Welcome back to the Short Term Rental Riches Podcast. If you’ve been following along over the last six plus years, well, you’ve heard a lot about my journey. I’ve grown from my personal portfolio to now managing hundreds of properties in over 40 cities with my team. This growth definitely has not come without challenges.

And so I want to talk about a couple of the breaking points today, specifically the difference between you hosting maybe an individual property or even up to five versus. A portfolio of 10 to 20 units. There’s a lot of differences that happen there. There’s a lot of breaking points, and so if you’re planning on scaling, I want to give you some insight into what that’s going to look like and how you can make sure that you stay successful with your short-term rental operation.

Before we break down this scaling process, I wanna talk about just a couple sort of mindset shifts before you start to scale.

The first one is that you have to be willing to let go a little bit. You have to be willing to delegate tasks. Managing up to 20 properties yourself is a ton of work, and if you’re trying to do it all yourself can almost guarantee that there are certain things that are getting overlooked.

Part of scaling also requires that you have a team that goes back to delegation, and then for those of you out there are like, Tim, how the heck am I supposed to scale my portfolio? I don’t have any more money. Well, this is a big part of scaling a portfolio as well. If you’re coming from the investment side of things, well then there’s a lot of options.

You can partner with people. For example, you can raise money if you’ve been successfully operating short-term rentals for a while, well then you have credibility and there are people out there that will invest in you.

And if you’re going the property management route, well then everything we’re about to jump into is gonna save you from a world of hurt when you start to scale your portfolio.

Okay, so I’ve got eight sections here and I can’t go into them in extreme detail because this podcast episode would be hours and hours long. Before we get started, where is our experience coming from? Well, if you’re new to the show, my team and I have managed over 60,000 guests, hundreds of properties in over 40 cities, and also multiple countries.

And so we’re speaking from real world experience here and we’ve already gone through these growth phases and these bottlenecks.

Let’s start with operational processes. If you’re in the group of one to five units versus the 10 to 20, what it’s very likely that you either don’t have a lot of SOPs, standard operating procedures set up, or you actually have zero. If we think about it, you’re getting four times fewer reservations, so you’ve had four times fewer chances to create those systems that you know work Instead, what happens is an issue comes up, you rethink how you handled it in the past, and maybe that wasn’t even the optimal way, and then you do that again. So it’s a lot more exhausting versus having these procedures in place, which you will definitely need to have if you scale up to that 10 to 20 unit size.

My next point is on technology. When you have a really small portfolio, you’re very likely not using a lot of the industry leading tools. Or maybe you’re using one or two, but you actually don’t know how to take full advantage of those software tools versus the little larger portfolio up to 20 units.

You’ve had more repetition, you’ve had more practice.

And you have a better idea of how they work. Now, that doesn’t mean that you have them set up in an optimal way. It depends on the size of your team. If you’re handling everything yourself with 20 units, then you’re probably overlooking some things.

We also know that using software makes the guest experience better, or it can make the experience better, I should say, because it helps you stay more organized. And if you’re less organized, well then that’s gonna show up in the way you manage your guests.

if you have the small portfolio, well, you’re probably not on all the OTA platforms. You may not even be using dynamic pricing, where when you jump to having a larger portfolio, these tools become crucial. And if you’re not on all the OTAs, then you have exponential losses there, right? If you’re missing out on a whole bunch of bookings from booking.com, for example, but you have 20 properties instead of five, well, there’s way more revenue that you’re leaving on the table.

All right, next up. Let’s talk about housekeeping and maintenance. If you only have one property, well, it’s a lot easier to keep an eye on that in terms of maintenance and housekeeping. If you have 20, well then you have to have multiple people working with you, especially if they’re all in the same area.

Imagine 20 single family homes all checking out on a Sunday morning. You have to have multiple housekeepers. You have to have backup housekeepers, and you have to have an easy way to manage all of that and to confirm that things are getting cleaned accordingly.

next up, guest communication. A lot of this comes back to the fact that you just have far fewer reservations if you have fewer properties. And so the one to five portfolios, they’re probably doing a lot of guest communication themselves. Unfortunately, we know that short term rentals are really busy around the holidays and all the times that you probably want to take that off.

We have to have a really quick response times When it comes to our short term rentals, we know that’s a huge factor in our review scores, so you’re probably doing a lot of this yourself if you have the smaller portfolio, but if you have 20 units. You basically can’t, right? You need to have some help or you’re going to start slacking.

