cancel
Showing results for 
Search instead for 
Did you mean: 

Do most people create a business for renting RV ?

Sonman
Day-tripper

I am preparing to begin renting my C Class this spring. My question is: do most people create a business (i.e. LLC or S company) for renting?

 

2 ACCEPTED SOLUTIONS

Kameron
Community Manager
Community Manager

Hi @Sonman welcome to the Outdoorsy owner community! I think the answer here is really a mixed bag. Many people will start renting as a sole proprietor with 1 rig and then expand from there if things go well and create an LLC down the road with multiple rigs. I just did a video interview in our Facebook group the other day with one of our favorite owners, they started with one and just kept adding rigs as they booked up and moved to an LLC fairly quickly. It also depends on your level of commitment and interest. Some will want to create their own business at some point while others are totally content-keeping things at 1 rig and have it booked up.

View solution in original post

ToddS
Day-tripper

If you have personal assets (home and other valuable assets) worth protecting beyond the liability protection offered as part of Outdoorsy’s insurances, then I would form at least an LLC even if you are just renting out one RV. Forming an LLC for your rental business will give you full personal liability protection. While LLCs are very easy to form, there are no tax savings and taxes may increase by forming an LLC for your rentals. Some states have a minimum LLC tax and you also can be liable for federal self-employment tax on profits under an LLC in addition to the income tax on the profits.  S-Corps can get around the self-employment tax and still give you full personal liability protection but are harder to set up and you have some extra annual filings.  It's always best to consult with your accountant or a lawyer. 

Business financing for a personal RV that you intend to rent out is difficult to find and rates are usually higher than consumer notes. Most business financing will want at least a few years of financial statements and you will likely have to be an LLC, S-Corp, or some other business entity.  For one or a few RVs, I would stay with consumer financing.  If you are looking to buy multiple RVs at the same time and direct from the manufacturer, that is when you will need business financing.

View solution in original post

8 REPLIES 8

Kameron
Community Manager
Community Manager

Hi @Sonman welcome to the Outdoorsy owner community! I think the answer here is really a mixed bag. Many people will start renting as a sole proprietor with 1 rig and then expand from there if things go well and create an LLC down the road with multiple rigs. I just did a video interview in our Facebook group the other day with one of our favorite owners, they started with one and just kept adding rigs as they booked up and moved to an LLC fairly quickly. It also depends on your level of commitment and interest. Some will want to create their own business at some point while others are totally content-keeping things at 1 rig and have it booked up.

Hey Kameron,

Would it still be beneficial to register just one vehicle with an LLC right out the gate?

@LobstahMoney I wouldn't be the best person to say. I've reached out to one of our people here at Outdoorsy for some wisdom, stay tuned.

We only have one rig and don't intend to grow the business (just trying to cover the cost of our hobby), but we were advised to put in an LLC to protect ourselves in case something were to happen. E.g.: a renter couldn't sue us for our house, etc. because that wouldn't be in the LLC. 

An LLC is what I formed.  It was financially advantageous to do so.  As my CPA explained to me and as I understand it, I am able to deduct 20% of the depreciation a year for five years.  Ask your CPA what that looks like and what it means for you.  I had filing fees associated with setting up the Corporation and will have renewal fees ongoing, but other than that, it really didn't take that much.  See you out there, Camper Jim

Hi I am looking to buy a converted van for personal use but also for the purpose of renting on here to help it pay for itself. Has anyone listed their RV under an LLC or taken a business loan to purchase said RV? Or is it more advantageous to finance and list as an individual? Thanks in advance!

ToddS
Day-tripper

If you have personal assets (home and other valuable assets) worth protecting beyond the liability protection offered as part of Outdoorsy’s insurances, then I would form at least an LLC even if you are just renting out one RV. Forming an LLC for your rental business will give you full personal liability protection. While LLCs are very easy to form, there are no tax savings and taxes may increase by forming an LLC for your rentals. Some states have a minimum LLC tax and you also can be liable for federal self-employment tax on profits under an LLC in addition to the income tax on the profits.  S-Corps can get around the self-employment tax and still give you full personal liability protection but are harder to set up and you have some extra annual filings.  It's always best to consult with your accountant or a lawyer. 

Business financing for a personal RV that you intend to rent out is difficult to find and rates are usually higher than consumer notes. Most business financing will want at least a few years of financial statements and you will likely have to be an LLC, S-Corp, or some other business entity.  For one or a few RVs, I would stay with consumer financing.  If you are looking to buy multiple RVs at the same time and direct from the manufacturer, that is when you will need business financing.

jim_hofer
Day-tripper III

It was advantageous for me to create an LLC in Minnesota for one travel trailer.   I work with a CPA and ran things past him.  I'm the only employee.  I do not take a salary or paycheck so to speak.  Profits are my "paycheck", (or early camper loan payoff!)  I had an 8995-A form for my taxes which as I understand it, enables me to simply throughput my revenues/profit/loss through my personal income tax filing for the year--again, I have a CPA that helps with these things.  It was explained to me that I would be able to deduct asset depreciation of 20% a year for five years.  That math is simple enough for me to understand!  $5,000 a year deduction for 5 years.  I deduct all other business-related expenses as well.  It is easy enough to keep track of receipts and even mileage while traveling to dump tanks or picking things up for the camper.  It's always made sense for our family to work with a tax professional.  Our tax person does business filings as well.  

See you out there! --Camper Jim