What Are Some Lucrative Rental Business Ideas?
The sharing economy is on a boom. Although it’s limited to big cities, soon the time would come when the peer-to-peer rental marketplace model (P2P) would accommodate everything and everyone who want to grab a fair share from this business model.
Inspired by two important business models, Renting and C2C eCommerce, online P2P rental is a new way to make money by lending the stuff you have already. The best thing about the rentals is it can accommodate any kind of product, service, revenue model, and period. It has a wide scope in virtually any category. As the people have gradually started to believe in the P2P sharing economy, this model is affluently becoming the home to unique rental business ideas and startups.
Let’s have a brief look at how this model functions and what’s in it for the different stakeholders.
How P2P Rental marketplaces work?
A P2P rental is merely an extension of the straightforward C2C eCommerce model. We have seen a popular example of C2C eCommerce in eBay’s business model where the platform allows it’s users to sell products to other users of the platform. It allows users to put products on sale or bid, and other users to bid for it or purchase directly. E-Bay manages the users and makes sure everything goes on ethically. That’s why the platform keeps a track of its sellers through background checks and monitoring their activities on the platform. In all this, eBay is supposed to be responsible for managing the transactions as well.
Similarly, a P2P rental marketplace allows its users to rent products or services to their peers. The platform does all kinds of background checks and monitors user activities besides facilitating the transactions. Similar to eBay, if you want to become a renter on the platform, you would require going through some steps to become a verified renter. However, the renting model also tracks its regular users more carefully, as the customers are required to return the things once their renting period is over. Airbnb is one perfect example to understand this model. It allows the users to rent their homes to other users of the platform and manages their transactions.
How P2P Rental Businesses make money?
The way any P2P rental platform could make money depends on the range of products and services. Different types of products and services offer different prospects to extend revenue streams. A rental platform may adopt N numbers of additional ways to make money, except the basic revenue model is always the same for any kind of P2P rental business.
Allow users to rent their stuff to other users and charge a commission on every earning they get from the same. Say, if a homeowner is charging $100 to rent his or her home to the other user, the platform may charge a 20% commission to payout $80 to the homeowner on every booking he or she gets. The rest $20 is the earning of the platform.
· Transaction Fees:
To manage transactions and payments on the platform, the rental marketplace software uses payment gateways. These payment gateways make money by charging transaction fees as a percentage cut from every transaction they facilitate for the users.
Hence, the marketplace platform must include this fee in the overall profit margin and ask users to pay the same, which the platform would payout to the payment gateways. Based on the profit margin, the platform may charge a little extra transaction fee from the customers than what the payment gateways charge. This extra would the earning for the platform.
· Value-Added Services:
Platforms may include some relevant value-added services for the users and make money from the margins. The value-added services could be for anyone from renters to the customers. For example, take some extra fees from renters to promote their listings on the home page, or extra fee from the vacation rental guests to facilitate pick and drop services from the airport. Anything that could add some extra value to the primary product or service would count as a value-added service.
· Overhead charges:
Overhead charges include all miscellaneous costs that may incur in the regular operation of the platform and the business. Charges like cancelation fee, waiting fee, advance booking fee, last-minute booking fee, surge fee, property damage penalty, etc. come under this category.
What are the benefits for different stakeholders?
There are three major stakeholders in any P2P rental business. All three stakeholders receive fair shares of prospects to encourage their active participation in the business model. Here is a breakdown of the benefits they must accept:
· Product Owner/Service Provider:
A product/Property/Service owner gets a chance to make money by renting his or her belongings for a fixed period to the peers. It allows them to make the best use of their personal belongings, which otherwise give no returns. Take a luxury car for rental. You purchase a car for personal use and bear all the cost of managing it. Sometimes, it just stays in the garage. If you could rent it to someone ready to pay you for lending, you would be making an extra income with it.
· Customer/Regular users:
Customers get an easier and affordable way to utilize a product or service for a limited time. They don’t have to pay upfront and purchase something that they won’t be using very often. Instead, they can rent from a peer. Renting from a peer comes out as a cheaper alternative to renting from professional businesses. Take Airbnb and hotels for instance. Airbnb homes are affordable than a hotel room. Besides, you can find an Airbnb even in remote areas where hotels lack presence.
· Platform Owner:
Platform owner makes money facilitating the services and levying the charges on different users, as explained in the previous section. All these revenue channels allow the platform owner to make money by renting something that is not even his or her own property. A rental business idea in the P2P marketplace model is all about connecting and facilitating online transactions.
