How to start a motorhome rental business
Whether you’re keen to make money from your camper or want to start from scratch, motorhome hire is an affordable and lucrative opportunity...
Maybe you already have a motorhome that could be making money while you’re not cruising in it yourself – or maybe you’re looking for profitable business opportunities in the travel or automobile industries. Either way, starting a motorhome rental business is an idea worth exploring.
First off, motorhome hire is an affordable home-based business opportunity. If you already own a camper, caravan or motorhome, marketing and insurance will be your primary outlays. Of course, buying a motorhome from scratch will cost more, but there’s potential for plenty of return on your investment.
Not to mention that there’s a lot of demand out there for motorhome hire.
It may be worth considering seeing if you can get a Business Loan to help you with financing your startup idea.
So, if you’re interested in a low-cost, potentially lucrative business opportunity in travel and automobiles, read on to find out how to start a motorhome rental business.
1. Market research
As with any new business, you’ll first need to carry out market research. This will give you a clear overview of the market you’ll be operating in and will help you to decide whether or not it makes financial sense for you to go ahead with the business.
To get started, compile a list of the motorhome hire and campervan businesses operating in your area. These will be your competitors. Try to find out:
- How much they charge. As well as giving you an idea of how much you might potentially earn from your business, this will also help you when it comes to deciding on your prices.
- How busy they are. How many vehicles are they managing? Do they always have vans going spare or are they having to turn bookings away? This should give you an insight into how much demand there’ll be for your vehicles.
- What exactly they offer. Whether it’s a slightly lower price, a freeview connected TV, a quirkily-decorated vehicle or something else, offering a benefit that your competitors don’t will help you to stand out from them.
Finding the right location
While it’s easy to assume that setting up in a holiday hotspot like Cornwall or Cumbria will mean instant success, you’re actually more likely to find eager customers in the towns and cities holidaymakers live in, rather than those that they’re travelling to.
This is because it’s standard practice for customers to travel to you, pick up their van, take it home to load up, and then journey on to their holiday destination from there.
Of course, just because someone lives by the seaside doesn’t mean they won’t want to take a motorhome holiday elsewhere – so you should use your market research to evaluate the level of demand in your chosen area.
Potentially, you could start a motorhome rental company anywhere in the UK. The key is to be accessible.
And there’s more good news: it’s perfectly possible (and advisable) to start your rental business at home. All you’ll need is your own driveway, garage or designated parking space for storing your mobile home and – if they’ve driven over to you – a spot to keep your customers’ car safe while they’re on holiday with your van.
If you grow and decide to acquire more vehicles to rent out, you might need to hire a larger space, complete with power and shelter, where you can keep your vehicles while they’re not in use.
Sorting this out can be as simple as doing a Google search for mobile home storage facilities near you, or even getting in touch with local farmers to find out whether you can rent any spare barns.
2. Equipment, software and costs
When running a motorhome rental business, getting your hands on the equipment and digital systems you’ll need to run the business will be your primary outlay.
First and foremost, you’ll need…
A motorhome to rent out
It definitely goes without saying, but if you don’t already own a caravan, motorhome or campervan, this is the first thing you should look to get.
You’ll also need…
Vehicle cleaning products and basic repair equipment
You’ll need to give each vehicle a thorough, professional-standard clean when it comes back to you. You might also need to make small repairs here and there; although if you don’t have the necessary skills it’ll be safer to have a professional do this.
Supplies for your customers
To ensure your customers have a carefree holiday, you’ll also want to stock your mobile home up with a few essentials. Consider buying:
- Kitchen equipment such as pots and pans, cooking utensils, cutlery, plates, bowls, cups and mugs (bare in mind that you’ll have to replace these items if they go missing or start to look well-worn)
- Bed sheets, pillows and duvets
- Cleaning products and equipment such as washing up liquid, surface cleaner (make sure these are kept stocked up between customers), dishcloths, sponges and a dustpan and brush
- Maps of the local area, and/or a GPS system such as SatNav
- A TV with a DVD player and a radio
- A bike rack
- A first aid kit
- A fire extinguisher
- A tow bar
- Levelling blocks
- Gas containers
- Electric cables and adaptors for hooking up to mains electricity
- If you expect your customers to take your motorhome into continental Europe, you should also supply European travel kits and European electrical adaptors.
Obviously it’s crucial that customers have an easy way to make enquiries and book with you. If you’re keen to deal with customers first-hand, you’ll need a reliable telephone and a professional email address so that they can get in touch with you.
For a more modern approach, you might find that kitting out your website (more on that in section five) with online booking software – which enables customers to view your vans’ availability and make booking enquiries easily online – proves a real time-saver for you. Not to mention that your customers will appreciate the smoother, simpler user experience afforded by these platforms.
A vehicle tracking system
Available to businesses of all shapes and sizes, a vehicle tracking system collects location data and uses it to pinpoint where your motorhomes are at all times; giving you peace of mind while people you don’t know are out making memories with them.
