Robert Leonard (02:10):

So I had no plans of getting into RV rentals. Like you guys, you probably didn’t really know it was a thing. And I had absolutely no clue that it was a thing. But I had a guest on the podcast. And it was I believe episode 69 with Buddy Rushing. We talked mostly about real estate investing. He’s a very successful real estate investor. But he was telling me at the beginning of the episode that he’s been starting to get into RV rentals, and he was making quite a good amount of money. And so that was really interesting to me because for those who have been listening to the podcast for a while, you know that I race motocross.

Robert Leonard (02:43):

So back when I was growing up and I was racing motocross, you go to the event, you go to the races in a motor home. For most people, you go into a motor home or a camper because it’s usually a weekend type event. You’re there Friday night, Saturday, go home on Sunday evening type thing. So instead of staying at a hotel which is kind of a pain, most people buy a camper or an RV and go to the races in that. So pretty much for 10 years of my life growing up from four to 14, I pretty much was in an RV every single weekend with my dad and my little brother. And we ended up traveling the country racing motocross one summer. So I spent a lot of time in an RV. So I felt like I knew them pretty well. And I was like, “Okay, well maybe I’ll have an edge there.” A lot of investors talk about competing or working on strategies that you might be able to have an edge or have some advantage. So I said, “Okay, well RVs, that’s interesting.” And I took 10 years off of racing from 14 to 24, but I started racing again recently.

Robert Leonard (03:38):

And I’ve been in going to the races in my pickup truck, and it was kind of a pain. And I was just staying at hotels and I didn’t really want to do that anymore. But I didn’t really want to buy an RV because nice ones are pretty expensive. And then when I talked to Buddy and we talked about renting RVs, I said, “Why don’t I just house hack an RV?” I’m a super big fan of house hacking, like I’m actually writing a book at house hacking right now. I just signed a book deal to write a book about house hacking. So I’m a big, big fan of it. And I said, “Well, why don’t I couple the strategy of house hacking with RVs? Why don’t I just RV hack? I don’t have races every single weekend. So why don’t I buy an RV, rent it out when I’m not using it, and then just use it when I need to?”

Robert Leonard (04:17):

And I don’t necessarily need to make a profit on it. If I can, that’s great, but at least just break even. If I get to use the RV whenever I want for free, I would consider that a win. And so there wasn’t really a lot of resources out there, but I got really interested in it. I said, “This could be really, really interesting.” But there really weren’t a lot of resources out there, no specific one thing tells all resource.

Robert Leonard (04:39):

So I started do my own research. And I determined in RVs, there’s a bunch of different classes. You have your class A, you have class B, you have class C, you have towing campers. So there’s a bunch of different types. The first thing you have to determine is which class you want and which was best. So I ultimately decided on class C, and I’ll explain a little bit later when I get into the questions as to why I chose class C. But I chose class C. So I started to search for them. I was looking all over. There’s a website called rvtrader.com. If you’re looking for an RV, I recommend checking it out.

Robert Leonard (05:13):

So I signed up for alerts. I knew what I wanted. I knew the year and mileage that I was looking for. I knew what class I wanted. So I put in those three parameters and I signed up for alerts so that I’d get emails when they came up.

Robert Leonard (05:26):

So I got a couple alerts for some that were available at a local dealership. I went down to check out the dealership, just kind of look at them and see if it was actually what I wanted, get an idea on price, and just kind of really get a feel for it. See it in person. I hadn’t seen in RV and probably to 10 years. I hadn’t been in one or owned one in 10 years. So I really just wanted to get a feel for it, check it out.

Robert Leonard (05:48):

So I go down there, and I end up meeting with this little old lady. And she actually owned the dealership. I had no idea who she was. I had no idea what her role was. I had no idea that she owned the dealership. But we started chatting. I went into our office and I was just hoping to get a tour of some of the RVs. They had probably 50 or 60 of them.

Robert Leonard (06:06):

So I started chatting with her, and I just started asking questions, and she was super open. And she literally gave me her entire playbook. I forget exactly how long we talked for, but we talked for probably probably close to an hour and a half. Hour, hour and a half all about her business, what she was doing. And I ultimately ended up leaving there with a probably 25 page packet of everything she does and how she does it. She even showed me some invoices from her customers on how she breaks everything down, pricing, etc. So I really got an inside look on what she was doing.

Robert Leonard (06:37):

So what was fascinating about this was I was there to buy an RV, but what I learned was so much about the RV rental business. They’ve been in business I believe she said 34 years. And she told me that she had just started selling RVs within the last year or so. And the only reason she started selling them was because she had so, so, so much demand from people who were renting them that they wanted to buy them after. So she decided to get into selling them as well. But for the last 30 years, all she had done was rent them out. And to me, that was great to hear because I had been wondering if this was just a trend, right? If this was just kind of a fad. With COVID, people are trying to get out doors and do other stuff, and things like that. So I was kind of a little worried that people were just doing this because of COVID, and not because it was a long term thing that was actually going to stick around.

Robert Leonard (07:27):

But the fact that she’s owned exclusively a rental RV business for 30 years, and she had a beautiful facility. Like I said, 50 to 60 if not more RVs with a bunch of bays, and cleaning, and employees. So she was doing well.

Robert Leonard (07:41):

So I was like okay, maybe this is actually a real business model. Maybe this is not just this year long fad. So that was really, really interesting. I was really glad that I ended up meeting with her and chatting with her. And it made me feel really good about doing the RV rentals because like I said, there’s not that’s ton of resources out there. I actually have some ideas for some resources. So if anybody’s a software developer and wants to potentially partner on a business idea, shoot me a message. You can reach me on Instagram or Twitter @therobertleonard, or you could send me an email. I have some ideas that I’d like to work on, but I’m not a developer.

