Anyone would love to take a day off and hit the coasts on their private yacht. While yachts are expensive, they are definitely affordable if you are willing to consider a few things. The size of the yacht is the most important factor when it comes to buying.
Considering that, you might be wondering what size yacht you really can afford?
To put it into perspective, the price of a yacht can range from $100,000 to a whopping $600 million simply based on the size. The guest capacity as well as the number of cabins the yacht holds greatly affects the price. An average-sized 50 feet yacht can cost around $3-5 million whereas a 100 feet long can cost about $20 million. Here’s the most important part, the annual maintenance cost of your yacht can be about 10% of the purchase price.
Aside from the size, you would still have to consider all the other factors associated with the price. That is why we have put together some useful information, to help you have a much clear idea of what size of yacht you can actually afford.
1. The Many Different Sizes
Before going in-depth with the costs why don’t we get familiar with a few sizes?
There are many debates but no definite answer to what the standard size of a yacht should be. It is safe to assume that an average family size yacht can be around 40 to 70 feet.
Then we have superyachts that are generally longer than 120 feet, megayachts are about 200 feet and the latest giant ones which are presumably called Giga yachts are about 400 feet in length.
You will have tons of options while choosing the right size. Check out yachts for sale to see many different sized yachts and their real-time price.
2. Determine What Size You Need
This is really important and will help you easily make your decision. First, ask yourself, how big do you personally want it to be? And how many people you are willing to take with you on your yacht. Since the size is a big factor be sure to properly look into these details.
Another reason why you should determine the size beforehand is that you might need a cabin crew. It is assumed that with little experience and practice beginner yacht owners can easily maneuver yachts reaching up to 50-60 feet. For a70 feet yacht, however, a professional captain and a cabin crew are needed to control everything smoothly.
Not to mention the whole crew comes at a hefty price. A professional captain has to be paid $1000 per foot. Meaning if you have a 70 feet yacht you will have to pay the captain $70,000 per year.
Now that you have a better idea about the size. Let’s dive into the costs
We briefly pointed out the required maintenance cost above but there are many other things that affect that cost.
3. Make Sure You Qualify For A Boat Loan
It is safe to assume that you will most likely be applying for a boat loan to buy your precious yacht. You usually have 2 options, a secured loan, and an unsecured loan.
The secured loan will have lower interest rates and longer payment period but will hold the boat as collateral.
The unsecured loan will have higher rates and shorter terms but likely will not hold anything as collateral.
To qualify for a boat loan you will have to have a debt to income ratio below 40%
4. Make A Smart Initial Payment Plan
It is always better to think ahead and make a plan that meets your expectation. A general plan would be to make a 10% down payment with a 5% annual interest rate spanning for about 10 years. This should give you enough time to enjoy your yacht while paying for other expenses.
5. Yachts Need To Be Insured
To make sure the yacht is secured you will need to insure it. The cost of insurance depends on the type of yacht, size, and the location where you currently reside. The average insurance cost for a yacht can be around $6,000-$10,000.
6. Fuel Costs Can Vary
Fuel costs can vary for different models. This is mainly due to the fuel capacity and how fast a yacht burns fuel. It also depends on the size of the yacht. There are plenty of yachts that are fuel-efficient but in general, the price is pretty steep.
For example, if you own a 70 feet yacht that has a fuel capacity of 1300 gallons and if the price per gallon is about $3.65 then you will need to pay $4,745 to refill it. Fuel price also differs depending on the regions.
7. Hidden Costs Should be Considered
This is one thing I’m sure everyone can agree on. Nobody likes hidden costs! But unfortunately, yachts have plenty of it.
For starters, depending on the size and guest numbers, you will have to spend about a thousand dollars to buy life jackets. Then there are fire extinguishers, safety gear bags, distress signal kits, a radio system, and a GPS chart plotter. Adding everything up can cost around $10,000-$20,000. You will also have to consider the storing cost of your big ol yacht.
Then there are those monthly incurring payments related to maintenance and design. The engine may wear out and motors need to be changed over time.
You might also be willing to change the interior design of the yacht after a couple of years if it gets out of style.
The cost of a cabin crew is also something to think about. The whole crew can be of 9-15 members consisting of a captain, engineers, deckhands, and a chef. Obviously, if you want quality service then you will need a quality cabin crew which is definitely not cheap.
To sum things up, the bigger your yacht is the more money it will need to maintain. Even aside from the purchasing price, there are many other factors you just can not ignore. With a larger yacht, you will need to worry about a lot of other things also.
The decision is totally up to you, it all comes down to how you envision your yacht to be and whether you want a 70 feet yacht or 200 feet. But keep in mind that size does matter a lot. Consider all these things the next time you are out to buy your dream yacht and head out to sun excursion on open waters.