Well, welcome back to the Short Term Rental Riches podcast. I’m really happy you’re here again. A really important piece of investing in short-term rentals is finding a good short-term rental to begin with. And then for a lot of you that are potentially wanting to sell your property, it’s important that we find the right buyer.

And to do that, we need someone that specializes in helping us find and sell our short-term rental deals. So today, I’m really excited to have Tyler Kuhn on. Tyler is the founder of Savvy STR Agents.

They are currently the largest exclusive STR agency in the nation. They’ve got a ton of experience. They have a lot of agents, and you better believe they’ve gone through a lot of deals. So welcome to the show today, Tyler.

Hey, Tim, thank you, uh, for having me here. Yeah, really, really excited to have you here, and there’s a lot of great things that we could dive into.

Uh, you know, it’s always great just to get a, uh, a state of the economy, you know? And, and probably no one better than, than a massive group of agents specialized with short-term rentals. But before we get into that, why don’t you give us just a little bit of background for, for those that haven’t worked with you guys before?

Yeah. So I started Savvy in, uh, 2022 after selling short-term rentals here myself in Asheville, North Carolina. That’s where I’m at, uh, and where Savvy launched out of. And in, uh, 2020, I personally decided to niche down into short-term rentals and make that my, my baby, my thing, kind of stake my flag on that.

And, uh, ended up doing so well that all of my past clients kept asking me, “Where can I find you of the Poconos, or of Virginia, or of Florida?” And so I started hiring for the team, uh, all the way to t- today, where we’re just about 50 agents in around 25 markets. And Savvy is today the number one short-term rental team for short-term, uh, rental buyers and sellers all over the nation.

We don’t just work with, um, individuals, but all the way up to family offices and private equity, institutional buyers nowadays. Um, everything is fair game.

 Well, Tyler, uh, I’m really glad that you guys exist because there’s a big difference between a traditional real estate agent, maybe someone that’s helping someone find a home that they’re gonna live in for the rest of their lives, and helping someone find a short-term rental investment that makes sense.

Can you talk a little bit about the distinctions there and some of the things that really are, are important for someone to understand if they’re either buying or selling a short-term rental? Yeah. There’s been a lot of news the last few years about the value of a real estate agent. Are commissions too high?

They continue to scale with purchase prices, but maybe the business is getting easier because you have access to more information online. You can go on Zillow and find every listing imaginable, and all of the previous history and sales data. And, um, I couldn’t be more pleased to be in an industry where I can really show people value, where people call me afterwards and they say, like, “Thank you so much.”

We didn’t just help them find a house that they like to live in, right? Which is always a great feeling for someone when you find a great house to live in, but nowadays buyers and sellers can do so much of that work on their own for so little time, money, and effort, and they can educate themselves with things like AI.

Um, that, you know, for me, I think the biggest difference is in the value that we can create. Most times my investors here in Asheville, and I know the rest of the team feels this way as well, they’re not from our area. Most of the time they never come to our area. They never tour houses here. They may not know why tourists come here, or what the best season to rent the properties is, or what the makeup of our guests and, and tourism is in the area.

Those are all things that they lean on us for. Even the data analytics online for short-term rentals is still so new that having somebody that has a pulse, that’s boots on the ground, that likely owns and manages properties in that local market, and then obviously does this every day, buying, selling, helping 50 to 100 people a year buy and sell in that area, we know the numbers better than the analytics platforms.

We know the trends better than the analytics platforms. And so for me, I can feel really good about waking up and knowing, like, “Wow, I’ve got something that’s truly of value to people,” to where we end the transaction and we’re truly changing lives. Not just putting somebody in a nice house that they appreciate and their family loves, but something that changes their life and their trajectory in terms of the wealth that they create.

So I really feel good about our value prop, especially when you compare it with the other one million real estate agents out there that exist. It’s so easy to get licensed, and, and people have to show so little value to actually sell houses nowadays that- I think it’s the opposite for us. We truly figure out how can we lead with more value?

What more can we do? What more could we provide, um, that becomes helpful to our clients and, and beefs up those services and makes life easier for them? And, uh, that’s a little bit of the distinction there. But honestly, it’s just something that more than anything when people ask me about it, I just feel really proud and really good about what we do Yeah.

