The rental business is the future of our generation, and the best part is, we’re just getting started. The older generations believed in buying stuff. Ownership is the great American dream that our forefathers and even our parents saw and tried to achieve.
But, now it seems that the definition of the great American dream is changing. It’s no longer about ownership but living the best life at the lowest cost. The Rental system is what makes this new lifestyle possible.
A simple example would be why to spend a fortune on a BMW just to show-off. Instead, you can pay a couple of hundred dollars to rent once for a party, and every time you get to the party with a new luxury car.
Which option sounds better? Owning and maintaining a single costly car, or rent several cars and don’t have to worry about maintaining—obviously, the second one. Today we will be talking about how to start your million dollars worth own online rental business.
What is Rental Marketplace?
A rental marketplace is a platform where individuals or companies can rent different types of goods and properties. This Rental Marketplace is what you will be building to start your own online rental business.
If you have seen the Airbnb app or Hertz car rental website, that’s what a rental marketplace is. The features and design differ according to the services each rental business offers and their visual theme. The digital rental marketplace can be offered via two platforms: a website portal and a mobile app.
The popularity of such rental marketplaces has skyrocketed in the recent couple of years.
Renting items (that are expensive or used infrequently) instead of buying them is cheaper and much more convenient for users. There is a rental marketplace for almost anything and everything from properties to equipment and apparel to appliances.
Note: There are two types of business models that online rental marketplace business offers; we will discuss both these models later in the blog.
There has never been a better time to become a rental marketplace entrepreneur than in 2020. The Millennials and Gen Z are the lead earning generation, and they avidly follow the rental approach more than the purchase approach.
How to Build a Lucrative Online Rental Business?
The rental marketplace business vertical is witnessing the largest turnover in the past half a decade than they ever saw since this business vertical came into existence. The rental and sharing economy are huge trends with massive business potential.
Let’s take a look at the most feasible way to build a million-dollar online rental business.
Step 1: Find Your Niche Market
There are several options that you can choose from to start your own rental business. For instance, you can start a rental marketplace portal for Airbnb properties or one that rents out furniture like Cort.
Choosing your niche depends on a few factors like:
- What kind of rental marketplace will work best in your city or state?
- What amount of capital you have for inventory purchase?
- What rental business vertical are you most familiar with?
- Does your target audience need such a rental service?
Answers to these questions will define what specific rental service you’ll be offering as your startup. There are several rental service options that you can launch your startup in, and we’ll talk about those options later in the blog.
Step 2: Create a Foolproof Business Plan
Now that you know what rental service you’ll be offering, the next step is to create a solid business plan for your online rental service startup. You need to first understand the two different business models that online rental business offers:
- Traditional Rental Business Model
- Peer-to-Peer Rental Business Model
The traditional rental business model is where your business owns the digital marketplace and the inventory that you’ll be offering to the customers. The cost of starting a rental business based on this model is costlier as the cost of inventory, storage, and maintenance also lies in you.
The Peer-to-Peer rental business model is where your business owns only the digital marketplace platform. In contrast, the inventory is owned by several owners that register to your platform to rent out their stuff. The customers/renters will interact with the providers/rentees via the rental marketplace portal.
Now you have to decide which business model to choose and build your rental marketplace accordingly.
Step 3: Build Your Online Rental Marketplace
Now you know what rental service you’ll offer and which business model you’ll decide on. It’s time to take the next big step towards building your million dollars online rental business. What you need to do now is to find the best real estate app development company to build the digital platform for your rental service business.
There are two ways to approach the rental app development process: (i) Custom App Development and (ii) Clone App Development Solution. Both approaches have their own benefits and drawbacks, and choosing the right one depends on your specific business needs.
The custom app development approach is costlier and takes longer than the clone solution, but it also provides the best quality and features. The rental app will be made from scratch so your every requirement will be fulfilled accurately, and the app will be tailor-made for your brand.
On the other hand, the clone app development approach is 1/10th the custom one’s price, but there is also a limit to the level of features and quality that one can achieve with this approach. People usually go for the clone app solution when they can’t afford the app development cost and are ready to compromise with the app’s quality, design, and features.
