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The happiest days in the life of a boat owner might be the day you buy it and ... the day you rent it out? See if Peer-To-Peer Boating Is For You.
If you want the joy of boating without owning one, peer-to-peer rental may be for you. (Photo: Chris-Craft)
As boat owners, we all know that even when we're not using our boats, they still cost us money. Slip fees, insurance, and maintenance don't stop just because our boats are sitting at the dock. At the same time, there are lots of people who aren't ready to invest in a boat, but who still want to get out on the water. To bridge these two boating groups, a new concept called peer-to-peer (P2P) boat rental has emerged. Let's take a look at how it works, and what to consider before you jump in.
For a few years now, people with underused assets, such as cars, bicycles, rooms, and even entire houses, have been connecting via P2P websites to others who want to rent them for a few hours, a day, or a week. Companies such as Airbnb, which allow people to rent out unused rooms on a daily basis, have been around for a few years, and the concept has now migrated to boats. With P2P rental, boat owners can collect some money on days their boats would otherwise sit at the dock or on the trailer. Non-boat owners can get on the water when they want, and let someone else handle the costs of ownership. Vacationers can rent boats far from their normal cruising area, opening up new waters to explore.
One advantage for those looking to buy a boat is that it's possible to rent a model you're considering buying so that you can get a whole day's use to evaluate it. Often P2P boats are fully loaded, unlike many traditional rentals, which normally are pretty basic in order to sustain daily use. If you're interested in fishing, for example, P2P owners will often rent their boats fully rigged.
Is it possible to make money renting out your boat this way? Maybe. According to Aaron Hall, founder of the P2P website Boatbound, you can often pay for your expenses by renting your boat once or twice a month, and some boat owners in hot markets can make money on top of that. Like any renting situation, P2P rentals aren't without risks and rewards. Here's what you need to know before you dive in as an owner or renter.
How It Works
Boat owners list their boats on a P2P website, such as Boatbound.com, Boatsetter.com, or Cruzin.com. Potential renters browse boats of all types and sizes, and once they find something they want to rent, the website handles the transaction from start to finish. Owners set their own price based on the market, as well as required deposits. Insurance should be included in the price with a deductible, which is often $500, or 2 percent of the boat's value, whichever is greater. Many boat owners set the deposit so it will cover the deductible. Some P2P companies also contract with BoatUS for on-the-water towing.
Peer-to-peer rental websites make listing or finding a boat easy.
Boat owners often find it hard to imagine renting their boat to a perfect stranger. Their biggest concern? How do I know a renter will take care of my stuff? The flip side to this is that a renter doesn't want a boat that's not safe, or that can barely make it out of the marina. While there is a certain element of trust, the answer combines something eBay has been doing for years — buyer and seller reviews — with vetting for both renter and boat. If your product is good, you get a good review; if your buyer is good, he/she gets a good review. If either gets poor reviews, it's not likely they'll be able to continue to participate. The same concept is used for P2P boat rentals, with the addition that a renter is further vetted and the boat has to meet certain qualifications.
You wouldn't rent your pride and joy to someone you know nothing about, so P2P companies typically require renters to complete a questionnaire and affidavit, meet age requirements, have a valid driver's license, and possess a minimum of two years of boating experience. P2P companies also require that the owners receive a deposit from renters to cover contingencies like minor damage, missing life jackets, or failure to refuel the boat. In the end, though, it's the owner who has to feel comfortable renting to an individual, and there's really no standard format. Hall says owners can talk to potential renters on the phone, meet them in person, or even take them out on a cruise around the marina until they're comfortable.
Renters can browse the P2P websites, which show pictures and descriptions of boats, along with reviews from previous renters, so they can be sure they're getting the right boat. Note that larger or faster boats, and those over 10 years old, may have additional requirements before being accepted for listing, such as an inspection or survey from a qualified marine surveyor, which should help ensure a good experience. Still not sure you'd rent out your boat? Boatsetter has taken a slightly different approach to address the high-end luxury-boat market, setting up their website to offer the option of having a licensed captain aboard for the rental.
And If You're The Renter?
The last thing you want is an unreliable boat. For boats with current reviews, you'll have to rely on previous renters' experiences. People who've had problems with a boat are not usually shy about saying so. If there are no reviews, and you're not comfortable with the pictures and description, ask to see the boat before you make a deal.
Ask what the policy is if the boat breaks down and you can't use it. In most cases, P2P companies will work with the owner and renter for a full or partial refund, or find another boat to rent. Boatbound, Boatsetter, and other P2P companies have agreements with BoatUS to provide towing resulting from on-the-water breakdowns at no charge to the renter.
Look for a boat you're comfortable with and that fits your needs, and be aware that you'll be paying fuel costs as well as the rental fee. Ask about any other fees or charges before you climb aboard.
Make sure you get a pre-rental checklist so you can note any prior damage. Walk through the boat, inside and out, looking for preexisting damage. It's a good idea to take your own date- and time-stamped photos of the boat, inside and out. Look at the P2P's liability coverage in the event you injure someone in an accident. Make sure it's at least as high as what you have through your own boat or auto policies.
