Fast-growing Neighbor.com is making a bold claim as it flexes its muscles.
“The space that we have on the platform today would cost a traditional self-storage facility well over $1 billion to build that space,” CEO Joseph Woodbury said. “Rather than building new space, we’re just tapping unused space that was sitting vacant.”
The company connects people who have space to spare in their garages, attics, basements and driveways with those seeking affordable storage that costs less than self-storage prices. Neighbor said those with space to rent can earn thousands of dollars in passive income per year.
Woodbury co-founded Neighbor in 2017 with Preston Alder and Colton Gardner. To date the company has raised $12.7 million in funding from investors, including Andreessen Horowitz.
The Lehi, UT-based company has operations in all 50 states. It recently announced a marketing push in the San Francisco/Oakland/San Jose area.
“When we launch a market, we send in market launchers,” Woodbury said, noting the company already has hired three people for those tasks. “We may have users there, but we’re going in and really going to scale up the market. When a renter gets online, they want to see a lot of options – an attic, a basement, a bedroom, a carport. Anyone that gets on can find what they’re looking for right at their price point.”
In addition, Neighbor is now partnering with Stuuf to help match up commercial real estate owners, who may be losing tenants because of the pandemic’s effects on business, with people that need space. Stuuf will lease unused office space from building owners and retrofit it into storage space.
“The owner is very satisfied because they’re getting lease revenue in space that otherwise could be a drain on their cash flow,” said Woodbury, 27.
The pandemic seems to be a tailwind supporting Neighbor’s current expansion. Companies are leaving their office spaces behind at a time when storage demand is high. People are moving at high rates these days, driving demand. Some are cleaning out space in their homes for home offices and need storage space.
‘The Airbnb of storage’
Neighbor, which calls itself the “Airbnb of storage,” offers free renter insurance coverage for up to $25,000.
“That’s the best insurance coverage that we’ve seen in the industry,” Woodbury said.
He also claims that storing items in residential areas is safer than in self-storage facilities in more crowded areas. “One in 10 facilities are broken into every year,” he said. “They are kind of targets. You know there are items in the units.”
Woodbury notes that Americans spend $40 billion a year on storage.
“This is such a big industry. We could grow into a massive business; so could our competitors,” Woodbury said.
Passive income for customers
One customer is David Cohen, 46, a marketing director for the Jewish Educational Loan Fund in Atlanta, who rents out two areas of his home through neighbor.com.
“Right now, we’re renting space next to our house for a boat,” he said. That arrangement began nine months ago. Cars also have used that space. He charges $75 per month.
He also rents out his home’s attic for $50 per month. One renter was a college student on summer break who needed to store some belongings. Another renter was moving and put clothes in the attic.
Then there’s the RV owner that wanted to park the vehicle in the parking space. But “after talking to them, I realized they wanted to live in the RV while he was there,” Cohen said. “I said no to that.”
Overall, Cohen is pleased with arrangements. “Everyone has been real polite,” he said. “And everyone pays through the site, so I don’t have to worry about that.”