Thoughts on leasing out my trawler for Loopers

[Slo-Mocean]

Hi all newbie on the board .

I have an idea of possibly doing an annual lease on my recently purchased 2004 GH-37 to experienced individuals instead of selling it and would appreciate some feedback on the pro and the cons .

Vessel is located in SW Florida for a perfect start to do the loop and by April 1st will be out of the yard after getting some cosmetic damage repaired and new hull paint and another coat over the year old bottom job.

I think this would allow an individual to cast off with minimal worries without the time ,expense and hassles of getting a recently purchased used vessel ready to cruise .

Vessel has 2 brand new Yanmars and gears with just 50 hours on them and all new running gear components along with a bilge rerig by Diversified Yachts.
All brand new electronics and auto pilot along with rebuilt windlass on newly replaced pulpit.

Upholstery and flooring is all brand new with a brand new full size Whirlpool frig/freezer with icemaker in the door along with brand new micro/convection oven and indirect flattop range.

Recent queen size Tempurpedic mattress and washer and dryer.

Brand new electric head and shower sump with new hoses and macerator .3 New Battle Born lithium house batteries and new 3000watt inverter. Three marinair units fully serviced along with a 9kw Mase generator with less than 3 thousand hours on the 3 cylinder Yanmar.

That about wraps it all up ,not much else to mention other than the watermaker that is pickled and would need to be discussed about the use feasability.

What do you guys think about it ? Any ideas of the lease value ? I have a figure in my head .

 

[RT Firefly]

Greetings,
First people I would talk to is your insurance company. This sounds an awful lot like a commercial venture to me. LOTS of stuff to consider above and beyond what your rental rate might be.
IF you're trying to recoup some of your costs, perhaps you should sell the boat and try another hobby.

 

[Slo-Mocean]

Greetings,
First people I would talk to is your insurance company. This sounds an awful lot like a commercial venture to me. LOTS of stuff to consider above and beyond what your rental rate might be.
IF you're trying to recoup some of your costs, perhaps you should sell the boat and try another hobby.

Yea the insurance is a huge consideration and I'm working on it as my wife has been in non commercial insurance for 12 years. I Used to be in the commercial parasail business for 20 years so I am familiar with the high cost of Liability.

I bought the boat to repair and sell but its such a nice boat in prime condition that I would like to hang onto it as they rarely come on the market. We are just not in a time position to use it for a year or 2 .

 

[READY]

Probably the best option would be to sign up with one of the agencies that rent boats. You could start with Boatsetter.com They are set up to handle rentals and perhaps in your case you could just offer a deep discount for the long term use. Not sure if they support this long term, overnight use but worth a discussion.

Otherwise I think you will have a very difficult time getting coverage and your personal exposure could be huge. Perhaps sell the boat, carry back the loan and then "repo" or have a buy back clause? I would not want to have any liability and any amount you might reasonably expect to earn while rented is likely to be offset by the wear and tear.

 

[STB]

Probably the best option would be to sign up with one of the agencies that rent boats. You could start with Boatsetter.com They are set up to handle rentals and perhaps in your case you could just offer a deep discount for the long term use. Not sure if they support this long term, overnight use but worth a discussion.

Otherwise I think you will have a very difficult time getting coverage and your personal exposure could be huge. Perhaps sell the boat, carry back the loan and then "repo" or have a buy back clause? I would not want to have any liability and any amount you might reasonably expect to earn while rented is likely to be offset by the wear and tear.

Another similar company is Anchor. They managed the boat next to me for a while and seemed to take good care of it and keep it busy. https://www.anchorrides.com/home It might be worth calling both to compare management models and financial arrangments, etc.

 

[CharlieO.]

How about just getting her into a yacht charter company run by a reputable company?

 

[mvweebles]

Unusual situation, but the biggest single challenge is a willing owner which, in this case, there already is. From time to time someone posts desire for a long term rental but no one wants to relinquish their boat. I would think all else is workable.

To the OP - the AGCLA group would likely snare some possible partners pretty quickly. I hope you update this thread on what worked, what didn't.

Good luck.

