Do you own an RV that is ideal for a long time, or are you considering buying it yourself? Well, Starting a rental business rather than making it junk in the coming years! Renting your vehicle not only eases users but benefits you by letting you make some money in the process.
If you are taking the RV rental business as an opportunity to earn money but are confused about how and where to start with a sense of dilemma about whether it will be the right decision?
Starting such a business to earn monthly payments or you want to run a proper business buying an entire fleet of RVs, you will get every detail in this blog.
RV or a recreational vehicle includes a kitchen, beds, equipment for cooking, and more to let people enjoy, travel, camp, and do adventure travelling without needing to book a hotel. In other words, an RV is a motorhome with a bus-like design where you can live and travel.
Furthermore, RVs are of three kinds: trailers, motorhomes, and truck campers. Motorhomes are the largest category, up to 45 feet in length, which can accommodate 10 people. Trailers are towed behind a vehicle, like a truck or SUV. Finally, the Truck Camper is a small cabin that fits in a pick-up truck’s bed, including a sleeping area, kitchen, etc.
The RV rental business was first started back in 2013 by Jon Gray with immense success. After that, the recreation vehicle renting marketplace is expected to reach USD 1018.96 Million at a CAGR of about 8% during 2022-2027.
How much money can you make renting an RV?
It’s possible to make anywhere from $20,000 to $50,000 per year as an RV renter! You can earn $20,000 to $50,000 annually if you rent your RV. Furthermore, the earnings also depend upon the type of RV you own, the number of RVs you own, your location, and more.
Is it right to start a recreational vehicle renting business in 2022?
People these days prefer to rent an RV rather than buy one. According to the report, around 40 million people in America spend 3-4 weeks in RV, predicting how this business will flourish in the near future. Furthermore, RV dealers see an approximately 70 percent hike in monthly sales after the Pandemic. Thus, the statistics indicate the immediate scope of the RV rental industry.
What are the Costs Involved in Starting an RV Rental Business?
Every business has expenses to run it, and RV rental business expenses include:
Business start-up costs: $150-$500 one time
RV insurance: $800-$1,500 per year
Business insurance: ~$500 per year
Supplies: ~$30 per month
Maintenance of Vehicle costs: $500-$1,000 per year
Cleaning costs: $50-$100 per cleaning
Personal liability insurance, if required: $150-$300 per year
Rental fees: Usually ~20% of the total booking fee (so $20 out of every $100)
If you start a small business, your expenses will be quite low.
An online recreational vehicle rental market consists of an administrator who provides an online platform for RV owners to lend their vehicles and customers to rent them. It has three main entities: admin, renters (RV owners), and rentees (customers).
The owner has full power and authority over all other business entities. The admin’s primary responsibility is to oversee business operations and settlement. In addition, they are in charge of accepting or declining listings and overseeing the vehicle’s delivery and return. Every payment that occurs on the platform earns the admin a commission.
Your main customers are the renters and peers who lend their RVs to you. Because both renters and rentees are end-users, finding renters for your RV rental business is just as important as finding renters. While it is your goal to assist prospects in finding RVs suitable for their needs, it is also your goal to assist RV owners in finding renters to earn money. Therefore, your business’s potential for success is limited unless you have many listings on your platform.
Your main customers are the tenants. They’re the ones who rent RVs from owners for a reasonable price and keep your business afloat. Therefore, understanding the rentees’ buyer personas is critical for developing a marketing strategy that appeals to renters and rentees.
Step-by-step process of booking an RV rental
Step 1: The renter creates an advertisement on the marketplace.
Step 2: The listing is approved or rejected by the administrator.
Step 3: If the listing is accepted, the administrator publishes it on the website.
Step 4: Renters can look through all of the RVs on the website. They can make a booking by paying the rent once they’ve found the RV they want.
Step 5: Following the booking, the administrator deducts their commission from the rental payment and transfers the remaining funds to the owner.
Step 6: The rentee receives the RV using the delivery method they selected on the website.
Step 7: When the RV is returned, the owner inspects it for any damages.
Step 8: If the RV is damaged, the renter notifies the administrator so that damage charges can be claimed. The charges are deducted from the security deposit by the admin. The security deposit is returned to the customer if there are no damages.
The RV rental business has a growth potential due to various revenue streams:
Rental Commission: It is the main source of income as you, the business owner, charge the renters commission to help them rent out their vehicles.
Affiliate Marketing: You can publicize any service or product of other brands on your website and earn a commission per sale.
Membership Plans: You can opt for a freemium model meaning the basic services are free to customers and RV owners. Still, they must pay charges such as insurance cover and free roadside assistance if they want to access other services.
