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Top Tips To Build a Booming Rental Business
Building a successful business isn’t an easy feat; though we can say, these RV owners make it look that way!
Building a successful business isn’t an easy feat; though we can say, these RV owners make it look that way! Lucky for you, we gathered them together to give you hot business tips to help you start the year and your rental business off right.
Topics covered include:
- Adjusting to demand
- Business tactics
- Trends for 2021
We gathered a group of expert panelists to share the inside scoop on all things RV.
Outdoorsy panelists include:
- Jen Young, Co-founder & CMO, Outdoorsy (Moderator)
- Dave Wald, Owner, Karma Campervans
- Marisol Hill, Owner, Adventure RV
- Rob and Brooke Lykins, Owners, RV Adventuring
- Michelle Ellsworth, Owner, Adventure Bound RV Rentals
These owners made it through 2020, which is testament enough to their expertise.
Adjusting to demand
2020 was a year of making adjustments to everything from daily routines to business endeavors. Needless to say, this brought a lot of challenges for our RV owners; however, they handled it well and are now prepared to offer great insights.
The panel offered insight on:
- creating new policies
- implementing creative solutions
- pivoting your business
Creating new policies
When COVID hit, Dave Wald says Karma Campervans had lost all bookings for April and May. With all the travel advisories and new restrictions, people had to cancel their trips and Dave had to update Karma’s policies and procedures.
The main question on Dave’s mind at this point was, “How can we then come up with some new procedures or policies that would enable people to reschedule without them losing their deposit [and] without us losing their deposit?” The team came up with two solutions:
- Rescheduling: Renters could receive a 10% top-up on their booking if they reschedule rather than cancel.
- Cancellation: Renters could use their cancellation fee towards a future booking within a year.
More than that, the key to success despite 2020’s challenges was having a good team. Dave tells us, “Pivoting that fast and having a good team behind you that can make quick key decisions was what helped us survive.”
Implementing creative solutions
For Michelle and Adventure Bound RV Rentals, COVID wasn’t the only problem they faced in 2020. They also had wildfires in their area. Instead of halting business completely, they took a community outreach route; they lent out their rigs to the firefighters fighting those wildfires.
Michelle’s biggest takeaway from all this was learning how to be flexible, noting that “You really cannot prepare for everything.” You have to be able to problem-solve and adapt as situations arise.
Pivoting your business
When things started to shut down, Brooke and Rob started to notice that fewer Class C’s and more Class B’s were being rented. This ultimately led them to buy a Class B campervan and adjust to their audience’s needs and wants.
“Learning what was working and what wasn’t” and adjusting accordingly was what RV Adventuring spent their year doing, and it worked.
We cannot stress the power of networking enough and neither could Marisol. As business for Adventure RV slowed due to COVID restrictions, she spent a lot of valuable time networking with videographers, trading services, and getting content to promote their business. She describes the year as ” an opportunity for us to get uncomfortable and try to figure out different methods and ways to grow.”
The audience had questions and our panelists had answers, covering:
- Business structure
- Resale & depreciation
- Gas costs
Two of the vehicles in Marisol’s fleet are consignments. What does this mean? The basic premise is you manage the RV rentals for another owner and split the profits. “You make money, they make money, and everybody’s happy,” as Marisol puts it.
If you’re looking into consignment, you’ll want to:
- Draw up a contract.
- Find rigs and owners that align with your beliefs and fit your fleet.
Consignment is a great way for you to grow your fleet and your profits without having to buy more vehicles.
When it comes to buying rigs, Brooke recommends buying what you can afford, especially during these ever-changing times. In building their fleet, Brooke and Rob search for rigs they can afford to pay cash for. The first RV they owned, they found at a tow yard and they fixed it up. The key, according to Rob, is “keeping your eyes out.” There’s a lot out there.
But of course, if you are in need of financing, there are a lot of options if you have good credit.
Many RV trailer owners, especially new ones, are nervous about letting renters tow their vehicles. Luckily, you can offer delivery on Outdoorsy. Marisol emphasizes that this offers peace of mind to both the owner and the renter.
But, if you do decide to let renters tow the trailer, Marisol recommends offering free training for those who’ve never towed an RV before. So, that’s an option if delivery-only isn’t the right business route for you.
If you’re looking to expand your fleet, your business structure is definitely something you have to think about. Michelle went from owning one RV to multiple in a short span of time. Because of that, she chose to transfer over to an LLC to mitigate some of the liability.
When you do this, it’s best to consult a lawyer and other professionals, as they can inform you of all the necessary actions you have to take from taxes to paperwork and everything in between.
Resale & depreciation
Depreciation is a hot topic. When you choose to resell RVs in your fleet will differ based on your business model. For Karma Campervans, they’re looking to run each of their RVs for 5 to 6 years as that’s when their business model shows they’ll be getting the best return for their investment.
The main question was does fluctuation in gas costs affect business? “These people have been planning a vacation, and they’re willing to pay for it,” as Dave puts it. So, even when gas prices are high, most renters will find a way to budget that in. For diesel RVs, owners can connect with larger fleet companies and get the same rates for gas as diesel truckers do. Michelle elaborates on that more in the panel, so go watch it!
To wrap up, we asked our panelists what trends they’re seeing coming into 2021.
More delivery requests
Michelle is getting a lot of RV delivery requests this year. Because they’re so close to the sand dunes, renters are having their toy hauler rentals just dropped off there!
Higher RV prices
Due to COVID and trailer manufacturers not having enough product to meet demand, prices for RVs are going up. What Michelle and her husband used to be able to buy for $1000 to $1500 are now going for more than double that.
Fewer bookings, but busy holidays
In Canada and for Karma Campervans, the 2021 rental season has had a slow start. People are more hesitant to rent, in fear that they may experience another lockdown and have to cancel. The same has proved true for RV Adventuring, as they are based in Los Angeles where lockdowns are more strict than other parts of the US.
“That said, Valentine’s weekend is almost sold out,” Dave tells us.
Adventure RV is seeing a lot of return customers this season. People who know and trust the business are willing to rent again and also refer others. Marisol has worked to build a trustworthy and well-known business. As she tells us, “I love to network, so I’ll go to different national parks, or parks in general, and introduce myself while I drop cars off.” She is also getting ready to list her Adventure RV with local and regional parks to ramp up business for the summer season.
More road trips with friends
Brooke tells us that more recently, more friend groups have started to rent from them. Previously, their business mostly catered to families. “I think it’s a way that people can gather safely, and go have some fun together,” Brooke shares.
That’s all, folks!
Watch the full panel discussion for more insider knowledge on how to build a booming rental business.
And if you missed any of our live virtual panels, don’t worry. You can still watch them!
- The Future of RV Travel: Mapping the Road Ahead After COVID-19
- Mapping the Road Ahead: Post-Pandemic RV Travel Destinations
- Mapping the Road Ahead: The Next Great Side Hustle
- Mapping the Road Ahead: A New Generation of RV Travel
- Mapping the Road Ahead: Success Starts Somewhere
- Mapping the Road Ahead: An Owner-Led Q&A with Outdoorsy’s Leadership Team
- Mapping the Road Ahead: Top Tips To Build a Booming Rental Business
Here’s to the new year! Join us next month for another panel chock-full of expert advice.