If your apartment community has onsite management, you really should evaluate U-Haul’s potential for side income.
It’s possible to have a small dealership with limited hours. You can run a weekend-only business if you’d like.
Of course you want to get the majority of your business from neighbors but your dealership can be a nice perk for your residents as well.
And, here’s something amazing that you might not know… you can set up a dealership for free. That’s right! It cost $0 to become a dealer. Just place a phone call, work out the details, and receive your truck(s) or trailer(s).
What is a U-Haul Dealership?
U-Haul is a moving equipment rental company that has been in business since 1945. They completely dominate their industry with their breakeven pricing strategy. They don’t make money on the truck rental! They make their money on selling accessories. Their profits come from side income!
U-Haul advertises their trucks for $19.95 per day, and that’s their hook. The real money comes from:
- Charging customers $1.09 per travel mile.
- Up selling boxes, packing tape, insurance, convenience fees and penalties, use of dollies, blankets, etc.
As the dealer, you get to keep 21% of the gross sales, so the more you up sell, the more you can make per transaction.
How Much Can You Make (Without Trying)
Say you house one U-Haul truck and it’s rented four times per week (16 times per month). Assume each customer travels 60 miles round trip and half of them bring back the truck without refueling it. Then your numbers would look like the following:
- Base Rental Charges: $19.95 per day x 16 rentals/month = $319.20
- Mileage Charges: $1.09 x 60 miles/rental x 16 rentals/month = $1,046.40
- Refueling Charges: $4.75 per gallon x 7 gallons consumed/trip x 8 rentals/month = $266.00
The grand total comes to $1,631.60 and since you’re paid a 21% commission, you get to keep $342.63.
Breaking Down the U-Haul Rentals
Let’s drop this idea into a breakdown table.
|What:||Use part of the land on your rental property to operate a small U-Haul dealership|
|Why:||Your residents and non-residents are always moving. Your on-site staff, especially if they are under-utilized, can operate this profit center with minimal effort and little start-up costs.|
|Increase Net Income By:||Collecting a 21% commission of gross sales|
|The Extreme Version:||Utilize your high traffic count in front of your rental to build up your business then buy and operate your own equipment and keep 100% of profits.|
|Possible New Income Streams:||
|Steps to Implement/Test:||
Although U-Haul is a turnkey side business that encourages online self-service, it does take effort to check in customers, refuel and clean vehicles.
This is an example of how you can make side income serving people who don’t reside on your property. It’s also an example of how a company, in a competitive environment, makes money not with their main product but with side income.
Even if a U-Haul dealership isn’t a good fit for your property, two questions still need to be asked:
- Are you at least breaking even with your rental?
- Do you have a side income strategy to ensure your profitability?
If the answers are “no” then you’re leaving money on the table. It’s time to go get it!
Check out my other methods of making extra money from your rentals.