Vol. 29 - Our Turo and Airbnb Earning
Last week we talked about lowering your two main expenses, now look at how much money this has brought in for us. We discuss:
How much Naseema has earned on Turo in 2020
How much Leisa has earned from AirBnB
The common questions asked when considering listing your property
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TRANSCRIPT:
Leisa Peterson: [00:00:00] We are super happy to be here and to talk about some very interesting topics, Airbnb and Turo.
We've got charts, we've got graphs where you're peeling back the veil, all and sharing what's going on for us. So, yeah. We are excited to share
we wanted to talk about. Touro Airbnb, , this kind of gig economy. I'm not sure if there's other apps and Naseema always seems to have the cool apps that she uses.
So she does both Airbnb and Turo, which is awesome. and yeah, where should we start in Naseema? What do you think? What should we start with sharing? Maybe your experience with Turo or just even this side hustle stuff.
Naseema McElroy: [00:00:44] Yeah. So, Toro. I started Touro because I wanted to get a third car, like, because who needs the third car, but I wanted to get a third car because on the weekends we like to travel with our family.
It's so beautiful on the coast, but I would rather just go on one car. So, I'll take my dad, my step mom. I have two kids, my partner, and sometimes my grandfather. So I wanted a seven seater cause that would be all of us. And, I was like, Whoa. The only way I can really justify this.
The action is if I made this car as cheap as possible, . So I preface is my thing cheapest possible is that. I'm not like you're kind of fancy girl, but I like nice things. So I wasn't going to get a bucket and I wasn't gonna get like a minivan. So, so, you know, I got a 7 seater Toyota Highlander it was used, but gently used in a good price
Naseema McElroy: And so I was like, okay. So in order to do this, we need to do something that's going to cover this car payment. And I had known about Touro for some time time. And so I was like, let's try Touro let's list the cars on Turo. And so the plan was just to list the Highlander on Turo. And if we rented it out, less than 10, 10 days a month, w we would cover the, the car payment and, yeah.
You know, , that was the goal to just the cover, the car payment. And the plan was just to drive the car on the weekends anyway. So it was like, okay, that'll work. So we list the car on Turo. We're like super excited and. The, we get a booking and his life for like $200 and we're like, awesome.
And then by some stroke of awesome luck, Toyota has a recall and Touro system, as soon as like the car is listed, as a recall, automatically delists list the car? Like you cannot ask the car. Right. And so I'm just like, Oh my God, like, this is like horrible. So, of course we have two other cars.
So Steve, my partner was like, well, why don't we just list the other cars? And then just, you know, since we're still trying to fell it, why don't we just like list the other cards? So I was like, fine. And, Okay. So my car is a Tesla. I love my car. I love driving my car. I don't really want to leave it, like put it on.
I was like, you're really resistant because I really legit like, love my car. And for me, that's saying a lot, cause I hate driving. but so I listed my car and his BMW X one and . I get pretty decent money. And, things did slow down like during, like when all the shelter in place started happening.
And so we even took our cars off for a little while to see what, what happened and this whole time, okay. My car, the Highlander is actually sitting in the dealership. Waiting for this recall. So we didn't even have the Highlander. They gave us a minivan to drive ironically from January until July?
We didn't have the Highlander the whole time. We just started listing the Highlander. So, Yeah, so we we've made pretty good money off of it. So the whole goal of, Touro was to replace that, Highlander. It isn't mine, but I don't know, at least a little share.
Leisa Peterson: [00:04:25] I know I'm sharing it. Yeah. yeah. 2020, it says $6,219 earned. How much work did it take to do this? You live near the Oakland airport too, right? Late. Did you?
Naseema McElroy: [00:04:40] Yeah. Yeah. I live literally down the street from the airport.
so I do a lot of deliveries to the airport. A lot of people just come to my house and pick it up, in my car is easy because I can control everything by my phone so I can let them in by my phone, everything I know how many miles it is. I know exactly where my car is. Everything I can control my phone.
So my car is really easy. So it's not a lot of face time. Or if people just pick up the keys and drive the car and go, it's taking pictures, making sure you chart the mileage. And that's it. We do do go to the San Francisco airport and sometimes we do pick up and drop off in other locations, but we charge for that
just cause we have to pay bridge toll and all that kind of stuff. But yeah.