Peter

 

[Fleming]

Before I could begin to tell you what I would be willing to pay to rent it for a year I would need to know the terms of the rental agreement. Is it like a rental car? When I rent a car and it doesn't start I don't stress, I call the car company and they come out and fix it or give me another. When the dripless shaft seal starts leaking profusely are you going to pay for the haulout and yard to fix it? You know I'm going to bump a few docks along the way, what is "normal wear and tear" or are you going to ding me $500 for every gel coat scratch? When the 3,000 hour generator craps out are you going to first accuse me of slacking on maintenance or are you going to hire a mechanic to come out and look at it right away?

So the question is what are my additional liabilities to rent this for a year on top of the fee I pay?

I see value for the renter in not having to buy and sell a boat, and not having to risk depreciation. But the details of the contract and the renter's future liabilities would make a big difference for me.

 

[O C Diver]

"Nothing parties like a rental".

So you're expecting someone to do maintenance on your brand new engines and generator that doesn't either own them or is getting paid to do the work. Wonder how long those Yanmars can be run on the pin.

Ted

 

[Blissboat]

For some time I have thought there is a market for this. The liability risk ought to be manageable - anything can be insured, for a price. To me, the hardest thing to articulate in the contract would be who takes responsibility (and how much) for dealing with the contingencies that crop up in unexpected locations. Most will be small, a few may be big, but no one deals with those things with as much promptness, care and frugality as the boat's owner.

If the owner is too busy to use the boat, he is also probably too busy to deal with a email from the charterer announcing that some of the systems have quit working, the trip isn't fun any more, and that "your boat" can be found tied up at a gas dock on some river in Illinois. In that case, "who ya gonna call?"

 

[ranger58sb]

Will a GH-37 clear the Chicago bridges?

-Chris

 

[sunchaser]

The costs to keep the boat and be sure of its readiness two years down the line may well be less than selling it now and starting over. The GH 37 is a very capable and nice vessel. Me, I’d just haul it and dry store in a safe area.

 

[MacPhid]

If the target market is to lease it for a year to someone doing the loop then I think it's possible. The problem is that while you could probably rent/charter it for a few thousand a week, for an annual lease it would be a lot less. I would guess $1000.00-$1500.00 a month based on the cost to purchase a boat for a one and done loop and sell after. I would guess insurance would be up to the person leasing?
Best market for that might be Australian/NZ/European citizens wanting to do the loop without the hassle of purchase, re registering and finally selling. Perhaps check with some brokers specializing in loop boats, Curtis Stokes, Great Loop Yacht Sales etc.
It might be a good way to keep the boat without all the associated annual costs until you're ready to use it.

James

 

[ksanders]

Lots of good questions but one that has not been asked is how much rent?

You have a several hundred thousand dollar boat that costs every month to own in debt service, even if it's completely paid for there is opportunity cost to overcome.

Then there is depreciation.

For example if the boat is worth $300,000 and your money is worth 7% then you are looking at $21,000 for a year as a real cost, and unlike a rental house that allegidly goes up in value your boat will actually go down in value, yet another very real cost.

I just do not see it as financially cost-justified.

 

[PM]

Lets play a little game here:

Say I come up to you. You have never seen me before and know nothing about me. I don't have any money. I ask you if I can borrow your boat for a day or week or a month. What is your response? Of course it is a huge "NO"!!

Now I come up to you, same story, you don't know me, never seen me before. But this time I am driving a Mercedes and have plenty of money. I ask the same question, can I use your boat for a day, week or month. I will give you money. What do you say? I would still say a huge "NO"!

If you are so hard up you need to rent out your boat, you need to sell it.

Ever hear the expression "Drive it like you stole it" or drive it like its a rental?

Don't do it.

pete

 

[Slo-Mocean]

A lot of great replies with some thought put in to them , I appreciate the feedback.

I would want a year long lease with a generous limit for the amount of Main engine hours. I would only want to do an annual or bi annual lease so to be able to spend time with the future operators .

I’ll spend more time replying this evening when I am at my pc.

 

[Jeff F]

I would think that if you could solve for the challenges mentioned an annual charter fee of $50-75k wouldn't be out of line.

There are many folks who buy a boat specifically to loop on, then sell after completion. I think it's hard to do that for less than $50k in sunk costs for a boat like the GH.

There is definitely a market, but also lots of reasons why nobody is offering a solution. I'd suggest contacting AGLCA and a couple of brokers who specialize in buying and selling looper boats to get insights into that market.

 

[Jeff F]

Best market for that might be Australian/NZ/European citizens wanting to do the loop without the hassle of purchase, re registering and finally selling.

