Pros and cons of renting out your van
We’ve all seen it on the news…. people making extra cash by renting out their caravan. But is it something that might be right for you? We talk you through the pros and cons – and associated considerations – of renting out your van.
Pros:
- An obvious one…. the extra $$ for not really having to do too much.
- Not having to store your van on your premises or in storage – leaving you much more room!
- If you list your van through sites such as Camplify, your fees include insurance cover, bond payments and vetting controls for any potential hirers. But please check the details of their policy to find out exactly what it covers and ensure that it suits your needs.
- You may be able to claim deductions on any expenses associated with hiring your van – however, make sure you speak to your accountant to discuss your individual circumstances!
- You can still use your van whenever you want to – you simply make those dates unavailable on the hire company website.
- Are you looking for short- or long-term rentals? At the moment, we are seeing insurance companies hiring out vans for their customers who have lost their homes due to floods. So, there are opportunities for guaranteed longer term rentals.
Cons:
Practicalities
- Are you comfortable having strangers sleep in your bed, use your bathroom, put their smelly feet on your lounge?
- Will you be providing all of the kitchen equipment, bedding, outdoor equipment such as tables and chairs? And if so, how are you going to manage the cleaning? What about the additional wear and tear these will incur?
- In the event of an insurance claim, depending on the damage, your van may be out of action for some months. Are you comfortable with a reduction in income during this downtime?
- You’ll have to liaise with customers for handovers and drop offs – are you happy to do so?
Financial
- Depending on your income, you may be required to pay tax on your earnings
- Other things you need to consider are:
- Your current taxable income and the implications to any tax payable by you for earning extra income
- Centrelink payments – given that all income is captured by Centrelink, be mindful that extra income may affect your payments
- Whether you will need an ABN or not – if you are operating van rentals as a business, you may need to be registered! But again, please speak to your accountant about whether this applies to your particular circumstances
- Other things you need to consider are:
When things go wrong
- While we like to think that most people will treat your van like you would, the reality is that we all have varying levels of care and cleanliness. There is a strong likelihood that, your van may be damaged or left in a less than ideal state. If you are using a rental platform, chances are a bond may be charged that can cover any bad behaviour. Additionally, their insurance should cover any damage. But do you want to deal with the hassle?
- And probably the biggest consideration of them all!! If your van is new, many manufacturers state that their warranty is void if the van is rented out or purchased for commercial use. Additionally, while your van might be covered by the insurance through your rental platform, the policy may not cover any claims considered to be a warranty issue. Also, regular caravan insurance policies generally do not cover you if you are renting it out. What does this all mean? If you find a defect, and you are hiring out your van, you may have to pay for the repairs yourself. And depending on the type of defect it is, it may be quite costly!
Renting your van out to make some extra cash may sound like a great idea. But make sure you have considered all of the potential aspects to making this decision. It’s not for everyone. As long as you go into it with open eyes, then there are some great opportunities around to earn some extra cash.