In this blog post, we had the privilege of engaging in a discussion with Cary Horenfeldt, the Director of POTE@CH Holdings. He bought his own 26-foot boat about four years ago and after he didn’t use it for a while, he decided to charter it out.
In this insightful interview, Cary shares his experiences and expertise, shedding light on the numerous advantages of renting out the boat and providing a comprehensive guide on how to do so effectively, ultimately minimizing your operating costs.
Owning a boat is a dream for many water enthusiasts, but the costs associated with maintenance, storage, and other operational expenses can sometimes make it feel like you're sailing through a sea of bills.
However, there's a solution that not only helps to offset these costs and even turn a profit—renting out your boat.
In this blog post, we had the privilege of engaging in a discussion with Cary Horenfeldt, the Director of POTE@CH Holdings. He bought his own 26-foot boat about four years ago and after he didn’t use it for a while, he decided to charter it out.
In this insightful interview, Cary shares his experiences and expertise, shedding light on the numerous advantages of renting out the boat and providing a comprehensive guide on how to do so effectively, ultimately minimizing your operating costs.
Discover firsthand whether chartering your boat is a viable option for you and gain valuable insights from Cary's perspective on the tips and tricks for efficiently offsetting your boat's operating costs through the rental market.
Dione: Cary, you’ve been described as the accidental boat charter operator. Could you share with us the journey that led you to where you are today? You’ve got some vessels and you charter them to help reduce the cost of operating. How did you get to this point today?
Cary: As you said, it was really not the intent. Back in 2016, I bought my first boat—a 26-foot Bowrider. I am Canadian and I own boats in Canada. My collection includes power crafts, jet skis, and smaller boats. At first, getting the Bowrider seemed like a great idea, but it ended up not being used much, and as any boat owner knows, leaving a boat idle is probably the worst thing you can do to it.
After some discussions with friends, someone suggested a novel idea—why not turn my personal watercraft into a business by offering it for hire? And that's where the whole chartering venture began.
You see, a powerboat is essentially a mechanical device, and letting anything with an engine sit unused for an extended period is a disservice to the engine itself. I started encountering issues, from drained batteries to the need for more frequent servicing, all because the boat was left idle. That's when I made the decision to turn it into a charter, to give it the purpose and activity it needed.
Dione: Did the financial aspect of it come in as well as the lack of use? Was it sort of one and the same?
Cary: That was sort of a happy additional benefit. With chartering, there is a fee structure associated with it and that certainly helped with the operating cost. Owning a boat involves various expenses—there's berthing, fuel, routine maintenance, and inevitable repairs. So the additional revenue from chartering goes to cover some of that operational cost.
Dione: For those who are first-time boat buyers and are curious about renting out their boats, what options are available here in Asia?
Cary: To give you some context, my watercraft are smaller boats, 30 feet or less, and also jet skis. Our setup primarily revolves around bareboat charters or rentals, which essentially means self-chartering. Depending on the market, this may or may not require a specific boat license. It's crucial to consider the licensing requirements in your specific market when you're both interested in chartering and renting out your boat.
A self-charter involves having someone in your group licensed to operate the boat. After a brief competency check, usually conducted by me with boat owners to assess their skill levels and familiarize them with the boat, safety equipment, and overall layout, they're good to go. And as we know, the hardest thing to do in the boat is berthing and unberthing. After that, it’s just trying not to bump into anybody or anything. All of that is a consideration.
I also offer skippered charters, where we provide a driver. Often, it's me, as it gives me a chance to operate my own watercraft. Generally, skippered charters are more experience-driven. I make recommendations on the itinerary, usually spanning around four hours, including cruising, anchoring, enjoying the boat, and activities like swimming and fishing. Since we're based in Singapore, there are unique experiences here that I can incorporate into the charters, and I'm sure every country has its own set of unique opportunities. That's the essence of how it all works.
Dione: It’s great to hear that you enjoy skippering. On that part of it, has that really been an important and valuable part of the charter experience for you, being able to be that skipper or would you recommend to people that they hire a skipper?
Cary: To be honest, I think that’s very much up to the individual. I enjoy doing it because I am generally social and part of being a skipper is that interaction. While the business was set up really to ensure the boats get used and to cover some operational costs, it’s an opportunity to promote as well. I tend to get fairly involved when I’m the one driving. I’ll do things like have conversations with the people potentially renting or chartering the boat to understand if there’s an occasion, and if there is, I’ll work with them to arrange birthday cakes and maybe a bottle of bubbly, to do whatever I can to help enhance the event and the experience.
