Turo Host

How it all Started

My wife had mentioned she has a friend who was doing it and the amount of time to clean and deliver a car seemed like a mostly passive option of income. During the pandemic there was a shortage of rental car options and cars seem to rent fairly easily.

Is Turo a Good Investment?

I’ve been doing Turo since July 2021 and after all this time I’m still involved. I bought a few cars to dip my toe into a new way of making some cash on the side. At the time when I started interest rates were very low and I ended up financing them. Currently, however, getting attractive financing is very difficult and that is a barrier to entry for new investors. My preference is to use leverage and as little money out of my own pocket as possible. Hence, the only money I really have invested is for a lock box, vehicle registration, and tracking device. All the other monthly fees such as car wash, insurance, loans, etc I expect to cash flow above with rental income. In my experience the good monthes make up for the bad months and you need long horizons to make this investment work. Running a car through the express wash and wiping it down is not a lot of work in my opinion.

As of this point in time I wouldn’t recommend it to others unless you have a few paid off vehicles and a partner to help you with deliveries. This is mostly due to interest rates.

Here’s why I say this:

  1. A vehicle is a depreciating asset, so the exit strategy needs to account for the fair market value of the vehicle.
  2. The vehicle needs to be less than 13 years old and have less than 130k miles with a clean title. You really need to spend about 15k to get a car that can fit the bill of being rentable.
  3. You make about 600-900 a month, so you can definitely cash flow positive but it’s a slow grind to get your car paid off and hit the point of profiting with a strong cash flow (about 3-5 years)
  4. A few bad guests can really make a low effort option like Turo a bad experience. In less than 6 monthes time I’ve already had to have my driver door replaced and recently had a car stolen.

Why are you still doing Turo?

Basically I’m doing it as a great tax break. You only start to make good money after you have a fleet of around 10 vehicles and are actively taking steps to keep them rented.

Here are some of the write-offs you can do with Turo

  1. Vehicle Depreciation
  2. Turo Fees
  3. Loan Interest and fees

On paper the money I make with Turo is close to tax-free.