BUYING A SHARE IN A BOAT
Want a bit of a narrowboat, regular holidays on the waterways and to be able to save on the cost of a new narrow boat? Buying your own share may be the answer.
Buying A Share In A Narrowboat… Is It The Right Choice For You?
Narrowboat sharing is an increasingly common way to move into boat ownership. In its simplest form, the cost of purchasing, maintaining and managing a narrow boat is split between a syndicate of owners.
Buying a share in a narrow boat can be an ideal solution if you want to regularly experience life on the water but without the expense of buying a boat outright and all the associated costs (moorings, maintenance, insurance etc). Buying a share is also ideal if you are limited with how much time you can spend on-board but looking for something more, and often more cost effective, than just a couple of weeks a year on a hire boat.
In most cases you will be purchasing an annual 4 week share in a narrow boat. There are a wide choice of size and type of share boats to choose from; most common are narrowboats but you will also find some widebeams and Dutch barges available. The initial cost to enter the scheme depends upon the number of syndicate shares available to individual members, the specification and age of the boat and how many holiday weeks are required. This one-time payment may vary from £1500 to £15,000.
Browse boat shares currently on offer on www.thesalespontoon.co.uk
Is it the same as a time share?
Absolutely not! Buying a share in a narrow boat is an investment as you become a part-owner in that narrowboat as part of a syndicate and as such, can sell on at a later stage. With a time share you own dates, whereas with a canal boat share you own an asset. The share purchase price represents a percentage ownership of the narrowboat and this is life time ownership and can be bequeathed of heirs.
How does a share boat system work?
Some syndicates will manage the narrowboat share scheme themselves and other shareholders will pay a management company to oversee the running of the narrow boat share scheme.
Of course there are on-going running and maintenance costs involved in a share boat, but as a syndicate you are in control of these (this will be covered in more detail later on in this chapter). Running costs are divided between owners based on their proportion to their share ownership. If the share scheme is run through a management company, there will also be an annual management fee payable for the administration of the syndicate.
Owning a share in a narrow boat often allows boat owners to see more of the canal network as the share boat is constantly on the move. If you own a canal boat outright, but can only use if for a few weeks of every year, you tend to find you have to start each holiday from the same point and therefore cruising opportunities can be limited. The share boat mooring base may change annually to allow share owners the opportunity to see more of the canal network.
Shares in a narrow boat generally cover 50 weeks of the year, allowing for 2 weeks of every year for maintenance.
Every year an Annual General Meeting will be held for members to attend at which point all decisions for the following year will be made; from allocating cruising weeks, on-going maintenance requirements, cruising options, marina moorings, financial accounts, winter maintenance etc.
How are weeks allocated?
Before deciding on a share boat, it is important you understand how the weeks are allocated as each syndicate will manage this slightly differently. If you have personal restrictions on which weeks you can use, for example due to work or school holidays, it is even more vital you understand if a share boat is feasible for your situation.
The simplest way syndicates allocate cruising weeks is using a draw. All 50 weeks are literally placed in a hat and then syndicate members draw out their weeks. Generally share weeks are divided in to winter, summer, spring and autumn and each share holder will draw one week from each pot, assuming they each hold a 4 week share. Often share holders will then conduct trading between themselves if the weeks picked are not suitable.
Other, more complicated, methods are used by some syndicates whereby each year a different share will get first pick of the weeks, and then others will select their weeks afterwards in order.
Some share boats will offer ‘Special Status Shares’ and this may be to guarantee a share holder school holiday weeks if applicable. Generally an annual fee will be payable for this privilege.
How much does it cost?
As mentioned above, the initial payment for a share can be between £1,500 – £15,000 depending on share percentage. After this an annual amount will be contributed towards the narrow boats upkeep, running costs and any administration charges for managing the syndicate. How much is budgeted is entirely up to the syndicate members, however moorings, licence, insurance, management fee (if applicable) and winter maintenance budget are a given. On top of this, as a syndicate, you may also decide to budget for a weekly cleaning service during handover between share holders; breakdown call outs; emergency repairs; gas; contingency fund for larger maintenance items e.g hull blacking, repaint, new engine or batteries etc. Some syndicates also chose to budget for diesel and pump out charges.
Every syndicate will have a different annual budget depending on the requirements of the syndicate and also the operational decisions made about the canal boat. If you are considering investing in a share boat it is vital you understand what your annual commitment will be to the operational costs of a share boat. Our research suggests you could be expected to pay around £1,500 for a 4 week share, but this will vary depending on number of share holders, age and condition of the canal boat. Considering hiring a boat for one week can easily cost around £1,000; it is easy to see why share boat schemes are popular with those regularly wanting holidays on-board.
Best practice is for each syndicate to have a bank account and to ensure each syndicate member has transparency of all financial transactions, this can be achieved by sending out a copy of the monthly bank accounts. All syndicates should have a formal agreement in place between each share owner and the syndicate to protect the interests of all owners.
It is important you do your research to ensure you invest in the right share boat for you. There are so many options out there in terms of vessel size, facilities, cost and location. There are also narrow boat share schemes available to suit all tastes and requirements such as pet friendly & pet free or smoking and non-smoking syndicates.
Buying A Share In A Narrowboat… Benefits & Considerations
- A cost effective way into boat ownership
- Fully managed schemes with fixed costs
- Regular planned maintenance
- Suits lifestyles where full boat ownership is not practical
- You know where you’re going on holiday next year
- Only a part time share in the boat is yours
- Limited flexibility on allocated cruising weeks
- All shareholders need to get on
- Not always easy to arrange cruising from different locations on the network
- Limited opportunity to personalise your boat
- You know where you’re going on holiday next year
Buying A Share In A Narrowboat
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