Renting a lake house with use of boat/jet ski?

3 Replies

I bought a house this summer on a lake. I plan to live here another year or so, but then it will become a rental property. It's in a unique location where I could either rent it like a normal house, or use it for vacation rentals. (Like airbnb type of thing) I haven't decided which option would be best yet.

What I'm thinking, is if I rent it as a vacation rental is to include the use of either a boat or jet ski. They rent them in several other places around the lake, in the neighborhood of $300/day. I could buy a brand new jet ski with a warranty for less than $300/month. I also have a dock where it can be kept. If I only rented it 12 days/year it would be paid for.

Anyone have any thoughts on this idea? What kind of extra insurance would I need for such a thing? Would my homeowner's policy cover anything like that? Or would I need some sort of commercial insurance? The biggest issue would be liability, one can cause a lot of damage with a jet ski. Maybe something like a pontoon boat would be safer, they are also common rentals around here.

What's the cost of insurance if you're allowing renters/guests to use the machine? Are you in a litigious state where guests are more likely to sue and judges are more likely to side with them?

I know professional property managers that won't even allow tenants to put their own trampoline on the property for fear of being sued. You've got to measure all these factors and see if the cost outweighs the benefits.

Personally, it's one more thing to maintain and cause problems. Tenants are unlikely to care for a jet ski like it's their own and are fare more likely to abuse it. Then there's the increased risk of injury and a lawsuit.

Not worth the money for me.

Originally posted by @Nathan G. :

What's the cost of insurance if you're allowing renters/guests to use the machine? Are you in a litigious state where guests are more likely to sue and judges are more likely to side with them?

I know professional property managers that won't even allow tenants to put their own trampoline on the property for fear of being sued. You've got to measure all these factors and see if the cost outweighs the benefits.

Personally, it's one more thing to maintain and cause problems. Tenants are unlikely to care for a jet ski like it's their own and are fare more likely to abuse it. Then there's the increased risk of injury and a lawsuit.

Not worth the money for me.

 That's what I am asking. What kind of insurance would I need? I have no idea. If I bought my own jet ski, my homeowners policy would cover any liability with me driving it. I'm also relatively sure I could let a friend drive it also. I suspect they would not cover a "commercial" use of the vehicle, but I have no idea what kind of commercial insurance I might need. (And thus, I cannot calculate a cost)

Yes, I know some landlords are extremely uptight about liability, but as long as I'm insured against said peril, I don't care.

And yes, of course there is maintenance and possible abuse, it's just like renting anything else. The same can be said for any rental house - tenants are hard on things, that's why you get to charge them money. :) That's why I'd buy a new vehicle with a warranty. If the renter damaged it beyond normal wear and tear, they would be on the hook. (And I'd have to get a deposit for it first) And they would definitely have to sign a waiver. The deposit would probably be whatever my deductible is on full coverage insurance.

So back to the cost - if the local mom and pop rental places around the lake can afford the insurance and maintenance, I feel like their insurance premiums are not too huge, and their maintenance bill not out of hand...or they wouldn't do it. If it rents for $300/day that's like a house that rents for $9,000 per month! Of course, it would not be rented every day, but probably most days in the summer.  The other bonus is, I get a free jet ski to ride whenever it isn't being paid for.

Getting a cut from somebody else to send them a customer is unlikely, they have no trouble renting them during the warm season. There's often a waiting list, they don't need a referral from me.