The Short Term Rental Authority Podcast
Join John and Wynde as they share their insider tips, tricks, and secrets for running a successful short-term rental business. Whether you host on Airbnb, Homeaway, VRBO, or other platforms, there is something here for you.
Investing
Business
Entrepreneurship
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STRA Episode 20: What we Did Right and Wrong in 2022 in our Short-Term Rental Business
STRA Episode 20: What we Did Right and Wrong in 2022...
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Jan 10 2023 29m
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STRA Episode 19: Pricing Your Short Term Rental 101 and John is Officially a Lord
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Dec 20 2022 22m
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STRA Episode 18: How to Manage the Holidays With Your Short-Term Rental
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Dec 13 2022 21m
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STRA Episode 17: How to Deal With Slow Season
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Dec 6 2022 26m
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STRA Episode 16: What to do When your Airbnb Guest is a Karen
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Nov 28 2022 27m
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STRA Episode 15: The four main things about your Airbnb listing that will get you booked
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Nov 14 2022 33m
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STRA Episode 14: What to do About a Party in Your Short-Term Rental
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Nov 1 2022 43m
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STRA Episode 13: How to Get Started in Short-Term Rentals
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Oct 23 2022 24m
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STRA Episode12: Why Does Design Matter and How to Get it Done
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Oct 17 2022 1h 55m
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STRA Episode 11: How to Scale From 1 Unit to as Many as You Want Without Working Harder
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Oct 2 2022 24m
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STRA Episode 10: How do I Protect my Investment if STR Regulations Change
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Sep 25 2022 38m
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STRA Episode 9: Should I Use a Property Manager for My Short Term Rental?
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Sep 18 2022 18m
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Hey everybody. Welcome back to the podcast. We are John and Wendy Williams with the short-term rental authority, your authority for all things, short-term rental related to help make you the best operator ever. And today's podcast. We're going to be talking about whether or not you should have a property managerChapter 3 27 sec
So we're going to talk about situations where it would be appropriate to have a property manager and then situations where it may not be as lucrative to have a property manager. That's a good way to say it. Yes. A good, a lucrative, not as lucrative, right? Yes. So let's start out by saying. What is a property managerChapter 4 19 sec
Oh, that's good. Cuz I would just assume that everybody knew what that was, but okay. Right. And I, and I think a lot of people, especially if you're coming from the real estate investor space, well then you definitely know what that is. Right? You, you already have an idea of, of what a, what a property manager isChapter 5 29 sec
Right. It's someone who. Manages your property for you. Right. But in the short term rental space, what is a property manager? And it's it's, I would say it's basically the same thing. Yeah. There's more to do. There is there's way more to do. Right. But it's someone who has the listing. For example on, on any of the, the OTAs, the, the platforms, Airbnb, VRBO, et ceteraChapter 6 14 sec
And they are responsible for the guest experience. That's probably the best way that I can put it. Yeah, I would say they're very similar in a, in a, in a 10,000 foot view. So you hire a property manager, whetherChapter 7 6 sec
it's long term rentals or short term rentals, you hire them. I'm gonna call them tenants just for now, but you hire them to find the tenantsChapter 8 20 sec
You hire them to collect the rent. You hire them to take care of any maintenance that needs done coordinate all of that. It it's way for you to be cleaner. Hands off. Well, not we'll cleaners. Yeah. In both sides. Right. Cause you have to be turnover. Sure. Yeah. So they're handling the turnover typically when one tenant leaves and another arriveChapter 9 21 sec
The, the biggest difference in the, the short term rental space is that happens more often, right? right. So it's it's instead of once a year, they're finding a new tenant it's it may be every couple of days that you're having to find a new or turnover the property. Right. Right. So there's, there's a lot more activity that goes on in short term rental property managementChapter 10 21 sec
And for that reason, short term rental property management typically is more expensive than. Your long term rental property management, just because there's so much extra work involved. Right, right. And typically not always cause you can negotiate anything, but typically property management is a percentage of gross revenueChapter 11 16 sec
In other words, top line revenue before expenses, usually property management is a percentage of that. Whatever that number is, monthly gross revenue. Okay. Right. Mm-hmm yeah. And that's how they make their money. So in a long term rental, if it rents for 1500 at least in, in our area, it's very typical that a property manager would make 10% of thatChapter 12 18 sec
So they would get $150 and minus any other expenses. And then you, as the owner would get what's left over. Whatever's left, basically. Yeah. And then it's your job to go pay mortgage taxes, insurance, that kind of thing. And the short term rental world it's same thing. It's just that number is higher, right?Chapter 13 11 sec
So on a $1,500 rent, you might make three. As a short term rental a month gross. And then typically property management, at least around here is taking 15 to 20% of thatChapter 14 11 sec
off the top. Yeah. So they're take, so if it's three grand, just we'll just say it's 20% now that's $600. and you have down 20 and minus expensesChapter 15 16 sec
Right? Right. And then you take what's left over and do the same thing, pay your rent, pay your mortgage, pay your right, whatever utilities, all that kind of thing. And then, and there are companies out there who will do that for you. Yes. Right. And so in the, in the short term world space like evolve. VA Casa UhhuhChapter 16 18 sec
Those are some of the big ones. Those are some of the big ones. And then there are local people that do it too. Yes. Right. There's lots of people that property manage. Mm-hmm and now we're talking short term mental side only that do that. Just keep in mind that in most states technically to be a property manager, you're supposed to be licensed if you're doing it for other people, for somebody elseChapter 17 19 sec
Yes. And now there's that gray area in there where people are doing that in the short term rental space. It's called co-host. Where they are essentially acting as a property manager, but they're not always necessarily licensed. And I feel like that's something that's gonna come into play at some point legally, but for now it's just something that's happeningChapter 18 29 sec
Yeah. But that you see those too, you know, that nobody's really regulating it or looking at it right now. Right. Yeah, but that's, what's going on there. That's that's the world of property management, right? So that's what a property at a high level manager is. And that's what a property manager does. And there are some situations where it may make sense for you to have a property manager, for example if you have a, if let's, let's say that you ownChapter 19 21 sec
Condo at the beach, for example, and you don't live there and you don't live there. Yeah. But you want to use it, right? Maybe it's a, a second home for you or, or a house at the lake or, or so let's say, and you own it. And you, you own it because you want to use it. And thenChapter 20 2 sec
when you're not using it, youChapter 21 27 sec
rent it out. Mm-hmm to on, on Airbnb or VRBO or wherever. Right. But you don't necessarily want to manage it yourself because you may not have time to do that, right? Yeah. Because it is a bit time consuming. So, well, I wanna say in that scenario, there's two things coming into play. One of those is, well, you only have the, one ofChapter 22 22 sec
right. So it's to, to your point, like spending time doing that, and it's not your ma it's not your business, right. It's not your business. It's kind of like, it's your vacation home. But the second part of that, that I think is even bigger is you don't live there. Like for us, if we had a condo, a condo at the beach, or even two or three well that's three hoursChapter 23 27 sec
and you may not have the local contacts or you might not have the, and, and wonder if, what if it's, Hey, I have a condo in Florida and I live in New York that New York place. Yeah. Right now I'm even further removed from being able to do that. Yeah. Right. Especially on, on a, if it's something like to your point, Hey, I, this is just my vacation home and I want to rent it out so that it offsets some of my costs, but really the goal isn't necessarilyChapter 24 36 sec
Make money, right. It's to it's just to have a place have, have it so you can use it. Mm-hmm whenever you want to. Right. Right. So in, in that case, having a, a property manager may make sense for you. Right. However,, if you are looking to actually start a short-term rental business, and this is your business, and you're looking to make money doing this and maybe not have just one, but a whole entire portfolio of short-term rentalsChapter 25
NowChapter 26 25 sec
we're now that property, that 15, 20%. Is gonna get really expensive. It does. And, and we just know from our experience operating and coaching other people and, and looking at the numbers that typically if you're doing the math, right, we'll talk about that some other time. But typically your expenses run somewhere between 70 and 80% percent mm-hmm of gross revenueChapter 27 22 sec
Yep. Which means if you make 10 grand that month, somewhere between 7,000 and $8,000 of that is expense. in, including the rent you're paying or mortgage, you're paying insurance, insurance, you're paying utilities and all that utilities you're paying. Right. Any, any kind of thing you're using. Right. And then if you then go pay a property manager, 15 to 20%, well that eats up the rest of itChapter 28 28 sec
Yep. And, and what I've, what we've found is that a lot of people who end up going down that road soon, discover that, oh, well, I'm not actually making any more than I would have. How if I'd just made it a long term rental or very little more. Right. And they, you think you're giving away 15 to 20%, but it's really 50% or more of your actual short term rental side of the income, right?Chapter 29 16 sec
Right, because we've already talked about separating the real estate from the short term rental business. Right. And it's yes. So yes. And, and so those are two separate businesses, right? So I'm only talking about what does the short term rental side of it generate? Cuz I remember this isn't real estate investing reallyChapter 30 15 sec
Right. Even if you own the real estate, that's the separate kind of thing. Totally separate business. And that thing does rent. Even if it's a beach house, it has a market rent as a long-term rental. It just does. Yep. And that you have to start at that number. And then the short term rental is how much more do I make?Chapter 31 8 sec
Yep. How much more on top of that? Yes. Right. And that's only looking at it as, okay. This is a for profit business. Mm-hmm when you, when you have your condo at the beach that you justChapter 32 9 sec
want to go to, then that is not as important. Right. So then back to, okay, well, I can just put property management and I don't really kind of care and really kind of break even, and trying to break even anywayChapter 33 20 sec
And just have this condo that's gonna appreciate over time. Right. And that I get to use. Sure. Right. So that's a whole different play. That's a whole point of it though. Right? Mm-hmm. And, but if the, if you're, if your strategy is, well, I wanna create a, a large portfolio of short term rentals, then that's theChapter 34 22 sec
In that instance, it would make sense for you to create your own short term rental property management company, which is what we. coach other people how to do, and to be clear, that is managing your own portfolio, managing your own portfolio. Yes. So you're, you're now not in that gray area of, even if you're not licensed, Hey, you're not doing it for someone elseChapter 35 13 sec
You're doing it for yourself. So in yes. I wanna say probably every state in the union, we're talking to the us here. It, you can manage your own properties. That's perfectly fine. It's when you start doing it for someone else that that licensing requirement comes in mm-hmm right. But, but to your point, yeahChapter 36 20 sec
That's When you, when you start building out a portfolio, well, it's cheaper to, to run it yourself for one. And what we teach people to do is, well, you're not really doing it yourself. You're building a team, you're building the, the software infrastructure. You're building the automations, right. You're building all of these thingsChapter 37 19 sec
And one of those true benefits of that. Is not only is that where actually the money is made in the short term rental business, it's in the management, it's in the, providing the service cuz that's the value to the marketplace yeah. Is providing the service. Sure. And if you try to outsource that, well, there goes the valueChapter 38 10 sec
Right. And not to mention what you mentioned earlier that that may have slipped by, but when you use property management, typically. TheirChapter 39 8 sec
website, it's their customer. It's loss of control. It's not only loss of control, but it's loss of value because the value of the business is who are your customers?Chapter 40 22 sec
Yeah. What's your customer list. What's your brand, right? Yep. And when you turn it over to property management, typically now it becomes evolves customers. Yep. It becomes vacation customers. It becomes local property managers, customers, and. now you don't have anything to sell, but a property cuz you have no customer listChapter 41 26 sec
You have no real business there. Yeah. Right. And that's valuable in and of itself. Right. So I, I always find that humorous when, for example, you see a house for sale, right. That says, Hey, it's been a great Airbnb. It's made this. Right. Right. But we used property management. So. So you're, so I'm not buying the Airbnb business, rightChapter 42 16 sec
Or the short term rental business now really I'm just buying a house. Right, right. That somebody else has run as an Airbnb. Right. But I don't mean to talk down to that person. I'm just saying that they, they don't have any value in the business. There's there's no, there's, there is no business. There's no reviews, right?Chapter 43 16 sec
That come with that. There are no, well, there's no systems. There's no customer list that comes with that. I mean, how, how you run your business is your business. Yeah. And we're, we're currently reading a book called the ETH. Revisited. That's so good by Michael Gerber. Yeah. And he talks about thatChapter 44 18 sec
Yeah. It's really good. The, the value in a business is actually the systems and processes and, and all of that kind of thing. Like how you do what you do. Yeah. And you always want to start a business with the thought of, even if you don't ever feel like you're going to, but with the thought of selling it and do you have something to sell?Chapter 45 7 sec
Right. And then to me, that's the biggest disadvantage to using property management is. If I decide to sell, IChapter 46 23 sec
don't have a business to sell. All I really have is a piece of property. Yep. Yep. Right. And, but that, that's what we do is we coach people on how to run that business, how to create those systems and processes and how to hire and train and fire all the, the team members that you needChapter 47 23 sec
so that you can work on your business and you're not in there in your working in your business. You you're just kinda managing the manager so to speak. Yeah. I wanna say that's one of the reasons, one of the big reasons people go to property management is because they're afraid of all the work. Well, you know, even if you, cause it sounds like a lot, have a property manager, you still need toChapter 48 19 sec
Know how to manage the property, know how to manage, manage the property manager. Yeah. Like how do you know if they're doing a good job? Yeah. Right. Really. Right, right. So, but yeah, I mean that, that's the, that's the thing is that, but that's why people do it though. Sure. I mean that, of course, cause that seems like a, a lot of work that seems like, well, that's a totally separate businessChapter 49 19 sec
It is, it is a whole, whole separate business. I mean, it's a whole, it's a totally separate skill set. I mean, I mean, the automation's involved. And the knowledge that you need to know is something that you have to learn. You have to teach yourself those things you do, or have somebody teach it to you or have someone teach it to youChapter 50 18 sec
Yeah. You have to learn those things. But I guess where I was really going with that is it's not as daunting as you think. Well, not when you have a guide. Yeah. I mean, it's, I mean, if I were out there doing it myself, I would just be like, oh my God, am I, am I doing be starting it to zero? Yeah. Am I, what am I, what am I doing?Chapter 51 12 sec
Right. Really having a, having a mentor in the space is, is going to make or break your for success. Well, that's what we did. It's not like we, nothing is nothing is newChapter 52 11 sec
knowledge. Right. But we, we had mentors. Yes. We had other people we leaned on. Yeah. And we learned how to do it correctly and then added some things to it on our own and kind of refined what was good for us as a businessChapter 53 18 sec
And now we have a complete system package. is it? I don't feel like it's that hard anymore. Yeah. Well, it was when we first got started, but to get started, it was, yeah, I can. I remember that. It was. Yeah. Yeah. But it's, it's not as, it's not as bad as you, you might think it's not worth giving up 20%. No, not at allChapter 54 15 sec
It's to have somebody else to do it for you, in my opinion, it's easy, but it's not simple. Well, it's simple, but it's not easy. It's simple, but it not, not easy. Yeah. I know what you meant. Yeah. But yeah, it was the other way around. It's it's simple. But it's not easy. Yeah, it does. It does take work. It doesChapter 55 22 sec
Don't get me. Don't get anything wrong. It does. But, but a lot of that is up on it's on the front end. Yes. It's getting it set up. It's getting the business, you know, stood up mm-hmm and getting all those processes in place. But once you do that, it's easy just to plug properties into it. Yep. You know, you don't have to redo that every time you sign another lease or just plug 'em into buy the property or, or whatever you're gonna do, you're now plugging them into the systemChapter 56 23 sec
Yeah. That then goes to work for you. Yep. Right. And that's where the value is in the short term rental business. Yep. Yep. Very good. Excellent. Well said. Yes. So there, so to sum up there, yes. There are some reasons you might want to use a property manager. We advocate for basically building your own property management system and to do that, you need well, you need properties that are close to you for one thingChapter 57 18 sec
We've talked about that. Yeah. Yeah. Which we've talked about before. So, you know, my advice would be if you're, if you're starting out don't go all over the country and have one house in Florida and one in Texas and one in Oklahoma. And because what you're doing is you're setting yourself up in a situation where you have to use property managementChapter 58 6 sec
And then as you have 10 or 15 of these, that becomes very expensive and you have no business at the end of itChapter 59 18 sec
Right? Yep. And that's where people kind of stop doing it and sell all the properties. Right, right. Yeah. Excellent. Oh, well, we hope that you have found some value in this podcast and if so, like, and subscribe, and we'll see you next time onto the next, onto the nextChapter 60
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STRA Episode 8 : How Many Nights do I Have to Have Rented to Break Even?