Robert Leonard (08:14):

So anyway, there was no data sources really that I could find that were great. And so hearing from her was really helpful. So I ended up going out kind of walking through all the motor homes, the RVs, and checking them out, and seeing exactly what I wanted. There’s a bunch of different layouts in them, and seeing which different things I wanted. And it gave me a really good idea. I was ready to buy one that day, but the problem was she required a $5,000 non-refundable deposit, and I hadn’t applied for financing yet to purchase it. So I was a little bit worried. I mean, I have great credit and I can afford to purchase it. So I really wasn’t super worried, but I was just a little cautious that there was a chance that I wouldn’t be able to secure financing. And if I didn’t secure financing, then I would have to forfeit that $5,000 deposit.

Robert Leonard (09:03):

So I was a little bit worried about that. But more importantly, all of them, even the one she was selling were rented out for weeks. And so even if I purchased it on that day, I wasn’t going to be able to pick it up for weeks until after those rentals were done. Then I was able to actually pick it up.

Robert Leonard (09:18):

So that didn’t really sit well with me. I didn’t really want to do that. So I ended up leaving. And I continued to just let the alerts go. And I was looking for others, but I didn’t find anything in the price range that I wanted. Hers were actually the cheapest around, which is kind of why I went there in the first place. And so everything else was quite a bit more expensive. And so I wasn’t really super interested in those. And so I was just kind of waiting, and waiting, and waiting.

Robert Leonard (09:41):

And so then I applied for a loan just to see how much I was pre-qualified for in case an alert did come through. And I applied with my local credit union that I actually bank with now. They had a really good RV product, but the interest rate was a little bit high. So I did some more research after. I didn’t apply with them, but I did some research into them. And then I found another credit union that seems to specialize in RVs. I don’t know the credit union that well, but they seemed to really focus on RVs. And so I applied for the loan through them and got pre-qualified through them to see how much I could qualify for. So when I did get an alert, I would be ready.

Robert Leonard (10:16):

So I was just waiting for alerts to come through. And then one day I was actually just laying in bed. I had just woken up, and I was laying in bed. I checked my phone. I had an email from RV Trader and it said one new saved alert or something like that. New saved vehicle ready to view, or something along those lines. So I opened the email, and it was exactly what I wanted for an RV. And the price was actually pretty good. So I was like, “I should go check this out.” This was at like 7:00 AM. And the dealership opened at 9:00 AM, and they were about an hour away. So I literally got out of bed, got dressed, and drove straight to the dealership. And I was there before they opened and I was ready to go, because I had saw that it just listed that day and I wanted to make sure I got to it before the anybody else did.

Robert Leonard (10:58):

So I got there, I checked it out, took it on a test drive. I really liked it. I thought the price was good. So I put a down payment on it. And interestingly, they also were nonrefundable and they were actually nonrefundable for 6,000. So that was a bit scary, but I still did it because I had already had that pre-approval. I felt better this because I at least had the pre-approval. I knew I was good to go. And so I wasn’t as concerned, but it was still a little bit scary.

Robert Leonard (11:22):

So I ended up going with that second credit union that I mentioned. I went with a 20 year loan. It was a 5% interest rate, and I had to put 0% down. So what that means is up front, you have to put money for the deposit. So I just put $6,000, which was the down payment on a credit card. So they charged my credit card 6,000. And then what happened was I got the loan for the full amount of the purchase price because I had to put 0% down. So when I gave the dealership the check to purchase the RV, they just refunded the down payment amount to my credit card.

Robert Leonard (11:55):

So thankfully, actually nothing out of pocket. And it was just all in a credit card. Happened within a few days, and it was back on my card. So no big deal really. So 0% down, which was awesome. And the reason I went with a 20 year loan, I know that sounds kind of crazy, especially you might be thinking a vehicle, right? Cars are usually four or five, maybe six years. 48, 60, 72 month terms. So why would I go with a 240 month term on an RV?

Robert Leonard (12:22):

Well, the reason I did was because it was a 65, it was 60 or 60, I believe it was 60,000. $60,000 RV. So if you went with a much shorter term, it’s going to be a pretty expensive loan payment. And I really wanted to de-risk. I really just wanted to make this as safe and least risky as possible. And the way I view risk is to lose the asset. And in this case, the asset is the RV. And the only way to lose the RV is of course through an accident or something like that, but there’s insurance to cover that. And then the real way is myself that I can control is through not making the monthly payment. So by making the monthly payment as low as possible, I felt like I was reducing the risk as much as I could.

Robert Leonard (13:08):

So I went with a 20 year loan. That put the total monthly payment at only $440 a month. I said, “Okay, well worst case scenario, if this thing doesn’t get rented at all, I can cover $440 a month for as long as I need to until I can sell it and not have to make that payment anymore.” Some people are going to disagree with me. It’s probably not the best financial decision. From a pure quantitative perspective. It’s probably not the best. I’m going to pay quite a bit of interest, etc. But I really wasn’t worried because the 5% interest rate’s pretty low. It’s not the lowest ever, but it’s pretty low. And I really was just happy with having such a low monthly payment because I didn’t know what this RV thing was going to be like.

Robert Leonard (13:49):

I think Warren Buffett talks a lot about becoming wealthy not so much by making huge wins, but really by protecting your downside and protecting yourself from ruin. And so when I was going into this, I was really trying to make sure I didn’t go into financial ruin. I really just didn’t want something bad to happen financially for me. And I had some confidence because of what I had talked to the lady about at the dealership. But you just never know. I didn’t know. I’d never used any of these third-party platforms. I’d never done any rentals like this. So I really just wanted to keep it as low as possible. And so that’s why I went with that. And if I purchase another one, I’m not sure if I would do 20 year again. I probably would, to be honest again. I really like to keep things as low risk as possible.