Yeah. There, there’s a lot of details when it comes to, you know, finding the right investment, and I think that’s one of the challenges for maybe a traditional real estate, uh, agent. And this goes for, like, long-term investments as well. You know, if you’re working with someone that’s not used to working with investments, they’re maybe just looking for different things, or maybe they’re overlooking some things that they should actually be paying attention to.

You know, short-term rentals are different, right? We’re gonna be paying utilities. We’re, we’re paying a lot of expenses that maybe we, we don’t look at, like, with a traditional investment. Can you talk a little bit about that side of things? And when you guys are, um, on the buying side, uh, what are some of the things you help your buyers, um, keep an eye on?

Yeah. I think I can split this up almost into two categories. There is the first-time investor, and the first-time investor, typically what they’re looking at is, um, where would I like to vacation, or what would I like to do? What would me and my husband like to do? And it’s almost never the, the real answer, right?

Like, you wanna figure out, where is my money best spent, on what sort of amenities, on what size house, how close to town? You know, one thing that we hear people talk about a lot when they come to Asheville, for instance… And I use Asheville as an example a lot, not because I think it’s the number one short-term rental market in America, um, but because I have the most experience here.

So for instance, people come here and say, like, “Oh, well, you’re in the mountains. You have got to have a view. You have to have a view.” And in fact, my view of it is the opposite. I really don’t want a view. And it’s not because a view wouldn’t come with more revenue, but it’s because a view comes with more expense than the revenue that you actually get.

So if you have to pay another million dollars for that house just because it has a view, but it only bumps revenue up by 10 or 20%, is it worth it? So for me, honestly, seeing a view almost rules the property out for me. I know it’s not gonna have the size or the proximity to downtown Asheville to actually make that a really good rental.

Because I know that the number one thing that’s gonna affect revenue is the size of the house and how many people you can sleep, more than anything else. And so for first-time investors, we’re kind of having that conversation a lot. For multi-time investors, a lot of times they’ll come to us and they think they know everything, ’cause they own three or four short-term rentals, they’ve explored some markets, they really start to feel like, “I have a grasp on things.

I’m managing properties. I’m dealing with this every day.” And for them, what we find more often than not is we’re kind of dealing with people being jaded, thinking that because they’ve had one issue happen to them, that that’s, like, a big major thing that they need to focus on, not really understanding that every time you buy a new property, it’s gonna be something new.

It’s very rare that you’re gonna have the same major problem, like, over and over and over. I’ll give you a good example. Um- In, in Western North Carolina is we’re heavy on septics and things like that here. Well, at the beach, I have a client, and she had two houses there. She ran into really big problems with the city sewer system, and she just pegged everything while she was looking for problems on, like, are we on city sewer?

We don’t wanna be on septic. We don’t wanna deal with these issues. When in reality, I’ve had more trouble with wells than I’ve ever had with septics in Western North Carolina. So I think with multi-time investors, we’re kind of getting that jaded sense of like, “Well, I already own these things. I know exactly what I’m doing.”

When in reality, we’re going like, “We get that. You own four short-term rentals. That’s really a big portfolio.” And we are buying and selling, we have 87 deals under contract right now at Savvy right now, at any given time, and this is early in the year. In, in December, it is highly likely we’re gonna close somewhere between $150 and $250 million in real estate in that month alone, and we share that experience amongst all the agents.

We constantly are meeting and saying, “What issues are you running into? How are we solving these issues for people? Can we pull in experts that can educate us on these issues?” And you’re, you’re really benefiting from an economy of scale there. Sure, you may own, as a multi-time investor, four or six short-term rentals, but I’ve got 15 under contract today, and I’m going through all of those issues at a much faster pace and a much faster clip.

That’s why you’re working with us is for that value that we bring. So listen to us, trust us, and sometimes that’s kind of, you know, we’re, we’re, we’re, we’re really… That’s an obstacle. You know, it’s something that we really have to overcome with these multi-time investors because we don’t wanna tell them, “You don’t know anything,” because they do.

Um, and we have a lot to learn from our clients, but they also have a lot to learn from us, and they need to really remember that. So that’s more of an obstacle with the multi-time investors than it typically is with the new investors.

