Real Estate News Radio with Rowena Patton

The Art of Mastering Short-Term Rental Investments and Operations

December 30, 2023 Rowena Patton
Real Estate News Radio with Rowena Patton
The Art of Mastering Short-Term Rental Investments and Operations
Show Notes Transcript Chapter Markers

See more at www.strCPO.com


Discover the insider secrets of short-term rental investing as we unravel the complex landscape with industry expert PJ Glenn. Together, we tackle the nuances of navigating city regulations, the impact on traditional hospitality, and how everyday hosts are maximizing their income in markets like Asheville and Wilmington. Whether you're an investor, host, or someone curious about the intersection of real estate and tourism, our conversation sheds light on the strategies and challenges that shape this bustling industry. 

Cleaners take center stage in the second chapter of our discussion, as I recount personal tales of the vital yet oft-overlooked work they perform to maintain the high standards guests expect. From finding forgotten items to the critical role of maintenance professionals, our talk is packed with insights on running a seamless operation. Plus, service providers won't want to miss the chance to increase their visibility in the short-term rental market by getting listed on our recommended resources.

Finally, we wrap things up with pearls of wisdom on property design, the savvy use of multiple rental platforms, and the importance of a well-crafted check-in guide. I also share my experience with choosing durable materials like luxury vinyl plank flooring, the benefits of neutral paint colors, and the criticality of meticulous maintenance records. As the landscape shifts, and some owners pivot to long-term rentals, we introduce the STR CPO program, a game-changer for those looking to navigate the selling and reinvestment process effortlessly. Join us for a comprehensive journey through the ever-evolving world of short-term rentals, where practical advice meets real-world applications.

Speaker 1:

This is the plain English real estate show with your host, rowena Patton, a show that focuses on the real estate market in terms you can easily understand. Call Rowena now. The number is 240 9962 or 1-800-570-9962. Now here's the English girl in the mountains, the agent that I would trust, rowena Patton.

Speaker 2:

Good morning, and this is Rowena Patton. I had an early fail there. Where were my headphones? I'm whispering, randy, randy, I am so happy. Today we are talking about short-term rentals, people who are unhappy with them. People who are happy with them. People wondering what the heck is going on. Are they going to be shut down. Hotels that are concerned that it hits their vacancy rates. People who say that it makes rentals much more expensive and it's cutting down on homes that are available for people to rent out. All kinds of things. Pj, go ahead and introduce yourself.

Speaker 3:

I'm PJ Glenn. I'm a short-term rental investor here in the Western North Carolina area. I own a number of short-term rentals just west of Asheville and also in the long-term rental business as well.

Speaker 2:

Absolutely. I want to start off with a quote from Lisa Cameron, who's an Airbnb host. She says is this assumption that only rich people are making money off multiple AirBnBs? But it's average people like me that depend on short-term rental income to sustain their lives? She's an Airbnb host who got hit with a $500 fine. It's not fair and there has to be a happy medium. She says so let's talk about what's going on around the country right now in terms of short-term rentals, and there's a lot of cities out there that are trying to shut it down. Basically, do you know anything about that?

Speaker 3:

We've got places like Wilmington and even here in Asheville where they're regulating more and more on the short-term rental world. That's something you need to consider when looking at a short-term rental. Where's the politics in the area at that? point what's the temperature in the room Before you do make such an investment? No kind of what's coming and what the law is really, what's currently in place, whether or not you may or may not be grandfathered into that. You need to be thinking about those things ahead of time, just in case you need, just like with any other business, so you can pivot and make moves and regroup and move in a different direction if you need to.

Speaker 2:

I think the issue as well is that you never know when those laws are going to change. Like anything else, you don't?

Speaker 3:

I think even here in Buncombe County it's been brewing for a while. I think, but in the last year or so it seems to really be garnering some steam. I personally don't have a short-term rental in the Buncombe County area, but if why is? That. That reason exactly is the temperature in the room and the politics of the area didn't.

Speaker 1:

When I'm looking out five, 10 years.

Speaker 3:

I didn't have a lot of faith that there weren't going to be some waves there. I just felt better that it was more appropriate for my long-term goals to invest in other places.

Speaker 2:

Let's talk about the hotel industry for a minute. In cities like Asheville, where many, many hotels have come in over the last 10 years and they're usually the big chains they have a lot of money and a lot of clout because obviously they're putting in a lot of taxes to the area. I would imagine that's partly why at least they can afford to pay very high-priced attorneys to come in and take the case and say well, this isn't fair. We're building here. We need the local community to do something about it in terms of offering all these Airbnb's and therefore taking up the vacancy rates. I want to come back to Lisa for a second, who was saying people assume that it's rich people that make money off Airbnb's. It's kind of the same way thinking that rich people make money from having franchises for McDonald's or something like that. Right, because aren't the vast majority of people that invest in Airbnb's mom and pops, as we call them, like small businesses, families who go hmm, we've inherited this house, maybe let's turn it into an Airbnb, or we've got a little bit of money, maybe somebody's past or they've inherited some money, and what can we do? Maybe we'd like an Airbnb, and I think maybe that comes from as well all the boomers who have this dream of retiring and running a bed and breakfast.

Speaker 3:

Right? Well, that's certainly true. I think a lot of times that does happen. A lot of times, when people get into this, they've inherited a property and the first thought is, hey, we saw this action going on with Airbnb's and well, let's just make an Airbnb. And I don't necessarily think every house is correct for an Airbnb. Most of my properties are in more remote areas, with distance between me and the next neighbor.

Speaker 2:

Why do you mention that? Because neighbors get upset sometimes when they have to. Sometimes neighbors get upset. Especially in neighborhoods, in neighborhoods.