Robert Leonard (14:34):

And it increases profitability month because you have a lower monthly payment, and technically you get more profit every month. Now you have to hold that loan for 20 years, which isn’t as great. But you can always pay it off earlier. At least that’s my philosophy is if you get a five year loan or seven year loan, you can’t pay it off any longer than that. You have to pay it off in five or seven years. But if you get a 20 year loan, you can always pay it off sooner. So if end up doing really well making a bunch of money, just make the same payment that you would at five years instead of 20 years, and you could pay it off in that same period. So 20 years in my opinion gives you a lot more flexibility. And that’s why I went with that.

Robert Leonard (15:10):

And I would went with a 2017 RV, had about 15,000 miles. So it was practically brand new. And I also bought it from a dealership as I mentioned. So the reason I did that was because of financing. So when it comes to RVs, at least based on my research and the credit union that I went through. I did a lot of research. And from what I found was a lot of them required it to be from a dealership. You could technically get it through a private party sale as well, but they really prefer to be from a dealership. And then also the newer, the better. The better loan terms you could get.

Robert Leonard (15:45):

So for me, I could have found a better deal. I could have found a more under market value RV if I went private sale. But the terms of the loan would’ve been worse and my monthly payment might have actually been higher. So I saw some that were $20,000 less than what I paid. I paid 60,000 for this RV. I found some that were like 40,000, but the monthly payment actually was higher because I could only get a 10 year loan on it, or a seven year loan, or something like that.

Robert Leonard (16:10):

So I ended up going with a little bit more expensive, newer RV to get better financing. And also, it felt like it was a good decision because of maintenance and just headaches. It’s like buying an older house. In real estate, if you buy an old house, you’re going to have more maintenance, and CAPEX, and repairs, and things along those lines. And so it’s the same idea with an RV. I didn’t want to have to deal with things breaking all the time. And I figured by going newer, I’d probably have a little bit less headaches going that way. And so that’s why I decided to go that route with a newer RV.

Robert Leonard (16:42):

And so for the actual closing process, I gave the down payment like I said, the 10% down payment which was about $6,000. I ended up going home, filling out all the paperwork. So I actually, I wanted to take the RV home that day. I talked to the credit union, they could literally get the check to them the next day or something along those lines. So I wanted to come back the next day and pick it up. But the dealership wouldn’t allow that. They needed to take a couple days to clean it and get it ready. So unfortunately, I wasn’t able to do that. So basically, what happened was I ended up going home, filling out all the details that I needed to for the credit union to get the loan. They sent me the check. I went back a couple days later to the dealership. They had cleaned it, gotten it all ready to go. And I gave them the check, filled out all the paperwork, and was pretty much good to go. Drove it home. And while I was also doing the financing, I got insurance for it because I had the purchase and sale already. So I had the VIN number and all that. So I made sure I put insurance on it.

Robert Leonard (17:40):

And this insurance was for just me to drive it. So this was me using it as my own personal vehicle. And we’ll talk a bit more about insurance for renters in just a minute. But I did put insurance on it for myself as well. It was $700 for the whole year, which I felt was really cheap. So I said it’s worth it.

Robert Leonard (18:01):

So after I drove it home, I decided to take it on a weekend trip myself because I didn’t want to rent it out to somebody else before I had gone and used it. Not because I cared to use it first, but because I just wanted make sure it was good to go for them. I wanted to make sure everything was working the way it should. I wanted to make sure it didn’t have any issues. I wanted to make sure I knew how everything works so that I could explain it to them. And so I took a short trip and it was a good thing I did. Because I actually noticed there was quite a few things missing that people were going to need for their trip. And it wasn’t necessarily anything that the dealership should have necessarily given me. It was just things that you realized your renters are going to need.

Robert Leonard (18:40):

So there are waste tanks in RVs for your sink, your toilet, your shower. All of that waste has to go into two different tank. And so to empty those tanks, you need pipes. They’re waste pipes that you connect to those tanks, and then you drain them. And so the RV didn’t come with the pipes to drain them. They came with the pipes that go out in the tank, but they didn’t come with the external pipe that you need to go and drain this. So if people needed to drain the sewer tanks or the waste tanks while they were using the motor home, the RV, they wouldn’t have been able to. So that was a really big thing that I wanted to make sure that people had and I’m glad I noticed that. Because I didn’t check when I bought it. I only realized myself when I went to go empty it on my trip. And I couldn’t because I didn’t have the pipes. So I went and bought them.

Robert Leonard (19:27):

There was a bunch of other small miscellaneous stuff. I wanted to make sure people had towels for the shower. I got plates, and cups, and silverware, and new sheets for the bed, and pillows, and blankets, and things like that so that people had what they needed for their trip. And I got them paper towels, and wipes, and things like that just so everybody had what they needed when they rented it. And these are all the minor things that you don’t really think about until you actually go on a trip. Because when I went on my trip, I realized that I needed those things for myself. So got all that stuff. It was a couple hundred dollars. And after that, I was pretty much ready to go. I was fairly confident in what it needed. And then from there, I was pretty much ready to go. I just needed to list it.

Robert Leonard (20:12):

And listing it is actually, it’s actually a really interesting story because it was ready to get listed in probably mid-July. And I don’t remember the exact dates, but probably mid-July. And I didn’t list it. And there was no reason. I was waiting to get the perfect photos, and I wanted to make sure I listed everything perfectly. I wanted every single listing to be absolutely perfect. I was falling victim to this perfectionism, and so I didn’t get it listed for a long time. And then one day, I’m in a mastermind with some other real estate investors from BiggerPockets, the hosts of the Real Estate Rookie Podcast from BiggerPockets and some other people.

