How to Start a PROFITABLE Turo Business in 2024
Summary
TLDRIn this video, Alex Profits discusses the potential of starting a profitable Turo car rental business with little to no initial investment. He emphasizes the importance of choosing the right car, with a focus on low-cost vehicles to minimize depreciation and maximize profit. Alex advises against financing cars for the business, suggesting a 50/50 mix of cash-owned and business-financed vehicles to maintain control and reinvest profits effectively. He also offers a free guide on the most profitable cars for Turo and encourages viewers to engage for personalized advice.
Takeaways
- 🚗 The video discusses how to start a profitable Turo business, emphasizing that while a car can generate $1,500 in profit monthly for the speaker, it may not be suitable for everyone.
- 🏷️ Turo is described as the 'Airbnb for cars', allowing individuals to start a car rental business with no initial out-of-pocket costs if they already own a car.
- 📸 To list a car on Turo, it must be less than 12 years old and have less than 130,000 miles, and the process of preparing a car for rental involves cleaning, taking photos, logging gas and mileage, and securing the key in a lockbox.
- 🚫 The script warns that not every car is suitable for long-term rental due to increased wear and tear, which can lead to rapid depreciation.
- 📉 The importance of having an exit strategy for each car is highlighted to avoid negative equity, which many hosts may not realize they have.
- 💰 The video suggests starting with a car you already own to test the business model without initial investment, and then scaling up if it fits your situation.
- 🚙 It's recommended to avoid financing cars for the Turo business due to the high risk of negative equity and the inability to fully control the vehicle's future.
- 💵 The speaker advocates for using 'cheap cash cars', suggesting a price range of $8,000 to $11,500, with a specific exit strategy to sell the car within 8 to 18 months to minimize risk.
- 🔄 A 50/50 rule is proposed for the business structure, with half of the fleet being cash-owned vehicles for immediate profit and the other half financed to scale the business.
- 📈 The video offers a guide to the most profitable cars for Turo and suggests booking a one-on-one call with the speaker for personalized advice.
Q & A
How much profit can one expect to make from a car on Turo per month?
-The script mentions that the speaker makes about $1,500 in profit every single month from one car on Turo.
What is Turo and how does it relate to car rentals?
-Turo is described as the Airbnb for cars, allowing individuals to start their own car rental business using their own vehicles or cars they already have.
What are the requirements for a car to be listed on Turo?
-A car must be within the last 12 years of age and have 130,000 miles or less to be eligible to be listed on Turo.
What is the process of preparing a car for a Turo trip according to the script?
-The process includes ensuring the car is clean, taking 75 or more photos of the vehicle, logging the gas and miles, putting the lock box on the window with the key inside, and waiting for the guest to pick it up.
Why is starting a Turo business with a car you already own considered a low-risk strategy?
-Starting with a car you already own is considered low-risk because it does not require any out-of-pocket expenses initially, allowing you to test the business model without additional financial investment.
What is the potential downside of using a financed car for Turo rentals?
-Using a financed car can lead to negative equity because the car depreciates faster than the loan is paid off, and the wear and tear from rentals can further decrease its value.
What is the recommended strategy for managing a Turo fleet according to the speaker?
-The recommended strategy is to have a mix of 50% cash-owned vehicles and 50% financed vehicles under the business name, with the goal of paying off the financed vehicles within 3 to 6 months.
Why is having an exit strategy for each car important in a Turo business?
-An exit strategy is important to ensure that the car is sold or replaced before it loses too much value, thus minimizing the risk of negative equity and maximizing profit.
How long does the speaker recommend keeping a cash car in the Turo business?
-The speaker recommends keeping a cash car for 8 to 18 months, aiming to buy and sell the car within the same depreciation range to minimize risk.
What is the speaker's advice for those who don't have a car eligible for Turo or the cash to buy one?
-For those without an eligible car or the cash to buy one, the speaker advises against personal financing as a last resort and suggests targeting a car in the $10,000 range with the goal of paying it off as soon as possible.
What resource does the speaker offer for those interested in the most profitable cars for Turo?
-The speaker offers a free guide listing the most profitable cars for the Turo business, which can be found in the description of the video.
