Is Buying an RV a Good Investment?

Most of us are aware that over the last couple of years several thousand RVs have been bought and sold, mainly due to a boosted economy. Surprisingly, many of these RVs are being bought by a new and unforeseen demographic: millennials. If this is true, you might be wondering if buying a motorhome, camper van or trailer is just an impulse buy or an actual investment. It’s hard to determine if an RV can really bring in healthy returns when the time comes to trade it in or sell it. And if you’re thinking about purchasing an RV for business or just as a second home, there are a few things to consider first.

What if the RV Trend Dies, and I Still Have the RV on My Hands?

You probably won’t be able to buy an RV as an investment and flip it for an astronomical price. There are some exceptions, like a completely renovated Airstream or an unusual and luxurious bus conversion, but those are rare situations. However, some RVs, like the classic VW camper van, can end up selling for what you spent on it a few years after you use it for your personal adventures. Of course, this is all with a given set of circumstances. For example, if you took good care of it and didn’t overdrive it or let it sit for months; and if it’s in perfect shape mechanically and aesthetically. This scenario presents the RV as an investment because you’re saving money on vacations. Your dwelling and transportation are virtually free because you’ll get your money back when you sell your rig.

Some RVs Depreciate Better Than Others

For the most part, anyone buying an RV will lose money as soon as they drive off a lot with it. That’s because the average rate of depreciation is typically 21% of the price. Buying an RV, after all, is really no different than buying a car in many ways. The two main differences are that an RV is also a home and it’s more expensive than a car. But just as with cars, some RVs depreciate far less than others.

VW Camper Van Exception

Look at the example of the famous VW camper van. There is little depreciation value for VW campers because they are manufactured according to custom specifications. People buying models that are a couple years old are willing to pay the seller’s requested price, which is often the same or even more than what they spent on it. They would rather avoid the long wait of having the camper built and customized themselves. Maybe they don’t fancy themselves as good interior designers either. If a buyer sees something that looks great on the spot, it’s worth getting it right away without picking out every detail. Besides, not everyone is made for the drudge work of renovating.

Follow Your Passion, Not the Trends

Even still, the question of whether or not the new uptick in RVing is a passing trend still lingers with most people considering buying an RV. Right now, it seems like there’s an organic outgrowth of the popular Tiny Home Movement and the millennial ethos of living simpler than their parents’ generation. However, there is the very real chance that millennials will outgrow this idealism. And this could cause many RVs to be on the market with no one interested in buying them. But just as with everything in life, there are no guarantees. Trends will always cycle up and down. Realistically, you should consider what it would mean if you do end up with a $65,000 camper van on your hands after three years without any takers.

What if the RV I Want Depreciates Unlike a Custom RV?

Remember that depreciation is not the end of the world. In fact, everything depreciates in value in some way or another. But the intrinsic value of a motorhome and the potential fun in owning one far surpasses the numbers behind it. And depreciation doesn’t have to take all the fun out of owning an RV.

Say you take a rickety old Airstream, worth not a lot, and pour some money and hard work into it to make it shine. There’s no doubt that it will appreciate in value because a shiny aluminum Airstream in mint condition is in very high demand. This generally stays true whether you’re looking at the past, present or future. With this type of investment, you’ll make a profit. And this profit would come despite the fact that the trailer originally depreciated in value decades ago. If that’s the case, maybe you really should take the leap and follow your heart to that shiny Airstream.

Does my RV Qualify as a Write-Off?

An RV can be written off as a tax reduction. Why? It’s considered interest on a second home! In order for your RV to be eligible for the tax write off, it must meet some specific criteria. Your RV must have a designated sleeping area, a bathroom and kitchen. If you really do use it as your primary residence, you can take a homeowner tax deduction that will greatly reduce what you owe. In this way, your RV purchase can be a sound investment. Not only will you have endless hours of camping fun, but you may be able to deduct the interest you paid on a loan to buy the RV.

Using an RV for Business Purposes

Many people use an RV for business purposes, like mobile pet-grooming or a traveling food truck. Be aware that a personal RV Insurance plan will not cover you for these types of ventures. But you can use an RV to make money. If in fact that is your end goal, then using an RV for business may be a great investment. It might even be cheaper than renting a more traditional physical space. This overhead will also likely be a write-off for your business.

Can I Insure an RV for Business Purposes?

Remember that mixed use of RVs is impossible to insure in most cases. For instance, people profiting off renting out their RVs are playing with fire when it comes to suffering losses. If a renter is using your RV and gets into an accident, you may not be covered by your personal RV Insurance policy. In fact, more often than not, you’re not covered. For more information about coverage, contact a trusted QRV Insurance Specialist: (866) 501-7335. If you’re serious about using your RV for business purposes, call an AIS Business Specialist at (866) 570-7335.

The information in this article is obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements. It should not replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. Such policy will be governed by the language contained therein, and no warranty or appropriateness for a specific purpose is expressed or implied.