Science Fiction or Your Future: Collaborative Landlord Triples Profits Leasing Cars to Tenants

16

To advance the mission of finding auxiliary income streams that could exceed gross scheduled tenant rents and to promote innovative landlording, I offer another fictional story:

Robert Newhart is a growing fan of the collaborative economy, so naturally he was attracted to a holistic housing offering that includes a car!

Newhart’s work day starts at his apartment where he unplugs a battery powered 1997 Corolla and drives to work downtown.

When he parks, he sends a text message to his landlord’s assistant letting her know his parking stall number. The assistant knows it’s a signal to notify various car share groups that the car is available for hourly rental.

“Besides keeping the car clean and sending a text, that’s all I do … Then $100 shows up in my account each month. I absolutely love it,” Newhart says.

Steve Austin is the brainchild behind this rental industry mash up. Austin owns the six unit apartment where Newhart lives. It’s roughly three miles outside the downtown area, in a working class neighborhood. If it weren’t for the electric charging stations in the parking lot, Austin’s building would go unnoticed.

“I simply reacted to the market,” Austin says, “More and more folks want access to things more than ownership, so I decided to cater to them.”

Shifting from Tenants to Club Members

Newhart is more than just Austin’s tenant, he’s a club member. And Austin’s lets all his members use his electric cars.   He charges a $1,000 monthly “membership dues” for his annual “apart-mobile” lease while other landlords charge $600 monthly rents.

“When you total it all up, car payment, cost of car ownership, repairs… our members actually come out $170 ahead. Austin says he’s able to get a group discount on insurance premiums and most of the cars are charged for free at downtown charging stations. “Just like at Costco, we buy in bulk and pass along the savings to our members.”

And also like Costco, Austin says he’s able to make a profit inside the spread. He says he clears around $90 per car per month after maintenance and reserves.

Leveraging Members for Car Sharing Revenue   

How is Newhart able to earn the $100 he brags about? Newhart, like the rest of the club members that Austin recruits, works at one of the popular restaurants in downtown. Because he drives an electric car, he’s allowed to park in spots reserved for such vehicles. These spots are some of the most desirable locations in the crowded downtown area.

By participating in a car sharing program, an hourly peer-to-peer car rental network, Newhart splits the rental proceeds with Austin. “My car is popular because people that borrow it are able to get preferred parking wherever they go.”

Getaround.com is one of the most popular car sharing programs in town. Getaround members rent Newhart’s car three to four times per week and the Newhart – Austin partnership splits over $200 in monthly proceeds.

Doing the Math

Austin has created a very small, but collaborative economy.

He helps his members reduce their living expenses by $170 per month and gives them an opportunity to earn over $100 (50% of proceeds) with car sharing opportunities.  For the members, that’s nearly $300 of hassle-free value every month!

You would think that’s too generous until you look at Austin’s profits. Each of his six units brings in an average of $290 per month ($100/unit + $90/car + $100/rideshare). That’s nearly three times what a landlord would make the traditional way!

What’s Next?

Austin says he wants to find other ways to leverage his members and create value. “I basically help members get perks that are beyond their individual reach …. and it’s a lot of fun!” Austin says with a grin.

He wants to continue helping members collaborate. He’s considering collecting rewards from their grocery purchases and using them to drive down costs of their non-durable goods.

He is also thinking about installing carports equipped with solar panels. They could both charge car batteries and offset the apartment’s master meter bill.

***

I hope you have enjoyed my three-part series of fiction. Are you able to re-imagine what landlords can do? Ready to boldly go where no landlord has gone before!

Will peer-to-peer business practices change the landlord industry as they have the newspaper industry? Will your “tenant” dump you in favor of your neighbor’s “club member” offering? Leave a comment. Let me know what you think.

Subscribe to our mailing list

* indicates required Email Address * First Name Last Name
Share.

About Author

Al Williamson (G+) helps landlords increase their monthly income by sharing unique tips to save money. He blogs at LeadingLandlord.com and is also the author of Building Wealth with Inner City Rentals: Success the Catalytic Landlord Way and an active BP member.

