Introduction
With the uptick in domestic travel in recent months, there’s been a wave of excitement spreading across RV owners. Renting out RVs can be a great source of passive income for owners who are looking to finance their RV mortgage payments and no longer intend to drive their RV as well as those who have been unable to find a buyer for their RV, or even just for the extra cash while the RV remains unused in their garage.
If you have been wondering: “Should I rent my trailer?” this is the article for you!
While it is undeniable that some of the hype is contributed by RV rental companies in order for them to earn some profit as the middlemen between renters and RV owners. It may seem like renting out your RV is a seamless process that offers easy money, however, it is important to take some things into account before plunging into the world of RV rental.
- Assess the possible income vs the possible losses incurred
If the situation is as many have claimed it to be, it seems that RV owners can earn quite a sum of money simply by signing a contract and allowing renters to rent their RV for some time. There have been claims that RV owners stand to earn as much as $15 000 yearly just by doing this, so it definitely sounds like an interesting proposition.
After doing some research, RV owners would soon discover that the possible losses are also high. Accidents could happen to the RV requiring expensive repairs. There might be legal issues should the contract not have been properly drawn up or the wrong category of insurance purchased. We recommend that RV renters should make a thorough assessment of the pros and cons before signing anything or committing to rent out their RVs.
- Can you truly afford to rent out your RV?
Keen to commit to an RV rental? Consider some of the costs involved before doing so. When the RV was first purchased, there is no doubt that a large downpayment was paid upfront, along with smaller expenses such as the sales and administration fees. That aside, there is also the matter of repaying the monthly mortgage and interest on the principal sum,
Even if we look at the smallest sums paid, it would have been a good thousand dollars or so coughed up for storage fees, repairs on the RV over the years, or even fuel costs. These costs can add up, so depending on how the market was at the time of your purchase, the RV could have cost you anywhere around $50,000.
Before thinking that you can commit to an RV rental simply because your RV is sitting around in the garage unused most of the time, take some time to understand that if renters cause damage to the RV, the value of the RV might take a hit, and your initial investment would go down the drain. Further, you might also find yourself in a lawsuit. Unless you are very sure you have the stomach for such risks, avoiding the temptation to rent out your RV is probably your best bet.
- Know how your insurance policy works
When buying your RV, you likely took out an insurance policy for it. You should definitely check to ensure that your insurer continues to cover your RV if it is rented out to a third party for profit. Many insurance policies do not cover the vehicle should it be rented out for profit, and you wouldn’t want to find yourself in a situation where you want to claim for an accident but find out you are not covered.
Moreover, if the accident is bad enough, you might also find that the cost of repair is beyond what the insurer will payout. It could greatly depreciate the value of your coach if the renters are not careful with it and land themselves in a bad accident. As the owner of the RV, you may also face legal liability for renting to people who are not deemed to be road-worthy.
Regardless of these, you will still have to pay the yearly premium on your insurance or pay an early termination fee to upgrade to a policy that does cover third-party liabilities. Thus, it is vital to read the fine print to understand how your insurance policy works.
- Are your renters road-worthy?
The issue with rentals is that you have absolutely no idea of the driving abilities of the renters, and everyone likes to put themselves out there as the next Formula 1 driver. As the matter of fact, most people renting RVs are first-timers who may not have driven anything other than a normal sedan or SUV.
If your renter doesn’t have the humility to take a quick lesson from you on the skills needed to drive your RV, it’s likely problems will arise and accidents will occur. We suggest that you assess each renter’s driving skills and have them take the RV out for a test run first before renting it out to them.
- Hygiene issues with renters and their furry friends
Though you can state that you will reject renters who are smokers or who intend to bring along their furry companions, some owners have come across renters who do it anyway.
Smokers can simply abstain while around you, but light up after the deal is done and decided. This leads to cigarette odors being left on your carpets and beddings that are hard to wash out. Fur parents who aren’t particular about their pet’s hygiene may also cause fleas and fur to be found in your RV.
The cost of engaging a deep cleaning service is high, and will surely eat into your profits. Thus, be sure to ask for a security deposit if you feel a renter might be a high cleanliness risk. Though some might deem this to be discriminatory, be sure to protect your investment. Otherwise, you could also ask for a meet-up to assess their suitability.
Conclusion
Now that you’ve been informed of some of the pitfalls of RV rentals, you can make an informed assessment as to if this side hustle is worth it for you!