Speaker 3:

Again, before you sign on that dotted line, you really need to read the neighborhood, read the room and see if this is an appropriate place, just because it's legal and just because there's no at that moment no law saying no restriction saying that you can't do it doesn't mean the headaches won't be coming down the road. You need to kind of weigh out the options If this investment better possibly for a long-term rental or with a short-term rental be appropriate here.

Speaker 2:

And most of the time you can do the 30-day rentals, even in neighborhoods. It's very hard to restrict that and even in the city you can do 30-day rentals because they're not short-term rentals for 30 days. You've got things like traveling nurses and the demand for longer-term rentals has really gone up as people are moving. Now We've gone post-COVID Are we still saying that anymore? Oh my gosh. We've gone post-COVID, where people are moving about in the country now. So they move to another state and they don't necessarily want to buy a home right away, but they want to live in a home. I mean, you can't buy a home here in four weeks, it's not even possible. So you'd want maybe 90 days or something like that, which isn't a short-term rental, correct? So that's correct.

Speaker 3:

And I think you can charge a bit more for that. You can charge a bit more for that. We call them the furnished finders in the industry, but we're seeing that there's a lot of people want to move in here to the area. As you very well know, you can't just jump on a property.

Speaker 1:

It's very competitive.

Speaker 3:

It's a multi-bid situation, so if someone wants to get here, maybe they need to rent for a little bit, Maybe they need that three six-month lease and maybe that's appropriate for them to be in the area to be able to be more on top of purchasing a home in this area, so there is a demand for that as well, and that's certainly something we've seen in this area.

Speaker 2:

And you've got the issue, too, that the natives anywhere this isn't Asheville, it's anywhere we have listeners all over the country. Thank you guys for listening today. A lot of the natives anywhere, in any city, anywhere, say we don't want these new people moving here.

Speaker 3:

Well, asheville, in the surrounding area, is absolutely beautiful If you've ever taken a road trip out west, and it certainly has its beauty and its charm too. But when you come back through the mountains you're happy to be home and many people they drive through and they remember us and they know that this is a beautiful place and they want to move here and that's just. We're blessed to live in a beautiful place. But a lot of people want to be here and supply and demand creates a situation where the prices are much higher.

Speaker 2:

And that's always going to be the case when people want to move to a place because of its natural beauty, Absolutely and unfortunately, regardless of what you think about it, you can either be the person that is unwelcoming or be the person that's welcoming. And the interesting thing too is and, Randa, you're a native, you've probably found this too is that many of the people who are complaining actually moved here from somewhere else.

Speaker 3:

Very true, isn't that right?

Speaker 2:

I mean, oh my goodness, so yeah. So you've got natives who are like, don't move here and therefore don't be in the Airbnb. And you've got people who have Airbnb who are very happy usually to offer those longer term leases. Obviously it's less money generally than a short term lease because those are the premium price, but it's more money than doing a six-month or a or a year's lease generally. So there's a big opportunity there as well, obviously, correct. So I wonder what portion of people everywhere that are moving somewhere because we've all become so transient, you know, maybe moving to be nearer the kids? The vast majority, it's something. It's a very high percentage. I won't quote the number because I might get it wrong, but the vast percentage of asset money in homes is still with the baby boomers, and baby boomer is 58 and up, or 59 and up, depending on where you draw on that line. So you've got people, you know people, who are entering their 60s right now, or next year it will be 60, and they're thinking about long-term care. They're thinking about, you know, getting insurance for that. They're thinking about moving into retirement communities. They're thinking about finally 59 downsizing from their five-bedroom, four-bedroom houses that the kids grew up in and now those kids are in their 30s and they've got their own families and they probably live somewhere else. So you've got this massive. I mean some economists are saying it will be a tsunami starting next year of boomers moving out of their homes and selling their homes and that I think will create a whole inventory out there. I mean real estate. Changes in demographics are usually a trickle and not a tsunami and it's probably going to be somewhere in between because the large number of boomers there but you wonder how many of them will be interested, especially the younger ones in their early 60s, of thinking about Airbnb and investing that money and what all that additional inventory that's coming on the market will do, because that inventory is generally going to be for younger people who have those families that want that four or five-bedroom home. You know.

Speaker 3:

That's true, and one thing I think about is, you know, sometimes bigger is not always better. To this day, I've owned several properties. I've owned beach property, lake property, mountain property. Still, to this day, the number one bottom line income-producing property that I own is a one-bedroom 962 square foot little cabin on the side of a mountain with a hot tub, and we always jokingly say, because it always pays the bills, it's always been number one. So we're a larger property, you know, still has higher utility costs, higher expenses and a higher cleaning fee at that. So it doesn't necessarily always produce the revenue that you think it's going to produce. So I would caution someone. You know, okay, we inherited mom and dad's house or grandmother's house and you know it's so big we're going to make tons of money. You really need to think that through first. But bigger is not always better.

Speaker 2:

And this is Rowena Patten and PJ on the Real Estate News Radio Show today. If you have any questions about short-term rentals, give us a call 828-240-9962. 828-240-9962. If you're calling in from Mars, you can use the 800 number, 570-9962. If you've got any questions about short-term rentals or real estate or what's happening in the market, we're here to help and we'd love to help you with that. So it's a really fascinating industry. I think there's absolutely blossomed, grown at an incredible rate, as people know, and I guess, as it's blossomed, and a lot of mom and pops and a lot of investment companies are buying properties to short-term rental, or maybe it's a second home as well. We'll talk about second homes in a minute. Then a lot of people who are supporting those rentals pop up. Let's talk about that a little bit. So cleaners, for example. How important to cleaners when you're going to have a short-term rental?

