Anyone doing RV Rentals?

[Lucas]

I am curious if anyone is doing RV rentals or has considered and done the calculations on this?  Obviously owning a giant giant vehicle that sits in your yard 90% of the time (or barn in my case), gets 10 MPG, and adds maintenance time/cost is not very Mustacian, and is one of the reasons i haven't considered this before.  However looking at this as more like a small mobile rental property that appears to be able to generate decent ROI and that you get to use occasionally has me thinking about this again.  Any help would be appreciated though as I feel like i am missing something obvious.   

Details:

I have an opportunity to buy a 2001 33ft Class A RV that looks like it is in excellent shape for $15000.  This sold new for $70000 so the worst of the depreciation has already hit.   Looking at comparable in my area (WI) it appears that there is a good and growing market for renting these out.  looks like the going rate is $150-450 /day depending on type and location.  Estimating a 4 mo rental season with 50% occupancy at $200/day - I would be looking at $12000/year in receipts.  https://rvshare.com/ is claiming this is towards the lower end of what people make a year in renting out their RV.  Their numbers are a little difficult to sort through, but i believe they claim 90% of all owners (all types of RVs including small pop ups,etc. ) make over $6000/year, and that with a Class A they estimate 15-30k a year.  Of course the missing piece here is what are the costs?  But even if i spend 50% of my intake in maintenance/insurance/depreciation that would still be a ~$6000/year return on $15000 capital or 40% ROI.  Help me if i am majorly missing something here????

Other thoughts of mine

Disadvantages:
- I don't know a lot about RVs in general so that is my major risk.  I am pretty handy both with a house (I do almost all my own repairs and reno projects), and a car (do as much work as i can myself as well and i have a lot better facilities now to work in).  So these seem to be the two major elements of a mobile house, i am not overly worried about the maintenance but more that i would miss something obvious in the one i am looking at buying. 
- Would also have to deal with short term rental time overhead.  My wife is pretty good at admin stuff so i think this is something she might be willing/able to do as she is home with the kids 80% of the time. 
- Compared to a rental property this would depreciate vs appreciate, and be more work.
- not sure how insurance would work on this?  Looks like most personal insurance policies would cover an RV rental, so i could ask people to provide proof of insurance, but obviously there is still risk on my side. 
- same as with rental properties this might be better to setup in an LLC which i currently don't have setup. 
 


Advantages:
- possible ROI seems pretty good compared to rental properties, especially for the amount of capital i would have to put in. 
- I am in what appears to be a popular weekend camping/RV area with tons of little lakes and camp grounds all around. 
- I have a barn and plenty of yard to store the RV if needed. 
- My house runs off of LP and I have a septic tank with very good drainage, so with some piping modifications i should be able to fill/empty RV on site as needed to reduce costs. 

[Lucas]

Cricket . . cricket . . . no one has any opinions if this idea is crazy or brilliant ;-)  ? 

[Choices]

Have you checked the competition like Cruise America or El Monte? How do your rates compare? What would make someone want to choose yours (the unknown) over a better-known brand with a whole fleet and credibility (the known)?

Are you in an area with lots of good places for RV trips? What type of policy will you have to rescue renters if a tire blows out or if they get stuck in a place they can't turn around?

Are you a landlord or do you have other types of rentals? How do you like those? This might have similar issues but any problems would be more urgent.

Do you have a place to store it when it isn't being rented? Do you want to use it also, or will it be purely a rental?

I don't have much personal experience with RVs, but my stepdad tinkers around with his as a full-time hobby with all sorts of repairs. I'm not sure how many are necessary and how many are him just puttering around.

[Lucas]

Good questions Julie.  I have thought about most of your questions but a couple of them i would have to think through a bit more. 

1)   I see private party rentals on similar age RVs through Craigslist and RVShare for ~$200/night.  Commercial dealers rates are ~$300+/night but they are newer units.  Would need to think a little bit about what would differentiate me from the other competition (other than just having the lowest rate). 

2) There are lot of places for RV trips here in Northern WI (tons of little lakes and campgrounds).  We are about 2-3 hours from the UP of michigan which is also a very popular destination.  One downside of where i live is that i would only have 4-6 mo a year where I think there would be demand for a rental.  Not sure i would want to rent it out when there is snow on the ground anyway. 

3) If I list through RVShare they take 15%, but provide roadside assistance if needed (like blown out tire, etc. . ).  I would need to look into property/liability insurance a bit more.  It looks like most people request that you provide an "insurance binder" from your auto insurance provider that lists the RV as covered for the rental period).  So they are essentially requiring the renter to have insurance that covers their own actions.  I feel like there could be a bit of a gap here though for the owner so need to check that out a bit more. 