Uh, yeah, those are great points there. The first one on, you know, return on investment, does it make sense to buy the ocean front property or the one that’s three blocks back, you know?

Uh, a lot of times it doesn’t, right? Like as you- Yeah … pointed out with the mountain view. Uh, I think one of the challenges for first-time real estate or short-term rental investors is that they have a personal component tied to it, like you kind of mentioned there. Like, maybe they want to stay there at the property a little bit, and they’re letting the desire for the mountain view run the whole investment ship.

So do you have any just, like, quick advice, or is it really just as simple as someone just needs to decide is this more important as an investment or more important as a personal, personal property?

Yeah, that’s the first thing that we determine with somebody. Um, typically for a multi-time investor, we’re seeing that less and less that’s for personal use.

Uh, for a first-time investor, definitely an obstacle we want to get through with them. And what we’ll find is, you know, when we start talking with them, they’re saying like, “Oh, we want to vacation there. We want to do this, we want to do that.” Over time, what it ends up morphing into is I can actually make more money by renting my place than vacationing in it, and I would actually rather stay next door because that person doesn’t know how to do their pricing.

So I could stay there for cheaper than I can stay at my own house, so I’d rather rent that out and stay over there. Um, but it is something that we have to get through because people do come in with their personal biases, and it is their money ultimately. And some people do truly buy for, um, lifestyle reasons, right?

They want a vacation at the beach. They want to have this, they want to have that. Um, but I find most times it does end up, people do end up morphing to, like, pure investor, and they’re seeing the economics of things and, uh, and really realizing… You know, what I have found so many times is people say like, “Oh, we, we want to go to Asheville.

We’re gonna come there every year.” And then they call me back three years later, and I’m like, “How many times did you come?” And they go, “One. We actually decided we want to go to the beach, and we wanted to go to Hawaii, and we wanted to go to Italy, and we wanted to do all the, those things instead.” It’s, uh, very rare that you find a family that vacations in the same exact place every single year.

Um, even if they do, that situation ends up changing. Kids grow up or they have kids. Um, family dynamics change. Um, personalities change. Uh, travel trends change. And ultimately, um, we almost always find that somebody that buys for that reason, “Hey, we come to the area a lot, so we want to have something there,” almost never ends up using it nearly as much as they thought they would.

So really look at it from that investment lens first, would be my typical advice for people. Of course, it’s their money. They’re gonna do what they want with it It’s, it’s hard sometimes to, uh, envision what things will actually look like, you know, two years or three years or four years from now. Uh, but it’s very likely, you know, if you found a good investment, you’re gonna have that property for a long time.

You know, 10 years, you never know. Um, but, uh, okay. Great, great advice. Great advice, Tyler. Uh, the other point you made was really on, like, velocity. You know, you have these velocity of transactions. You know, you have these investors that have made four investments, and maybe they’re not all in the same place.

They’re, like, four totally different markets. Um, can you tell us a little bit more about your team structure? ‘Cause I know you’re in a lot of different markets, and you’re getting that velocity of transactions basically in all of those individual markets, which truly does make you guys experts. Yeah. Um, I think that that has been, um, the best part for us.

Um, when it comes to those velocity of transactions, we’re understanding short-term rental insurance, short-term rental lending, short-term rental regulations at just such a higher level, um, than, than any especially regular real estate agent ever could. Um, right now I’m in conversation with, uh, Alex Bland from Airbnb about working on regul- the regulatory environment in North Carolina.

Um, no residential real estate agent is gonna have that kind of access, right? Um, I was- had a call last week with Airbnb’s real estate department, which most people don’t even know that they have a focus on anything like that. Um, so it’s that velocity of transactions that truly just puts us at another level, and ultimately we’re really excited to be able to pass that down to our clients.

It’s just, is the client gonna trust us or not? The most successful clients that I’ve ever had are the ones that come in and they ask the right questions and they trust us. I’ll give you a good example. Last week I had a transaction, uh, that terminated because the client just did not believe me for inspections.

You know, there was some water intrusion, things like that. The way that I look at things like inspections, almost everything is fixable. Unless the house is coming off the foundation or falling down the mountain, everything on a home inspection is fixable. What it depends on is, is the seller gonna play ball?

