Turo vs VRBO vs AirBnB vs WAKE

We analyzed all of the different sharing platforms to sort out the best return on investment for the entrepreneurs and the hustlers. 

We wanted to know, if I am starting a side hustle, where should I put my money? Should I buy a boat, a car, a house? 

Below we analyzed each one with pros and cons of each.

VRBO/AirBnB

There are thousands of people around the country buying houses and condos to VRBO it… and it’s fantastic. It’s a great way to buy an investment property and make some serious money. 

On the surface, it’s a no-brainer… But, it costs a lot of money to get started. Buying an investment property can require a 10-20% downpayment which could amount to $25,000 to $100,000. 

Pros:

• Cash flow can be significantly higher than the mortgage creating a profitable business
• Appreciation… you could buy a house today for $450,000 that could be worth $500,000 next year. The appreciation alone makes it compelling. 
• Financing is readily available
• You can rent a house year around in certain climates

Cons:

• Downpayments on investment properties could be 10-20% which amounts to $25,000 to $100,000 depending on property costs. 
• Furnishing the property could cost 25,000 to $50,000 out of pocket. 
• Light remodeling could be needed. Surfaces, exterior improvements, etc. All requiring out of pocket investment. 
• Most properties are seasonal, which means rentals are primarily in 3-4 months of the year. The house would be mostly vacant for most of the year. 
• Management could be costly. If you manage it yourself, it takes a lot of time to deal with renters, cleaners, home maintenance, repairs, etc. If you pay someone to manage, it could cost 30% of the gross rent. Instead of collecting $1,000 in rent, after management cost you could be closer to $700

The numbers:

• Purchase a house for $450,000
• Downpayment of $45,000
• Monthly payment of $2,622
• Daily rent of $275
• Monthly rent potential $8,250
• 4 months at 80% occupancy = $6,600/26,400
• 8 months at 40% occupancy = $3,300
• Total rent per year $52,800
• Minus Management fees (optional)  = $15,840
• Subtotal = $36,960
• Mortgage cost = $31,464
• Net Profit = $5,496 – $21,336 (self managed)
• 115 Daily rentals to Break even. 

TURO

I’m a big fan of Turo, we’ve been renting on Turo for years. Since it first launched. It’s a great service and I have had almost only great experiences. 1 bad, at least 15 good. But what do the numbers look like? 

Pros

• You can start with your own car.
• Easy to manage
• Easy to buy cars
• Easy to store cars
• Maintenance is pretty straightforward
• A simple formula for best car types (white minivan) and prices
• Huge market need. People come to your city every day and rent cars. 
• Good ROI. 
• If you can duplicate the model, it could be very profitable and scalable. I know people that own several cars and can compound their earnings. 

Cons:

• Low revenue per car per day/week/year. 
• A 3-day rental would gross $180. Seems like a lot of work for $180 gross.
• Hassle with repairs, accidents, cleaning. This goes with most rentals, so it’s not a huge con.  

The numbers:

• Purchase a house for $35,000
• Downpayment of $3,500
• Monthly payment of $537
• Daily rent of $60
• Monthly rent potential $1,800
• 4 months at 80% occupancy = $1,440
• 8 months at 40% occupancy = $720
• Total rent per year $11,520
• Minus Management fees (optional)  = $0
• Subtotal = $11,520
• Loan cost = $6,444
• Net Profit = $5,076/car per year. 
• 107 daily rentals to break even. 

If you are running a Turo business in certain towns, the numbers could be much different. Phoenix as an example could see 8 months of 80% occupancy, whereas Seattle might be 4 months. 

One way to consider this… say you want to own a convertible, but you know you won’t use it much. This is a great way to have an extra toy that someone else pays for. Maybe you get a cool jeep, or a mini van that your family could use sometimes but you don’t need all of the time. This is a great way to have the extra toys you want while allowing someone else to pay for them through a rental marketplace. 

Spinlister

This is a cool service… allows renters to grab a bike in a new city so they don’t have to ship, etc. Or, it allows bike renters to try a new type of bike that they aren’t quite ready to purchase. Rent a $3,500 road bike for $200 for the week to see if you like it before buying one. Or rent it for the week of vacation so you don’t have to ship your own. It’s a very cool service. 

