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Leases - The Good, The Bad, The Ugly?

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  • Leases - The Good, The Bad, The Ugly?

    I need some advice on leasing my horse; I have a horse listed at a pretty low price right now in order to get him sold quickly this summer. Well I haven't had a ton of interest yet (though he hasn't been listed too long), and I do have someone asking whether or not I would lease him. Now, normallly I would not consider it, but this young lady would be taking him to A-shows, which would get him off my dollar. And shouldn't that increase his value in the long run? Or would he need to consistantly place or win for it to make a difference? And some more questions:

    1. I'm considering a free lease where he would remain for sale the entire time, is that normal or something anyone would do if I stated that I would not sell him until the lease is up?
    2. If not, what is the going rate for a lease? We're only talking about a summer lease if that helps.
    3. Any suggestions on what the contract though says as far as death or injury to cover me?
    4. Do you require insurance on your's?

    I'm sure I will think of more, but I want to make sure I look at this from all angles before I make a decision. I really appreciate any good or bad stories and experiences you can share. Oh and they are looking at him as a childrens' hunter if that matters.

    Thank you so much!

  • #2
    Originally posted by Philliab View Post
    I need some advice on leasing my horse; I have a horse listed at a pretty low price right now in order to get him sold quickly this summer. Well I haven't had a ton of interest yet (though he hasn't been listed too long), and I do have someone asking whether or not I would lease him. Now, normallly I would not consider it, but this young lady would be taking him to A-shows, which would get him off my dollar. And shouldn't that increase his value in the long run? Or would he need to consistantly place or win for it to make a difference? And some more questions:

    1. I'm considering a free lease where he would remain for sale the entire time, is that normal or something anyone would do if I stated that I would not sell him until the lease is up?
    2. If not, what is the going rate for a lease? We're only talking about a summer lease if that helps.
    3. Any suggestions on what the contract though says as far as death or injury to cover me?
    4. Do you require insurance on your's?

    I'm sure I will think of more, but I want to make sure I look at this from all angles before I make a decision. I really appreciate any good or bad stories and experiences you can share. Oh and they are looking at him as a childrens' hunter if that matters.

    Thank you so much!
    Yes, he will have to place consistently for 'A' show experience to add to his value. Otherwise all you're proving is that he can't compete at that level.

    1. I've seen some leases structured similarly, but I don't know the details, so I'll let someone a little more knowledgeable fill those in.

    2. Going rate for a lease is 1/3 the horse's sale value annually. I guess you could divide that by 12 to get the monthly rate and go from there.

    3. There are lots of examples of lease contracts on here if you search. Otherwise I'm sure someone can provide you with one.

    4. Yes, you should require that the horse is insured. For at least mortality, major medical, and loss of use.

    I've leased horses myself and I've had others lease from me and as long as everything is spelled out clearly, leasing is a great way to go.
    "Are you yawning? You don't ride well enough to yawn. I can yawn, because I ride better than you. Meredith Michael Beerbaum can yawn. But you? Not so much..."
    -George Morris

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    • #3
      Really leases are flexible, you can set it up to suit the needs of you and the lessee. Many leases stipulate that insurance must be purchased if shipping and horse shows are involved.
      Horse Gifts
      Dog Gifts

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      • #4
        Originally posted by SaturdayNightLive View Post
        2. Going rate for a lease is 1/3 the horse's sale value annually. I guess you could divide that by 12 to get the monthly rate and go from there.
        But there should be a premium on the prime showing months -- otherwise everyone would just lease from April to September and no one would have to pay during the winter! (At least up north!)
        Originally posted by tidy rabbit
        Oh, well, clearly you're not thoroughly indoctrinated to COTH yet, because finger pointing and drawing conclusions are the cornerstones of this great online community.

        Comment


        • #5
          As a negotiating tactic, I would ask her, "Well, I hadn't considered a lease, but since you are asking, what are you prepared to offer?"
          If someone approaches YOU about leasing your horse, it keeps the ball in your court to ask them to come up with something.

          See what she says.


          IMO, the 1/3 of the value is a nice guide but if you really want this horse off your tab and she is ok with him being for sale and having people come out and try him during her lease, I would play nice.
          The Noodlehttp://tiny.cc/NGKmT&http://tiny.cc/gioSA
          Jinxyhttp://tiny.cc/PIC798&http://tiny.cc/jinx364
          Boy Wonderhttp://tiny.cc/G9290
          The Hana is nuts! NUTS!!http://tinyurl.com/SOCRAZY

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          • #6
            The best shot at any lease going well is when you know who you are leasing to and their trainer and/or BM at the facility the horse will be living at.

            When you involve the trainers on both sides, they each have an interest in protecting that horse so they can continue to do business with each other in the future.

            If you lease to an individual, huge questions about quality of training/instruction and living conditions at the new barn start cropping up.

            Any lease deal can tank on you but the most common we read of on COTH is the free or very cheap lease to an individual some distance away-as in too far to keep an eye on it.

            If you stipluate that horse is for sale and can sell out any time and offer a free lease? Can't say you'd get a serious person on the other end...or even one willing to properly present the horse to buyers. Why bother if it could go away tomorrow????

            Charge 1/3 of stated value for a 12 month lease or pro rate 6 to 8 months so he comes back next winter and you can market him next spring when the market should be improving.

