Keith Gooden:
Welcome back to the Motorhome Matt podcast. I’m Keith Gooden, and with me is our expert, Matt Sims.
Matt Sims:
Great to be here, Keith.
Keith Gooden:
First question – very easy one – how do I make money out of my motorhome?
Hire it out yourself
Matt Sims:
Through hiring it out, I presume you mean! It’s certainly become a hugely popular trend, hasn’t it? Lots of people are looking into motorhomes and with prices going through the roof, people are looking to hire rather than buy. We’ve seen a big boom in the number of motorhomes available for hire in the UK, and there are lots of ways you can do it.
Do it yourself! You have it on your drive, you go and buy yourself a pressure washer, a sponge and a J cloth and a massive array of spare parts and components and then you advertise it yourself. You can do that on Facebook marketplace, or you can advertise it on Instagram and that way you can reach a local audience who will come and undoubtedly hire the motorhome from you.
You also need to sort your insurance out. That’s a really important factor. There’s only really a couple of companies that offer that, number one being a company called Alan Boswell. There we are, a free top tip! That’s a well guarded industry secret and I’m happy to share it with you. You can expect a premium of around £2000 a year if you’re just running one or maybe two motorhomes as you scale things up.
So, number one is you can hire the motorhome out yourself; you can do all the marketing yourself, do all the donkey work yourself, all the cleaning, the handovers and so on, but that does come with some challenges, you know? What happens if it comes back on a Friday evening and the rear bumper is hanging off or missing – what do you do if it’s going out Saturday morning? That’s your headache to sort out.
You’d have to carry a spare bumper, have a great relationship with a body shop or worst case, you’d have to phone that family on Saturday morning and say, “I’m really sorry, but it’s not available,” if you don’t have another motorhome to give them. They’d have to either cancel their plans or make new plans. So doing it yourself comes with a lot of work, which you have to be prepared to burden yourself with. It can be done, but it isn’t straightforward and it is a huge amount of work.
Keith Gooden:
So, let’s say I’ve ruled that option out. It’s too much trouble for me. You’ve dissuaded me. What else can I do now that I’ve got my motorhome sitting on the drive to make some cash out of it?
Hire through an agency
Matt Sims:
I am biased, you are right! I paint a dark picture, but it is a lot of work. You can go ‘halfway house’ and list it with an agency site who will do all the marketing for you, saving you huge amounts of time. They’ll deal with the customer ID, taking the payment, the customer security bond, all of the legal stuff. All of that stuff can cost thousands of pounds to set up – it certainly did for us as a hire company. Examples include companies like Camplify, Camptoo, Goboony and of course Airbnb. There are many others as well – Google them and you’ll find your Facebook feed will flood with all their advertising. So that’s a kind of ‘halfway house’ solution where they’ll send the customer to you, and then you deal with the customer and you still have to deal with the operational turnaround, maintenance and cleaning.
Hire through a motorhome earn program
The other option – I refer to it as a third option but I’d call it the first option really – is to join our motorhome earn program! As a motorhome hire company, the secret of our success in scaling up has been hiring out other people’s motorhomes rather than ones we own. Many of the motorhomes in our own hire fleet are not owned by us. They are third party owned and those owners entrust them to us.
We become the custodian of it – we store it, we maintain it and we hire it out. We do all the marketing, take care of all the customer ID checks and payments, and then we take care of all the cleaning, all the maintenance, all the handovers, everything. As far as our customer is concerned, it’s our motorhome, although we make no secret of the fact it’s not our motorhome!
We do that for good reason, because we want the hirer to have a sense of responsibility for it. That it is actually somebody else’s pride and joy. For our owners, all the hassle of ownership is taken away. There’s no need for them to sort out maintenance or storage, so they save a huge amount of costs and they get to use it whenever they wish. They can book in as a customer would on our online booking system and make a reservation. There’s no cost to do it and there are some perks and benefits. If your motorhome is booked and there’s a particular folk festival that you want to attend – well, why not go away in another vehicle?
One couple has tried five different layouts. They rang me and said, “Matt, can we just check that putting our motorhome in the motorhome earn program means we could try lots of different motorhomes?” I said, “Of course you could!” And for them, that was a year well spent because they also had a motorhome that they were receiving an income on.
We share the income 50-50 with the owner, so you would earn less by being part of this program, that’s true, but you have nothing to do other than own the motorhome! This one particular couple went off in lots of different layouts, and now they’re in a position where they know exactly what layout they want to use and to own. Next year they will change the motorhome into the one that’s perfect for them. It’s a no-hassle way of making money from your motorhome.
Of course at the moment, there is a huge boom in the popularity of motorhome and campervan holidays, so it’s a great time to make some money back from the asset you bought and still enjoy yourself!
Keith Gooden:
You’ve talked in the past of the demand for new motorhomes. And eventually people get them after long delays because of manufacturing issues or because of COVID-19 or Brexit or whatever – let’s say you’ve been promised it in April and you don’t get it until October and you want to make some money out of it. Let’s get down to brass tacks – how much money can I make?
How much money can you make?
Matt Sims:
How much you use it yourself is going to massively impact that. If your plan is to have five or six weeks in July and August with the kids on holiday in it, then that will hugely impact your income from it.
Other factors will include the layout. Without going into great detail about different types of layout, there are some which are very popular with couples out of the summer season, and some with the same layout could be very popular with families in the summer season. A motorhome like that is going to be busier all year round. We would help advise you on the best type of layout. There are many considerations – including the number of seat belts, for example. I would suggest a minimum of four because then you can cater for a family.