Speaker 3:

Well, cleaners are everything. Those are the backbone, those are the people that are really going to hold things together. We're truly blessed with a great crew. You want to find somebody that's dependable. You want to find somebody that will answer their phone. Gosh, there's a lot of questions you need to ask. Go through, walk through the house, open up drawers, look at stuff and there's going to be incidentals. There's going to be things that get missed. You want to have someone that you can depend on to call and say, hey, we've got this issue. Can you take care?

Speaker 2:

of it.

Speaker 3:

I've been through a lot of cleaners and it took a long time to find the right ones. Right now we have the best. They support us, they understand the business we're in and that's the thing you always just want to talk to that person, have a conversation with that person. It's not cut and dry, it's not someone that just simply performs a service Right, but it's a relationship and that's what we have gotten in our business. Is that relationship? And the same goes with a lot of things where I'm very blessed that I've been able to acquire a lot of minor skills and I can do the simple repairs, the plumbing, the electrical, simple wall repairs Cool. But if you can't do that, if that's something that you're not comfortable with, you need a good maintenance person, a good handyman and having that person who's willing. It's eight o'clock at night and something's not working and can you go out and take care of it.

Speaker 2:

Something's leaking. Something's leaking Something critical.

Speaker 3:

And having that person on standby it's very critical. So that's another thing to think about when getting into this business is how involved can I be, how involved do I want to be, and do I have a network of people that can support where I can't?

Speaker 2:

Yes, and if you can't, you can have a management company to that. And I do want to direct everybody to STR, short-term rental, STRCPO. We're building a big national list of resources for people who are interested in short-term rentals, people who support short-term rentals. So if you are a cleaner or management company or anybody that's interested in short-term rentals whether it's buying it, getting funding for it maybe you offer funding to short-term rentals go ahead and go to STRCPO. That's certified pre-owned STRCPOcom. There's a link on there to enter your details and we'll share them out anywhere in the country. We're at the start of building the list. It'll take us a little while, but eventually we're going to have a gorgeous map there where you can go on and find someone to call to help you. And if you're a newbie getting into the short-term rental market, then you want to think about what do I need to know? And maybe you're thinking, oh, I can just maintain it myself and I can go in and clean it myself, or something like that. Get a quote. We'll have a list of people for you to get a quote from on that. And I really want to support the cleaners, those people that really specialize in STR, so they know what to do Because, like you said, it's not like cleaning somebody's home. When you clean somebody's regular home, you're not normally going through their drawers. But give me some other examples of that. Let's get down to Nitty Gritty on there. If you're a cleaner, what do you expect them to do in a short-term rental?

Speaker 3:

I expect every door to be opened, every drawer to be opened. I've personally never had this happen, but I've read stories about where a guest might have left their firearm in a drawer somewhere and the cleaner didn't open up the side drawer when doing the cleaning. And lo and behold, the next guest comes in goes to put their keys in the side drawer, and then there's a firearm in the side drawer. Imagine if a child's staying in that room Exactly exactly, so that's something we go over with our cleaners is open up every side table to every bedroom, the chest drawers, the end tables. Open those up For nothing. Just make sure that a drink hasn't been spilled in there, to make sure no belongings have been left behind. Maybe we can perform a service to our guest. Maybe they put a diamond necklace in that drawer. We can catch that before it gets lost.

Speaker 2:

I'll go catch those for you.

Speaker 3:

But that's important. But looking inside microwaves and ovens and behind things in cabinets, things that can catch things, things on shelves, one of my big things I ask my cleaners to do if I have a reclining couch is to make sure you open up the recliner because there's the little fold there.

Speaker 2:

Things will fold down.

Speaker 3:

Things fall down there, but also there's a little fold there on the footrest that tends to get a little debris and I want that cleaned out. We want to have a high standard Just pulling things out and just doing regular deep cleaning all the time pulling furniture out, vacuuming behind there and overall. That's what we look for from our cleaners.

Speaker 2:

I'll tell you a funny story. I once stayed in an Airbnb at the beach and I used the stove I was heating up some muffins in the morning or something I don't know and the little plastic fascia that goes across the front with the clock in and the dials and all of that the cockroach is running underneath that.

Speaker 3:

Well, the beach is its own special thing. We have owned beach properties in the past and I was told new beach property owners I said, when you're looking for your pest control, you need to go to your next door neighbor and ask who their pest control is, Because you want your pest control done. At the same time they get their pest control done. That way you're not chasing each other's bugs across the street.

Speaker 2:

Oh, oh, my gosh Genius. That's a really good point. That's what we did, oh my gosh.

Speaker 3:

We had three houses in Myrtle Beach and what we did was we would just get with the neighbors and we would all have one whole section of the block pest control done at one time and that proved very effective.

Speaker 2:

When I first moved here to DC, washington DC, I lived in an apartment building and it was an older apartment building and I wondered why there was some steel wall down behind the cabinets. That's a little trick, apparently, to stop the cockroaches coming out. So I didn't know that. So I went out one night and I used lots of bug spray because I kept seeing cockroaches. I'm like I'm going to pull all that out. I'm going to really deep bug spray the entire apartment and I swear to you, I came home and the countertops were covered. You couldn't see the countertops with dead cockroaches. The pest control works and that's something. Except I sent them next door is the problem, and that's why they put the steel wall in, so they can't travel through the walls so they can't travel back in. Yeah, into the apartment next door. So if you've got a condo building, that's definitely something to think about. I just triggered that memory because you said you don't want to be chasing the pest next door. I'm sure that's what happens. Yes, it does happen. You get more pests.

Speaker 3:

next, door Right, right and we have a fantastic pest control system at our properties. We have the best in the business and get quarterly sprayings and you need that, and that's another thing to consider when running a short-term rental. Is these maintenance costs that you wouldn't normally think of in?

