Fractional ownership – time-share RVing
How can I use a luxury RV for a few weeks a year?
Jaimie Hall Bruzenak
Out of the 30 million RV enthusiasts, only a few million are full-time RVers. Most have a house and use their RVs for trips or for travel during part of the year. Their RV may sit unused most of the time.
So, why not rent an RV when you need one? For some, renting does not meet their needs. RV rentals are typically low-end coaches. For the person seeking an upscale luxury coach, the only choice has been to purchase it—until recently. Now several companies are offering the opportunity to have the use of a high-end coach for a set number of weeks per year at a big savings off the price of buying one outright.
Fractional ownership has been used for years for planes and yachts and even for condominiums or vacation houses, called time-shares. So why not RVs? For your next trip, you, too, could drive a Prevost or Monoco!
An RV time-share or fractional ownership can be appealing for two reasons. First, you have the use of an RV without the large capital outlay. Second, you can get a larger, more upscale RV than you can with a typical RV rental. If you want to go RVing for only a few weeks of the year, a fractional ownership or time share might be the way to go.
Miguel Edwards thought so. Edwards was vice president of sales and marketing at ShareACoach LLC, a Montana company that offered time shares on Country Coach motor coaches. “Our studies found that the average person buys an RV, uses it for 21 weeks, then sells it,” Edwards said, pointing out that if you purchase a Country Coach outright, your half-million dollar investment will take a big hit in depreciation when you decide to sell. According to Bob Gummersall, chief technical officer at RVers Online, as well as other analysts, new RVs typically lose 20 percent to 30 percent of their value the moment you drive off the lot.
The typical RV fractional ownership arrangement is set up as a limited liability company (LLC), usually for a three- or five-year period. You purchase one or more shares in a particular coach and have the use of it for specified weeks. At the end of the time period, the RV is sold and the proceeds are split among the owners. The LLC is designed to limit personal liability, so you are protected in the event that one of the other owners has an accident.
How it works
Once you decide what type of RV you want to own, you contact one of the companies that handles these. You typically purchase one-twelfth to one-quarter interest, putting only a small deposit down until enough interested purchasers are located. Then your share is due. A partnership or LLC is formed. The company takes care of all paperwork, including insurance.
A quarter-share entitles you to 12 weeks of use, while a one-twelfth share equals five weeks. You can reserve time in advance. The company takes care of all maintenance and prepping the RV for each use. They provide 24-hour emergency roadside assistance, training to drive and operate the systems, and usually concierge service. For an additional fee, you can have the kitchen stocked or have the RV delivered to your residence or near your travel destination.
One company, CoachShare, advertises that they make sure everything is perfect for you, right down to the last detail. “We monogram your sheets and towels, set them up in the coach before each trip and launder them afterwards. Your coach includes upscale amenities such as satellite radio, satellite TV, home theater system with surround sound, fine dinnerware, glassware, cookware, barbecue grill, outdoor furniture, and more. We can even stock your refrigerator with your favorite foods and beverages to make your trip more enjoyable.”
Typically, a program runs three to five years. At the end of that time, the RV is sold and proceeds distributed among the owners. At that time you can reinvest your share in a similar or upgraded model or cash out. You can sell or trade your shares during the course of the program, too.
It may be financially risky
Two of the three companies listed in previous articles no longer have active websites; presumably, they have gone out of business.
The Orlando Sentinel (Fla.) reported in January 2007 that another company, Universal Luxury Coaches LLC, which had also offered fractional sales, had gone out of business and that 172 investors had lost money in a scheme that left two executives in the company facing fraud and racketeering charges. Universal Luxury Coaches LLC, which offered fractional sales, went under and the investors lost their money (read the article). Two executives face fraud and racketeering charges.
Be sure to investigate carefully before making any investment and consider waiting until this industry has more of a track record before participating.
Get a lawyer
Check out the company carefully. Make sure it is financially solid. Involve a lawyer to make sure that purchases made by individuals remain segregated from those assigned to other assets. Also, make sure that the structure of the sale is such that creditors for the company selling the shares can’t put a lien on your asset if the seller gets into financial trouble.
The ShareACoach story
ShareACoach, which no longer has an active website, worked a little differently. Instead of selling fractional ownerships, it sold 10- and 21-week memberships, which Edwards described as true time-shares. Unlike fractional ownership, you were not limited to a particular time period or to a single coach. You could use your weeks all in one year or spread them out over several years. The company had six Country Coaches in its own fleet and had access to additional units, which were similar, through another program.
ShareACoach promised that if you made your reservation for a coach 90 days in advance of your road trip, you would have a coach—guaranteed. Memberships was not cheap. The 10-week membership cost $45,000 and the 21-week membership was $85,000. According to Edwards, this was less than you would pay to rent a similar unit. Plus the coach was delivered to wherever you would like to start your trip and picked up wherever you finished. Moreover, ShareACoach operated as an LLC, assuming most of the operating liability unless you were grossly negligent or disregarded prohibited uses. It was similar to a rental car agency in that respect.
Current fractional ownership companies
I located three companies on the Web offering fractional ownerships at this time:
- Coach Share, one of the companies I mentioned two years ago, is still in operation. It offers two models of Monaco coaches equipped with such amenities as satellite radio, satellite TV, a home theater system with surround sound, fine dinnerware, glassware, cookware, a BBQ grill, outdoor furniture and more. You also get monogrammed sheets and towels set up in the coach before each trip and laundered for you afterwards. Add-on services include stocking your refrigerator with your favorite foods and beverages. Contact the company for pricing.
- My RV Time Share offers part ownership in an RV with up to nine other partners. You pay 10 percent of the cost ($9,900 plus 10 percent of taxes, storage and maintenance costs). In return you will get to use the RV for 10 percent of the time (approximately 30 days a year). You will also get 10 percent vote on what to do and how to manage your RV.
- Coach Quarters offers quarter share ownership or 25 of an available 100 “Occasions,” with Occasions defined as: Average 3 days of use, including travel time to/from home base with Professional Coach Captain and everything you need for a trip.
Before you participate
The checkered histories of some of these fractional-sale companies should serve as a warning: Investigate any fractional-sale or time-share arrangement thoroughly, and have a lawyer review the contract.
- Ask a lot of questions.
- If the company went under before selling all the shares for your unit, what would happen to your investment? This is important since the life of most of these companies appears to be very short.
- Does the company have related businesses in the industry or a partnership with a manufacturer?
- Are there any extra fees? (Most companies have some sort of maintenance fee in addition to the cost of membership or the cost of your shares. ShareACoach waived this fee if you paid the entire price of your membership upfront; otherwise, you paid a monthly maintenance fee until you used up your weeks.)
An alternative: Private coach rentals
I did come across a company, Goss RV that rents luxury RVs that include a private driver! You can also put your luxury RV in their rental pool to recoup some of the costs. Another company, Share My Coach rents out other people’s RVs when they are not using them. Share My Coach also buys, sells and consigns RVs. I have not used these companies nor do I know anyone who has. Do your due diligence before renting.
Jaimie Hall Bruzenak
- Monaco Coaches: CoachShare
- Prevost Coaches: Coach Quarters
- Own a Dream: Part-Time (GoRVTexas.com)