We’ve all gotten used to ridesharing, co-working, and buying vintage clothes. But would you wear a stranger’s wedding dress – or let someone cruise around in your classic Porsche?
Rentable luxury, a growing niche of the sharing economy, taps into the increased desire to enjoy expensive things – without the downsides of buying or owning them. For those renting out the high-end items, it can provide an income stream, free storage space and maintenance, and for small business owners, a potential tax deduction.
Those doing the renting get to experience the joy of using luxury items they would not normally be able to afford, or don’t want to store given how little they will use them.
Anita Paramalingam, 34, saved so much money by renting the outfits she wore to her wedding reception that she was able to hire dance performers for the event, something that otherwise wasn’t in her budget. The savings were so drastic compared to what she’d planned to spend on attire that she rented two outfits for the day instead of buying just one, she says.
Ms. Paramalingam, who lives in Pickering, Ont., paid just over $400 to rent two lehengas, South Asian formal outfits that typically include a flowing, floor-length skirt, a fitted blouse and a scarf. Bridal lehengas typically run between $2,000 and $10,000, she says.
“There’s probably still a good amount of women who would say, ‘It’s my wedding day. I don’t want to wear something someone else has worn,” she says. “But most people, when I was telling them I rented [my lehengas], a lot of them thought that was cool.”
The rentals came from MeeraMeera, a new business in Vaughan, Ont., that rents out South Asian formal wear, and shares the profits with the clothing’s owners. After deducting the cost of dry cleaning, owners take home 40 to 50 per cent of the rental profits and don’t have to worry about the rarely used outfits taking up precious closet space, says founder Sonny Joshi.
“When it comes to a bridal lehenga, you’re never going to wear it again and that’s a fact,” Ms. Joshi says, noting those who consign garments with MeeraMeera can make between $50 and $150 each time someone rents them. “At least this way you can monetize your closet.”
Ms. Joshi believes there’s less stigma related to women wearing rented formal wear than there used to be, and says the shift has helped drive her business.
“The new generation, they don’t believe in that at all,” she says, noting many clients are increasingly aware of the impact the fashion industry has on the environment. “Price is a crucial factor, but it is just one factor.”
At Rclub, a Toronto social club for self-described “petrolheads,” the allure of being around other people who love cars is just as much of a membership driver as the access to a diverse fleet of very cool vehicles, says chief executive officer Adam Westland. But for those who want to use the cars – which include a 1977 Porsche 911 S, a 1988 BMW M3 and a 2017 Alfa Romeo 4C Spider – it’s hard to compare the costs of owning and maintaining such a vehicle with club membership fees.
Mr. Westland says the cars in the fleet are all owned by members – “people willing to share their prized possessions” – in exchange for free storage, maintenance, detailing and a 50-50 split of the fees paid when the cars are used. Some of the fleet vehicles retail in the $200,000 range, can cost about $20,000 annually to maintain, with indoor storage adding about $300 per month. Knowing that maintenance and storage would be covered has even motivated Rclub members to buy vehicles they might not have otherwise, such as an Aston Martin that will soon join the group’s fleet, Mr. Westland says.
Further, he adds, “it’s hard to put a dollar amount on that feeling when you’ve finally got a day off and it’s sunny, and you’re like, ‘I am going to drive my sports car for the day’ and you go to turn it on and the battery’s dead.”
On the user side, the club’s nearly 400 members pay $2,500 annually for 24/7 access to the Leaside clubhouse, which includes an auto shop and wash bay, racetrack simulators, a co-working space, snacks and social events. They pay extra to buy credits which can be cashed in for drive time on the vehicles. At the upper end, that rounds to about $1,000 for a day driving a 2020 Porsche 718 Spyder, or down to about $200 per day to use a 2016 Mazda Miata MX-5.
“We have a bunch of people who don’t buy sports cars anymore because they just use ours as a garage extension,” Mr. Westland says, noting one member who works as a real estate agent uses the cars for client visits. “We have a number of members that are in the financial industry, that are some of our largest users of the fleet, because they ran the numbers and realized it was cheaper to do that than to buy their own sportscars.”
Chartered professional accountant Dayna Holland says there can also be tax advantages to renting or sharing these items rather than buying. She notes that using sports cars belonging to someone else is a good way to avoid the new luxury car tax, which came into play in September and applies to vehicles valued at more than $100,000 at the time of purchase.
Ms. Holland, based in the Vancouver area, says someone who was using Rclub as a workspace, or who worked in certain areas of the automotive field, could likely claim membership as a business expense, but recommends people check with their accountant first for advice on their particular situation.
She says the Canada Revenue Agency is typically understanding if people claim business expenses of items rented solely for work – such as an outfit for a special event, or a vehicle for certain jobs – but looks less favourably when people buy these items and try to expense them.
“Buying it means you can use it again for a purpose not specific to your job,” she says.
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