[QUOTE=bringing_up_baby;8161371]
Horses are resilient.[/QUOTE]
They are?
And this is precisely why they don’t want to lease, they still have the horse at the end of the year, in a tough market and another year older.
My guess is they would happily entertain a lower offer than the 35,000 for the year. But if you went to them with a 10 or $12,000 offer on a $35,000 price tag, they probably aren’t going to play ball.
[QUOTE=dags;8161462]
And this is precisely why they don’t want to lease, they still have the horse at the end of the year, in a tough market and another year older.
My guess is they would happily entertain a lower offer than the 35,000 for the year. But if you went to them with a 10 or $12,000 offer on a $35,000 price tag, they probably aren’t going to play ball.[/QUOTE]
Paying $35k lease is 80% of the purchase price, which is ridiculous. $20k is 50% is still a bit of a stretch. What I’d almost be offering for six months is equivalent to a year at the regular 1/3. I can see paying more if the horse has a show record, hence upping resale value. I can see economically why they want to sell, but you can see why economically and common-sense wise why I’d want to lease…there’s no incentive for me to buy. I guess that’s why the market is so tough and at a stalemate.
(Also, the horse showed all over the height-range spectrum for one year only, and didn’t place. It wasn’t for training. All other show experiences were local/unrated.)
Again, thank you everyone for your explanations. I understand why they’d rather sell. It’s too bad for both parties.
I agree that a $35k lease on a $45k asking price is too high, that’s why I’m betting they are open to offers. I’m guessing they need $20k out of this horse one way or another to balance the P/L, either with a lump sum sale of $40/45k, or a lease at a minimum of $20k (the 6 month price), so they have a little flexibility on the asking price when they get it back later (ie, they can price it lower and up the chances of getting it sold b/c they made a little money on the lease). I would not be surprised if an offer of the 6 month price for the year led to a happy deal on a $25k annual fee.
There are a number of instances when one/third is not the rule of thumb. One of those instances is when the one/third is so low that you’re basically just covering bills for the owner for the year, and not paying into the value of the horse (in case you break it). Additionally, if you’re not planning to show the horse, this opportunity is going to have little value to the seller. There’s often some consideration for a rider that will put a good record on a horse, or at least some record, but trying to sell a show horse with a year long gap on its show record is never a good spot for a seller to be in.
You leasing for a short period of time may result in YOU getting all of the “show season” (assuming you start now and return the horse in 6 months) and them getting stuck with all the winter/downtime. Yet another reason why they want more for a 6 month lease now. You’re getting the best time and sending him back at a terrible time for them to re-lease/sell.
[QUOTE=dags;8161590]
There are a number of instances when one/third is not the rule of thumb. One of those instances is when the one/third is so low that you’re basically just covering bills for the owner for the year, and not paying into the value of the horse (in case you break it). Additionally, if you’re not planning to show the horse, this opportunity is going to have little value to the seller. There’s often some consideration for a rider that will put a good record on a horse, or at least some record, but trying to sell a show horse with a year long gap on its show record is never a good spot for a seller to be in.[/QUOTE]
This is why I like to pose questions on this board because people are more knowledgeable than I in different respects. I see that you work for exchangehunterjumper.com, which is extremely reputable.
My question is what would motivate me (and the general public) as a lessee or even a potential buyer to buy a horse that has a failure of a show record? Why should anyone sink money in to a horse that hasn’t proven itself and chances are not yield any positive show results with said lessor/buyer? Isn’t that why a heftier lease price, understandably so, is asked of champion or “in the ribbons” horses for that very factor?
And isn’t the lease price just for the use of the horse…I am covering the costs for the owner, as when you lease a horse, it is essentially like it becoming “yours.” That lease fee I mentioned doesn’t include the very expensive boarding in my area, farrier, chiro/massage therapist, lessons/training, and minor vet work (barring major surgery). That all adds up beyond the initial lease price.
My biggest question is what are the factors that determine a horses’ value in the first place?
I have put in lease clauses that the horse can remain on market and the lease fee prorated if horse is sold. It actually has happened to me and a 1.35m jumper. That way, the owner is at least getting some money while waiting for the horse to be sold…if it ever is. (And a horse can just as easily get injured doing nothing or being exercised by owner or under said training program as it is by the lessor.
Anyways, I can see from all the helpful answers that it is all very up-in-the-air and varies by each situation.
Not everyone can afford the winner. A horse that can consistently win at 1.25m, jump higher on occasion, and also take care of their rider/pack someone around at that height is worth more than $45K in my area. A fair amount more, actually.
If I understood your earlier post, this is a horse around 11 years old who showed consistently (if not with the ribbons you are looking for.) That is an indication that the horse stayed sound in work, which is a plus. That is relatively young, too - not an older horse that has been “all used up.” And you say its well educated on the flat and can take a joke.
For a rider who might be moving up to this height, or wants something they might want to do some USET type classes on in addition to the jumpers, this sounds like a very attractive horse at a pretty good price.