Robert Leonard (20:57):

And so we were talking. And during that, we were talking about RV rentals. And I got super motivated. And so that meeting ended at like 12:30, and I had an interview with a very successful businessman or investor for the podcast at 1:00 PM. So I only had 30 minutes. And I was so motivated, that I got the RV listed on Outdoorsy, RVshare, and Airbnb all within 30 minutes. And the listings were horrible. My pictures were horrible. The descriptions were horrible. I did not do a good job at all. But I was really trying to fight this perfectionism. So I just listed it and I said, “I’m just going to leave it, and I’ll go back and I’ll make it better over time, but I need to just get this thing listed.” So that’s what I did.

Robert Leonard (21:40):

And so funny enough, I’m in this interview with the guest recording the podcast. And I get an email and it says, “Somebody has booked your RV.” And I was absolutely shocked. And I believe the booking was worth like $1,000 or so. And that was 20 or 30 minutes after I had just posted it. I was totally shocked, and it was a really big eyeopening lesson and situation for me to not fall victim to perfectionism. And so from there, I ended up spending some time. I did take some nicer photos and I did update the description, and things like that. But it was really, really interesting to see that it still got some bookings from there.

Robert Leonard (22:20):

So even before I updated the description and while I was updating the description all within this timeframe, it pretty much rented every single day from August 18th until mid-October. It missed four or five days in there during the week when most people weren’t using it. But it rented for $247 a night plus $30 or so per night for insurance. So it did really well from August to mid-October, and it really interesting to learn. And it was a big learning moment for me about perfectionism. So if you guys take that away from this episode, don’t fall victim to being a perfectionist. There’s a quote that says, there’s a couple different ones. “Perfect is the enemy of good.” “Perfection is the enemy of progress.” There’s a couple of them. “Perfection is the enemy of done.” There’s a couple different ones. But in reality, I just learned that perfection was really keeping me from progress, and I didn’t need to be perfect. So if you guys can, I highly recommend you take that away from this episode.

Robert Leonard (23:21):

And so you might be wondering why I listed it on Airbnb. And so I listed it on Airbnb because there are some specialty experiences on Airbnb. If you’ve ever spent some time, you’ve probably seen some interesting stuff. And you’ve probably heard of people that rent school buses on Airbnb. And so what I put on there was that people could stay in it as a rental unit when it was in my driveway. I didn’t want people to drive it from Airbnb, because Airbnb doesn’t provide insurance. These other platforms like Outdoorsy and RVshare do provide insurance when people are taking the vehicle to drive. And since Airbnb doesn’t, I didn’t want people to take it and drive it, but they were able to stay in it as an experiential kind of rental unit. And so that’s why I listed it on Airbnb. I got a lot of interest in it, but every single person pretty much asked if they could drive it. Even though I said in the description that it’s a stationary RV and it’s staying where it’s parked.

Robert Leonard (24:14):

So nobody ended up booking it. And so for that reason, I canceled it. I removed the listing because all of the messages, I was spending a lot of time on messages with people who ended up just canceling or not booking because they wanted to drive it. They had a miscommunication. I clearly didn’t communicate it well. And so spending a lot of time on things that didn’t matter. So I ended up canceling it off Airbnb. I might put it back and maybe try to explain it better that it doesn’t move, or you can’t move it when you book it on Airbnb. But I did cancel it for now.

Robert Leonard (24:43):

And the other interesting thing was I’ve been considering moving off of the platform because the lady that I talked with at the dealership, she doesn’t use these third-party platforms. She does everything herself. And the platforms do take a lot. They take 20 to 25%. So when you get a booking for $1,000 and then you see them take a good chunk, it can be painful. So I started to consider whether I wanted to do that or not. And it’s interesting because I thought it was a foregone conclusion. I was not even considering not doing it. I was just pretty much going to this winter set up my own system to do all my rentals myself.

Robert Leonard (25:17):

But these third-party platforms, that is a lot to take, but they make it so easy. They provide roadside assistance. So if the RV ever breaks down, no matter where the people are, it’s covered and somebody will go out and take care of them. And they make the pickup and drop off process easy, they provide insurance. I can get the same insurance, or if you’re listening and you want to do an RV rental, you can get the same insurance that they offer. The lady at the dealership does the same thing and charges the same price. So it’s totally possible. But their platforms just make it so easy. You input the mileage, and you can calculate how much money you get for overage, for mileage, and generator hours, and things like that, rather than having to calculate it all yourself since you don’t have a software.

Robert Leonard (25:57):

So I’m not sure right now if I’m going to move them off platform. I think I might at some point. If I end up getting three or four, maybe five of these RV rentals, then I probably would, because it would be worth it. That 20, 25% would start to add up. But for now, I think I’m going to keep it on there. And we’ll see how it goes. But for now I think that’s my plan.

Robert Leonard (26:17):

Before we get into the Q&A where I answer some of the most common questions that I’ve been asked about this, I want to talk a bit about some of the negatives of the RV rental business that I’ve experienced so far. So it’s very labor intensive. And there are definitely ways you could outsource this. For example, one of the most labor intensive parts is cleaning it. It’s actually super easy to clean it. For the most part, people have taken care of it. I think it’s been rented 15 times or so, and people have taken care of it, which is good and makes the cleaning really easy. But it’s still kind of a pain. It’ll come back on a Tuesday night and it’ll go out Wednesday morning.

