Neat concept! Do something you enjoy and make some $. This post is not meant to tear down your idea, but hopefully to expand the concept. Plus, I'm just curious...

On any business endeavor I question the numbers first. I hopped onto Enterprise's website and found rental rates for three classes of car:

Economy: Weekly $189

Compact: Weekly $199

Intermediate: Weekly $209

** Caveat: I realize rental car rates vary by location somewhat.

I assume you're looking at weekly-ish type rentals, although perhaps some shorter term. These rates are for cars that are maximum 2 years old, but most of which are the current year model.

A $5-$6K car obviously is not going to be as new and will have far fewer of the nice features and perks. My very uneducated guess is your cars will be 5-7 years old?

So why would I pay $150-$200/week to rent your car when I can get a much nicer, newer, trendier, feature-filled car for about $20-$40 per week?

Remember, Americans LOVE their cars...status symbol and all that.

How will you be competing with these folks who offer a much nicer product for almost the same price? What sites did you visit to get your projections and how did they answer these same questions? Did they do more than say, "You can make big $$$!" and then threw out random numbers? Data, stats, industry numbers?

I think when entering any business, step 1 is how will you offer something different than the competition AND convince someone to pay you for it. With real estate, it's fairly easy to answer the first question: location and amenities! There's only one house in location X that has the amenities that your house has. But cars are a commodity: they look and drive the same on the East Coast, West Coast, South West or Mid West...and commodities can be bought in bulk, giving large operators a significant leg up on Mom 'n Pop shops.

I could see maybe if you did some kind of customization...or something "exotic." One thing I tried to do when my wife turned 40 was rent a Corvette to go cruise in for a weekend. Closets place that did anything like that was Kansas City...3.5 hours away! No thanks.

Maybe if you restored and rented vintage Vettes to people like me who are in mid-life/impress-the-wife crises? ;-)

Or other types of classic/sports cars?

I have a friend that rents out specialty trucks. Some for the movie and TV industry, others for contractors. He owns three (three) automotive repair business and can keep his fleet of vehicles going on the cheep. At one point, back in 2003, he had 160 vehicles for rent.

Around 100 were cars used in movies or special occasions. In 2015 he sold his vehicles rental business after hitting his 80th birthday. What did he do with all of his profits? He built a mix use building on a lot of his. Cost $15,000,000. Retail, offices and apartments.

If your doing Turo which is what this sounds like I would make sure you have commercial rental insurance.

My Spidey senses say this would be a disaster. Too many crimes committed with cars and those who would do that would be looking for cars to rent since the cops take cars with drugs in them when drug dealers are caught.

Before you jump in...

1. Study the operation of a company called Rent A Wreck.

2. Study the ins and outs of things like Insurance.

3. Have designated shops help you with maintenance and repairs (mechanical, body and towing), in case you are not available. With 28 rentals, I really doubt that you will be able to take care of a small fleet of cars. So, subbing repairs will cost you.

4. Used cars are expensive to fix, even when you DIY. You could see yourself dipping into your home rental profits more than you'd like.

5. On some makes and models you'll find that parts are just hard or impossible to find, causing loss of time and profits.

Privately, or through a program?

If you do it privately, I'd find out what kind of industry regulations need to be complied with. (Licensing? Insurance? etc. I know you can't sell more than x cars per year without a dealer's license-- what are the rules for renting?)

If you're doing it through a program, like Turo/Zip2Go/Zipcar/etc, I'd look into it and see if its house rules were a good match.

So, for example, with Zipcar or Getaround-- you can rent it by the hour. Do I want to take time out my day to hand off my car and then take it back? It's one thing to hand it off on the 8th and pick it up again on the 15th-- but if someone wants to pick it up at 6 am and drop it back off at 3, does that fit?

Or with Turo. According to one example in a review article, you have the option of picking it up from someone's house for free, or you can pick it up at the airport for $20, or you can have the car's owner deliver it to you for $20. If I'm going to deliver it to someone at a designated spot, whether the airport or somewhere else--- how am I going to get on with my day without bringing a third party in a second vehicle to bring me back home? Likewise, if they choose to pick it up/drop it off at my place, how will they get there/leave? And do I like having people know where I live, if I don't live in a big, anonymous apartment complex?

I rented cars three times last year.

Once was when DH totaled my car when he hit a deer. Insurance paid for us to rent a car for a couple of weeks from Enterprise while we went shopping for a new car. Would insurance cover a Turo rental?

Once was when DH hit a wild pig with the replacement car we'd just bought. :) We dropped off the damaged car at the Toyota place, and then picked up a rental at Enterprise down the street while it was repaired.

The third time was when I took the kids to BWI. We landed around 4 pm, took the free shuttle to the car rental garage, rented a car, and drove off around 5 pm. I brought it back two weeks later at 3 am, dropped it off at the rental garage, took the free shuttle back to the airport, and flew home. (And happened to discover that airport security lines don't open until 7, sigh...)

So, if I was returning a car to a Turo owner, would he be okay with me leaving the rental in the airport garage at 3 am, and having him come to retrieve it? If he has other places to be in at rush hour in Washington, DC, and I've got two grumpy, hungry kids who turned their noses up at lunch in DFW eight hours ago-- are we going to trust each other for it to be a smooth trade-off? What happens if there's something annoying with the baggage claim, and I'm delayed half an hour? Is he going to wait for me?

I'm already in the business. You have no idea how tough it is to compete in this field. They (renters) all want new vehicles. You need a strong contract, good insurance and the ability to staff it at all hours. When things go wrong you need to act quickly in order to fix the problem and get the unit. The fleets are doing it for different reasons. Sell new cars, tread water while amortizing, gain on sale at end, support used sales operations, support other operations ie service, parts and collision repairs,

Oh, wow. That's a really interesting thought.

When we were car shopping after the deer incident, we had narrowed it down to two cars. One was being sold at the place where Enterprise sold all their cars they were rotating out. I want to say it was something like a 2016 Sonata hybrid with better-than-basic-level finishes. It had around 20k miles and was being sold for $18k, if I recall. (You can buy new ones all day long for around $20k, although I don't know about the finishes.)

The other one we shortlisted was also a former fleet car, although I don't know whose. It was a Camry hybrid. It was about $2k more expensive, about 15k more miles, not as nice finishes, one year older-- but it had a place for a spare tire, whereas the Sonata only came with roadside assistance and a can of fix-a-flat. So we ended up choosing the Camry. (You can buy new ones for around $30k, but I don't know about the finishes.)

In both cases, I was really surprised that businesses were getting rid of such low-mileage cars-- it didn't seem very economical, especially considering the car we were replacing was 9 years old with 325,000 miles on it, and would have run a lot longer if it hadn't been for the wildlife! :)

But I hadn't realized that was part of the business model-- that renters are picky about what they rent, combined with recapturing a big chunk of their investment by selling them after just a year or so.

Homer,

Several TURO folks running many cars talking about their operations on YouTube. Lots of stories about trying to deliver cars to clients who don't show up or have flight delays.

Seems airports are a great hub for these rentals. A guy in Chicago has a Rolls Royce for $1000 per day, 2 day minimum plus $200 cleaning fee.

Talked to 2 people who bought a new class C motorhome. Rent it out a few times a year - makes the payments.

Personally I don't want job jumping when strangers call.

I'm with Robin - check out lending to other RE investors. You know that game well.

BRAD

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I taught myself and. I did it with real money so I did lose a little when learning but I was using such a small amount it was no big deal.

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