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Cruise ships offer new property investment opportunity

Cruise ships offer new property investment opportunity

Thursday, 19 January 2006 12:00 AM

Property investors in America could soon have a novel new investment prospect in the shape of cruise ships converted into apartments.

A shortage of waterfront property on America's Gulf Coast prompted Florida entrepreneur Mark Boyd to assemble a group of investors to purchase cruise ships being sold off by cruise companies and convert the cabins into apartments.

Each apartment suite will cost between $249,000 (£141,875) and $529,000 (£301,464) to purchase and will be subject to a service charge, or ground rent, of between $7,000 (£3,989) and $10,000 (£5,698) a year.

The $15 million annual bill for operating a mid-size luxury cruise ship will be financed by a combination of the ground rent as well as ongoing casino and nightclub operations aboard the ship.

The ship would not just being a floating hotel, but would continue to sail until the end of its working life.

Under the scheme, Condo Cruise Lines, as Mr Boyds's company is called, will purchase ships being discarded by cruise lines who are seeking to buy ever-bigger vessels and convert the cabins into apartment suites.

The ship will then be sold to a management association which will in turn sell the suites to reservation-holders, who will pay a refundable $10,000 deposit.

The owners will then decide whether to live on board permanently of rent out the apartment to the holidaying public.

The apartments, or condos as they are called in America, can be rented out around the year for between $3,000 (£1,709) and $6,000 (£3,418) a week - less than the cost of a luxury cruise, but enough to provide the apartment owners a large return on their investment.

"Many of these ships still have 20 or 30 years of life left in them and can accommodate several hundred passengers in great comfort," said Mr Boyd.

"We will take a retired cruise ship and convert every two to three cabins into luxury suites and sell them to investors."

Investors in the cruise ship apartments will have no electricity or water bills to pay, and their 'apartment building' will contain health spas, daily housekeeping, shopping, restaurants, cocktail lounges and constantly changing views.

For more information on Condo Cruise Lines see: www.condocruiselines.com