Speaker 2:

pest control.

Speaker 3:

Don't undercapitalize your pest control. Don't always necessarily look for the less expensive guy. Make sure you get the right guy, because one bad review can cost you hundreds of dollars that you may never even see. Yeah, or even more, I'm sure, or even more, because you want to keep those stars high right, absolutely, whichever one you're on.

Speaker 2:

Oh, my goodness, we're going to have a download sheet for you. I think PJ and I can put one together quite easily so that you can look at this. It's not there yet, but you can go to strcpocom for all those resources. There is a link there so that if you are a pest control company and please share this with anybody you know who's a great pest control company. Wherever you're listening, you know works with STRs or they're just a great pest control company. Same thing with cleaners. Do you have a great cleaner? If you've got an STR or a regular house that you know could do a great job in an STR, help them with their business. Everybody needs them out with their business right now Maintenance people, handymen, plumbers that are trying to build their business. Maybe they've left a big plumbing company or a big electrical company and they're building their business on their own, or they're a general contractor or a handy person. If you know anybody that does that or you are that person, go ahead and click on that link at strcpocom and enter the details there and we will share your details out with people who are looking and you can always say no, but it's just a great source of business for you. It's all free. We're never going to charge you for it. So, yes, it's well worth looking at. Maybe we'll charge for it in the future, I don't know. But it won't be charged for quite a while and a lot of people will get your names and phone number and business and everything else. Did I miss anybody in that list there of people you'd be thinking about that are supporting a short-term rental?

Speaker 3:

You know, I think one thing, especially here in the mountains and I know this is true over in the Gatlinburg Pigeon Forge area is if you have a hot tub, you need a hot tub maintenance guy. You need somebody that is on the other end of their phone and can help you, because a hot tub can make or break somebody's vacation. So I would You're right.

Speaker 2:

If they want a hot, I mean they're choosing a home that has a hot tub. They've checked that box. And then they get there and it's not warm. And it's the middle of the winter. Because it's just lovely being in a hot tub in the middle of the winter. I've been in one in snow. It's just so delightful, and then it's not warm. You've got a bad review coming down. It spoils somebody's vacation. Absolutely. Hvac too. I'm sure. Oh the same thing.

Speaker 3:

One thing I would encourage people to do is don't wait until the problem shows up. Get those numbers ahead of time. Have somebody ready to go. Get those relationships built ahead of time. Don't wait for that HVAC issue to come around. Have regular maintenance on that HVAC. But also be with a company that will come out at 10 o'clock at night. I had a good friend of mine the other day. Just the same thing happened. He had a guest come into his house and at 10 o'clock at night his HVAC was not working. He had a bad control board. We were able to get him with somebody that could get out to him within hours, but he lived out of town. He didn't have that network and it created a situation. But we got through it and just through networking and knowing some knowing.

Speaker 1:

Knowing the right people.

Speaker 3:

Knowing the right people and who we could rely on. We got him taken care of, but that's important. Again, back to Hot Tub. Have that Hot Tub guy ahead of time. The cleaning crew, the maintenance people, those are people you want to have relationships. Before something happens, just call and say, hey, I've got this house and give them a little bit of business. Call that person just to build that relationship and that rapport ahead of time. If that's something you're not comfortable with doing Absolutely.

Speaker 2:

And I can tell you we're at about 3,600 transactions at All-Star Powerhouse, brokered by EXP here in the mountains. I will also use that list to recommend you to our clients. That's a big client database. We've got about 60,000 people that have registered over the years, that are thinking about moving to the mountains and they want to look at properties. We've got all of those people too, so go ahead and enter your details If you want some more business. Strcpocom it is a new site, so we're building it over time and we're going to build this short-term rental community because it is all about knowing the right people and it isn't something for the faint of heart, is it? We're just going to jump into it.

Speaker 3:

No, that's true. If you're considering, if you have a piece of property and you're debating between short-term and long-term, you really want to think about where your commitment level is. Are you looking for just passive income or do you want to make this a daily chore?

Speaker 2:

Yes.

Speaker 3:

And if you have one, that's one thing, but it's not going to be enough to have a full-time income off of. And a lot of people don't think that. They think you throw it up there and it's instantly going to make you $40,000, $50,000, $60,000 a year, and that's just not how it works. So you really need to start thinking what are you wanting to put into this? What is your level of commitment? And then I always say that too, is that number that you're really starting to rethink things? In the same thing with franchises, a lot of people who've been in the franchise business know that, and you have too. I have too, I've been a franchisee of a large restaurant chain, and I know that number two was the one where you're like, wow, I've really got to grow, because this is a lot harder than number one, but it'll be easier at number three. And so at number two you're working a lot more, but if you're still working a full-time job at this point, you're working a whole lot. You're working your full-time job.

Speaker 2:

What if you have a management company? What are you paying the management company? What if you have?

Speaker 3:

a management company. I personally manage all my own stuff, but I've heard management companies everything from 10% to 25%. It just depends on the level of service that they're providing. I think on the lower end they're just servicing your listing and providing the reservation, you're still managing cleanings, you're still managing maintenance and upkeep and purchasing of durable goods inside the house, and then, of course, that number goes higher. You get up to the 20%, 25%. That's going to be a complete hands-off type of experience.

Speaker 2:

When you recommend that, though for somebody that just wants one at least to get started, it might be a good idea for some.

Speaker 3:

If you really want to be hands-on, you really want to dig into this, just educate yourself. It's not the hardest thing in the world, but just be prepared for the unknowns, try to figure out what you don't know and just educate yourself. And you can go on the forums out there. There's Facebook pages everywhere, but you've got to be careful there too, because they'll scare you to death.

Speaker 2:

They don't want competition, sometimes right.

