​Welcome back to the Short Term Rental Riches podcast. I’m happy you’re here again. If you tuned in last week, you know we dove into some really important questions, questions that we received from you, the audience in over 130 countries now,

I know these are questions that a lot of you are thinking, but you haven’t actually asked them. So today we’re gonna dive into part two of our q and a series. 

stay tuned as we dive into all of that in today’s show.

Well, first off, yeah, I just wanna welcome everyone. Uh, it’s been a really long time since we had some, some group calls like this, and I’m excited to say we’re gonna be doing these more regularly. We actually have a couple of our own partners that have joined Corely on the call. but lots of questions just in regards to everything.

And yeah, we’ll just jump into some of these questions one by one.

Let’s see. Uh, Kelly Addington asked, how are you leveraging ai? Do you have local inspectors? Is every home I inspected by an employee prior to guest arrival? What systems, tools, tech do you use? So yeah, lots of tech. Questions because there’s lots of tools and because it’s changing really quickly. so I mentioned one way that we’re leveraging it already is in guest communication, in terms of inspections.

So we use a program called Breezeway that’s designed for housekeeping turnovers. it allows us to create custom checklists. It also allows us to al to ask or require photos. and now we used to. We really highly encourage all of our car to join us, to take photos of every space of the property, both before and after.

 and I know, yeah, there’s some times where, you know, the photo’s not gonna show the little hair that’s like in the corner behind the bed, under the pillow or whatever. but what it does do is reinforce to the housekeeper. the importance, and there’s a couple other things that we do with housekeepers and terms of technology is, most of the time, our guests leave us great reviews.

Occasionally there’s something that pops up in the private feedback. maybe it is that. There was a little hair under the bed, in the corner or a dust bunny or whatever. and so that doesn’t go out on their public review, but it does go out on their private review. so one of our most recent updates, which I’m really excited about, is sharing that information with our housekeepers, uh, the private feedback.

 and this will be coming through the, the tool that we use in breezeway. and let’s say someone has like a, a portfolio properties, uh. And it just becomes kind of hard to keep track of if, or sending manually. And so instead, we have our housekeepers showing up now and before they go to clean that property, they can see that there were some prior feedback.

 so that’s one of our most recent ways, that we’re excited about again, requiring photos. In the very near future, we’re gonna be using AI to, to actually, monitor the photos. so that’ll be cool. Do you have local inspectors? we work with a lot of different partners in a lot of different places, and everyone has a little bit of a different setup.

Again, Sally, you know, we’re the backend core operations. but our partners have their own on the ground teams. housekeeping and maintenance. some of them do local inspections, some of them do not. some of them do inspections. Randomly, you know, so not every property. and so yeah, I guess that one’s all across the board.

 why would someone need to do an inspection? It’s really because the housekeeper didn’t do a good job, right? Or they, they left something behind or they forgot something. And so if you’re constantly having to do inspections for the same housekeeper and you’re constantly finding things. Then you need to have a talk with your housekeeper.

 and maybe you need to make a change, a change there. so I guess that would be my, my advice. let’s see. What systems tools do you use? Yeah, so we use breezeway for a lot of that coordination. also, yeah, for all housekeeping, checklists, everything like that.

 This is from Justin Warren. How do you find local boots on the ground support? What tools and resources do you use to identify and source local help? So I’m currently in, in Florida, in Orlando, and maybe what you could call the vacation rental capital of the world.

Uh, they have 75 million people visit here every year. Which is, is a lot. Right. Um, and so this is an incredibly competitive market, um, and actually just acquired a property here. Um, well, it’ll be interesting to see how it goes. Uh, it, our decision was to use it for personal use because we do spend a lot of time in South America, and so this is a bit of a, a stop over for us.

It’s, it’s got a direct flight basically to, to all the places where we spend time. Um, and so we’re in the process of furnishing this property. I’m, I’m, I’m in it today and, uh, we need a housekeeper. And so I used a tool called Perplexity. There’s lots of ways to find housekeepers, right? And the more short-term rentals there are on the market, the more options you’re likely going to have.

And so there’s a lot here. Uh, and I use a tool called Perplexity. Actually. It’s, it’s an AI tool like Chat, GBT or Gemini. And I just asked it. I said, where can I find a housekeeper for Orlando? Uh, and it found a Facebook forum so Perplexity can search websites for you. And on the Facebook forum, it was specifically for housekeepers, and there was a post there of someone that had already asked.