IMO, without knowing where this horse showed or how many classes it actually competed in? I’m not prepared to assume the DNP results mean much of anything one way or the other.
You do realize those classes tend to be huge at better shows? Like 40+? And DNP does not tell you if he had 4 rails and ended up 11th of 12, stopped out, went off course, lost the rider or he was 11th out of 40 with a rail in the jump off and time faults. Also doesn’t tell you if he did place or even win in non rated classes/shows.
If he had rated results he’d be more then 45k anyway. If he could do the Big Eq, it could be twice that.
Dont know where OP is located but in most places, short term leases are rare and pricey if you do find one. Can’t fault the owners here, their horse and their decision to price it in a way that’s best for them. Pretty obvious they need to sell, not get him back in 6 months after the season wraps up.
The show record doesn’t always tell everything! Was it an ammy dumping him at almost every fence, therefore causing some time penalties and a rail or two? Was it a class with 50+ horses going at WEF? How many shows did he go to in this one year and how many classes? Was it raining/storming/crappy footing? Was it a pro? Honestly, showing for his first year and not placing in every single class doesn’t concern me that much.
Again, why does it matter? You don’t want to show anyway…
[QUOTE=bringing_up_baby;8161651]
And isn’t the lease price just for the use of the horse…I am covering the costs for the owner, as when you lease a horse, it is essentially like it becoming “yours.” That lease fee I mentioned doesn’t include the very expensive boarding in my area, farrier, chiro/massage therapist, lessons/training, and minor vet work (barring major surgery). That all adds up beyond the initial lease price.[/QUOTE]
As a HO, I think you are looking at this wrong.
As you see it, you are doing me the favor of taking my horse off my payroll for awhile.
As I see it, I already have accepted the cost of keeping a horse. And insofar as he’s a useful, well-educated and well-maintained show horse (the one you say you want), I have already committed to spending “above and beyond” basic care in order to enjoy this useful animal. And I have a way of managing him/team of horse care pros that keep him going as he is.
If I send him to someone else, I lose control of all those bits of care that keep the horse where he is. So if you break him badly-- or even diminish him while he ages-- I get back a horse with less utility…. and still a looming balloon payment at the end when someone has to retire him.
My rule of thumb: Never lease out a horse that you want back in the same condition you sent him. It’s a fundamental misunderstanding of the deal, of the lessee’s motivations and economical philosophy to think that I’ll get profit from someone else borrowing and feeding my horse. What a lessee really is buying, as the OP points out, is the ability to use a horse with no strings attached. And the lessee is paying to “self-insure” against a horse that she breaks or ruins. She has paid someone else, the HO, to accept the risk that she’ll produce.
The only profit to the HO, then, comes from the lease fee paid. She can’t reasonably expect a second form of profit in terms of an improved horse. If you get that, great: You are a shrewd and lucky entrepreneur. But I don’t think this is the normal way that this business goes.
A fair price is determined by how much you want the horse and how much you can pay for the horse. Some horses are extremely overpriced, but if you want the horse, you decide whether or not to pay the price. Determine age, conformation, breeding, performance, etc., and then decide if the horse is “worth the price.” It’s all subjective. There are no rules. Will you be happy with the horse after paying X amt of dollars? Then buy him. If not, move on.
OP does not want to buy though, s/he wants only to lease and only lease for six months.
Not fair to judge the owner/seller because they said no to a 7500 offer for six months on a 45k horse they need to sell. There’s no Kelly Blue Book for used horses, they can price wherever they want based on how bad they need to sell and it sounds like they really need to sell.
I’m confused as to how the show record contributes to the value in the case that the intended leasor does not show.
After all, at home, you always have the fewest rails and fastest time, no?
As an owner, leasing out my show horse to someone who doesn’t want to show concerns me. If he’s out showing and doing well, then I know he’s being reasonably well cared for in a program similar to my own. To send him into the nothing to be ridden at home and jumped a ton and then given back to me, would not be an attractive deal to me at ALL.
Honestly for that price I would just buy the horse, at least you’ll get money out of it if you end up selling. I don’t think the lease price is way too out there, but if it were me I would buy over lease if I had my heart set on that horse.
Sounds like the owner doesn’t want to send the horse out on a short term lease and has priced it appropriately. It doesn’t really matter why they did it and they are not interested in making the lease more attractive.
Personally, I would not lease one of my horses out for $7500 for six months. Too much potential retraining at the end of it and the risk of undue wear and tear.
And the OP who doesn’t want to pay precisely because it doesn’t have much of a show record…… but wants to lease it for the summer and fall-- 2015 show season…. and doesn’t want to show it…. so the HO who wants to sell it can have it back in November with no more wins to it’s credit?
In that spot, I can see why the HO might throw out at a “hey, there’s nothing in this deal for me but if you want to pay Crazy Amount, go ahead and lease it” number and see if the OP would pay.
[QUOTE=mvp;8162086]
If I send him to someone else, I lose control of all those bits of care that keep the horse where he is.