If the engine quits, or there's an equipment breakdown, how will the boat get back to the dock? Ask the P2P company how they handle breakdowns. Some contract with BoatUS for on-the-water towing service, so there's no money out of your pocket. (If you are renting a boat and have your own BoatUS membership with Towing Service, it will provide for a tow up to your selected per-incident service level, even if the P2P company doesn't provide it.)
You'll need a credit card for the daily fee as well as an advance deposit. Most P2P companies return your deposit automatically after the boat owner inspects the boat and gives the OK.
Interested in finding out more about putting your boat up for rental, or in renting out someone else's boat? For more information on Peer-to-Peer Rentals, see these websites: Boatbound and Boatsetter.
Before Renting Out Your Boat
The first thing boat owners need to know is what happens if your boat gets damaged or someone gets hurt. Most recreational marine-insurance policies will not provide coverage during any rental period — no matter whether you're renting someone else's boat, or renting your boat to someone else. Some companies may not cover your boat at all if the boat is even offered in a P2P program. While BoatUS Marine Insurance may provide a policy to boats used for P2P rentals, there's no coverage of any type during the rental period. If you would like to rent someone else's boat, and you have a BoatUS policy, you can obtain an endorsement that will extend the liability coverage of your boat policy to you while renting another boat. But bear in mind that this supplemental coverage does not provide for any damages that you may cause to the rental boat itself.
To deal with this issue, the P2P businesses that BoatUS Consumer Protection is aware of, provide their own insurance policies, covering damages that may occur while the boat is engaged in a rental arrangement. But before you enter into any agreement, check with the P2P business about their coverage to make sure you're adequately protected no matter which side of the transaction you're on.
Boat owners should look at how much the policy will actually pay if the boat is lost completely, how much the payment will be reduced by depreciation if the boat is damaged, and whether salvage charges will be deducted from the payment for damages to the boat. Hopefully any deposit collected will cover the deductible if the boat is damaged, but again, be aware that there may be depreciation to repair things like engines or sails on older boats, and the deposit may not be enough. Most P2P companies give you a couple of days to inspect your boat before allowing the deposit to be returned. The good news is that typically less than one percent of P2P rentals have problems with damage, and they're usually cleared up fairly easily. Remember, if a renter wants to continue renting, he's got to have a positive review. (To read about one BoatUS member's P2P experience, see below.) Keep in mind that as a boat owner, you're responsible to make sure that your boat meets all relevant USCG requirements.
What's It Like To Rent Your Pride & Joy?
Bob Kellett, a BoatUS member from Seattle, Washington, has rented his 30-foot Nonsuch, Bobcat, several times and says that so far he's been impressed. "You're in control of the entire process," he says, "from setting your price to checking out potential renters." Kellett talks to potential renters on the phone and if he's comfortable with their experience, he'll meet them at the boat for a thorough run-through. He gives his renters a detailed instruction form about the boat's equipment, and a step-by-step guide for things like starting the engine, raising the boat's big main, and how to use the head. He'll even take them out on the boat for a few minutes if they want.
The first time he rented his boat he was apprehensive. "I felt like a nervous father whose daughter was going to the prom," he jokes. But after a couple of rentals, he realized that the renters cared about his boat, too, and were there for the same reason he was — a love of the water and boating. He also tells his renters that he's only a phone call away, should they have questions. So far, the only downside is an occasional scheduling conflict when he'd like to use the boat himself, so he tries to find renters who can give him a few weeks' notice. On the upside, he says it's a good excuse to keep his boat looking good. And the extra money in his pocket from a couple of rentals a month easily pays his moorage. "I hope to do more of this next year," he says. "I'm sold on the concept."
How Is The Renter Vetted?
Most companies require renters fill out a detailed questionnaire that asks about criminal and driving convictions, as well as boating experience. But it's your boat, after all, so you can decide what else you want to ask, and decide to whom you're willing to rent. Most P2P companies provide a pre- and post-rental checklist for inventory and damage, and you may want your own checklist for extra equipment. A photo or video documentation of the boat's condition inside and out, before each rental, can help resolve disputes later on.
Costs & Profits
What does it cost to rent a boat? The rental price you can get for your boat varies based on the size and equipment level of the boat as well as the market area, and ranges from kayaks in Annapolis, Maryland, for $45 a day to a 10-year-old 30-foot powerboat in San Diego, for $400 a day. A newer ski/wakeboard boat in Austin can go for $600-700 a day. A 31-foot Hunter sailboat in San Francisco may rent for $500-600 a day. P2P companies typically take 30 to 40 percent of your rental (and in return, most P2P companies provide towing and insurance coverage for the rental period). The money you get for renting your boat has some other costs to it, too; maintenance goes up the more your boat gets used, and its resale value may decrease due to higher engine hours or wear and tear.