Can You Really Live on a Cruise?

It's a life many people only dream of: Unlimited time aboard an ocean liner with all the amenities of a luxury hotel—gourmet restaurants, wellness center, swimming pools—traveling the world with access to desirable destinations and some of the most remote places on earth.

For some, this is a substantial part of their lifestyle as owners in so-called residential ships, a niche yet growing sector in travel¹ that includes ships with fanciful names such as The World, MV Narrative, and Somnio. These may look like typical cruise vessels, but they feature key differences: They aren't open to the public—individuals must own a unit to gain access; they offer spacious apartments, not cabins, limiting the number of people on board; and they set their own itineraries, which vary from year to year and can include typically inaccessible parts of the world.

"We offer a unique lifestyle that exists nowhere else on the planet," says Tom Wolber, CEO of The World, Residences at Sea, a ship launched in 2002 that regularly visits perennial bucket-list destinations like Antarctica, the far-flung Marquesas Islands, and the Galapagos archipelago. In addition to dining and recreational facilities, the ship's programming includes regular lectures by Nobel Prize winners such as physicist Shuji Nakamura and guided expeditions into its ports of call. "A home here is a life filled with global adventure at the pinnacle of luxury."

It's enough to make travel enthusiasts want to give up life on land. "It could be an interesting lifestyle," says Susan Hirshman, director of wealth management at Schwab Wealth Advisory, Inc. But what are the real-life implications of such a move? Here are some of the considerations.

"It's easy to get lost in the dream, but like with any investment, you have to consider its impact on your finances and cash flow management," Susan says.

Unlike a vacation home, which you can make your permanent home, rent out to help defray expenses, or easily sell if necessary, a residence on a ship doesn't offer that flexibility. The World, for example, doesn't allow owners to make their ship their primary home. Nor are they allowed to rent their units—which range in price from $2.5 million to more than $15 million, plus annual dues of 8%–10% of the unit's value—to non-owners. Even sales are restricted to a private waitlist composed of existing owners or personally referred prospects. "Should your situation suddenly change, it may be difficult to quickly offload such an asset," Susan says.

Another factor is the ownership structure. On some ships like The World, owners technically gain shares of the ship's holding company proportionate to their unit's square footage, while other vessels, like the MV Narrative launching next year, offer termed lease agreements for exclusive occupancy. "If you own, does the asset appreciate?" Susan says. "And if you lease, is the experience worth enough to you to sacrifice the return those funds could generate invested elsewhere?"

The seclusion of life at sea may be attractive, but it's also a drawback. No ship, no matter the size or cost, can provide comprehensive medical treatment should you have health emergency resulting from illness or injury. "You have to consider your health situation and have a plan for the worst-case scenario at sea," Susan says. Among the chief considerations are your ability to reach a hospital and whether a ship's crew and facilities can sustain you until that happens. "Everyone has different thresholds for risk, but make sure you understand the access to medical care you'll have while on board."

Regardless of your health, Susan recommends updating your estate plans and insurance policies before embarking on any extended journey. "And don't overlook your home back on land," she adds. "If you'll be away at sea for an extended period, ensure your property and casualty insurance is up to date."

It's safe to say that living on a ship may not be for everyone. However, even globetrotters and adventure seekers may eventually wish for a change of scenery. The experience could lose its luster for any reason, whether its monotony, isolation, changes in management, or even the inability to develop friendships in such a small community, Susan says. "This is a unique and rewarding lifestyle, but it may be a good idea to think of it more as an extended vacation or a second home."