How much should I charge to share my boat?
Anyone who has shared, or thought of sharing, a boat has had to face the question of how much to charge partners. In a shared ownership or syndicate scenario the question gets a little easier, i.e., split all costs according to percentage of ownership for each owner. When you want maintain ownership but share your boat with other people however, the question is a bit more complex.
What will the Market Bear?
This is the idea that you should set prices based on what a sharing partner is willing to pay. This pricing paradigm is difficult in the boat sharing market because there isn’t a lot of data about what others are charging. Without some external data, what the market will bear become a guess. You may price your share too low and lose money or you may price to high and never get anyone on the boat.
How can you put some intelligence on “what the market will bear?”
Relate to Current Cost of Owning a Similar Boat
Notwithstanding your actual costs, you might price a share of your boat according to the cost of owning a similar boat at today’s prices.
Let’s say you own a boat with a $30,000 mortgage, have a $350/month mortgage payment and pay $200/month is other miscellaneous costs. Your actual costs are $550/month.
However, the current value of the boat is $20,000. If you bought your boat today, your payment would be around $150/month (just to make the math easier) and you still have the $200/month in miscellaneous costs.
A 50% share based on what you’re actually paying would be $275/month. A 50% share based on your boat’s current cost would be $175/month. Thus, under this analysis you would offer a 50% share for $175/month
While this simple analysis might be a backdoor method to get at “what the market will bear” it leaves some important facts off the table.
The Cost of the Boat is the Cost of the Boat
It is difficult to put a price on the countless hours most of us have spent caring for, fixing and maintaining our boats. Regular oil changes, a new generator, adding a set of fenders, upgrading the stereo, underwater lights, a satellite TV system, fuel meters, etc., etc. Most boat owners have spent a lot of money and time keeping their boats in tip top shape. You know the boat and you know its particularities.
By contrast, when you purchase a used boat you really have no idea what problems you’re going to encounter once you get it on the water. Has this boat been taken care of? Is it really worth what I paid for it? Only time will tell.
When you bring a partner on your boat you’re not selling him a used boat, you’re sharing something you’ve cared for and maintained for years. A shared boat also comes with a kind of built-in or implied guarantee that that boat is in good shape and if something breaks you will fix it – something you would never get when purchasing a used boat.
For these reasons, I think pricing your boat based on the current cost of a similar used boat is probably less then what the share is actually worth. The right price is probably somewhere between your actual costs and the cost of a similar used boat.
If your boat is in great shape and you’ve done a lot of upgrades you could push the price to the higher end of the range. If your actual costs are way out of line with the current cost of a similar used boat you would probably want to set your price at the lower end of the range.
We would love to hear any other methods you have used and, generally, what kinds of prices you’re getting to share your boats – feel free to add your thoughts and comments below.
I guess the 50% sharing is reasonable.
Do you need to make any legal documents for boat sharing?