Welcome to Motorhomefacts, we are a thriving motorhome community (Largest in Europe). Why Not JOIN NOW and get instant access to more of the website. It costs nothing to join and only takes a few minutes. We have 200,000 different people visiting our site monthly and this amount of motorhomers in one place guarantees a fast response to any questions you may have. We also have unique facilities not found elsewhere such as our Online Logbook, stopover tracker, Motorhome directory with Ebay type feedback and the largest repository of motorhome campsites reviews found anywhere
Hi, I want to pick your brains a bit.
I own an old 1994 elddis in very good condition which we enjoy greatly, but would never consider renting it out as I think it would be too old for the people hiring the vehicle, and I have am emotional attachment to it, so if anyone brought it back with so much as a scratch I would cut their wedding tackle off, even if they weren’t married!
However that said I run my own small business which is running fine and has done so for a long time which is quite lucky all things considered, but I have no ambition to expand it anymore, so I was thinking of motor home hire.
I would have no emotional attachment it would be treated solely as a business adventure and would be available 52 weeks a year to hire.
I was looking at buying a new van, but looking at depreciation wear and tear mileage insurance etc wear would I be in 5 years time, I would of thought the van would have lost 2/3 rds of its value even though it is 100% deductible I believe, and this is only one area I have been thinking about.
Can anyone give any advise good or bad, are there people out there making good money from this?
Although I would give this 100% effort, because I have another business I would not need to draw any monies from the hire company, only normal expenditure to keep the van or vans on the road looking good etc.
The question is really is this a good investment for the long term, even when unlike property generally goes up over a 10 year period?
I’m in a rush to write this so sorry if its incoherent
I have no experience of Motorhome hire but would think it might be a risky venture.
I would compare revenues and costs to those of buying a house to rent out and I think the house would come out on top every time.
Lets say you buy MH new for £50k
In 5 years time with 50000 miles probably worth £25k
5 years insurance @ £5000
Servicing repairs etc @ £3000
Road tax @ £700
Total costs @ £34000
If you managed 26 weeks per year at average £400 pw that would earn £52000
So GP over 5 years @ £18000
I may be way out with my figures but had a few idle minutes to spare.
It maybe worth investigating canal boat hire, as outlay, weekly rental, upkeep, rental costs etc etc may be in a similar ballpark even if just as a pre-existing comparison?
The difference being that you can buy a portion of such a boat from several rental companies, giving a return but without the hassle. The one I looked at ages ago gave you a portion of the rental £, two weeks at each end of the season for free, and after the useful life of the interior you could keep it (5 years?), or they'd refit it and continue renting. The main reason why I didn't is if I wanted to live on one once it was mine it would be maybe 60' and 4 berth, not the 6 or 7 berth their layout demands.
Just an idea
______________________________________________________________ Small steps
I have no experience of Motorhome hire but would think it might be a risky venture.
I would compare revenues and costs to those of buying a house to rent out and I think the house would come out on top every time.
Lets say you buy MH new for £50k
In 5 years time with 50000 miles probably worth £25k
5 years insurance @ £5000
Servicing repairs etc @ £3000
Road tax @ £700
Total costs @ £34000
If you managed 26 weeks per year at average £400 pw that would earn £52000
So GP over 5 years @ £18000
I may be way out with my figures but had a few idle minutes to spare.
Food for thought though.
Quote:
5 years insurance @ £5000
I don't know where you get that from - in my case the hirer pays the insurance on top of the hire charge and few hire vans cost anywhere near £50k - you just don't spend that sort of money for hiring out. You don't often manage 26 weeks a year, but you also don't usually go as low as £400.
You have missed out all the other costs though advertising/gas/loo fluid/servicing etc.
One thing you don't get is bad debts, as everything is paid for up front and a substantial deposit is taken against any damage not covered by the insurance.
The agency we hire through had 3 vans of it's own last year it now has 6 so something must be working.
I think you could possibly get a 2 to 3 year old van with low mileage for between £22 and £24K something like a Chausson Flash 03 and make a decent return, sell it after 12 to 24 months and lose very little in depreciation.
When looking for our last van we looked at a Flash 03 ex hire that was 2 1/2 years old. the price new was £26K at purchase, he sold it for £20K with 24000miles on it. We bought a non rental one for £21K so even ex rental it had not forced the price down much more than a lower mileage unrented van.
Thanks for all your thoughts. How much should i expect to pay on insurance if i included it in the price of the rental?
Jezport i think the depreciation to income is much better your way and i still would think you should get reasonable reliability out of a 2-3 year old as all the teething problems should have been ironed out.
Peter you know what your talking about and i think you have put me off a new van, the work does not put me off it's the unknown and hidden costs like you pointed out, but how much would i be expected to pay on a traders policy?
Can anyone give a norm for weeks rented under or over 25 say.
rolla, in answer to your question: it depends what you want out of it, there will be little money in it from rental alone, the money will come when the van has been paid and you are left with the residual value ( assuming that the finance has been cleared via the hire term) its like any business, 1 or 2 vans will not make you rich, however if you bulk it out say 6-10 vans then it will become more appealing, but more hassle.
How much should i expect to pay on insurance if i included it in the price of the rental?
If you can work with their requirements dayinsure will let you set up an account with them that allows everything to be done on line - the pro-rata cost of insurance with them drops the longer the hire period as the set up cost is paid off over more days. Their excess is also lower than straight "for hire and reward" brokers.
Hi
It is a good business and you get to meet some lovely people, but, do not underestimate the time you will spend running this business. People will be late in collecting, late in returning, your pre and post hire checks will be demanding if you do a professional job. The vehicle will inevitably get damaged, bank on between 6 to 8 weeks for body parts and consider what you will do to secure your continued hirers a vehicle. Insurance companies will not pay for loss of earnings. As I have said this can be a good business, 18 months ago we had 2 vans and we now run 14. We are lucky we have the infrastructure in place to enable us to do this.
If I can help in any way please contact me.
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum You cannot attach files in this forum You cannot download files in this forum
All times are GMT + 1 Hour Page 1 of 2Goto page 1, 2Next
France