About housekeepers in Orlando. And so there were contacts there. So I sent a few text messages, uh, and then I made my own post and I said, Hey, my name’s Tim. I got a property, you know, message me if, if you’re interested. And I’m not kidding, but my phone just started ringing and ringing and for like, I actually deleted the post at the end of the night.

I edited it, I created a form where they could enter their information if they’re interested, so I could organize everything better. Um, that’s me kind of just being really techie. But, uh, long story short, we have lots of housekeeping contacts and literally a, you know, a day. And I, and it took me five minutes, like from finding that post to posting on Facebook.

Uh, it, it only took that long. And that is a national group. I think there were 160,000 people in it or something like that. So that’s one option. Uh, and you can do that for maintenance also. And, and a good tip is that a lot of housekeepers, um, that are professionals that are doing that for a living have maintenance contacts.

And they often have maintenance contacts that they prefer working with. Uh, and so it’s a really good idea to just ask them. Um, so referrals is a really big one. You know, when I, when we bought this property, uh, I asked my real estate agent, you know, Hey, do you know any local housekeepers? Do you know any local handyman?

And he wants the property to go well for me. And, and, and that’s what he specializes in. So of course he had some contacts as well. Um, so I would say that. Online, you know, finding people is, is, uh, easier than it’s ever been before. Now we’re, we’re gonna do a podcast, uh, in the very near future on finding housekeepers.

So I think I will save a little bit, uh, for that podcast so we can dive in deeper because there’s a lot of questions that you want to ask the housekeepers to make sure that. You’re all aligned, um, and that they’re going to work well for your property. So thanks Justin. Uh, great question. Really important one.

Let’s see. Uh, we’ve kind of gone through ai, uh, we’ve gone through some revenue management. We’ve gone through some task management and, um, some PMS questions. Um, here is. Another one from John Hicks. Thank you, John. Uh, we have had great difficulty obtaining homeowners insurance that covers both fire and liability.

Most insurance carriers were, uh, we’ve spoken to, don’t offer liability insurance because they consider short-term rentals too risky. We ended up getting a separate policy for liability. Um, okay. Sounds like, uh, John’s in California. That’s where I’m from originally. We’ve had. Yeah, so some places are tougher than others.

Uh, you know, California has obviously had lots of of wildfires, uh, and. Similarly, you know, the East Coast, Miami, Southern Florida have had lots of hurricanes, the Gulf area, and that’s made insurance really difficult for those places. There are some primary short-term rental lenders. Proper insurance is one, uh, safely, maybe doing short-term rental insurance.

There’s another one called Generality, uh, that’s been around for a long time. Insurance is one of those ones where you really just have to kind of dig in and research and, and yeah, it has gotten a lot more difficult. So, um, I, I would say that it’s very important that you are doing your due diligence and make sure that your policy coverage, the short-term rental, because there are lots of things, you know, most traditional insurance policies do not cover short-term rentals.

Uh, and even if your agent says that they do. If it’s not in writing, when push comes to shove, they, uh, they’re not going to enforce it. Right. So I think John, maybe for a little bit of help, you could try using an AI browser tool like this tool perplexity, which can search websites for you. And you could put in your exact situation, I have a property in California, this is the address.

Uh, you know, just give it all the context that you’ve given here and. It could help you find some resources. Um, but yeah, I don’t have an easy answer for that one. That that has gotten more, more difficult.

All right, lots of good questions here. Um. Let’s go with Joanna Woods. Uh, she says I’m about to onboard property number five. Awesome. Congrats Joanna. Uh, and the goal is 15 by the end of the year. Wow. Okay. That’s a big, that’s a lot. Uh, I’d like to know what you had to change to cope with more properties and how you go about employing the right people when you get to that point.

Great question. Um, well, if you go from five to 15 properties, you’re increasing all your operat operations by 300%, right? I mean, there’s literally three times more things that you’re going to need to do. Um, they don’t always happen at the same time. Uh, maybe you’re in a seasonal market. And so for part of the year things are quiet, but then the rest of the year they’re not.

