Accountant Shifts Gears To Renting Out Cars

This transcript was generated from the episode audio and may contain minor errors.

One of my favorite stories from the Side Hustle book was about a guy in California who acquires more than a dozen cars. He calls them a fleet of cars. He goes out and leases a dozen cars and then rents them out on Turo. Turo is the crowd-sourced rental car site that allows owners to get paid for offering their cars to strangers. Check it out if you'd like to make some extra money and you have a car you don't use every day.

But Turo isn't the only game in town. One thing I don't think we have ever talked about, another platform is Getaround. So this company, Getaround, is active in more than 300 cities, offers a similar business model in terms of you can take a personal vehicle and then allow strangers to rent it out. You get paid. They take a cut, of course.

So that's what today's story focuses on. When a young accountant in Atlanta discovers the sharing economy, he wheels and deals his way to owning-- yes, that's right-- an entire fleet of cars. Oh, I'm so excited. Story is called Accountant Shifts Gears to Renting Out Cars. Story's coming up in just 30 seconds.

Stay tuned. Keeshawn Smith graduated from the University of Georgia in 2016 with a degree in accounting. While studying, he had low expenses and paid minimal student rent. But after graduating and landing his first job, he soon realized student life is not real life. In his home city of Atlanta, rent for even a modest place was four times what he was used to.

Being an accountant, Keeshawn started to crunch some numbers. He figured he could buy a modest home, rent out the spare rooms on Airbnb, and make a profit on top of his monthly payments. To make a long story short, since this isn't really our story, it worked. And that's what led to his next adventure. And what is our story?

The sharing economy has become a huge industry. Airbnb is now a household name, but there's plenty of other services in the space. And Keeshawn set about exploring them. He soon discovered Getaround, a platform that enables car owners to rent their cars to others for an hourly or daily rate. After a good experience as a renter, Keeshawn decided he wanted in on the action.

If he could find a cheap car that was still desirable as a rental, he felt he'd make a decent amount of money, at least if it was regularly used. So he started researching. He'd heard horror stories of people renting out luxury cars like a BMW or Tesla, only to see them abused. So he instantly ruled that out. His logic was that most people renting cars like that would not drive them sensibly.

Instead, he wanted the type of car the average person might need to run an errand, something to get from A to B. He settled on a 2015 white smart car, cheap, small, and fit for utility. He purchased it for $1,000 down with monthly payments of $176. There would be other costs to consider-- insurance, maintenance, and commission fees to Getaround. But Keeshawn was confident he could make the economics work.

Besides, he was driven to test out his theory. Driven, right? Make sure you didn't miss that. Getaround offers a simple sign-up process and two ways for users to rent-- with a key exchange or without. Keeshawn opted for the exchange without key.

That would allow renters to open his car with an app by confirming their identity with their license and facial recognition. There's some work needed to rig the car to operate that way. But if you want your operation to be more passive, it's definitely the better option. With sign-up complete, it was time for him to see if the residents of Atlanta would rent out his smart car. Drivers, start your engines.

Keeshawn received bookings almost instantly. By the end of the first month, he'd earned $700 in rentals. After the car payment, insurance, and commission, he was still left with well over $200 in profit. The best part, though, was that it took almost no work. Getaround provided the marketing channel.

Their app took care of the logistics. And all he had to do was sit and wait for the money to hit his bank account. Keeshawn was excited. That first month's result were enough for him to go all in on this side hustle. Almost immediately, he purchased a second car, the same as the first, and under the same financial terms.

It, too, became a successful rental on Getaround. So he did it once again, and was now the proud owner of three smart cars, all zipping around from A to B, earning him money every month. Being an accountant, Keeshawn kept a close eye on the numbers over the following months. He noticed that, on average, his cars were rented for 19 days a month, resulting in up to $900 of rental income. After subtracting expenses, he was still left with an average of $300 profit per car per month.

With those figures, it was time to hit the gas. Keeshawn switched from a financing to a purchasing model, and began using his own funds to buy additional cars and cash. He would buy from private sellers, not dealerships, which enabled him to find better deals. Over the next two years, his personal fleet grew to 13 vehicles, encompassing not just smart cars, but Ford's, Nissan's, and Kia's as well. With that many cars, Keeshawn earns well over $3,000 profit per month on the side.

He does it all remotely, and in less than one hour a day. Getaround has been in business for nearly 12 years, and has 5 million users and approximately 20,000 connected cars worldwide. Now, if you're interested in doing something like this, what you want to do is start with one, right? Nobody has a fleet of cars by going out and buying 13. You start with one.

You start with one smart car, like Keeshawn did. Doesn't have to be a smart car. The point is you start simple. You start small. You kind of begin to develop systems.

How can you make it easy to not spend a lot of back and forth time with renters? How can you make sure they have a great experience, that you get a good review, and your car begins to be rented more? And then if you really want to scale up, that's when you see if you can replicate it. It's essentially the franchise model, just a lot easier, because they're cars and not retail stores. You don't have to staff them.

So as noted, Keeshawn does this in about an hour a day with 13 vehicles being rented out continuously. I'm especially impressed with that systematic process of how he's built out the process, where it doesn't take much time. I think for me, it would not be a good thing to rent out 13 cars, because I wouldn't have a great process for it. So got to know your strengths. But in this case, it's worked out very well for him.

All right. Inspiration is good, but inspiration with action is so much better. Today's show notes. All right, sidehustleschool.com/1618. Include links to anything mentioned in the episode.

If you've got a comment or question for the show, sidehustleschool.com/questions. Thank you so much for joining me today. I hope you will subscribe or follow and come back tomorrow. My name is Chris Guillebeau. This is sidehustleschool.

From the Onward Project.