Why Buy a Car, Jet, or a Vacation Home When You Can Share It?
The American dream typically centers around ownership.
We dream about buying our first car or our first home. More ambitious dreamers target a second home for holiday getaways, or a private jet to whisk them away at a moment's call.
There are both financial and logistical hurdles to making these things happen, but what if there were a cheaper -- and easier -- way?
Bumming Rides, Crashing on Couches
Asset sharing has become a popular theme on Wall Street. There was no shortage of demand when HomeAway (AWAY) and Zipcar (ZIP) went public, despite the climate of volatile share prices of IPOs.
Both stocks popped higher on their first days of trading, and they both continue to trade well above their original IPO prices.
HomeAway gives property owners a way to help offset the sting of second home ownership by showcasing them as short-term rentals to folks who need a place to stay for days, weeks, or even months. Travelers benefit because they can stay in one-of-a-kind vacation homes that are far more spacious than cramped hotel rooms, often at prices that are comparable to, if not cheaper than, conventional lodging.
Everybody wins: Owners can make money on their vacation properties when they're not using them, while travelers can stay in a genuine vacation home without the costs or hassle of actual ownership.
It's not surprising to see HomeAway so successful. The $329 property owners pay annually for listing their getaways and having access to HomeAway's seamless fulfillment tools is typically made back on the very first rental. Through HomeAway.com, VRBO.com, and several other websites it owns, the company offers more than 625,000 paid vacation rental home listings in more than 145 countries.
Baby, You Can Drive My Car
Zipcar is another asset-sharing success story.
Owning a car can be a drag. Between car payments, routine maintenance, insurance premiums, and fuel costs, having a set of wheels can drive your disposable income a lot lower than you think for a machine that sits idle most of the time. Zipcar offers a way out with a presence in 15 metropolitan cities and on more than 250 college campuses.
Zipsters -- that's what members call themselves -- typically pay a one-time $25 application fee and an annual fee of around $50 to join, and are then charged as little as roughly $8 an hour for a car. Unlike traditional auto rentals that can nickel and dime you over longer periods, Zipcar reservations cover insurance, gasoline, and up to 180 miles per day.
Environmentalists love Zipcar because they eliminate the carbon footprint of having a plethora of cars on the road. There were 604,571 Zipsters sharing 9,480 cars at the end of June. Drivers love Zipcar because it's cool. All it takes is a smartphone app or a high-tech Zipcard to open a reserved Zipcar from its designated parking spot.
Zipcar obviously will never be for everybody. The math won't work for suburban residents with frequent daily commutes. Zipcar is concentrated in major cities or college towns where occasional treks for leisure or groceries make sense. But given Zipcar's healthy growth over the years, it's clearly resonating for its growing army of Zipsters.
Asset Sharing 2.0
If time shares and traditional auto rental agencies were the past of asset sharing, and HomeAway and Zipcar are the present, airbnb and Relay Rides may very well be the future.
Sponsored Links
You don't need a second home to cash in through airbnb. If you have a spare room that you're willing to rent out, airbnb is growing into a popular option. It's an intriguing value proposition. Listing is free: Property owners only pay a 3% commission on any completed bookings. There are now more than 70,000 listings on the site. Venture capitalists have been investing heavily in airbnb in recent months, so an IPO in the next year or two isn't out of the question.
RelayRides and Getaround also take Zipcar to the next level, allowing individual automobile owners to offer up their cars to others, instead of relying on a company-owned fleet. There's also been a fair deal of venture capital flowing into these true car-sharing upstarts.
Flying High
At least one iconic billionaire investor is on board with the sharing of big-ticket assets. Warren Buffett's Berkshire Hathaway (BRK-A) (BRK-B) owns NetJets. The pioneer in fractional jet ownership allows well-to-do travelers to buy time to use a private jet without breaking the bank by actually buying a Cessna or Gulfstream.
The sky isn't the limit, apparently. Several cities have startups that offer exotic and luxury car rentals. Yacht-sharing clubs are popping up in coastal cities.
So the next time you're ready to plunk down your hard-earned -- or borrowed -- money on a car, home, or dream asset, see if there are cheaper sharing options available instead. The asset-sharing model means that you may be able to afford more than you think you can.
The American dream -- your American dream -- is closer than you think.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article, except for Zipcar. The Motley Fool owns shares of Berkshire Hathaway and Zipcar. Motley Fool newsletter services have recommended buying shares of Zipcar, Berkshire Hathaway, and HomeAway.
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