Agreed, and I've met a number of experienced boaters from the west coast doing the Loop as well, having either shipped their boats east or bought a dedicated loop boat. The AGLCA has really popularized the route, and there are many dreaming of doing it.

 

[Slo-Mocean]

A quick reply and update while I have a second. I believe this is the only GH37 that has almost been totally updated and I think the realistic value is in the 350 to 400 thousand range if someone wants an almost new boat equipment wise .

There is a few n37s for sale in that range that are newer but lack the new power. There is a G37 that per ad has a brand new yacht finish but also has lot of engine hours and the floor plan is not as nice I feel.

I’m not trying to sell my boat just giving an idea of its value and try to determine a lease rate .

https://www.yachtworld.com/yacht/2001-great-harbour-gh37-9125560/

 

[firehoser75]

To the OP:
To me, another very important consideration would be "how attached to the boat" are you??
It sounds like you are proud of the boat and it's condition, have put alot of effort (and/or money) in it for maintenance and upgrades, etc. It sounds like it is currently in very good condition overall. How will you feel if the boat comes back to you in a year with alot of wear and tear (mostly cosmetic but visible damage) in a much worsened condition?? Not always, but often enough, renters don't look after what they feel they are "paying lots of money to use" to anywhere near the level that an owner would!! I think I am giving most "renters" the benefit of the doubt with that wording

Personally, I would not do this. I did place my first sailboat (brand new) into a reputable charter company for one summer. They did a good job looking after the boat, but I was not happy with the outcome (wear and tear, high engine hours, damage, etc.). Also after all expenses, the company did better financially than I did, and I had an "older" (by heavy use) boat as result.
My free advice, store the boat, sell the boat, or just use it as you can, but don't do what you are proposing. However, we are all different, and it may work for you???????

 

[sjisailor]

This sounds like a very interesting idea for those of us with boats elsewhere who would like to do the Loop with minimal hassle and fairly predictable investment. But I also agree with the concerns.

One thought I have would be to sell the boat but with a contract that guarantees you would repurchase it at some particular discount, e.g. sales price less $40k or whatever. Contingent on condition and survey, of course. There would be a risk someone might keep her, but that seems like a lower overall risk than the charter path

 

[mvweebles]

Lots of good questions but one that has not been asked is how much rent?

You have a several hundred thousand dollar boat that costs every month to own in debt service, even if it's completely paid for there is opportunity cost to overcome.

Then there is depreciation.

For example if the boat is worth $300,000 and your money is worth 7% then you are looking at $21,000 for a year as a real cost, and unlike a rental house that allegidly goes up in value your boat will actually go down in value, yet another very real cost.

I just do not see it as financially cost-justified.

How about looking at it along the lines of renting a $350k house ----- say $3500/mo; plus $10 per hour for each engine (WAG). Just like renting a house, renter is responsible for everything above normal wear and tear, though would have to really define what wear/tear includes.

This really isn't too complicated. All sorts of heavy equipment and complex stuff is leased all the time. It's just a matter of money.

Peter

 

[Comodave]

My boats are too personal to me to ever consider leasing it out for any period of time, much less a year. But we are all different. If I were to do this then the lease fee would be the value of the boat so I could walk away and write the boat off in my mind.

 

[Delta Riverat]

I agree.

After fixing it up to that extent and expense (ie the way you want it) I would be leery of letting it go to "unknown people on a rental year long cruise"

Consider the real possibility of getting back your boat that you never saw before.

 

[STB]

The thing is that you aren't really just trusting a year of use. You are also trusting a year of DYI repairs. If a boat isn't maintained for a year of active use, it will be banged up and wore out. If they do maintain it, they'll be fixing all those little things that go wrong, patching up storm damage, repairingnwear and tear from docking, etc.

If you agree to have the maintenance done -- they'll be upset to be paying for a boat that is tied down or laid up for weeks at a time.

It is hard to see the win with a long term lease.

At least with a charter arrangement via one of the big players, all of this and insurance is worked out.

 

[jbinbi]

OP, I think the term you are looking for is charter. I purchased a sailing catamaran for me about 9 years ago. I knew I wouldn't be able to use it every week, so I decided to put it into limited charter, 4 or maybe 5 weeks. I would only charter it to sailors who had owned a 30+ ft sailing boat for more than 5 years and had demonstrated experience on this size boat. I worked with a local charter company who found me these clients. The company knew these people well. My wife and I did all the turnarounds. Cleaning, laundry, etc. The boat was in RI, and the boat was limited to go to certain areas, but again, we were not too concerned since they were all well known.