Speaker 3:

Well, that's true, that's true. You really. You'll get some of the nightmare stories and some things you'll look at and you'll say well, that's easy to solve. I know how to solve that, and usually the answer is just take care of your guests, Just do the right thing. And if you can just keep that in mind, I also tell people another thing, and I think this is one of the most important things that you can really keep in mind what you're doing, it's not your house, it's your business. Don't take it personally. It's a business. If you own a pizza place and the front counter gets damaged by a kid who throws a toy into it or something, that's just part of business. Don't be that person that well, my table has a minor scratch on it. I'm going to file a claim with Airbnb. That's you're getting into the weeds. Just fix it and move along. Don't stress yourself out with those. If you're getting stressed out over that you're going to be getting, you're going to put a lot on your plate very quickly where those efforts could be spent in other places. So just remember it's your business, it's not your home.

Speaker 2:

Well, sometimes it is your home too. So I had one in Black Mountain when I lived there and I'd taken on. My husband had moved out and I'd taken on the big mortgage all alone and I put a door at the top of the stairs. It was in a beautiful little neighborhood that allowed short-term rentals and I met some lovely families and couples and individuals that were coming to the area. It was a really nice little Airbnb downstairs. It really didn't bother me at all. I never really saw anybody, but that was in my home, so it was actually very easy to run down and change the bed, and the laundry was downstairs too. The only way it put me out really is that the laundry was downstairs so I couldn't do laundry when somebody was staying. But, as you know, many people stay at the weekend. They're not staying during the week or they might go home Monday or Tuesday or something. So that wasn't putting me out too much. But one interesting thing I learned through that is that I'll tell you a funny story about the dog too. One thing I really learned from that is that year two is when it starts happening, because people start rebooking because they've had a nice experience and now you've got a bedrock of clients and it's like anything else. If you're a nail salon, people come back when you've had a nice experience. So from the launch it might not be crazy and wonderful, but it takes a while. If you've got a hair salon, same thing. Or if you go to a car dealership and they serve you so well you might. I know I stayed with a certain brand of car because the service was so amazing. I mean they'd come and pick me up and it was amazing, it was just incredible. And then the guy left and then I went to a different brand, literally because the service meant everything to me. So you've really got to think about it, I think, because yes, you might not make money overnight, but year two, you know, if you give that great experience. What do you think to that?

Speaker 3:

That's absolutely true. We have many repeat renters over the years. They come back time after time and it's almost you know, once or twice a month I'll get a message from somebody that says hey, you know, my friend Bob stayed at your place. He highly recommended it. I wanted to reach out to you. So you know you'll build up the referral and that just keeps. It's the snowball effect. And then you can just come to a point where you know a lot of people start asking like, well, are you booked every weekend? I said, well, yeah, I'm booked every weekend. I'm booked, you know, 28 out of 30 days a month and a lot of that is referrals and it is repeats and people come back and we have families now at this point that have made traditions. They spend the same, you know, three-day weekend every January or every February at one of our properties. So that momentum builds. You know the same thing. You know we look down at our lake house. People come down for football games, they come down to spend time on the water and that's tradition.

Speaker 2:

Which lake is it Lake Hartwell.

Speaker 3:

Okay, so they've made it a family tradition at this point, and so we're seeing those people come back time and time again. So and that's very rewarding that we were able to take care of that person and earn their business a second, third, fourth time.

Speaker 2:

What do families say about staying in any of your rentals as opposed to getting a hotel room and traveling somewhere?

Speaker 3:

Well, the advantage to having a short being in an Airbnb or a short-term rental is you have the whole space. Well, at least at our properties, you have the whole space. You typically have got a yard or a big patch of forest behind you or just a big deck to hang out on. We're in a hotel room. You've got 400, 450 square feet to pack everybody into and no kitchen. Yeah, one of our properties is a two-story property with a big living room downstairs, and when I designed it I didn't really think about it, but we get a lot of feedback. That was the greatest place to send the teenagers. They would go play video games on the big screen and the adults would stay upstairs on the deck hanging out and grilling or cooking and just spending fellowship with each other. And I never really thought of it that way, but it was a separate space and you don't get that with hotel rooms.

Speaker 2:

Right, right, and a family gathering place Instead of gathering in the lobby downstairs or gathering in the hotel restaurant or something, having to go out in the city and spend a whole lot of money. So you probably save a lot of money like that as well. Go to the grocery store. Before you go, we need a download sheet on what you need.

Speaker 3:

Oh sure, and that's one of the biggest questions we get is where's the closest grocery store? I bet and so that's what we've included in our check-in guide is where is the closest grocery store, and we usually list the top three, whether that be Ingalls or Publix or whatever else is nearby. But that and you learn that going into this business Questions that repeatedly get answered, and if those questions are asked multiple times, you know we'll put that in your guide and it will make your world a little easier. Just to go ahead and be preemptive and taking care of that guest and getting them the information ahead of time so they can plan. Maybe they want to pick up groceries on their way in, Maybe they come to the mountains and I had a family that they always ask is there going to be snow? Well, this is Western North Carolina. It could be 75 degrees one day and six inches of snow the next. So Isn't that the truth? Yeah, so, but they want to pick up groceries and typically they have had people just say you know they wanted to get snowed in and just hang out in a cabin and sit in front of a wood stove, fire and spend time with their family.

Speaker 2:

Sounds so delightful. Oh my gosh, in the summer too, I bet.

Speaker 3:

In the summertime they want to spread out a little more. The hot tub's not necessarily the most popular thing, but sitting out on the deck and grilling, and kids running through the woods, where maybe they're from a city area or urban area where they don't get a lot of exposure to the forest so, and our particular properties were surrounded by forest and all of them, and so they do get that true mountain experience. Wow.