Certainly, vehicle tracking will help mitigate the small risk of theft – so if someone does decide to take your motorhome “off road”, you’ll know exactly where it’s being whisked away to and can get the authorities involved ASAP.
3. Making an income from motorhome rental
So, how much can you earn from renting out a motorhome? The answer, of course, depends on your prices, the expenses you pay out to maintain your vehicles and run your business, and how often your motorhome is rented out.
It’s likely that you’ll be making a profit on each hire from the get go, however, your income will usually be seasonal.
In particular, UK Google searches for motorhome rental and campervan hire spike dramatically from April to September as British families and couples look to take their summer holidays. You might find that there’s also high demand over Christmas and the New Year.
Festivals too can prove a lucrative opportunity, with plenty of festival goers keen to enjoy a little luxury (read: a comfortable bed, private space and their own toilet) during the event instead of a stay in a tent. It’s worth pulling together a tailored festival package to make the most of this.
Due to this seasonality, it’s a good idea to keep your day job and start the business as a part-time venture. As demand for your motorhomes grows, however, and you find yourself making more steady money, there’s plenty of potential to go full-time with this business.
Setting a pricing structure
When choosing your prices, you’ll need to consider:
- The motorhome you’re renting out. How big is it? How many people does it sleep? How new is it? Does it have a USP? (It may be reasonable to charge more for vehicles which offer something unique or quirky.) Remember, if you have a collection of different mobile homes you don’t have to charge the same for each one.
- Your competitors’ prices. Investigate the motorhome rental companies in your region and find out how much they’re charging for similar vehicles to yours; use this as a benchmark for your pricing – though offering lower prices can give you a competitive edge.
- Your expenses. You want your business to be profitable, so make sure your prices cover what you pay for each time you rent the vehicle out – including the cost of insurance, stocking up supplies, subscriptions for booking and vehicle tracking software, et cetera.
- The time of year. As a rule of thumb, it’s best not to stick to the same prices all year round – lower them for out of season periods so as to make the hire a more attractive proposition during these times.
4. Regulations, licences and insurance
✓ Get the necessary business licenses
The licenses you need to operate your business legally can vary from council to council – so get in touch with your local authority to find out what you’re required to have.
✓ Get self-drive hire insurance
If you’re providing customers with a motorhome under a rental contract, self-drive hire insurance is a legal requirement; covering both the driver and the vehicle during each hire in case of theft and other issues.
Most providers will offer cover on a pay-as-you-go basis, so you pay for the cover each time your vehicle is rented out, while others will offer it on an annual basis.
Bear in mind that if you opt for pay-as-you-go, you’ll be paying a different amount for each hire depending on who your hirer is. Someone who’s been driving for a while and holds a spotless license will be cheaper for you to insure than a freshly P-plated student, for instance.
You’ll need to shop around to find the provider that best suits your needs and budget.
✓ Prepare to accept payments
In order to run your business smoothly, you’ll need to be able to accept digital, credit and debit card payments. To do so you’ll need to set up a business banking account (you can’t simply use your personal account to accept business payments) and a merchant account.
After a payment is made, the money is stored in your merchant account while your customer’s bank approves the payment; so it’s crucial that you have one.
5. Find customers
Of course, your business won’t be a success if nobody knows it exists so, once it’s ready to go, you’ll need to get the word out.
You’ll find that you secure most of your summer bookings during the out of season months, so you should be working to advertise your business all year round. Marketing will take up most of the time you have to spend on your business.
As a starting point, try the following:
- Launch a website. It’s absolutely crucial that you’re visible online, as Google is often the first place potential customers will look for you. Your website should be professional, modern and easy to navigate – so it’ll be worth your while to either hire a web designer or invest in a website building tool. Make sure that you display your contact details on your site, and that it’s optimised for SEO; meaning it will appear high up on the search results page when people look up local motorhome rental providers. Find out how you can build a great website – and how much it’ll cost – here.
- Place adverts in local newspapers – just make sure that your advert is sleek, professional-looking and shows all your contact details. If you’re not really one for design, consider hiring a freelance designer to work on these with you.
- Carry out leaflet drops – in other words, design and print leaflets and pop them through the letterboxes of local homes. While this sounds invasive, it’s actually a standard marketing technique – think how many takeaway menus and local business adverts have appeared through your door.
- Print posters and ask if you can place them in the windows of local shops and businesses.
- Signwrite your motorhomes. This involves sticking your business name and contact details on each of your motorhomes, getting your rental service in front of countless people as your motorhomes trawl the country. It doesn’t have to be ostentatious – you can simply have ‘On hire from [business name], [business website]’ stuck to the back of each van.
Using the tips and advice in this guide, we hope that you feel confident that you can start up your own motorhome rental business and achieve great results.
So, what are you waiting for? If you’re keen to provide excellent holidays while earning some money, put that unused motorhome to good use – or start looking to invest in a shiny new one – today!