Quite frankly, my goal is to promote the use of the boat, so if they had a good time there’s a very good likelihood that they’re going to tell their friends. This business for me has been very much about word of mouth, much more so than investing significant amounts of time in marketing. I do work with other charter agencies that refer business to me and I also work with one of the large licencing organisations in Singapore that will refer new boaters to me as well. But, really, word of mouth is tremendous for this particular business.
Dione: So you’ve got your boats under 30 feet and you’ve got your jet skis, so is that sort of very similar, I suppose just self-drive, is it?
Cary: No, actually, funny enough, it isn’t and I’m not sure how this necessarily translates to other markets, but certainly self-drive is a good chunk of jet ski usage. My skis can comfortably accommodate up to three people, though two is more common.
We also receive charters from larger boats. They might take a jet ski as a tender or as an additional feature to a bigger charter. There's even a bit of a hybrid approach, where I or the skipper will transport the jet ski to another boat, providing jet ski rides to those already on an existing charter. I guess the skis are slightly different in that they’ve got three iterations--self-charter, the variation where the ski gets chartered by a larger charter or chartering organisation or where they are actually skippered charters where one person is driving and another is sitting behind him.
Dione: What’s the minimum amount of time that someone can charter a jet ski for?
Cary: For me, everything is a minimum of two hours.
Dione: What would that approximately cost?
Cary: Well, obviously contextual to what I charge here and it’s going to be in Singapore dollars. So frame of reference, typically we’ll send the skis out for about $150 inclusive of petrol for two hours and the boat will go out for $250 for two hours inclusive of petrol.
Dione: That’s really reasonable, isn’t it? And one of the things that we want to promote is that actually being able to participate in the boating lifestyle can be done for as little as a few hundred dollars. So what you’re explaining here is a really valuable illustration of that.
If someone is thinking about offsetting cost, do you think they should buy a boat that’s already got some charter income or should they set up a company or a business for themselves? What’s your advice here?
Cary: I think there are merits of both. It also very much depends on whether somebody is keen on buying a new boat or a second-hand boat. Obviously, if it’s already got charter business, it’s not a brand new boat. The assumption is that it’s got some hours on the engine. I don’t have a good answer for you because my boats have always been second-hand, at least in Singapore anyway. The jet skis are always new but the boats aren’t.
I think the answer is really dependent on your intention in buying the water craft. You can be sole owner, you can be co-owner. I think ultimately what it comes down to is your belief in how you would utilise that boat. If you think you’re buying it to use it frequently, it may not be something that you need to consider because I think you’ll get used to it. If it’s something that you’re thinking you’re going to buy and use periodically, it may be something you want to consider. If you’re buying a boat and the expressed purpose is to charter it, that very much depends on your base of operations, the waters, whether it’s power or sail, really, that’s a fairly extensive conversation, but ultimately, go into the proposition with your eyes open. Understand what your capital costs are. Understand what your running costs are. Understand what your berthing facilities are. Really just get the big picture before you make the decision.
Dione: What about the insurance and additional costs? So if someone wanted to offset some costs by renting their boat out, are there any additional costs rather than just purely private?
Cary: To some extent, this is market-specific. Singapore charges a premium for boats for hire. Understand how your marina perceives for hire or for renting watercraft. It’s important to know whether they’re going to charge a premium for berthing, or whether they charge additional money for launching if the boat is not in a wet berth.
For insurance, my reference in Canada was that insurers didn’t really differentiate between pleasure crafts for hire versus pleasure crafts for personal use. However, in Singapore, unfortunately, they do, so there is a premium on insurance, so again, something to be mindful of. Also, being a small market, there are not that many insurers. Elsewhere perhaps, in more competitive markets, it might not be the case.
Dione: Will the insurance be 50% more or 30% more?
Cary: In my experience it’s been 100% more.
Dione: Just to let some first-timers know and your boat is under 30 feet, would you mind saying how much the insurance roughly is? Is it like $1,000 a year or is it $10,000 a year?
Cary: I pay roughly $2,300 a year for insurance, which, interestingly enough is not actually much of the cost difference for insurance that I would pay in Canada. In Canada, typically, boats are insured for replacement value, so insurance is not inexpensive. Insurance is not a cost prohibitive component of the boat.