So to answer the question, ‘how much do you earn from renting out your motorhome?’ – we typically promise our customers that there’s usually an income of between £3000 and £5000 from being part of the motorhome earn scheme. It uncannily always seems to be around 10% of the motorhome’s value! I don’t know why – it just seems to be where it ends up. That’s a good gauge, or a good indicator of what you can expect to earn.
Of course, many motorhomes have been going up in price by 10% or 20%, so you can actually make money when you come to sell it as well. It’s a great way of offsetting your insurance cost. We ask you to insure it for your own use. We ask you to road tax it – again, for your own use. All the other costs are shared 50-50. So if it needs tires, we pay for half and you pay for half. And of course, remember, we are buying them at trade price as well, so we’re saving money that way too. It’s a very, very cost effective way of having a motorhome and making money from it.
Keith Gooden:
You’ve talked in the past about people being emotionally attached to their motorhomes. They might have bought it from, say, a pension fund – they’ve got the tax free payment, been dreaming of a motorhome for all those years, and while they’ve still got their health and aren’t too old, they can get out there and have great holidays! Still, this is a business. You can’t be too attached to Doris or Beryl or Dave or whatever you call your motorhome.
Matt Sims:
I think if you came to me with a motorhome you’d named, that would ring an alarm bell immediately. You cannot have an emotional attachment to it. You can love it, absolutely, but it needs to be seen as a means to a financial gain.
The first thing I would do is try and put people off putting their motorhome with us to earn money from it. You can imagine the complication that comes if people are too attached. The reality is that somebody else is going to sleep in it, somebody else is going to use the toilet and somebody else is going to cook in it. And miles are going to be put on it.
You might use a motorhome four or five times a year, and if we put it out on hire, it will be used for maybe 15, 20, or even more weeks of the year and certainly weekends throughout the year. So its wear and tear will be speeded up, that’s a given. The first question would be, ‘how attached are you to this vehicle?’ The only way it can work is if you are not attached to a point where you are giving it a name.
Keith Gooden:
Clearly, the motorhomes are looked after and are in great condition. When I look at the lot here at the Motorhome Holiday Company, I can see they’re all very well looked after and look brand new. Are people as fussy about motorhomes as they are about when they rent out a flat, you know, no pets, no smoking, et cetera, et cetera?
Matt Sims:
We are led by them really. Some of our motorhomes are pet free. We ask you to choose – are you happy to allow pets? We have one owner that says, ‘well, I’m not very keen, but just don’t tell me.’ Others we don’t allow to Europe. At the moment, European travel is restricted, so none of our motorhomes can go, but some we don’t allow to Europe. There are lots of reasons why that might be. Some owners might be concerned about mileage.
So if we have a vehicle that’s got particularly higher than average miles on it, we will start to monitor the trips that are being booked in it. We will manage that accordingly with the owner. All of our motorhomes are no smoking, no vaping, including the area just outside of it. That’s in the terms and conditions of hire – there are financial penalties for the hirer if we find that there’s been smoking or any other activity that we don’t allow. So we’ll work with the owner to create a hire profile for that vehicle that’s a good fit for everyone.
Keith Gooden:
So, as long as you’re not too fussy, you can be certain that the motorhome is going to be looked after, will be maintained and will be hired out to people. There’s a good, solid contract, so actually it’s pretty low risk.
Matt Sims:
It is low risk, but there is still a risk at the end of the day. It’s going to be driven on the roads, perhaps by somebody who’s never driven a motorhome before – and increasingly that’s a trend. We take out the hire insurance, which can be a premium as much as £2000 per vehicle. We have a fleet policy which covers them all, and we fit trackers and immobilisers that can be activated remotely as well.
If we think one’s getting on a ferry and they haven’t got permission to head to France or head to Ireland, we can remotely disable the starter motor at the press of a button. And we keep a close eye on all of these things. We treat the motorhomes as if they were our own. There is an element of risk however you choose to hire out a motorhome, in just the same way as if you hire out a flat or a cottage. There’s always a risk of damage.
We hold a bond from the hire customer of £1000. We have a set of really quite robust and reasonable terms and conditions, which means any damage is paid for by the hirer. We endeavor to get things resolved and sorted as quickly as possible to ensure that the motorhome stays in tip top condition.
You mentioned earlier, Keith, about their condition. We’ve had motorhomes that have been on hire with us for three years, we’ve then come to sell it for the owner, and a viewer has said, ‘is this brand new?’ You know, this motorhome has got maybe 30,000 miles on it and has been a very active motorhome on our hire fleet, and people still think they’re brand new. Come and have a look at them, come and see for yourself. We really do take care of them and take huge pride in their condition.
How old can a motorhome be to hire it out?
Another question we often get asked is, ‘how old can the motorhome be if we wish to put it on the hire fleet?’ Well, typically we say up to five years old. The reason we say that is wear and tear, mileage and so on. Also the trims and the finishes inside of them.
Five years ago, motorhomes went through quite a big transition of change. There were a lot of new features added, a lot of modernisation in the technology within them that we’re keen to feature. Even basic things like air conditioning in the cab, you know, you now wouldn’t expect to see a motorhome without that. That’s a fairly recent inclusion as standard. So those types of features we always look for. Condition is absolutely paramount along with your emotional detachment from it.
Keith Gooden:
And who was to know there’s a Matt Sims eye in the sky that can switch the motorhome off if somebody’s being naughty?
Matt Sims:
They call me Big Brother.
Keith Gooden:
Well, from me, Keith Gooden and Big Brother, Matt Sims, thanks for listening to another Motorhome Matt podcast. Come back to us for some more episodes in the very near future.