Speaker 2:

So let's talk about Airbnb, the RBO. Those are the two biggest sites where people advertise. Are there others? Where do you put yours, and do you know any differences between the two?

Speaker 3:

So we're listed on several different sites, airbnb and VRBO being the top two, of course. Airbnb I mean we all know Airbnb, it's very diverse is where you can get a room in someone's house all the way up to an entire space in a five 6,000 square foot home. Vrbo, especially right now, has been pushing a marketing campaign of where you do get only the whole space and a lot of people like that. I've spoke with guests in the past and that's what they want. They're looking for privacy, they're looking, they don't wanna be supervised, they don't wanna be looked over, and I get that. You're on vacation, you don't wanna be, you don't want your vacation micromanaged to a certain extent. But one we're seeing a lot more traffic on is bookingcom, and not necessarily the easiest website to navigate, but we are seeing more and more traction on that and I don't really know why. Maybe it's their marketing strategy, but we are seeing some increased bookings there.

Speaker 2:

I would think that's probably because they have hotels as well. Probably so and you can get the car and it's like a normal, normal regular hotel booking site, but they're throwing the Airbnb's VRBOs on there as well.

Speaker 3:

Right, right, and we've seen different properties do better on different sites. For instance, our Lake property does better on VRBO for some reason. I don't really know why it just does, and when we had property down in Myrtle Beach, it did better with VRBO than it did with Airbnb. No real rhyme or reason to it. It just was is what it was. But you wanna be everywhere and very important this is one of those things. If you just take the headache off the plate to start with is make sure your calendars are synced. There is nothing worse than a double booking. Yes, and it's not hard to do. But just be redundant on that. Go back through your calendar, make sure you're going through 30, 60 days. Just double check your calendar to make sure that the sync did work and you don't have a double booking somewhere, because that can spell trouble.

Speaker 2:

An Airbnb and VRBO now offer that facility right.

Speaker 3:

Where you can sync those calendars.

Speaker 2:

Thank goodness I know that when I started I either didn't know about it or they weren't offering it at the time and that just made it a huge pain. And they do that on purpose. It's kind of like an Apple phone and an iPhone and an. Android phone. You know, the Apple keeps everybody out.

Speaker 3:

Right and before. We operate an RV rental business as well, and between the big sites, the Outdoorsy, the RV share. There was issues with their calendar syncing and we ended up with double booking several times and I think they've got that mostly worked out at this point. But that is. It can be very costly, it can be very time consuming.

Speaker 2:

And people get very ticked up. People get because you've made your plans.

Speaker 3:

This is your vacation. You wanna make your plans be done and be reliable.

Speaker 2:

And especially around the holidays, and might not be anything else available.

Speaker 3:

Exactly exactly those peak times Christmas, july 4th, Memorial Day, labor Day. You know you've made your plans and at the last minute, if there's a mistake, then finding an alternative accommodation is gonna be, it's gonna be hard.

Speaker 2:

Yeah, but really hard. And then what about? Let's talk about pets for a minute? What do you think about pets in Airbnb?

Speaker 3:

Well, we are pet friendly and so I tell people you know, carpet is your enemy. Do not have carpet in your Airbnb. Either hardwood floors or LVT or plank make it easier. Most of my houses all have life proof flooring in them from Home Depot I love that stuff, it's easy to clean. You can't destroy it. We put it in a couple of beach houses and if they can survive the beach, it can survive anything. But it makes it easier on the cleaners. And when it comes to pets and accidents and accidents do happen you've got a pet that's not in their normal environment, so they get nervous. But you know, as a market example, you know a lot of people don't want pets for some reason and I think you're singling out a huge part of the market by saying no pets allowed. So to me that's really important. You know, cause families like traveling with their pets.

Speaker 2:

It's part of their family and it's one of the reasons you don't go to a hotel.

Speaker 3:

And it's another reason you don't go to a hotel Most of the time.

Speaker 2:

they take pets, some of them don't, and the carpet normally is not pleasant when there's been a pet in the hotel room Exactly. I love. I just want to talk about LVP just for a second, because I love LVP. If you're thinking about putting it in your home or a short-term rental or whatever it is, I want you to make sure that you pay a little bit more money. It's about a third more actually. It's about another dollar or a square foot in general for the full vinyl. Yes, don't go for the layered vinyl over the top of the word. And here's why If somebody has an accident, your doggy pee's on it or the kid knocks over a glass or whatever it is a lot of them will have a 24 hour certification on them. The problem is you might not see that glass of water behind the couch or the dog pee behind the couch or whatever it is. And water and mixed wood does not mix very well, it blows. And the very worst thing is, if you can't, then it's not easy to replace those planks in place. It's possible, but normally luxury vinyl planks of LVP, as they call it has come such a long way. You go into Loes or Home Depot. You've got 30 plus colors to choose from. I did it only three years ago and there were six colors to choose from.

Speaker 3:

The market is absolutely exploded because everybody looks at it Absolutely, and there's some great brands out there.

Speaker 2:

We love the Life Proof. We love the Stainmaster and it looks like real wood. It wipes off like a countertop.

Speaker 3:

It's great stuff, but, going back to your point, using those other more inexpensive products that have MDF or other materials in them they're really not worth it. And that goes back to getting into short-term rentals is do you have enough capital to do this right? Are you properly capitalized to properly stage your Airbnb? And it's?