Robert Leonard (26:56):

So if I’m tired or I have stuff going on, the last thing that I want to do is go out and clean the RV for it to go out on Wednesday morning. You could build in a buffer so it doesn’t go out as quick or whatever, things like that. You could hire a cleaning company, but it’s labor intensive. And it’s kind of like an Airbnb in that sense where you can make more money. My rental properties are super passive. I never have to do anything for them, but they don’t make nearly as much money. I’ll make a profit on one trip for this, but they’re not as profitable. And with the RV, I can make as much in profit off one trip or two trips that I make in profit for an entire rental for a year. But one is entirely passive, and one takes a lot more of my time. I have to talk to the renters. I have to answer all their messages. I have to answer their issues that they have while they’re on their trip. I have to clean it. I have to meet them.

Robert Leonard (27:43):

So nobody that has rented from me out of say 15, 20 people has known anything about RVs. So pretty much everyone was their first time. So I had to do a walkthrough with them every single time on top of all the other back and forth questions before they rented it. And then on their trip, they all have questions while they’re using it. So they’re getting texts and phone calls. So that’s kind of an issue. And then of course you need to go and empty the waste tanks. So that takes quite a bit of time.

Robert Leonard (28:11):

So there’s all this stuff that’s just super labor intensive. And it’s not necessarily not worth it because it does make quite a bit of money, but it’s just not passive like rental properties. It’s more like an Airbnb, but with Airbnbs you can get property manage companies. With RV, there’s not really people that specialize in RV rentals for cleaning, and management, and things like that. Yet. I might be working on a program, stay tuned for that. But yeah, so it’s labor intensive. And that’s pretty much been my only downside.

Robert Leonard (28:41):

The other thing, and this is not about RV rentals. This is an issue with the RV that I purchased. So for those who aren’t familiar with RVs, this is going to be a little bit niche, and it’s going to be a little bit kind of nuanced, but it’s something important to kind of think about. Because when we analyze rental properties, we think about CAPEX, and maintenance, and repairs, and all these things that can break. And so with RVs, it’s no different. This is kind of a similar situation. So I want to bring it up and just make it aware.

Robert Leonard (29:07):

So as I mentioned, you have waste tanks in RVs. You have a black tank, and you have a gray tank. Typically, the gray tank is going to be just water. So that’s from your shower. That’s from your sinks. Nothing goes down those pipes into that tank. So what they do is at the bottom of that tank, the pipe is much skinnier where it comes out. So when you go to drain it, there’s nothing that has to flow through there. There’s no paper, there’s nothing. So they can make that pipe smaller.

Robert Leonard (29:33):

Now on the black tank is the second tank. You have two waist tanks, gray and black. A black one is typically where your toilet will go into. And you have to think about that, right? You have all the waste from people and then you have toilet paper and things like that, that go in to the toilet. And so when you go to empty it, they have to make the pipe that comes out of the tank much bigger to allow more things to flow through there.

Robert Leonard (29:58):

So what happened was couple times that I went to empty the waste tanks, the gray pipe got clogged. And we were really, really confused. My dad’s a mechanic. So he was helping me out. And we were really, really confused as to why this was happening, because we were doing everything right. And so it shouldn’t be clogged.

Robert Leonard (30:17):

And so long story short, what we ended up finding out was the manufacturer actually flipped the pipes on the tanks. So they actually had the skinny pipe coming out of the black tank, and they had the wider pipe coming out of the gray tank. So because you had the skinny pipe on the black tank where everything, the stuff from the toilet was coming out, the toilet paper and everything kept clogging it because it’s not made to go through there. It’s made to go through the bigger pipe. So it kept being an issue, kept being an issue. And we eventually found out that it was from the manufacturer, from the factory when this RV was built. They put it in backwards.

Robert Leonard (30:54):

And so I reached out to the manufacturer. We sent them pictures, they asked for pictures, etc. And they admitted that it was wrong. And they could tell that it was done in the factory, but they refused to fix it. So that’s ultimately on me. I haven’t fixed it yet. I just realized this about last week or the week before. And where I live in the Boston area, it’s cold. And you can’t rent the RVs in the winter because the pipes will freeze. Well you can technically rent it in the winter, but people can’t use the water because the pipes will freeze. You have to winterize it in the winter. So anyway, people aren’t going to be renting it much over the winter. So I’m not in a rush to fix it, but I’ll have to fix it for the spring.

Robert Leonard (31:31):

So the manufacturer or the factory is not going to do anything for me to fix it. In all reality, I don’t think it’s going to end up being a huge deal. Like I said, my dad’s a mechanic, and I’ve gotten a little bit handy over the years. So I should be able to fix it. But for somebody who doesn’t have a dad that’s a mechanic, that could be an issue. You could have to take it to the shop and have them fix it. And it could get a little bit expensive. So it’s just like one of those things that’s like a CAPEX, or maintenance, or repair when it comes to a rental property.

Robert Leonard (31:58):

And I recognize that it’s a very kind of nuanced situation. That’s not going to happen to a lot of people. Although I did a little bit of research on this problem, and it’s actually very common with the RV that I purchased. But most people aren’t going to come across that if you’re listening to this and get into RV rentals. So it’s not so much that specific problem that you’re going to run into, but you might run into something else. Maybe the AC stops working, maybe something else breaks. Whatever the case is, you’re going to run into issues.

Robert Leonard (32:21):

And so that was more what I want you to take away from says that there’s going to be these small things that happen. That happens with rental properties too. So it’s not necessarily a big, bad thing about RVs. It’s just something to keep in mind.

Robert Leonard (32:34):

All right, now I want to get into some Q&A. And you guys asked really good questions, and I answered some of them quickly in kind of the overview of how I got into the RV rentals. But I’m going to list out the question and then I’ll provide my answer.