4) In terms of rental experience - i don't have a lot.  I did rent out my townhouse for 3 years while i was on assignment to HI (actually got to hang out with MMM and wife a couple times while he was out there for 4 months), and have read a good bit about it and always planned to do it more actively someday.  thinking this might be a good test run in case i am not cut out for it. 

5) I have a 60x60 poll barn that has plenty of space for an RV.  I would likely be using it personally a bit, but no where near enough to justify the purchase for personal use only. 

[Choices]

Lucas,
It does sound like you've put a lot of thought into this. Well done!

As potential customers, my husband and I would love the lower price, but I think we'd be cautious about renting from an individual. If the RV becomes undriveable for whatever reason, that could ruin a long-anticipated trip. A large company could provide a replacement quickly, but we would ask what you could do in such a situation so that we could proceed with our vacation.

I'm not sure how likely this scenario is or how many people actually think about things like this in advance, but we're planners. And it looks like a lot of individuals rent out their RVs, so that give us food for thought on our next trip. Thanks!

[calimom]

It sounds as though it might work for super local rentals. I rented an RV to take my kids on a National Parks trip a few summers ago and rented through El Monte, which was helpful when I had a small problem mid-trip, they have a huge network.

Specializing might be good. Here in California, I have heard of a couple of specialty RV rentals. One is vintage VW Westphalia campers and another service that has a fleet of Airstreams and takes them to the desired campsite and even sets them up for the (probably very urban) renters wanting a "clamping" experience.

[Lucas]

As potential customers, my husband and I would love the lower price, but I think we'd be cautious about renting from an individual. If the RV becomes undriveable for whatever reason, that could ruin a long-anticipated trip. A large company could provide a replacement quickly, but we would ask what you could do in such a situation so that we could proceed with our vacation.

I'm not sure how likely this scenario is or how many people actually think about things like this in advance, but we're planners. And it looks like a lot of individuals rent out their RVs, so that give us food for thought on our next trip. Thanks!

Excellent point.  I looked through the private RF listings and saw a couple that listed local usage only so obviously someone else is thinking about this.  I would probably want to prep some options for what is wrong. 

[Lucas]

It sounds as though it might work for super local rentals. I rented an RV to take my kids on a National Parks trip a few summers ago and rented through El Monte, which was helpful when I had a small problem mid-trip, they have a huge network.

Specializing might be good. Here in California, I have heard of a couple of specialty RV rentals. One is vintage VW Westphalia campers and another service that has a fleet of Airstreams and takes them to the desired campsite and even sets them up for the (probably very urban) renters wanting a "clamping" experience.

Or going with towables seems like it would reduce the risks.  If their SUV/Truck breaks down it isn't on me.  If the microwave doesn't work right in the RV it probably won't kill their whole vacation and i can give them a credit back on it to make them happy.

 

[CanuckExpat]

Interesting, I would consider it, but only if you already owned an RV, or where going to buy one. I don't think I'd buy an RV just to try this out as a business opportunity, but like you said, the capital outlay is low.

I'll look more into RVShare, thanks for that link. Did you follow further with them?

[Cassie]

Some friends wanted to rent our RV so I called my insurance and they would not cover it at all. We would have had to find different insurance. Also I got to thinking that if they totaled a used RV we would probably get much less then what we paid for it. Things break all the time and we sometimes just do without but you couldn't do that if you were renting it.  We decided it was a bad idea for us.  Last summer we had the refrigerator fixed before we took a month long trip and that was expensive repair. We take it off the road all winter and put it back on in June to find that it doesn't work again. So the next trip we just used it as a cooler.

[zinethstache]

Funny story related to this. We have owned RVs for many years. They are a PITA to keep all systems working. We average 40 nights/year of use but do spend alot of time (care and feeding) keeping it in good working order. Not long ago I noticed a house only 5 houses away from ours (larger lots, country road so not super close). Had at least 4 trailers in their yard. I was like what on earth are they doing?

I then snooped around on CL and found their ads. The family is 5 people, so 2 adults, 3 kids. I like to imagine how they came up with their business model. But now a couple of years later they have like 10 units. Had to put gravel down for a large chunk of their front yard. etc.

They didn't seem to keep older units. Now they only have brand new ones. I think they are quite successful. In the last six months all the units disappeared and their very large gravel front yard is vacant. Either they worked their tails off for a couple of years to FIRE, or our county ordinances finally caught up with them and they got the boot. Not sure.

