LaVell Riddle owns six cars that he rents out to earn extra income. sydney ledge
Turo is a car-sharing app that allows people to rent their cars to others for a daily rate.
Insider talked to five Turo hosts about the best and worst parts of renting out their cars.
Accidents are bound to happen, so Turo offers roadside assistance and covers up to $200,000 in damages.
If you’ve ever imagined yourself cruising down the Pacific Coast Highway in a convertible Ferrari, there’s an app for that.
For $423 a day, you can rent a bright red Ferrari and drive from Malibu to Santa Barbara on the car-sharing app Turo.
Turo allows people to rent out their cars to customers at a daily rate. Renters range from families looking for affordable SUVs for road trips to vacationers who want to drive to their hotel in luxurious sports cars. Some hosts rent as a side hustle to earn passive income, while others operate full-time businesses.
While many Touro hosts see a business opportunity, there can be downsides to renting out your car to strangers.
You can start earning passive income on Turo by renting your car already
Natalia Zorina is a Touro Host based in Miami. Natalia Zorina
To get an idea of what the process is like, many tour hosts start by renting their own private vehicles. Zorina rented her family car, a Porsche Cayenne, for the first time for the weekend in Miami. It provided him with passive side income while he figured out how the business worked.
“I am very impressed by how people appreciate that they can use the vehicle and at the same time, it is an income,” she said. “After the first car, I was like, ‘Oh, wow, this really works.’”
From there, he bought more cars to rent every year, and in 2021, he got his first investor. Last year, his fleet of 69 cars earned him an income of $922,225.
But renting your own private car is not always convenient
Keemsha Whitmore is a Touro Host based in Arizona. camesha whitmore
While it is the easiest and cheapest method, renting out your vehicle comes with trade-offs. Camisha Whitmore kicks off his Touro side hustle in 2021 by leasing his Range Rover in Phoenix.
Because it was his only car at the time, the first month came with some lifestyle changes.
“I was getting bookings left and right so I never had a car,” she said. “I was taking Lyfts everywhere and would have to get DoorDash to get food.”
Last year, Whitmore earned $76,620 in passive income from his seven cars. Overall, he doesn’t mind the inconvenience as most of the things he needs are within walking distance from his house.
“But if I ever need a car for an important event, I have enough time to block it off my calendar,” she said.
David Ruvalcaba and Valle Diaz, two more Turo hosts, recommend renting a secondary car if you rely on your primary car often. That way, you don’t miss a booking when you need to drive it.
“If something happens and you need the car, you’ll lose a lot of potential money,” Diaz said.
With Multiple Cars, It’s Not Passive Income Anymore
LaVell Riddle is a Touro Host based in Detroit. sydney ledge
The larger you scale your Touro operation, the more work is required to maintain, clean and track vehicles – and communicate with renters.
Riddle became a Toro host in 2021 and earned $72,020 in income last year. Most of Paheli’s customers rent out their cars for multiple days, so he is making money when he is not physically working.
“However, it is not inactive,” he said. “Once the vehicle is back, I’m totally on deck. I’m going to make sure there’s no damage and the car is in reasonable working condition, it gets washed and the inside is well Get clean.”
To keep up with all her bookings, Zorina has hired three employees who help her manage listings, car maintenance and customer service.
More cars come with more financial risk
Vale Diaz and David Ruvalcaba are Touro Hosts based in Utah. Dawa Marketing
As is the case with any business, there is considerable risk involved. That’s why Ruvalcaba and Diaz started hiring on the app as a side hustle while running their startup, Dava Marketing.
“Whenever we try these new projects, we try small and if it makes sense we start with a larger scale,” Ruvalcaba said.
Together, they have rented 16 cars on Toro, including five Teslas. Last year, he scaled back and sold four cars to reduce the risk. While they are based in Utah, they also outsource some of their cars to a team in Denver.
Ruvalcaba advised the hosts not to buy cars beyond their capacity as the bad months were to come.
“If we didn’t have an alternative way to pay, we wouldn’t have bought Tesla and taken the loan,” he said. “There were months when we simply didn’t pay back the money for the loan, even with all the cars.”