Leisa Peterson: [00:05:18] How much was you broke up a little bit. How much is it when you add the delivery and stuff,
Naseema McElroy: [00:05:24] $50.
Leisa Peterson: [00:05:25] Oh, okay. Got it. So you make it worth your while so what do the payments like, is this more than covered?
Is this covered the payments for the year already? Or how does that work out? Do you think?
Naseema McElroy: [00:05:40] almost it's almost covered the payments for the year and then yeah.
Leisa Peterson: [00:05:45] Still having it. It doesn't say on this report, how many days it's. been rented out, but you still have access,
Naseema McElroy: [00:05:54] these are for all my cars.
So I, there's another way that you can drop it down per vehicle and it'll show you kind of how many days? No, no, no, it doesn't lift out how many days, but yeah, I still have access. I still drive all my cars. We always have at least one car, or two. So
Leisa Peterson: [00:06:12] yeah. I mean, do you recommend it, do you think it's a good thing to do?
Naseema McElroy: [00:06:18] I think it's awesome. I think it's awesome. I actually, like, I really like it a lot. and spoiler alert, I'm actually getting another car just to list on Turo, and to see how that works out because, , we know the market's a well. we know what kind of car people like and to, to, it's like for me, I could spend this amount of money, like on an investment property and the returns not be so great.
So I'm trying this out, like in lieu of like buying like a cheaper investment property, lack of $40,000 under investment property, buying a car that, The way when we did the math, the minimum we would get it, it's like $1,200 a month on this car if it's rented out, 12 day and the car that we're getting is a very popular car on Turo.
It's one of the top five cars, we're getting another Tesla. So, we're using that as a way to, have passive income, cause we'll pay off the car and just have that income rolling in. And when the car gets kind of older, we'll replace it. And so to me, it's another form of real estate investing.
So we're using that to experiment. And so yeah, I'm actually really, really impressed by turo's marketplace. And I know there's other competitors out there.
Leisa Peterson: [00:07:37] So one of the things you shared with me that I also thought was really interesting with the Teslas is you've seen people who are thinking about buying Teslas, actually coming and renting the car for a day or two to try it out, which is way better than what they get. If they were trying to go to a dealer, I guess, and just test drive the car.
So how often does that happen?
Naseema McElroy: [00:08:02] with my car, it's like 80% of the people either already have a Tesla. And they're just, they just want to, can like have that same experience of what they're used to driving, or they want to know like what all the hype is about. And so they test the car out and they usually go on a road trip and nine times out of 10, they're like, yeah, I'm going to buy this car.
So yeah, most of the time people rent my car just for that.
Leisa Peterson: [00:08:28] And how are they taking care of it? Like, how is that part?
Naseema McElroy: [00:08:31] Oh yeah. I have had one issue with somebody with a car and it was resolved pretty fast. Touro, so you have your own insurance, your own insurance doesn't change because of course that protects you as a driver, but Touro also has insurance.
product and, and you can choose a level of insurance that you want, and it depends on how much deductible you want to pay. And it affects him much of the sharing of compensation you'd get. So the higher the coverage, the more of a cut they take. And so your car is always protected.
most people are worried about really like catastrophic things. and if that happens, you just get a new car. How I look at it, I mean, it's a car, it's a car. Like, and like I said, for me initially, especially when my car is kind of like an emotional thing, like, but I love my car and I got over it. Cause I'm not even really that kind of person.
I'm just like, I am with my house, yeah, it'll get things. It'll get replaced. No big deal.
Leisa Peterson: [00:09:29] Nice. That's great. Anything else we should know about with Turo before we skip over to Airbnb?
Naseema McElroy: [00:09:41] Nothing that I can think of it. I'll let you know if I can think of stuff off the top of my head, the insurance piece was big. Oh. They pay like right away. So anytime right after you get your rental, as soon as, I think actually like at least once a week, cause I had someone actually keep my car for two weeks.
But, and they paid, like in the middle of that, and then at the end, so your payments come through really, really fast. And that's what I like.
Leisa Peterson: [00:10:07] Oh yeah. Money, money, money, money. Did, does it have to be a certain newer car? Like are, do they have rules about how new your car has to be?
Naseema McElroy: [00:10:16] forgive me. I do not know what that is, but for example, I think Steve's car is a 2014. So it's not like super new. My car's at 2017. but I, it just has to be in a certain condition. I think I have seen like some older cars on there, but I'm not sure what the cutoff is are if there's a cutoff.
