How to Start a Hot Tub Rental Business: Zero to $1000s per Month (Greatest Hits)

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1:16What's up? What's up, Nick Loper here. Welcome to the Side Hustle Show because your idea of success might not coincide with your boss's. Awesome show for you today with another example of an unconventional rental business. Yes, there are assets other than traditional real estate that can cash flow pretty nicely with lower upfront investments. This week's guest is a high school history and economics teacher in New York and a listener of the show who reached out after our Thanksgiving episode, which touched on briefly renting out attic space and even camper vans and semi trucks as potential sources of recurring revenue.

1:53Steve Nadramia said he had a side hustle that definitely checked the unconventional rental box, portable hot tubs. How awesome is that? Steve wrote that lihottubrentals.com has been a life-changing side hustle. He's got 25 to 30 of these things in his quote fleet, delivers them with his pickup truck, and is doing thousands of dollars in bookings every month. Stick around to learn how Steve got this idea, how he's marketed and grown the business, and the logistics of how it all works. Notes and links for this episode are at sidehustlenation.com slash hot tub, all one word. While you're there, be sure to download the free list of 24 other unconventional things you could start a rental business around.

2:36You can also grab that through the link in the episode description of your podcast player app. I'll be back after this chat with Steve. Ready? Let's do it. There's a product out there that's kind of like a high density foam hot tub. So the The tub weighs about 200 pounds and has a detachable motor pump unit. So they're pretty portable. They're also circular, so they roll. That's the product that we use. In the United States, there's a handful of people who are doing this business. But if you look up hot tub rentals on the Internet, what you'll find is probably 100 or 200 companies in England, in Ireland, and in Central Europe, where it is just absolutely a huge industry, a very normal, popular type of recreation.

3:21for every holiday under the sun. So there's huge operations there. And I've kind of tried to observe and learn a little bit from what they do. So very popular in Europe. Was it on a Europe trip that struck the light bulb for you? Or curious, how did this get on your radar? It got on my radar. I'm a high school teacher. As my primary career and occupation, I teach high school history and I teach high school economics. and I had had for many years a summer job where I worked in parks and recreation. I was responsible for running the beaches and summer operations for a local town. That job was absolutely amazing.

3:59I had a lifeguard job there as a kid and then a management job. And then when I got this teaching job, I was running the whole operation and it was just like a dream come true. And it was like that for years and it was fantastic. And as things often happen, things change. The management there changed. I ended up for the first time in my life having a boss that I just could not find common ground with, just a really difficult, difficult person. I started looking for something new, thought about a rental business as a good opportunity. A lot of people rent tents and chairs around here on Long Island for parties.

4:34Inflatables was an idea. It was really a saturated business. I just found a guy in upstate New York in the Syracuse area who was renting hot tubs. He's like in a big college town, kind of in a ski town area. And I just got in touch with him, sent him an email, talked to him on the phone. Guy was awesome. I went up there, bought the first three units from him, spent the day with him, learned all about his business. He was super helpful, supportive, and it just kind of balloons from there. Was there any research into, is anybody looking for hot tub rentals near you? Or you say, hey, he's making it work.

5:11He's not too far from me. There must be some demand here. I kind of felt like he was making it work in central New York. We're on Long Island, and just knowing our population here, we've got the Hamptons kind of 20 miles in one direction. We've got pretty affluent suburbs 20 miles in the other direction. There's over a million people on Long Island alone. And I thought, look, I'm making$10 ,000 a summer in this summer job. If I could make$1 ,000 a month over the course of the year renting these hot tubs, I think that's really doable. I'd have a lot more free time. And I think at that level, it's worth a shot.

5:50Okay. So you meet this guy in Syracuse, you say, okay, I'm going to buy my initial inventory from him. He was unloading stuff or he was also a dealer? Yeah, he was a dealer, you know, did hot tub service, sold this one brand of hot tub that we use, which was portable. So he had, you know, like units everywhere. It was like a hot tub graveyard. So we picked out three good units, But he was great. He put together like really like a nice starter pack of stuff that I would need and parts and things that he uses and gave me a lot of info, gave me some of the documents that he uses, his insurance policy.

6:24I mean, he was really, really helpful. You know, I'm about three, I'm three, four hundred miles away. So he was just a helpful and friendly guy. Maybe he was hoping to sell stuff over a longer term relationship, which was cool. Yeah. You're not gonna be stealing market share from him. You're far enough away. No, not at all. So got along well and that's how things started. Okay. And so there was nobody doing this currently on Long Island, but you're confident that the demand was there. It was just unfilled demand. What did it cost for these initial three tubs worth of inventory to put up for rent?