Episode 8: How Many Nights do I Have to Have Rented ...
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Sep 11 2022 19m
Chapter 1 4 sec
Chapter 2 9 sec
Hey guys. Welcome back to the podcast. The short term rental authority podcast. We are John and Wendy Williams here to make you the best operator everChapter 3 21 sec
And today's topic is how many nights. per month, do you have to get it rented in order to break even right. And the answer to that is, and the answer is, it depends. John's answer to everything it depends. It truly does. But here's, here's what you need to figure out. You need to figure out what are your expenses?Chapter 4 22 sec
So what are your, what are your basic expenses? Meaning if no one stayed there. at all that place still costs you something, right? We call it fixed expenses, but yeah. It's your fixed expenses. Yeah. And the reason what he said, eh, is because, well, you're figure here, I'll tell you what they are. They're your, what the place would rent for per month as a long term rentalChapter 5 20 sec
It's your gas, electric. Your utilities, water, all utilities, right. Which are technically variable, meaning they aren't exactly the same every month. Right. They're just not, but we include them as fixed expenses because we have to pay 'em regardless. You still have to pay something for electric. You don't turn it off when it's vacant net, right?Chapter 6 21 sec
Yeah. Internet's more of a, I know what that is every month. Cuz it's the. Unless you have a plan that goes over data or whatever, but the, the idea is I, I need to know what all of those expenses are and it doesn't, here's what it doesn't include. It doesn't include cleaning. It doesn't include these other things that you are actually charging a fee for when someone is staying thereChapter 7 16 sec
Right. So it's just your fixed expenses. It's your rent? It's your. Utilities utilities. It's your insurance insurance. It's your, any software subscriptions you have that you pay either way. It's those things, and you add all that up and now you have a monthlyChapter 8 2 sec
number, cuz truly that's what break even is it's rightChapter 9 28 sec
How much am I paying every month? How much am I paying every month? And how much do I have to make to break even mm-hmm to bring that back to zero. Right? Right. So. the question really becomes is, well, how much do you charge per night? Mm. So if you're, if your fixed expenses were, you know, $2,000, just to make it a round number and make the math easy, if you charge $2,000 a night, the answer is one, right?Chapter 10 23 sec
if you charge a thousand dollars a night, the answer is two. If you charge $500 a night, the answer is I need four, cuz I'm trying to get to 2000. so it's very dependent on what is your nightly rate and the challenge becomes that your nightly rate? Well, at least it shouldn't be it should not be the same across the boardChapter 11 29 sec
Right. And it's very seasonal. So when I say it depends, not only does it depend on what are you charging per night? It also depends on when, in other. here in, for example, in our market, our seasonality is January's our worst month, June, July. Our tend to be our best months. So the number of nights we need to break, even in August, because we're charging more per night is actually less than it is in January, right?Chapter 12 25 sec
Because we have a certain number that we have to get to, to break even that month. And if we're able to charge. That average daily rate char, if we charge more on that average daily rate, then we don't need to get it booked as much. Correct. And, and so average daily rate with that term it's or ADR, what that is, is what on averageChapter 13 7 sec
do you charge per night because every night's different weekends are different, even if it's just, Hey, it's this price during the week and this price on theChapter 14 13 sec
weekend, or it's this price in January and it's this price in July, right. It changes. Right. So your ADR actually changes per month. So how do you, how do you get to a place where, okay, I know I'm going to be able to make itChapter 15 17 sec
And what we suggest is start looking at things over a 12 month period. Yeah. So start looking at average. Instead of trying to, trying to say this month, it's this and this month, it's this eventually you will figure that out as you have data, but you almost have to be operating for a year to, to know what your numbers areChapter 16 32 sec
Yeah. I think that's a, a really interesting mindset shift that, that a lot of people need to make that are thinking about going into the short term rental spaces. yes, you do want to, to make money we're in business to make money, but it's important to, to think about it in think bigger, think, think, think of it in a year's worth in, in terms of a year instead of a, a daily rateChapter 17 18 sec
Yeah. And so what you're looking for now is now what you can start doing is aver. out over the whole year. Right. And that's why you, why that's why you need to make that mindset shift. I think. Yes. Yeah, because it's, it's hard to say. That's why I said it depends. Cuz I had said, well, is it January? Or is it July?Chapter 18 20 sec
Right? Right. So you need to have that mindset of, oh well. Okay. And I I'm let's look at bigger time periods. Let's let's make it let's let's go bigger here. Right. So the question was what's my average daily rate and the, and the real question is, well, what's your average yearly rate. Yes. Right. Is the real thingChapter 19 14 sec
That's the real S what's your average daily rate over a year's period. Yes. And now you can start getting into, okay. On average, I need 13 days of the month rented to break even. Right. Right. But that probably means that inChapter 20 5 sec
January you need 20. And in July, maybe you need seven, right. But it averages out to 13Chapter 21 21 sec
Yes. So you're, so you're looking at, as long as you're looking at it over a long period of time, you can get more accurate with what mm-hmm that actual break even number is. Yeah. So I think that's a really great nugget. What you just said was mm-hmm the, it just shifting your mindset a little bit to. Not focus on so much about the, the, the average daily rateChapter 22 27 sec
Think of it as a average yearly rate, right? Yeah. Which essentially comes down to an average daily rate, but take the yearly amount, take amount and divide it by 365 if you want. Okay. So if that's the case, then where, how do we even get started? Let's let's talk about. the tools that you can use to, to come up with that numberChapter 23 21 sec
Right? Cause that is a problem like that. It's, it's way easier to come up with that number if you've been operating for a year, right. Or even six months. Cause at least you have six months of data, but if you, if you're just starting and this is your, you know, only property of that type in this area, you have to have some way of figuring or at least estimatingChapter 24 18 sec
out to figure out, okay, what on average? And by the way, it's like, Hey, what you're really asking is does that sound reasonable? Can I get half the month rented and break even, or whatever that number is? Yeah. I think that is at the actual question that people really want to know the answer to. Right. Cause I always ask, why are you asking?Chapter 25 21 sec
Well, I I'm afraid. do well. Right. And that's the concern is the fear that I'm not gonna get it rented. Yeah. And how do I estimate that? Yes. So yeah, here, here's a, a, a way to estimate that there's a tool out there called air DNA air DNA. Yep. And it's a subscription service you're going to want to pay for at least a month of itChapter 26
That's theChapter 27 23 sec
only way you're gonna get all the data you need. What it does is it looks at all of the reservations in your area on two platforms, Airbnb and V R B O. And it will come up with averages for every, say, two bedroom in that area and say, Hey, here's the average revenue for two bedrooms in your areaChapter 28 29 sec
But, but not all two bedrooms are created equally. Right? They're not. So you can, they're not even if they're next door. Yeah. And air DNA doesn't know that part. That's the problem. So the, you can't while it's all the data, that's the good part about it. The bad part about it is it's all the data. Right? so if I, for example, if what you're really looking for are, because remember, we're trying to figure out what is the annual revenue forChapter 29 18 sec
The two bedroom I have. Well, I don't know yet because I don't have data. So I'm gonna go out to the market and look at other two bedrooms and what you have to do with a tool like air DNA is realize that 78, 80% of the data is actually junk and it's not useful to you. So what you have to do is go find true comps, cuz you're trueChapter 30 19 sec
Comps are not necessarily just other two bedrooms. Right? We've talked about this. It's not about the real estate. It's also about, are your photos good? Were they professional or did you do cell phone photos that affects profitability? Did you have it designed or did you let your cousin do it? Who bought stuff off Facebook marketplace?Chapter 31 20 sec
The, you know, these things come into play. How long has that listing been up? In other words, is it someone who. Has this two bedroom that they make it available all year and it's only for guests or. is it the place they actually live in and they only rent it out when an event comes to town and then they go on vacationChapter 32 5 sec
Right. But, but both of those types of properties are on air DNA and airChapter 33 15 sec
DNA doesn't know the difference. Right. And it's just gonna say two bedrooms do this. So what you have to do then is go in that area, open up air DNA, pay for an area. Usually it's a zip code or a city, and it will show you all the little dots on theChapter 34 24 sec
and guess what you're gonna have to do, and you're gonna have to click on those click on every single one of those and click through to the listing. And here here's what you're looking for. And air DNA will tell you some of this and the listing will tell you the rest. So, oh yeah, this is good. So here's your three criteria for a true comp you're looking for a property that's been available at for at least 300 days to the last 365, 3 available for at least 300 daysChapter 35 19 sec
out of the last 360 out the last 365. So I'm looking for some, somebody that's actually it's been operating for a year, essentially. Right? Mm-hmm I'm looking for, does it have reviews? I mean, active reviews for every single month in the last year, like recent reviews? No, I mean every single month in the last year specifically, because I want to know that okayChapter 36 16 sec
It was available, but were people actually staying there? Yeah. Right. That's that's your that's you have to click through the listing to find that. You know, does it have reviews? Is it truly an active listing? Cause it could be on there. And if it has no reviews in the last year, then it's not a comp, rightChapter 37 25 sec
It wasn't truly available for some reason, right. People weren't staying there. And the third criteria I'm looking at is, is it truly comparable to the property? I'm looking at meaning if, if it has a pool and mine does not, then I may expect it to actually make more money than. right, right. Or am I planning on doing professional photography, but this one has cell phone photosChapter 38 15 sec
Well, I would tend to do better than that property. Right. And so, so I'm looking at the amenities. I'm looking at the quality of the listing. I'm looking at frankly, it's location. If it's, you know, on the lake, that's different than being two streets back, right. That's aChapter 39 5 sec
good point. So I'm, I'm looking for something and, and what I'm really trying to find is who's, who's the top of the marketChapter 40 21 sec
Because it will show you their annual revenue, as long as it meets those criteria. Who's at the middle of the market and who's at the bottom of the market and I'm gonna get a range there. And then I'm gonna go back to my property and be very true to myself and say, where does my property fall in that spectrum?Chapter 41 19 sec
Hopefully we're not ever in the bottom of the market. Right. Cause we're at least gonna have good photos. Right? at. But that will tell you what the bottom is. You know, even if you do poorly, I know I can beat that. Yeah. Here's what he can expect. Yeah. But like I said, the top of the market may not be you because maybe that's recently renovated and has a pool and rightChapter 42 24 sec
A great location and you don't. Right. But if you have all those things, then, okay, that's your, that's your cop, but it's gonna give you a range in there. And I like to pick something in the middle, cause I know always I can always compete in the middle. Right. Just being an experienced operator.. And now that I have that yearly revenue number from that kind of middle ground, now I can back that into, well, I can simply divide by 12 and get monthly average revenueChapter 43 23 sec
So you take the yearly number and air DNA will tell you what that year it's. It's gonna tell you yearly revenue. Yes. And that remember that's what, that's the mindset shift that we're, that we're trying to. Talk about and, and teach you about, so you take that yearly number and divide that by 12, and that at least gives you a monthly number and that will at least give you a monthly number, right?Chapter 44 20 sec
Yes. And if I simply divided that by 30, it would tell me what my average daily rate was. Right. Because remember, I know it's not gonna be a hundred percent occupied, but the revenue has taken that into account already. Sure. Right. Right. So you take the yearly average. Divide that by 12, that will give you a monthly averageChapter 45 1 sec
And you can take that monthlyChapter 46 21 sec
average and divide that by 30. And that will give you an average day, an average daily rate that then now I can say, okay, now that I know what my expenses are, I can simply take my expense average expenses, divide that by the average daily rate. And then I'll tell me on average per month, what I need to do to breakChapter 47 14 sec
but again, then you kind of look at seasonality and you know, you're not gonna do that exact number every month. You're just not right. Right. Hopefully that's just break even hopefully do better than that on average. Well, we're not in business to break even. Right. But that that'll, that'll give you an idea, but at least it'll give you an ideaChapter 48 15 sec
A start. That's a good starting point. If you're just getting started and keep in mind, it's just an estimate. So it's, it's not gonna be exact. Right. And there are other things that come into play. Like I, it's not gonna be vacant. We're gonna have cleaning. We typically charge a little more than the cleaners charge usChapter 49 15 sec
So there's a revenue source there, right? So there are other revenues early, late check-ins pet fees. Yep. All those kind of things that Aird a isn't considering, right. Extra cleanings that are actually sources of revenue as well. But you can almost just treat those as icing on the cake and kinda leave 'em out of the equationChapter 50 22 sec
Sure. I think that's smart to do, because we really were just choose, you know, talking about average daily rate. Right, right. The, the, the, the room rate mm-hmm, what we charge for the room. So air DNA is a great tool that, that you can use. And we've just explained how to use that. And you also have another really greatChapter 51 17 sec
for people. Oh, another source of figuring out that uh, yes. So here's, here's another way you can kind of estimate what the average daily rate is call up your local extended stay and it has to be an extended stay hotel. Yeah. You're looking for a place that has a kitchen at that's that's the primary criteriaChapter 52 9 sec
So you're, you know, extended stay Americas, a large one you're, you know, Candlewood suites. There's different brands of these extended stay hotel. And you're lookingChapter 53 7 sec
for a hotel room with the kitchenette. Cause that's the closest they're gonna get to what we do, right. And simply call them, don't go on the websiteChapter 54 23 sec
No, don't go on the website. Like simply call them and get a quote for an actual two months. Stay say, I wanna stay September 1st through. November 1st. Yeah. can you tell me what the bottom line rate is on that? Cause they're gonna add all their fees in and all their other stuff. Mm-hmm and then simply divide that by two, cuz you asked for two months and that'll tell you what they're charging per monthChapter 55 18 sec
Yep. And that should be, and, and, and the reason I go there is because, well, they spend a lot of money. They have data scientists and analysts and their, the professionals in your market. So I want to know what are they, what's their average daily. over that two month period. And how does that compare to what I'm doing?Chapter 56 23 sec
Right. So get a two month or a 60 day quote. Yeah. Cause that, yeah. Cause you're gonna get their, you're gonna get their best rate. Yeah. If you ask for a two month quote. Yes. Yeah, exactly. So get that number for the 60 days. Divide that by two, that will get your monthly for them. And then divide that by 30 and gives you at least what their average daily rateChapter 57 21 sec
Right. So it kind of gives you a sniff test of, you know, where it, it is what I'm doing comparable now. Obviously they're one bedroom hotel rooms, in fact, they're studios really? Yeah. With a kitchen net. Yeah. So that's more apples to apples with like a studio apartment. So if you've got a four bedroom house, you should make more than thatChapter 58 22 sec
But it at least gives you on a room by room basis. What, what they're doing. Oh, that's good. That's good. On the room by room basis. Mm-hmm mm-hmm yeah, I like that. So, so those are two ways that may help you. Yeah. It's another data point to, to determine that information. So anything else? No, it's just all about knowing what yourChapter 59
base expenses areChapter 60 19 sec
Yeah. That's that's number one. Because you have to know what breaking even looks like for you, for you, and then figuring out what historically has that market done. And then with those two numbers you can kind of back into, okay, what's my average number of days that I need to have booked to at least break evenChapter 61 26 sec
Right. So that, again, we're looking at 12 month period, we're looking at averages, but that's about as close as you're gonna. To coming up with what, what is break? What does break even look like for me? Right? Mm-hmm good job. Nicely done. Excellent. Who are a wealth of information? Well, you are too. I am well, we, we hope that you found some value in the information that we have shared with you todayChapter 62 9 sec
If so, be sure to like, and subscribe and we will see you next time onto the next, onto the. NiceChapter 63 11 sec
No captions Available
STRA Episode7: How to Afford the Initial Investment in Your Short-Term Rental
Episode7: How to Afford the Initial Investment in Y...
