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Le Boat / Emerald Star Boat Ownership Scheme

  • #1
    Registered Users Posts: 38 mobyduck


    Hello, has anyone here looked into this?

    https://www.emeraldstar.ie/boat-sales

    On the face of it, an 8% return per year for 8 years and guarantee to buy the boat back for 50% of purchase cost looks interesting especially combined with at least a few weeks of cruising thrown in per season.

    What are your thoughts?

    Thanks!


Comments



  • Seems to me rather like buying a timeshare on on island in the middle of the Atlantic where they have to import sand and is a day's flight time away. Is it promoted by that brilliant financial genius eddie hobbs?




  • To flesh out my rather snarky comment above –

    If it were a decent deal Emerald would be more upfront with the details, prices, lenders, loan rates, when you can take your 8 weeks, etc. You have to register and give full personal details to get the brochure for the ‘offer’ and I’m not doing that.

    A few comments – (1) a guaranteed 8% annual return for 8 years is excessively high in today’s market, where decently rated banks have negative deposit rates, bond yields are a fraction of that and the main stock markets are very toppish; (2) currently, excluding the stockmarket, investments where your entire capital is at risk are paying 4 - 6% tops. And those latter investments are available only to professional investors (funds), not to punters, widows or orphans. (3) I would not expect most boats to be worth only 50% of the purchase price after 8 years. Boats tend to depreciate considerably less than cars. A 30 year old boat in good condition often sells for its purchase price, the ‘depreciation’ is caused by the rate of inflation/present day value of money. Hire boats probably are mistreated and as such possibly depreciate more.

    This type of ‘offer’ was a typical wheeze in the Celtic Tiger era – instead of a boat it was an apartment. You buy from a developer in for e.g. Bulgaria for €200k, he would rent and manage it for you and ‘guarantee’ a minimum of 6 months rental income (€6,000) for the first three years. (Investor thinks -“If they are prepared to do that it must be easily rented, so it’s a good deal!”) That’s the line and the hook. The problem – the sinker - was that the guaranteed rental amounted (€18k) was paid out of the profit from building an apartment for €75,000 and selling it for €200k.

    I’m not saying that Emerald Star are doing anything dishonest, but on what is transparently available from them their figures simply don’t stack or look appealing.




  • Thanks for feedback.

    So yeah I do have the details of the points system and looks ok but likely suits retired couple best as to get 8+ weeks, would need to use up a lot of mid/low season and a week or two only in high season.

    The ability to “hire” same/similar boat around Europe against your points is attractive.

    The point you raise re the possible return is valid. Is it 8% on the total paid or on some lower “nett” value? That is a game changer.

    Cheers




  • As I've said I've not seen the brochure so I've no idea of the 'detail'. If 'stuff' is still unclear to you (with the brochure) I'd worry.
    Why be forced to use a boat for 8 weeks mid/low season 'to get value'? Is that really 'value'?
    Without boat ownership you already can rent a boat anywhere today. Why not do so for 2-3 weeks? What happens if your partner is not a fan, or you want to fly to Perpignan to join a boat and Ryanair/Aer Lingus have closed the routes for 'off season'? What is the cost of that? Even if you take up the offer, it's not going to be 'your' boat as it will be rented out all the time. If you fancy a trip in Canada, do you really want to do it on a river at 3mph?




  • Looked into this before.
    Essentially it is a finance offer. You buy a boat for the price Emerald Star sets, while they arrange finance for you, and you get an 8% annual return as you drop 50% of your investment. Beware it does not appear to be regulated by the Central Bank of Ireland. So while it looks good, it may be too good to be true.


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  • POBox19 wrote: »
    Looked into this before.
    Essentially it is a finance offer. You buy a boat for the price Emerald Star sets, while they arrange finance for you, and you get an 8% annual return as you drop 50% of your investment. Beware it does not appear to be regulated by the Central Bank of Ireland. So while it looks good, it may be too good to be true.
    It would be interesting to compare their price, open market value 'new' and the residual price after a few years to compare the depreciation.
    Emerald would not be providing the finance and they probably outsource the loan application process to a broker so there is no need for CBI input/approval.




  • Mick Tator wrote: »

    (3) I would not expect most boats to be worth only 50% of the purchase price after 8 years. Boats tend to depreciate considerably less than cars. A 30 year old boat in good condition often sells for its purchase price, the ‘depreciation’ is caused by the rate of inflation/present day value of money. Hire boats probably are mistreated and as such possibly depreciate more.