Profitable Rental business ideas for Your Venture
As you now know about the working models of rental businesses, it would be easier to comprehend about various products and services to start an Airbnb for x business, where x represents a lot more than just vacation houses. The following are some highly profitable rental business ideas you may consider for your venture in this regard.
Please note: These rental business ideas would give the best return if you adopt them based on a critical analysis of the prospects in your local market. You must consider demand, gaps, competition research, future prospects, available B2B services, cost of management, and local infrastructure of the target market to get the best out of any of these ideas. Moreover, the prospects, margin size, and custom features of your rental marketplace software might vary largely depending on the selected business idea.
These are more of niched ideas in a wider market, which is still is in the budding phase. However, it promises some good ROIs on strategic execution. You may choose to accommodate one or multiple ideas in your model based on your strategies.
1. Bicycle Rental
Some people would rather rent a bicycle to travel around their town or travel around in a tourist destination on their trip. Just connect the people with bicycles to the people who want them; you would be making money from a rental business idea so easy to start without any hefty investment.
2. Hunting Equipment Rental
Some people go around for hunting regularly, and some people keep it as an occasional hobby. There are N numbers of hunting destinations around the planet. Pick one, connect with the locals, and ask them to rent out their hunting supplies to the tourists who would pay some good amounts for it.
3. Boat Rental
Similar to hunting destinations, you can get in terms with locals to rent out their boats to the tourists and make money from their otherwise not-so-often-used boats. You can include different types of boats in your catalog based on the demands and geography of the area.
4. Fishing Rental
Fishing fans would pay hefty amounts to rent out fishing supplies occasionally. Give occasional fishing people an easier way to get fishing supplies without purchasing them, and regular fishing goers to make money from their hobby and its suppliers.
5. Food Serving Equipment Rental
Some people would prefer renting the food serving equipment from people rather than purchasing the same for a single occasion. While some people or professional suppliers keep these provisions in-house. You can unite them on a unified food serving supplies platform and make money.
6. Office Equipment Rental
Rent out office supplies to the businesses who have just started and not looking to purchase supplies like Printers, Projectors, Conference tables, etc. This could also be a great B2B rental business idea where you can connect office supplies companies with the office owners.
7. Party Supplies Rental
Start a party supplies rentals and lend assortment of stuff that people often rent out to throw parties. It may include renting tables, chairs, serving ware, decoration supplies, and music systems, etc. This could also accommodate professional party rental businesses.
8. Vacation Home Rental
Start a vacation home rental just like Airbnb in your locality. You may target a different category of vacation houses that Airbnb does not target. For example, weekend vacation homes for events like seminars, sports events, college fests, etc. This could accommodate small motels and lodges too.
9. General House Rental
It works a little different from most of the P2P rentals. While most of the rentals in the P2P model are for the short term, you may experiment with long-term house rentals in different towns and cities. You can accommodate all sorts of dependent, independent, shared, and private homes for rentals.
10. Room Rental
Instead of an entire house, you can let people rent individual rooms. This service has a scope in both short-term and long-term rentals market. You can include both peers and professional paying guest accommodation businesses in your catalog.
Some More Rental Business Ideas
As mentioned earlier, the rental business is a very diverse market. It has the scope to include both peer-to-peer and B2C models on a single platform. You just need a good rental marketplace software with features and revenue channels for both models. You can experiment with one of these, or make a well-balanced hybrid of multiple niches. Here are some more niches and rental business ideas you should consider:
|1. Tent Rental||2. Land Rental||3. Apartment Rental|
|4. Outdoor Gear Rental||5. Artificial Flowers Rental||6. Campsite Rental|
|7. Photography Rental||8. Home Decor Rental||9. Heavy Tools Rental|
|10. Car Rental||11. Event Venue Rental||12. Office Space Rental|
|13. Storage Rental||14. HVAC Rental||15. Sporting Goods Rental|
|16. Excavator Rental||17. AV Equipment Rental||18. RV Rental|
|19. Meeting Room Rental||20. Sports Equipment Rental||21. Moving Gear Rental|
|22. Dumpster Rental||23. Camp Equipment Rental||24. Furniture Rental|
|25. Tech Supplies Rental||26. Animal Rental||27. Vanity Van Rental|
|28. Golf Supplies Rental||29. Video Game Rental||30. Co-working space Rental|
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