Speaker 2:

not inexpensive to remove all that carpet. So I know that, so I can get. I can quote you on what it cost me to do my about 1400 square feet. I had everything ripped out. It had old hardwood flooring in places. It had, you know, over the years this is a mid 60s house. It had marble floors that are all cracks somewhere else that you know Bob the dad put down. I'm sure at some point sorry, bob, his name wasn't really Bob, but you know it was all cracked because he was just a handyman special where his daughter said hey, can you help me out with this? The floor doesn't look good. It had old vinyl or something and you know it is all mixed floors that it all ripped out Such a mess and LVP put down everywhere, including on the concrete downstairs. That's the other thing about LVP. If you consider it in your home, you can put it in a basement. You still want to put the vapor barrier between, absolutely. However, you can put it straight down, unlike hardwood in a basement, right? So it's a great thing to do that and I think it cost me about $14,000, which was a big investment. But oh my gosh, these floors are wonderful. The house has now been rented out for two years and I don't have to worry about it, you know. So LVP is definitely.

Speaker 3:

Yeah, it's definitely a great product and it will. If you get the quality stuff, it'll last for a long time and you will. You will be happy years down the road that you did that and get the wide plank.

Speaker 2:

To get the assorted. You want to make sure that it's got at least six different planks in the patterns because that makes it look more like word, it makes it more natural and get the assorted widths as well. So if you ever go into a and that doesn't cost very much more at all I add 10% to it, but it's worth it. If you ever go into a high-end luxury home, you'll always notice that they use wide planks and assorted planks and assorted colors generally. So you know, have it, emulate that. And it's still a lot cheaper than hardwood and it's definitely easier to maintain. Very true, and I think a lot of families are choosing that too. You see it in a lot of luxury homes now.

Speaker 3:

You do, you do and you know I have a dislike for carpet. Like I said, it's just you know you can never get it clean and if you have a pet, it's just something that you can. It just it's a. It never ends the cleaning never ends with it when hair stick to it, right.

Speaker 2:

Right, you, you, if you've got one of those little robot cleaners like a Roomba or something like that, they don't. They say that it cleans the carpet, but it really doesn't. It really doesn't. No, I know from buying a carpet cleaner. We've got some old legacy carpet that was in the house since it was built that every time and I use it on a regular basis it's like a vacuum cleaner. It's so easy to use. But when I do the deep clean on it which I do every month or so because we've got dogs there's so much hair that comes up. It's unbelievable. And anybody with dogs if you think your carpet is clean, buy one of those things. It's a bisit. Give a little shout out to bisit. There it's, it's an amazing product. But it pulls up clumps of hair that it leaves on the carpet. It's like where did it get that from? You know, and if you've got doggies, you've got hair. Sorry, unless you've got one of these hypo-alentgenic ones that doesn't shed, you're going to have that hair problem. So, yeah, anyway, we, obviously, we love LVP, whether it's in your home or anything else. What about colors that you're painting? Go for a neutral and remember the paint.

Speaker 3:

Well, yeah, yeah, I, like you know, keep, keep your, keep your rental looking modern, keep it looking clean. You know that's that's another thing to design it in a way where, where it can stay cleaned easily. Yes, and there's going to be times you need you need to remember your color because you may need to do an emergency touch-up for whatever reason, but I like to keep it warm, inviting. Typically, my sure one Williams colors are either modern gray or online light French gray. I love all those colors.

Speaker 2:

I love pure white, pure white my go-to trim paint is marshmallow but but it keeps it kind of uniform and I can do a quick touch-up, if need be, and you're going to have to do that, or we're talking the same about really maintaining maintaining your home too, oh sure, whether it's an STR or not. Like these are good things to have, and you know we're over 3,500 sales in the area here, all over the mountains, and I always ask my sellers to make a list of all the colors, everything they've used, where they got it from. You know where they bought the I don't know dishwasher from or wherever it was. As much information as they've got. Keep that information, because you never know when you're going to need it and it's, oh my gosh, ceiling paint. What a nightmare. If you don't know the ceiling paint that we use, you're like, oh, ceiling paint is all the same color.

Speaker 3:

No, it isn't, no, it's not, no, it's not.

Speaker 2:

And if you put a different light fixture in or you decide to put pendants over the again short-term rental all your home. If you need some work doing on the ceiling maybe there's a shower that's leaked upstairs or something and you have to repair that You've got to do the entire ceiling. Right, right and if you've got, say, 1600 square feet or 1400 square feet, which is kind of normal on each level. That's a lot of money to paint your ceiling. Not only that, they've got a. What a nightmare. They've got to cover everything. They generally spray it Like that's a heck of an investment. So keep your ceiling color.

Speaker 3:

Exactly. Just save or take a picture of it, of the label and file that way in a folder in your computer just to keep up with those colors. You know, three, four years later you may not remember what was that Valspar ceiling paint I used. Or was that Sherwin Williams?

Speaker 1:

paint I used.

Speaker 3:

So, and there will be a difference. You will be able to tell oh, it's awful.

Speaker 2:

And you see that patch on the ceiling, it looks like a stain that's come through and you stare at it every time. Oh, it's awful. Yeah, I mean, nobody else notices except that annoying aunt that comes in over the holidays and says hey, what's that stain on your ceiling? You need to get that fixed. You know it's a normal thing, right? So let's talk about the. I think we've talked about the downside a little bit. It's segment five that we put together as we were doing our research this week, you know, analyzing the potential downsize. I think we've talked about that quite extensively in terms of the market volatility. So I know in the last year that a lot of those rental amounts have dropped. Do you have any idea why that would be? Is it because the markets become saturated? Because everybody wants an Airbnb?

Speaker 3:

Well, there's a couple of different things coming into that. You know, if you got into this during COVID, you were riding the highway. Disney was closed, cruise ships were closed, europe was closed, so people wanted to go somewhere. The beach business went booming pretty fast, but the short-term rental business in general had an incredible, incredible growth spurt there. You know, people didn't want to be in hotels, they didn't want to be in that 400 square foot room.

