Making Money by Chartering Your Boat
Connecting boat owners and renters raises some interesting issues in the sharing economy.
Published: Saturday, October 23, 2021
By: Zuzana Prochazka
The proliferation of the sharing economy has birthed P2P (peer-to-peer) boating and, with it, more players in the field of direct boater-to-renter vessel chartering. Most of us have used Uber and Airbnb so we’re familiar with the concept, and it’s only natural to see numerous services popping up offering P2P boat rentals. But the complexities of boater education, insurance legalities, and taxation provide a dynamic in this marketplace that doesn’t compare to getting into someone’s car or renting a bedroom in their apartment.
At last count, there were several boating P2P businesses including Boatbound, Sailo, GetMyBoat, Boatsetter, and others in the U.S. and some in Europe including Antlos, Click&Boat, and Samboat. Most of these companies work with a mix of private rentals (P2P) and commercial charters where they aggregate or re-market existing charter company services.
For example, GetMyBoat is an aggregator service with 80% of their 140,000 listings (which can be anything from paddleboards to yachts) in dozens of countries being commercially available. That means GetMyBoat is another marketing resource for existing businesses. Meanwhile, Boatbound (nearly 25,000 boats in 2,100 U.S. cities), Boatsetter (4,000-plus boats), and Sailo (1,500 boats in the U.S. with more abroad) focus the bulk of their business on true P2P transactions between private owners and individual renters. You can decide which to join if you’re considering the concept.
Potential Issues with Renting Your Boat
There are sticky issues with the idea, like insurance. Providing affordable and comprehensive insurance has been a challenge for all the companies. Boatbound works with Geico (BoatUS) and Sailo with Lloyds of London to provide per-outing insurance that is calculated into the price of the vessel. GetMyBoat offers the ability for renters or owners to buy trip insurance separately. Boatsetter will provide a BoatUS policy underwritten by Geico that includes coverage for the boat, boating liability, medical payments, uninsured boaters, and fuel spills. You don’t have to change your regular insurance policy because this one supersedes the other for the duration of a particular charter.
Other issues are of a legal nature. The first is one of licensure. Unlicensed owners taking out passengers on their own boat is illegal. Boaters can rent from owners who aren't themselves licensed, but there will still need to be a licensed captain aboard. Most of the companies say they offer a database of USCG-licensed captains (who are also insured under their umbrella policies) so that inexperienced boaters can still rent from owners who are not licensed.
Additionally, it’s not just the captain’s license that determines how many passengers a vessel can carry. In order to accommodate more than six paying passengers, a vessel must be USCG inspected unless it’s chartered as a “bareboat” which can carry 12 passengers. That’s a distinction that should be noted by both owner and renter.
Next is boater education. As more states like California and Washington require boater certification, renting boats may require a Vessel Operator Card, even for bareboats. How will this affect P2P boating? It's hard to tell but some rental companies stipulate their renters be at least 25 years old unless they’re also hiring a licensed captain.
Finally, there are tax consequences. You should expect to receive a 1099 statement at the end of the year from whichever company you work with summarizing your revenues.
The Logistics of Renting
Renting your boat isn’t a set-it-and-forget-it proposition. First, there’s the issue of scheduling for check in and out. You’ll need to meet your renters and run the boat for them or instruct them on how to use it themselves. The same goes for check out after the charter. Most rentals are usually last minute so you’ll need to think about what that will do to the rest of your schedule.
You’ll need to vet the renter. Ideally, you can develop a database of qualified, courteous renters who know what they’re doing and treat your boat well and then focus on these repeat customers.
Some of the rental companies agree that the challenge has been to convince owners (usually ages 55+) to charter their coveted toys to renters (usually 45 and under) and that’s something you’ll need to think about.
You’ll also need to keep your boat in rental-ready shape and that means it’s always clean, fueled up, and in good operational order for all systems. You’ll also need to have the safety equipment up to date in case the Coast Guard decides to inspect it.
Volume and Revenue Expectations
How much can owners expect to make by renting their vessel? The answers vary. Boatbound says their sweet spot is powerboats 16’-24’ and business varies by location. For example, South Florida is a year-round market while Chicago picks up in summer. Depending on location, boat size and age, and price, owners can expect to rent their boats 14-17 times per season and in some locations, owners can make enough over two summer months to cover their costs for nearly two years. That means you’d be offsetting ongoing maintenance costs, insurance premiums, and slip fees, or you may be paying down the mortgage.
Prices for rentals are usually set by the owners and can vary wildly. It’s still not cheap to rent a boat although it is much more affordable than buying one. For example, powerboats 28’-45’ are the most popular with Boatsetter and those will normally rent for approximately $1,300-$1,400 per day plus the cost of a captain.
Both Boatbound and Sailo keep roughly 35% of the specified price for insurance and fees. Boatsetter keeps 28% and has a revenue sharing program with marinas that participate. Aggregators keep a lower percentage.
Is It Right for You?
P2P boat rental demand has skyrocketed since COVID and business is booming. However, as you can see from the above, there are a number of things to ponder before deciding to make boat ownership a revenue-generating proposition. The financial benefits are real, but they do come with tradeoffs. Only you can decide what makes sense for you so educate yourself, weigh your options, and then do (or don’t) dive in.
About the Author
Zuzana is a freelance writer and photographer with regular contributions to over 18 sailing and power boating publications. A USCG 100 Ton Master, Zuzana is the founder of a flotilla charter company called Zescapes that takes guests adventure sailing at destinations around the world.
Zuzana serves as an international presenter on charter destinations, safety issues, and technical topics, and she's the Chair of the New Product Awards committee for innovative boats and new gear. She is a member of the American Society of Authors and Journalists and a board member of Boating Writers International.
A version of this article appeared in the Fall Issue (September/October) 2021 of Great Lakes Scuttlebutt magazine.
tags: Applicable Everywhere, Charters, Do It Yourself (DIY), Job Opportunities, Lifestyle, Rentals, Software & Apps