more
Sep 5 2022 25m
Chapter 1 4 sec
Chapter 2 8 sec
Hey guys, John and Wendy Williams here with the short-term rental authority here to help make you the best operator everChapter 3 26 sec
And today we are going to talk about. How to fund your initial investment. Cuz we get asked this question all the time, all the time. Yes. So what we're gonna be talking about is we will talk about exactly what that means. And we will talk about what that cost is. So we'll give you some numbers. We'll talk about what we did and, and how we funded our business in the beginningChapter 4 21 sec
And then we'll talk about some other, other ways to fund your business that we've learned since then, since we got started operating, and then we'll talk about at the very end What, if you are purchasing the property. Cause a lot of people do that. Yeah. Like if you, if you saw the title of this podcast, you might be thinking, how do I buy the property?Chapter 5 18 sec
Right. And that's not what we're actually talking about at the beginning. We're talking about, okay, I have the property now, what, what's the, what's the setup cost for the, the short term rental side of it. And I think that applies whether you bought it or whether you rent it or however you acquire. RightChapter 6 22 sec
Is the end of the conversation. What we're actually talking about is how do you set it up and what's the cost for that and how do you fund that piece? Mm-hmm right. So, so let's talk about that. What, what are we talking about when, when we say how much does it cost or how did you get started? How did you fund it and, and what does that mean?Chapter 7 14 sec
What are you actually funding? Yeah, I say, I wanna say furniture is an obvious. So you've gotta buy furniture in our system that we teach you, you need a security system and, and we encourage you toChapter 8 4 sec
buy that equipment, but it, you could finance it, right. It could be an operational expense. It might not be a setup expenseChapter 9 23 sec
You do need, however, you do need those initial supplies. So you, so you're gonna have to do toilet paper. You're gonna have to do bots K cups. You're gonna have to do. Sugar, you have to do, you know what, whatever those consumables are, you know, stockpiling those at least for your first one. It's if you're, if you're renting the place, it's probably security deposit up frontChapter 10 22 sec
So you need to count for that. It's it's all those things that get you to the place where. you can actually list it. It can have, it's a photographer. Mm-hmm it may be a designer. It should be a designer actually. So it, it there's, there's all these costs that you occur before anyone shows up so that it place is rentableChapter 11 26 sec
as a short term rental. Right? So it's all those things. And, and what we tell people that we, that we coach is to budget at least $25 a square foot. I, I wouldn't say anymore than that. No, that, well, that's a measure. It's really don't go over that amount. Right. So don't go over $25 a square foot because you're you're you should be hiring aChapter 12 23 sec
And that designer is going to charge you around. You should budget $20 a square foot for the designer. And so the, the other, but that includes the stuff they're buying too. Yes. That includes furniture. It includes the furniture. Yeah. And it should include some designers have, have the, have you purchased the TVs yourself separate fromChapter 13 16 sec
Some designers will purchase the TVs for you, but that should cover. everything as far as furnishings and, and design go, right. But the other $5 a square foot, that'sChapter 14 15 sec
what you're gonna use for your, your supplies, such as K cups and toilet paper and paper towels and sponges and dishwasher, pods, and dish detergent and, and everything else, because there's notChapter 15 19 sec
The unit that you have to think about, there's also your supply closet that you have to think about too. Yeah. In your linens. I wanna say we spent a lot on women. Oh my gosh. Linens. Well, cause you need four sets for bed. We've talked about that and everything, but that's linens is a huge expense. I was about to say expensive, but that's where your other $5 goesChapter 16 20 sec
Yes. Let's let's budget for that. And hopefully you have some, I think you should, if you, if you budget $25 a square foot, you should have some left over, but I would rather you over budget. Yeah. And come under budget for sure than getting a, get in a situation where I, I don't have enough money to complete itChapter 17 23 sec
Sure. Yeah. For sure. Right. Or I, now I have to cut corner. right. Like not hire a professional photographer because I don't have the $300 to pay that person. Right. Right. Totally. So I, that, that $25 really is a top end. It's a, don't go over that per square foot, rather than a go spend. $25 a square foot. Of course cut costsChapter 18 19 sec
We're all entrepreneurs. We should be cutting costs, but do not cut corner. Oh, those two things are different. So there's things that Wendy mentioned, like hiring a designer, getting a professional photographer you know, those types putting in the security system. Yeah. That's where I see personally people make mistakes because theyChapter 19 17 sec
Try to save money. Mm-hmm on the front end. Yeah. And for us they're non-negotiables and, and really what they're doing is they're cutting corners and not costs. Yeah. And that, that hurts you in the long run. You, you lose way more. Cause I know there's somebody out there saying $20 a square foot. That seems expensiveChapter 20
So forChapter 21 23 sec
a thousand square foot place, you're telling me I need 20. well, the guy, the guru over on, I'm not gonna mention his name cause, but I saw on his as day, he said it was only five grand to set up a one bedroom apartment. No way. There's no way you can do that and have it still look nice. You're rightChapter 22 19 sec
You're right. But you can do. Oh, yeah, no doubt. There's no, there's no, but it's gonna look like you spent $5,000. It is. Yeah. That's gonna look like it. And if you get, guess what that tells your customers that I, that you don't care that I am a cheap I'm cheap and I don't care. Yep. Mm-hmm right. That's rightChapter 23 27 sec
Your customer. And that's exact customer customer over time. That will cost you money. It will. If I could tell you anything is don't skimp on the front. Do not skimp. Yep. You will lose more money than you are saving. Yeah. It'll feel like you're saving a dollar, but you're gonna lose 10. Yep. And when you get a good photographer in bad design, like stuff you bought off of Craigslist or Facebook marketplace, it's gonna look like itChapter 24 18 sec
It really is. Everybody can tell, so that that's a nugget for you do not skimp. So believe me when I say, if you're doing this right. And you're following the system that we teach. It sounds it, you should be spending somewhere around $20 a square foot and you should be budgeting for 25. Cause I want you to have that bufferChapter 25 17 sec
So then when it comes out to be 22, you're not scrambling. Right. And you can thank us later. yes, yes. And if you're, if you're that person that says, well, I didn't that's that money for five. Great. Go for. We'll beat you every time. Yep. we'll beat you every, on the long, in the long term, we'll beat you every timeChapter 26 10 sec
And I want my students to be set up for success. Yes. Amen. Right? Not to say, Hey, here's the cheapest way you can do it. No, that's not worry about, that's worry about here's the no, and I'm all forChapter 27 5 sec
again. I'm all for cutting costs. I'm not for cutting corner. and that's what that ends up being. Yep. Cause you're cutting cornersChapter 28 19 sec
That's right. So I'll get off my soapbox in that one. Okay. So so let's talk about how we funded our business. Yeah. So now we're said, okay, it's a thousand square foot, cuz that was actually our first one. It was a, it's a two, it was a two, two house. Yeah. Smaller house was our first one. Obviously it's only a thousand square feet or it was 1100 square feet actuallyChapter 29 20 sec
Just about the first one. Yeah. Almost. Yeah. And, and what we did, we. Good credit. So we got an American express card. Remember we went to Lowe's hardware. We did. Yeah. Yeah. We went to Lowe's hardware and got a, a Lowe's American express card. right, but it wasn't in our personal name. No, it was in our business nameChapter 30 27 sec
It was, it was in our business name. Yeah, actually, you know what I did was you probably don't even know this. What I did was I went on nerd, wallet.com. Okay. And I searched for the top five business credit card. and all I did was start at the top and I applied for the first one. And then I waited to see if we would get approved for thatChapter 31 18 sec
And then I moved on to the next one. Interesting. That's what I did. Okay. Yep. I went to nerd wallet, right. So, but that's something you may not realize if you're in the, in the, in the, if you're looking at this as real estate, kind of beating that drum again, like you might not realize that, oh, there's actually business credit outChapter 32 20 sec
So if I had my LLC, if I had my Corp, even if it's new, yes. You're going, and, and you alluded to that, cause you said that we had good credit. They're gonna qualify you based on your individual credit score, but they're gonna put the credit in your business name and it's gonna report to your business credit, which you should do from the very beginningChapter 33 4 sec
Yes. We learned that as well, too. Yep. You want to be building business credit all theChapter 34 15 sec
time., but that's how we funded it. Like it's 20 grand. How do we come up with 20 grand? I think it was two credit cards. Yeah, because we, the first one gave us like 10, 10, and the other one gave us like 15 or somethingChapter 35 14 sec
Right. Something like that. Yeah. Yeah. And so that's how we, yep. That's how we did it. Came up with the funds. to buy the furniture and buy the security system. And mm-hmm, all those other things. Yep. And there are advanced things we could, you're like, there's certain things you can't buy in credit cardsChapter 36 30 sec
Yeah. You can you, you certainly can. for a lot of you. You're probably thinking, well, credit card debt's bad though, right? Oh, debt is a four letter word. Why would well, especially credit card debt, especially credit card debt, but that's a, because it's high interest. That's an interesting mindset shift. It is, but, but is important when you, when you sign up with these cards, initially, the, the, you can get these introductory rates where there's 0% forChapter 37 17 sec
12 or 18 months, 12 to 18 months. I wanna say that's what happened. And that's the cheapest money you can get, man. 0%. Yeah. And this business generates enough cash flow to pay off that card before you incur interest, if you really want to, I don't know why you would, but okay. Well, you can sure. What could just save the interestChapter 38 15 sec
That's why you would do it. Sure. I understand that. You're gonna go from zero to 25 mm-hmm but Wendy, Wendy knows that that's not actually important is what she's saying.. But it may be in the mind to somebody that heard credit card debt. So I'm trying to help them. Okay. Right. I'm trying to encourage themChapter 39 18 sec
Well, I'm trying to say that debt is not necessarily a four letter word. Right. And especially credit card debt because, well, there's, well, you always want the cheapest interest rate. Well, that obviously that's a no brainer, but what I'm saying is there's most people can qualify for some kind of credit cardChapter 40 4 sec
Yeah. Now, if you can't and your credit challengChapter 41 20 sec
Credit challenge. Well, that's what it's called. I know. It's just funny. If you're, if you're credit challenged, what would you say? If you have bad credit Uhhuh okay. Maybe I'm using a PC word. I don't know, but if you're credit challenged or you have bad credit, if you wanna say it that way and you're like, Hey, I can't qualify for thatChapter 42 20 sec
Then another way to fund it is have cash. like, if you have cash in the bank now, you know that, Hey, I only need 20 grand. I know that. I said only to a lie to you, but there, there you, that is an option. You can sell fund cash and then you don't have the interest payment. Yep. Even better. Right. True enoughChapter 43 19 sec
Yeah. And then if that doesn't work, there's there's also the, the private money route. So that is a skillset, I will say, that's it is indeed. That's harder obviously than indeed applying for a credit card. Yes. Or going down to the bank and applying for line of credit or here's another idea for youChapter 44 21 sec
If you have a personal residence already that has equity in it, which it should, because as, as of this recording, real estate prices are in a bubble, I believe, but they're high. So if you bought. Sometime ago you probably have equity. You probably could get a line of credit or something on your, your personal residenceChapter 45 20 sec
That is a way to go. That's cheaper money. But if you have to go the private money route, which means friends, family, acquaintances, that kind of thing. That's a whole other discussion. It can be done. It's a skill set though. It's not a I know how to write and fill out application right. So I don't wanna kind of get into that, but I just wanna say that is a source of fundsChapter 46 14 sec
It is. And we've had quite a few students that were, that were able to. To raise private, private money from private money limits. Yes, they were, it was either friends, family, or somebody they attracted to their idea or, or whatever. Right. And thenChapter 47 3 sec
the, you know, you have to have the right conversations and know how to structure those thingsChapter 48 25 sec
Right. You know, it's that kind. That's why I didn't want to get into it. Right. Exactly. But it is, it is something that students have had success with as well. Yeah. Yeah. It is a, it's a whole nother podcast long. Yes. So long lengthy podcast by itself. Separate maybe a four part series, right. yes. So, so now that we've covered all that and you know how we funded our business and you there's some, are there any otherChapter 49 23 sec
I can't think of any other options besides the ones that you've said, not if you, if you're just starting out. So if you have none, if you're at zero, those are kind of your options. However, if you've been operating for a while, that's true. Yeah. Your business, hopefully you have it. One like an structure, like an LLC, an S Corp or corporation or somethingChapter 50 26 sec
Your business has revenue. and because your business has revenue, now you start qualifying for other things that have nothing to do with your personal credit at all. They have to do with your business makes five to 10 grand a month, right? That in fact, as you, as you have more units, you have way more cash flow, cuz it's a very cash flow, heavy businessChapter 51 23 sec
And remember, they're not looking at typically your. After expense number, they're looking at your pipeline revenue number, right? Right. So if your payout for the month was 20 grand from Airbnb, let's say, so you that's the only place you list. If you got paid 20 grand on Airbnb this month, they're now qualifying you on, oh, your business makes 20 grand a monthChapter 52 14 sec
Right. And now you qualify for those type of product. So once you get started, once you get past the, okay, the only thing I have is a credit card, realize that if you have the, the mindset that, Hey, this is aChapter 53 4 sec
business and it's not really about the real estate, which we've talked about a lot, then now you start applyingChapter 54 22 sec
You start not well, you applying of course, but qualifying for business, business, credit, credit, and business lines of credit that are really based on what the business. How does the business reform, and it has nothing to do with your personal credit at all at some point. And so we've been able to fund ourselves that way as wellChapter 55 39 sec
Right. You know, our personal, but that's after you've gotten started and yeah. And you've gotten some, some bookings and you're starting to make money. Yeah. You know, what else? You know, what else? That I was just thinking about was, you know, if you pass your, your what, if you are purchasing the property, right. And you already talked about that a little bit, but there's really no difference. What do you mean when you say there's really no difference? Well, in my mind, because it does cost more, right. If I buy it, I have to pay more. Yeah. But you're still you're setting at that pointChapter 56 23 sec