    Boats depreciate at a similar if slightly less rate of depreciation than cars.

    Take these two as a very small sample.
    https://motorboats.apolloduck.ie/boat/axopar-28o-c-for-sale/655589
    https://motorboats.apolloduck.ie/boat/jeanneau-leader-46-for-sale/578434

    Both have depreciated by an average of 10% per annum.

    Depreciation slows considerably until it becomes negligible, usually at the 10-year mark.

    Take into account also that ex hire boats do not demand any premium over other similar vessels, will have the base level of inventory, fit out and (most importantly) very high hours on the smallest powered engine, practical for use on that model.

    That 50% purchase valuation seems quite realistic, if a little generous to the buyer.




  • Im not emailing them for their brochure but do they say what the cost of the boat is initially? And how may years are the 8% returns over? It would be important to check they are not inflating the cost price over the market price for the same vessel.

    On the face of it it seems like a scheme for Emerald to increase their fleet without having to take out bank loans to do so, the customer does it for them. Nothing wrong with that but important that anyone investing makes sure the scales are not tipped away in their favour.

    Also while the 6-8 weeks use of a boat seems attractive unless you already spend your holidays this way every year its kind of forcing you into doing so to get value. As someone mentioned it might be more suitable for a retied couple who have flexibility. Or maybe a group of 3/4 families who could share the weeks out. Would be important to check out when and where the weeks are available too, theres not much point in having a week cruising in Canada in October.




  • Tabnabs wrote: »
    Boats depreciate at a similar if slightly less rate of depreciation than cars.

    Take these two as a very small sample.
    https://motorboats.apolloduck.ie/boat/axopar-28o-c-for-sale/655589
    https://motorboats.apolloduck.ie/boat/jeanneau-leader-46-for-sale/578434

    Both have depreciated by an average of 10% per annum.

    Depreciation slows considerably until it becomes negligible, usually at the 10-year mark.

    Take into account also that ex hire boats do not demand any premium over other similar vessels, will have the base level of inventory, fit out and (most importantly) very high hours on the smallest powered engine, practical for use on that model.

    That 50% purchase valuation seems quite realistic, if a little generous to the buyer.
    I agree with your comments on ex hire boats but disagree on residual values.
    But there are boats and boats, the two you referenced are not very good examples on which to base a depreciation example. The first is a speedboat more suited to the Med with all that open deck space. From the photos it looks more like a rib with a tent than a weekender. In Ireland IMO it would have a very limited market and be difficult to re-sell, so depreciation is higher. Very same with ordinary high-performance cars. (Classics like Ferrari’s are different.)

    Most of the half tonners that are sold currently are not far off their initial cost price – on Apollo there’s a Golden Shamrock for £22k and another for £10,750. Most sell in that range. Our old half tonner (co-owned) was £16k in c 1980 and sold for just a bit less more than a decade later. Current owner would I guess.want +/- the same now if not more.

    Leisure Yachts (17, 23, 27) and Shipman 28’s have been discussed here recently – early models of those are currently being sold for near or more than their original cost price. The L17 originally cost £500 (about the same as a Mini 850) in the 1960’s but the 70’s and 80’s models are now selling for more then £1500 and up to £3k. There is a 1989 Leisure 27 for sale in Greystones for €20k. Shipmans sell for around the €10k, not a big drop from their original prices 30 years ago

    On power, classic MBs like the Seaward hold their value very well – there is a 2002 Seaward 23 (angling version) for sale at £35k (>€40k) which is considerably more than her original price.

    Anything mass-produced in big volumes will lose value. Classic design in anything produced in small numbers will outlast fads every time and retain more value.




  • But Emerald Star are inland, large volume, mass produced motor boats, not 1970s British build yachts. :confused:

    The Axopar boat is built in Finland for northern European climates, a sturdy year round boat. They rarely come up for sale and when they do they are snapped up quickly. That boat included.

    Motorboats depreciate at a similar rate to cars. A Jeanneau Prestige 32 that in the mid 2000s was the guts of €200,000 brand new, is now selling for €85,000.

    BTW, that Leisure 27 for sale is grossly overpriced. Even during the Celtic Tiger boom days you wouldn't get that kind of money for one. I know as I owned both a L23 and L27 previously.


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