16 Comments

    • Ah Patrick you missed what I was driving at. This is not about a supplier-buyer thing. I’m not talking about consumerism here (although there is nothing wrong with consumerism if that’s your thing).

      The collaborative model hinges on a peer-to-peer network. Like asking your neighbor if she will you loan you her drill for two hours for two bucks… It’s renting/borrowing, not purchasing.

      Next point is that a company store is a one to one exchange. I’m trying to describe a distribution model with a “tenant” as the middleman.

      We’ve got new technology – it’s time for new wine skins.

  1. I love these. Sharing your visions of how we can maximize our relationships for profit and mutual benefits are amazing! Can’t wait to hear more. This gave me something new to think about, especially if you are a multi-family investor.

    • LP, I know you like to leverage your good looks to make videos, but please consider co-authoring some landlord fiction for an out-of-state single family landlord with me.
      That’s a proposal.

  2. Thanks Sharon. Regarding insurance, I was able to research that a little bit.

    GetAround.com members have their own insurance policy with > $1M of coverage. They’ve got their package dialed in.

    Regarding protecting the car owner (landlord) that’s a standard policy you would attached to any leased car. Regarding insurance for the driver, that’s a standard company policy with “after work” modifications.

    Come on Sharon, everything works in the Neighborhood of Make-Believe.

  3. Al:
    Always good to see you pushing folks comfort level. Apologies for not getting back to you on the math bit … I’ve had very needy customers in other business these past two weeks. BTW: the math works.

    I still like the idea of the cars powering the flats during power outages.

    BTW: I’m in talks with a local fitness club about a programme offering for our tenants and with a CSA /whole food / natural food vendor about free delivery of grocery orders … there may be material for more episodes.

    Sharon: Car shares here have fleet insurance polices …. the scale, combined with the fact many are cooperatives, results in good coverage at a lower cost per driver. When I was looking into starting a car share here (8-10 years ago), I found there were actually better bang-for-your-buck insurance offerings in the U.S.A. than here; which is not usually the case {due to the difference in appetite for litigation}.

  4. Interesting. I’ve thought about doing something like this for apartment buildings that have limited parking.

    Even if I didn’t get paid money on a monthly basis, with a service like Zipcar out front of my building, I think it could help increase the appeal of the building.

    • Sam,
      Thanks for playing along. I once rented San Francisco apartment where the landlord rented three of six parking spots to ZipCar. Very clever. I think you should look close at the option.

      PS – my company was paying $300/month for my parking.

  5. Greetings, Al!

    I’m guessing that this is going to come off sounding like a “stupid” question, but why, exactly, is your article still “science fiction”?

    My ideas make your’s sound sane, at least, by comparison! Let me know if you ever find yourself in the mood for some serious “speculative fiction”…and yes, the numbers seem to work out also, sigh!

    • Funny Barry, but I actually understand where you’re coming from. Unlike the first two posts in this series, this time, my idea is very doable right now. I just don’t know anyone who’s actually doing it. Otherwise I would interview them for real.

      BTW, I’m always in the mood for serious speculative fiction. I’ll send you a invite. I want to hear more!

  6. I love this article because it’s opened my mind to different possibilities and a great reminder to think outside the box. Great ideas! Thanks!

  7. What a powerful value add. Classic Win-Win situation. The idea of generating profit by providing additional services or tied in deals makes me feel warm and fuzzy in both my emotions and my wallet.

    Great stuff, thank you so much!

    • Josh, thanks for reading and grappling with the ideas. That’s all an unknown blogger like myself could ask for.
      Hey, that warm fuzzy… that your internal dowsing rod. It’s telling you to dig here and dig deep. Constructing this piece helped me figure out that when people cooperate, they use fewer resources. That means whoever orchestrates cooperation also creates value which could lead to a financial reward.
      What do you think of that concept? Where could you orchestrate cooperation in your business right now?

Leave A Reply

css.php