If you are purchasing the property, that's a whole separate business. It is the, and the short term rental business is a whole separate business. Those are two separate businesses. They really are. So what you're really saying is if you buy the property, do a good real estate deal mm-hmm and take the short term rental out of your mind, take that revenue outta your mindChapter 57 27 sec
Make sure that the real estate deal that you were doing is a good real estate deal, own its own. And that it's profitable own its. And then consider putting your short term rental business in there and then make sure the short term rental business own its own paying fair market rent to your real estate business is profitable, own itsChapter 58
Make sure that the real estate deal that you were doing is a good real estate deal, own its own. And that it's profitable own its. And then consider putting your short term rental business in there and then make sure the short term rental business own its own paying fair market rent to your real estate business is profitable, own itsChapter 59 21 sec
And that's how you actually protect yourself. That's how you protect yourself from doing a bad real estate deal because you thought if I just did the short term real. Right. But the problem is a lot of times, oh, we see this so often that doesn't, it goes away or, or it doesn't become the thing. And now you're stuck with this bad real estate deal that you, you have to scramble to get out ofChapter 60 31 sec
Yep. Like you don't want that. Or you have this bad real estate deal that only works because you have this short term rental business over here, that subs is subsidizing. right. And, and you lie to, and, and it, and that's actually lying to yourself because it's, it's, it's, it's forcing you to hold this bad real estate deal because you think you're making all this money over here where really half of that's going to subsidize the real estateChapter 61 30 sec
And now this actually becomes a unprofitable short-term rental business. Cuz if you actually charge true market rent to this. then it wouldn't survive. Right. So if you, so that's a rule of thumb. If you're, if you're a short term rental business, even if you own the property, if it could not afford to pay market rent on the property, then it's in, then it's not really a profitable business, cuz it's not about how much you makeChapter 62 22 sec
Right. It's about how much more did you make? And it's about making good decisions on each side of that equation. Right? So here's something I, I may have mentioned this before in a different episode, but here's something I, I heard cuz we're in different Facebook, real estate groups and somebody was actually just, you know, be moaning the fact that one of their favorite restaurants was closing downChapter 63 10 sec
Oh, we did talk about this. We did. Yeah. Cuz we talked about olive garden. No, no that it wasn't, it wasn't about olive garden at all. Okay. That was a whole different conversation we talking about. Oh it was okay. Yeah. This one wasChapter 64 4 sec
I don't remember this one, then this one was their, it was that their favorite restaurant was closing downChapter 65 21 sec
And I believe it was in Nodi area, which is the arts district of Charlotte. Right. Cuz it's a local real estate group. And what they were saying was and they posted like the news article to it. And the, the news article was all about this restaurant had to close down because their landlord raised their rent and they couldn't afford to beChapter 66 24 sec
anymore. So they just decided to close the restaurant down, cuz they weren't gonna be able to be profitable with the rent increase. And as a point of, you know, fact, somebody else commented on it in that thread. Who's another real estate investor in the area that I respect. And he said, well, you know, actually the rent increases is in line with current market rentChapter 67 24 sec
You know what they were paying before. From 10 years ago and they've just never been raised. And that's actually what the piece of real estate's worth. So it's not like they're gouging them. They're just bringing it up to what it's, what actual market rent is current market rent. Yeah. And then a little bit, you know, there are other comments and a little bit later another person that I'm a, you know, acquaintance with in the real estate investing worldChapter 68 24 sec
But she happens to be a licensed realtor. She chimed in and. This is why I always encourage my business owners, like a restaurant business owner to actually buy the property that they're operating their restaurant in. Interesting. So that, that can't happen. well, she, she needs to listen to the podcastChapter 69 17 sec
Right. But that does make logical sense. Like it's not a, if you saw that comment, Normally, like, I didn't see anybody else protest what she said. Right. But they don't understand that there's two separate businesses. Yes. It, it, so that's the whole point. Like the, the restaurant actually isn'tChapter 70
profitableChapter 71 19 sec
That's actually the point, right? If they own the real estate, they should be charging. They're gonna be charging market rent, regardless of who's rent. Not my point. What I'm saying is what she was saying was if that restaurant has bought that building, then they would still be in operation today. Mm-hmmChapter 72 21 sec
Yeah, but that restaurant would be, actually be a lie. Yes. Because they're not considering because, because what they, what they could have been making, like not considering what they could be renting that space for. Yes. In, right. And when you consider that and realize that that's actually an opportunityChapter 73 23 sec
oh, of running the restaurant in that building. Mm-hmm your foregoing market rent. Mm-hmm and it can suck you into thinking, oh, I actually have a profitable, profitable business. Right, right. When you don't. Right. And what you, a, what you actually do is have a profitable business at the expense of a bad real estateChapter 74 22 sec
Ooh. So where you're making it over here, you're losing it over here. Mm-hmm and you don't do the math in your head to say, oh, that's actually a, a negative situation. Right. But how would you know that if they weren't separate, that's why we advocate separating. Right. And, and it is very obvious when you're in the rental arbitrage model, because you're only on one side the equation mm-hmmChapter 75 18 sec
So it's very clear to us whether. queen city suites is profitable. Right? Sure. But even if we own the building, it would be very clear to us is queen city suites profitable because, because queen city suites doesn't own any real estate. Right. But even if we own the underlying real estate, that's the whole pointChapter 76 10 sec
Right. There's another separate business that actually owns the real estate. Yeah. And actually it in the places that we're in today, I, I did the math. It would not make sense for us to buy them. Yeah. That's interest. YeahChapter 77 5 sec
it wouldn't because the, the rent that we pay is, would not support the purchase priceChapter 78 19 sec
Right. $1,500 in rent a month does not support a $350 thousand dollars purchase price. Well, that is the market right now, so, right. So you gotta consider that. So it would actually be to our detriment to purchase the property, to purchase the property. Even if the mortgage payment was less than. And that's hardChapter 79 29 sec
That's hard to wrap your mind around, is it not? Yeah, for sure. Because, but it's because you're only looking at it as a monolith, this single thing. Yeah. Instead of realizing that, oh, it's actually a real estate deal and it's actually a business separate from that. And that's why I like using the restaurant thing because that it, for some reason in our heads that makes it clearer to understand that, Hey, maybe I don't need to own the building that my restaurant'sChapter 80 23 sec
in fact, most restaurants don't right. Sure. So, okay. That, that's what I have to say about the real estate side. Okay. Do you have anything you wanted to add to that or? No? Mm-hmm okay. Well, we hope we have, you found some value in this episode, if so, click that like and subscribe button and we will see you next time onto the next on to the nextChapter 81 12 sec
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Episode 6: How to choose the right Property for your Short-Term Rental (AKA Airbnb)
Episode 6: How to choose the right Property for your...
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Aug 29 2022 31m
Chapter 1 4 sec
Chapter 2 21 sec
Hey guys, welcome back to the podcast. This is the short-term rental authority podcast, where we help you become the best short-term rental operator ever. And today's topic is how to choose the best property for your short term rental business. Yeah. I wanna feel like we get this question a lot. We get this question a lotChapter 3 26 sec
Yeah. So we thought that we would. Talk about it. So I think that the main thing, if you take away nothing else from this podcast, the, the main thing that is going to help you be successful in finding the best property is to think about who your customer is first. Yeah. We, we advocate that a lot, a lotChapter 4 25 sec
That's the way we were taught. Yes. And. It's something you don't hear a lot. I want to say in the space, it's more, and I hear this a lot from people that come in that are new to space and are asking for coaching and their real question ends up being, where can I make the most money? Ooh. Yeah. Right. And, and that's aChapter 5 21 sec
It's a, it's a, I understand why the question comes and we're investors and entrepreneurs, and that seems like a natural question. Like where can I make the most money? Right. But the, the answer to the question is, is, is a little more mindset thing than it is a we analyze the market and you should go do three bedroomsChapter 6 17 sec
which I've heard before I too, I've heard that too. Yes. Yeah. So, so that's what we're going to be talking about in the podcast today. So always there's mindset associated with everything that we do, right. So we'll talk about the mindset about itChapter 7 5 sec
And then there are three things to consider when you areChapter 8 25 sec
Thinking about what property type you're you're going to be choosing. And those things are your avatar. Who are you serving? Yep. The, the location and the the property type itself. And I'm talking about, is it an apartment or is it a house? So those are the three things to consider. So, yeah. And so can I interject just a little bit?Chapter 9 19 sec
Cause I had a really cool thing, so, okay. We were listening it, it, it was my birthday this week. And, and you gonna take to you? Yes. And so we went to traditionally in Wendy's Val family, we, we go to their house and. You know, we, they combine birthdays is what they do. Right. So if I had a birthday and somebody else had a birthday that was close, rightChapter 10 17 sec
And then somebody else that was close, we kind of celebrate everybody's birthdays together, which I think is fun. Cuz we all get together and grill out. Everybody gets present. Well, not everybody that had a birthday close gets present. Right, right. It is fine. And that kind of thing. So I can actually kind of enjoy thatChapter 11 26 sec
on the way there we were trying to be good parents and instilling in our children. Teenagers. Mind you? Yes. So we have a 15 year old, 15 year old and a 11 year old, 11 year old. And I decided, okay, I've got a captive's audience here. Yes. What I'm gonna do, cuz it's an hour and a half drive. I'm going toChapter 12 21 sec
Play the audio version of rich dad, poor dad by Robert Kiyosaki. I'm sure a lot of you have read this book or if you haven't go read rich dad, poor dad. A lot of people got started there. It was the inspiration for their real estate journey and investing journey and all this kind of thing. But, and, and I, it's one of those books that I like to reread from time to time, at least once a yearChapter 13
That is a good oneChapter 14 19 sec
but I want to pass that along right. Financial literacy idea. Believe me, I'm going somewhere. So. I was playing the audio book in the car and we, and it's an hour and a half. So we got through first two, three chapters, something like that was, we got through like chapter four or five, well, on the back backChapter 15 22 sec
So I made a list it on the way back too, right? Yeah. That's good. And I could tell they were kind of interested in it. Yeah. Cause they didn't, especially on the way down there, both of them were, they did not complain too much yep. About having to listen to this, but. Whatever, and maybe it'll soak in, maybe it won't, but the point is one of the things that I cuz every time you li re re-listen to something, you pick up, always pick up somethingChapter 16 23 sec
Yeah. You always pick up a little nugget that you didn't either didn't hear first time or you wasn't forgot about, or it wasn't relevant or yeah. Yeah. Cuz sometimes I think you hear things and it's like, all well that's not real immune. Right. But. One of the things in that book that I heard today was if you're going to build a skyscraper, you need a really good foundationChapter 17 36 sec
In fact, the foundation needs to be deep. Yeah. You'd gotta dig a big hole. Like it's deep in the ground. Mm-hmm for a, for a large building like that. If you're building a single family house, maybe it's just a concrete slab. that goes 12 inches in the ground. Right? Because there are different types of structures, but what a lot, the analogy he was giving and the reason he was telling that was what a lot of people try to do is pour a six, you know, the, the, the slab intended for a single family house, but they're trying to, but they're trying to build skyscraper on itChapter 18 15 sec
Yeah. And that's what get rich quick is. Yeah. So it's it. the, the foundation matters. So you need to build the foundation that's relevant to the thing you're trying to build. Yeah. That's really good advice. And that, I likeChapter 19 6 sec
that analogy that translated to what we were just talking about. Picking your customer avatar firstChapter 20 22 sec
Yes. Because that ends up being that deep foundation. Mm-hmm that then you can actually build an empire on, oh, that's good. Because there's tons of people that they'll just go out and do all these properties, buy the stuff, but they didn't build the deep foundation and it crumbles. Yep. So it's kind of like I got, I got rich quickChapter 21 22 sec
I did this thing. I have a hundred units. And then all of a sudden it, two years later, it all comes crashing down and I have a certain student in mind. I know you do. Yes. I know that that happened too. yes. Yes. So we've seen it firsthand. Yeah. And, and we, we try to tell people. the right way to do things, but not everybody listensChapter 22 16 sec
True. True. So please listen to the video, if you wanna be successful long term cause this is, this is that deep foundation. Yes. That you really need to internalize. Yes. And do. So that you really can build us that skyscraper. That's not gonna topple over. And I think, I think what he called it was the leaningChapter 23 28 sec
You don't want the leaning tower of pizza, the leaning tower of pizza, you want the right Rockefeller center or, or whatever the skyscraper you're talking on. Right. Right. So, and I think mindset goes along with that too, is, is building the right foundation. And, and what you said before, About the people who are just going out and, and, and just getting any property that they possibly can, you know, and, and not thinking aboutChapter 24 20 sec
Who they're building this business for there. Yeah. And thinking about your customer avatar first, who's going to be staying there. And what is their experience going to be like, where are they going to be most comfortable? And that's always where we start. Right. So let's talkChapter 25 5 sec
about, and maybe give some examples of, of what that looks likeChapter 26 27 sec
All these things fall into place. Once you, once you determine who your customer avatar is, everything else just falls into place. Right? So let's take, for example, the customers that we do, right. Well, we're talking about picking the right property, but yes. Right. So, well, the first thing to pick the right property, to pro to find who the property is forChapter 27 26 sec