What sort of deal did we get on the property in the first place, and how does it affect the investment in the long run? Is this CapEx that you have to put right away? Are there things that you can defer until later? Uh, and one question that I always have for my investors is, if we did a home inspection on your home today, how many items do you think they would find?

Do you think it’s gonna come back perfect? And if not, then do those items absolutely have to be fixed today just because you did the home inspection, or likely can some of that stuff go for 10 years before it actually ever even starts to become somewhat of a significant problem, right? And so we look at everything from an investment standpoint, and that’s what makes us different as short-term rental realtors is we’re always talking from that lens.

Does this actually change the mechanics of the deal? When it comes to these, um, properties that have water intrusion, I’m telling my clients it’s incredibly likely that the n- if you terminate on this one, the next house you buy is gonna have the same problem, so you might as well just start attacking it here since we’re already in this deal, right?

Um, so that’s how we look at things, and it’s different. I think it, it is a different lens on how we look at things. But that velocity changes things and, uh, you know, I have certainly gone out there and I talk about my production, I talk about the production of the team. It’s never meant as a boast. Is this something to be proud of?

Hell yeah. I’m super proud of where Savvy is, what we’ve done, where we’ve come from. Um, but the greatest thing for me is this treasure hunt of finding great short-term rentals for our investors, landing it, and then getting that feedback from them six months later that it changed their life That they made so much money, that they’re net positive, that it’s better than they could have anticipated before.

Um, and, uh, and that just… It’s such a rewarding aspect of what we do. And I have people tell me like, “Well, are you just a saint? Are you… It’s just altruism. What is it?” No. Like, we’re also in the game. Like, we’re benefiting here as well. But the greatest thing that I love so much about Savvy, about what we do, is that we can help ourselves win while we help other people win.

And it’s funny because w- you, you see short-term rental consultants, there’s a lot of these short-term rental consultancies that have popped up and they say things like, “Oh, well, you gotta watch out for your real estate agent because, like, your real estate agent is just gonna get paid on a completed transaction.”

I already know that I’m gonna do 50, $70 million in sales this year. I don’t need to sell one bad property to somebody to make my next paycheck. We don’t need to do it, right? In fact, I think that that would work against me. I sell one bad property to somebody that I really thought was gonna be a bad property and, and I didn’t think was gonna work out well, I…

You can believe that person’s gonna be online, in all the forums, on all the Facebook groups talking about it all the time, and, uh, and that’s gonna cost me more than two clients. So when we niche down in an industry like this, we really have to focus on doing the right thing for the client first, knowing that that comes back to us tenfold.

And so that’s one thing I can wake up feeling really good about, is like I am certainly looking out for myself, but by looking out for my clients, that is the best way I can look out for myself. That’s how you can really trust what we’re doing. That’s what I’ve always done. That’s what I’ll always do. I will never put somebody in an investment that I have any doubts about without telling them, “Hey, these are my doubts about this investment,” and they make their decision, right?

Um, because ultimately that will follow me around. It’s not gonna be good for business, and that’s how you can trust us. Yes, we’re incentivized by commission, but why would I sell you a bad one when we can just wait and then I’ll sell you a good one, right? Um, those short-term rental consultants I think have it in for themselves because they get paid no matter what.

So why do they care? Why do they care at all if they get paid no matter what? So a little bit of, a little bit of bickering back and forth in the industry going on about, uh, about things like that. Yeah. Yeah. No, great points. And I, I used to be, um, a commercial broker as well, like on the commercial property side of things, and I’ve always highly recommended working with good, qualified, and experienced agents.

I’ve certainly worked with my fair share that, you know, didn’t end up working out. But I think one of the things you said is what distinguishes good agents or brokers from others, and it’s basically building a good reputation and it, you know, it takes a lifetime. Forget where this quote comes from, but they say, you know, it takes a lifetime to, uh, to build a reputation, but you can ruin it, you know, one day or something.

And so obviously with your guys’ growth and, and expansion, that’s not the way you guys operate. Um, so a lot of value, a lot of value working with, uh, experienced people. Um- I’m curious to get your on-the-ground, uh, you know, how is the market today? Well, before we jumped on, I asked you just, you know, what was the split between how many properties you guys were selling versus buying, because there’s still a lot of gloom and doom out there, you know, that, you know, the Airbnb bust and all that.

