6 Things You Need to Consider Before Renting Out Your RV
There has been a lot of hype lately that encourages recreational vehicle owners to rent out their travel units in order to make some extra cash.
This can be very tempting for people who
- are upside down on their RV loans,
- no longer want to use their coaches,
- have been unable to sell them or
- who need extra money.
Some of the hoopla comes from companies that help people with this issue. They make it sound easy and profitable, but anybody thinking about using their personal recreational vehicle for this purpose should think carefully before doing so because all may not be as it seems.
Six things you need to think about before you decide to rent out your RV.
GoRVing.com (with special permission)
1. Possible Income vs. Possible Loss
If you believe the hype, it would appear that you can earn a substantial amount of income simply by signing a few papers and allowing people to drive off in your recreational vehicle.
Some RV owners claim to make upwards of $15,000 per year doing this, so the thought definitely could be tempting given the right circumstances.
However, if an owner took the time to do some research, he would quickly learn that he might wind up losing more than he might make—not to mention he could easily have legal problems to boot.
2. Assess Your Investment
Before you go running off to place an ad that will bring forth an RV renter, you need to consider your investment.
When you bought your coach, you no doubt handed over a hefty down payment, paid sales tax and registration fees and began making monthly payments plus interest.
Even in the best of circumstances, you would have invested several thousand dollars and then would have paid for storage, detailing, repairs and general maintenance.
These costs can really add up over the years, so depending on your purchase price, your deal and how well you maintained your coach, you could easily have an investment of $50,000 or more.
So, even though you may not be using your unit much these days or are tired of constantly shelling out money to maintain it, you need to understand that if you do anything that might damage the value of your coach, make it unsalable or bring a lawsuit your way, what you have invested may look insignificant compared to what you might wind up owing if things don’t go well when you rent your coach.
Unless you are willing to risk putting yourself in this situation, you should avoid the temptation to earn those extra dollars.
Some renters will take good care of your coach. Others won't.
GoRVing.com (with special permission)
3. Understand Your Insurance
You pay a fee every year to insure your coach, but it is likely that your insurer would frown upon the fact that you might be allowing someone to drive away with it for a vacation, especially if that person was a total stranger.
While professional RV rental companies are able to obtain special coverage for situations like this, you probably won’t be able to do the same.
Even if you can, if your renter has an accident along the way, it is you who are going to have the headaches, not him! It is, after all, your RV!
Furthermore, if the accident is bad enough, it could destroy or at least badly damage your coach to the point that it would never be right again.
Finally, if the problem occurs due to a flaw in your unit (such as can happen with tires that are too old), your renter can sue you.
So, there goes your rental income along with the value of your coach!
But guess what? You’ll still have to make the payments!
4. The Driving Ability of Your Renters
Right now, you’re thinking that something like this could never happen to you, but the truth is that if you are renting to a stranger (or worse yet, a friend), you have no real idea about his driving abilities.
Many people who rent trailers and motor homes are first-timers who may have never driven anything larger than a van or pickup truck.
You already know that driving an RV requires special skills, so if a renter does not have them, it is very likely that he will have problems.
When he does, you’ll have to pay to fix them, and your insurance rates will rise.
5. Consider Possible Use Problems
I used to work part-time in a large South Dakota campground, taking campsite reservations.
It was common for RV renters to show up with clogged sewer tanks because they either had no idea that you were supposed to empty and clean them out regularly or just didn't want to fool with doing so.
Right now, you’re thinking, “OK., So I’ll do some training”, but the truth is that you have no control over how people will treat your coach once they drive off in it.
There is no guarantee that they will maintain your tanks, clean the toilets, mop the floors, or check the oil levels in generators and engines while they’re enjoying a holiday in your coach.
Yes, you can take a security deposit, but some of the damage people can do could cost much more than what you require. If it does, you’ll be stuck again!
6. Think About Renter Hygiene and Pets
While you can specify that you will not rent to people who smoke or have pets, the truth is that people will often lie to you about these things.
Once you’re out of sight, many will light up and plop their pets in your RV. This means that cigarette and cigar odors will infiltrate your upholstery and carpets, you may get fleas and furniture and draperies may get chewed up during the trip.
Furthermore, if renters are not clean about themselves, you can add body odor to the mix. That smell is very hard to eliminate once it settles into a coach.
Once a unit is returned, it will be up to you to sanitize and repair it. In worst-case scenarios, no security deposit could ever be enough to pay for the cleanup.
Is the Money Worth the Risks?
Of course, it will be up to you to decide whether the “easy” money will be worth the risks.
These days you can expect to get anywhere from $60 to $250 per night for an older motor home or trailer and from $125 to $450 per night for those newer than 10 years of age.
So for a newer Class A for one week, you can get a base income of $3150 plus any extras such as
- stocking the coach with linens and dishes,
- mileage,
- security deposits and
- insurance.
The above video shows you how to figure potential income. It's good, but bear in mind, it does not include your costs for storage, repairs, upkeep and other ongoing costs. These can greatly reduce any profits you might have.
Remember, too, that if you rent your coach with the help of a professional rental company, they can take commissions, some of which go as high as 50%, depending on which company you use and how much of the work they do for you.
- Do you want them to vet renters for you?
- Who will wash, wax and clean the coach after each use?
- Will they provide professional-level insurance for you or will you do it?
In most situations, you'll have to declare your rental income as a business for tax purposes, which means you likely will have limitations on how often, if at all, you are able to use your own coach.
Even in the best of circumstances, your unit will have ongoing wear and tear, which means you may also have to pay for upgrades such as replacing upholstery and flooring if you want to be able to continue renting it out.
As you can see, you won't have to rent your unit often to make a good income from it, but doing so can be costly and risky. Therefore, it will be up to you to decide if the income you'll receive after taxes and expenses will be worthwhile.
While the money you can earn from renting out your RV can be substantial, you should remember that the same can be said for the risks involved in doing so.
So before you decide to use your coach as a money-making machine, remember that the earnings are only temporary, but the problems they may bring can be serious, expensive and permanent.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2017 Sondra Rochelle
Comments
Sondra Rochelle (author) from USA on October 20, 2017:
Mary Wickison: Even when keeping it parked to rent, there can be big problems. We had friends who did this and they almost worked themselves to death just trying to sanitize the unit after each rental.
Mary Wickison from USA on October 20, 2017:
I can see this could be a recipe for disaster. If someone was going to use it at a permanent campsite and not drive it, then maybe it would work.
There are a lot of things to consider as you say before going down this route.
