Combining partially paid off ships?

[Rerednaw]

So let's say I have a couple of merchant captains.
Through a dint of luck both acquire the white elephant that is known as a ship mortgage
However, one gets 10 years paid off and the other 20 years.

Are they allowed to combine the two 'payoffs' and end up with one ship with 10 years left? Or can one essentially 'sell off' his paid off portions and get (maybe with some penalty) some cash back for maybe spending on upgrades for the other ship?

The math for acquiring a new ship is 20% down and 1/240 per month and ends up being 220% over the life of the 40 year mortgage. I did some quick math and find it runs to a rate of roughly 4%...not too shabby actually.

Say maybe go with a linear split? So 20% plus 20% per 10 year block?
To maintain game balance perhaps lock these funds for ship or ship upgrades....not cash out and retire LOL... although I suppose if that's what the player really wants?

 

[McPerth]

I guess it depends on ho you inted to play your campaign...

Another solution, if you don't want them to be too concerned on mortages is to asume that ,as they achieved 5 ship rolls among both of them, they have a ship fuly paid, or a far (or fat) trader instead of a free trader with more years morgage...

See that a similar problem occurs if you're already playing a campaign and the players have a ship. Then another carácter joins them (eithr as a eplacemente or as a new player), and it has a ship from chargen (be it a scout, a free trader or whatever).

 

[AnotherDilbert]

It's up to you as Referee.

I would allow them to combine the payed-off time. You could also reduce the mortgage, but that will lead to the player making a lot more money...

I would not like a solution like them selling off one of the ships and starting with a few MCr in cash, unless that fits the campaign.

If one of them is a noble you might even sell both ships and let them have a Yacht, Safari, or Scout with say half mortgage, they are now gentlemen adventurers instead of tramp traders.

 

[whartung]

Sell the ship with the least equity, apply the profit to the ship with the most equity. Come to some partnership agreement between the parties as to who owns how much of the ship after joining forces.

Going with a contrived example.

Two ships, 100Mcr each.

One ship is 30 years old, thus 10 years left on the mortgage.

The other is 20 years old, thus 20 year left on the mortgage.

From the "making-stuff-up" department: Starships have a 75 year life, with a 30% salvage value.

Which means that after 75 years, you can sell off the 100M starship for junk and parts for 30M.

So that means the ship depreciates (using straight line depreciation) at 70M/75y per year, or 930KCr per year.

So.

After 20 years, the ship is worth 100M - (20 * 930Kcr) = 100M - 17.36M = 82.64.

Your equity after 20 years at 5% interest of a 40 year, 100M mortgage. "EZ Financing Starships -- $0 DOWN!" is 26.94MCr. Which means you owe 100M - 26.94 = 73.06. So, Sell it for 82.64, pay it off for 73.06, 82.64 - 73.06 = 9.58MCr cash in pocket!

Meanwhile, the other guy, and his 30 year old ship.

His ship is worth 100M - (30 * 930Kcr) = 72.1MCr. He has 54.53MCr equity in the ship, still owes 45.46MCr.

At raw value, 9.58/72.1 = 13.3% share in the ship. If you go against his actual equity, 9.58/54.53 = 17.5% share in the ship.

And, honestly, I don't know which is the "fairer" way to allocate that.

"This is not financial advice, consult with your Tax Professional."

 

[RandyB]

It's up to you as Referee.

I would allow them to combine the payed-off time. You could also reduce the mortgage, but that will lead to the player making a lot more money...

I would not like a solution like them selling off one of the ships and starting with a few MCr in cash, unless that fits the campaign.

If one of them is a noble you might even sell both ships and let them have a Yacht, Safari, or Scout with say half mortgage, they are now gentlemen adventurers instead of tramp traders.

Or, you know, skip the whole mortgage thing and just run adventures without it. Heresy, I know.

 

[aramis]

RAW, no.
RA run: Many GM's do allow combining them.
My house rules included combining and spending receipts for bigger/better ships.
1 receipt to upgrade to J2, 1 receipt to upgrade from 200Td to 400Td.
IIRC, I set the 1000Td at 3 reciepts, and 5 years per additional receipt.

And those are still 40 year loans.

TNE has a ship share system, which makes more sense, and would combine.

 

[Condottiere]

If you're willing to do and upkeep the book keeping, in a way that's transparent and clear to the Dungeon Master.

You know, for each ship system.

