Small business idea - running it by you guys first.

[jme5343]

My wife and I have been wanting a motorhome for some time now. We'd prefer a class C, which is the kind on a van frame (and sometimes a truck frame).

We're thinking of buying one from the mid nineties, as you can still find some pretty decent ones for a good price. We've been saving up, but were just brainstorming the other day and wondered about buying one and renting it out. We'd be pretty affordable and there's a market for it in the spring / summer / fall here in Minnesota with so many state parks and lakes in the area.

Now, I know about the risk of people being stupid with it, the liability, etc. and have weighed all that, but what I'm wondering is what kind of tax benefits could I gain if we started an LLC and rented it out. I figure we could make at least half the payment on the thing by renting it out (conservatively, really), but what kind of tax benefits could we get?

On trips with the home, I assume if we advertised and performed business while on the trip, we could write most everything off. If we used our vehicles - non RV - we could write that off. Repairs, tags, taxes, insurance...all write offs?

I plan to see a CPA and lawyer before we do anything, but thought I'd see what y'all had to offer.

 

[chipy]

i think it's definitely worth considering. i think you can either deduct or depreciation your motorhome, not sure if you can claim the repairs, tags, taxes, etc. but then again, i'm not a CPA i'll say this much, it's a good thing when the husband and wife are on the same boa... i mean, motorhome, when it comes to this kind of stuff. i think your chances of succeeding are higher if you have each other to bounce ideas off and keep each other in check.

i've always wanted to start a business and i'm thinking of doing something here soon. (i know i keep saying that). good luck to you, sorry i couldn't be much help but i'm sure your CPA/lawyer can answer most of those questions. good luck and keep us updated.

chipy

 

[guyver01]

So... what would be the difference between someone renting your 20+ year old RV.. and one from http://www.cruiseamerica.com/ ?

 

[waggy]

So... what would be the difference between someone renting your 20+ year old RV.. and one from http://www.cruiseamerica.com/ ?

wow thats expensive. rental + $.32/mile

 

[jme5343]

wow thats expensive. rental + $.32/mile

This. Cost and convenience. Also, the closest one to us is 3+ hours. If they're going camping or traveling North, west or East, that's going to be very inconvenient.

Our hope is to fill a small niche and have the vehicle stocked, or at the least offer convenience packs with things commonly needed.

For an RV the size we'll have, it's over 600 for a weekend. Our (very preliminary and ignorant) pricing would likely be about $300.

 

[manlymatt83]

This. Cost and convenience. Also, the closest one to us is 3+ hours. If they're going camping or traveling North, west or East, that's going to be very inconvenient.

Our hope is to fill a small niche and have the vehicle stocked, or at the least offer convenience packs with things commonly needed.

For an RV the size we'll have, it's over 600 for a weekend. Our (very preliminary and ignorant) pricing would likely be about $300.

Hell, count me in. I'd probably rent it for a price like that ... comparable to hotels!

 

[Ken g6]

1. Buy RV.
2. Rent out RV.
3. Profit!!!

Wow, no "???". You might actually have something there!

 

[jme5343]

Hell, count me in. I'd probably rent it for a price like that ... comparable to hotels!

Of course you'll have to factor in fuel at like 6 mpg, but hey, your hotel doesn't move!

 

[BarkingGhostar]

You should rent out the wife--its probably more profitable.

 

[theflyingpig]

Horrible idea.

1. You won't make any money.
2. Fools will destroy your property.
3. You will get sued for something.
4. Everyone knows this.

 

[lxskllr]

I'm with the pig. You can very well make some money with it, but the headaches wouldn't be worth it to me. The first time some noob burns out the brakes, and careens down a steep hill, it'll wipe out any profit you had going.

 

[marvdmartian]

Of course you'll have to factor in fuel at like 6 mpg, but hey, your hotel doesn't move!

Easiest solution: do it like a rental car. They get it with a full tank, they bring it back with a full tank, or they pay $5/gallon to get it refueled.

