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kgrove
05-19-2012, 02:30 AM
Looking for ideas. Long story as short as I can make it, I have a great wakeboard boat ('08 X15) and only get to put maybe 60-80 hours per year on the engine while a close friend is thinking about buying an older, less expensive wakeboard boat so he can go boarding in the off season (he has a nice '08 Malibu at his summer home 2,000 miles away but can only use it June through Aug). If we can find th right way to do it, it makes more sense for him to rent my boat on the days I can take him out. He'd get access to a much nicer boat without having to invest a bunch of cash and I'd get to subsidize the cost of my boat that gets very low usage anyway.

The questions:

1) what's a fair rate to charge? I'd like to make sure to charge a rate that would cover normal maintenance and wear/tear/breakage, loss of resale value due to putting more hours on the engine, and maybe a little bit extra for the risk and inconvenience. I have absolutely no idea what a good wakeboard should rent for.

2) what other issues should I consider? By renting it to him rather than selling partial ownership, I can control when he uses it versus me. I know I need to check my boaters insurance to see what happens if he is renting the boat and destroys it or causes an injury to somebody. What else might I miss?

Appreciate any thoughts or experience you might have.

jafo9
05-19-2012, 04:26 AM
not sure about the legal issues or insurance. however, in my experience, one of the best ways to ruin a friendship is money. especially if there is any damage, perceived or otherwise.

nascar
05-19-2012, 07:11 AM
I would never rent or loan my boat , if the worst happens and someone is hurt or worst killed , you can bet that you will be named in a law suit .

Skywalker
05-19-2012, 07:25 AM
I would never rent or loan my boat , if the worst happens and someone is hurt or worst killed , you can bet that you will be named in a law suit .

Amen!!

Panda Cub
05-19-2012, 09:09 AM
Wouldn't even consider it

Lucky26
05-19-2012, 09:10 AM
Train wreck waiting to happen

madcityskier
05-19-2012, 09:36 AM
By my reading you're taking him out? If that's the case you're in charge of damage/repairs etc? If so gas and maintenance plus a little something for your time would sound right. If you're not going it's a problem waiting to happen.

Jim@BAWS
05-19-2012, 10:02 AM
You are golng to RENT your boat to a FRIEND while you are in it!!!???

What ever happened to chipping in for gas an helping wipe and clean it down!!

73blue
05-19-2012, 10:05 AM
A lot depends on your friendship, and the other guy's attitude. I have a friend (may as well be a brother) that has unlimited access to my boat. It didn't cost much to add him to insurance, and I know from past history that he is stand-up enough to take responsibility for damage, maintenance, etc. Of course, even if he doesn't, our relationship is strong enough to handle it.

If you are wanting, or feel you need, a more formal agreement, then you need to cover all your bases. First of all, that may be a red flag that you shouldn't do it. If you still want to, you need a formal, signed agreement outlining payment, maintenance, damage, liability, etc. May want to get an attorney to draw that up. As others have said, that won't prevent a lawsuit, so you need to be very upfront with your insurance company about what coverage you need. I would not recommend buying your insurance for this on the internet. Now, if this transaction ever comes to light through a lawsuit or otherwise, you're going to be responsible for income taxes on the rent.

Another option for all this is to start a little LLC and register the boat in that name as a rental (no sales tax, at least in TN). Then the boat becomes a business expense that you can write off to offset your rental income. This will also add a layer of liability protection. There may be some limits as to personal use I'm not aware of in that scenario.

Keep in mind, I'm not a lawyer or accountant, and my suggestions should not be considered professional advice. This can be done, and in a way where you can benefit and be sufficiently protected. It is a little work on the front end, though. You just have to decide if its worth it.

73blue
05-19-2012, 10:06 AM
By my reading you're taking him out?

I think that may have been a typo by OP. At least I hope so.

cwarndahl
05-19-2012, 10:11 AM
I have 2 people as "partners". On my boat. I have a lease with full detials
in it. I charge 1/3 of the payment and slip. Also responsible for 1/3 the cost of repairs and cleaning, we get together once a month and detial the boat. In the lease we detial out thing like fuel, example boat must be left on full at all times, sometimes you come in late and the marina gas station is closed. You leave money in the box plus 25 for the next guy to fill it up service charge. Rent is due on the first if your late 25 charge. Don't wipe the boat 25 charge. You have to deal with it like a land lord paper work and payment up front. It's a great way to subsidize owner ship of the boat. I also have had to find a new partner in the past and I charge a 1500 buy in fee and make them sign for a year. Every one wants a boat in the summer. But winter I when ownership can be a Burdon, in my line of work it slows down in the cold so that's when the partners pay off. I also keep my boat in a slip so it's a bit more expensive. Any how these arrangements work good for me and some other people I know but every one says the same thing, get a buy in fee and make them commit for a year, and have paper work with everything laid out. Other wise the other post was right you could ruin a friendship. That's my 2 cents

kgrove
05-19-2012, 01:13 PM
Btw, it was a typo. I'm considering renting him the boat on days when I CAN'T take him out myself. His job allows him much more flexibility than mine, so he'd like to go more often than I can. He's entirely trustworthy - 10x more boating experience than myself, totally safe, responsible. I'm fully aware that mixing money and friends is dangerous, which is why I'm looking for advance on how to do it successfully.

