Many people consider the RV lifestyle, but for those who want an investment return, renting out an RV can be much more lucrative. For those with RVs in enviable locations, rent out an RV on Airbnb, VRBO, or similar platforms that offer great locations for guests who would like to stay for a few months. However, a prospective RV rental landlord needs a clear understanding of regulations, cost segregation benefits, tax implications, and best practices for optimizing profitability. This guide breaks down the key steps, tax strategies, and operational considerations for setting up a long-term RV rental business.
What qualifies as a long-term RV rental?
A long-term RV rental typically refers to leasing an RV for an extended period, usually 30 days or more. This setup differs from short-term vacation rentals as it requires lease agreements, utility considerations, and a different approach to tenant management.
Who benefits from long-term RV rentals?
Long-term RV rentals attract a diverse range of tenants looking for affordability, flexibility, and mobility. From digital nomads to retirees, these rentals offer a practical housing solution for those who need temporary or alternative living arrangements. Below are some of the key groups that benefit from long-term RV rentals.
| Ideal Tenants for Long-Term RV Rentals |
|---|
| Digital nomads seeking affordable housing |
| Retirees looking for flexible living arrangements |
| Temporary workers or traveling professionals |
| People transitioning between permanent homes |
Zoning and legal considerations
Before setting up an RV as a rental, owners must verify zoning laws, state and county regulations, and homeowners’ association (HOA) rules. Some areas prohibit full-time RV living, while others allow it with specific permits.
Where can you legally rent out an RV for long-term stays?
Yes, in general, you can but it’s important to check local regulations. RV rentals offer a flexible and cost-effective alternative to traditional housing, but state laws vary significantly. While some states allow long-term RV rentals on residential property with minimal restrictions, others impose strict zoning laws or outright prohibit them.
The map below provides a state-by-state breakdown of where long-term RV rentals are permitted (1) and where they are not permitted (0) based on general state regulations.
This map provides a general overview, but always verify the details, as some states may have specific counties or municipalities with restrictions or additional requirements. For instance, while a state may generally permit long-term RV rentals, certain cities within that state might have ordinances prohibiting or limiting them. Always consult local zoning laws and regulations before setting up a long-term RV rental.
Main benefits of long-term RV rentals
Long-term RV rentals offer a unique opportunity for property owners and investors looking for alternative income streams. Beyond the flexibility and affordability they provide tenants, they also come with tax advantages, lower turnover, and reduced maintenance costs. Here’s a detailed breakdown of why long-term RV rentals can be a profitable and strategic investment.
1. High demand with lower turnover
One of the biggest advantages of long-term RV rentals is their stability compared to short-term vacation rentals. Instead of dealing with frequent check-ins, cleanings, and potential vacancies, landlords benefit from consistent, long-term occupancy.
Why is demand rising for long-term RV rentals?
- Housing affordability crisis: Many individuals are turning to RV living as a cost-effective alternative to traditional housing.
- Digital nomads & remote workers: As remote work becomes the norm, more people are seeking flexible, mobile housing options.
- Temporary housing needs: Construction workers, travel nurses, and people relocating for work often prefer long-term RV rentals over apartments or hotels.
- Retirees & downsizers: Many retirees are opting for RV living as a simpler, more affordable lifestyle.
| Advantage | Benefit |
|---|---|
| Fewer vacancies | Since tenants stay for months or years, landlords avoid the income gaps of short-term rentals. |
| Less marketing & administrative work | Owners don’t need to constantly list and relist the RV, respond to inquiries, or negotiate terms. |
| Reduced wear and tear | Frequent short-term stays can cause excessive wear on an RV, while long-term tenants typically take better care of the space. |
| Steady rental income | Unlike vacation rentals that may have off-seasons, long-term rentals provide reliable, month-to-month revenue. |
2. Tax advantages with depreciation and more
Tax benefits make long-term RV rentals a financially attractive investment. Property owners can take advantage of depreciation and cost segregation to lower taxable income, accelerating the recovery of their investment costs.
How depreciation works for RV rentals
- The IRS allows depreciation of RVs used for rental income over 5 to 7 years instead of the 27.5 years typically applied to residential real estate.
- Cost segregation studies help investors break down RV components, identifying assets that depreciate at faster rates, leading to higher tax deductions in the early years.
- If the RV is parked on owned land with added infrastructure (e.g., hookups, driveways, decks), those improvements qualify for separate depreciation schedules, further increasing tax benefits.
Cost segregation benefits
A cost segregation study breaks down an RV rental’s components into different depreciation categories:
| Component | Depreciation Period |
|---|---|
| RV vehicle structure | 5-7 years |
| Interior appliances & fixtures | 5 years |
| Electrical & plumbing systems | 15 years |
| Land improvements (hookups, driveways) | 15 years |
How do real RV owners see their RVs as an investment? We spoke to Jeffery Maitre, of RV Properly, an expert on RVs and travel.
“Turning your RV into a mobile business is a growing trend. From pet grooming and pop-up salons to boutiques and traveling bars, entrepreneurs are getting creative with their RVs. Not only can you earn income and move where the demand is, but you may also qualify for tax deductions related to your “mobile office.” If you have the flexibility, living in your RV full-time or even part-time can be a major cost-of-living reduction and, effectively, turning it into a lifestyle investment. With skyrocketing real estate prices and rental shortages, many people are opting for RV living to reduce expenses and generate free cash. Considering the average one-bedroom apartment in Florida costs over $1,000 a month, the savings can really add up.