Uh, that creates challenges for hiring. Hiring people and Yep. I went through these challenges before and a lot of our partners have, have joined us, uh, for this reason. Uh, because unfortunately at a smaller scale it doesn’t make financial sense most of the time. It depends on your average daily rates. You know, if you have some very luxurious properties, then you can afford it a lot easier, but majority of this make financial sense.

To hire a full team. Now I say a full team. A lot of people’s natural progression is to hire a virtual assistant. It’s a great option. That’s what I did. Um, but we have to set the right expectations. Um, if you’re expecting that virtual assistant to be on call, you know, seven days a week, or, you know. All day long, then it’s not realistic.

And you’ll probably see some churn. You know, they’re, they’re probably not gonna stick with you. The more properties you add, of course, um, the more work they’ll have. If, if, if, uh, you know, it is, it is manageable, but you do have that. You can’t have that churn if you don’t have the right expectations. Um, and then of course you have to train them, right.

There are a lot of VAs now available. You know, we’ve high, our, our team is completely virtual. Um, so we’ve got team members in the Philippines, in Eastern Europe who helps us with our content here right now is in South Africa. We have people in, uh, south America. Um, my partner’s Canadian. I mean, we’re based all over the place.

So that is one of the great things today is that you can. You can find people all over the world now, uh, but you still have to train them, right? Um, and part of training is having the experience to, to train them, you know? So depending on how long you’ve been managing the properties, you’ve got a lot of these things figured out.

But when you’re adding properties really quickly is what we found is there’s, there’s just a lot more to do and sometimes the training gets overlooked. Um, it’s not realistic to expect your VA to also be doing your revenue management. Uh, although a lot of people do this, um. But are their properties actually optimized?

Probably not. You know, uh, not saying that that doesn’t exist, but there’s basically, there’s, there’s quite a few roles to fill there, right? You need multiple receptionists to cover all the different shifts. If, if, you know, depending on how much time you’re still staying involved, um, if you’re working on all the different OTAs, they’ll all have different policies.

And so. There’s quite a bit there, but, uh, I would say the natural progression, Joanna, is to hire a va, uh, or to hire someone on the backend that, that can help with operations like that. Um, you know, like, like Cordley for example. Sorry for the, sorry for the plug there. Um, but great to hear you’re expanding quickly.

That’s awesome. Uh, let’s see here. How much time do we have? Okay. Another 15 minutes or so. Does anyone have any questions on anything that I’ve, that we’ve covered so far?

Be shy. Feel free to speak up. Can you speak more about what Cosley does? Yeah, sure. I love talking about our company. So, um, Cosley, uh, I mean the idea. Behind our name is that we’re this core operating center behind all of our partners properties. Um, and we’re handling the revenue management. We handle the technology, we handle the distribution, putting the properties on different listings, um, and we handle all the guest communications and everything like that.

Um, but we do it under our partner’s accounts, so we don’t actually own your account. You know, if, if things, if you want to sell the future for whatever reason you didn’t like working with us, then you can part ways. And that’s pretty different than a lot of traditional property managers. Uh, and then we are virtual, and so we do all that at a, at a discounted, um, rate.

So that’s kind of in a, in a nutshell, um, happy to jump on with anyone. Um. You can email me at, uh, or go to our website@atcorley.com and we can jump on a call. Uh, let’s see here. We did get quite a few questions on specific. Property scenarios. And so I’m gonna, I’m gonna skip those ones for now. Um, here’s another question from Mark and Jessica, do you still feel that a one to two bedroom property is, is the sweet spot?

So yeah, if Mark and, uh, if you guys have been. Following along the podcast for a long time. That’s where I started with a lot of my short-term rental portfolio. And things have definitely changed. And so yeah, this is, this is good. Why don’t we get into some industry sort of updates where, where things are at with the market.

Um, there was another question from, uh, Al that just says, to be or not to be in the short term rental game today, you know, uh, Airbnb bust. Is that a reality? So when I got started with short term rentals 11 years ago now, um. I was coming over from the long-term rental investment world and I had been focused on long-term rentals, but I realized that a lot of long-term rentals worked well as short-term rentals and they made significantly more revenue.

And so that’s what I did. But a lot of people have done that, uh, and the easiest properties to get into. Are the ones with the lowest barriers, the the ones that are least expensive, the ones that have more financing options, uh, and a lot of times those are the one and two bedrooms. And so what’s happened?