Profit varies depending on your region and customers
One of Whitmore’s cars, a Range Rover. Camisha Whitmore
Each Touro host can set their own prices based on their target customers, car type and demand in their area. Rates are also subject to change depending on the season. For example, Zorina lowers its prices on rainy days because most of its cars are convertibles.
Riddle owns six cars including Jeep Compass, Kia Sportage and Honda HR-V. He calls these types of cars “bread-and-butter” vehicles because they aren’t luxurious, have four-wheel drive, and cater to working people.
In Detroit, Riddle bases its prices on the school schedule. Business slows when kids go back to school, so he sets his prices between $45 and $60 a day. During the busy season, its weekday rates range between $55 and $75.
Whitmore recommends new hosts use Turo’s pricing insights until they become familiar with their market.
“They will compare all the cars in your area that are similar to yours and tell you the going rate,” she said. “For people who are new and don’t know how to price their cars, this is a really great tool.”
There are chances of accident and theft.
A tree branch fell on one of Ruvalcaba and Diaz’s cars while it was being rented. david ruvalcaba
For the first year, Ruvalcaba and Diaz were fortunate to have no major incidents with their vehicles. Then one month, one weekend, he had two accidents.
Diaz was on vacation in Hawaii when he discovered that one of his Hyundai cars had been completely wrecked.
“The tenant who was driving it hit the rear and then hit the person in front of him,” Diaz said.
The next day, a tenant had parked his Nissan Versa next to a tree and a branch fell on the car.
“We have three cars in total and two cars were stolen,” Ruvalcaba said.
They usually unlock their cars a few hours before the renter arrives and leave the keys inside, but this can sometimes lead to theft.
“We opened it very quickly and a homeless guy was playing with the handle of the car, opened it, and got out of the car,” he said.
But Turo has roadside assistance and a security department for incidents like this.
The interior of one of Whitmore’s cars. Kemesha Whitmore
Whitmore had close contact with a renter who did not return his car several days after his booking had expired. The tenant initially told Whitmore that her tire was punctured, then stopped responding to her messages.
“I have tracking devices in all my cars,” she said. “So I followed him for the next two or three days, seeing where he was going, and I knew what hotel he was staying at.”
Turo’s security department worked with Whitmore to send notifications to the renter to return the vehicle.
“So we can sit back while they do all the work,” she said. “Once they got the notification from Turo that they were going to be involved with law enforcement, they returned my car.”
Toro also has 24/7 roadside assistance available for renters and hosts in case of emergencies.
Touro offers protection package to cover damages
One of Ruvalcaba’s and Díaz’s cars was damaged in the collision. david ruvalcaba
According to Turo’s website, hosts are covered for up to $750,000 in liability insurance and are required to choose one of Turo’s three protection plans.
The plans are based on the total amount the host earns in rent. On the highest coverage plan, hosts earn 60% of their rental fee, pay no deductible, and Touro pays all eligible damage costs up to $200,000. On the lowest coverage plan, hosts earn 90% of their rental fee and pay a $2,500 deductible, then after the deductible, Turo pays for eligible damages.
Ruvalcaba and Diaz chose the plan with the lowest coverage, which comes with more risk but pays them more money on each trip.
“Our deductible is only $2,500 and when your car is totaled it’s not a lot because you pay back so much,” Diaz said. For example, he said he bought a Nissan Versa for $8,000 and after it was damaged, Turo reimbursed him $13,490.
“Not only did we rent it out for a year and make money, but we paid more than we bought the car, which helped turn a profit even more,” he said.
To be eligible for reimbursement, hosts must report damage within 24 hours after the trip ends and take clear photos of the vehicle’s condition before and after the trip.
Lots of good customer experiences too
Natalia Zorina rents a fleet of 69 vehicles, including several sports cars. Natalia Zorina
Not only has Touro become a thriving business for Zorina, it’s also a way for her to network with interesting people who rent her cars.
“I meet such amazing people through this app, like business people and famous people,” she said. “I actually communicate with a lot of past guests and we collaborate sometimes.”
Whitmore loves hearing stories from her clients’ travels.
“To know that your cars are being used for weddings, proposals, graduations and major celebrations – it’s amazing,” she said.
And many people honeymoon with their cars, he added.
“They’re like, ‘We just got married and we want a nice car to ride off into the sunset with.’”
Read the original article on Business Insider