Renting out your RV--Help
Hi all, I am an RV owner and freelance writer, and I am working on article about the pros and cons of renting out your RV. If you've ever rented your Class A or any previous motorhome you owned, I'...
Forum Discussion
As someone who used to own an rv rental business here are a few thoughts;
- RV rentals is not for the meek of heart or anyone emotionally attached to their RV. Despite extensive vetting, customers will damage your RV, despite charges for not cleaning it will come back filthy. it will come back empty of gas, empty of LP, tanks full, etc etc. In short people simply do not care to treat any rental like they are personally invested -because they aren't. There are exceptions, few and far between. And unlike most other rentals - most people renting RV's have no experience with them and thus exacerbate screwing things up.
- Start an LLC or some way to protect yourself not only from physical liability but financially.
- insurance - we were required to carry a million in liability - the cost was about $500/month, per unit.
- Be prepared for the massive depreciation, as mileage adds up, wear and tear, your RV's value drops like a rock. The value of the RV is moot. In an RV rental business (any rental business) the value is in the contract, not the depreciating asset. The RV is simply a means to the contract/income. Proper business setup helps to mange depreciation in a more tax/cost beneficial way but your RV at the end is worth about 25% what a comparable un-rented unit would be worth on the open market. And the lifespan of a an RV for renting is abut 3-4 years. After that, the wear and tear and depreciation against upkeep isn't worth it and it needs to go out to pasture - sale for pennies on the dollar. Financially, you should make more cash and leverage tax depreciation to offset the loss on value at the end of it's rental life. But it needs to be set up that way.
- Have multiple RV's - When your RV becomes damaged (and it will) and has to be removed from service to get fixed, you now have contracts scheduled and waiting to use it. Having multiple RV's allows you to honor contracts and keep customers happy and profits flowing.
RV rentals is a business - plain and simple. In my opinion, anyone trying to offset the cost of their own RV by renting it, is a fool - unless either you don't care about it, and/or can afford to take a total loss on it but make some fast cash in exchange.
On edit - BTW these are just a few highlights. There are a hundred other considerations that come up that a properly set up business can handle. Like - what do you do if your customer breaks down in the middle of nowhere? Who fields the phone calls at 1 am when the TV isn't working? Who does walkthroughs, washes the units, fixes them, maintenance? What do you do when a customer doesn't pay for damages, who manages the contracts? What do you do when your RV doesn't come back? Where do you dump and flush tanks when they come back full? the list goes on and on...
- RV rentals is not for the meek of heart or anyone emotionally attached to their RV. Despite extensive vetting, customers will damage your RV, despite charges for not cleaning it will come back filthy. it will come back empty of gas, empty of LP, tanks full, etc etc. In short people simply do not care to treat any rental like they are personally invested -because they aren't. There are exceptions, few and far between. And unlike most other rentals - most people renting RV's have no experience with them and thus exacerbate screwing things up.
- Start an LLC or some way to protect yourself not only from physical liability but financially.
- insurance - we were required to carry a million in liability - the cost was about $500/month, per unit.
- Be prepared for the massive depreciation, as mileage adds up, wear and tear, your RV's value drops like a rock. The value of the RV is moot. In an RV rental business (any rental business) the value is in the contract, not the depreciating asset. The RV is simply a means to the contract/income. Proper business setup helps to mange depreciation in a more tax/cost beneficial way but your RV at the end is worth about 25% what a comparable un-rented unit would be worth on the open market. And the lifespan of a an RV for renting is abut 3-4 years. After that, the wear and tear and depreciation against upkeep isn't worth it and it needs to go out to pasture - sale for pennies on the dollar. Financially, you should make more cash and leverage tax depreciation to offset the loss on value at the end of it's rental life. But it needs to be set up that way.
- Have multiple RV's - When your RV becomes damaged (and it will) and has to be removed from service to get fixed, you now have contracts scheduled and waiting to use it. Having multiple RV's allows you to honor contracts and keep customers happy and profits flowing.
RV rentals is a business - plain and simple. In my opinion, anyone trying to offset the cost of their own RV by renting it, is a fool - unless either you don't care about it, and/or can afford to take a total loss on it but make some fast cash in exchange.
On edit - BTW these are just a few highlights. There are a hundred other considerations that come up that a properly set up business can handle. Like - what do you do if your customer breaks down in the middle of nowhere? Who fields the phone calls at 1 am when the TV isn't working? Who does walkthroughs, washes the units, fixes them, maintenance? What do you do when a customer doesn't pay for damages, who manages the contracts? What do you do when your RV doesn't come back? Where do you dump and flush tanks when they come back full? the list goes on and on...