Dione: As you’re setting up the business and setting it up for charter, was it like a huge amount of work that surprised you or was it quite manageable?
Cary: Firstly, establishing a business in Singapore is remarkably straightforward. I can't speak for other markets, but the port authority and the marine authority in Singapore, specifically the MTA, operate in a fairly formulaic manner. They used to have something called the one-stop document centre which was wonderful. Now everything has gone digital and it’s not quite as wonderful, but it is readily available and once you understand what needs to be done, it’s relatively straightforward.
The one thing to note and I can’t speak for other countries, I know I can speak for Canada and Singapore on this, but because Singapore is a port, there is a fairly stringent regime in terms of safety requirements. To be fair, this is actually something that I appreciate. Good seamanship is actually a very high priority in Singapore and because of that there is a significant safety regime, both in terms of understanding as well as equipment. It is clearly laid out what is required but there is quite a bit of stuff and there are regular inspections.
Dione: What about the marketing side of things to actually get customers and the revenue in the door?
Cary: I have a Facebook page, but I depend more on referrals and word of mouth, so I think, again, it probably very much depends on how invested you are in making this a real business versus a cost offset, so how much do you want to invest versus how much do you think you’ll get out of it.
Dione: Is it possible to AirBnB a boat or can people stay on it overnight? How is AirBnB different from what you’re saying be a boat charter or a skippered charter?
Cary: Ultimately, I think it probably depends on two things. AirBnB, in general, is very much based on the regulatory regime of a country. I would argue that AirBnB is only one channel to potentially offer your boat for charter.
The other thing to be mindful of is any regulations or rules within the marinas that you choose to berth your boat. For instance, AirBnB does have an implication of a longer-term stay rather than a day charter or a day rental. There are a number of marinas that don’t allow overnight stays on boats. So it’s something to be mindful of, again, that full picture of what you’re planning to do.
Dione: Is it possible to rent your boat and have a party at the dock without even going out and is that restricted to not being able to stay overnight?
Cary: Typically, the feasibility of hosting a dockside party depends on the marina's regulations. However, there's an added layer now with Covid-19, which imposes a limit on the number of passengers allowed on a boat in Singapore—five plus the crew.
Having a dockside party is possible, respecting both the marina's rules and a couple of other considerations: Firstly, being considerate to fellow boaters in the marina—extended parties late into the night might not be the best idea. Secondly, my boat doesn't have air-conditioning. In Singapore, for an overnight stay, that could pose a challenge. For such an arrangement, you'd probably need a larger boat equipped with air-conditioning
Dione: What do you wish that you had known about at the beginning before you started?
Two things that are top of mind are:
No matter how you slice this, you really need to treat it like a hobby. And hobbies always rightly or wrongly take a disproportionate amount of your time. Just be prepared for time investment not just monetary investment.
On the monetary investment side, you’ve got to find Zen when other people are using your stuff, because no matter how gentle they are, they will never treat it the way you will treat your own thing. Things will break. You will witness a mishap during berthing or whatever. Being Zen about rentals chartering is important.
Dione: Has it achieved the objectives of offsetting the maintenance cost?
Cary: I would say it has achieved some of the objectives. Anything is better than nothing and ultimately one of the objectives is to reduce cost. Is it covering 100% of the cost? No, but it covers some so it’s not a bad thing.
Dione: For someone who is thinking of buying a boat and they’re considering this option of renting, what are the first three things that they should do to look at this seriously?
Cary: Firstly, establish your budget. Determine how much you're willing to invest in terms of capital expenditure, including the cost of the watercraft itself.
Secondly, grasp the overall running costs involved. This includes maintenance, fuel, and any unexpected expenses that might arise.
Thirdly, consider where you plan to berth the boat. While this is specific to Singapore, it might differ in other locations.
Really understanding what your total costs are is going to determine what you’re going to buy, how you’re going to run it, whether you’re going to do some cost offset through rentals or chartering, and your overall experience with the boat.
Note: This interview is being run for the Boat Buyer Expo (www.boatbuyerexpo.com). You can also watch the interview on YouTube HERE.
About Cary: Cary is Canadian and a permanent resident of Singapore. He has been living and working in Asia for more than 13 years, the last 10 in Singapore. Cary comes from a boating family and holds a number of sailing and powerboat certifications. He has been running his own company, POTE@CH Holdings, chartering boats and jet skis in Singapore since 2016.
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