Robert Leonard (32:50):

So the first question, one of the most common ones was, “How do you feel about campers that need to be pulled? Thoughts on camper vans as rental?” So this goes back to when I talked about when I did my research with class C. So you have your class A, class B, class C, and you have your towing campers, which is what the first thing they’re asked about. And then camper vans is your class B.

Robert Leonard (33:14):

So class A is going to be basically depending where you live, they’re called Greyhound buses where I live. But in the major cities, you have these big buses that people take into cities or on long trips. Not like a school bus, but a little bit bigger than that. And not really like a city bus, but more of the buses that sports teams travel on, things like that. So you have those big buses like that. Those are class A. They’re made to be motor homes. Essentially the same shell, but on the inside, they’re an RV. They have beds, toilet, shower, bathrooms, etc. So they’re made to be an RV. That’s your class A.

Robert Leonard (33:47):

And so class B is like your camper vans. That’s like a sprinter van, or even a painter’s van, or buying a Mercedes van and converting the inside of it to have a bed and have all the … you’ve probably seen it on social for media where people convert their vans into these campers. So that’s typically considered your class B.

Robert Leonard (34:06):

And then class C is more like a pickup truck with a big body on it that has a smaller RV or living quarters in there. And then the tow along campers is somewhat self-explanatory, but it’s basically a camper that you have to hook up to a truck. And there’s a couple different kinds of those. You have fifth wheels, you have just your regular hitch campers. But for the most part, the same idea is that you have living quarters that are basically in a trailer, and you tow it along.

Robert Leonard (34:36):

So my problem with the campers that need to be pulled to the original question is that your demand is not going to be super high. I actually wanted one. For my own personal use, I would’ve gone with a class A or a tow along camper that needs to be pulled. The reason I didn’t go with the pulled one is because not a lot of people have trucks that can pull them. So that instantly reduces your demand. Like now, not only do you have to have somebody that wants it during the dates that it’s available, lives in your area, wants to use it, and they have to have a truck that they can pull it. And be confident. Not only do they have to have the truck, but they have to be confident in themselves to pull it. And this is kind of personal, anecdotal I guess. My personal opinion, but I would argue that they’re more likely to ruin it if they’re towing it along, especially if they’re not experienced.

Robert Leonard (35:26):

So that’s why I didn’t go with the camper. I was worried about the demand, the tow along campers. I was worried about the demand. And then it’s a very similar idea with the class A. So no license is needed to drive the class A, but they’re very big and they’re very long. So it’s very daunting to most people. I would say pretty confidently that the average person is not going to hop in a class A motor home RV and drive it confidently. A lot of people would be worried. So I was worried. Even though that was really what I wanted as my number one choice, because I am very confident in driving that. So for my own use, I would’ve gone with class A. But I was worried about people not being confident in themselves, and therefore hurting the demand for people that wanted or was able to drive the class A. So I really thought that that was going to hurt the demand for my rentals.

Robert Leonard (36:18):

So then it came to camper vans and class C. And camper vans were interesting, but they’re really expensive. At least from what I found, they were more expensive than the class C motor homes. And they weren’t going for a much better rate. They were pretty much being rented out for the same nightly rate. And there was a little bit of nuance. Some might be slightly more, slightly less. But class A, class B, and class C were all relatively close. The tow along campers were quite a bit cheaper to rent for the renter. But the class A, the class A, class B, and class C all rented for relatively similar rates.

Robert Leonard (37:01):

So with people being worried about driving class A and me being worried about the demand, I wasn’t going to go with the class A given that they rent for a similar rates as class C. And then with camper vans, I was worried about the demand because they’re kind of niche. The usually only have one bed. They don’t have a lot of space. And sure, millennials are going to love that, but they’re not great for families. And you really just need to find a person that’s going by themselves or with maybe like their significant other. And so again, I was worried about the demand there. And again, the nightly rates weren’t that, like they were about the same. They weren’t anything higher. And these were really expensive. The ones that I were looking at that were already built, because I didn’t want to build it myself were like somewhere of 80, 90, sometimes $100,000.

Robert Leonard (37:43):

And so with class C, it’s probably a supply and demand thing, but the nightly rates is one of the highest. They are affordable. I got mine almost brand new, very nice for 60,000. So almost 30,000 less than the camper van. And it fits a family of four very easily. Husband, wife, kids, whoever. Friends. And pretty much anybody can hop in it and drive it no problem. It’s pretty much like driving a pickup truck, just a little bit wider and a little bit bigger. So if you could drive a pickup truck, you can drive this. So that made me really confident in the cloud C over all of the other ones. And if I were to build a whole fleet, I would probably buy five or six of the class C first. And then I might diversify into some of the other ones. Because when I went and saw the woman at the dealership, she did have class A, B. I don’t think she had any B actually, but she did have tow alongs. And so there certainly is demand and you see a lot of them listed on the sites. But for me, the thought process that we just went through is exactly why I chose class C. So I hope that answers your question.

Robert Leonard (38:55):

The next question was, how is insurance handled since the owner is using the RV? So that’s what I mentioned before. I got my own policy that covered myself. And so that pretty much covers me. Let’s just assume I didn’t rent it at all. That would be the insurance policy that I needed. It was relatively cheap. It was like $700 for the year. So I was covered there as the user and owner of it. And then when people rent it, this is again going back to why I use the online platforms, they’re required to buy insurance through the platform. So that covers the renter, and it covers the owner while that person’s renting it. So you double dip on insurance a little bit, but you’re covered really well. So that’s how I handled the insurance.