Sorry.
Leisa Peterson: [00:10:35] Cool. But you can go on to Turo and research what your car would command and get some ideas. Just like if you went to Airbnb, you can get an idea of what your property would rent for.
Naseema McElroy: [00:10:49] Yes, exactly.
Leisa Peterson: [00:10:50] And easy to get set up.
Naseema McElroy: [00:10:53] Yeah. Super easy. It's all on your phone. It's all on an app. they also have things where like you can have somebody else come pick up your car and do the transaction for you if you want to.
I mean, obviously that's for like an increased premium, they're the premium for that, ,
Leisa Peterson: [00:11:08] awesome. Awesome. And then do you have to tell people where to charge your Tesla? Do they end up asking about
Naseema McElroy: [00:11:15] the car? The car tells you
great. No, but I mean, the thing is, is that when people are going from a gas vehicle to an electric vehicle, what I tell them to do, and, and, and before they booked my car, I have.
Extensive information on there, how to charge the car, how to drive the car, how to plan a trip around driving a Tesla. Like it's a lot more that goes into the car because you do have to charge. It's a hundred percent electric. Everything is electric in the car, but I'm making sure that people read that.
Like, and I ask them, did you read it? Did you make sure you understand that? And then like, if I'm giving them an orientation, I'll show them like, when you're putting your destination, it'll tell you, you have to stop
Leisa Peterson: [00:11:55] how cool. Okay. That's not happening with my Subaru that we were just talking about just to be clear. Okay. We were just on an CMAs podcast and we were talking about the fact that I like to like get the most. The least expensive four wheel drive cars. Cause we go to the snow a lot and keep those cars for as long as possible to like 300,000 miles .
And then the car dies and yeah, that's, we've got a different approach. But now with Turo, you never know because I like this idea of a new investment. And then how do you keep them from returning it without reach charging it before was a question.
Naseema McElroy: [00:12:37] They, I don't really care. I don't really care if they return before.
I just try to tell him to keep it within like a reasonable range. I live down the street from the supercharger. Even when I move, I'll be right down the street from the supercharger. That's not a big deal
Leisa Peterson: [00:12:48] to me. Perfect. Okay. Well, that's pretty cool. So now let's talk about Airbnb and then I'll keep checking those notes.
Cause I think some other stuff's coming in, but both of us, Airbnb, Airbnb, we have two houses in Sedona that we're renting out and those are full time rentals. Except right now during COVID we had one property. We decided to rent to somebody who had been a previous guest reached out to us because she was saying, thinking maybe, you know, she could come in and stay and we'd let her stay through September, temporarily in one of the places.
But you rent out a place in your current home, you rent out a room or does it have a separate entrance or it's tell us about that.
Naseema McElroy: [00:13:31] So I live on a Hill and doctors below me. I have just the, I have a separate entrance. And so it's just like a big studio area.
With a little kitchenette and you know, its own bathroom. And so I rent that out and most recently our rented it out to, one of my coworkers, but I did do Airbnb and it was super convenient where Airbnb, I barely even saw the people I have. My, my episode of doors was locked. I have, key code on there the day before they come.
I give them the key code number and I leave the key on the nightstand and with a little. Gift bags with goodies in there. And it's like, I don't have to interact with them unless they need something. And then nine times out of 10, they don't need anything. And so that was really easy. And when my coworker was here is like family and, you know, she helped me watch my kids.
So that's nice. I have. They're in my house since I've been on my financial freedom journey because, I mean, it's just a cheap way to decrease your expenses and I've always had like extra rooms. And even now, like I'm moving into another house and want to the, Things that I look for in that I had to have with like a space that is, I wanted to rent it out.
I could rent it out to decrease my, over ahead, because usually it decreases the Berry leasing, inc decreases my mortgage. And let me put this into context. I live in Northern California, so houses are expensive, but it decreases my overhead by usually at least a third to half. so, and other people in other places can do it to cover their whole mortgage, but not in California.
Leisa Peterson: [00:15:12] So, yeah, I mean, there's a few things with renting out your house. We were just talking about this too, where. You can rent your house out to someone else, whether it be through Airbnb or friends, or what have you, those folks like Jody and Tahoe, if you're going away for Christmas and you rent your place out for up to two weeks a year , that is tax free income.