But I think we both know that that is not true. It’s, it’s true in some places, but not in a lot of others. So how are things down there o- on the ground in the markets you guys are working in? Yeah. I think what we see is a really big shift to experiential Airbnbs, right? Um, places that people come and they can create core memories at, long-lasting family memories, memories with their friend groups, memories with coworkers.

Um, that’s really what we’re seeing. Um, you can really see this in what happened in Asheville with Helene. Uh, we had a market and a city that was pretty much trashed. It was a disaster. Um, a lot of disaster relief efforts going on, entire neighborhoods wiped out, difficult to get around the area, and that happened at the end of September, um, of 2024.

And, um, uh, immediately after that, I still had guests that came in October because they were just coming for the house. So I had this great experiential Airbnb, pickleball courts, um, sauna, cold plunge, outdoor dining, indoor game room, indoor movie theater, and they’re like, “Honestly, we weren’t coming just to stay in Asheville.

Like, we really booked this just for the house itself.” And I’m not saying that that’s the case everywhere, but we’re seeing things like that more and more. Airbnb is not just a place to stay. Go to a hotel room for that, go to a resort for that. People are really looking for an experience where they’re creating these core memories.

So that’s where we’re seeing hosts excel, is when they’re willing to put in the money, the time, and the effort that it cr- that it takes to create those experiences and, and those sort of large scale places. But it’s not just heads and beds. Um, I bought a small two bedroom with great views, and I put, you know, $300,000 into designing that really well as an amazing couples retreat or a small family, and that property has done really, really well for me.

But it was because I did it really well. We put in amazing wall features, great furniture, a sauna that hangs out over the deck so it looks like a 360-degree long range mountain view. Um, doubled the size of the outdoor deck so that people could really take advantage of and hang out outside. And, uh, so that’s what I think it- things are morphing to.

So when you hear about the Airbnb bust, uh, I think ultimately what it, uh, pertains to is this kind of, like, bottom 50% of people that bought during COVID. They put a bunch of Amazon furniture in a house. You know, plastic tables, plastic chairs, $500 couches, 32-inch TVs, and, uh, no outdoor amenities- And, uh, and, and, and they have not done well, especially moving into this kind of era of experiential short-term rentals.

I’m not seeing them do well. I don’t think people should buy them if that’s what they’re gonna do. And I think the budgets for great short-term rentals are going up more and more. And, uh, and, and so when people come to me and they say like, “Well, I have a $50,000 budget,” I tell them, “I don’t know if this market is made for you anymore.”

Um, and, and that is pricing some people out, which is unfortunate, but I don’t want people to come in thinking that they can spend 50K anymore and lose it, and then lose money ultimately the entire time that they own the property Yeah. Yeah, some excellent points there. And certainly we can’t talk about the industry as just one segment.

You know, there’s, there’s a lot of different segments, experiential properties or commodity type properties in the middle of a city and, and, and they operate really differently. Um, that said, um, everyone like, likes to get a good deal, you know? And, uh, I’m, I’m curious, what are some of the things that you guys do to, to help, uh, win deals or, you know, get the most for a property?

Um, yeah, can you, can you speak to any of that? Yeah. I think like so many things of what we do, it’s about the right perspective. And so, you know, I think that it’s important to buy the property right. I don’t think anybody should overpay for properties. Um, we’re not paying over appraised value. We’re not recommending anything like that, um, even though that was kind of big during the COVID era.

Um, and ultimately, I think nowadays what you’re really looking at is what is that property gonna be able to produce in terms of revenue, and then what is it actually… If we’re putting money into experiences and, and upgrading, making more people fit in the house, maybe it’s more bedrooms, more bathrooms, things like that, then is that gonna be worth it on the return for the value of the house, some forced appreciation?

And so, you know, we’re looking at those two things. But ultimately, if we’re talking about great experiences, then we’re talking about premium properties, and those are not gonna be cheap. And so, like, we wanna get a good deal on those properties if we can, but also, I have not hesitated. I have paid almost close to purchase price for everything that we’ve bought in the last couple of years.