Listings and Banners: Most eCommerce stores offer paid listings as an option. Vendors whose products are highlighted in these listing spaces may increase sales. You can do the same on your website by charging renters for featured listing spaces.
Gallery: Customers prefer to see the product before renting it, so you can add a video gallery feature to your website and embed YouTube videos of all your top-rated RVs in that section. Thus, YouTube will become another way of revenue channel in this way.
How to start an RV rental business?
Business Planning: A crisp and clear business plan is crucial for your business success and to remain in the right direction while setting your business. In addition, your business plan will help you map out the specifics of your business.
Setting up a plan will help you get answers to various questions like What will be the ongoing business costs? Who will be your target audience? (your target market will be singles, couples, and families who enjoy outdoor activities), and how much to charge a customer? (The cost of renting an RV varies depending on the type and age of the vehicle. The average daily rate is $100-200, with an added $100-200 for newer RVs) and much more.
Form A Legal Entity: Most common business structures are sole proprietorship, partnership, LLC, and corporation. If your RV share business is sued, forming a legal business entity such as an LLC or corporation safeguards you from being held legally responsible.
Register For Taxes: Before you can start doing business, you’ll need to enroll for a wide range of state and federal taxes. You will need to apply for an EIN to register for taxes. It’s very simple and entirely free!
Get Permits And Licence: Failure to obtain the required permits and licenses can lead to heavy penalties or even the closure of your business. Thus, it’s always best to consult your town, city, or county clerks.
Open up A new Bank Account and a Credit Card: You must also open a business bank account and a business credit card to keep your work and personal taxes separate.
Business Insurance: Like licenses and permits, insurance for RV rental business is required to run it safely and legally. If a covered loss, business shields your company’s financial well-being.
Hire Developers: After finalizing everything, developing an RV share app or website for your business is next. And for that, you need to hire website developers. Developing a website is important for your business so that people know and buy from you.
Key features you must add to your rental platform.
A business website must have an alluring user interface and a positive user experience. These features play an important role in creating a positive customer experience. The following are UX/UI features that make RV share website or app useful:
Filter: A search field will assist customers in locating an RV that meets their requirements. To better assist users in their search for an RV, it should include the tentative rental date and pick-up location.
Renter option: A List of your RV options should also be on the top to attract and inform renters. To first-time visitors, this will emphasize the peer-to-peer aspect of your business.
Top-rated RVs: Reviews and rating options help find the top-rated RVs and the customer experience. It brings a sense of trust.
Different RVs: You must specify what type of ‘recreational vehicle’ the person can book with the price so that your customers can decide.
Features of the Product Page
To do business, providing as much detail as possible about your RV rental listing is preferable.
1. Images of Excellent Quality
2. Optional delivery methods
3. Advice on upkeep
4. Amenities and Features
5. Model and name
6. Fees for renting
7. Terms and conditions of the renter
Rent calculator: The vehicle’s availability and total rent should be fully detailed in the rent estimator on the product page.
The RV owner’s basic details: By providing this information, you will increase the reliability and trustworthiness of your service to the tenants.
Contact Information for RV Owners: Some businesses prefer to provide information to tenants, while others prefer more private communication channels, such as private P2P chat. You can choose the first option if you don’t want to use a messenger or the second option if you want to give the renters some privacy.
Customer Feedback and Ratings: These two would be the most important elements on your website for establishing trust and assisting renters in making final decisions.
Additional features to include
RV Owner Features
Registration: Owners must be able to register using their email or social media accounts, so the registration process must be simple. Then they must share the vehicle documents for verification by the administrator.
Manage Bookings: In their dashboard, RV owners can see their latest and forthcoming bookings.
Payout Method: To receive the payment, the RV owners must share their correct details.
RV Renter Features
Instant Booking: This feature can help renters have a better booking experience, as renters can book an RV without the owner’s permission.
Wishlist: RV renters can create a wishlist of vehicles they’d like to book in the future.
Admin Panel Features
Users Management: The admin will use the simple-to-use dashboard to handle users, owners, and renters.
Reservations Management: The administrator will keep track of all the bookings made by the RV renter. In addition, you’ll be in charge of repayments and payouts to renters and RV owners, respectively.
Admin Review: The admin can review ratings and reviews and will reply to customer suggestions and implement the required changes if required.
In the End
Developing an RV rental business is an ideal business opportunity and a need of an hour due to its increasing demand. In addition, people have become more health-conscious after the Pandemic, and there are no vehicles other than RV that offer a luxury experience and, at the same time, give some private time to them.
Thus, if you are considering starting your recreational van renting business, you must consider various things like your business model, business size, and much more.