Every RV owner loves the freedom to drive off on a new adventure in their home away from home. But paying for RV financing, maintenance, storage, and seasonal preparations can get expensive. You could offset those costs by starting an RV rental business. By renting out your RV, you can give other people the chance to follow their wanderlust while you earn extra income.
Why Should I Start an RV Rental Business?
More and more savvy owners know that RV renting can be a good stream of passive income. If you rent your RV, you can also make up some of the ongoing expenses of ownership, like maintenance costs, while continuing to enjoy those RV camping trips. Let’s dig in a little deeper on the benefits of starting an RV rental business.
More Money = More RV Road Trips
Those who own RV rental businesses know that the best way to spend more time on the road is by earning money while you’re not. By starting an RV rental business, you can earn money on rental fees that you can put toward your next big adventure. The amount you earn is up to you! It depends on how frequently you lease to RV renters, the age and condition of your RV or camper, and how well you advertise to prospective renters.
Recoup Vehicle Maintenance Costs
RV enthusiasts know that ownership is more than a road trip every camping season . While most RV owners would prefer to spend more time on the “r” in “recreational vehicle,” they know that the costs involved in having an RV add up quickly. By putting up your RV for rent, you can have more money for oil changes, insurance costs, a storage lot, and other charges that pop up.
Save Money on Taxes and Still Hit Your Favorite RV Parks
The truth is, you typically have at least a week or two of notice before taking a trip, so scheduling with potential RV renters shouldn’t impact how you normally use your RV. Even more enticing? You may be eligible for tax deductions and other benefits associated with renting when you don’t have an RV road trip planned.
Pay Off Your RV Loan Faster
If you’re still paying off your RV, it makes sense to form an LLC and start a rental business. Having an RV rental is a great way to keep the most amount of money in your pocket while enjoying all of the benefits of ownership. The extra income could help you pay off your vehicle sooner rather than later.
Thinking about Starting an RV Rental Business of Your Own?
We’ve gone over the benefits of starting your own RV rental business. Your RV business can provide you with more money, it can cover necessary vehicle maintenance costs, and you can potentially get tax deductions by making your RV business official. It just makes sense to put your RV to work for you!
To get the ball rolling, your checklist is simple:
Find the RV of Your Dreams
You don’t have to spend huge sums of money on the best camper in the RV fleet to get your rental business started. Check online RV listing pages to find a good deal on a used RV. Be sure to inspect your purchase before you spend the money. Of all of your potential business expenses, buying the right RV is the biggest and most important.
Form an LLC
Why form an LLC for your RV rental business? A limited liability company, or LLC, is a business entity that legally separates your personal assets/income/expenses from your business assets/income/expenses. RV LLCs have two key benefits: tax breaks and asset protection. More on the benefits of forming an LLC for your RV rental business later on.
Join RVshare
The typical RV sits unused for 90 percent of the year. With RVshare, you can help other RV enthusiasts enjoy more campsites, sporting events, and natural wonders while you earn extra income. Why not put that 90 percent down time to good use? RVshare connects the best potential renters with the best RVs to make the most memorable trips every day. We help you, the RV owner, connect with more renters so you can make the most money possible and enjoy a profitable RV rental business.
How Does Forming an RV LLC Help Me?
The benefits of forming an LLC for your RV rental business are big. You can write off eligible business expenses related to starting and running your RV rental. There are other tax perks that can help you put more money in your pocket and further enjoy the life of an RV enthusiast.
Start Up Cost + Business Expenses = Tax Deductions
The IRS allows small business owners to deduct a portion of their qualifying start up costs. Additionally, the money you make renting out your RV is considered taxable income. Your tax professional can help you identify certain business write-offs that may mitigate the tax bill you’re responsible for paying.
Business Income Can Fund RV Upkeep
LLCs have the advantage of income distribution, meaning that an RV owner can easily use funds from their RV rental business bank account to pay for vehicle repairs and regular upkeep costs. This allows the business to fund the maintenance. You may also be able to claim the maintenance as a business tax write-off.
Open a Business Bank Account and Credit Card
LLC owners have the option of opening up a business credit card that can be used to build credit and designate business-specific spending toward RV repairs and upgrades. Of course, you’ll also benefit from that upkeep every time you use your RV for personal travel.
Additionally, by using a business bank account to keep your personal assets separate from your LLC income, you’ll have an easier time filing your taxes. That’s because you’ll already have separate accounts for your personal assets and your business’s expenses.
How does an LLC better protect my assets?
In addition to carrying business insurance, an LLC can better safeguard your personal assets in case someone seeks damages against you. It can serve as a barrier between your personal assets, like your checking and savings accounts, home, and vehicles, and any judgments. Without an LLC, your personal assets could be fair game.
How do I form an LLC?
The requirements for setting up an LLC differ from one state to the next, so it’s best to contact your state Department of Commerce to learn exactly what you’ll need to do. That said, there are certain steps that are pretty much universal.
- Choose a business name – Know that this name must meet certain state requirements. For instance, you can’t have the same name as another registered business in the state and there are certain words you won’t be allowed to use.
- Designate a registered agent – A registered agent is in charge of receiving official and legal mail for the business and must be available in the state during normal business hours. Some people choose to hire a company to act as the registered agent for their LLC.
- Fill out the correct form – In most states, the document you must file to become an LLC is called the articles of organization, but some states give it a different name. In any case, you will need to obtain a copy of the form and fill it out completely and truthfully.
- Create an operating agreement – An operating agreement outlines details of the inner workings of the LLC. It should include information on the financial, legal, and management rights of all members of the LLC. Some states require that you have one, but others do not. Either way, it is a good idea to create such a document and templates can be found online.
Once you have your LLC set up with the state, you will also need to do the following tasks.
- Obtain and submit business licenses and permits through the Department of Commerce
- Get an Employer Identification Number through the IRS
- Open a business bank account to keep personal and business assets separate
Once all of this is done, make sure you know and follow the requirements for keeping your LLC active, so your business remains in good standing with the state.
Businesses that Help With Forming an LLC
Not sure you’re up for the task of forming an LLC on your own? We get it. It can feel very overwhelming. Fortunately, there are some businesses out there that help with this exact thing.
Some good picks include:
As you can see, there are lots of reasons to form an LLC when opening your own RV rental business. Fortunately, the process is relatively easy, especially if you choose to use one of the LLC services listed above. Why not get started today?