Outlines
🚗 Starting a Profitable Turo Business
The speaker, Alex Profits, introduces the concept of starting a profitable car rental business on Turo, which is likened to Airbnb for cars. He emphasizes that while his car makes him a significant profit, the success may vary depending on individual circumstances. The video aims to provide insights into starting a Turo business. Turo allows users to list their cars for rent, provided they are less than 12 years old and have less than 130,000 miles. Alex shares his experience of preparing cars for rental, which involves cleaning, taking photos, logging gas and mileage, and securing the key in a lockbox. He suggests starting with a car one already owns to test the business model without initial investment. He also discusses the importance of choosing the right car for rental to maximize profits and minimize depreciation, advising on developing an exit strategy to avoid negative equity.
💰 Financing Strategies for Turo Business
Alex Profits advises against financing cars for the Turo business due to the high risk of negative equity from depreciation and wear. He suggests starting with 'cheap cash cars', ideally priced between $8,000 to $15,000, with a clear exit strategy to sell the car within 8 to 18 months to minimize loss. The speaker shares his 50/50 rule for business structuring, recommending a mix of cash-owned and financed vehicles to balance risk and reward. He provides an example of how to use profits from cash-owned cars to pay off financed cars quickly, thus expanding the business. Alex also offers a free guide for the most profitable cars for Turo and invites viewers to book a one-on-one call for personalized advice. He concludes by stressing the importance of a well-structured business model over hastily acquiring personally financed cars.
Mindmap
Keywords
💡Turo
💡Profitable
💡Eligibility
💡Depreciation
💡Exit Strategy
💡Financing
💡Negative Equity
💡Cash Cars
💡Risk Management
💡Scaling
💡Business Structure
Highlights
A single car can generate $1,500 in profit per month on Turo.
Turo is described as the Airbnb for cars, allowing car owners to rent out their vehicles.
To start a Turo business, a car must be less than 12 years old and have less than 130,000 miles.
Starting a Turo business requires no initial out-of-pocket investment if you already own a car.
The process of preparing a car for a Turo trip includes cleaning, taking photos, logging gas and miles, and securing a lockbox with the key.
A case study is presented where an individual scaled to 10 cars within 60 days and made $11,000 in profit the first month.
Not every car is suitable for long-term rental due to increased wear and tear and depreciation.
The importance of having an exit strategy for each car to avoid negative equity is emphasized.
Financing a car for Turo is discouraged due to the high risk of negative equity and depreciation.
Cheap cash cars are recommended for the Turo business, with a focus on an 8 to 18-month ownership period.
A 50/50 rule is suggested for a balanced fleet, with half cash-owned vehicles and half financed vehicles.
Financing should aim to pay off the loan within 3 to 6 months to control the exit strategy and minimize risk.
For those without an eligible car, personal financing is a last resort, with a focus on paying off the car as quickly as possible.
The speaker offers a free guide with a list of the most profitable cars for Turo business in the video description.
Booking a one-on-one call with the speaker can help those starting with Turo or needing guidance.
Transcripts
this car alone makes me about $1,500 in
profit every single month but just
because it makes sense for me doesn't
mean it's going to make sense for you
and your situation and that's what I'm
about to cover in this video what does
it take to start a profitable turo
business keyword being profitable and
how can you do it I'm Alex profits and
on this channel I give you guys an
in-depth Look Into My Life as a rental
car Fleet owner all right so if you
don't already know turo is the Airbnb
for cars and right now I'm actually
getting one of my cars ready to go out
on a trip and really all I have have to
do is make sure the car is clean take
pictures of the vehicle obviously 75 or
more photos for every single trip log
the gas and miles in the last step put
the lock box on the window put the key
in the lock box and wait for the guest
to pick it up and this whole process
takes five maybe 10 minutes max in the
most basic sense turo allows you to
start your own car rental business with
$0 out of pocket if you have a car just
sitting or want to start with a car that
you already have you can start and again
it's not going to cost you anything in
order for a car to be eligible to be
listed on turo it must be within the
last 12 years of age and have 130,000 Mi
or less in the grand scheme of things
there aren't that many businesses out
there that you can start with $0 which
is why in my opinion I think turo is an
absolute no-brainer if you have a car
and that's going to be the best way to
go ahead and start this business with a
car that you already have by starting
with a car that you already have you're
not going to have to spend any money
before trying out this business and
before even seeing if you like it or if
it fits with your situation like James
he started with a car that he already
had learned the business for the first
30 days then we scaled them to 10 cars
within 60 days and after bringing in
$11,000 in pure profit his first month
he was all in the next thing that you
have to understand is not every car is
going to be a good fit as a rental long
term meaning we're going to be fully
maximizing these cars more miles more
wear and tear increas in depreciation
which means the value is going to go
