An article appearing in Business Insider this month indicates a rise in renting and a sharing economy—a trend identified by the author Matthew Boesler as catastrophic. Boesler points out that a society in which houses, vehicles, and bicycles are rented instead of owned has the potential to spiral as the millennial generation gets older and still fails to invest in larger purchases—houses, for instance. The article accurately points to a rise in renters and a decline in the house buying market, but oversimplifies with the assumption that it will be catastrophic.

As Jason Hartman points out, a sharing economy is a good thing—in other countries, for example, this type of lifestyle flourishes. When things and places that are available for sharing are shared (think rooms, bikes, cars, etc.) they remain in constant use. This increases, as Jason Hartman points

Call it collaborative consumption or a peer-to-peer marketplace—ability to access goods and skills has become a desirable alternative to owning them. This type of economy also boasts lower costs, less waste, and the development of likeminded communities with open minds and an attention to being neighborly.

Through the sharing of products and services also arises the concept of peer to peer lending, providing more money to those who may be interested in more traditional business models. And while these ideas might seem threatening to businesses, they don’t nullify their existence, but ask for change.

Plus, when goods are exchanged for free, there is potentially more money to be spent on other things, which may include international travel, later in life investments, and luxury items a person wouldn’t otherwise be able to afford. A sharing economy simply shifts the money to other things at other times.

For an investor, whether in the United States or abroad, this is win-win. Provided it’s in an economy with a large number of community-minded and respectful renters with a low number of possessions and an excess of money—a landlord’s dream scenario. And it’s a win for the consumer too—affordable rent, access to quality goods and services, and more money for fun later in life.

What do you think? Does a sharing-focused economy threaten the traditional business model? Let us know which side you fall on! (photo credit: ryancr via photopin cc)

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