It calls itself the “Airbnb of storage,” and it might be one of the easiest ways yet to earn passive income.Neighbor.com has set out to revolutionize the self-storage industry. This service allows people to rent out unused space in their homes or on their property to potential renters who have stuff they need to store.
With annual revenue of $36 billion, the self-storage industry is a massive market. For comparison, if you added together all of the McDonald's and Starbucks locations in the U.S., you still wouldn't equal the number of self-storage units there are in the country. All trends point to it continuing to grow as Americans continue our love affair with our stuff.
So how does Neighbor let you take advantage of this booming industry? Here's a look at how the business works, how much money you can make, and why it might be right for you.
What Is Neighbor?
Neighbor is a website that allows you to rent unused space in your home to people who need more storage space. Basically, you're a storage unit for someone who lives close to you. Instead of going to a self-storage facility, they would come to your house to store and retrieve their goods.
The company was started in 2017 by a few guys with a simple but transformative idea. One of them was looking for a new way to store his stuff after a disappointing experience with a self-storage unit. He ended up storing his belongings in a friend's garage instead. And just like that, Neighbor was born.
The business is called “Neighbor” because, from its inception, the goal was to connect people within a community to meet each other's storage needs. Instead of driving across town to a storage unit, you can keep your things in a neighbor's house, someone who only lives a few doors down from you.
In two short years, Neighbor has expanded into all 50 states and Washington, D.C. For people who need to store things beyond boxes and clothes, Neighbor has also expanded into the areas of boat, car, and RV storage in many cities.
Let's Talk Money
Let's face it. The first question anyone asks about a side hustle is, can it really make me money? The answer with Neighbor is yes, it can, and with minimal work from you.
How Much Money Can You Make?
The short answer is that you determine what you charge for your space. That means you determine how much money you can make. However, you want to be smart about what you list your space for in order to attract renters and make money. Ultimately, what you charge renters to pay depends on several factors.
- How big is the space you have to rent? The bigger your space, the more money you can charge.
- Where do you live? Areas of the country with a higher cost of living generally means that you will be able to charge a little bit more for your storage space. Neighbor also provides a price range for storage areas, and part of what they factor into that range is your location.
- What does traditional storage cost where you live? The general rule of thumb for setting a price for storage space rental is that it should be around 50% of what the traditional storage costs. Take a few minutes and search out those costs where you live.
- What are other people charging in your area? In order to give yourself the best shot at getting a renter quickly, you want to charge a similar price for your space as others in your area are charging for theirs. If you overprice your space, you may not find a renter. If you underprice your space, you aren't making as much money as you could.
Does It Cost You Anything?
It doesn't cost you anything to list your space on Neighbor. When you do connect with a renter, Neighbor charges a service fee of 4.9% of your gross reservation. They also charge $0.30 for each payment you receive going forward. For example, if you rent your space for $100 a month, Neighbor will charge you $4.90 when you initially find a renter and $0.30 for each payment you receive from that renter.
What About Insurance?
Neighbor has your back on that. Per their website, as a host, you are not liable for any damage to your renters' possessions that you did not cause. Neighbor also provides a $2 million insurance against damage or loss caused by a renter to your personal property. That kicks in if and when your own homeowners' policy does not cover the damage.
Pros And Cons Of Neighbor
Like any side hustle, there are pros and cons to participating. The good news for Neighbor is that there are more pros than cons.
- You can vet potential renters. As a host, you're allowed to ask potential renters to see their ID, to see pictures of the things they're planning on storing in your home, and even meet them in person before you agree to store their belongings.
- You can set your price. As we stated above, there are guidelines you should follow and things you should consider before setting your price. But in the end, it's your decision how much you charge for your space.
- You can choose how long you rent your space. Hosts set the terms with their renters, so while most renters are likely looking for something longer term than just a few months, you can work out what works best for both of you.
- You decide how much access to your storage space that your renters have. You can choose between 24/7 access, business hours, or upon request.
- You're capitalizing on space you're not using. If you have empty space in your house, why not put it to work for you? That's an easy way to make money.
- Neighbor uses the same technology as Facebook to help connect you to potential renters you might know through other people. What this means is that, as part of the vetting process, you can see if you have any mutual friends with your potential renters. That might help ease your mind if you're concerned about renting space to strangers.
- You don't have access to that space at all while a renter is renting it. Make sure that the area that you want to rent out really will be empty for the foreseeable future. If you rent out your guest room as storage space and then grandma decides she's going to come to town for Thanksgiving and that she must use that room, it's bad news for you. Your renter has rights and if you have to ask him to leave early, you might have to pay a penalty.
- You have a responsibility to keep someone else's property safe. You're taking possession of someone else's belongings and agreeing to keep them safe. That means you must protect it from kids going through it, pets being in the room, etc.
Taking all of this into consideration, we believe Neighbor is a solid side hustle. We recommend it as a worthwhile way to make passive income. If you have spare space or you can clear out extra space in your home, you can bring in extra cash for little to no investment on your part. Just clean your space, list it on Neighbor, and get ready to collect your money!
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