So what can you make from your SPOT rentals?
If you haven’t heard of Airbnb, you need to start watching the news more…or going on the internet in general. For those unaware, Airbnb is an online marketplace that allows individuals and property managers to rent out their room or home. Most places are typically cheaper than hotels and easier to reserve.
A term associated with Airbnb is rental arbitrage. Rental arbitrage is when the potential daily revenue you could make from an asset highly exceeds its daily cost. Let’s use a hypothetical Airbnb listing. If your monthly lease/rent amount is $1100 and you list your home at $100/night on Airbnb, you’d only need to rent your home for 11 days to break even on your monthly bill. That means the other 19 days would be pure profit, thus rental arbitrage.
SPOT is very similar, however, when renting your parking space as opposed to your home, it works a little differently. To better illustrate the difference and potential, we looked at a SPOT that’s currently rented out in the South End/Back Bay.
The Owner’s cost for their SPOT is $300/month. This SPOT, however, has a limited availability: From Tuesday-Saturday from 9:30am-6:30pm. This means the daily cost of the SPOT is ($300/22 days) $13.63/day. Since they sets their price at $25/day, they only need 12 days booked to break even. That means the other 10 days would be profit, which is great with a limited availability! Let’s take it one step further and look at this by the hour.
So for this Owner, their SPOT is only available for 8 hours day, 5 days of the week (160 hours a month). This makes the hourly cost of their SPOT ($300/160 hours) $1.88/hour. At their rate of $3.50/hour, they’d only need to have about 85 hours booked to break even, meaning they’re making even more than at a daily rate.
On top of the potential profits, you don’t have to market your SPOT in any way and the app handles most forms of management so you can live your life easier. Unlike Airbnb, you’re mostly not interacting with your Renters since it’s usually in-and-out. All you have to do is sit back and watch the cash come in.
They say money doesn’t grow on trees but thankfully that doesn’t apply to your parking SPOT! If you have a SPOT, feel free to reach out with questions and check out some other blog posts that help you learn how SPOT makes you money!