My rule of thumb: Never lease out a horse that you want back in the same condition you sent him. It’s a fundamental misunderstanding of the deal, of the lessee’s motivations and economical philosophy to think that I’ll get profit from
someone else borrowing and feeding my horse. What a lessee really is buying, as the OP points out, is the ability to use a horse with no strings attached. And the lessee is paying to “self-insure” against a horse that she breaks or ruins. She has paid someone else, the HO, to accept the risk that she’ll produce.
The only profit to the HO, then, comes from the lease fee paid. She can’t reasonably expect a second form of profit in terms of an improved horse. .[/QUOTE]
To everyone, the horse isn’t a show horse. I hardly call one almost-failure USEF season (not at any major HITS, WEF, or Gulfport shows) at 10 some years old a “well-maintained show horse.”
As far as the owner losing control, well, that’s why I have in lease clauses how the owner cares for the horse (massage therapy, chiro, special feed, supplements, training, etc.) If you have a competent rider who knows what they are doing supplemented with a professional lesson program, the horse should wind up back in your care in the same condition. Plus, you are temporarily suspending your rights as to what I can and can’t do (per terms of an agreed upon lease agreement) in a lease.
And I beg to differ…a lessee is not only paying for a lease fee, but also assuming all of your costs…isn’t that what a lease is? That is your compensation for the use of your horse.
As I said before, the horse could get hurt in its stall, turnout, training…all under the owner’s care. That’s the risk a lessor takes to alleviate expenses. Otherwise, why lease at all?
[QUOTE=soloudinhere;8162195]
I’m confused as to how the show record contributes to the value in the case that the intended leasor does not show.
As an owner, leasing out my show horse to someone who doesn’t want to show concerns me. If he’s out showing and doing well, then I know he’s being reasonably well cared for in a program similar to my own. To send him into the nothing to be ridden at home and jumped a ton and then given back to me, would not be an attractive deal to me at ALL.[/QUOTE]
I’m assuming that you’ve visited exchangehunterjumper.com’s website. What are the things that they list for a horse that is to be sold and/or leased…detailed show record. It factors it to the price. I don’t see why people can’t seem to grasp that. Next, they show lineage/breeding.
And just because a horse isn’t showing doesn’t mean he isn’t in a reputable training/lesson program. In my opinion, a horse if far less likely to be overjumped not showing than showing every day for 2-3 week sessions every month, on top of regular schooling. Come on.
Long and short, I passed on the horse.
I think this topic shows that everything is pretty subjective and double-sided, while the majority of the industry falsely touts 1/3 lease price of the somewhat subjective “value” of the horse.
Thank you everyone. I appreciate your comments.
[QUOTE=bringing_up_baby;8162508]
To everyone, the horse isn’t a show horse. I hardly call one almost-failure USEF season (not at any major HITS, WEF, or Gulfport shows) at 10 some years old a “well-maintained show horse.”
As far as the owner losing control, well, that’s why I have in lease clauses how the owner cares for the horse (massage therapy, chiro, special feed, supplements, training, etc.) If you have a competent rider who knows what they are doing supplemented with a professional lesson program, the horse should wind up back in your care in the same condition. Plus, you are temporarily suspending your rights as to what I can and can’t do (per terms of an agreed upon lease agreement) in a lease.
And I beg to differ…a lessee is not only paying for a lease fee, but also assuming all of your costs…isn’t that what a lease is? That is your compensation for the use of your horse.
As I said before, the horse could get hurt in its stall, turnout, training…all under the owner’s care. That’s the risk a lessor takes to alleviate expenses. Otherwise, why lease at all?[/QUOTE]
I think we just have different senses of how much “getting a horse temporarily off my payroll when I’d really like to sell him” is worth. I don’t think someone covering the “holding costs” of a horse all tuned up to sell is worth the risk.
Also, I don’t enter into contracts that I don’t think I can enforce. The more specificity about care and such I try to legislate, the more likely someone will breach the contract. That’s why I like to lease working horses that need to be managed to people I know and people with whom I have had long relationships.
But that’s just my taste in doing business. I’m pretty financially conservative so I usually can afford to wait out and care for a horse I’m try it to sell. But I’m sure other people would think about this situation differently. Or they really might, in fact, be getting to the money they have and need the horse fed either as a lease or as someone else’s horse.
Also, this is really the time of year to market a horse. In 6 months when you are done with him, the HO will be looking at feeding the horse through the winter because fewer horses are sold then.
Last, I don’t think it matters whether this horse is a magnificent show horse or not. To the HOs, he represents X dollars that they think someone will pay for him. You might think he’s over-priced. And he might be, according to the market. But before they know that and appreciating that leasing him to you won’t help them sell him, they probably want to be compensated for the risk they are taking that the horse comes back 1) late in the selling season and 2) hurt or screwed up.
I’m not saying the HOs are right in all this. I’m trying to infer the strategy behind their pricing.
I think this horse’s sale price sounds like it is somewhat under market value- the lease price sounds appropriate for the quality of horse described even if it is a larger percent of the asking sales price.