Step 4: Promote Your Online Rental Marketplace
Your app is all set to launch, and your rental business brand is ready to be introduced to the world. But how do you let your millions of potential customers know that such an online rental marketplace exists for them?
So, how do you roll the ball on app promotions, and where do you start from? The trick is knowing where your potential customers spend their maximum time and utilizing all your marketing resources to advertise on those mediums. Only by doing so can you make every penny of your marketing budget worth it.
For example, if your rental business offers a sports equipment rental service, you shouldn’t waste your money and time on cheap magazine ad space. Rather, your target for promotional activities should be to do paid promotions with sports and outdoor adventure influencers on social media, blogging sites, and forums where people discuss sports, etc.
If marketing is not your strong suit, you can hire a small marketing team or even a single marketing expert to take care of your rental app’s promotional activities.
Most Popular Online Rental business ideas
We discussed the entire business model for Online Rental Service Startup, but what if you are still stuck on step 1? No need to worry. We have formed a list of the best online rental business ideas that you can choose from to start in 2020.
Wedding Equipment Rental
Weddings are the most beautiful but also the most expensive celebration that any family hosts. Why not ease the families’ financial burden off the families b giving more rental options and making good revenue from it. Everything from the wedding gown to the decoration piece on guest tables everything can be rented out.
Clothes & Apparels Rental
Why buy a single party dress for a few hundred dollars when you can rent several dresses for the same price. People understand this and opt more for rental clothes and apparel for parties and special occasions.
Party Supply Rental
No one in their right mind will buy an entire bouncing house for just a birthday party. People usually rent out such big party elements like a petting zoo, trampoline, bouncing house, snow machine, etc. You can rent out these party supplies and make a steady revenue all around the year.
Books will always be trending, but not every reader has space to create their own little library. So, usually, such avid readers rent the books and return after reading. Some local bookstores and libraries have begun to give such book delivery service based on the rental model.
Whether you are new in town or visiting a tourist place for a short vacation, renting a car is a wiser decision than buying or taking your own car. Several businesses offer offline rental services, but you can change the game and raise the profits by offering an app-based online car rental service.
Many people own more than one property and are usually looking for potential renters all the time. You can provide a property rental platform where renters and rentees can interact and find the perfect match for each other. You get to earn a commission on every transaction made.
Construction Equipment & Tools Rental
Many handy professionals and construction workers are skilled laborers but can’t afford to buy the tools they need to offer their services. The best option for them is to rent particular tools as per their needs and return when the work is done.
Travel Equipment Rental
Several people love traveling and discovering new places. Each place has its own climate and unique specifications that need various equipment. For instance, if you wish to explore Alaska’s cold lands, you need winter wear, while a trip to Miami would need a surfboard. You can partner up with travel sites and offer travel equipment rental options.
Sports Equipment Rental
Some people love to play cricket while some like swimming, but why pay for sports equipment you’ll use seldom. It’s better to rent out such sports equipment once in a while for a low price. You can either own your own inventory or let other people rent out their sports equipment on your rental platform.
Music Instrument Rental
Just like sports equipment, you can also start a music instruments rental service. A guitar or keyboard could be costly for some people, but that doesn’t mean they need to let go of their dream to learn and play those instruments. They can rent musical instruments for an evening or a month as per their needs.
Vacation Home Rental
Not everyone owns a vacation home in the country, but that shouldn’t stop a family from having a dream vacation trip once in a while. You can start a vacation home rental platform for such people. The homeowners will get a side income from their assets while renters get to enjoy a beautiful vacation, and you get to earn a good commission.
Whether moving to a new city or starting up a new office, buying home and office furniture is a costly investment that people can avoid entirely. By renting furniture at a fraction of the price, there is no worry about a substantial capital investment or maintaining and dragging the whole thing when moving out.
Like furniture, electrical appliances like toaster, coffee maker, TV, fridge, etc. can be rented. This service is not just for household appliances and devices. IT firms and any other companies that work with many appliances and digital devices like laptops, mobiles, tablets, etc. can rent these costly devices at a low rental price per month.
Build Your Own Million-Dollar Online Rental Marketplace
Creating your own online rental marketplace business is not very difficult if you have the right idea and the right team to execute your idea. At the end of the day, it all boils down to two things; how powerful your rental service app is and how talented your team is in running the business.