Wealthy people have always bought big boats and yachts, but now those sales are on the rise. What’s interesting is that superyachts are among those rising boat sales. A superyacht is a yacht that exceeds 100 feet and costs significantly more to purchase, insure, staff, and maintain.
While yachts have always been a symbol of luxury, superyachts are a symbol of excessive luxury. Apparently, that symbol of excessive luxury is in hot demand. Consumers spent $2.9 billion USD on nearly 300 superyachts in 2018. These sales constituted a 21% increase from 2016. In contrast, 249 vessels were purchased in 2017.
Why are more millionaires and billionaires buying enormous luxury boats all of a sudden? The following reasons will shed some light on the situation.
The U.S. economy is currently in great shape
Compared to the economic collapse of 2007/2008, the U.S. economy is in excellent shape. According to the BBC, wages are up, unemployment is down to 3.6%, and 6.7 million jobs have been created. The unemployment rate hasn’t been this low since 1969. Although the U.S. economy has slowed down, it remains strong.
Large purchases – like yachts and superyachts – make more sense when the economy in good shape. While the same amount money is required to purchase and maintain a superyacht, a good economy makes it easier to continue generating revenue to replenish the costs.
In a bad economy, nearly all businesses suffer financially – even businesses owned by billionaires. The best time to buy a superyacht is when the economy is in good shape. However, if you’ve never bought a boat, you probably shouldn’t start with a yacht.
Are you thinking about buying or financing a superyacht as your first boat? Even though the economy is in great shape, you may want to hold off on buying an expensive boat and consider buying a smaller boat first. The Yacht Market suggests buying the smallest boat possible rather than buying the biggest boat you can afford. Smaller boats are easier to maintain, and you are more likely to find support through a boat owner’s association.
Superyachts are fun toys
For those who can afford to sink several million dollars into a boat, a superyacht is a fun toy. Most people know that yachts don’t appreciate in value and they’ll lose money on the resale, but breaking even on the resale isn’t the point. Most people who can afford a yacht already have plenty of income-generating investments; they understand how the game works. For them, a yacht isn’t an investment – it’s a toy.
Big boats make people feel important
For people who have money but not fame, buying a superyacht can make them feel more important. Buying a superyacht can boost a person’s self-esteem and make a great impression on friends and clients alike.
A superyacht is perfect for throwing parties and holding conferences
For business owners, having a superyacht means having the ability to throw a party or hold a conference anytime. Some business owners charter a yacht, while others host events on their own boat.
Chartering a superyacht is a source of income
Provided the maintenance is kept up, owning a yacht for the purpose of chartering is a great source of income. Some superyacht owners generate more than $100,000 per charter. Chartering a superyacht won’t generate the passive income seen from real estate, but it’s a great way to recover a portion of maintenance and crew costs.
Superyachts aren’t all extravagant – some are reasonably priced
Building a new yacht from scratch can take up to four years. While some of the world’s most expensive superyachts built from scratch are worth $100 million to $1.9 billion, not all are priced that high. Second-hand yachts are cheaper, easier, and faster to obtain. Building a new yacht from scratch can take up to four years. Buying second hand eliminates the wait time. Buying second hand also provides more of a selection as well.
Superyachts provide privacy and freedom
Privacy and freedom are perhaps the biggest reasons superyacht sales are on the rise. Those who can afford to buy a superyacht aren’t concerned with owning a boat guaranteed to depreciate – they want the benefits of being free to sail anywhere they wish at any time and have total privacy on the water.
Is a superyacht worth the money?
Whether or not a yacht is worth buying depends on how the owner uses the boat. Some people don’t spend nearly enough time on their yacht to make it worth buying. However, for those who want the freedom and privacy and those who can afford the upkeep, owning a superyacht is a worthwhile way to spend money.