So that's really good to know you don't, there's a part on your taxes that you actually indicate that that money came in and it was. Tax free. So that's pretty cool. So even people who have no plans, except maybe going on occasion for two, three plus weeks a year, you could rent out your home for that time and have it be tax free income, which offsets the vacation or whatever else you've got going on.
but with Airbnb, you can also like my inlaws, They ran out their house. They stay in an RV in the backyard. They've been making, upwards of $10,000 a year doing that. just, you know, a week at a time for people who come to visit the Redding California area. And when you're renting out that property or you're renting out one space, you're using it.
You mentioned earlier, this is part of your financial freedom. Can you just explain , what that means? Cause I don't know if people have heard that before because we speak in weird languages.
Naseema McElroy: [00:16:37] We'd be very aware, really. So my whole goal is to be able to not have to work. I don't want to, to make work optional.
I'm a registered nurse. I love what I do. but I don't want to have to depend on working for anyone else because you know, I like freedom. And so, Part of that is, making sure that, the majority of my money goes into investing and saving for the future so that I have a good nest day to quit my job.
And in this personal finance, crazy fire community that we have, there is a FII number that people calculate and that FII number is 25 times your expenses so, typically, you know, A million dollars is like a goal. A lot of people have, if you have that save and invest, it, you're able to live off of that.
That will yield fourth at $40,000 a year that you can live off X, Y, and Z. But that's like where I get these like a numbers from and like, how. I'm decreasing my expenses on my exposure. It's helping me reach those goals faster. So that's where that both crazy ideas come from.
Leisa Peterson: [00:17:49] That's awesome. So you said, what was the number factor that they're using?
I've never heard this before.
Naseema McElroy: [00:17:55] Okay. it's 25 times your expense senses. So if you think it's going to our retirement, or whenever you're going to leave your dad's retirement is our little word, but it doesn't necessarily need traditional retirement. But if you think your expenses are going to be, say $40,000 a year, when you aren't working, then you would need to say a million dollars and using the 4% rule, which.
Maybe a lot to talk about, right? Yeah. Yeah. Then you can safely draw 4% of your income. And that would be, I mean, 4% from your investments. And that would be $40,000 a year to live off of. So if you have a million dollars, right. Then the chances of that million dollars, right. I think 30 years is like a 90%, 95% chance.
If you use this safe withdrawal, right. So you had all of that.
Leisa Peterson: [00:18:47] And how is that working out for you? How long have you been doing it and are you on track to meet your goals?
Naseema McElroy: [00:18:56] so it's pretty aggressive. but just like life, I feel like, things change rapidly and, Oh, like for me, it would be because I'm in Northern California closer to $2 million.
And, I started this in about the end, the very tail end of 2017 when I first kind of started learning and diving really deeply into, into this community. And I would say I'm well on that path. However, like I said, I love what I do. So my number is going to be a lot smaller like that I need to live off of because I probably, , and because I'm a nurse, I need to work a certain amount of hours to keep my license.
I want to keep my license up. And so even if I, if I work like just like two or three months out of the year, I can reduce that number I'm probably going to do some version of fire. and so I'm well on the way to doing that. So.
Leisa Peterson: [00:19:54] You are amazing. Thank you for sharing that.
You're super inspiring. We have a lot of fun together because we're always talking about these different strategies in these different ways of doing, you know, helping people. And I know you're super focused on that and, And that's awesome. So thank you for sharing and you make it accessible well, and I appreciate that.
And, and so let's, we can talk about Airbnb for a second. So this year with Airbnb has been very interesting, just like you mentioned with COVID shutting things down.
And so we were on track, I think with our two properties in Sedona, I estimated that we would be at about $80,000 this year. And COVID wiped out, bookings in March, April, may, June. Is that a big impact, but still we are at. booked earnings for 2020, at 36,000. we have about 10,000 in expected bookings, but we're about to go into our most , busy period of the year and bookings are happening.
So my guess is, is that we'll probably end up being at about 45,000 for the year with two properties in Sedona. In the middle of a pandemic. and , like I said, there's a lot of different ways to use Airbnb. I created a class. I have not actively sold that class. We're actually moving it to Thinkific, but I may make it available because.