I call it Judicious Use Networked Komponents.

 

[kilemall]

I recently rolled up a noble that got three Yacht results.

Rather then squander the unusual result by ignoring the last 2, I would tend to either give him a 600-ton yacht with all sorts of ridiculous space wasting luxuries, or a 400-ton one with serious performance upgrades.

 

[McPerth]

I recently rolled up a noble that got three Yacht results.

Rather then squander the unusual result by ignoring the last 2, I would tend to either give him a 600-ton yacht with all sorts of ridiculous space wasting luxuries, or a 400-ton one with serious performance upgrades.

I always understood (maybe MT tainted me, as it is explicit there) that all ships but the scout and the corsair imply the 40 years mortgage as the free trader, so rolling it 3 times onlye means having 20 years of it paid...

Personally, when a player rolls a ship more than it must to have it in full, I let him to choose maong ship upgrades or "space" skill (as when a weapon is rolled more than once).

 

[Timerover51]

Depreciation is an accounting technique to reduce taxes when you use capital to make a purchase. It may or may not have anything to do with the expected life of the purchase, and there are several different ways you can do depreciation with respect to taxes. Unless there is an Imperium-wide tax on ships and other personal or business property, depreciation would not be a factor.

Now, a ship's mortgage is typically 40 years, based on the minimum down payment. That would imply a useful life of the ship of more than 40 years. Currently, there are commercial ships on the Great Lakes that are in excess of 60 years old, that are still operating with regularly scheduled maintenance and Coast Guard inspections. So, let us assume that the minimum life of a ship with proper maintenance is 60 years. That would give a life expectancy of another 20 years once the mortgage is paid off. Based on the life expectancy and lack of a mortgage, I can see someone with enough money for a down payment to put that toward a used ship with paid off mortgage, so the value would be at least 20% of the cost of new construction. After all, maintenance will be the same factor even with new construction, and all of the other standard expenses would still apply as well. Not having to pay off a mortgage would make the used ship a lot more profitable immediately. On a standard Free Trader, that would mean a savings of 154,500 Credits per month. With that, 6 middle passengers at 48,000 Credits and 82 tons of cargo at 82,000 Credits every month, or basically 50% of the ship capacity, would more than cover all of the monthly expenses and leave a nice profit.

Having established a probably value after 40 years, what would a ship with a mortgage still be worth. Taking the ship at 10 years old, that would leave 360 monthly payments left, or 75% of the base price of the ship. However, the ship has a useful live expectancy of 50 years left. So the prospective purchaser goes to a bank or other form of lending institution, including venture capitalists, and borrows the remaining 75% of the purchase price but over 40 years, reducing his monthly mortgage fee. The new owner is now paying 115,875 Credits a month, instead of 154,500, a savings of almost 40,000 credits. That makes turning a profit a lot easier. The deal with the seller would be the 20% down payment in cash to him, while the buyer picks up the refinanced mortgage, with the seller paying off his mortgage.

Based on this, the minimum selling price of a used commercial vessel should be the value of the 20% down payment, paid in cash. Anything beyond that, like the value of ship upgrades, would be subject to the Game Master.

 

[Condottiere]

Assuming normal supply of new and used spaceships and regular maintenance, sales price minus cost of removing ship quirks.

 

[RandyB]

Depreciation is an accounting technique to reduce taxes when you use capital to make a purchase. It may or may not have anything to do with the expected life of the purchase, and there are several different ways you can do depreciation with respect to taxes. Unless there is an Imperium-wide tax on ships and other personal or business property, depreciation would not be a factor.

Now, a ship's mortgage is typically 40 years, based on the minimum down payment. That would imply a useful life of the ship of more than 40 years. Currently, there are commercial ships on the Great Lakes that are in excess of 60 years old, that are still operating with regularly scheduled maintenance and Coast Guard inspections. So, let us assume that the minimum life of a ship with proper maintenance is 60 years. That would give a life expectancy of another 20 years once the mortgage is paid off. Based on the life expectancy and lack of a mortgage, I can see someone with enough money for a down payment to put that toward a used ship with paid off mortgage, so the value would be at least 20% of the cost of new construction. After all, maintenance will be the same factor even with new construction, and all of the other standard expenses would still apply as well. Not having to pay off a mortgage would make the used ship a lot more profitable immediately. On a standard Free Trader, that would mean a savings of 154,500 Credits per month. With that, 6 middle passengers at 48,000 Credits and 82 tons of cargo at 82,000 Credits every month, or basically 50% of the ship capacity, would more than cover all of the monthly expenses and leave a nice profit.

