There are about 10 million US households who currently own an RV. Most of the time, these RVs would remain unused for a couple of months. This means owners usually pay for vehicle taxes, storage fees, and depreciation while the RV is sitting in storage.
If you are an RV owner or planning to own one, renting out your RV for others to experience the adventurous travel lifestyle would be a great idea to earn some cash.
Why Is RVing Popular?
A lot of people are now choosing to become full-time RVers for several reasons. According to Forbes, there has been more than a 15% increase in RV sales over recent years. This is mostly owing to retiring baby boomers who want to spend their later years outdoors.
The younger generations are also into the RV lifestyle recently. In fact, according to CNN money, people under the age of 45 account for half of the RV sales. Some chose to become full-time RVers, while others chose to take the RV on the road only for vacations.
One reason why certain people chose RV living is that it is less expensive than owning a house. If you own an RV, you won’t have to pay for rent or mortgage. Furthermore, the appeal of simple living and traveling also contributes to the RV industry’s popularity.
Advantages of Renting Out Your RV
Renting out your RV is also known as RV sharing. Here are its advantages:
- Earn Extra Cash
Having an extra income is one of the most significant advantages of renting out your RV. However, the number of earnings will depend on several factors:
- Type of RV you own;
- Your current location;
- Renovations you’ve done on the RV;
- How well the RV is maintained over time;
- Extra services you might offer.
The larger your RV is, the higher the income you might get. This is because larger RV types provide more room and amenities. However, smaller RV types may give you a decent income if you rent them out during peak seasons like summer months, spring breaks, or holidays.
How much you earn will also depend on your pricing strategy. You can opt to charge more during peak seasons. You can also choose to give discounts or charge less when demands are down.
- Sharing the RV Lifestyle
Renting out your RV allows you to share what RV living feels like. Others who plan to buy an RV find renting one an economical way to help them decide on whether to buy or not. It’s kind of a test run for possible RV owners.
RV camping will continue to be popular. This means more people will try RV camping. And you can help them out by renting out your RV.
Disadvantages of Renting Out Your RV
The following are the disadvantages of RV sharing:
- Damage Risks
As an RV owner, you already know the ins and outs of your vehicle. However, renting it out to inexperienced RV renters might be risky. For example, the renter might accidentally leave the faucet running or worse.
Possible damage to your vehicle is the most significant turndown in RV sharing. A solution would be to ensure that the renter will handle your vehicle with care. Moreover, RV sharing sites can help provide you and the renter an insurance policy if the worst thing happens.
- Safety Considerations
You might need to invest in some RV upgrades for the renter’s safety. A safe and well-maintained RV will attract more renters. An example of these safety investments include:
- Replacing your tires if needed;
- Installing smoke detectors and fire extinguisher;
- Buying a portable air compressor and air pressure gauge so that renters can adjust tire pressure while on their trip;
- Paying for a safety inspection from a certified RV mechanic.
- Complex Taxes
Your taxes might get complicated if you start renting out your RV. Your vehicle will be added as an asset and claim depreciation. Also, you might be able to deduct maintenance, insurance costs, and repairs. Furthermore, you have to pay taxes for the revenue you will receive in RV sharing.
- Higher Insurance Costs
You most likely have an insurance policy for your RV. The insurance will cover the damages you might encounter along your trip. However, that same insurance will not cover the damages your renter might possibly cause. Hence, you might need extra coverage.
If you are still planning to get an RV and can’t afford to buy it outright, an RV loan is a perfect solution. RV loans can provide you with $25,000 to $300,000 depending on the lender. Moreover, some need full repayment within a few years, while others last for a couple of years.
Just like any other financing options, RV loans will require you to apply so that lenders can assess if you can qualify. They will base their decisions on several factors such as credit, income, and employment, among others. Furthermore, borrowing requirements might be stringent for larger purchases.
It is important to note that RV loans usually require a down payment. This is usually 10% to 20% of the purchase price. The larger the amount you pay, the lesser your loan total costs will be.
Where to Get RV Loans
There are two major options to get an RV Loan. These are the following:
You can choose to apply for an RV loan at the RV dealership. Dealerships usually give you financing options through various lender partnerships or in-house. Getting a loan at the RV dealership might gain you additional bargaining power on the RV price or APR.
Online or Traditional Lender
You can get an RV loan through a bank or credit union. On the other hand, others choose online lenders such as My Financing USA motorhome loans. If you opt to take this route, you can pre-qualify an RV loan before heading out to the dealership. This is useful if you’re not quite sure yet how much you can afford.
Renting out your RV is a great way to earn income. However, it is vital to note that it also carries some risks. Hence, weighing the benefits and risks is essential in deciding whether or not you should consider RV sharing.
Lauren Cordell is a freelance blog writer who primarily writes about financial literacy and management. She has been living in an RV trailer for a year now and loves the experience of living on the road. When she’s down for some writing, Lauren stays in her cozy trailer and parks near a lakeside. Lauren also travels with Lassy, her pet dog.