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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 11, 2022
Investment range
$24,050 - $39,100
Revenue potential
$70,000 - $175,000 p.a.
Time to build
1 – 3 months
Profit potential
$42,000 - $105,000 p.a.
Industry trend
Growing
Commitment
Flexible
Consider these crucial factors when launching your RV rental business:
You May Also Wonder:
Is an RV rental business profitable?
Yes, an RV business can be very profitable. You just need to make sure that your RVs are well-maintained to avoid issues and to make sure your customers have a great vacation.
How can I differentiate my RV rental business from competitors in the market?
To differentiate your RV rental business from competitors, consider offering unique features or services such as specialized RV models, luxury amenities, flexible rental options, exceptional customer service, or value-added extras like camping gear or personalized trip planning assistance.
How do I handle maintenance and repairs for the rental RVs?
Develop a regular maintenance schedule for routine checks and address any repairs promptly. Establish relationships with reliable mechanics or maintenance facilities experienced in RV repairs.
What steps should I take to ensure the safety and cleanliness of the rental RVs?
Implement a thorough cleaning process between rentals, including disinfecting high-touch areas, laundering linens, and thoroughly cleaning kitchen and bathroom facilities. Regularly inspect and maintain safety features such as smoke detectors, carbon monoxide detectors, fire extinguishers, and tires.
Can I offer additional services or packages with the RV rentals?
Consider offering add-ons such as camping equipment rentals, Wi-Fi or entertainment packages, RV delivery and setup services, or customized trip planning assistance.
Can I start RV rental on the side?
Starting an RV rental business on the side is possible, but it requires careful planning and management. Consider the time commitment required for managing reservations, maintenance, and customer service alongside other commitments.
Starting an RV rental business has pros and cons to consider before deciding if it’s right for you.
Trends in the RV rental industry include:
Challenges in the RV rental industry include:
Startup costs for an RV rental business range from $24,000 to $40,000 if you start with two RVs. Costs include the down payments on the RVs, a storage space, and a website.
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | $175 |
| Business licenses and permits | $100 - $300 | $200 |
| Insurance | $100-$300 | $200 |
| Business cards and brochures | $200 - $300 | $250 |
| Website setup | $1,000 - $3,000 | $2,000 |
| Down payment on two RVs | $20,000 - $30,000 | $25,000 |
| Storage space lease | $2,500 - $5,000 | $3,750 |
| Total | $24,050 - $39,100 | $31,575 |
Prices for RV rental range from $100 to $275 per night depending on the class of the RV. These calculations will assume an average rate of $175. Your profit margin after costs of insurance, maintenance, and storage space rent should be about 60%.
In your first year or two, you may have two RVs that are each rented 200 days of the year, bringing in $70,000 in annual revenue. This would mean $42,000 in profit, assuming that 60% margin. At this point, you might add two more RVs and rent them 250 days a year. With annual revenue of $175,000, you’d make a fantastic profit of $105,000.
There are a few barriers to entry for an RV rental business. Your biggest challenges will be:
Now that you know what’s involved in starting an RV rental business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research RV rental businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a campervan rental company or an RV rental business that provides an RV park guide.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as class C motorhomes or luxury class A motorhomes.
This could jumpstart your word-of-mouth marketing and attract clients right away.
Your RV rental offerings should cater to a range of customer needs. Consider:
Prices will depend on the types of RVs you rent and could be up to $275 per night. Even class B and C RVs can go up to $200 per night. After costs of maintenance and insurance, you should aim for a profit margin of about 60%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
To identify your target market for an RV rental business, focus on:
Choosing a location for your RV rental business involves considering factors that ensure accessibility, visibility, and convenience for your target market:
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to RV rental businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your RV rental business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding an RV rental business.
Starting an RV rental business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your RV rental business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as Guesty, Wheelbase, or Sirvoy, to manage your bookings, rates, communication, and invoicing.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your RV rental business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your RV rental business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an RV rental business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in RVs for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in RVs. You’ll probably generate new customers or find companies with which you could establish a partnership.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for an RV rental business include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
RV rentals are booming, particularly as the pandemic winds down and people want to get out and enjoy the great outdoors. With 72 million people planning RV vacations in 2022, an RV rental business should have no shortage of customers. You could start your own RV rental business, build up a reputation and soon expand to become a national RV empire!
After reading this guide you’ve got the gist of the business side, so it’s time to hit the road with your successful RV rental business.
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