Creating Your Own Rental | Using Quality Items w/o the High Cost of Ownership

Move along, nothing to see here!
Post Reply
User avatar
Ego
Posts: 6359
Joined: Wed Nov 23, 2011 12:42 am

Post by Ego »

A little more than a year ago my wife and I were preparing for an extended trip to Asia which we knew would include the three-week Everest Basecamp trek in Nepal. For the trip I wanted a Suunto altimeter/compass/thermostat watch.
We are extremely frugal. Typically when contemplating a purchase like this we ask ourselves - and one another - a simple question, "Do you need it or do you want it?" Clearly the watch was a "want". So I employed another technique I've used in the past and it worked like a charm.
Most of the stuff we buy does not last very long. Nearly everything has a built-in, preplanned useful life that seems to be getting shorter and shorter. The trick, it seems, is to avoid being the guy who is left owning the item at the end of that useful life. Buying good stuff is important, but getting rid of it before it dies is even more important.
So, back to the watch.... I figured out exactly which model I wanted then bought it second-hand on ebay for $105 with shipping. I used it for a year of travel. I used the altimeter to calculate every meter on our way up to basecamp and used the compass to navigate winding alley-like streets of Northern India on a Royal Enfield. Over that time it got a few minor bumps and scratches, but nothing major. After returning home it still worked perfectly so I snapped closeup photos and listed it on ebay for a little more than I paid. After shipping and ebay/paypal fees I ended up spending $9.75 to have the exact watch I wanted for a year. In short, I created for myself a rental. I borrowed it from one person and returned it to another.
The best part, I will not be the one who owns the expensive watch when it finally stops ticking. Someone else will have it decorating the bottom of their sock drawer.
I've been using this technique for other somewhat perishable items as well. For instance, I'm an avid cyclist. I often cycle early in the morning, before sunrise. A good light is a requirement. Good lights are expensive and after a few years of use the rechargeable batteries die. So each year I purchase a brand-new NiteRider at REI during their excellent bike-light sale in October. I then sell last-years model - with pristine box and packaging material - on ebay just after Christmas when everyone has gift-card-euphoria. Of course, I make it clear that I've owned it for a year. I've done this twice and came within $10 of breaking even both times. I've always got a new light and avoid the bottom-of-the-sock-drawer experience.
So, that begs the question: What else can this technique be used for?


Wanderer
Posts: 3
Joined: Sat Nov 12, 2011 7:41 pm

Post by Wanderer »

I've seen this trick explained somewhere with cars. (right here on ERE maybe?) You can "rent" a car from the market for the amount that the value drops in the period that you own it.
I'd say it works for any product with a significant secondary market. Sites such as Ebay have obviously made this much easier. Obviously whatever you try to rent should not be overly perishable or consumable, but otherwise you can probably do it with almost anything.


dot_com_vet
Posts: 603
Joined: Mon Jan 31, 2011 2:07 am

Post by dot_com_vet »

Pretty smart! I bought a very old used car in 2004. Drove it five years, then received cash for clunker trade in. Total depreciation over 5 years was $900. Not bad as car ownership is normally like burning piles of money.


mikeBOS
Posts: 569
Joined: Sat Nov 13, 2010 6:46 am
Contact:

Post by mikeBOS »

I bought a poorly-advertised 1978 corolla off a 70 year old lady that had 30k miles on it for $1,200. She was the one owner. Literally just drove it to church and the grocery store for 30 years.
I had a blast in it for about 3 years, put about 20,000 more miles on it, then the brake lines were going to be a pain to fix, so I put up a nice craigslist ad and sold it to an enthusiast who said it was his "dream car" for $1,500. When I told my mechanic uncle about it he said, "What, did he have a nightmare?"
I think there's lots of opportunities to buy old cars off of lazy people, drive them around, clean them up, and put up a nice ad and come out ahead.


Felix
Posts: 1272
Joined: Fri Nov 05, 2010 6:30 pm

Post by Felix »

I wonder how this can be done with real estate. Buy a fixer-upper (cash, we're ERE-guys, we don't need credit), live there, fix it up in 3-6 months, sell after 2-3 years, rinse, repeat? Anyone doing this? Seems feasible and you can get some real estate experience under your belt. Are there good books on this? Other sources of information?


aptruncata
Posts: 66
Joined: Thu Jun 14, 2012 11:14 pm

Post by aptruncata »

back in 2005 i had a international intern at my my place of employment and her time came for her to leave. she had a 1995 honda civic with 200k miles that i have agreed to purchase from her the day before her departure for 2000. Few hours before we made the transaction, she crashed the front end and it was all asthetics damages to the hood, lights and bumper. I told her i don't want it and she offered to sell the vehicle to me for $250 to get rid of it. Made the deal, drove it for 3 worry free 60k miles until it spun a bearing. Parked it where it broke, called around for bids on the vehicle sold it for $900.

I doubt i'll ever get that luck again.


