BAREBOAT CHARTER INVESTMENT

A BAREBOAT

A bareboat is a charter vessel fully equipped with all the modern conveniences necessary to provide a self-contained holiday afloat. Equipment includes cooking facilities, refrigeration, bathroom facilities, linens, snorkeling gear and an inflatable dinghy with an outboard. All vessels need to comply with Queensland Transport standards in relation to construction, stability and safety equipment. All Whitsunday Escape bareboats are privately owned and managed by Whitsunday Escape.

THE PRODUCT AND DESTINATION

A Whitsunday Bareboat holiday offers great value to the holidaymaker:

• The mobility of your own boat with the satisfaction of handling it yourself.
• The freedom to explore the anchorages and islands of your choice at your own pace.
• 74 islands, numerous anchorages and waters protected by the Great Barrier Reef.
• A year round tropical climate with the associated air and water temperatures.
• A choice of eight resorts that welcome visiting yachts.
• One of the best diving and snorkelling destinations in the world.
• The freedom to recreational fish in most anchorages.
• The benefit of a holiday in a crime free environment with the protection of Australian health, emergency and legal systems.

ADVANTAGES TO THE INVESTOR

• The satisfaction of owning your own boat.
• The opportunity to use your vessel for up to 4 weeks a year. Additional time may be available on a standby basis.
• Significant savings in operating costs when compared with private ownership.
• Investors with Whitsunday Escape are achieving a return on investment before depreciation and finance charges payments of between 5% and 12%.
• The tax advantages relating to interest, depreciation, repayments etc. (see additional notes) 

WHITSUNDAY ESCAPE

Whitsunday Escape has been established for over 20 years. Our fleet presently consists of 33 charter vessels; three power cruisers, six power catamarans, twelve sailing catamarans, and eleven sailing yachts. Whitsunday Escape’s office is located at Able Point Marina Airlie Beach.

THE MANAGEMENT AGREEMENT

A summary:
At cost to Whitsunday Escape:

1. The promotion, marketing, advertising and booking of your vessel.
2. The administration of all bookings and security bonds.
3. The operation of an office at the Marina, to meet and greet the charters and provide the radio communications 7 days a week.
4. Administer and pay government fees and charges along with providing timely monthly statements to the vessel owners.
5. A valid Marine Park Permit (similar to a taxi licence) for the vessel to operate in the Whitsundays.

Whitsunday Escape receives a booking commission for these services.
At cost to the vessel owner

1. The cost of insurance, berthing, maintenance and upkeep of your vessel.
2. The cost of cleaning, linen, briefing and pre charter checks “the turnaround” (Whitsunday Escape can provide a flat fee for these services)

WHY PLACE YOUR VESSEL WITH WHITSUNDAY ESCAPE

• All vessels in Whitsunday Escape’s fleet are operating under the same management system and Whitsunday Escape does not own any of the vessels. The result being there are no favourites when it comes to placing bookings on your vessel.
• Whitsunday Escape does not treat the maintenance and turnaround cost of your charter vessel a profit centre. Provided our high standards are maintained, the owners are welcome to participate or appoint someone besides Whitsunday Escape to look after their vessel.
• Our charter base at Abel point Marina is one of the most cost efficient destinations in Australia to maintain a boat. We have two mechanic shops, two marine electric shops, one haul out yard, a shipwright, a sail maker and a marine chandlery.
• Whitsunday Escape owns and maintains on standby, a 5.5 m rigid inflatable rescue boat.
• Whitsunday Escape does not bill the boat owners for marketing contributions or credit card charges.
• Whitsunday Escape does not charge a management fee on top of the cost of work completed to your boat by outside contractors or on parts needed for your boat.
• Whitsunday Escape operates using trust account principals, charter fees paid in advance, are held trust until they are distributed to the boat owner.
• Whitsunday Escape’s insurance claims record is among the lowest of any fleet in the Whitsundays. Such an achievement is recognized in the insurance premiums that our boat owner’s pay.
• Whitsunday Escape does not receive any commission for new vessels placed in our fleet, from manufacturers or importers. The investor is able to negotiate the best possible price for their vessel.
• Whitsunday Escape only selects vessels that are suited to charter and that are in demand. We believe that the level of owner satisfaction within our fleet to be the highest in the Whitsundays. References are available.
• Whitsunday Escape was recently presented with two Whitsunday Tourism and two Queensland Tourism awards in 2006 as finalist for Adventure Tourism and Unique Accommodation.

TAX IMPLICATIONS

The industry is presently operating under tax ruling TR 2003/2004; this ruling requires each boat to operate as a separate stand-alone business and as such must pass the business test. To summarize:

• The investor is required to prepare a business plan prior investing. The business plan needs to demonstrate that the boat has a realistic expectation of profit during the life of the business. You need to consider finance payments and the actual decline in value of the boat over the life of the plan.
• The investor is entitled to a GST rebate on the purchase price of the boat.
• The investor needs to be involved with the running of the business and participate in decisions relating to maintenance and rates.
• The investor may use the boat for private use, providing they document their time and adjust their tax return accordingly.
• In most cases it is difficult to achieve a realistic business outcome with 100% finance.
• Depreciation may be claimed and offset against the boats income and other income.

This is a brief summary of our understanding of the tax ruling. You will need to seek your own independent financial advice.

Whitsunday Escape contact details: Trevor Rees Managing Director 1800 075 145