Having established a probably value after 40 years, what would a ship with a mortgage still be worth. Taking the ship at 10 years old, that would leave 360 monthly payments left, or 75% of the base price of the ship. However, the ship has a useful live expectancy of 50 years left. So the prospective purchaser goes to a bank or other form of lending institution, including venture capitalists, and borrows the remaining 75% of the purchase price but over 40 years, reducing his monthly mortgage fee. The new owner is now paying 115,875 Credits a month, instead of 154,500, a savings of almost 40,000 credits. That makes turning a profit a lot easier. The deal with the seller would be the 20% down payment in cash to him, while the buyer picks up the refinanced mortgage, with the seller paying off his mortgage.

Based on this, the minimum selling price of a used commercial vessel should be the value of the 20% down payment, paid in cash. Anything beyond that, like the value of ship upgrades, would be subject to the Game Master.

Note also, that no one will underwrite a mortgage on an asset that will not retain enough market value to cover the cost of the mortgage, assuming regular maintenance and no egregious physical damage. Thus, until play begins,* any mortgaged ship received as a mustering out benefit should be salable for at least the amount owed.

*Because, IMO, the mustering out benefit presumes normal physical condition of any physical benefit received. Anything less is an arbitrary removal of value of the benefit from the PC in question, which is Bad Form.

 

[robject]

Are they allowed to combine the two 'payoffs' and end up with one ship with 10 years left? [...]

Say maybe go with a linear split? So 20% plus 20% per 10 year block?
To maintain game balance perhaps lock these funds for ship or ship upgrades....not cash out and retire LOL... although I suppose if that's what the player really wants?

1. The Enlightened Referee would ask: what is the most fun for the players?

2. Then he would ask: how do I make the answer to No. 1 work best in the framework of their game?


Some players do indeed want to cash out and retire. But remember that even this can be useful for a larger plot line.

For instances: many adventure novels have wealthy protagonists, with a nice home base. In that case, the adventure is not in acquisition of wealth, but is in overcoming larger obstacles. Toppling a criminal organization. Finding the Great Lost Maguffin of Planet X (before the Arch Rival does). Starting a Psionics Institute and defending the galaxy. And so on.

 

[kilemall]

I always understood (maybe MT tainted me, as it is explicit there) that all ships but the scout and the corsair imply the 40 years mortgage as the free trader, so rolling it 3 times onlye means having 20 years of it paid...

Personally, when a player rolls a ship more than it must to have it in full, I let him to choose maong ship upgrades or "space" skill (as when a weapon is rolled more than once).

Hmm, well my thought was the yacht is not really a normal commercial payoff capable craft, it just doesn't have the passenger carry capacity and isn't really the Noble gig anyway- running cargo or even a bed and breakfast cruise ship is so plebe and SOC 5, it's more for making swank deals and doing diplomacy and persuasion in style.

So I figure it's more like they have this ship and little else, and just the maintenance fees are going to eat up their remaining cash- best be hitting the country club for some highend dealmaking.

Same thing for the hunter craft, do the math on charters which would be it's normal fare, don't forget the Type L is usually on loan from a uni or research foundation/corp, maybe just the Seeker would be a S4 book candidate for mortgage. Even then that's a tough row to hoe without a quick line on a radioactives claim.

 

[RandyB]

1. The Enlightened Referee would ask: what is the most fun for the players?

2. Then he would ask: how do I make the answer to No. 1 work best in the framework of their game?


Some players do indeed want to cash out and retire. But remember that even this can be useful for a larger plot line.

For instances: many adventure novels have wealthy protagonists, with a nice home base. In that case, the adventure is not in acquisition of wealth, but is in overcoming larger obstacles. Toppling a criminal organization. Finding the Great Lost Maguffin of Planet X (before the Arch Rival does). Starting a Psionics Institute and defending the galaxy. And so on.

We don't have an upvote function on this board, do we? I'd use it for this post, especially the closing paragraph.

 

[Condottiere]

Breaking up the ship and selling off the components separately might be more profitable.

 

[aramis]

We don't have an upvote function on this board, do we? I'd use it for this post, especially the closing paragraph.

Click the scales

in the post header.