Pros

• You can start with your own bike.
• Easy to manage
• Easy to buy bikes if you want to scale
• Easy to store bike
• Maintenance is pretty straightforward and inexpensive
• Good ROI. 
• Low investment
• Good way to spread your love of biking to others!

Cons:

• Low revenue per bike per day/week/year. 
• A 7-day rental would gross $200. Seems like a lot of work for $200 gross.

The numbers:

• Purchase a bike for $3,500
• Monthly payment of $0
• Weekly rent of $200
• Monthly rent potential $800
• 4 months at 80% occupancy = $640
• 8 months at 40% occupancy = $320
• Total rent per year $5,120
• Minus Management fees (optional)  = $0
• Subtotal = $5,120
• Loan cost = $0
• Net Profit = $5,120/bike per year. 

I’m really not sure you could get to 80% occupancy, so these numbers may be off and pretty optimistic. I do think this is a great side hustle. There isn’t a lot of money in it, but it is a GREAT way to use your resources wisely. This may justify buying a new beautiful mountain bike because after a year of renting, it would be FREE…  Or maybe it justifies buying a sweet new triathalon bike because after a season of renting it, you have a FREE bike. I love this model!  

The other thing about Spinlister… $5,120 per year is not awesome… but it would be very very easy to multiply this. It is so simple to buy and store bikes, that you could very easily get 20-50 bikes going. Now imagine, you own 20 bikes and you are making 100K doing almost nothing. Not. Too. Shabby. 

WAKE

I’ll give you two break downs below. One for a boat, another for a jet ski. But this can apply to SUP, sail boats, yachts… whatever it is that you want to rent. 

Wakesurf Boat

Pros

• You can start with your own boat.
• This is good justification to buy a boat.
• Rather than a boat sitting 95% of the time, rent it out!
• Revenue per hour/day is very high
• Easily cover year costs of ownership. 
• Easy to buy boats if you want to scale
• Maintenance is pretty straightforward
• Best ROI compared to other Peer to Peer rentals. 
• Low investment upfront
• Good way to spread your love of watersports to others!

Cons:

• Some people don’t want other people using their boat. It’s their pride and joy. 
• Boats are a little more complicated to store, drive, etc. 

The numbers for a boat:

• Purchase a house for $70,000
• Downpayment of $0-15,000
• Monthly payment of $435
• Hourly rent of $200
• Daily rent (4 – 12 hours) $800 – $2,400
• Monthly rent potential $24,000+
• 4 months at 80% occupancy = $19,200
• 8 months at 0% occupancy = $0
• Total rent per year $38,400
• Minus Management fees (optional)  = $0
• Subtotal = $38,400
• Loan cost = $5,220
• Net Profit = $33,180/boat per year. 

The numbers for a JetSki:

• Purchase a house for $10,000
• Downpayment of $1,000
• Monthly payment of $188
• Hourly rent of $100
• Daily rent (4 – 12 hours) $400-800
• Monthly rent potential $12,000+
• 4 months at 80% occupancy = $9,600
• 8 months at 0% occupancy = $0
• Total rent per year $19,200
• Minus Management fees (optional)  = $0
• Subtotal = $19,200
• Loan cost = $2,256
• Net Profit = $16,944/jet ski per year. 

With the Wakesurf boat rental, we have real numbers in our case study post… Last summer in 3 months we had gross rent of $54,000 with a net profit of $48,780 (before moorage, storage, maintenance)

My favorite part about this model is this. 

1. Everyone loves to boat/jetski
2. Everyone wants a boat/jetski
3. Boats are expensive toys
4. It’s hard to justify the expense given busy lives make it hard to use all of the time
5. Boats tend to only be used a couple of days per week (at most) for a couple of months per year. But costs are accumulated all year. 
6. This model allows you to get a beautiful toy to enjoy with friends and family, and let your renters pay for it.

For a little bit of work, you can have a beautiful FREE boat!