Owning a vacation rental (read as: yacht)

[Loren Thomas]

I think a strong argument can be made for a yacht to be considered real estate. Perhaps not by some standards, but an argument could certainly be made... 

Does anyone own a yacht? Do you charter it? Has anyone done this? I'm not talking the 250M one at F1 races in Abu Dhabi, I'm talking say a 1M one. If you can get it to cash flow then you have a viable business asset.

Location is obviously important. Me being in the Pacific Northwest, I think location would not be an issue so I haven't put much thought into it. There's many years worth of places to go here. (RE!?)

A good certified captain Captain would have to be found, another title for him could perhaps be property manager... (RE!?)

Depreciation. This is the only area that's really tough. It's never going to increase in value.. it just isn't. But the income in produces perhaps could.

Anyone!?

[Christopher Brainard]

@Loren Thomas

I'm not sure I understand what argument you could make - Real Estate by definition is land and the stuff attached on or below it. A yacht is not land, therefore, is not real estate. I really don't see any similarities at all and view them as two completely different assets, with real estate being a positive asset and a yacht being a negative.

At the very core, there is a finite amount of real estate in areas that are appealing to live, which is what drives the market and appreciation. Everyone has to live somewhere. Chartering a yacht is a superfluous activity by those looking for please and relaxation.  This isn't a requirement for anyone and I suspect is very dangerous during bleak economic times. 

Both assets are subject to changes in value, but real estate typically appreciates because the amount of land in the world doesn't increase, but our world's population is on the rise and people are living longer. More demand for a specific commodity yields higher prices. A yacht will always be a depreciating asset and the more it is used, the faster it will depreciate. Doesn't sound like a good investment to me. 

I wouldn't even want to speculate how hard it would be to manage a fleet of captains. There are many captains that make a good living doing charters, however, I don't think this would be an easy business to scale or expand.

-Christopher