We’re paying almost close to purchase price. Maybe if we’re getting a little bit of a discount, a little bit in credit, but we’re looking at what can be the best Airbnbs, then that means you’re gonna pay premium prices. And so, um, it does kind of go against some longstanding, like, real estate advice, which is like, “You make all your money on the buy.”

Well, that’s true, and it’s a long-term rental, and your cash flow is 100 bucks a month, and you have to renovate it, and you have to force some value add appreciation there, and every dollar matters so much. It doesn’t as much for these large experiential Airbnbs, and, uh, and I’ll tell you why. You know, we bought a place in Asheville for $905,000, and we spent about 410,000, both in carrying costs and renovation costs for that property, and we pushed the value of that property to $1.95 million.

It’s about a $600,000 gain in the value after what we had already put into the property, and that’s what we were able to cash out of that property. So we were able to cash out more on that property than we ever put into it, and it’s still cash flowing somewhere between five and 10 grand a month, depending on the month of the year.

It’s depending on seasonality. Um- So, and we paid $10,000 more than list price for that house, right? Um, so what is a good deal ultimately, I think is the question. And sometimes that means it’s the purchase price. Sometimes properties are definitely overpriced, but go into things with a totally open mind.

Look at every single deal, not as I just want as much off the list price as possible, but is the list price fair? What does it comp out to? What is the price of the property gonna be after you do this value add? And then what’s the revenue? What’s your cash on cash return? You have to take into account the entire financial picture, and I think including the tax benefits that you get for short-term rentals.

Um, take everything into account and then make your decision from there. Is the property worth what you’re paying for or not? Um, but certainly I don’t think the only question is how much money are we getting off list price? Yeah, of course. Um, yeah, it’s all, it’s all about the potential returns and, and really underwriting the property properly.

I, I think a lot, especially the, the first-time investors though, don’t really know how to do that. Uh, is that… How far do you guys go in the analysis of a potential property with your guys’ agents, or is that something that, um, they need to handle mainly on their end? Yeah, we go really deep with them. Um, we’re looking at pro formas, we’re looking at comparable properties with them, we’re using all of the data analytics tools.

We’re, uh, partners with Airbnb, we’re partners with BnBCalc, we’re partners with Raboo. So we talk to all of the data in the industry. Um, not only that, but we’ve helped develop half of those tools. Um, I’ve sat with the CEO of AirDNA. I was on the phone with the CEO of Raboo last week. Um, I was heavily involved in the development and the startup of BnBCalc and, and work with the developers and the CEO there all the time.

Um, so we’re really, really involved at that level because we wanna understand what is the data saying today, how correct is it, what sort of variances do we need to include, what are the tourism trends, how many new listings are there, how much new ADR is there, um, and what are the trends of all those things?

So we go really deep into that with our clients. We, uh, every time that we have a tre- a retreat, uh, with all of our savvy agents, we bring AirDNA, we bring Raboo in to come speak to us and talk to us about the trends. We’re always looking at it from a, both a micro and a macro econom- e- economic lens. Um, we want to be there for our clients, and we want them to make sure that they can rely on us.

Of course, it doesn’t eliminate the due diligence that they need to do themselves. They ultimately need to make the final decision. Our job is to give them options, give them recommendations, tell them where the market is headed, and tell them what’s working today. Is it gonna work tomorrow or not? Well, we can rely on some historicals, we can rely on some trends, but we don’t know what’s gonna happen with Iran.

We don’t know what’s gonna happen with interest rates. We can always give it our best guess, um, and tell them based on historicals what is likely to happen or what are all the options and potentials, but ultimately everyone has to do their own due diligence for themselves. What I would say, and what I always say to my investors that come here to Asheville is, “I’m there investing alongside you based on all of this info myself.”

So just this year, you know, we’ve bought about $4 million in short-term rentals, me and my partners, just in Asheville this year. And, uh, so we are investing on all of the investment thesis that I know about, all of the data that I can see and know about. We feel comfortable doing it. They have to make their decision if they feel comfortable doing it or not, and that’s totally up to them.

We don’t make decisions for our clients. We make recommendations, we give options, we trade on historical data, and that’s the best we can do. But ultimately, there’s always a risk in real estate investing. I just happen to be of the belief right now that short-term rentals has the least risk of any sort of real estate investing out there, and the most potential upside Certainly.