User avatar
Ego
Posts: 6359
Joined: Wed Nov 23, 2011 12:42 am

Re: Creating Your Own Rental | Using Quality Items w/o the High Cost of Ownership

Post by Ego »

Reviving this old thread. Several years ago I bought an Arc'teryx hard shell jacket on ebay and used it on our last two year-long trips. I sold it recently on ebay for a little more than the price I paid. Not quite enough to cover the ebay commission, but close. In the end I paid about $4 per year for the jacket. Not bad.

Toska2
Posts: 420
Joined: Fri Nov 20, 2015 8:51 pm

Re: Creating Your Own Rental | Using Quality Items w/o the High Cost of Ownership

Post by Toska2 »

My method is to buy stuff that is likely to rust out and loan it out. Think wood splitters, snow boards, nail guns and the like. I like the trade of using their storage space so I can build more connections and become aware of interesting projects.

User avatar
Seppia
Posts: 2016
Joined: Tue Aug 30, 2016 9:34 am
Location: South Florida

Re: Creating Your Own Rental | Using Quality Items w/o the High Cost of Ownership

Post by Seppia »

I’d agree that “buy used, treat it well and sell it when you don’t need it anymore” is by far the best way to “own” things.
I did this with a scooter while I lived in Trieste.
Bought it second hand for 2400€, used it two years and sold it for 1800€ or so net of all transaction costs IIRC.

Clothes are so cheap these days that I just buy stuff I really need and run it into the ground

7Wannabe5
Posts: 9370
Joined: Fri Oct 18, 2013 9:03 am

Re: Creating Your Own Rental | Using Quality Items w/o the High Cost of Ownership

Post by 7Wannabe5 »

Perhaps a bit off-topic, but I’ve been recently puzzling on how the practice of “Sell something every day.” might be systems level semi-analogous to the practice of “Plant something every day.” These practices are not functional analogous because not found at same juncture of Food or Money yield loops, but they are analogous in the sense that they represent a minimum action to move from Seeds/Stuff to Food or Money. Simple bottom-up challenges which may further inform top-down intelligent design.

User avatar
Sclass
Posts: 2791
Joined: Tue Jul 10, 2012 5:15 pm
Location: Orange County, CA

Re: Creating Your Own Rental | Using Quality Items w/o the High Cost of Ownership

Post by Sclass »

Very interesting philosophy. I’ll have to try this out. I do I own a lot of BIFL stuff that my estate will have to donate away. Max depreciation. The rest is disposable trash I buy from the 99 cent store.

I was going to say I’m not afraid of rebuilding a niterider battery…but for $10 rental sheesh Ego! New cells will cost you more than that.

I’ll have to give this a go. I’m currently somewhere else on the spectrum. I buy BIFL and hoard it forever. Or I buy second hand stuff cheap and discard it when done. Or I get one time use trash and discard it when done. This is a new move to add to my MMA.

I know some guys who do this with exotic cars. It is a skill. And work depending on how you see it. But they basically drive these high end cars for less than I pay for my wife’s Accords I upgrade every ten years. I always thought a Porsche or Ferrari was a money pit till I met these guys. It’s basically a break even for them. The work - they store, insure, maintain, obsess over scuffs, watch the market like eagles, and only drive the cars to shows. But think about it…they drive a car we visualize only rich wasteful people own and they pay basically nothing over say three years.

Not my cup of tea but maybe I’ll try it on something else.

7Wannabe5
Posts: 9370
Joined: Fri Oct 18, 2013 9:03 am

Re: Creating Your Own Rental | Using Quality Items w/o the High Cost of Ownership

Post by 7Wannabe5 »

BIFL quality is not necessary for process. Some humans know how to sell rocks by painting them with smiles using a half gallon of discarded paint.

User avatar
Sclass
Posts: 2791
Joined: Tue Jul 10, 2012 5:15 pm
Location: Orange County, CA

Re: Creating Your Own Rental | Using Quality Items w/o the High Cost of Ownership

Post by Sclass »

BIFL is often used as an excuse to go upmarket for ordinary stuff.

I have the tendency to hoard and collect. Though I may buy something for life, it often sits around in my attic for most of its life. I comfort myself knowing I have a lot of capabilities in my workshop but my tools are idled for the most part.

7Wannabe5
Posts: 9370
Joined: Fri Oct 18, 2013 9:03 am

Re: Creating Your Own Rental | Using Quality Items w/o the High Cost of Ownership

Post by 7Wannabe5 »

I realized that BIFL was not best tactic for me back when I saved up all my babysitting pennies to buy some very expensive, very cool leather clogs and almost immediately absent-mindedly stepped into some hot tar while wearing them. I dislike gifts of jewelry for same reason.

