Becoming a Motor Home Landlord?

A discussion of the pros and cons involved in renting out your coach to others.

as the thought of becoming a motorhome landlord — in other words, renting out your coach to others — ever crossed your mind? If it has, and you have been reluctant to turn the keys over to a stranger, maybe you should give it a second thought. Renting out your motorhome to others can be profit­able, but this financial gain may not •always be a visible one.

As a motorhome owner, one must consider several factors before watching someone else drive the coach away for a day, a week, or even a month. Insurance, warranty, time, and money will become very important issues to you, the owner.

I own a 34-foot 1988 Holiday Ram­bler Imperial, and believe me I was a skeptic and a worried motorhome landlord when my first renter drove my coach away for a seven-day trip. But, to my relief, the vehicle was returned without a scratch, and I received a $700 check to boot — the easiest work week I had ever had.

But, before you become excited about the easy money that can be earned, let me warn you that being a motorhome landlord is not always that easy. Take it to heart — this is not for everyone who owns a motor-home. The reason I decided to rent out the coach was that my vacation time is limited, and I can't stand writ­ing a check for that monthly payment while the coach sits winterized in a storage lot. Remember, it can be hard on a vehicle to sit dormant for two-thirds of the year. It was a difficult decision at first, but in my case it has worked out quite well.

So, before you decide to place a rental ad in the local newspaper, take the time to evaluate your own situa­tion. Is it worth your time and money (yes, money) to try to rent out your motorhome?

One of the first things to consider in deciding to rent out a motorhome is the age of the vehicle and its mechanical condition. For instance, if you rent a 1975, somewhat depend­able motorhome to the Joneses, who happen to forget to add that extra quart of oil every 200 miles, you might receive an angry phone call at 2:00 in the morning from a stranded family three states away complaining that your coach died and asking what you intend to do about it. So, first off, you must seriously consider the qual­ity of your RV, and just how depend­able and maintenance-free it really is. This alone will ensure you a sound night's sleep.

Once you pass this step of consider­ation, the next thing to deal with is talking to your insurance agent about your coverage. In most cases, you can insure your RV to cover another driver temporarily, sometimes for as little as five dollars a day above your current rate. In some cases, you need only give your insurance agent a two-day notice that the RV will be in use for a stated period of time. I have found it easier and much safer to carry the insurance myself. This alone will save you worry and the trouble of contacting the renter's agent to ensure that he or she is even covered. This is a very important issue to you, the owner; so, be sure to discuss this matter with your in­surance company.

One of the next things to do is to decide whether this venture will in­deed be profitable. To do this, first determine the average current RV rental rates in your area. The Yellow Pages and local newspaper ads are invaluable resources in making this determination.

Rental fees vary according to the type of RV. A top-of-the-line motor-home, ranging in length from_£0 to 35 feet, generally can be rented out at $450 to S700 a week, plus some­where between 15 to 30 cents a mile. Mini-motorhomes, ranging from 17 to 25 feet in length, rent for approx­imately $350 to $500 a week plus 18 to 23 cents a mile.

Currently, in Columbus, Ohio, I receive an average of $150 a day or $700 a week, including 1,000 free miles and then 25 cents for every mile thereafter, for rental of my coach. However, each coach owner will have to evaluate his or her area and personal situation. Many rental motorhomes can be acquired for a lower price, approximately $35 to $50 a day, taut then an additional charge of as much as 35 cents a mile is tacked on to the total. This money will add up quickly, but I find it much easier to set a fixed price and then worry only about the extra miles over the first thousand.

Just as traditional landlords do, motorhome landlords should ask for a deposit, thus providing them with added insurance to protect their investment. I require a $250 deposit, which helps to ensure that the renters will be more thoughtful about the use of the motorhome, knowing that they might forfeit their deposit.

Another necessity is a written agreement that can help you if a legal problem should ever arise. A standard motorhome rental agreement can be obtained from Jenkins Business Forms, Mascoutah, IL 62258; ask for form number 1155. A lease form is recommended, as the form asks for all of the pertinent information, suchas driver's license number, address, references, what slates the renters plan to visit, approximate mileage, etc. This form provides the owner with a written record and helps to limit liability if anything should ever occur.

Another factor to consider, especially if you have a relatively new motorhome, is warranty coverage. Check with the dealer from whom you purchased the RV. Some manu­facturers void warranties if the coach is rented out.

If you have taken all of the afore­mentioned steps and have placed your ad in the newspaper, be prepared to answer the phone, and a great many questions. Keep a calendar readily available so that you can mark down proposed and firm reser­vation times for the rental of your RV. You must keep in mind that most renters are vacationers who plan to pick up the RV on a specific date; so, don't schedule the rentals too close together. The owner must always consider the fact that when Group A brings the coach back, it may need a major or minor repair, or simply minor cleaning, before Group B can pick it up. It is best to have the RV mechanically inspected periodically to make sure that the engine is being well maintained.

It will be in your own best interest and in the interest of the renters if you go over all of the coach's equipment, its location and use, because many people are not familiar with RVs, especially the dumping and filling of holding tanks. So, the owner should always give the renters a thorough demonstration of the work­ings of the coach. One small step that could prevent mishaps is placing a small sign denoting the vehicle's height upon the dash. Any small trick that makes the RV a more user-friendly vehicle will help you, the owner, in the long run, and will make it easier on the renter. Always provide the "tenants" with a telephone number at which you can be reached should questions or any possible problems present themselves.

Be prepared for damages that might occur. No matter how careful the renters are, minor damages are sometimes unavoidable. In the past two years, I have had to replace a door mirror, have the carpet cleaned occasionally, and replace a vent cover. Most of the repairs are minor, but be prepared to have anything happen; however, remember that the renters do share some of that financial burden if they caused the damage.

One really has to be prepared to dedicate some time to earning a profit from renting out one's motor-home. One must allow time and money for repair's that invariably cut profits. In figuring the profits of such an undertaking, would-be renters must consider the personal time and money that need be expended in renting out an RV. It can sometimes become costly, or simply a break­even proposition in that you earn enough money to cover the monthly payment on the coach. One benefit is that you will still have use of the vehicle for your personal vacations and you will be able to claim the interest tax write-off, since the vehicle qualifies as a second home. One must also remember that the rent is earned income and, as such, must be reported to the Internal Revenue Service.

If vou are a busy person with little time to dedicate to the hassles of renting, then you shouldn't even con­sider this proposition. Of course, renting out the coach may be time-consuming at first, but once you get the hang of it, the process becomes much easier.

If vou do decide to trv renting out your coach, be prepared to take reservations. It is surprising how many people want the convenience of vacationing in an RV but don't want the responsibility or payments that go with it. You may receive calls from people wanting to rent the ve­hicle for a month at a time, which can be very profitable. In addition, many corporations or high-level executives rent motorhomes for traveling or en­tertaining clients. Eventually, you will probably attract repeat customers, year after year, which will make it profitable to own and rent your major investment.

I know of people who have rented out their RV and as a result have paid off the loan for the vehicle in half the time. Keep in mind the added mileage on your RV, and be prepared to face the salesman when you go to trade it in for a new one. Take the time to consider all of your options, and make sure that renting will suit vour lifestyle and be profitable to you in some way.