Robert Leonard (39:38):

So kind of going along with the insurance idea, the next question that I was asked was, “Are you worried about them getting into an accident and suing? What actions do you take to avoid that?” So again, this kind of goes back to why I use the platform because the platform provides, they’re signing a ton of waivers. I think they come with a million dollars worth insurance just through using the platform. So there’s a ton of safety nets there. Of course, in theory it could go over a million dollars, but I feel very secure and very de-risked by using the platform and the insurances that they provide. So no, I’m not really worried about them getting into an accident and suing. I mean, I am worried about them getting into an accident and getting hurt, but I’m not really worried about being sued or anything like that. And the actions I’m taking to avoid that are continuing to use the platform.

Robert Leonard (40:29):

The next question was, “How would you determine if there is a good market for RV rentals?” So like I mentioned before, I have an idea for a business. If anybody wants to partner, send me a DM on Twitter or Instagram @therobertleonard, because I don’t think anything like this exists, and I want to create one. But there really isn’t any great tools to decide if there’s a good RV market for rentals. And so what I did was I just went on these third-party platforms and checked to see how many there were listed. I figured if there’s none listed, then there’s probably not a good market for it. But if there is a bunch listed, then there might be a market. And then what I also did was try to look at reviews and see how many reviews there were and how frequent they were. If there was a bunch of listings but there was no reviews, then tell me that there’s not a lot of demand. Because there could be a lot of listings without any demand. So I was trying to look at the reviews to see how many there were and how frequent they were. And so that gave me an idea.

Robert Leonard (41:23):

And then also, I just really thought holistically about it. Do I live in an area where people go camping? And I figured if I live in an area where a lot of people go camping and there’s a lot of opportunity to take the RV to go do things, then it probably would have a rental market.

Robert Leonard (41:37):

So I live kind of, I don’t want to say in the woods, but I live about an hour outside of Boston. And there’s a lot of camping where I am. And actually talking to the woman at the dealership, she told me a lot of people actually take the RVs and go south. A lot of people drive from the Boston area to Florida, or the Carolinas, or things like that. So I felt pretty confident in it. There was no good data source for it, one source that I could go to for data. But that was kind of the thought process that I went to to determine if there was a good market RV rental.

Robert Leonard (42:07):

From the same person they asked, “How much do you need to put down and what are the interest rates?” So I talked about that briefly before. I had to put 0% down, and my interest rate was 5%. I was also asked where do you keep it? At your home, or is it parked somewhere out of state? And so I keep it in my driveway, and it’s right at the back of my driveway. I thankfully have a pretty big driveway, even though I live in a decent sized city. But I keep it in my driveway, and then people just pick it up from here when they want to use it. But I have been considering bringing the RV down south somewhere in the Carolinas south of South Carolina, maybe Georgia, Florida. Even South Carolina or out west a little bit during the winter. Because like I mentioned briefly, in the winter, you can use the RV. You just can’t use the water because the pipes will freeze. So you have to winterize it when it starts to get cold out, and then you can’t use the water. So people can still use it, but they don’t really love it if you can’t use the shower, or the toilet, or even the sink. So it’s not great in the winter. So you basically have five to six months where there’s no demand.

Robert Leonard (43:15):

So I was considering keeping the RV up here in the summer, in the New England area where I live. And then working with somebody, either a friend, family member, maybe somebody from the podcast who lives in the south to do rentals in the winter when there’s still demand in other markets.

Robert Leonard (43:32):

I haven’t fully come to a decision on that yet. I think I’m going to sit it out winter again. This kind of comes back to the benefit of having such a low monthly payment because of the long term. But in the future, I wouldn’t be surprised if in future years, I have a place down south where I go and rent it out as well.

Robert Leonard (43:50):

The next question I got was how do you vet renters? This is a great question. And it’s actually something that I think the third-party platforms can do better. So when you list, if anybody is familiar with Airbnb, whether it be as a traveler or as a host, when you are a host, you can see the person that’s looking to book your place. And they get reviews, and you can check them out, things like that. The third-party platforms that I use don’t do a great job of that so far. So I really can’t do much vetting of the renters. That would be one of the benefits of booking outside of the platform is I can vet myself. I could ask them for information. I could have a conversation with them, etc., and really get a feel for it. So right now really honestly, I don’t vet people. And I know that’s a bad answer and not really how you should do it, but there’s no real solution for it. And I don’t think anybody that’s doing these rentals has a great solution.

Robert Leonard (44:47):

But the caveat there is I feel okay with it for a couple reasons. And that’s one, like I said, most people that are interested in doing this reach out to you and ask a bunch of questions up front. So you’re having a conversation usually with people before they book. So you’re kind of getting an idea for what they’re like. And it’s still hard to gauge, but you can get an idea. So I really try to vet them that way. And then also, it’s expensive to book an RV. I mean, to be completely honest and point blank, $247 a night to rent an RV is expensive. So that typically makes the quality of the people that are renting the RV quite a bit higher, rather than let’s say owning a rental unit at the cheapest rent in any city. You’re going to typically get a little bit lower quality tenant. With a little bit more expensive rental unit, you typically get a higher quality tenant.

Robert Leonard (45:45):

So something like this, it’s quite expensive to do. And so typically the people that rent it are a little bit more high quality. And so knock on wood, I’ve really relied on that. It’s been a good vetting process. I’ve had some people that have tried to negotiate with me on the rate, and I don’t negotiate with them. Not because I don’t want them to get a deal on it or that I can’t go lower on the rate. But because if they’re trying to negotiate and really trying to really hard get a lower rate, a little bit worried about how they’ll treat the RV. I think if they’re willing to pay the full rate, I think that’s very indicative of how they’ll treat it. So that’s another way that I’ve been vetting them.

