How to Start a PROFITABLE Turo Business in 2024

Summary

In 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

00:00

🚗 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.

05:01

💰 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.

Keywords

💡Turo

Turo is a peer-to-peer car-sharing platform often referred to as the 'Airbnb for cars.' It allows car owners to rent out their vehicles to others. In the video, Turo is central to the discussion as the platform that enables the car rental business model being explored. The speaker uses their personal experience with Turo to illustrate the potential profitability of listing a car on the platform.

💡Profitable

Profitability is a key focus of the video, as the speaker discusses strategies to ensure that a Turo business is not only operational but also financially rewarding. The term is used to emphasize the importance of careful planning and management to generate income from car rentals that exceeds the costs and depreciation of the vehicle.

💡Eligibility

Eligibility criteria for cars listed on Turo are mentioned, specifying that vehicles must be within the last 12 years of age and have 130,000 miles or less. This sets the baseline for what types of cars can be used in the business, and the speaker uses this to discuss the potential of cars that meet these criteria for the Turo platform.

💡Depreciation

Depreciation refers to the decrease in value of a vehicle over time, which is a significant factor in the car rental business. The video discusses how increased mileage and wear and tear from rentals can accelerate depreciation, impacting the resale value of the car. The speaker advises on strategies to manage and mitigate the financial impact of depreciation.

💡Exit Strategy

An exit strategy in the context of the video refers to a plan for selling the car once it no longer serves the business model effectively. The speaker emphasizes the importance of having a clear exit strategy to avoid losses due to depreciation and to ensure that the car can be sold at a time that maximizes profit.

💡Financing

Financing a car for the purpose of renting it out on Turo is discussed as a potential strategy. However, the speaker warns against it, suggesting that it can lead to negative equity due to the high miles and wear and tear on the vehicle. The video provides insights into why financing might not be the best approach and offers alternative strategies.

💡Negative Equity

Negative equity occurs when the amount owed on a vehicle exceeds its current market value. The video explains how financing a car for a Turo business can lead to negative equity, as the car's value decreases faster than the loan is paid off. The speaker uses this concept to caution against financing and to advocate for cash purchases of cars for the business.

💡Cash Cars

Cash cars refer to vehicles that are owned outright, without any outstanding loans. The video suggests that using cash cars for the Turo business is preferable because it allows for greater control over the vehicle and its exit strategy, and it avoids the financial risks associated with financing.

💡Risk Management

Risk management is implicitly discussed throughout the video in terms of how to minimize financial risks associated with running a Turo business. This includes strategies for managing depreciation, planning exit strategies, and choosing the right type of vehicles to minimize the chance of losses.

💡Scaling

Scaling refers to the process of growing the car rental business by adding more vehicles to the fleet. The video provides an example of how one individual scaled from one car to ten within 60 days, highlighting the potential for growth in this business model. Scaling is presented as a way to increase profits by expanding the number of rental opportunities.

💡Business Structure

The business structure refers to the organization and management of the car rental business. The video emphasizes the importance of a well-thought-out structure, such as the 50/50 rule of having a mix of cash-owned and financed vehicles, to ensure the business is sustainable and profitable in the long term.

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