True. Yeah. so, so, so let's give some examples. So let's start with the, our customer. Avatar is families with children and pets who are relocating to the area in between housing or have an insurance claim on their personal property. Right? So if you're thinking about people with families, with children and petChapter 28 37 sec
do they want to stay in a one bedroom apartment? Probably not. Probably not. Probably not. What do they value most? And this is a really great question to ask yourself, what do they value most? What are the things that they value most? And I think that people, families with children and pet. One of the things that they value most is privacy and security, securityChapter 29 19 sec
They want a, a safe place. Yes. We get that question a lot. A lot from people who inquire mm-hmm safe. Is this a safe neighborhood? Yes, we get that a lot. Now side note, you can never just say something safe because well, crime happens everywhere, right. But. You get what they're asking? Yeah. They're they're asking, is this in a bad area?Chapter 30
Right? That's what they'reChapter 31 23 sec
really asking. Right. And we know this. Yeah. Cuz they have, they have kids, they have dogs, dogs. They have exactly, you know, this family type. So if I was choosing a property for that person that now gives me an idea of, okay, if I'm a local expert on the real estate market and what areas are quote good and quote bad, then I'm really shopping for themChapter 32 23 sec
And I'm looking for properties that okay, they're gonna, when they get there, they're gonna say, yes, this is a really great, great place. Yes. And I feel safe here. Right? Mm-hmm, you know, with all the co caveats of will crying happens everywhere. Right? It does. So, so one of the things, and, and here's a really great nugget for youChapter 33 32 sec
One of the things that we look for. And in looking for a safe space is we, we don't want to be around any kind of check cashing place. We don't wanna be around any place that has a lot of graffiti other than. There's a really cool air hip area of town in Charlotte called NoDa. And it has some graffiti, but it's, it's fits the areaChapter 34 32 sec
It's not, yeah. It's more like trendy artist. Right, right. It's not what you would think of as like graffiti. Right. It it's it's, you know, it's not gang signs, it's not gang signs. Right. But it, yeah. Right, right, right. So and abandoned cars. Things like that, that, you know, people begging on the street, for example, you don't wanna be in those types of areas, cuz that's going that, that does not give any kind of reassurance to, to a guest thereChapter 35 5 sec
They're gonna pull up and, and say, Ugh, for that type of avatar for that type of avatarChapter 36 15 sec
Right. Right. And, and just, that's just the way it is. Oh, that's just the way that's what your customer is expecting, but you have to start with who's my customer. Yeah. Always to even know that. Right. And it's, it's not only the property itself, but it's what do you have to drive through to get to the property?Chapter 37 24 sec
Yes. A lot of the students that we have are in bigger cities, Have these homeless problems. Yeah, that's true. And we get that question from them. You're like, is this something that is detrimental because if you come from out of town and you're not used to, cause I feel like if you live in an LA or if you live in a and I mean, Los Angeles not lower Alabama, right?Chapter 38 30 sec
I mean like Los Angeles or if you're in Seattle, Seattle is or Portland or Portland or. You know, any major city, any bigs, New York, whatever it, we even have that in Charlotte. Yeah, we do in certain areas yeah. In certain areas. So that becomes a concern of, okay, if I've got somebody that's coming and they're not from a city where they're used to that, is that something that's gonna be detrimental to them in their experience?Chapter 39 19 sec
And the answer is probably, yeah, it is. because it's not something they're used to. Right. You know, if you're coming from, you know, rural America and you're not used to a city atmosphere, then you see that and immediately you think, okay, I'm not in a good area. I'm not in a good area. And I've got my baby with meChapter 40 22 sec
Yeah. Right, right. Cause it is the family with children thing that we serve. Yep. Exactly. And you start to have these thoughts. Yep. So you have to think of everything through the lens of. who is your customer? And then I would even go a step further and say, sometimes it's educating that customer on what to expectChapter 41 4 sec
Oh, now that's really interesting. Let's talk about that. Yeah. So it's settingChapter 42 16 sec
expectations. So mm-hmm so if you're, this may be a nugget for you, cuz we like to throw this out, but one of the things we've seen to mitigate that is after book. Because you kind of can't do it before, cuz you can't take pictures of homeless people on your listingChapter 43 24 sec
Right. But if you, after booking, if you have an experience where, okay, here's how you get into the property, here's the check-in process. And perhaps you provide a video of that. maybe we would use you. We would use Wendy because she's a female and we would film her. walking to the property maybe at night even, and saying, here's where you goChapter 44 41 sec
Here's how you get this. And then yeah, those other things are in the background. But if you can see that and ex and know that before you're coming, it sets the expectations for what, what you're going to experience when you're. No. That's interesting. So instead of somebody showing up and, and this is the first time they've ever seen graffiti or whatever it is, a homeless person or whatever homeless person or, or whatever, at least they're now prepared that, okay, I see that that's gonna happen, cuz I've seen the video of the check-in process and it doesn't seem that big a deal because well Wendy's doing it rightChapter 45 20 sec
And. that becomes a way to, okay. It's not so much of a shock mm-hmm to say that that occurs. Yeah. That's a, that's a really good nugget. That's that's an interesting thing that we've seen a way to mitigate that problem. Yeah. Yeah. Making a video of the check-in process. Mm-hmm I think a lot of people like that and they do it's informative tooChapter 46 14 sec
Yeah. Because it's, here's how you get in it. It is. But especially for, for families, with children, because. They tend to book farther in advance. They do they plan, I think because they haveChapter 47 6 sec
to plan out everything. Right? When you have children, you, you know, you, you really have to plan out stuff and you plan around school and all thatChapter 48 29 sec
Yeah, for sure. Yeah. And, and I think that and we've noticed too that our customer, the, the families with the children, they like to have their check-in instruc. Like three days before they, before they get here at a minimum. Yeah. Because they, they wanna know the address because they want to, they've got plans to go see grandma and, you know, they wanna know how far away grandma's gonna be or, or where's the grocery store or where's the grocery store gonna beChapter 49 16 sec
And, and, you know, they, they really plan their trip. So things like that, giving their, their check-in instructions early is, is another little nugget that we've noticed that, that people really like. So, but that's our avatar. Right. But so if you're doing business travelers, it could be totally differentChapter 50 22 sec
Right. So, so, so it it's all about knowing who your customer is. Yes. Right. And that's, again, going back to building that deep foundation. Right. So that, okay. I go not wide. But deep. Yeah. Right. And get really deep into who do I serve really know them really on a personal level. Yeah. And now I'm picking the properties that serve themChapter 51 21 sec
Yes. And, and we always say you should have more than one avatar. Yes. Right. So I think that moves into the next thing. Yeah, it does. So you should always have more than one. We say we should have at least three, at least three. Yes. And you know what? That has served us well, getting through COVID. and all sorts of things, but no more than five, because once you get over five, oh yeahChapter 52 16 sec
Five, then now you're vague. Yeah. That's too many. Right. So you don't wanna say, Hey, I serve everybody. Yeah. Well, when, when you, so three to five, when you, when you are, when you try to serve everyone, you end up serving no one. Well, you end up being generic and it's none. And you end up being commodity. YesChapter 53 3 sec
And now you're competing on price. Now you're competing on price and now you'reChapter 54 13 sec
calling us saying, well, we're not booked. We're not getting booked. Yep. Can you please help us with our pricing? And I'm like your pricing. Isn't the problem, actually, exactly. Your pricing is that your, your problem is that you don't know who your customer isChapter 55 17 sec
and you did not build it for them because you didn't think of that first. So please think, think of, for your customers first and build it for them. Yeah. And that answers a lot of questions that you actually have, and it actually answers the question of what kind of property do we serve or what kind of property do we wantChapter 56 21 sec
Right. And that goes to the avatars because you want to pick at least three and you were talking about this earlier. Is you need three to five that that can be served by the same property type. Yes. Right. So families with children and pets are probably going to want a, a larger space. Yeah. Two or three bedroom, right?Chapter 57 18 sec
A two or three bedroom, probably a house, a single family house or a house, or at least something that's pet friendly. Yeah. Yeah. And, and if you could get something with no carpet. yeah, that that's the way to go. If you're pet. Yes. Is no carpet and children too. Right. But, and fist in backyard steals the dealChapter 58 23 sec
Oh yeah. It so totally does. And no stairs. Yes. That is that's money right there. But so like a, a, like a, a two bedroom, two bath single family ranch with a fenced in backyard is the perfect. Place for a, for families with children and pets. that we've got. Yeah, that, that's what we've that that's kind of our bread and breadChapter 59 19 sec
That's our bread and market C Mar Charlotte market. Yes. That's been fantastic. Yeah, it really has uh, that it's but houses are good. They can, yeah. Townhouse can. In fact, we have somebody staying with us right now. Yep. That has pets. Yep. In one of our townhouses, but again, it's pet friendly. There's no carpetChapter 60 2 sec
Yep. It's. NiceChapter 61 15 sec
area. Yep. You know, when they arrive, they're gonna feel. okay. I'm in a safe space, right? Well, there's people walking their dogs yes. In the neighborhood pushing strollers in the neighborhood. So people see that and they're, they're like, okay. I'm, I'm, I'm in a great, yeah. And that's how you earn a good reviewChapter 62 13 sec
Right. And that's how you get the next one. Yep. Right. Cause they said, Hey, we came with our, our infant and our three pets and it was a wonderful experience and it was a great neighborhood. Yep. So you don't even have to tell 'em the reviews would tell them and it's because we thought about that and, and built it for themChapter 63 25 sec
Yep. And then that's why we chose that property. And specifically was because of the, the neighborhood and it was, it was a really great neighborhood and we actually have. Had two houses and right. But going back to property type, what, what I was trying to get at is don't pick avatars that are okay. I wanna first serve families with children and I wanna serve traveling nursesChapter 64 19 sec
Right. And I wanna serve business travelers and I wanna serve people coming for weddings. Yeah, no, because that same property type cannot serve all of those different people. Because your, your families of children, like we were saying are two to three bedrooms. Your traveling nurse is probably more like a studio, right?Chapter 65 18 sec
Or maybe even a room mm-hmm cause they're budget. Your business traveler depends on who the business traveler is. Cuz we talk about that in other episodes, but you wanna be very niche, but assuming that's a single business traveler that all starts, starts ING like a studio one bedroom and not a two bedroomChapter 66 22 sec
Right? So when you pick these three to five avatar. Pick things that overlap as far as the property type and the location go, and then you'll be picking the right property for the person you're trying to serve. So for example, if you're, if you wanna serve families with children and pets, then, then you could also serve the, the military families tooChapter 67 1 sec
You could, if you, and thisChapter 68 17 sec
is goes into the next thing. Location, where do they want to be close to? Right. And that's the other part of it. Yeah. Yes. Right. So if you're going to be serving families with children and, and, and pets and the military, you're going to have to be near a military base, like trueChapter 69 27 sec
We are not near a military base. So that, that, that avatar's out of the window. It's, it's off the chart. It's it's off the table. It's off the table for us. However, if you are near a, any kind of military base, it doesn't matter what it is. Yeah. I would say within what, 30 minutes or so. Yeah, 30 to 60 minutes, 30 to 60 minutes of a military base, a military, then that closer to better, but great avatar to serveChapter 70 26 sec
Fantastic. And then you can also serve the families with children who are relocating to the area or have an insurance claim. So it's things like. So if you have a if you wanna serve the let's say you wanna serve the, the, the people who are coming into town and you have a big theater near youChapter 71 25 sec
and, and people come to town and stay that work at the theater. And cuz they'll stay for a long time. You mean like the people that are coming in to, to like the performers, the performers, production, the props people and the makeup artists and the costume artists and, and all those people that, that put on this, these theater productions, you know, they, they last for a whileChapter 72 20 sec
So if you are near a large theater, You know, you're, you're going to want to be near that theater. Right, right. Or sporting events if you're doing sporting events. Yes. That's a good one. Medical traveling medical professionals. Cause it's not just traveling nurses that that's true travel. Right. It's if, especially if you areChapter 73 12 sec
near a specialty hospital, like a, like a cancer hospital, Or even a plastic surgeon, we have a student that is has, is near a plastic surgeon down in FloridaChapter 74 21 sec
And if you go through plastic surgery, you have to. Recover for quite some time. You do. Yeah. So people have people who are going for plastic surgery need a place to stay for a long time, but they want to be near that plastic surgeon's office and they want to be near that hospital. Right. So we usually tell peopleChapter 75 21 sec
Try to find something within three, to, to five miles of, in a, in a radius of whatever that is, whatever your, what we call your point of interest is. Yeah. Right. And then you need to figure out, okay, what are the other two to three avatars that would also be served by that location? Because it always, it is probably near something else tooChapter 76 20 sec
Right. Like a convention center or convention center, or it could be sporting event sporting event, or it could be whatever. Yeah. Whatever it is. Mm-hmm and then now you have overlap and you're not so dependent on just this one type of, you know, traffic that comes through right. Business travelers, for example, didn't travel during COVID muchChapter 77 23 sec
Well, there's that like, cuz that can happen. Yeah. Like one thing goes away. Right. And then you need the next thing and you've you wanna make sure that you've picked the property that can. the two or three, right. Or to five. Right. And so that, that's how you actually protect yourself is by having a property that can serve three to five and still be niche down enoughChapter 78 17 sec
Cause that that's actually the fear. Yeah. The fear in nicheing down and picking an avatar is, is it comes from a place of fear of, well, if I do that, then I'm afraid I won't get enough bookings. Yeah. But here's the, here's the deal about that? Okay. you're gonna getChapter 79 21 sec