6:57Yeah, the three tubs, two of them, the plan was two of them are in real good shape, didn't need anything. And then one was a spare. It was functional, but maybe didn't look so great. So we'd have the two and we'd have a spare. So we didn't get jammed up with any problems if anything went wrong. I think I paid 6 ,500 bucks for those three tubs. Beyond that, I had a pickup truck. I had a trailer. So there was no investment there. We spent a little bit of money on website development. I got Squarespace. I started working on it myself, basically on my lunch breaks. But in the end, I took what I had and what I could build on my own, having never built a website before.

7:34And basically just got a freelance helper to come in and say, this is what I've got. Tune it up. Help me out a bit. We sat down for about three or four hours and made it, I think, really presentable to roll out. So we had a little bit of expense there and some initial signage for the truck, some printed material, and that's it. That's it. Okay, so I'm at lihottubrentals.com now. If I navigate over to packages, I can see the pricing there. And then it's just a, is it an online reservation system where people call you to say, hey, I'm looking for a hot tub for this weekend. How does it work? Yeah, we get a lot of phone calls through Google Voice, which we use.

8:14We get a lot of emails through the website. We get a lot of Facebook and Instagram inquiries, really Facebook. I could not imagine growing this business in the way that we have without Facebook. And we're trying to bring Instagram in, you know, as a parallel, because I feel like in my day job, I work with high school students, 11th and 12th graders. Not one of them has a Facebook account. From what I can tell, they all have Instagram and they're our future customers, you know, 10 years down the road when they're in their mid, late 20s and beyond. So we're trying to grow that at the same time. But Facebook has been tremendous and mostly free.

8:51Anything specific that you did on Facebook to gain traction, to gain customers? I mean, so our product is great in that it's really visually presentable. So you get lots of good organic pictures that we take, that our customers take, send to us, that we can post. It really looks inviting and lends itself to that. It also seems to really get good traction on local groups, whether they're buy and sell groups, which are free to post on Facebook Marketplace. We found a way where we can post on there without having a problem. And that's been really helpful. And the local kind of like school groups, moms groups, community groups, they get a hold of some of our posts.

9:32And that has really taken off. Oh, interesting. So you can put rental stuff up on Marketplace. I didn't know that. Yeah, you can. At one point, I thought we were having trouble with that because it was like, hey, you're not selling a product. Boom, we're going to shut it down. But we're forthcoming with what we're doing. We post it as a price. We say it's$249 or$259 for the week, but we just list it as$259. And then in the details, it's exactly what it is. Rent a hot tub for a week. We can put it right on your back deck, on your patio. Give us a call. Okay. And it gets a ton of traffic. Okay. I'm looking at Amazon for, I searched, I think, portable hot tub.

10:10These are the inflatable models. So would this work? Because these are kind of in the price point of, you know, say$500 to$800 versus you're talking about picking up used ones for$3 ,000? Yeah. So the inflatable tubs are cool for what they are. They definitely work, but they don't function below 50 or 60 degrees and, you know, or at least don't function efficiently. So you can't use them in the winter. Like the pump or the heater isn't strong enough. When it starts to get cool, kind of like New York fall temperatures, they work, but they run constantly. Then once you hit around the 40, 50 degree mark, they can no longer, you know, create heat in a sufficient way that you can use them.

10:49They're also not really durable. So, you know, you're looking at a season or two or three if you use it carefully. But if you're not going to have this tub for a long period of time there, you know, it's like you ever have an air mattress. You take it out of the box, you lay on it and it's like this thing is garbage and throw it away. It's kind of like that. They're not repairable. They're not serviceable. They're, you know, it's a different animal. So for some people, that's what they want, but that's not what we offer. All right. So you're going a little bit more premium quality on the inventory in the hopes that, number one, it functions during a New York winter.

11:23And number two, it lasts a little bit longer. And, you know, once it's paid for, paid off, once you've broken even on it, then it's all gravy. It's just your labor in the pickup and delivery and stuff. Yeah, exactly. How did you figure out how much to charge for the service? Yeah, I'd like to say that, you know, I really studied the market and looked at, you know, all kinds of data. Really, I looked at what I needed to make to get rid of this summer job, which was becoming kind of a burden to me. And like I said, I was looking at that $1 ,000 a month,$12 ,000 a year to kind of cover my$10 ,000 salary that I was trying to replace.

12:00I thought that was doable. I think we started at a$199 for a week, so$200 a week. If I had two tubs, could I get five rentals, basically a 50 % capacity per month between the two tubs? Could I do that on average over the course of a year and make$12 ,000? I thought I could. It also seemed like a price that I would pay. My friends who are kind of in the same middle-class neighborhood lifestyle would pay for their vacation, for their kid's birthday party, for something like that. There's a lot of alternatives that are around$200,$300. I'm going to rent a tent. I'm going to rent a water slide. I'm going to rent a bounce house.

