6 Easy Ways Retirees Can Cash in on the Sharing Economy
Whether renting out a car or an extra room in the house, retirees can generate some extra income with an Internet-based side business.
At age 57, Scott Ullerich of Redondo Beach, Cal., is still earning a paycheck from his job as a human resources professional at a large aerospace company. At the same time, he's earning money on the side -- a few extra hundred dollars a month -- by participating in the Internet-based "sharing economy."
You've likely heard of Uber, the taxi service, and Airbnb, which connects people renting out rooms or homes to travelers seeking short-term accommodations. Ullerich uses RelayRides (www.relayrides.com), a service that unites car owners to people who are looking for cheap car rentals. He lists his 2010 Kia Soul on the service's Web site and mobile app.
His primary customers are travelers flying into Los Angeles International Airport, which is practically next door to his office in El Segundo. "I'd say I'm averaging about $400 to $450 a month on this thing," says Ullerich, who charges $37 per day to rent the Kia, his second car. He estimates that his car is booked three weeks of every month. RelayRides takes a 25% cut of the rental price. It screens all renters' driving histories and provides a $1 million liability insurance policy on each rental.
The sharing economy enables individuals to bypass traditional businesses to rent, borrow, lend and trade goods and services directly from each other. Want to earn a little extra cash by doing odd jobs around town? TaskRabbit (www.taskrabbit.com) connects you with people who need specific services done, such as handyman chores, babysitting and packing. Yerdle (www.yerdle.com) is an online community where you offer up personal items -- clothes, dishes, gadgets -- you no longer need. Bidders pay with Yerdle "credits" rather than cash, and sellers can use these credits to acquire items posted by other Yerdle users.
Often associated with young hipsters looking to save a buck, the sharing economy is attracting many older individuals, too. "The sharing economy is my retirement plan," Ullerich says. "If I can figure out enough of these little side businesses, I can probably retire sooner rather than later."
Here are several that Ullerich and you can consider. Make sure you read any contracts or agreements before you sign on. And ask your accountant about any taxes you may owe on the income.
Cottage for cash. Got a spare bedroom or guest cottage? Why not use it to generate extra income? That's the idea behind Airbnb (www.airbnb.com). Toby Judith Klayman and Joe Branchcomb, both 79, are artists who use Airbnb to rent out their cozy garden cottage behind their home in San Francisco's Bernal Heights neighborhood. The 9-by-12 foot space, which rents for $125 per night plus a $60 cleaning fee, generates a steady income stream, the couple says.
Airbnb handles the online billing and takes a 3% cut. Hosts are paid 24 hours after their guests arrive, a delay designed to protect visitors, who can get a refund if they don't like the accommodations. Airbnb will also reimburse hosts for up to $1 million in damage.
Klayman and Branchcomb say their cottage is a big hit with travelers. They had 50 guests in 2013, and more than that in 2014. "We close the cottage when we feel the need to be alone, or when family comes," says Klayman, a retired art professor.
Guests receive a welcome package with postcards of their art, as well as a walking map of the area. "We've had a wonderful time with the guests," Klayman says. "A lot of them are our Facebook friends now. They come back and have tea when they're in the area."
Although Airbnb offers liability coverage, it's secondary to your own homeowners insurance. Not all policies will cover damage caused by a guest who books your property. Guests must go through Airbnb's verification process, but hosts also should screen their guests by checking their social media profiles and calling the phone numbers they give the service.
Recycled rides. Many of us have an extra bicycle or two around the house, or maybe even a dusty pair of skis. Why not make a few dollars off of them with little effort? Spinlister (www.spinlister.com) is a person-to-person rental service for cyclists, skiers, surfers and snowboarders.
Timothy Calvert, 52, of Portland, Ore., uses the service to rent out his fleet of four bikes. Customers pay Spinlister directly, and the service takes a 17.5% cut of the listing fee. If a bike is damaged or stolen during a rental period and the renter won't reimburse the owner, Spinlister will cover the cost up to $10,000. "I'm renting bikes for basically $10 per day, which is a really good price compared to shops," says Calvert.
Calvert says his bike-rental operation isn't exactly the road to riches. After Spinlister's cut, he nets less than $25 for a three-day rental. He also is an Airbnb host, so he rents bikes to his overnight guests -- another potential profit center.
Calvert believes the relaxed vibe of Spinlister and other sharing-economy sites is a large part of their appeal. "I think customers prefer the nonpressure atmosphere of a smaller, at-home business compared to a retail shop," he says.
Doggie getaways. Richard and Reggie Bliss of Woodland Hills, Cal., are a married couple who raised six children together. "They're all grown, in their thirties, and are now getting their own dogs," says Reggie, 65. "And, of course, we're the first ones they call and say, 'We don't want our dog in a kennel, can you take care of Fido?' " So when she and Richard, 67, a retired chiropractor, heard about DogVacay (www.dogvacay.com), a service that connects pet sitters with pet owners, they figured they had the skills to give it a go.
Since March 2013, their dog-sitting business has been taking in pets from across Southern California. If they ever encounter a problem dog, they can phone DogVacay's 24-hour hotline for help. Pet owners leave an emergency backup if the host has trouble with a dog. Hosts and dogs have a meet-and-greet before the boarding to make sure the guest dog interacts well with the hosts' dog.
DogVacay's boarding rates start at $25 per night, although sitters do have the option of charging higher rates, as the Blisses do. The service takes a 15% cut and provides insurance for both hosts and pet owners. The coverage includes injuries a dog may cause to a third party and emergency vet bills. Check the Web site for additional details on insurance coverage. Although Reggie would not say how much she and Richard earn each year, she says a successful pet-sitter could make $30,000 to $40,000 a year.