Well, as people discovered the returns with these smaller properties. The returns have gone down, and that’s just how the economy works, right? Uh, people chase higher returns until those returns go, go lower and lower, uh, to the point where someone will only continue renting a short term rental if the ex additional work that they’re putting into the property.

Is justified by the additional income that they’re making versus a long-term rental, which would be a lot less, lot less time. Um, now I don’t wanna lump all one and two bedrooms into a single group, uh, because there are one and two bedroom, uh, luxury cabins that are completely unique. Uh, and then there are the inner city one and two bedrooms, and those are totally different.

I mean, all of it. Really comes back to supply and demand. Like how many options does someone have and how different is your property? And so the, the latest conference I was at had a, um, a session on luxury properties like ultra luxury properties, and they’re doing very well. They’re doing very well. Uh, the one and two bedroom sector.

In heavily supplied areas, like bigger cities are not doing well. Uh, and from my personal experience, I, I, I can confirm that, you know, I have a lot of, uh, properties like that, that have seen market increases by 300%. And yes, I’m still operating above the market, but the market’s been going down. So I’m earning less money, but I’m earning more than the market.

Uh, and I have, um. Well, I’m actually selling a property without that short term rental, uh, to roll into some other funds or into some other projects. And so that’s just the nature of the game. Uh, it’s been over a decade and you really gotta make sure that where you’re buying, you’re comfortable with. Now there’s a lot of side benefits to short term rentals, right?

A lot of people are investing today purely because of the tax benefits, um, where you can get bonus depreciation, check with your CPA, of course. Uh, but ways to. Materially participate with your short-term rental, where you can use those deductions against your, your ordinary income. So if you’re W2 earner, airline, pilot, doctor, whatever it happens to be, uh, you can get some really significant tax gains and that could make it worth it by itself, even if the property’s not not cash flowing.

Um, so to get back to your question, yeah, one or two bedrooms still a sweet spot. It depends, uh, but in general, if it’s a commodity type property where they’re very similar, then I would say no. Uh, but that could also, you know, that goes for three, four, or five bedrooms. If there’s lots of them, then I would say I.

Say no. Uh, we can get that data today by going to air DNA and looking at supply and demand. So they have a really handy chart that says you can put in whatever city submarket that you want. You can see how many properties have been added. They go back three years. Uh, and in lots of these places you can see that the markets have added hundreds or thousands of units.

Now, that alone doesn’t mean that it’s a bad place to invest in. You’ve gotta look at one other piece. And the other piece is your average daily rate and your occupancy, or if you combine those two things, that’s what we call RevPAR. Uh, the total revenue, essentially that the property’s earning. And so if we’ve seen a market that’s increased substantially in supply.

It’s also increased in RevPAR then that’s fair game. Uh, and you can also sort that supply chart out by bedroom count. So you could look at one bedrooms, you could look at two bedrooms, uh, and they all operate a little bit differently within a market. Um. It’s interesting. I’m here in Orlando, you know, and I did a fair amount of research, uh, before jumping in here.

Again, this was not a pure investment decision for us. We’re, we’re gonna be staying here personally, and so wasn’t expecting to do, uh, do that well. Um. But there are not a lot of one bedrooms here. You know, Orlando is a place where families come to go to Disney or go to Universal Studios or all these different places, and they want multiple bedrooms and a lot of times multi-generations, you know, uh, multiple families staying in the same property, but there’s not a lot of one bedrooms.

Uh, and so a place here, you know, that could be a good option. Um, and of course, you know, one bedrooms. Two bedrooms are cheaper to furnish, there’s less furniture to put in there. And so all that goes into this equation. Uh, and the numbers ultimately are what, tell us if it’s a good investment or not. So quite a lot there, hopefully that, that, um, helps a little bit.

Uh, and kafa hopefully that helps answer your question, you know, to be or not to be in the short term rental gain. Uh, for me, my personal experience. Long-term rentals do not. I mean, it’s very rare. It’s, it’s much more difficult to find a long-term rental that cash flows versus a short-term rental. Uh, it just, versus, you know, years ago when prices were lower and interest rates were also lower.

Uh, it’s just incredibly challenging now to find long-term rentals. That makes sense. And so, should we be in the short-term rental game? It depends. Um. If you’re chasing higher returns, then there’s more opportunity still. Um, but it doesn’t mean that opportunity’s gonna be there forever. And then of course.

