RV rental for cash flow and depreciation?

Question

I am considering buying a 5th wheel RV in the name of my business so I can use apply accelerated depreciation and get 100% depreciation on year 1, which I want to offset my wholesaling income for the year. I consulted this with accountant and he says as long it is a 100% business use is a valid opportunity from the tax perspective. The idea is to park it and pay rent for the lot on a RV resort in Florida that already allows airbnb rentals. Once set up it will be available on all short term rentals websites, rv share and doorsy.

Does anyone here know where can I get the best financing for this opportunity?
Anyoned done something similar? what else am I missing?

Any feedback is appreciated. Thanks.

Robert Gilstrap · Answer

Dude, you just blew my mind on several fronts!  Tax savings to offset other income through accelerated depreciation PLUS an RV as an Airbnb!

Nancy Bachety · Answer

@Freddy Poveda I’ve seen an RV park in Salt Springs, FL and St. Augustine, FL (probably others exist too) where this strategy is applied. Fifth wheels purchased and planted on the owner’s purchased lot and listed on Airbnb ( maybe other platforms too, not sure). I’ve seen a couple listed for sale. Maybe you can dig deeper and make contact with an actual owner at one of these resorts through one of those listing sites. Nothing to move, permitted at the RV park, tax benefits as you described. Interesting concept but as @Paul Sandhu alluded to, maybe its success is dependent on location and other factors not mentioned.

Paul Sandhu · Answer

Sorry mayng, I tried that same route and it didn't work.  Ended up giving a tenant a commission for selling it for me.

Luke Carl · Answer

@Freddy Poveda I’ve got a 36’ class A. It is our mobile office. We also use it for personal use. We keep track if what miles are for what purpose. It was a lot of money. Do the write offs pay for it? Hell no. I also would not consider renting it. The wear and tear and insurance involved is not worth it to us personally. It moves us between our primary residences and has its own parking spots at each of them.

Sounds like you’re literally looking for an alternative to a SFH to rent and would never actually use it. I think this would get old real quick. Why not just buy the SFH? I think you’re over thinking.

Yonah Weiss · Answer

@Freddy Poveda

I have had clients that have acquired RV Parks and taken the 100% bonus depreciation, which can be extensive. It's a great option.

As far as the financing is concerned, I have heard it is very difficult to get financing on, but I am happy to put you in touch with those clients who did it.

Freddy Poveda · Answer

Thanks for the feedback. I would be a 5th wheel stationed on a fixed lot at least for a season paying  monthly rent on that lot near the beach. This would remove from the equation the motor part of the RV which based on my research can be an issue down the road, plus on the road liablity. I would not want to have to explain each time to renters how to move it, that is why a fixed location is the goal. The accelerated depreciation is actually has name:  bonus depreciation. It can be done with  assets that depreciate in less than 20 years. All things equal a single family home would be better for the resale value but it would not qualified. The RV does.

Nathan Gesner · Answer

I have some friends that tried this a couple years ago. They applied for a camping permit and parked their trailer in a camp sites near Yellowstone. I think each permit was good for a week and then the camper had to be moved to the next permitted site. They rented it through Outdoorsy.com or some similar website. Tenants would book their stay, host would make sure the camper was in the spot and ready to go, guest drives up and stays. When the guest left, he would clean and move it to the next spot or whatever. I have no idea how much they earned but I seem to remember he only had about ten guests over the entire summer, so it probably wasn't a ton. In his case, he had to pay for the camp site in advance to ensure there was a place to book. This means he paid for at least 90 days of campsites but only booked a small portion of those days. When you take into account the cost of the RV and hookups, plus the time involved with moving it around, it doesn't seem to be worth it.

Daniel Green · Answer

Well I'm interested too as I had a similar idea.  I want to put several tiny homes on a property and the rent them out as an AirBnB.  The accelerated depreciation didn't occur to me but I think that would work.  I'm not sure how much folks would pay for an RV park and I also would not be too sure how many RV parks would allow you to STR an RV.  I would post on a RV forum and see what they say about it.

RV rental for cash flow and depreciation?

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