Recreational Vehicle Management Program
| OWNER USE The owner has the opportunity of reserving his/her RV in any season. The amount of use in high or mid season will reduce the rental revenue proportionately. Use of one's own motor home is at no charge. A nominal amount is charged as a preparation fee, that includes a supple of propane/toilet chemicals, etc. ($55.) Owners inspecting their own unit will be required to pay a nominal amount of sales tax for the daily use. TAX FREE INCOME The rental revenue is based on the following criteria: The Tour Wholesalers' confidential rates, using 160 km., per day, and premier fleet. The net rate is the amount after the wholesaler commission of 25% is discounted. The following example is based on a 27-28 foot RV:
PST The 8% provincial sales tax is not charged on the sale of an RV when a management agreement is signed. Motor Home Travel Canada will remit sales tax to the Treasurer of Ontario on you behalf. GST The 7% GST will be charged to the purchaser at time of sale. The purchaser is required to register as a GST registrant. On the first return, the purchaser may show the amount paid for GST as an input tax credit, which will be refunded by Revenue Canada. The 60% rental fee charged to the management company by the purchaser will incur 7% GST. The purchaser is responsible to remit the GST to Revenue Canada. OPERATIONAL RESPONSIBILITIES For a fee equivalent to 40% of the daily/kilometre rate, Motor Home Travel Canada is responsible for the following: marketing tour operators, movie production companies, and local renters. We also are responsible for invoicing, receivable collections, billings and providing customer vouchers using our sophisticated computerized reservation system. We arrange the transfer of our worldwide clients from an airport area hotel or the airport. We provide demonstrations on the use of a motor home to our clients in their language. Our professional service and maintenance staff complete thorough vehicle check-in and out; cleaning of the RV; filling of the propane tanks; and the emptying of holding tanks. A documented 68 point turn-around inspection is completed for each and every rental. Among our many other responsibilities we include: storage for the RV, advertising and providing replacement parts and accessories. |
OWNER
RESPONSIBILITIES The owner will invoice Motor Home Travel Canada for 60% of the daily/kilometer rate collected (calculations and an invoice will be supplied by MHT), plus applicable GST. MHT will pay owner this amount on the 15th of the month following the month the transactions occurred. The owner is responsible for any bank payments if the RV is financed, license plates and their renewals and insurance. The owner does not share in fees charged to the renter for convenience kits, tv rentals, prep fees, or cdw/vip insurance, etc. INCOME TAX CONSIDERATIONS Normally, income earned from the rental of an RV is added to taxable income. Each owner is permitted to reduce taxable income from rental of the RV, down to zero, by the use of depreciation. This depreciation is calculated at 30% per year on a declining balance basis with half the allowable rate in the year of acquisition. The net result is that all rental income will be free from income tax after allowing for deductible expenses such as insurance, interest, license fees, and depreciation. REPAIRS AND MAINTENANCE The cost of repairs and maintenance is deducted from owner income. However, an RV is covered by a manufacturers warranty for 3 years during which Motor Home Travel Canada will arrange for any warranty repairs that are required. Most owners choose the optional full coverage warranty, which can protect your investment up to 7 years or 120,000 kms. Any damage repairs caused by renters will be repaired by MHT and billed to the insurance company. Motor Home Travel Canada or the renter will be fully responsible for the deductible portion, not the owner of the motor home. The following illustrates a typical sale and proposed cash flow based on the purchase of a MHC28 motor home:
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