all that business. That's true. Yeah. So, I mean, people, you put, you build it for them and they are scrolling through Airbnb or VRBO or wherever, and they see that place and it is in the right location and it has all the things in it that they're looking forChapter 80 18 sec
They're gonna be like, oh my God, they're gonna choose you. They're gonna choose you. Yes. Regardless of price to a certain degree. Yes, actually. And, and I will say one of the most profitable things, one of the most profitable ways people come to you is through insurance claims. Mm-hmm. It is, it's. And if you don't know what that is, it's okayChapter 81 24 sec
Somebody had a house fire or somebody had, you know, the pipes burst or whatever it is. They, they can't live in their house and they have homeowners insurance and they tend to be local. Cuz that's what that is. And they, they need a spot to stay in. well, they're not paying for it. The insurance company is so they're literally picking you based on, did you build this for me?Chapter 82 20 sec
Yep. Is it something that speaks to me? And you can almost, I mean, you can almost set your price. No that's true. Would based on what the insurance company will pay, they have yet to tell us. No, but you can almost set your price. Yeah. And keep in mind that it's not the insurance company that's picking youChapter 83 25 sec
It's the, it's not the person with the money. It's the person that needs the stay. Yep. And they have to agree that, Hey, we will stay there. And those are some of the most profitable clients you can have. Yeah. They really are. And because we built it for them. they pick us. Yep. Every single time. And the, those are some of the, like I say, a fourth time, some of the most profitable bookings you can getChapter 84 6 sec
Yeah. Yeah. They really are. so, so I, I know it works. I know that's the way to do it. I know youChapter 85 17 sec
should be picking your avatar first and picking the property then. Yep. That serves that avatar. Right. So there's to, to recap, here's the things that. To consider when you are, are thinking about, if you're asking yourself, well, where, what property should I pick?Chapter 86 24 sec
So the first thing of course is your customer avatar. Who's going to be staying there and remember the riches are in the niches here also. True. So the, the more niche you can get, I know it sounds counterintuitive. It, it is, this is really that's the secret sauce. It really is. It's the secret sauce. YesChapter 87 34 sec
And it sounds counterintuitive, but it works. The, the more niche you can get. In your three to five avatars, you will get all of them. Right. They're going to pick you every time because it speaks to them. Right? So the next thing is the location. Where, why are they coming? What do they want to be close to and be about three to five miles in, in that radius of where they're coming toChapter 88 31 sec
And then the last thing. The the property type itself, think about where are they going to be most comfortable and what do they value most? Right. So, or if they value safety and security and privacy. Then then think about that when you're going around, looking for properties, you know, are, and the space, the size of the space, you know, families are gonna want more space because they're, there's more people thereChapter 89 9 sec
Right. And if you're serving business travelers than., you know, maybe there's just, just one or two of them in, in a studioChapter 90 11 sec
or a one bedroom, little apartment and, you know, maybe they value being able to work out when they get, get off of work and they, and they like the gym mm-hmm right. Because we have some of those tooChapter 91 28 sec
So, so thinking about all of those things, Is going to be key when you are looking for the, the right property for your space. So well said. Okay. Very good. Excellent. Well, we hope we found some value in the information that we provided here. This is John and Wendy Williams with the short term rental authority, where we help make you the best operator everChapter 92 6 sec
And we hope that you will like, and. Excellent. Okay. Onto the next, onto the next. YeahChapter 93 12 sec
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STRA Episode 5: How not to Stay Glued to Your Phone on Vacation Part 2
Episode5: How not to Stay Glued to Your Phone on Vac...
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Aug 22 2022 1m
Chapter 1 1 min
Chapter 2 1 min
P for everything dare I say standard operating procedure and then it's okayChapter 3 1 min
That's right. And we built the, the systems too. Yes. And we ran the systems ourselves. Yes. So that's really step one, but yes. Well, let's go back to training. Yes. Right. So training process in our company is, so we've got there's four steps to the training process. So the first one is, watch me do it. Mm-hmm so the second one is do it withChapter 4 1 min
sometimes it is okay. Let's get on zoom and, and do it together. Yeah, it is right. And then, but then you record that too, right? Sure. Yeah. Right. For training purposes, this call will be recorded for training purposes. Yes,. Well, it's true. So that's the, the, watch me do itChapter 5 1 min
But our cleaners don't take months. Well, the cleaners don't right? Yeah. So it depends on, on who it is, what the job is. Yeah. I would say, but. I would say that for most customer experience people, it's gonna take them a couple of months to that's true. YeahChapter 6 1 min
so let's talk a little bit about that next, cuz that leads us nicely into the, the second thing that we were gonna talk about, which is in fact, these systems and the processes, like what do they do?Chapter 7 1 min
checklist and that's the process. And then if there's a problem, they report it to us. But the tool then becomes what facilitates that, what facilitates the checklist, what facilitates the quality control, what facilitates the feedback to themChapter 8 1 min
experience specialist, then we'll talk about the operation specialist. Then we'll talk about the, the cleaners. So, and if you're talking about the, the customer experience specialist, now, this person is, we've talked about this last week, but this person is the, really the glue that holdsChapter 9 1 min
out to the guest proactively and say, Hey, we know this is a problemChapter 10 1 min
communications channel is great because you're going to have more than one customer experienced person eventually anyway. And what you need is a centralized place so that when the next person comes on shift, they now have access to all the communications that have happenedChapter 11 1 min
properlyChapter 12 1 min
Trello, which is free as well, which is free as well. And it assigns a due date for them to go do tasks when things need to get done. Like for example in our houses in Charlotte, well, somebody has to take the trash down every Sunday and Monday, depending on the place that gets scheduled for the runner to doChapter 13
say, I hope everything's okay
No captions Available
STRA Episode 6: Part Two of How Not to Stay Glued to Your Phone on Vacation
Episode 6: Part Two of How Not to Stay Glued to You...
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Aug 22 2022 25m
Chapter 1 4 sec
Chapter 2 15 sec
Welcome back to the podcast. This is part. Of how to not stay glued to your phone while you're on vacation. Yeah. So we, we did the first part of that last episode at the lake lures at the lake lure, we were on vacation and so fabulousChapter 3 19 sec
We were thinking that's a very timely subject. Like let's go on vacation and not have to worry about being glued to our phone. Right. Cause you hear that a lot and you can't, and it is true. This business, you can do it on your mobile device. Like that's one of the. Advantage advantages to the way we have things set up is it is all virtual, butChapter 4 17 sec
At the same time when you're on vacation, you kind of just wanna be on vacation and not be glued to that phone all the time. Yeah. Cause we've had that experience before, too. Yeah. Because when I'm floating around on the, on my floaty float, yeah. You don't want your phone in a bag or? I don't want John. I got John a beaver float cause he likeChapter 5 21 sec
Beavers beavers are a very noble animal and, and they're awesome. And I don't know. What's funny about that at all. Nothing. It was, it was glorious, but anyway, and I did have a beaver float. Yes. I'll have to post a picture of that, cuz it was great. Yeah. But what we wanna talk about today was. how that, how that works rightChapter 6 22 sec
Is how are we able to do that? And we talked last week about the team team members that we have in place. So mm-hmm, this week we wanted to talk about what the team members actually did, how we trained them to do the things, what they do and the tools that they use to get it done. Yeah. So there's three parts of thatChapter 7 15 sec
It's. Training. Yeah. It's great that you have team members, but you need the training. Yes. Training. Yeah. And then the second part was the, the systems and processes. Right. Which is like how to do the things they do, right? Yeah. So there's a system, there's a process. There's a soChapter 8 3 sec
P for everything dare I say standard operating procedure and then it's okayChapter 9 25 sec
Well, what tools do you actually use to facilitate that, right. Those processes, right? Yeah. So training is, we started with that. I feel like that is very foundational because if you are going to take the time to have bring someone on your team and, and you want them to stay there for a long time, rightChapter 10 27 sec
Mm-hmm so, and by the time you get done, Training them, it, it takes a little while. I wanna say a couple of months to, to train someone up really good really well. And that is the foundation that you can build upon to, to have them stay. to like what they do to enjoy the job because they feel supportedChapter 11 16 sec
Right. So let's talk about the training process and can they even do the job, right? Like how do you want it done? Yes, because that's one of the mistakes we we made in the beginning is we brought people on and didn't, didn't not really train them. Yeah, just kind of gave them the tools. Right. Which we'll talk aboutChapter 12 22 sec
Right. I see. But there was no training on what, what is, you know, how do we want it done? Right, right. And you need to think about that in your business too. How do you want it done? What's the, what's the culture there, right? Well, you know, I think that's really key. and the, the way that we started was we were actually the ones doing itChapter 13 21 sec
That's right. And we built the, the systems too. Yes. And we ran the systems ourselves. Yes. So that's really step one, but yes. Well, let's go back to training. Yes. Right. So training process in our company is, so we've got there's four steps to the training process. So the first one is, watch me do it. Mm-hmm so the second one is do it withChapter 14 18 sec
Mm-hmm the next one is do it by yourself and then the fourth one is, teach someone else. So let's go over each one of those, just touch on each one of those and how we do each one of those in our business. Yeah. And you used to be a waitress, so you're very familiar with that process. And I think a lot of people would be familiar with that tooChapter 15 18 sec
If you've ever been to a restaurant and had a waitress or a waiter in training. You've actually seen this going on. May not internalize it. Yep. It was going on. Yeah. So what's so the first thing you get is you get this job is watch me do it. Yeah. So they're basically walking around with the experience personChapter 16 19 sec
Yep. Essentially watching them take orders and watching how they enter the orders. Cause you have to go back to the kitchen and enter them. Right. Mm-hmm and then. They're they're literally just following them around. Right. That's that's watch me do it. So, so in our business, watch me do it is a, a lot of it is over zoomChapter 17 17 sec
I would say mm-hmm yeah. Some of it's over zoom. And another way to do that is simply make a video of you doing it. Yes mm-hmm. so any time that's a very simple thing. You can do simple start documenting these processes. Yes. Is every time you're doing something, no matter how mundane you think it is or how easy itChapter 18 18 sec
just record it, screen record it. Yep. There are tools out there for it. Loom is one very popular one loom.com, L O O M. Yep. That, that one works very well. Veo, if you've ever, they're kind of like your competitor, YouTube, maybe Vimeo, V I M E O. Yes. They have a tool free tool for doing it. I believe you can do it with Google driveChapter 19 19 sec
I mean, there are tons of screen, you know, sharing tools. And if you just install one of those and just make it a habit of every time you do something, record it. Yep. At least you have that. Yeah. Yep. Right. And that's so, so easy to do. Just click that, that record button and just record yourself doing itChapter 20 4 sec
Mm-hmm and so that's the. Watch me do it. And to your pointChapter 21 17 sec
sometimes it is okay. Let's get on zoom and, and do it together. Yeah, it is right. And then, but then you record that too, right? Sure. Yeah. Right. For training purposes, this call will be recorded for training purposes. Yes,. Well, it's true. So that's the, the, watch me do itChapter 22 20 sec
And then the do it with me is a lot over. That that is where zoom probably we use that the most in, in zoom as the, is the, do it with me. It can be. Yeah. And then another way we've utilized that is we'll talk about one of the tools later, but basically we use a tool called slack, which is our internal communicationsChapter 23 20 sec
So for a while there, for example, when the customer service people were responding to a., they would actually write out their re what they were going to say in slack, in, in there mm-hmm and then we would either say, yeah, that's good. Or, or change that or change this before you send it. Right. Mm-hmm so that was a way for us to do it with meChapter 24 21 sec
Yeah. That didn't involve zoom, right? Yeah, yeah. Yeah. That was really good. And we'll, we'll talk more about slack here when we talk about the tools. So that is watch me do it, watch me do it. And that was do it with me. Mm-hmm and then the third one is do it by yourself. Mm-hmm and, and all this entails is you've been trained and now go to do the jobChapter 25 26 sec
Basically, you go do the job and we are just here to kind of manage things and answer questions as needed and you know, that kind of thing. Right. Help guide, guide the process. Right. So mm-hmm and a lot of that is, is done in slack too. So and then the third, the fourth one is train somebody else. Mm-hmmChapter 26 10 sec
So now that you have trained someone and, and this is going to take several months, it's gonna depends on the job you're talking customer experience. YesChapter 27 13 sec
But our cleaners don't take months. Well, the cleaners don't right? Yeah. So it depends on, on who it is, what the job is. Yeah. I would say, but. I would say that for most customer experience people, it's gonna take them a couple of months to that's trueChapter 28 24 sec
Yeah. Yeah. To, to really get feel comfortable in the position. Mm-hmm, where they don't have to ask you a billion questions. Mm-hmm like, can I say this? Can I say that? So now that you have someone that. competent, competent, and, and knows a little bit about how the, how the role works and the tools and the processes of thingsChapter 29 25 sec
Now they can go train somebody else. Right. And you're not having to do it, which I love that. Yeah. And another thing we have them do a lot of the times is actually create the documentation for us. So even if we're making a video say, yeah, we may make a video of, Hey, here's how to do this thing. And then it's their job to actually watch that video and write it out in textChapter 30 16 sec
Mm-hmm. And then that also gives you feedback of, did they really understand the video mm-hmm cause it's kinda like read this book and write me an essay mm-hmm so let's watch this video and write, write out the procedure, right? Step by step. Yeah. That, so here step one. You're step two. Here's step three, as detailed as possibleChapter 31 21 sec
Yeah. Right? So that now you have it documented not only in video, but in, in written form. Right? Cause people learn different. and you know, that person truly understood what it was, cuz you've now read through that and said yes, this or no change, this, that type of thing. Mm-hmm. So that, that ends up starts building your documentation over timeChapter 32 15 sec