            Good contract outlining responsibilities and think about what happens if the horse gets hurt and becomes unsuitable for the purpose it was leased for. Whether they have to keep and and continue all the vet expenses or you would take it back if it is out for more then 90 days can vary so think that out and put whatever you choose in the contract.
            And you bet insurance-mortality and Major Medical.They pay.
            When opportunity knocks it's wearing overalls and looks like work.

            The horse world. Two people. Three opinions.

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            • Original Poster

              #7
              Thanks!

              Originally posted by SaturdayNightLive View Post
              Yes, he will have to place consistently for 'A' show experience to add to his value. Otherwise all you're proving is that he can't compete at that level.
              Thank you, SaturdayNightLive. That's one thing I was afraid of. I don't know this person at all or her abilities, and if she doesn't give him great rides that allow him to do his best I fear his value will go down and he will be even harder to sell. So that confirms that fear.

              Oh and when I was talking about keeping him for sale, I just meant she could continue to show him and I'd keep him listed, but he would remain hers through the lease contract. But I guess that kind of defeats the purpose, huh? And I was kind of worried about how the trainer and distance would fit into all this.

              I'm beginning to think that this might be too complicated and nervewracking for me.

              Thank you everyone for your answers and suggestions!

              Comment


              • #8
                [QUOTE=Philliab;4805573] but this young lady would be taking him to A-shows, which would get him off my dollar. And shouldn't that increase his value in the long run? Or would he need to consistantly place or win for it to make a difference? And some more questions:

                Yes, it would increase his value.

                1. I'm considering a free lease where he would remain for sale the entire time, is that normal or something anyone would do if I stated that I would not sell him until the lease is up?

                I personally would not lease a horse that is for sale during the lease. Seems like owner can back out of the lease at any time. The leasee - not so much. It's a promises, promises but when you have high 5 figures in front of you for your horse that is on lease. Which are you going to go with

                2. If not, what is the going rate for a lease? We're only talking about a summer lease if that helps.

                Depends how "special" your horse is. If he is accomplished with a show record and has a big dollar then a summer lease price would depend on that. I lease horses for a year or so at a pop and what I worked out with the owners is just insurance. No lease fee since I am paying for all their care etc. I think that is fair.

                3. Any suggestions on what the contract though says as far as death or injury to cover me?

                Again Insure the horse

                4. Do you require insurance on your's?

                I don't lease any of mine I am the leasee and it is a requirement for me and the owner that the horse be insurance mortality/surgery should it happen. CYA


                I have no bad stories as the leasee, the owners are happy and I am happy with their horses

                Comment


                • #9
                  Just going to A shows, as others have stated, will not increase his value because there is no threshold "quality" requirement to enter an A show -- they'll be more than happy to take your money no matter what kind of equine you show up with If he gets some results, it will help you with his value and marketability, but if he isn't placing because he gets bad rides, I don't know that it really hurts you so much that it wouldn't be worth doing to get him off your dime for a while.

                  As far as lease price, 1/3 of the asking price is more a going rate for horses currently and successfully showing, so if your horse is not doing that right now, I wouldn't necessarily expect that. There are plenty of leases that are expenses only, expenses plus insurance, and expenses plus insurance plus a set monthly fee -- it really depends on your situation. If you want to do a month to month lease and keep the horse on the market, expect to offer your lessee concessions on the cost of the lease as a trade off. Otherwise, not many lessees would be interested, and even with concessions many won't be.

                  I would definitely want to make sure there was insurance in place, but you may want to just factor that cost into the lease price so that you are paying the premiums and will know for sure that (a) the coverage stays in force and (b) you remain the named beneficiary!

                  Comment


                  • #10
                    Lease

                    I think that the lease is a great idea. Any experience at the A-level is fantastic for the horse and will most certainly increase his price, no matter how they perform. I think that the free lease also sounds like a great idea in your scenario. Pretty much you are leasing a horse so that it will get show experience and therefore you, the horse, and the rider are benefitting. I have put a free leased a few of my horses and they all worked out fantastically. The horses gained a ton of experiences and I felt like I was helping out families who couldn't afford an expensive show horse.

                    Comment


                    • #11
                      Make sure everything is agreed upon and on paper beforehand. Years ago I ended up in a really nasty situation because of this. I began half-leasing a gelding and there was never a formal agreement drawn up. It was agreed that each leaser would pay a set amount per month to cover the cost of board and use of the horse, plus I was responsible for the shoe bill and the other girl was responsible for supplements, wormer, etc (worked about to roughly equal $/month). A few months in the other girl dropped the lease. I still rode the horse 3x a week while the owner was looking for someone for the other half. Should have been an easy horse to find a leaser for - made show horse, had shown very successfully in Open Hunters and 4'6" jumpers, although he had been off for a couple years, and the price was reasonable. After a few months of not being able to find another leaser owner started changing the deal - I ended up paying for supplements/wormer/etc, base rate was hiked up $100 in the span of a couple of months, I was responsible for XYZ that were never in the original agreement, etc. however I was still only riding 3x week and owner's daughter would ride the other days. I found out after the fact that the reason owner could never find anyone else for the horse was due to their reputation (I was new to the area and didn't know). A formal lease agreement is an important CYA for both yourself and the leaser - make sure everyone has a copy.

                      Comment

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