Performance, how we operate the property is a huge, huge driver in how well the property does. I mean, you can literally have, I say this all the time, but you can literally have two properties right next to each other and one the other one, even though they’re pretty much the same as a short-term rental, because one has much better reviews, they’re on all the platforms.

They have an amazing guest experience. Uh. It’s not like that in the long-term rental space, right? And so we do have an opportunity to operate our properties as best possible to o to, to maximize them as best possible. Um, and as long as those things are happening, then I think there’s much more opportunity than there is with traditional long-term rentals.

Hopefully that answers that. Let’s see, I think we got another question in the chat here. Uh. Are your services offered in Tulsa? So, yeah, we’re, we’re virtual Paul, uh, we’re, you know, we can be in any city and we have data and on literally every single property in the world, um, that’s on Airbnb or VRBO. So, uh, we can be in any property that, that, uh, we need to, uh, what is.

Uh, let’s see, here’s one from Lindsay. What is something you cons, Lindsay ar What is something you constantly have to educate your clients on regarding the industry? Um, yeah, good one. Uh, one thing that causes a lot of confusion for someone just getting started is around housekeeping, as we know.

Housekeeping fees used to be charged separately. Uh, looks like we just got four minutes, so we will take this as the last question, but this has been really great. There’s lots of, lots of good questions here and lots that I didn’t get to. So looking forward to doing this again. Um, but some common confusion around housekeeping.

So it used to be that housekeeping piece showed up in our listings when you booked an Airbnb. You had, you know, $500 for the reservation, a hundred dollars and $150 for a housekeeping fee, it was $650. It’s not like that anymore. It’s now just $650. Right? That’s what the guest sees. That’s the total reservation cost.

Exactly the same way the hotel industry works and has always worked. You know, they’ve never charged a separate housekeeping fee. A lot of people, when they get started with a short-term rental, look at their housekeeping expenses and use that. Uh, what they’re going to charge for their housekeeping fee.

Uh, but that can really mess with your potential to get your property booked. Um, and I know housekeeping costs have gone up, you know, costs in general have gone up, right? Inflation, everything’s more expensive than it used to be. Um, but we have to look at the total reservation price. And so we don’t wanna be charging a housekeeping fee again that the guest hasn’t seen, but it’s raising that average reservation price.

To a point where no one’s gonna book your property because maybe your reservation or your total cost for the reservation is now 10% more than your neighbor. And if you’re in a really competitive market, you’re not gonna get booked. That’s just how, how it is. And so that’s something that constantly comes up, at least with, with new owners, uh, that join us, is that unfortunately.

Your costs on the housekeeping, uh, don’t impact what we can charge a guest and expect to get booked. And I’ll add just one quick last one here, um, before we jump off. That’s similar. So a lot of you that have nice vacation rentals or in very typical vacation rental markets. You charge damage waivers, uh, instead of collecting a deposit.

And those damage waivers can range from 50 to a hundred dollars. That’s charged to the guest. If you’re with a company like Evolve Vacation Rentals, for example, they make it mandatory. Uh, and they also collect the fee from what I understand. So, but it does price, uh, and if you’re in a. A copy type property where let’s just say you’re renting for $125 a night.

It’s a low season, the market’s hardly occupied, but then you tack another a hundred dollars on or $75 for a image wave. And so a two night reservation goes from $250 to $325. You just significantly raise the total cost of that reservation. And again, if you’re. In a competitive market, it’s very unlikely that you’re gonna get booked.

Um, so I think that’s a common misconception is our costs, uh, they should drive our investment decisions, but they shouldn’t drive our pricing decisions with our guests. Um, because if they’re not, if they’re not calculated properly, it basically means that your, your property’s not gonna earn, uh, as much money as it should.

So. That was great. Thank you everyone, uh, for joining. I can’t believe I’ve been babbling for an hour already, but, uh, hopefully you found some value in that. Uh, lots of good questions. We’ve got lots still on our list that are saved here. Um, and. Yeah. Thank you for joining and, and look for, we look forward to doing this again, so we will, we’ll send out some reminders and if you do have any questions, please reach out to us.

Uh, you can go to corley.com, CRZ y.com and uh, look forward to seeing everyone next time. Take care.