And then that becomes a training tool as new people come in. Yeah. And, and yeah, that, that's great that, that you are not the only one that is creating those. Those those SOPs, those standard operating procedures. Mm-hmmChapter 33 12 sec
so, so let's talk a little bit about that next, cuz that leads us nicely into the, the second thing that we were gonna talk about, which is in fact, these systems and the processes, like what do they do?Chapter 34 20 sec
Right. Mm-hmm so if depends on the job, right, right. So let's, let's break that down into. The different team members that we have in place. Right. So let's start with the customer experience specialist, then we'll talk about the operation specialist and then we'll talk about the cleaners. Okay. Yeah. So let's do it that wayChapter 35 36 sec
And we're separating processes from tools. Is that right? Yes. Correct. Okay. Those are easy to confuse. Yeah. Yes. So the that's so a really good thing to talk about. So why don't you. Talk about what the difference between those things is. Got it. So your processes tend to be the thing, the, the, the, you know, the, the thing that's getting done, it's the, the process, meaning for example, if someone let's go to the customer experience side, if someone inquires and asks for a discount, the process ends up being okayChapter 36 17 sec
Here's what we asked. so we may ask them, what discount were you looking for? Right. Or we may say, what was your budget? Right. You know, there's lots of responses you could have, but that's the process, right? And then we have, you know, basically a list we go through to determine, you know, we can give you this offChapter 37 19 sec
We can give you this off, or there's no discount available. And, you know, how do you determine that? Well, there there's an SOP for that. Mm-hmm, but that's different from the tool of how we're actually communicating with them, right. Or where those procedures are stored. That's a tool mm-hmm,, it's not really the processChapter 38 10 sec
Right? So the tools tend to facilitate the processes and make those processes easier. Another example would be the cleaners. Obviously their job is to come. and have aChapter 39 14 sec
checklist and that's the process. And then if there's a problem, they report it to us. But the tool then becomes what facilitates that, what facilitates the checklist, what facilitates the quality control, what facilitates the feedback to themChapter 40 17 sec
Right. Right. And that tool could brain from anything from, Hey, I call them on the phone and schedule them all the way to, well, I'm using a tool that automates that process. Like we do. Right. So that that's the tool, right? Yeah. So, and they're very closely tied together. Cause sometimes the processes enter this in the toolChapter 41 20 sec
Right. right. But it's not the main thing it's the, the tool can change. The process tends to be. And I think the, the tool will change as you grow and scale too. We've noticed that that happens, happens true. And your process has changed as well as you fine. They, they, yes. As you were fine over time, certainly did not start off withChapter 42 21 sec
Well, same things we have today. Yeah. Yeah. Well, the extensive systems and processes that we use today, for sure. So it, it is very, it is very much a, a fluid thing to, yeah, it's an iterative process. Always going to be. Changing and mm-hmm and growing and, and making it better all the time. And it usually comes from some mistakeChapter 43 15 sec
Yes. Or something that happened that was experience. Yes. Not perfect. Right. Which is probably the wrong thing to say. Cause it's hard to be perfect, but it's something that, okay. If we had this, then this wouldn't would not have happened. Right. Right. Right. And then that becomes a procedure or that becomes a okayChapter 44 17 sec
What tool do we need to make sure that procedure gets followed? Cuz sometimes it's that. The procedure didn't did not get followed. Like they didn't, there was something on the cleaning checklist that wasn't done. So what tool can we use to make sure that happens? Yep. Right. So that's just an example. YeahChapter 45 9 sec
So let's talk about the. how to okay. Of it. So, and let's start, we're gonna do the customerChapter 46 19 sec
experience specialist, then we'll talk about the operation specialist. Then we'll talk about the, the cleaners. So, and if you're talking about the, the customer experience specialist, now, this person is, we've talked about this last week, but this person is the, really the glue that holdsChapter 47 24 sec
This business together. Yeah, there's a hub. I think they remember there's a hub of a wheel. Cause they, they are the ones that are responsible for things like. messaging the guests. Mm-hmm, communicating with the guests. They're responsible for communicating with the cleaners. They're responsible for communicating and organizing and scheduling any kind of maintenance that needs to happenChapter 48 31 sec
Mm-hmm so this person is really a key role in your business. So how do they, how do they do their job? Mm-hmm is. so is all SOPs, I would say. Yeah, it is everything in the business should be. Everything is, everything should be documented is, is SOP driven. It is. Yeah. So, so that they know exactly what to do and how to do itChapter 49 23 sec
And it all starts with SOPs. Right? So that's an example of a procedure. Say the cleaners coming clean and this just happened. And the, they, they discovered that the blinds are yep. Broken and they report that back to customer service customer experience team. Now what, that's their procedure they're doneChapter 50 17 sec
They don't fix blinds. So what's the customer service to do well. Their procedure is reach out to maintenance and, and relay that, Hey, this needs to be. and then find out and coordinate for them to go, you know, fix that before the next guest comes. Right. Or if they're not gonna be able to, to then, okayChapter 51 21 sec
Reach out to the guest proactively and say, Hey, we know this is a problem. Is it okay if maintenance comes after you arrive to fix it? Right? So they, they end up communicating with all three of those pieces that don't necessarily directly communicate with each. and they, they need to be in the middle because it's a customer driven customer focused experienceChapter 52 17 sec
So they really need to be in a, in a, in a large sense so that they know what's going on so that they can anticipate, okay, a guest comes and they tell you, the blinds are broken. Well, you already know. Right. Or you've already reached out to them hopefully, or whatever it is, whatever the, whatever the problem wasChapter 53 15 sec
That was just an example. But they, they are the. So that's, that's an example of a procedure. Do you wanna talk about the tools yet or like how they do their job? I, I feel like that would be a natural progression of things. Okay. Well, I'm just saying, did you want to talk about the other team members first?Chapter 54 19 sec
Did you want to talk about cleaners? Did you wanna talk about, well, it would make more sense if we, you did the tools to go along with that. Okay. So for our communications internal communications, I mentioned earlier, we use a program called. It's free. It's very much like messenger. It's kind of like a group chat if you willChapter 55 17 sec
And there are different channels, so you can break up these chats into, so is this one big, long group chat like you might have on your phone, like with a text or something? They're actually different channels. So we have a channel for cleaning where we only talk about cleaning. We have a channel for each property where we only talk aboutChapter 56 17 sec
Things that are associated with that property in that channel. So it helps you organize your communication as well. And then we have an internal team. We have an operations channel where it's really us and customer experience. So because they are the hub that tends to be the only people in there. The cleaners are actually in thereChapter 57 8 sec
We have a cleaning channel. That's where they can talk back and forth through the cleaners if need be. So that that slackChapter 58 14 sec
communications channel is great because you're going to have more than one customer experienced person eventually anyway. And what you need is a centralized place so that when the next person comes on shift, they now have access to all the communications that have happenedChapter 59 18 sec
Yep. So it's part of, that's not organized, so it's all transparent. It's also all informed. Everybody's informed. Yep. And it's organized and it's. now there is a paid version of it that eventually you're gonna want as you scale. But it's, I, I like to start with tools that are free especially when you're just starting outChapter 60 18 sec
Well, every penny counts. Sure. And a lot of large corporations use slack. It's not like it's, that's true. You know, it's, it's a well functioning product. So slack is our internal communications. That's how that would have happened. So the cleaners may have reported a problem. They may have notified customer service in slackChapter 61 25 sec
Rather than texting. Right. Cause that, that is now stuck on your phone. Yep. Right. So we've remember, we don't wanna be, nobody knows about it. The phone, we want it out here somewhere. Yeah. So it's in slack. They talk to customer service in slack. Customer service can talk back to them and actually perhaps even talk to maintenance, maybe there's a maintenance channel in there, or it may be that your operation specialist, which is the person that goes out to the unit when somebody needs to go out, that'sChapter 62 22 sec
You know, a maintenance issue or a cleaning issue, maybe it's something they can address and, and go do, cuz it could be something like the cleaners. Just tell you, Hey, we don't have any more toilet paper. We'd love to put some out for you, but you don't have any. Well, now that becomes a, that comes back into customer service customer service then would talk to the runner or operation specialist and say, Hey, can you take some toilet paper over there?Chapter 63 17 sec
Cuz the cleaners didn't. right. So it becomes your hub of communication. So slack is a big tool that we use. Yeah. Like all the time, every day. All the time. Yep. Now for the cleaners they, we actually have a program. We call we call we that is called turnover. BMB that we use there, there are several, there's another oneChapter 64
called properlyChapter 65 21 sec
We happen to like turn over BMB., but what it does is it allows us to not only automatically schedule cleaners, so you can hook this thing up to your calendar. Yeah. So that when they're in, cuz you're always cleaning on checkout, always on checkout. Oh that's part, day of checkout. You can actually have it automatically schedule you're cleaner to come on checkoutChapter 66 24 sec
So now you've, that's a piece of automation actually that helps you not have to call your schedule your cleaners. Right? Right. Remember, I'm trying to get away from my. And it also, because it's automated, it eliminates or helps to eliminate mistakes. Like we forgot to schedule the cleaner. Right. And what it also does, it allows them to verify that yes, they're coming cuz they accept the cleaning jobChapter 67 22 sec
Yep. And then when they're cleaning, it also provides them the checklist. Yes. That then they can check off and then it allows them to upload pictures of the things they. So now we've in this one and it pays them automatically too. It will pay them automatically. So in, within this one tool, we have documentation that things got doneChapter 68 18 sec
We have the procedure of how to get it done. We have the scheduling done and we have a way to quality control it. Remote. by having them put those pictures in there and then automated, I thought of it because they can actually also report problems in there. Mm-hmm yes, they can. So if not slack, they can put it in turnoverChapter 69 17 sec
Yep. And mark that as a problem. And then customer service again, would get it from that channel. So turnover B and B is a big one for the cleaners that we use for our operations specialist. We actually scheduled them on a calendar and we automate that through. Through Trello and a and a in ZapierChapter 70 11 sec
So Zapier is a program that allows you to tie programs together that aren't necessarily connected otherwise. So what it does is it ties our calendar to a tool calledChapter 71 16 sec
Trello, which is free as well, which is free as well. And it assigns a due date for them to go do tasks when things need to get done. Like for example in our houses in Charlotte, well, somebody has to take the trash down every Sunday and Monday, depending on the place that gets scheduled for the runner to doChapter 72 18 sec
Somebody has to in the, in the Charlotte properties, the runner goes to every checkout, cuz they're also the one running the linens back and forth to, to the linen service. So they get scheduled for every checkout. Inventory inventory is on there as well. Yep. So Trello become. Actually, we do all of our documentation on Trello as wellChapter 73 20 sec
All the SOPs are housed all the, the SOPs live there. And, and again, that's just the tool. You don't have to use Trello, but it's what we use. And it's free again, which is what I, I like to always start people on something that's free. And you may graduate from an eventually, but it's a great tool. So tho those are the three main ones that we use a lot as far asChapter 74 20 sec
the operations of the business beyond, you know, pricing and some there's some other tools that we use for other things, but as far as operations and getting everything done, it's mostly turnover, B and B and Trello, and then, and slack. And then the third, I would say the fourth one, that's a big one is a program called hospitableChapter 75 41 sec
And what hospitable is, it's now the communication to the gas. Because remember they're not in slack, right. But we are on multiple platforms. So what it has is it has an, an integrated inbox so that if something comes in from Airbnb or it comes in from VRBO, or it comes in direct, even mm-hmm,, all those communications are there in centrally inbox, inhospitable, and it has an automation component as well, so that it can automatically send out, for example, thank you for your reservation when someone makes a reservation or thank you for your inquiry when somebody makes an inquiry or here are your checkin instructions two days before, or the first morning of weChapter 76
say, I hope everything's okayChapter 77 21 sec
You know, please let us know if anything, all those automations are done through hospitable and it gives the customer service a way to have that unified inbox and respond when they need. Because not all communication can be automated. Right. For example, that's very true discounts. Yes. We can generically respond to discounts, but we can't approve or deny themChapter 78 18 sec
We still have to communicate, or they have a specific question about certain things that, well, that's a main, how far is this from? From wherever they're going, right. Or, you know, can I park my RV in your driveway? You know, those types of things are manual. Can I bring a chicken? can I bring a chicken that's happened?Chapter 79 14 sec
We did allow it for a pet fee. We did. We, we did chickens. Aren't that bad. We've had a pet chicken pet chicken. But yeah, so those that's, that's one of our big tools as well. That's that's really helpful in the business. And in, you know, in the course material, we have a lot more detail on actually how to use all of thoseChapter 80 18 sec
Right. We can coach you on exactly how to set all this up. Yes. And how it all works together. Cause they are tools, but you have to set them up properly and correct. And. Learn how to use them expertly, let them all hook together properly and all those kind of things. Yeah. Yeah. So that's the major tools that we use, I would say to facilitate those processesChapter 81 14 sec
Very good. So we hope that you found some value in this episode be sure to like, and follow and we will see you next time onto the next, onto the nextChapter 82 11 sec
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STRA Episode 5: How Not To Stay Glued to Your Phone On Vacation
Episode4: How Not To Stay Glued to Your Phone On V...