down really fast that's why each car's
exit strategy is really the most
important thing to consider in this
business for the most part in that
testing phase 1 to 3 months if your
vehicle is on the platform for that long
it's really not going to affect the
value too much of the vehicle which
again is why I say if you have a car
throw it on turo you L have nothing to
lose and everything to gain if it's a
good fit for you and your situation but
anything longer than 3 months you're
going to want to think through a proper
exit strategy so that you don't lose
money on that car which news flash most
hosts don't even know they have negative
equity and are losing more money than
they're making which leads me to
financing everyone that hears or learns
about this business wants to finance
Finance Finance which is the absolute
worst strategy for this business when
you finance a car it's most likely going
to be a five 6 7 or even 8ye loan and
with the miles and wear and tear we're
going to be putting on these vehicles
there's absolutely no way that vehicle
is going to last the full length of the
loan and if you're only paying the
monthly payment every single month and
pocketing the rest of the money left
over on top as profit there's for sure
going to be negative equity which in
most cases that negative equity equals
the amount of profit that you made on
top of the payment did you just work for
free yes sir so we want to be able to
fully control each vehicle and if it's
financed we don't have that much control
most host vehicles are financed which
means they probably have negative equity
and they don't even know it because you
really won't have to realize that
negative equity until it's time to sell
or if the vehicle gets total out and
either way you're going to be
responsible for that difference that's
why cheap cash cars are the best
possible fit for this business think
$8,000 to $115,000 Max every single car
on my fleet has a very specific ex
strategy an exact date that we need to
get rid of the vehicle bu on these cheap
8,000 10,000 even $155,000 units I'm
only keeping each vehicle for8 to 18
months the idea is to buy and sell the
car in the same depreciation range as I
bought it that way I can get close to
what I bought the car for when I sell it
only making money from the rentals and
minimizing the total risk so when it's
time to sell it I pretty much buy the
exact same thing but with less miles
every year that I keep a car the only
thing that changes is the increased risk
of mechanical failure which I would have
to come out of pocket for so if I sell
it before the issue then I'm going to be
able to make more money over the long
term and that's the whole idea here as
opposed to if I financed it the majority
of that first year is mostly going to be
interest and the car would have already
lost value meaning I would have already
have negative equity my general rule of
thumb is 50% cash own vehicles on your
Fleet and 50% financed and when I say
Finance I mean financing under the name
of your business with the cash own cars
there's no payment so it's mostly all
profit so all that money can go towards
paying down notes on your finance car or
scaling this business via more cash cars
as opposed to when everything's financed
you're paying mostly interest the car is
losing value and the negative equity is
rising with every rental and the most
important thing is there's not going to
be much money left over to reinvest into
the business so when we do Finance we
want to be able to pay off that entire
Loan in 3 to 6 months and if you follow
the 50/50 rule you'll be able to do just
that here's an example five cash cars
and five Finance cars all worth about
$10,000 if each car brings in $1,000
every single month in profit then you
can pay off a finance vehicle every
single month control the exit strategy
on each vehicle and get each car for
free with the money the business is
already producing and once you get to 5
to 10 cars and it's time to get rid of
them via your exit strategy you can
trade them in for something nicer and
get the nicer newer car for absolutely
free for those of you that don't have a
car that's eligible to list on turo or
don't have the cash to buy a cash car
personally financing a vehicle would be
your last resort which I would only
recommend if it was truly your last
resort if that's you then Target
something in the $10,000 range your
number one goal is to pay this car off
as soon as possible which could take up
to 12 months then at the 12mth Mark
because it is a cheap cash car it might
be time to get rid of it via the exit
strategy but you'll own it out right and
be able to trade it in or use the
proceeds from the sale and at that point
with one fully cash Owned Car you'd be
able to expand and then Finance your
second car all staying within 50% cash
own and 50% Finance the structure of
your business is really the most
important thing most people skip over
this and jump right into getting as many
personally financed cars as they can
which is just a recipe for disaster I've
seen it time and time again so if you
found this information helpful be sure
to leave a like And subscribe for more
videos just like this and drop me a
comment down below with what car you
have and I'll let you know if it's a
good fit for turo if you want my
personal list of the most profitable
cars for this business I put together a
whole guide for you guys absolutely free
down below in the description so be sure
to check it out and if you're just
starting your turo journey or maybe you
already started and have a bunch of
questions book a one-on-one call with me
below and I'll get you back on track
thanks for tuning in to another episode
I'm Alex profits peace
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