Real-life example: Depreciation model for an RV rental
Imagine purchasing a Class A RV for $70,000 and setting it up on a leased lot. To enhance the rental experience, you invest $15,000 in improvements, including electrical hookups, a concrete parking pad, and a water system.
The goal is to maximize tax savings using depreciation and cost segregation.
Step 1: Breaking down the assets
| Asset | Cost | Depreciation Period |
|---|---|---|
| RV vehicle structure | $70,000 | 5-7 years |
| Interior appliances & fixtures | $5,000 | 5 years |
| Electrical & plumbing systems | $7,000 | 15 years |
| Land improvements (hookups, driveways) | $8,000 | 15 years |
🔹 Total Investment: $85,000
Step 2: Calculating annual depreciation
Depreciation allows RV rental owners to reduce taxable income by deducting a portion of their investment each year. The chart below illustrates how different components of an RV rental depreciate annually using the straight-line depreciation method, spreading costs over their IRS-designated lifespan.
Final tax impact
If the RV rental generates $30,000 per year in revenue, applying a $12,000 annual depreciation deduction means taxes are only owed on $18,000 of income instead of the full $30,000.
Additional tax benefits
- Operating expenses (maintenance, insurance, property management) can be written off.
- Section 179 deductions may allow full or partial depreciation in the first year.
- If structured properly, RV rental owners may qualify for real estate professional tax benefits if they actively manage multiple units.
3. Flexible investment strategy
Unlike traditional real estate investments that require purchasing homes or apartment buildings, RV rentals offer multiple setup options. Investors can choose stationary or mobile rental strategies based on location, financing, and personal preferences.
RV rental placement options
| Option | Pros | Cons |
|---|---|---|
| Stationary RV rental on private land | Control over rental terms can add infrastructure for more tax benefits | Requires proper zoning and permits |
| RV park long-term lease | Low setup costs, utilities included, access to amenities | Monthly lease fees cut into profits |
| Tenant places RV on their land | No land investment is needed, the tenant handles the utilities | Less control over rental conditions |
Flexible income streams
- Residential RV rentals – Set up as full-time residences on private land, RV parks, or tiny home communities.
- Commercial RV rentals – Used for mobile offices, construction worker housing, or disaster relief housing, often leading to higher rental income.
- Rent-to-own programs – Tenants can work towards ownership, reducing landlord maintenance responsibilities over time.
Investment scalability
Investment scalability offers RV rental owners a cost-effective way to grow their portfolio without the high expenses of traditional real estate. Instead of purchasing costly properties, owners can expand by adding multiple RVs over time, increasing rental income while keeping initial investments lower. Some investors choose to place RVs on leased land rather than buying property outright, further reducing upfront costs and financial risk. Additionally, partnership opportunities with RV parks and tiny home communities provide a way to generate passive income with minimal management responsibilities, making long-term RV rentals a flexible and scalable investment strategy.
4. Lower operating costs compared to traditional rentals
One of the biggest advantages of renting out an RV is that operating costs are often lower than a traditional rental property.
Key cost advantages
- No major structural repairs – Unlike houses, RVs don’t have roofs, foundations, or HVAC systems that require major overhauls.
- Lower property taxes – Since RVs are considered personal property in most states, they often avoid high real estate taxes.
- No mortgage required – Unlike traditional real estate investments, many RVs can be purchased outright or financed through lower-cost alternatives.
5. Easier entry into real estate investing
For new investors who want to generate rental income without purchasing a full home, RV rentals provide a low-cost, high-yield entry into real estate.
Why RV rentals are beginner-friendly?
- Lower purchase price: A fully-equipped rental RV can cost between $20,000 – $80,000, far lower than buying a house.
- Faster setup: RV rentals can be operational within weeks, compared to months or years for building or renovating a home.
- Flexible exit strategy: If an investor no longer wants to rent their RV, they can sell it easily compared to liquidating a home.
Maximizing the potential of long-term RV rentals
Mobile homes and RVs are generally not seen as investment opportunities, but done correctly, they can be incredibly shrewd investment decisions. The key is location as the upfront capital required for an RV is generally not anything close to the price of an actual physical structure. Long-term RV rentals can offer a flexible, cost-effective way to generate steady income while taking advantage of significant tax benefits. With lower operating costs, a growing market of tenants, and the ability to scale investments over time, this rental strategy can be a smart alternative to traditional real estate. Whether setting up an RV on private land, leasing space in an RV park, or creating a small rental fleet, understanding zoning laws, depreciation strategies, and financing options is essential for long-term success.
FAQ
Can you get a mortgage for an RV rental business?
Traditional mortgages are not available for RVs since they are classified as personal property rather than real estate. However, investors can explore alternative financing options such as personal loans, RV loans, or business loans. Some lenders offer commercial financing for rental RVs, but the terms and interest rates may differ from traditional property loans.
What insurance do you need for a long-term RV rental?
Long-term RV rentals require specialized insurance that covers both the vehicle and rental liability. Standard auto or homeowner’s insurance policies may not provide adequate protection, so landlords should consider commercial RV rental insurance. This type of policy typically includes coverage for property damage, liability claims, and potential loss of rental income.
How do you handle utilities for a stationary RV rental?
For stationary RV rentals, utilities such as electricity, water, and sewage must be properly set up and billed. Some landlords include these costs in the monthly rent, while others require tenants to pay separately. If the RV is on private land, installing separate utility meters or working with an RV park that offers long-term hookups can simplify the process.