skps190
05-19-2012, 02:03 PM
My question would be how many hours do you think he'll be putting on the boat? If its going to be more than you, which it sounds like, then I'd consider figuring out an hourly rate. I have no idea how you'd do it, maybe start looking at used ones and figure price differences based on hours or talk to your dealer and see what they use as a guide when evaluating trade-ins. I think that if you try to do an even monthly split you're going to get the short end of the stick in the long run, he's putting the hours on which is going to cost you when you go to sell. I can see doing a monthly charge + an hourly charge along w/ a fuel arrangement.

73blue
05-19-2012, 02:08 PM
Btw, it was a typo. I'm considering renting him the boat on days when I CAN'T take him out myself. His job allows him much more flexibility than mine, so he'd like to go more often than I can. He's entirely trustworthy - 10x more boating experience than myself, totally safe, responsible. I'm fully aware that mixing money and friends is dangerous, which is why I'm looking for advance on how to do it successfully.

Well, you can always just add him to your insurance as an additional operator and he can throw you some cash on the side. ( I still wouldnt recommend it, though, as there's probably only 2-3 people in the world I would do this with.) Your insurance should cover the liability pretty much the same as if you are operating the boat.You will want to check with the ins agent as to coverage if he were to sue or whatever. When a maintenance or repair issue arises, and it will, its much easier to have it worked out in advance. Its also better in writing, but then you are moving from "friend borrowing my boat" to a contractual business relationship, as I stated before. Remember its always better to err on the side of caution

krutzmart
05-19-2012, 02:29 PM
You really got to ask yourself about your friends responsibility level ?
I've owned 2 different boats with two different friends and it worked great. 2 to split costs. twice the use of the boat. You really rack up hours fast but, if your friend a machanic it has it's perks too. Or wgatever the case is.
Now we own our own boats and I would let those 2 take my boat any time. And they return the favors.
But, NO ONE ELSE TOUCHES IT. NO ONE. guese that means I only have 2 responsible friends.
Now when something got broke, and its gonna happen, just a matter of time. It would be fixed right away either better than before or just as good. No cheap scates...
But all in all it can work, I would make them a partner before I would rent it.
Funny how people take care of stuff when it cost them dearly.
Rentals.....GET THE **** BEAT OUT OF THEM....
just my 2 cents. WHO CARES ITS JUST A RENTAL ?????

petermegan
05-19-2012, 08:29 PM
I suppose it is worthy of mention that even though your friend has your trust, he will not be the one driving it when he is wakeboarding behind it. This is probably the biggest problem I perceive.

atlfootr
05-19-2012, 09:44 PM
BAD IDEA :noface: DON'T DO IT!

JohnE
05-19-2012, 10:14 PM
I would either let my close friend use my boat for free or let him wait till I could take him. Unlesss it were a one time gig

mtajpa
05-19-2012, 11:17 PM
I have 1 friend that I would allow to take my boat and would never charge him. He would do the same for me. Quickest way to lose a good friend is to put money into the game.

east tx skier
05-19-2012, 11:49 PM
These responses sum it up well. It is a train wreck waiting to happen. Let your friend buy the older boat and buy your friend a case of beer to celebrate your continuing friendship.

broncotw
05-20-2012, 12:17 AM
I could not sleep at night knowing I was charging rent to a good friend for borrowing my boat! I am in agreement with the majority of the others who have posted -- renting your boat to your friend is a BIG mistake! If you feel you MUST pursue this venture then instead of coming up with some mathematical quagmire in an attempt to determine how much you can charge him -- why don't you just make it simple! You pay for your boat, he agrees to pay the cost to add him to your insurance policy, he pays for the slip/storage, and you'll both pay for gas as you'll use it!

Thrall
05-20-2012, 01:56 PM
Sounds like this isn't going to be sporadic use, that he will be using it frequently.
Just an idea, but if he spends 3 months straight at his summer home, why can't he spend a few extra days towing his boat back for use in the off season?
On the other hand, if he mainly rides with you in the "off season" and only will be using your boat a handful of times, AND is a good enough friend, then just let him use it and he should be happy to compensate you for ancillary costs (maint, repairs, docking fees, etc).
If he will put alot of hrs on it as you suggest, then you need to get some $ for it. You see people on craigslist renting their wakeboats for around $400/day. You'll pay even more renting from a rental business, so $3-400/day sounds about right for a friend. With that, 10 days rental and he could about pay to ship his own boat home and back.

petermegan
05-20-2012, 07:32 PM
$400/day and you have cured your problem. He isn't a friend any more.:)
How would double the fuel work. ie. $100 to fill the tank, leave $100 in the glove compartment? If he puts excessive hours on it then review it.