Luxury Boat Syndicates

Lifestyle dividends for a smaller capital outlay than going it alone

Boat share. Boat Syndication. Boat management. It’s the new way to go boating. Share in the costs and share in the spoils. Leave the dirty work to someone else. Simply walk on, cast the lines and enjoy your just-add-water experience. Return, tie-up at the marina, and walk off. For more and more time-poor captains and crews, shared-boat ownership makes dollars and plain good sense.

Enter Luxury Boat Syndicates, a relatively new player in the increasingly popular boat-share market that, perhaps not surprisingly, has defied gravity in the post-GFC era. Based at Rose Bay on Sydney Harbour, Luxury Boat Syndicates is, however, quite unlike some of the big boat-share operators. It’s based its business model around a boutique fleet of prestige craft instead of well-worn outmoded or ho-hum models.

At the time of writing, Luxury Boat Syndicates’ fleet included a dashing Chris-Craft Corsair 28 for day-boating in high style (one share left for $32,500 plus $800 a month in outgoings), a Regal 35 Sport Coupe with joystick due in January (five shares left for $56K each including $990 a month in outgoings), and a top-end Absolute 45 Fly (pictured) from Italy with IPS 600s (three shares remaining for $145K each plus $1163 per month in outgoings).

SIMPLE SHARE MODEL?

- Eight owners each get 43 days boating per year

The Luxury Boat Syndicates’ model is simple enough. There are eight co-owners in each boat, each entitled to 43 days of boating per year, including 13 weekend days and 30 weekdays. Thus, every owner gets one weekend day per month, which is probably enough in at least the occasional boater’s minds. You certainly enjoy greater access compared to the more-common 10-12 owner syndicates.

Furthermore, there are unlimited stand-by days. In this age of telecommuting that opens up a whole lot more pleasure boating opportunities. You don’t have to tell the office you’re afloat on your work-from-floating-home day. A cleaning fee of $75-$150 (depending on the size of boat) and fuel are the only extra charges.

Finally, at the end of the three- to three-and-a-half-year period, probably around 600 engine hours later and leading into summer when the used-boat market is strongest, Luxury Boat Syndicates will sell the boat for a five per cent commission and return the capital pro rata to the owners. Cashed up, owners can either exit the pleasure boating market forthwith or roll the balance into the next syndicate which, if all goes to plan, could well be to a bigger boat. Luxury Boat Syndicates also says owners can exit the syndicates and it will help on-sell their share.

PROPERTY GURU ABOARD

- “Life’s not just about money”

Chris Gray (right in red shirt above) is something of an ambassador for Luxury Boat Syndicates. You may have heard of him. He’s the high-profile property guru and host of Your Property Empire on the Sky News Business channel. He did a stint as the Financial Judge on Channel Ten's The Renovators and time as the Property Expert on Channel Nine’s My Home TV.

Gray has also authored two books and is the CEO of Empire Property Portfolios, a buyers’ agency and renovation business that teaches people how to make wealth from bricks and mortar. His clients range from those making a first-time investment of $500K to extremely high net-worth individuals investing $10-$20 million a year in property alone.

This begs the question: why is the savvy investment expert tipping money into a boat that is, as sure as night follows day, a depreciating ‘asset’? Given all his investment experience and nous in making money from appreciating assets, you’d think he would steer clear.

?“My thought is life’s not purely about money,” Gray tells us from the saloon of the new Absolute 56 Fly, a sister ship to the 45 Fly that’s he’s jointly about to own. “You got to enjoy life and make the most of it as well,” he says, having arrived moments earlier in bright-orange 2005 Lamborghini Murcielago Roadster, valued when new at $750,000.

“Most of my cash is heavily invested in the thing that’s going to make the most amount of money for the least amount of risk,” Gray says, explaining that he’d rather lease his car and boat to free-up the capital to invest elsewhere. It’s this rationale, the lack of capital tie-up and the returns for investments to fund his penchant for boating, that makes shared ownership so appealing, he says.

Gray’s share in an Absolute 45 costs $145K plus $1163 per month in outgoings for a $1.15 million boat. As one of eight owners, he knows he’s in a good position in respect of boat usage, as he’s self-employed and able to head out mid-week on a stand-by basis. Other owners do a lot of overseas travel.

“Why spend a million bucks when for $145K you can use the boat pretty much when you like. And if you’re not using the boat every day, why pay for it every day?”

“Then if you get half back after three years, it will have cost you $70,000 to own a million-dollar boat,” Gray says, (ignoring the cost of outgoings). He also teamed up with a mate who he would go boating with in any case, so it’s actually costing him half that amount.

NO TAX DEDUCATION?

- No tax deduction for a networking platform

While Gray intends using his professionally maintained luxury boat as a floating office for networking with business investors, he’s run the program past Deloitte Australia, which soon quashed any thoughts of the boat being a tax deduction.

“We’ll get a skipper in the afternoon for a few hours when we want to start drinking,” he adds, before sharing some of the harbour boating cruises he’s planning.

Gray says he got into boating by sharing much smaller boats with friends. His last boat was a Regal 2300 bowrider bought through Premier Marine, the importer of all the boats in the Luxury Boat Syndicates fleet, and also based at Rose Bay Marina.

One of the co-owners in the Regal was Ian Rose (left above in white shirt), a former aviation engineer, who was sitting at the airport when he had his epiphany. Research subsequently revealed no-one was offering truly luxurious boats on a share-managed basis in the well-heeled Eastern Suburbs.

One thing led to the next and now he’s got the Chris Craft 28, the Regal 35 due this month, and the Absolute 45 arriving later this year, he says. More boats are a distinct possibility given Gray’s circle of high-achieving friends.

SHARE BOATING SET TO GROW

- Founder looks forward to sharing the love around

The company Rose formed, Luxury Boat Syndicates offers new owners a full training program and continuous training until everyone is confident. This includes day and night boating. They can also organise a skipper, perfect for those corporate cruises, for about $60-$70 per hour.

The expanding fleet will be managed using a professional maintenance model that may well owe something to the strict maintenance schedules for the jumbos that Rose used to help keep in the air. A dedicated detailer and cleaning manager is part of his business model, too.

Great service, no maintenance, and more time aboard for less money is exactly what the doctor ordered, believes Rose. He expects his boat-share business will flourish, especially once Gray spreads the word amid his network of professionals and entertains them on ‘his’ impressive Absolute 45. More at http://luxuryboatsyndicates.com.au.

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Luxury Boat Syndicates

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