I can totally see how if you knew RVs and were in that industry you could make a killing on it. I would NOT want to use a 2001 RV however. I think there are too many potential issues.

I sold our RV back to the original dealer. They were building up their rental fleet back in 2014. I picked their brains a bit and they did say trailers are a pain. They ONLY use Motorhomes. Class C, shorter ones for ease of driving. I think length of your potential rental is a bit long for most renters. I would stick with 24-28'.

We love the RV lifestyle so much we now live in a Fifth wheel and LOVE IT. I feel like I am perma-camping.

I wish you the best of luck, lots of logistics to work out but I think it is doable.

Re. insurance, I wonder if you can get "bonded" or something, have a liability policy? Not sure, but would be curious what you end up needing.

[Fuzz]

I have some friends that had a really tough time getting insurance on their RV. I'd start making calls and see what's possible. My guess is it's pretty expensive.

I think the RV share for 15% is a steal if they'll deal with an RV breaking down for you.

Getting something shorter/easier to drive is a good idea. A Class A is probably more expensive to insure too.

I'd stage the RV very carefully in the photos. Put a typewriter in it or some sort of hipster thing. Sprinter vans are the new Toyota Pickups and people spend way too much money on those. If you can get a Sprinter from a flower delivery business that views the van as a tool rather than a source of hipster cred, I bet you could do surprisingly well renting that out.

I kicked the tires on this idea and it seemed like a good way to go if you can get the insurance lined up. I assumed lower rents and higher vacancy. To me it seemed less a return on capital, and more a return on my time (all the phone calls, scheduling, maintenance, brain-space), so I took a pass. Plus, I was going to have to rent space, while you have a spare pole barn. This seems like a relatively low risk thing to experiment with, so I'd say go for it.

If you're sneaky, you could even put up ads on CL before you own the RV and see what kind of response you get. If you get a ton of emails, you know there is a market for it. Then go buy the RV.

[Lucas]

Thanks for all the input.  We ended up taking the RV for a weekend test and I was really close to buying it but decided to pass.  Most of the systems worked, but the Dash A/C did not (which i figured could affect ability to rent out in the summer).  There was something up with the brakes as well (after they heated up they were squeaking pretty bad).  Also the double fold down beds were really short (adult would have to lay diagonal to sleep) so that cut down the number of available beds for teenagers or adults. 

Also we realized that one of our intended uses (as extra space for my parents or other guests) didn't work as well as we thought if the temperature drops below 0.   It would be a pain to de-winterize and keep the heat on all the time, and then winterize it again.  I think if we lived in a warmer climate where it could be used or rented year round we definitely would have bought it. 

Thanks again. 

[YearninAndLearning]

Have you looked into consigning your RV? There is a saying; "If you like fixing things, buy an RV." I work for an RV rental company in Houston and we consign most of our fleet. Individuals that own an RV that we rent out for them will get free storage, free basic and very regular maintenance, and 50% of the profit. Owners can also take their RV whenever they want even at the drop of a hat's notice. RVs are fickle and it benefits to have them being used regularly and have some costs offset. The tax benefits could be worthwhile to you, as well. Consider looking into that in your area but stick with individually owned RV rental companies. Also, pick my brain if you'd like or drop by my company's website.

Y&L
http://www.suncruisinrv.com

[HPstache]

We rented out our popup trailer for this summer and half of last summer.  It went OK, but honestly at this point we are done with it.  There's a ton of coordination that is involved and it was always a stress builder for me.  We cleared around $1,500 using RVshare.com ($75/night, they take 25%).  We only paid $3K for our trailer, so it could have started becoming a good ROI had we gone another summer or two.  I think the fact that popup trailers are more complex than regular trailers (pop up & down procedures, etc.) and that people always seemed to show up with vehicles that were undersized ("it's just a popup! how heavy can it be!") or improperly prepared probably made renting out our trailer more complicated than a normal hard side trailer.  The other thing that you really have to think about is insurance & liability, which is something I was never 100% confident on, and RVshare.com will not insure a RV older than 15 years.  I think that a motorhome would be much easier.

[Cassie]

We couldn’t find any insurance that would cover our motor home if we rented it.

[Dancin'Dog]

Look what this guy is doing.  Instead of renting out RV's he rents out a mini houseboat. 


https://tinyhb.com/

[YearninAndLearning]

We couldn’t find any insurance that would cover our motor home if we rented it.

Cassie, if it is something that you might find helpful in the future, look into MBA Insurance in Scottsdale, AZ or on mbainsurance.net

[Cassie]

Thanks for the information.