I am a believer, uh, always have been, probably always will be, uh, barring any large governmental changes or- Yeah, that’s right … you know, regulation. Um, a, a big piece of having good investments, so you, you’ve sort of mentioned it here subtly a couple times, is the financing piece. You know, most people aren’t going out and, and buying a million dollar property with cash.

There are those, uh, people out there of course. But one of the powerful benefits of investing in real estate is that we get to leverage it. Yeah. Uh, and we get to borrow money. Um, and that’s always changing. You know? It’s, it’s nice that we can buy investments today, and if it, if it makes sense today or, you know, with our calculations it makes sense, we get to kind of renegotiate it down the line with a bank.

Yeah. Um, but how, how is the lending scene right now? ‘Cause I know it’s changed a lot over the years. Obviously short-term rentals are much more common these days than they were a decade ago. What, what does that side of the equation look like? It’s difficult and it’s easy. Uh, and I’ll start with easy. Um, sometimes I see people online say things like they wish that short-term rentals were more recognized as commercial property, that they could trade on cap rates and trade on revenue and things like that.

I hesitate when I see things like that. Uh, we are incredibly lucky to be able to have fixed rate residential financing for short-term rentals. We’re incredibly lucky at a regulatory level that in most states short-term rentals are still considered residential property, like in North Carolina, um, or Arizona, and we s- are able to stand on that residential property classification, uh, to be able to get great financing, um, with really, um, stable, you know, historical data that the banks can rely on in the residential property market.

I would, I would hesitate there. Be very, very careful asking for commercial valuation, commercial loans. Uh, you’re gonna get lower terms, you’re gonna get variable rates, you’re gonna get, uh, like, you know, uh, five-year balloons. Uh, that’s putting a lot of people in bad positions in commercial real estate right now where people thought rates were gonna go down and they aren’t.

Where your short-term rental is cash flowing just as much as it was four years ago because your rate is exactly the same as it was four years ago, and you don’t have to worry about it going up in the next four years. Um, so I think that’s the easy part. Um, difficult part is rates. Rates are not going down like a lot of people thought they would.

And I was never a fan, and I thought that this was just a bunch of, uh, uh, marketing jargon, um, uh, when people were saying, “Marry the house, date the rate.” Mm, I’d be really careful there. Who knows exactly what rates are gonna do? You’ve got political environment, you’ve got economic, you’ve got world, uh, uh, you know, wars, potentially wars happening and just all of these things, oil and things like that that are affecting interest rates and, and the outlook on the economy.

Inflation has been a big, big, um, conversation the last few years ever since COVID happened. Um, so it’s difficult, you know? Rates are not going down. What I will say is I don’t see rates going up If they go up a quarter, if they go up a half, it shouldn’t really affect things that much. So as you underwrite today, you can feel really confident, at least I do feel really confident, right?

You have to make that decision for yourself. But I feel really confident underwriting at today’s rates because I don’t see those going up. I think we’re at historically fairly high rates, especially on average and especially for as long as those high rates have lasted. Um, and so I think that, um, if you underwrite for today, you’re guaranteeing yourself success for tomorrow, barring, like you said, Tim, any, you know, other crazy economic factors or anything like that.

But what are you gonna do? Not invest in the best asset class I think you can invest in America? Um, I think commercial property is still too expensive. I think long-term rentals are too expensive and the rents are, are going down. Um, and so I still believe in short-term rentals. I believe in these experiential Airbnbs.

I own them all myself. We invest $400,000 or $500,000 in all of our new assets. They perform. They give us the money back and, uh, and we’re seeing that happen really well. And w- we’re, we’re doing things like re-leveraging, refinancing, and people will tell me like, “Aren’t you worried? You know, your, your, your debt service is going up so much, 10 or $12,000 a month.”

If we’re doing $300,000 a, a year on that property and our debt service and expenses are somewhere between 120, 150,000 a year, um, and a lot of those other fees are pass-throughs like cleaning and things like that, um, I feel really good about where we are ’cause if our revenues are at 300,000, then that means the Airbnb market has to crash by 50% before we’re at zero and I’m okay being at zero That would mean that if we refi these properties at 1.9 million and we bought them at 900 and, uh, you know, for me, values would have to crash by more than 25% for me to be at zero.

