How the Sharing Economy is Changing Home Affordability

The sharing economy has come out as a good thing for plenty of people. As its name suggests, it works when people who own things rent them out to others in need and in the process the owners earn money, where he would not have, while the person renting forgoes the cost of buying the item. The cost of renting is usually less than the traditional rentals. This also provides a great opportunity to purchase a piece of investment real estate in Cedar City.

Some of the notable examples include a house owner with an extra room renting it out, someone borrowing your car to drive himself around or the owner driving you around in their car. The sharing economics has been there for a while but over the last few years, it has started moving towards mainstream. So why is this?

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Globalization and Urbanization in Cedar City and Surrounding Areas

Every year tourist boards like the Cedar City Tourism Bureau trumpet on the growth of tourists in the area. Reasons for this may be due to good living conditions or the business environment. This has made the world a smaller place as people travel further towards cities in search of housing and transport services. In the past, only big brands such as big hotels and car rentals would have been the choice but now, that is not the case. And this is the case for Cedar as well, and provides an opportunity for investment in Cedar City.

Urbanization is continuing at a very fast rate. If you would take into consideration the US, in 1960, only 67 percent people lived in urban areas. Now, it is 80 percent. Add up to the population growth, this leads to many people living closer together. This would lead to the question, “Do I really need a car?”

Some companies are studying this trend and trying to show people how to live in these conditions.

Breaking the Barriers to Adoption

There have been plenty of technological advancements towards business that have removed the barriers of adoption for home owners in Cedar City to rent out their homes on something like a vacation rentals website. They include smartphones that enable real time discovery (location of the nearest car or bus stop), social media that provides transparency (the kind of person you are renting your room to and if they are trustworthy), mobile cashless payment processes and also geolocation supporting tracking methods and many more.

With these technologies, companies such as Uber, AirBnB and Lyft which have huge brands, valuations running into billions of dollars and huge insurance covers, are able to provide price standardization, risk management and insurances allowing people to borrow and rent without fear as their services are of high quality as well as extensive experience.

Cedar City Real Estate Investment Affordability Impact

There is a huge impact on affordability in these services. For instance, a normal Lyft driver can make about $25 per hour. At times, one shift of six hours would rake in about $500 in one month. For those who rent out their car through Relay Rides, they are able to make about $250 per month. This allows people who do not require cars to save up on thousands of dollars.

Even for small US cities like Cedar, you will rarely find one room on AirBnB that costs less than $70. Therefore, it is possible to make about $300 easily by renting out your spare room for some nights every month.

With these statistics, it doesn’t take a genius to notice that spending $300 per month would make him or her avoid a debt of $50000 with 5% in interest rates. Therefore, figure out on which side you would like to be in as both sides are beneficial.

So the incentives to invest in a Cedar City investment property are getting better and better.

Photo Credit: Joanne

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Rich Bontadelli