12:45They're all around that same price point. So I thought we'd just go in there. Okay. Yeah, that makes sense. Was it a matter of just scoring the initial inventory, putting up the website, and then the phone started to ring? or did you do anything else proactive to market this thing? The challenge, which has been really rewarding, is that there's really two sales that have to be made, right? You've got to, in this case, introduce the idea to the customer because no one is really out there looking for this or they certainly weren't four years ago. So no one is thinking like, I got a week off. Maybe we're not going anywhere.

13:19Let's rent a hot tub. Nobody's thinking that. So you've got to introduce that idea and then they will call and then make the sale of your hot tub for$200 on this day. So we had to do that. And that took a little bit of time. Social media with the images have helped a lot. And then word of mouth, we've done about 700 rentals now. In any given month, half of our rentals are returning customers. Another chunk of our customers have come as a word of mouth referral, friend, neighbor, parent. And now we are filling in the rest with brand new organic business. Okay. So somebody is proactively searching for it.

14:02They are likely to find you by virtue of there not being that many other options out there, but it was a matter of this boots on the ground, social media in the marketplace, in the community groups, in the local buy-sell groups, letting people know this was a thing. This is an option. And hey, it's not that expensive for what is kind of a cool novel thing to have at your house? Yeah. Now, we do get calls all the time. And I always ask, how'd you find us? And I do get a lot of customers that said, oh, I just typed it in Google. I was just searching online. There really is no one else doing it. So if you type in not even Long Island Hot Tub Rentals or Hot Tub Rental Long Island, even if you type in Long Island Hot Tub, I think we're pretty visible, even with those pretty basic generic terms.

14:47And that's been helpful. So you're teaching high school history. The phone rings during the day. You're in the middle of class. Like, how are you handling the customer inquiries logistics? So I try to keep my two worlds separate a bit. I certainly don't. The calls go to our Google Voice. A lot of times the calls will go to voicemail. Lindsay gets them. She'll take care of it or send it to me. I'll see the emails come in and I'll respond to them over the course of the day just because I like to. And, you know, so I'm able to kind of balance it. You know, we will get back to a customer that same day 100 % of the time.

15:27So usually within a few hours. And that's helpful because a customer is interested in this. They've called us. We get back to them. And, you know, a lot of times that's it. Closes right there. They say, what's the first available? Or we want this date or we want this week. And that's it. Oh, okay. So you get somebody on the phone. You book them. do you take credit card information over the phone? What we'll do is we'll send them a square, no matter what you're doing, whether you're doing a three month rental or a two day rental, our deposit is 50 bucks towards the total. That small amount is basically enough to stop 99 % of the cancellation schedule changes, anything.

16:05And we're pretty flexible. I mean, you can change your reservation up to a few days before, but that small deposit basically locks it in and eliminates all the headaches that you might have with customers making changes. Okay. So a little bit of a deposit up front, 50 bucks up front, and then balance due upon delivery. How does that work? Yeah. Delivery and setup. Yes. Okay. More with Steve in just a moment, including the customer setup process and how he thinks about the return on investment math for each new hot tub coming up right after this. Are you still overpaying for wireless? It's time to say yes to saying no.

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18:56So you roll it up to somebody's backyard and then it's theirs. They fill it with their own water supply. They plug it in. Yeah, I'll do the setup. That's part of it. So we leave you with a hot tub that's up and running, show you how to use it, give you written instructions. I put in the initial chemicals, and that's really important. So when it's full, the chemical proportions are going to be correct when it's full. The customer will have to maintain. It's usually just the chlorine level, so just like a pool. So we give them a test strip. They match up the color, add really small amounts. I mean, if you had this thing for a week, you're talking about ounces of chlorine that you would really need to maintain it.

19:31And that's it. Plug into a standard outlet, 110, so there's no wiring or electrical issues or anything like that. Comes with a cover, locks up. It's a really nice, really nice unit. Heats up to 104 degrees. Set the thermostat, forget it. Okay. And after 10 or so rentals, you've broken even on the, I mean, depending on the length of the rental. But like if, you know, if it's just$2.59 for a week, you know, after eight or ten of those, you're kind of in the black on that unit, not counting delivery time and stuff like that. Is there a metric that you're shooting for, you know, in regards to ROI or anything on that math front?

