How to make a profit from renting out a boat

• 16.10.2023.
• News, Management

Have you seen enthusiastic tourists enjoying the untouched nature of the Adriatic Sea on rented yachts this season? And all this while the owners of these vessels and yacht charter companies rub their hands with satisfaction? Would you like to get a piece of that pie for yourself?

Whether you are the current boat owner or plan to buy a boat through cooperation with a charter management company – we bring you helpful information on how to rent boats to tourists as a profitable and legal business activity.  
   
The activity of renting boats doesn't require excessive predispositions for success. It's enough to have a boat, study all the ways you can use it next season to make a profit, and once you've decided which way you want to go - get to work.  
 

 

Renting of boats to natural persons  

Before embarking on any business adventure, it's necessary to put your ideas and plans on paper and check their viability and profitability in the current market.  
   
The same procedure is applicable to nautical tourism. And here, it is necessary to check the current situation in the tourism sector in general before making any specific plans.  
   
We definitely recommend you do more detailed market research. But we can tell you right away that it is clear - Croatia has become one of the most popular vacation countries. Most tourists who come here, especially those of the younger generation, are ready to pay for a unique vacation experience.  
   
On the other hand, you should remember that the competition in nautical tourism is huge.  
   
That's why extra effort and investment are needed in order to stand out from all the others. And those others also offer their vessels for rent or already have active yacht charter companies.  
   
Giving a boat for rental is an activity that you need to plan carefully and be prepared for a lot of trial and error before you find your unique recipe for a successful business.  
   
Without going into too many details, let's look at how you can charter a vessel in the first place.  

  

Cooperation with yacht charter management companies for boat rental  

Owning your own boat means taking care of its maintenance and being responsible for the costs that come with it, especially if you want to rent it out.  
   
However, there is a way to reduce the amount of time and money you invest in the vessel with even additional earnings: cooperation with yacht charter management companies.  
   
This way of doing business is one of the most common choices of vessel owners for charter. The above-mentioned yacht charter companies take responsibility for the maintenance and rental of the vessel from the owner, and the profit is later shared according to the agreement established in the contract.  
   
At the same time, current costs, such as payment of moorings in the marina, maintenance, insurance, etc., are covered by the rental profit.  
   
Such cooperation enables an individual to monetize the investment in a charter management company, especially if one does not yet own a vessel, because it actually pays it off by renting it out.  
   
Suppose you manage to achieve successful cooperation as the vessel owner and the yacht charter management company. In that case, you can expect a return on investment within 5-7 years.  
   
When you decide to invest your funds in the described business relationship, you can expect that the yacht charter management company will take over all the vessel's risks, costs and management. At the same time, it offers marketing networks and large client bases for the purpose of chartering vessels.  
   
In particular, the yacht charter company usually promises you about 20 weeks of rental occupancy per year. In their yacht charter management program, they take vessels from 10 meters in length up to, most often, 16 meters.  
   
Cooperation with yacht charter management companies is often the most profitable solution for renting a vessel. This is where you retain the value of the invested capital and increase it without much effort and unnecessary risk.  
 

 

Which vessel to choose for charter?  

If you currently don't have your own vessel but are thinking about purchasing it through cooperation with a yacht charter management company, be sure to consider the purpose you want to achieve before choosing.  
   
It's a common mistake to buy a boat according to your taste. To avoid this, you should keep in mind the target group of guests to whom you want to offer your vessel.  
   
For example, smaller groups of guests who prefer peace or entertainment away from the coast will often choose yachts, while adventurers will look for sailboats.  
   
If you want to attract larger groups of tourists who do not know how to sail on their own, it is a good idea to consider owning a catamaran.  
   
If, for any reason, you don't trust your own judgment or don't have the time to study, don't hesitate to hire an expert!  
   
Choosing the type of boat is one of the most important decisions you will make in business, and it is difficult to change it later.  
   

Independent boat rental  

Owning your own boat is an excellent start to getting into yacht chartering to achieve financial profitability. The earnings provided by the vessel will be almost pure profit with annual maintenance and possibly annual vacation costs.  
   
However, private chartering of vessels is prohibited in Croatia. You can only offer your boat for use by tourists if you are going to start a yacht charter company or boat rental business and register activities related to nautical tourism.  
   
According to the law, a distinction is made between registering vessels for private purposes and those for commercial purposes. You cannot rent a private boat on your own, but certain bureaucratic changes must be made.  
   
Thus, private boats have different terms of use, mooring options, registration, insurance and sailing regime than vessels registered for tourist rental.  
   
In short, you cannot rent a private boat to tourists, but you can use a vessel registered with your company for personal use.  
 

  

Rental of smaller boats

For smaller boats, there is a daily rent-a-boat option, where the boat is rented without accommodation because there is simply no physical possibility for such a multi-day arrangement.  
   
This type of rental is ideal for tourists whose base is in a hotel or other accommodation on the coast. Still, they want to use the boat for a full-day trip and exploration, or they only need it as transportation to a specific location.  
   
You can rent them with a skipper or a guide who will immediately present guests with the beauties of the Adriatic coast. Guests can drive them themselves if they have the necessary knowledge and permits, and you also make additional savings.  
   

Renting a vessel - conclusion  

In business practice, it's usual to rent larger vessels and for smaller pleasure boats, to rent them with the signing of a rental agreement. The form and content of such a contract are not prescribed by law except for mandatory provisions of maritime administrative law (e.g. safety of navigation and protection of the marine environment). There, you have plenty of space to determine the ideal rental conditions with your guests, which will be to your mutual benefit.  
   
Whichever way of renting a boat is the most profitable for your situation, be sure to study the market well before starting the business. In particular, learn what your guests want from you and plan your business moves in advance.  
   
It is impossible to predict precisely everything that awaits you in the boat rental business.  
   
But - you can always make the best possible preparation to reduce the risk of losing your invested money and time.

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