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Aug 15 2022 28m
Chapter 1 1 min
Chapter 2 1 min
wanna say, that's one of those things that, well it's happened to us in the past where we've gone on vacationChapter 3 1 min
that. And then the systems, how, what tools do we use? That allow the people to do the jobs, to do the things. Yeah. That's a big part of it. Those were, those were the three main things that allow us to be out here in the rightChapter 4 1 min
because you have to clean every time something turns and it, Amy. Yeah. Every time there's a turnover you have to clean. Right. And I think one of the, the things that we see people do a lot is they put a lot on their cleaners. Yeah. They make their cleaners do the linen, do the laundry in theChapter 5 1 min
to wash and dry mm-hmm but at least two hours. Okay. So that's two hours of time and I know you have that five hour block. But they also have to clean. So how many turns can they actually do in a day? And so if you have a place that's fine, but if you have 10 of them or 20 of them, that starts becoming an issue and it becomes more of a efficiency thingChapter 6 1 min
bedroom place, then you need four sets of sheets, four sets of pillow cases, and four sets we use duvet covers, right? Cuz they're a lot cheaper to, to clean the comforters among other reasons. And then we have four sets of, of towels that we have per bathroom and there's two setsChapter 7 1 min
wifi doesn't work and I don't know how to reset the modem. Somebody has to go. It's the we don't have enough toilet paper. Can you bring, please bring some more it's the, you know, whatever it is that that happens all the time that somebody needs to go for some reason that doesn't involve cleaning and that ends up being a runner now in our houses, because we've mentioned in the past, we have single family housesChapter 8 1 min
this in just a second, but there are things that are on the cleaning checklist that are also on the operations specialist checklist too, becauseChapter 9 1 min
checklist and then we told our cleaners and another thingChapter 10 1 min
To clean exactly the way that you want them to clean. Yeah. And then quality call becomes accountability. Yeah. Accountability. You need to build, build accountability. Must. And again, it's one of those it's, there's no single point of failure, right? You must. So I think that's important. Yeah. Well, how do the, let's talk about thisChapter 11 1 min
quality control found or the cleaners foundChapter 12 1 min
guest shows up and now they have a bad experience and they leave you a bad view. And how much did that cost you? Oh, over. Oh, my, you just did a big one. So it's not only those hard costs, but it's those soft costs that you feel like aren't really cost, but they areChapter 13 1 min
this is part of the systems that we have, because we can do that. We can see the thermostats remotely. Does the inside temperature match what the thermostat is set to. Yep. So if the thermostat in the summer is set to 72 degrees Fahrenheit and the actual inside temperature is 85, problem, problem is probably happeningChapter 14 1 min
I got lake here and I don't care. I got lake here and I don't care but we do hope that you found a lot of valueChapter 15 16 sec
and we'll see you next time
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STRA Episode 3: The First (And Most Important) Step When Starting a New Short-Term Rental / Airbnb
The First (And Most Important) Step When Starting a ...
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Aug 8 2022 32m
Chapter 1 1 min
Chapter 2 1 min
we may not even realize that, that there are so manyChapter 3 1 min
that experience. Yes. Cause remember you're, you know, one of our mentors, Jay Massey told us this, he said, you do your first deals for the experienceChapter 4 1 min
your possible things that you could. are narrowed down by geography. Yeah, they are. But I will say that it's probably not as narrowed down as you think, even if you're in a, say a Myrtle beach, right. Say I wanted a short term rental in Myrtle beach. Would you immediately think vacation rental?Chapter 5 1 min
entertainment traveler, the medical traveler, the military traveler mm-hmm the seasonal or tourist traveler, the academic traveler, the emergency travelChapter 6 1 min
branch offices. Yep. Team meetings. Mm-hmm merger, acquisition teams. Yes, they do that. Yep. So those are just some examples of the corporate traveler that you could serveChapter 7 1 min
concerts, football games, football games, basketball, basketball, sports, any kind of sporting events festivals we have. That's right. Yep. We have the Renaissance festival here. If you've never been to a Renaissance festival, you must goChapter 8 1 min
professionals. Well, that's great but is it traveling nurses or is it the traveling surgeon? Right, because those are two different people. They're and they're two different experiences. Yes, too. Yes. And we're gonna talk about that in just a second long term hospitalizationChapter 9 1 min
nursing home. Right. And put them in one of our units with a caregiver, because well, that's where everybody was dying. Yeah. We're in the nursing home. Right. And they, they were trying to take them outta that environment. Yep. And yeah, that was interesting. Yeah. Yeah, it was, it was so, oh, this next one is one of my, one of my very favorites to serve and that's the military traveler and big props to all you and military out thereChapter 10 1 min
say a student from Italy, Italy you were screwed and the campus shut down. Well, you didn't really want to go back home either. Yeah, no, rightChapter 11 1 min
to your area. They'll, they're building a new houseChapter 12 1 min
could be a nurse mm-hmm, but it could also be a surgeon as well. Right, rightChapter 13 1 min
things, but that answers the question of, if I know who I'm serving now I know where to go put that thingChapter 14 1 min
far. level of service, you know, are they expecting Egyptian cotton sheets, right? Or do they not value that because they'd rather have a lower nightly priceChapter 15 1 min
think one of the mistakes, you, you, it's actually a mistake. People. What people really want to do when they come to us is, is they wanna say, who can I make the most money with? Right. mm-hmm right. And then you start with that a lotChapter 16 1 min
going to want to be around that general area. I mean, if. If you are serving the, the military, for example, you need to be around a military baseChapter 17 35 sec
example, Mm-hmm. So we hope that you have found loads of value in this episode and stay tuned for the next exciting episode and be sure to like, and follow us. And so you get notified of the next exciting episode that's coming out
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STRA Episode2: The #1 Mistake Real Estate Investors Make When Investing In Short-Term Rentals / Airbnb
STRA Episode2 The number one mistake real estate inv...
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Jul 31 2022 29m
Chapter 1 59 sec
Chapter 2 59 sec
rental businessChapter 3 59 sec
if you, if you have the, the property. Yeah. And you're trying to. Operate a business inside of it. I think a lot of people don't even realize that's what's going onChapter 4 59 sec
short term rental side of it. I'm gonna say business is much more like running a reChapter 5 59 sec
rental is because, well, you're actually running a business in it hereChapter 6 59 sec
probably never think to himself, Hey, I could get more rent if I own the Chinese restaurant. Right, right. He would realize that, oh, I'm starting a whole nother business. Yes. I'm gonna run it in my strip mall. But what I'm also forgoing is the rent that I would normally be collecting from the Chinese restaurantChapter 7 59 sec
what I'm doing is I'm putting a hospitality business inside of this houseChapter 8 59 sec
of YouTube videos and things you can read andChapter 9 59 sec
the right word to say it, but it's trying to, you're trying to shoe horn your customer into this property. Right? So taking that into consideration is, is the, the first thing that you need to do is. okay, well, who's gonna be staying in my short term rental businessChapter 10 59 sec
I would tooChapter 11 59 sec
just one, you want a whole chain of these things. Mm-hmm and I know we do, and that's another mistake. Ends up happening with real estate investors is because they're going for deals and value. Ooh, this is another really good point. Mm-hmm yes, they are real estate investors tend to, to think about the, what the cash flow that this particular property is going to bring in mm-hmm rightChapter 12 59 sec
here, a duplex over here in a totally separate part of town. And, you know, a four bedroom over here. Right. And then I've got this place in the mountains. It's from beach house, five bedroom, beach house over hereChapter 13 59 sec
customer. Right? Right. So now if I really want to get into like taking direct bookings and having an email list and I, I, all of a sudden have this fractured customer base. Right. And if I want to reach those different types of people, now I have to, if I had a hundred dollars to market with, I gotta, well, put 10 on the beach house and 10 on the, instead of spending the whole hundred mm-hmm and saying, Hey, here, come stay at any of these placesChapter 14 59 sec
and had a really great experience, mm-hmm for example, they, and they, and they want to come back then. And, but the, the time that they wanna come back, your, your beach house is, is rented or even worseChapter 15 59 sec
be here in this place, in this house, right in this house. They're really saying I enjoyed that experience. I enjoyed that experience. Yep. Mm-hmm that's exactly right. And you know, this happened to us not too long ago, the, we we're in Charlotte, North Carolina, and as hot as Hades here in the townChapter 16 59 sec
get, you need to place to either, either correct the problem by having portable space heaters or something, portable airChapter 17 59 sec
perspective on itChapter 18 59 sec
you're now competing with people that are lowering their price. So now, now you're a commodity and now you're just competing on price mm-hmm yes, that's huge. Yep. Well. I like the, the way that the way that we've done it is at well, the, the way that we coach a lot of people to, to do is to think about what you're, who you're serving, what customers gonna be there and then put what, what they want inside the unitChapter 19 59 sec
those pet covers over the top. Right, right. And pray that people, and we're gonna have a place that doesn't haveChapter 20 59 sec
they do, but they do don't they don't talk to baby contraptionsChapter 21 59 sec
are speaking to that particular customer. And why are we speaking to that particular, particular customer? Because that's who we picked because that's who we picked and that's who we know who we areChapter 22 59 sec
far marketplace furniture and cell phone pictures. And will everybody knows to put a cure egg in there now. Right. Right. And everything's cookie cutter and kind of looks the sameChapter 23 59 sec
Right. Right. The, the, the whole idea is I'm building a, well, at least for us in our avatar, we're building a business that serve. provides temporary housing, short term rentals for families, with children and petsChapter 24 59 sec
right. Even if you didn't start out as a real estate investor, a lot of times what you learned about this business came from someone who actually had that perspective as well. Mm. I hadn't, I hadn't considered that. Mm-hmm yeah. That's interesting. Yeah. Huh. I see what you're sayingChapter 25 59 sec
actually operating? Yes. Yes. What are you actually doing here?Chapter 26 59 sec
Marriotts there's IHG Hilton Hilton. Some, some of 'em like that, and then they have their subbrands like IHG is your holiday Inn and like your, oh, so IHG traveling holiday and your days inChapter 27 59 sec
what a franchise is, right. That's what a F the value in holiday Inn is the systems. Yeah. It's the experience. It's the, and the name, it's the name? Yeah, the brand, the brand and the marketing Uhhuh and all of those thingsChapter 28 59 sec
stuff and, and that's really the value. So when you, when you're thinking about, Hey, I'm going to turn this into aChapter 29 59 sec
even though it's my handwriting, I can't read your handwriting and you can't read your own handwriting. If that's bad. I think about third grade, I was like, okay, I can make letters. good enough to pass. And I just never practiced after that. Yeah. It's really bad. It's well, we hope that you found some value in the discussChapter 30 1 sec
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The number one mistake real estate investors make with short-term rentals / Airbnb
Episode2 of the New Season The number one mistake re...
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Jul 31 2022 29m
Chapter 1 59 sec
Chapter 2 59 sec
rental businessChapter 3 59 sec
if you, if you have the, the property. Yeah. And you're trying to. Operate a business inside of it. I think a lot of people don't even realize that's what's going onChapter 4 59 sec
short term rental side of it. I'm gonna say business is much more like running a reChapter 5 59 sec
rental is because, well, you're actually running a business in it hereChapter 6 59 sec
probably never think to himself, Hey, I could get more rent if I own the Chinese restaurant. Right, right. He would realize that, oh, I'm starting a whole nother business. Yes. I'm gonna run it in my strip mall. But what I'm also forgoing is the rent that I would normally be collecting from the Chinese restaurantChapter 7 59 sec
what I'm doing is I'm putting a hospitality business inside of this houseChapter 8 59 sec
of YouTube videos and things you can read andChapter 9 59 sec
the right word to say it, but it's trying to, you're trying to shoe horn your customer into this property. Right? So taking that into consideration is, is the, the first thing that you need to do is. okay, well, who's gonna be staying in my short term rental businessChapter 10 59 sec
I would tooChapter 11 59 sec
just one, you want a whole chain of these things. Mm-hmm and I know we do, and that's another mistake. Ends up happening with real estate investors is because they're going for deals and value. Ooh, this is another really good point. Mm-hmm yes, they are real estate investors tend to, to think about the, what the cash flow that this particular property is going to bring in mm-hmm rightChapter 12 59 sec
here, a duplex over here in a totally separate part of town. And, you know, a four bedroom over here. Right. And then I've got this place in the mountains. It's from beach house, five bedroom, beach house over hereChapter 13 59 sec
customer. Right? Right. So now if I really want to get into like taking direct bookings and having an email list and I, I, all of a sudden have this fractured customer base. Right. And if I want to reach those different types of people, now I have to, if I had a hundred dollars to market with, I gotta, well, put 10 on the beach house and 10 on the, instead of spending the whole hundred mm-hmm and saying, Hey, here, come stay at any of these placesChapter 14 59 sec
and had a really great experience, mm-hmm for example, they, and they, and they want to come back then. And, but the, the time that they wanna come back, your, your beach house is, is rented or even worseChapter 15 59 sec
be here in this place, in this house, right in this house. They're really saying I enjoyed that experience. I enjoyed that experience. Yep. Mm-hmm that's exactly right. And you know, this happened to us not too long ago, the, we we're in Charlotte, North Carolina, and as hot as Hades here in the townChapter 16 59 sec
get, you need to place to either, either correct the problem by having portable space heaters or something, portable airChapter 17 59 sec
perspective on itChapter 18 59 sec
you're now competing with people that are lowering their price. And you have no realChapter 19 59 sec
for example, if you are serving families with children and pets, what are you gonna put inside the unit? You're gonna put a pack and play a stroller. Yeah, we do the high chair. High chair. Yeah. Dog bowls. Mm-hmm we're gonna put those pet covers over the top. Right, right. And pray that people, and we're gonna have a place that doesn't haveChapter 20 59 sec
I've got two small children and I am coming to Tim buck to, to visit my elderly parents mm-hmm and I've got to cart all this. I don't know how these little babies come with so much crap they do, but they do don't they don't talk to baby contraptionsChapter 21 59 sec
they're, they're thinking, well, you know, I could pay. You know, a little bit more for this great space that has everything that I need alreadyChapter 22 59 sec
until, well, this is why you hear people say it's things thatChapter 23 59 sec
more in the long run. Mm. Cause you will consistently attract that customer. Ooh, that's good. And, and that's the key to getting 'em to comeback direct too, by the way, which is dang. I was just about to say thatChapter 24 59 sec
And quote well, other things, you know, pricing and all these other kind of things that people tend to get tripped up on because frankly they came into it as real estate investorsChapter 25 59 sec
you know, properties or NopeChapter 26 59 sec
are, is Airbnb a threat to the hotels? Oh yeah. What I learned it, it, that was the subjectChapter 27 59 sec
owned some time ago. So they don't even own the real estate. Yeah. So when you go to a holiday Inn, it's not owned by holiday Inn, it's franchised by holiday InnChapter 28 59 sec
offer to manage it? They were simply buying the name. The, the brand awareness or the computer software. Yeah. Like how do you run a hotel? Oh, like here's the owner's manualChapter 29 59 sec
cause John thinks of something laterChapter 30 19 sec
authority for all things, short term rental related to help make you best short term rental operator ever
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