20:12My mentality is I get this hot tub. I'm thinking, you know, I buy a car. I buy a hot tub. I buy a house. I'm thinking not breaking even. I'm thinking like how many years, you know, which child of mine is going to be using this hot tub? 20 years from now. Okay. So, you know, my strategy has really been to find a product that is really reliable, but is also like refurbishable, that is also serviceable, and we can prolong the life. I have hot tubs that are from 2001, 2002, 2003. They're 15 years old. This one particular brand, you can buy and replace motor parts, pump parts, the liners. I've actually gotten this type of hot tub, you know, off Craigslist for 50 bucks, for 100 bucks.

20:53I've gotten out of the trash, okay, that needs to be completely refurbished. But I can do it and I can have a fully functional tub that looks brand new, sometimes for$1 ,000,$1 ,500, buy a brand new cover. They look fantastic. I've had someone pay me to remove it from their home because they didn't want it anymore. It was in a basement and they had the dealer bring it in eight years ago and we just want to get it out of here. were not using it, but they didn't know how to take the door off the hinges. They didn't know how to get it up the stairs. I said, I'll come and take it for free. I ended up taking it.

21:29The guy gave me a hundred bucks. Gladly. I'll take it off your hands. Jeez. The tub was in great shape. You know, I brought it home, ran it, cleaned it, replaced a couple of little fittings and things on it. That was a couple of months ago. That tub went out after being with me for about a week and it's been out for 350, 400 a month for four months. Okay. Nice. So this is the soft tub brand. And you must have just Google alerts, Craigslist alerts. Anytime somebody posts one of these used for sale, it's like, I got to jump on that. Yeah. I've gone, so I'm on Long Island. I've gone everywhere from Montpelier, Vermont, all the way to really South Jersey.

22:09So about 300 miles in any direction. If I can get one of these at the right price, I'll go and scoop it up. The goal is to have them all rented. And so there's not a lot of storage issues, but you know, they got to come back for repairs or if there's a low and you got just you got a bunch of these sitting around in a storage locker or in the side yard of your house. I'm just curious. It's a big bulky thing. It is times 25 or times 30. But by the summer, it's a massive amount of foam. But, you know, that's a problem that we started thinking about when we first started this business. And I figured as soon as it becomes a problem, we're going to have to broach that.

22:46We're going to have to deal with that. We're going to have to rent space. Yeah, we're going to have an issue. Now I got 25 tubs. I have zero inventory right now. I had picked one up yesterday, brought it home, cleaned it. It was out today. I got one coming back tomorrow. It actually comes back, gets serviced, goes back out tomorrow. We have no slack. We've got a spare, which we keep as our own. Is winter like the high time for you, high season? Well, winter, the holidays is a huge season. My initial thought when we started this as a teacher was this is a summer thing, you know, pool parties, barbecues.

23:21We're going to be hanging out in the summer. I'll be a little bit busy, you know, and make money during the summer part time. I'll be maybe a little busy over the course of the year and it'll kind of come together. Turns out there is that, but there's also this huge winter. As soon as it gets cold, the winter market just explodes. This is fascinating. As a matter of fact, I will, there's a snowstorm coming, right? Or some crazy winter weather. I'll just take a screenshot of the Weather Channel five-day forecast and just post that as the ad, and I'll just put some text across it like, perfect hot tub weather on tap.

23:55Boom. Lights up the phone. Snow day. Your kids are going to be home from school. Basically, the insinuation, do you want to be occupying your kids for the one or two days that they're going to be off because we're going to get six inches or a foot of snow? The answer that every parent has is no. If a The solution to that is$200. That's a very easy sell to make. Yeah, this is fascinating. So it sounds like the bottleneck isn't necessarily the marketing right now. It's the inventory. So you're like, hey, you know, because it's kind of like a hotel. There's a sweet spot for occupancy, right? It's like, well, you know, at the price point and, you know, the occupancy rate versus like, did I undercharge and could I have sold more?

24:37So it's an interesting one where you're kind of still in this inventory growth mode to meet the existing demand, which, again, you have helped create, but I didn't know was a thing. So it's very impressive. I also try to depress supply. So if you want to buy – my customers, they love these hot tubs. How can we get them? Now, they could buy them new, and that's pretty expensive at the retail level with no discounts for buying a bunch of them or anything. that they're looking at maybe$5 ,000 to buy this unit. But if they're on Craigslist or eBay or Facebook Marketplace, and I've told them this, you're competing with me to buy this used tub.

25:16The other thing, and maybe this was your next question, we were busy up until a year ago just doing our thing. And we'd have busy times. We'd have a few come back. We try to extend our current customers. That was always the idea, right? Somebody has it for a week. If we're not busy, call them halfway through and be like, How about next week for half price? You know, just keep it out. Keep it rolling. Oh, OK. We've already made the delivery, right? And I'm looking at availability for next week. And I kind of do this mental supply and demand graph of where's that price that this customer is going to say, yeah, I'll keep it.