There's actually a lot of steps involved in Airbnb. I think it's more complicated than my impression based on what you explained then tomorrow, but the payoff can be huge, especially if you're renting a, even a bedroom. I mean, right now in COVID a lot of people don't know people coming into your home.
You need a separate entrance to feel safe, but even making adaptations to home so that you can have a separate entrance is like a huge. When for those who own a home who want to have, you know, a strategy, part of the reason I like the Airbnb option, especially in retirement is we have a two properties in Sedona.
And I really thought strategically. And I think too, this is like a very rude chakra thing for me is I wanted to know that no matter what happened, no matter what catastrophes happen, no matter , the floor falling out from beneath me, right? This is, this is the story that goes way back in my family. I wanted to know that I could easily live off of whatever I had available.
So the idea of having an in law unit owning a property with an inlay unit that you could live in and the money coming in from the Enlai unit, it more than covers all of our monthly expenses. To me, that's like a no brainer, right? Like that's a great way for me to be super excited about like, There's a fallback strategy.
There's always a fallback strategy because we just never know what's going to happen. So that was the other longterm. just easy living when you want it. If you want it, you may always want to work, but that's been the strategy that we've applied for having the Airbnb. And learning the business pretty cool.
Once you get it going up and running, it's pretty awesome. I would say the first year takes some work. So anything you want to add to that Naseema? Yeah.
Naseema McElroy: [00:23:19] I mean like for Airbnb. . I overthought it a lot because I thought I had to have like this picture, perfect room and all this kind of stuff.
And like, I procrastinated a lot longer than I probably should have. And at the end of the day, I was just like, one day I was just like, you better just like list this thing. And I just lifted it as it was with my imperfect pictures and I just started getting bookings and I've never stopped. And I think that's what a lot of people do.
They think that they have to perfect things. especially if it's new to them and they don't have to another thing that you can do, if you don't want it two, or you're not necessarily into the learning curve of Airbnb or the kind of turnover that comes with Airbnb. Because like, for me, I had a lot of turnover with Airbnb.
I use another tool actually to rent out my space. actually never had to use it, but I set up an account. it's called furnished finders. And, I like it because it's usually longer term. It's a lot of nurses who are working on contract and they a come usually at . Three month period at a time.
And the thing about furnished finders is, is that, you just pay a fixed fee once a year to use their site, to list it, to list your property, you list your property on there. And then people send inquiries. And I don't even know my property isn't even listed, but somehow people find my property and I get inquiries all the time.
And, Even like, for example, like people reach out to me, for this list thing and I'm like, yeah, this property isn't available, but I am moving. And if you are interested in being in this area, you can apply to, You know, live in my house here. So, that's the difference between that kind of site versus like an Airbnb it's like straightforward, you just list your property.
People reach out to you. the drop back to that is you have to kind of do your own leases and your background checks, but they've actually partnered with Cozy, . It's a done for you service now. And so, it's kind of made it really easy, but like with Airbnb, the ease is that, you know, you have this insurance, if somebody messes up your property, the money flows through them.
So you don't have to worry about collecting money. And, so that's a little bit of the difference, but I think that, furnished finders has kind of found a way to mitigate a lot of those things that may make it harder for other people, to use their services. So.
Leisa Peterson: [00:25:38] That's awesome. That's awesome good things to think about.
Maybe not immediately, but they can be ideas that like Nisima said. Doesn't hurt to try. Doesn't hurt to see what happens if you are not using your car on a regular basis, or you've got a space that you can rent, or even just, you could book something out like Christmas. You could book that out six months in advance and know who's coming and have it all.
Set up and get to know the people. We've had great luck with people through Airbnb, just very, communicative, helpful. It's been amazing. I mean, we have had very out of. Hundreds and hundreds of bookings over the past couple years, we have had two situations that we're like, Oh, that was kind of awkward.
We had to do some running around. We had some issues, but that is hardly anything. When you're talking about making, you know, well, over a hundred thousand dollars on Airbnb and we've only had a couple issues and they cost us, like in the end, Airbnb took care of things and we were able to rectify by the situation.
Maybe we had to spend $150 bucks for a mattress on a sofa so far something, you know, no big stuff. So good stuff. And I'm hoping folks are inspired thank you so much for hanging out with us and sharing all these great things. Really appreciate it. That's awesome. I love it.
Hey there I’m Naseema
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