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A boat of our own – share and share alike, part 2

| Boat share, Help | October 24, 2012

Reproduced with kind permission of Canals and Rivers, June 2007.

Jackie Sherman and her husband were bitten by the boating bug after a holiday on the Kennet and Avon. This second part of a two part feature describes how they got into boating by going for a shared option.

Part 1 of share and share alike

On a bright sunny Friday morning, we sped up the M40 en route to Ownerships’ open day at Stockton Top near Rugby – exactly one hour’s drive from Abingdon. As instructed, we parked at the ear end of The Boat Inn car park and made our way down the steps to the waterside.

A number of boats were laid out in the basin, dating in age from 1991 to 2006, and offering a wide range of layouts and furnishings for us to inspect and consider.

We were asked to put on smart plastic shoes as many of the boats had just been valeted (at a price of £25 per boat), and then went exploring.

We had been sent lots of information about the company, as well as lists of boat with shares available, and these told us the age and layout in terms of stern and galley positions.

Galleys

Looking at the notes, we soon learned that the terms “mid-galley” or “rear-galley” were deceptive. This is because there were in fact four different possible layouts: a rear galley split from the front saloon; a rear galley leading straight into the saloon; a rear saloon leading into the mid-galley; and a mid-galley leading through a saloon onto the front deck.

We immediately discounted the split arrangement as both galley and saloon felt cramped and poky. A rear galley and saloon have advantages for a quick brew-up and a chat when one partner in preparing dinner and the other is still at the tiller, but we preferred the open feel of the galley leading into the saloon and then through French doors our onto the front deck. We decided that this particular mid-galley style was probably best for us.

The stern

When it came to the stern, the holiday boat we had hired for our trip to bath had had a cruiser stern with no seating, which turned out to have one big disadvantage – the boatman got lonely! We therefore decided to look for a semi-traditional stern with comfy seats. Unfortunately, after trying, we found that comfy was not a term we could apply to the high, hard, metal bench found in this style of boat. However it was a good place to perch a tea tray and the addition of a few cushions and a footstall would probably mean it would work out fine.

There was no double that the new generation of boats available were beautiful. Launched in 2004, these offered luxuries such as modern furniture, a freezer, flat screen satellite TV and DVD and a dishwasher.

However, as we planned to spend only a few weeks a year on the boat, we were more concerned about the share price and the running costs, and so felt comfortable sticking to the lower spec boats.

All of them at least offered a second, tiny bathroom and the vital provision of a double bed that could be extended on flaps or a pull-out base to offer a sensible 5ft width.

There were even two comfy chairs that would convert into single beds – although no-one we spoke to actually knew how to get them to work!

Finding out more

Although on our visit we certainly got a good feel for the type of boats, not all of those in the Ownerships” stable were present on the day. It therefore came down to choosing one or two that met our criteria, and then finding out more about them from the company as well as other shareholders.

Once we settled down to the detailed paperwork we began to see that choosing “our” boat was going to be extremely difficult,. There were six main considerations:

  1. The initial cost of the share (with subsequent loss of interest)
  2. The likely maintenance requirements over the term of the ownership
  3. The location of the boat
  4. A special share. As a maximum of three per boat is allowed, many shares on sale did not offer this option
  5. The holiday weeks that had actually been chosen (unfortunately the annual meetings taking place and the holiday choices are made in September/October, just a few weeks before we started our investigation.)
  6. How likely we were to sell the share when we wanted to, before we started incurring the following year’s running costs. The older the boat the more likely we were to want to pay into the “buy back” scheme. For £120 per annum, Ownerships guaranteed to buy-back a share at a sum related to the insurance value of the boat.

Like most people, we felt much more comfortable parting with £2,000 – £3,000 than £7,000 – £8,000 and so had been concentrating on older boats that would still be in good condition. We therefore picked out one boat that was built in 1996, had our preferred layout and offered a Special share at £2,900.

Running costs

The location selected for 2007 was quite close to us at Blissworth, just north of Stoke Bruerne on the Grand union canal. We felt this allowed us to take advantage of extra weeks without having a long journey to the boat yard each time. The current share owner had also selected holiday weeks that suited our needs rather than any during term time.

Unfortunately, we soon found that this particular boat had unusually high running costs. The owners had agreed on a substantial paint job for the coming year that we would have to pay for straight away, and it had not yet had any replacement or refurbished engine. It was almost guaranteed that this would be needed soon, now that the boat had reached the ripe old age of ten,

Working on a five year ownership cycle, we created a formula to pin down what the boat would actually cost us over this running time. It took the form:

Running costs + Lost interest on capital + Lost capital (Share price now -share price at sale) + Buy-back insurance.

For this boat, it worked out at a whopping £9,500.

Armed with this formula, we were intrigued to discover the costs for other boats in the scheme that at first sight looked more expensive. We believed that older boats with new or refurbished engines and paintwork carried out, were likely to lose their value less over five years and would also have less than expected maintenance costs.

A new generation of boat, on the other hand, would suffer a huge loss of interest on the capital expenditure as well as the initial big drop in the share price, although it would have very low maintenance costs and would probably not require membership of a buy-back scheme.

Taking three other Ownerships boats as examples, we found that our formula was very helpful as it appeared to confirm that after five years a new generation cost share would cost the most at £9,312; a 2002 boat that had not had much work on it so far would cost £8.912 and a 1992 boat refurbished during the last few years would cost £8,100.

Seeing these results, we quickly made up our minds to find out more about the 1992 boat that looked such good value and then, if that wasn’t ideal, to offer a much lower price for the share currently on offer at £2,900.

Engine

A short phone call later, we had dismissed the older boat out of hand. Having installed a refurbished engine in late 2003, the owners were now facing the prospect of replacing it with another one – not surprisingly favouring brand new, due to disappointing failures. Also, with the boats now almost 15 years old, they had decided to hire a surveyor to check all was still well. The running costs for the next few years were suddenly looking much too high.

Of less relevance, we also discovered that the mooring for 2007 was a two and half hour drive away and the holidays that had been picked included a week slap bang in the middle of the summer school term.

So, our choice was now clear – to start negotiating,

Negotiations

When you own a share in a boat, you pay a year’s running costs and management fees in January, and then use the boat between April and October. Once you have had your last holiday, you try to sell as quickly as possible (if you are not in the buy back scheme) so that you don’t incur extra bills during the winter when the new owners will get no benefit from owning a share

Although it would have been cheaper for us to wait until the Annual Ownerships’ Show in February when most of the share are bought and sold, we knew that by then our choice of special shares would be very limited indeed.

Bearing that in mind, we were able to buy a share in the boat for a very reasonable £2,100. This mean the final cost now worked out at a little over £8,500 over five year or around £425 a week for each narrow boat holiday. Compared to taking out a hire boat four times a year, we didn’t think that was bad at all!

Copyright: Canals and Rivers 2007

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