This worked out well for 4 years, though it was a bit more work than I expected, mostly because we had to do the turnarounds in a single day or over a weekend. The revenue covered the cost of the boat. Depreciation helped more (though I sold the boat for more than what I purchased it for, so all that was recaptured).

Insurance was not an issue, nor was it more expensive, a rider was added that limited me to 5 weeks of charter to certain types of guests.

I have been looking at moving from sail to power, and have wanted to charter a trawler on the east US and have found very little. There are a few Nords in WA. I personally would be interested in chartering your boat.

 

[Mako]

OP if you're just trying to recoup some money while not using it for the next two years, then just go the Air-B-N-B route instead. SW Florida or the Keys. The boat doesn't move. You can even bring it to a guest marina where the renter wishes (for a one week minimum) anywhere in the Keys, as long as he pays for the costs.

Better than renting it out as a bareboat for one year. It will be trashed.

 

[Action]

I am nearly in the same boat. (Forgive the pun)
I have the $ to buy a boat on the West coast, however I don't want to slip and maintain one for 3 years. At best I might be able to use the boat a weekend or two. That seems like a waste at this point. So, I have not pulled the trigger.

Action

 

[Slo-Mocean]

Before I could begin to tell you what I would be willing to pay to rent it for a year I would need to know the terms of the rental agreement. Is it like a rental car? When I rent a car and it doesn't start I don't stress, I call the car company and they come out and fix it or give me another. When the dripless shaft seal starts leaking profusely are you going to pay for the haulout and yard to fix it? You know I'm going to bump a few docks along the way, what is "normal wear and tear" or are you going to ding me $500 for every gel coat scratch? When the 3,000 hour generator craps out are you going to first accuse me of slacking on maintenance or are you going to hire a mechanic to come out and look at it right away?

So the question is what are my additional liabilities to rent this for a year on top of the fee I pay?

I see value for the renter in not having to buy and sell a boat, and not having to risk depreciation. But the details of the contract and the renter's future liabilities would make a big difference for me.

Great questions .

I would first off have to qualify the individuals over the course of a couple days in handling the boat, as it can be a handful in any high wind with its superstructure and 57hp Yanmars swinging 24" props through a 2.32 reduction. You need to get aggressive on the throttles sometimes to get the boat to respond to windage .

During this time I can observe their knowledge of operating a vessel and question them about their seamanship .

Next I would be interested in their mechanical knowledge and perhaps show them all the systems and see how they react to see if they have any mechanical ability. I myself have wrenched on my stuff for 45 years and i think I can get a pretty good read on someone .

I would prefer someone that could handle oil changes with me supplying all filters and fluids onboard for a year long lease as well as the ability to change out freshwater pumps, a/c pump, macerator pump, shower sump and bilge pumps if needed. All are brand new as of now but new spares would be onboard .

If I found an individual that did not have any mechanical ability I would try to schedule fluid changes along their route and the lease price would reflect that as well as any minor repairs .

Short of someone putting it on the rocks I for see no need for a haulout as the dripless are brand new as well as cutlasses and rudder shaft packings. But if an unforseen mechanical problem required a haulout it would be my responsibility .

Now as far as exterior damage minor scuffs and scratches would be overlooked and taken as wear and tear as well as upholstery wear. But if their permanently stained with red wine it's on their dime as well as if the interior looks like a barfight occurred.

Props are guarded on 2 skegs with a draft of 3 feet so minimal risk for underwater damage.

I'm thinking $15,000 damage deposit with 6 months of the lease due
up front with the last 6 months due in 90 days.

 

[Slo-Mocean]

OP if you're just trying to recoup some money while not using it for the next two years, then just go the Air-B-N-B route instead. SW Florida or the Keys. The boat doesn't move. You can even bring it to a guest marina where the renter wishes (for a one week minimum) anywhere in the Keys, as long as he pays for the costs.

Better than renting it out as a bareboat for one year. It will be trashed.

I appreciate your input but I don't see any advantage to having non boaters who have no idea, using my boat as a Party Pad for $150 a night, the liability alone gives me the heebie jeebies. I currently dock it in front of a home that Air bnbs. I see the clientele.