User avatar
Ego
Posts: 6359
Joined: Wed Nov 23, 2011 12:42 am

Re: Creating Your Own Rental | Using Quality Items w/o the High Cost of Ownership

Post by Ego »

Seppia wrote:
Sun Aug 01, 2021 7:22 am
Clothes are so cheap these days that I just buy stuff I really need and run it into the ground
Interesting. On the rare occasion I find myself in a store with office or designer quality clothing (Nordstrom, Saks, Neiman Marcus) I am surprised how expensive it is. I imagine you (Italian, expat manager) as someone who dresses well for work, no?

One of our super-elegant tenants does Rent the Runway. Her partner is someone I look to for tips on men's dinner party fashion. Together they appear as if they were plucked off the pages of vogue but they are better looking than the models. Truly.

A few weeks ago Mrs. Ego was digging through a pile of $1 clothing at the swap meet trying to reproduce one of this tenants outfits and she stumbled upon a Versace dress from the 2019 collection. It has a tag inside that allows you to confirm authenticity on the Versace website, which I did. We made a deal that she would give me the dress to resell (@$400) and she could then use the funds on whatever outfit she wants. She bought seven other items from the dollar pile. She was so pleased with her purchases she decided she didn't really want to buy anything else. Hah.
Sclass wrote:
Sun Aug 01, 2021 8:11 am
I was going to say I’m not afraid of rebuilding a niterider battery…but for $10 rental sheesh Ego! New cells will cost you more than that.
I had to stop doing this. Inexpensive good quality Chinese lights have driven the price for bike lights down significantly. Every other vendor at the swap meet sells Amazon returns and they seem to get bike lights frequently. For a while during Covid (and maybe still?) Amazon was not repackaging and reselling returned items. Every return was tossed in a giant bin and actioned to swap meet sellers. The amount of stuff they churn through is astounding. Costco as well.
7Wannabe5 wrote:
Sun Aug 01, 2021 12:09 pm
I realized that BIFL was not best tactic for me back when I saved up all my babysitting pennies to buy some very expensive, very cool leather clogs and almost immediately absent-mindedly stepped into some hot tar while wearing them.
Whenever I have something like your clogs that are expensive and in good condition I am always worried that I will somehow ruin them so that I can't resell them. I think of this as getting stuck with the hot potato. One of my trashpicker friends picks at an industrial site where they discard a wide variety of half used, very specialized 3M solutions and potions. I have many different solvents and acetones to remove every version of tar from (in my case) vintage Red Wing boots.

User avatar
Seppia
Posts: 2016
Joined: Tue Aug 30, 2016 9:34 am
Location: South Florida

Re: Creating Your Own Rental | Using Quality Items w/o the High Cost of Ownership

Post by Seppia »

Ego wrote:
Sun Aug 01, 2021 9:15 pm
Interesting. On the rare occasion I find myself in a store with office or designer quality clothing (Nordstrom, Saks, Neiman Marcus) I am surprised how expensive it is. I imagine you (Italian, expat manager) as someone who dresses well for work, no?
Well I do own a few rather expensive pieces of clothing, but with a bit of luck/patience they can be had substantially below retail.
I have six Armani blazers that I purchased from a friends and family sale in NYC (was invited by a friend who worked there), paid $60/piece for those around 2010 and never bough another one since (nor I plan to, I bought 6 specifically so I could be set for my career)
6 Armani trousers, bought in the same occasion for $30 each.
I still own two other nice blazers I bough in 2005.
I have four pairs of dress shoes, two are Clark loafers that I paid $120/each back around 2012 (have both been resoled once), plus a pair of English shoes (bought in 2007 for around $500) and a pair of Ferragamo Tramezza I got through my wife (who used to work there) at 1/5th of retail (still, that was like $250) back in 2009.
Shirts I usually bought from Brooks Brothers on their annual sale for like $70 each, I go through about two/three per year so I have like 10 of those and just replenish those that are run down.

So if you think about it, not that crazy expensive, the key is I use the best stuff only when needed, and the rest of the days I dress rather casual.
No need to wear a blazer 100% of the time: I normally don't go to the office with it (I have a backup blazer+tie+nice shoes always at the office just in case). No need to wear Armani pants in the office every day: a pair of nice pants and a shirt from Uniqlo will cost around $40 combined.
So my everyday stuff is cheap, and that's what I wear around 85% of my life hours.
Some examples of promo prices at Uniqlo: A nice 100% cotton t-shirt at Uniqlo: $4. A pair of shorts: $12. Dress shirt $30 (never on promo). Nice chinos-like pants that one can wear at the office: $10-15.

Of course the pandemic is accelerating the process of reducing spending. I work from home around 2 days/week now, so I put even less wear on my nice stuff.
I looked at my last 5 years of expenses and I on average I spend around $7-800 per year on clothes (which may include the occasional thing I buy for my son or my wife, so probably it's a tiny bit less), but if I were to stop working it would probably drop to 200 or so at most.

$7-800 is still a lot by ERE standards but it's less than 1% of my net income so it's an inconsequential cost.

Post Reply