# Hiring is it a business?



## rolla (Aug 14, 2010)

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


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## motormouth (Jul 3, 2010)

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.


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## grizzlyj (Oct 14, 2008)

Hi

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


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## Stanner (Aug 17, 2006)

motormouth said:


> 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
> ...





> 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.


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## JohnsCrossMotorHomes (Jul 21, 2007)

Hi,

Think long and hard about it, lot more involved than you think.

I have six vans on my hire fleet and I don't get fat out of it and I buy at trade price, use my own wokshops for maintenance, own staff for valeting.

Insurance on trade policy and a long standing good record.

You will be paying retail, top money for everything and a newbie

Peter


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## Jezport (Jun 19, 2008)

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.


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## rolla (Aug 14, 2010)

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.

thanks
all


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## JohnGun (May 15, 2009)

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.

hope this helps


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## Stanner (Aug 17, 2006)

rolla said:


> 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.


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## hireme (Sep 10, 2010)

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.

Regards
Tel


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## DTPCHEMICALS (Jul 24, 2006)

try this site.
http://www.motorhomesdirect.co.uk

Dave p


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