Speaker 2:

Yes, and a lot of them were closed down and they were having all these COVID things and they were putting up new sanitation devices and having the cleaners and the people in the hotel wearing masks and you didn't know whether it was going to be open or not. And then you were scared of going down in the elevator and they were saying the elevator should only have one person. Oh yeah, why wouldn't you stay in an Airbnb? No wonder they went crazy during that.

Speaker 3:

Yeah, they were popular. It was the boom of the industry and a lot of people discovered Airbnbs and short-term rentals at that point. So you know, a lot of people got into the business at that point. So, yeah, do I believe there's a little oversaturation? I think there is. I think a lot of people got into it, and probably a lot of people who just didn't know what they were getting into. It seemed like a good idea, it was the hot thing to do at that time and then, you know, about a year or two down the road, they realized just how much work this is. Yes, and so you know. Maybe they're rethinking this now. Maybe they're thinking, well, I've got this property or I invest in this property, but you know it's a lot of work to keep this up. I'm not a handy person, I'm not a marketing person and they're looking at converting that now to a long-term rental.

Speaker 2:

Yes, and there may be people who have a portfolio of short-term rentals that maybe want to offload one or two that maybe aren't performing and maybe buy another one, and we've got all kinds of lenders that can help you with that. Strcpocom that came about because we have our cash offer program whereby if you're a short-term rental owner, you don't really want to list it, do you? Because how on earth do you coordinate being able to show the home? And then it's kind of weird when you go to a rental, if it's a short-term rental or a long-term rental and there's a for sale sign outside, it's the same with a long-term rental. Most people who own long-term rentals don't want the for sale sign outside. You don't want your renters in there and the for sale sign's out. You may not even want your renters to know that you're selling the property.

Speaker 3:

It does prevent challenges and I agree with you. You don't want that for sale sign out front. It could say a lot of different things, but it could say your commitment level to this is not as high as it used to be.

Speaker 2:

Or it's not very good and people don't want it. Otherwise, why would you be selling it? Exactly, why would you be selling it?

Speaker 3:

yes, so I think in that case you may have to make the hard decision to just pause your rentals and put the for sale sign out. Oh, interesting.

Speaker 2:

Well, the other way we do it is through the STR CPO program and that's the cash offer. So this isn't grandfathers or your grandparents' cash offer. Sorry, grandparents out there, but you remember what cash offers used to be and still are. In many instances They've got a very bad name because you know the ugly houses folks, and there's nothing wrong with that business model. You go in and you scoop up a home for 50 or 60% and then you remodel it and you flip it or you hold it and rent it out. That's the general model. There's lots of realtors that have cash offer programs. The biggest one I've ever come across is one at about 84%. There's a guy that has big billboards that says we buy houses and it's about 84%. Ours is a return of about 90 to 120% on average. And what we do? The cash GPO team goes in and purchases the home and up fronts the money for the appraisal and the inspection. So you end up with a certified pre-owned home that you don't have to pay for that certification, for the cash GPO team then goes in, paints the walls, puts new countertops on whatever it needs to be able to be sold at that higher price. Or there's lots of people out there that are just getting 90% on a regular listing right now. But it doesn't have to be listed. You get a big cash advance, a 70% cash advance, in 12 days. So for somebody that's looking to invest in another one, without all the hassle of that, you get the cash advance of 70% in 12 days. And then the cash GPO team go in, do whatever it needs, clean it up, get the furniture out. If we're getting the furniture out, it could be just a deep clean, quite honestly. It maybe needs some painting, it maybe needs some sprucing up and you're just done. At that point you want the money out to invest in a different short-term rental that maybe you've gotten a little more expertise over time and you know that if you could get your money out of that one, you could buy another one. Maybe the market's flatter and it's harder to sell right now, which is happening in most areas around the country. It's harder to sell your home right now. That's why getting your home certified pre-owned, where it's got the inspection, the appraisal on offers, the home warranty, is very, very important, whether you're selling your regular home or you are selling your STR but STRCPOcom. If you want to look at the cash offer, 70% in 12 days, cash closing and then everything is done for you. It's resold and on average, and they're buying 3,000 this year On average, you're getting another 20% to 50%. Two thirds of sellers get more than with a traditional listing, without any showings, without dealing with your pets or your kids, or in the short-term rental sense. You're a visitor, so I think that's a great thing. Any other thoughts? Because can you believe PJ, we're wrapping up already. Was that the quickest hour you've ever experienced?

Speaker 3:

That was pretty fast. Yes, I just tell people just think through what you're getting into. You certainly don't want to get yourself in trouble, get yourself in a bind. Reach out to your lender, have a good conversation. I have a great guy I work with. Carl the Master has been fantastic with me and in build that relationship, just to make sure you're fully aware of everything you're getting into.

Speaker 2:

Let's get his name on strcom.

Speaker 3:

Absolutely.

Speaker 2:

Thank you, strcpocom. Strcpocom, if you're a provider for STRs, get your name in there. Thank you so much, pj. That was amazing. It's going to be podcast as well, so we can share it with anybody interested in STRs, and we'll see you on the radio next week. Happy New.

Speaker 1:

Year Real Estate Show with Rowena Patton. Visit Rowena and post your questions at radioashvillecom or call her at 828-210-1648. Stand by for the latest from around the world and right here at home from the Apple Tree Automotive Superstore Studios. This is WWNC Ashfield and iHeart radio station.

Short-Term Rentals
Importance of Cleaners in Short-Term Rentals
Considerations for Short-Term Rental Business
Property Design & Rental Platform Discussion
Choosing Flooring, Colors, and Ceiling Paint
Short-Term Rentals
Getting Name on Strcom and Promotion