And so if it’s 30%, if it’s 35% values actually crash that much, that’s when I actually lose a little bit of equity. Um, I’m okay with that because I’ve already actually earned that delta in equity from my cash out refinance the first time I had it. Um, so I feel really safe in short-term rentals right now.

I think we’re really well protected. We’re really well leveraged. We’re at decent LTVs. We’re happy with where we are, and we’re looking at it from every angle, including all… If all of those things happen, and I think we’re in deeper, a deeper pot if, uh, if, if, if Airbnb revenues crash by more than 50% and home values crash by more than 25%, I think we’re in a deeper pot.

We have other things to probably worry about. Uh, I don’t see it happening. I would be very surprised. So I feel really safe here. I feel comfortable telling my investors that they should feel safe here, but of course, it’s risk, right? Investment is risk. That’s just what it is, and so you can never guarantee, um, what’s gonna happen.

But overall, I feel good about where the economy is right now. Looking at everything that’s happening and seeing how well things are still going, that makes me feel pretty comfortable, slightly hesitant about the future, oil wars, Iran politics, geopolitical environment, all of that sort of stuff, but you always should be.

If everything is feeling safe to you in the moment, that’s when I think you should be even more cautious. So I feel happy that there are things to worry about, but that things are still going so well. That to me feels like a safe environment to be in. We’re hesitant. We’re looking at every investment because of these environmental factors that are going on, um, and trying to make smart decisions, and that’s making us cautious enough to look really deeply.

If we still feel really good after that, that’s where I’m feeling really comfortable right now. Right. Yeah, great points, Tyler, and there, there’s certainly a lot to, like, making the decision to invest, uh, in a property, right? But more people have become wealthy through real estate than any other asset class in- Yeah

in the history of the United States, and yeah, I agree. I don’t see a lot of huge dramatic changes that would, uh- throw a huge curve ball in there. You know? Yeah. There’s just, there’s a lot of ways that we make money with real estate, not just the cash flow, but you- Yeah … you mentioned a lot of them there, and, uh, I know we’re, we’re getting short on time here.

Uh, another thing I just wanted to point out for anyone out there that hasn’t worked with agents before, another big benefit is that they know lenders to work with, they know insurance companies to work with, they know people in the local area that can just help facilitate the whole transaction. And so, um, I always highly recommend working with an experienced agent.

Tyler, you guys have a whole team of them. How can someone find you guys if they are, uh, looking for their next investment or looking to potentially sell one they already have? Yeah. I think a great place to start is our new website, savvy-agents.com. Um, we have got all of our inventory on there, what we think might make a good short-term rental today in over 25 markets all over the US.

Um, and that new website has got Airbnb comps, it’s got revenue ranges, it’s got as-is potential, and then it’s got fully amenitized potential, what those amenities might be, and how much they might cost. It’s got our personal take on the house, and then it’s got all the normal information that you’ll see on Zillow, like the number of bedrooms and the description of the house and all that sort of stuff.

So I think it comes with some really, really good context that you’re not getting from any other site out there. Any data aggregator or any site that lists short-term rentals, you’re not getting that local agent’s context around that exact property, what we think it can do as is, and what we think it can do if you invest a bunch of money into it, and how much that might be and what your return might be if you do all of those things, and there’s no other site like that out there, and that’s why we built it for you, and we’re really, really excited to release that beta version.

So if it’s not working, um, I’ll send you someone that you can yell at other than me, but it is brand new. We’re really excited about making it better. So if you wanna go surf it and take a look and, and send me some tips. Tell me what we could be doing better, what you as a short-term rental investor might wanna see even more of.

We wanna build a platform for short-term rental investors where they can come and buy and sell, that we can add a lot of value into that process for them that doesn’t cost them any extra money versus working with a regular real estate agent, and that’s our goal here at Savvy. So yeah, appreciate you having me on, Tim.

Thank you so much. Yeah. It’s been a pleasure, and I look forward to, uh, future conversations. You know- Yeah … you guys, you add a lot of value, and, uh, we appreciate it. Thanks, Tyler. Okay. Thank you