance
Ice Machine $2,500
Air Conditioning $2,000 – $6,000
Fire Suppression $500
Total Miscellaneous Costs: $7,500 – $11,500
Total Yearly Budget: $224,000 – $327,000
2021 At a Glance
Ah, the good old days. When you could step into a tackle store and buy a pack of hooks for $1.00…or not. Recent years have seen a variety of unpredictable factors that have affected the prices of essential sportfishing gear and equipment. In our first annual cost of sportfishing analysis we’re providing a snapshot for a market basket of common goods. We’ve selected the following mix of everyday items based on their longstanding popularity and look forward to examining the consumer price index for years to come.
- 12 pack Baitmasters medium ballyhoo, unrigged $15.00
- 12 pack Bionic Bait small ballyhoo, unrigged $12.00
- Dozen live goggle eye $80.00
- Diesel fuel, Buccaneer Yacht Club, Palm Beach, FL $3.35 gal.
- Registration (State of FL) $128.00
- U.S. Coast Guard Documentation $26.00
- NOAA HMS permit $20.00
- The Absorber Chamois, 27” x 17” $18.99
- Shell Rotella T4 15-40 oil, 5 gal. $75.69
- Racor fuel filter 30 micron element $14.18
- Mold Craft daisy chain, five 9” squid $39.99
- Yo-Zuri HD fluorocarbon 60 lb. pink, 100 yd. $89.99
- Momoi Hi-Catch Diamond 20 lb., 3,000 yd. $106.99
- Berkley Prospec 50 lb., 3,000 yd. $173.99
- Black Bart Breakfast teaser $110.20
- Shimano Talica 20 BFC $699.99
- Shimano Tiagra 50WA $699.99
- Penn International 80 VISW $899.95
- Eagle Claw 9/0 L2004 ELF, 100 ct. $35.99
- Lindgren-Pitman SV-2400 $8,750.00
- Yamaha F300 V6 $33,400.00
- YETI Tundra 65 $349.99
- Dexter 8-inch Sofgrip fillet knife $36.60
- Costa Del Mar Blackfin Pro 580 G $269.00
- Bud Light 12 pack, cans $12.49
- Fireball cinnamon whiskey, 750 ml $17.99