Hardest part to that is that you'll probably have to either set yourself up with a merchant account with the credit card companies (more expense on your part, especially as you'll do so few charges), or take a huge cash deposit, which some people will balk at (because who has $500 cash to plop down for a deposit?). Do NOT offer to take payment through services like PayPal, since they normally side with the customer in the event of a dispute, and you could find yourself losing big bucks that way.

So far as the people tearing up the thing, abusing it, or breaking things, it will take a few things to prevent most of that from happening:
1. regular maintenance & repairs, probably done professionally (that way, if there's a question of whether it was done right, it's the professional with the big insurance policy defending their work, not you!). Also, don't skimp on the maintenance.....make sure that when you replace important, safety related items (like brake pads/shoes), you're using top quality parts (lifetime warranty, if you can find parts for an RV with that warranty).
2. like a rental car, a thorough before and after inspection by you. If you miss something, YOU pay for it.
3. contact a lawyer to draw up a bulletproof contract for you. Something that will require the renter to show not only proof of insurance to drive this thing, but proof from their insurance company that their insurance covers loss or damage to the vehicle. Your ability to make claims after having renting a vehicle to someone who's not your family member should also be discussed with an attorney. It will be well worth your time & money to do this, as it will severely limit your liability.
4. talk to your insurance company about buying business liability insurance, and don't be cheap about it. A million dollar coverage should be a good start.

 

[Bignate603]

Horrible idea.

1. You won't make any money.
2. Fools will destroy your property.
3. You will get sued for something.
4. Everyone knows this.

I've got to agree. After you get insurance to cover yourself and your property you probably won't have much profit at all.

 

[Paladin3]

A business adviser once told me a good way to start a business was to find someone successfully running the same business in another market and use them as a consultant.

I'd hit craigslist in other areas and call the people who are renting their RVs out and see if any of them are willing to talk. A lot of them are retired or semi-retired and will probably love to talk if you are friendly and let them know you would be doing this in a totally different market.

 

[jme5343]

Paladin, that's actually where I picked up the idea I will most definitely try and do that.

To the folks mentioning liability, if we carry through, it will be as an LLC. I already carry a million dollar umbrella on my personal insurance, the business would not be likely to be different.

Again, profit isn't the sole intent, it's also to further justify the ownership of an RV. *ANY* income and tax benefit will benefit us personally.

I'm currently reading all I can and scouring the 'nets for information. There's a company that offers a class on an RV rental business in Vegas for $600. It's in February, so I may try to go...it would, of course, be a write off

Thanks for all the input so far!

 

[Meghan54]

Who are you going to contract with to provide breakdown towing, service, and repairs for your renters when the RV you rented them blows its transmission or rear end or tires or any other thing 1500 miles away from you?

 

[D1gger]

We did the same thing with our vacation property (a cabin on the beach), but we didn't have the same concerns you will have with a vehicle that could fail or be involved in an accident. In our case it worked great and the revenue essentially paid the mortgage and we now own it debt free and it is still bringing in revenue.

Keep in mind that the increased usage will definitely increase the maintenance costs, and I'm not sure buying something that is already 10-15 years old will work out in your favor. You may end up spending more on repairs than you make. Our cabin was virtually new when we bought it and we still have had to replace lots of furnishings and appliances just from the increased wear and tear due to more usage.

 

[DrPizza]

The 1500 miles away thing is a good point. However, to minimize this risk, risk of breakdown problems, etc., he could limit its usage to a certain radius. We've looked into running a similar business - except more roughing it. With 8500 acres of state land behind us and lots of camping locations that are far underutilized, we considered running a packing business with llamas. We'd provide the equipment, llamas, food, etc., and guide people to their campsites. The only problem is that I simply don't have the spare time right now.

 

[Gothgar]

You should rent out the wife--its probably more profitable.

only after seeing pics and approving

 

[rasczak]

nice idea.