Greg's Corner

Personal rentals: A quick buck with a lot of hidden risks

When the economy is in the tank and money is tight at home, people can do some out-of-the-ordinary things to make an extra buck – like pimping out the family dog or letting a stranger rent your car for a week. 

Such was the story of Rob Baedeker, a self-described “rentrepreneur” from Berkeley, Calif who penned an article in Newsweek magazine last month about his new money-making adventure. Baedeker rents his stuff – anything and everything imaginable – to anyone willing to pay. A doglover whose landlord doesn’t allow pets rents Baedeker’s border collie for $6 for a couple of hours of playing fetch in the park. For $18, he lets a group of strangers use his backyard deck for a Sunday afternoon party.  For $25 per night, he provides an air mattress in a spare room for a stranger seeking a hotel alternative. 

Renting out your own stuff, I suppose, is no different from lending a a hedge trimmer to a neighbor, for example. Opening your home to a stranger for the night the way you would a relative or close friend, however, is quite different. Still, if he’s OK with that, who am I to criticize? After all, Baedeker is just being entrepreneurial – and his article in Newsweek is a fun piece that paints a rosy picture to suggest that you could also start raking in big bucks if you did the same. 

That’s where I have a problem with all of this. You see, what Baedeker doesn’t include in his article – and Newsweek’s editors apparently didn’t consider necessary – was an acknowledgement of the risk factors involved with some of these rental transactions. 

Here’s what I mean: Baedeker boasts a $150 windfall from renting his old 1992 Saab to a woman from France who will be spending a week in San Francisco for an art show. But renting a car is quite different from renting out a belt sander for a few hours. Let’s consider some questions that I would ask before even thinking about handing over my car keys. 

Does this woman have a driver’s license that’s valid in the U.S.? How’s her driving record? Does she have a history of reckless driving or, worse yet, DUIs? Does she have any experience driving in San Francisco? What if she gets a parking ticket? What if she hits a light pole? What if she hits another car? Actually, forget the car. What if she hits a pedestrian? What if someone gets hurt? What if someone dies? 

Sure, you can call me an extremely paranoid “what-iffer” if you’d like. But these sorts of things happen all the time. (Just ask a parent with a new teenage driver about all of the “what-if” thoughts that go through their minds.) What would Baedeker do if lawyers representing an insurance company filed suit against him on behalf of the child who was injured by the driver of his car? Would his insurance policy cover that? Knowing what I know about insurance companies, I would guess the answer to that question would be no. 

As a responsible adult, you just cannot afford to dismiss or overlook any possible scenarios. Earlier this year, I chimed in about some controversy over a site called AirBnB, which connects people who are looking for a hotel alternative with people who are willing to open their homes. As expected, there was an incident with a home being trashed. And yes, lawyers got involved. Today, AirBnB is still around – in fact, Baedeker references him in his article – but they’ve learned from their mistakes. 

I would certainly never try to rain on the parade of an entrepreneur. But any good entrepreneur needs to know about the risks involved with a business venture so that they can be weighed and considered when making a business decision. It seems to me that Baedeker is just having some fun and making a few bucks along the way. 

That may be all fine and good – but if something goes wrong, just know that the $150 Braedeker pocketed with that car rental isn’t going to be nearly enough to take care of the financial nightmare that could follow.