Robert Leonard (46:23):

Did you purchase from a private party or a dealership? We talked through this a little bit earlier, but I bought it through a dealership pretty much exclusively because of financing. How do you know you’re paying a good price for the RV? So this is interesting, because there’s no comps, right? With real estate, there’s comps, you get an idea. Or if you’re doing commercial real estate, you can calculate it based on the net operating income. But with an RV, it’s a little bit harder. I mean you can do comps, you can look at what other similar RVs are going for, but there’s no like market analysis or anything like that. So what I relied on was just the Kelley Blue Book Value. What I’ve noticed is that especially when buying through a dealership, they can’t really price gauge you anymore because technology really has just made car buying really efficient. And if the Kelley Blue Book, the KBB value is let’s just say $50,000, the dealer is not going to sell it for 65 because they know people will go online and be able to find out what the real value is through KBB or just through other research.

Robert Leonard (47:23):

And you could get away with that when there wasn’t online, like there is today. But with the amount of access that people has to listings, the demand and the competitiveness of these markets has really driven into a really efficient market. So you can buy under price. You can certainly overpay. But I think for the most part, if you go through a dealership and just check the KBB, I think you’ll be confident that you’re getting a decent price. You’re not going to get a steal most likely, but you could get a decent price.

Robert Leonard (47:50):

The next question was what types of questions are you receiving and what support are you providing for your renters? So the types of questions I’m receiving, I mean, they’re super ranging. People ask how to turn on certain lights, how to use the awning, how to put down the table bed, how to use the propane, how to turn on the electricity, how to make the outlets work. I mean, there’s a million different things. People ask a ton, a ton, a ton of questions. And the support I’m providing to them is that I pretty much tell them all that they can call or text me anytime when they’re on their trip. A lot of people are respectful of that, but you do still get a lot of texts and a lot of questions. So it’s a little bit labor intensive, but the questions really run the gamut. They ask anything and everything. So the support I provide is just being available as much as I can for texts and phone calls. Of course I set limitations on that, but I try to be as available as possible.

Robert Leonard (48:45):

How much reserves are you setting aside and for what purposes, is the next question. That’s a great question. And right now I essentially set everything aside for reserves. And the reason for that is because I don’t necessarily need the income right now personally from the RV for the profits. That’s not to say I won’t in the future. I definitely will be taking the profits. But right now, I just let all the profits accrue. Then if I have anything that I need to use the money for, then I take it out of that ‘reserves.’ And the purposes of that, we talked about the issue with the waste tank. This would cover that if there’s any cost for it. Anytime there’s cost to purchase anything, anytime there’s cost for gas or, which is typically covered by the renter. But if there’s any issues with that, if you need to fill propane, if you need to get new towels, sheets, whatever the case is, I use the money to cover that.

Robert Leonard (49:36):

What are your rules and policies when they rent from you? I mean, I pretty much just have your normal standard policies and rules that you have, that anybody has whether rental, whether it be Airbnb or an RV. I don’t allow smoking. I do allow children of course, because an RV like this is a very much so a family thing. So children of course are okay. And then I personally do allow pets. I think I’ve only had one renter bring a pet out of about 15 or 20 so far. So it hasn’t been a ton of people, but I think just by allowing pets, you open yourself up to a lot more demand. And I allow pets in my rentals as well. Funny enough, I’m not a huge pet guy in my own personal life. I don’t have any pets, but I still allow typically all my renters to have pets. So I think those are the most common rules and policies that I have. Everything else is pretty standard.

Robert Leonard (50:26):

And the last question is, do you deliver or pick up the RV every time it is rented, or does the customer pick it up and return it to a specific location? I do offer delivery, but I don’t typically do that. I offer delivery and pick up for a fee. And I don’t want to do it. So I set the fee very, very high for delivery and pick up. And so far, nobody has asked for delivery or pick up. Every time, somebody comes, picks it up, and returns it to a specific location. I don’t want to take the time to go there. And then the problem is if you deliver it, you have to then get a ride back from wherever you deliver it. That can be a huge pain. So I do technically have it listed as an offering so that if people are searching for it, then it’ll still show up for my thing. It’s just kind of more for a searchability type thing. And I set it so high, that if people are willing to pay that rate, then I would be willing to do it. But otherwise, I don’t want to do it. And it hasn’t been an issue. Most people aren’t really super concerned with that. So I don’t really do any pickup or delivery, but I would if I needed to.

Robert Leonard (51:25):

And also by having it at a specific location, you’re able to kind of streamline the process. So what I did is I ended up putting a lock box outside my house where people pick up the RV so that I don’t have to be there. And they can just open the lock box and get the RV key. And I’ve created videos for people to use, to walk … instead of me being there to give the exact walkthrough every single time, they can just watch these videos and get the same walkthrough that I would give if I was there in person. So I don’t have to be there for the pickup or delivery. So I don’t have to be there for the pickup or drop off. And when people drop it off, they just leave it in the driveway, put the keys back in the lock box, and they leave. So by using a specific location, you’re able to streamline the process quite a bit more. So that’s how I do it. I really am trying to streamline this and make it as least labor intensive as I can.

Robert Leonard (52:14):

All right guys. So that’s pretty much everything I had for my story on RVs and answering some of your questions. I’d really like to know what you think of this. Do you like me just kind of hopping on the mic, talking to you guys, talking about some of the things I’m working on? Or do you prefer guest interviews? And I’ll still bring on guest interviews. So we’ll probably have a little bit of both, but I’d really love to hear your opinion both on this style episode. And also of course, if you have any questions about RVs, if you want to learn anything about RVs, connect with me on social. I talk a lot about it on there and happy to answer any of your questions through there as well. You can follow me on Instagram or Twitter @therobertleonard. Really hope you guys enjoyed the episode. Until next time, see you guys.

Outro (52:55):

Thank you for listening TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday, we teach you about Bitcoin. And every Saturday, we study billionaires and the financial market. To access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.