Your responses aren’t going to be as good, or they’re probably going to be delayed. Yes, we have a lot of AI tools available now. We have a lot of automations, but even with those in place, we know from managing tens of thousands of guests that the things that actually take a lot of time are usually not just the guest communication, it’s the issues that arise during a guest day.

Maybe they need to change their reservation. Maybe they had an issue checking into your property, whatever it happens to be, it’s the issues that actually end up taking a lot of time and not the typical guest communication, like sending check-in instructions.

All right, number five. Let’s talk about the differences between these portfolio sizes when it comes to revenue management. Well, five or less units versus 20. Again, there’s the scale thing going on. If they’re all in the same area, though, you have a pretty good idea of what your market’s doing. But what we find is that the smaller portfolios are not really fully understanding all of the aspects of a dynamic pricing tool, and there’s a lot of guessing going on there.

Maybe there is a note in the back of their head that said last year on New Year’s. This is what I did, and so I’m gonna try to get that. But maybe with that smaller portfolio, they’re not really looking at the market data. When you get up into the 20 unit portfolio, you have to make sure that you’re looking at all of these things because again, you have many more properties and if you’re losing revenue

and if you’re lagging behind with one property and you multiply that by 20, it adds up to be a ton of money that’s getting left on the table. Now, unfortunately, with both sizes of portfolio here, it doesn’t make sense to hire a revenue manager, right? That is an expensive position, and that is a position that requires a lot of skill.

In fact, in the hotel industry, after the general manager, which is the highest paid position. It’s the revenue manager that makes the most amount of money because assuming you have a good guest experience and your listings are advertised in the right place, they can tremendously underperform if they’re not priced right.

So if you’re in the larger portfolio side, it’s very likely you’re using a dynamic pricing tool. We use Price Labs. We also recommend Error DNA or Key Data. If you’re in the smaller portfolio size, do not rely on Airbnb’s smart pricing. Make sure you get a different tool.

If you’re in the larger portfolio size, getting up to 20, a lot of people are going with revenue managers, but unfortunately, there’s a bit of a disconnect there. If you have someone just managing your pricing, but they don’t know how your reviews are doing, or they’re not actively looking at your listings, well then they’re not seeing the whole picture there.

All right. Next up, when it comes to staffing and delegation, if you have that smaller portfolio, you’re probably trying to do everything yourself, and you’re probably doing a good job with your guest communications and your guest experience because you’re more hands on, but, .

It is probably unlikely that you’re actually optimizing that property’s performance. Now, I know there’s a lot of you out there that do a really good job, but if you’re not constantly looking at all the market data and you don’t have the luxury of having so many reservations come in to learn from, then you don’t have access to all the data.

So while we see the average review scores for these smaller portfolios are a lot of times higher than the larger portfolio, like a 20 unit, it doesn’t necessarily mean that those properties are all optimized.

Now, if you’re in the 10 to 20 unit range, you have to start delegating. Otherwise, you’re gonna be doing everything yourself and you’re very likely gonna be overlooking some things.

You’ll, you’ll want to consider having a virtual assistant. If you’re new to the show, you can go to t riches.com. We have tons of free eBooks that we’ve put together after thousands of hours in the industry. Learning things that you can do to help you scale your portfolio. To make the right decisions and to learn from our mistakes.

But hiring a VA is one of those first steps, but unfortunately, you can’t really stop there, right? If you’re hiring one person to try to replace a lot of the things that you’re already doing, it’s hard or it’s not realistic to expect that they can be an expert revenue manager, that they can handle expert guest communications, and that they can be available 24 7, right?

If you’re asking someone to be on call. 24 7. That’s not a super desirable position, right? And it often leads to some churn. So that size portfolio, I don’t see any other way around it. It is pretty difficult because you need more help. Now, shameless plug, Cosley works on the back end of your short-term rental operation.

That is our company we partner with. We’ve partnered with hundreds of properties around the US If you want us to take off the backend operations for you, but everything still stays under your name and your accounts. Well, we’d be happy to chat with you. I’d love to hear more about your properties.

You can go to scr riches.com. There’s a little partner with us button. We can jump on a quick call.

All right, number seven. When it comes to portfolio performance, a lot of our performance is based on our reviews. And if we’re scaling without help, without delegating, without using tools, then that shows up. In our reviews, we see those smaller portfolios typically have better reviews, but it definitely does not mean that they’re optimized.

So it’s hard to say who’s really less optimized, the larger portfolio or the smaller one. What we do know is the more properties you have, if they’re not completely optimized. Then you’re leaving money on the table, not just on a few properties, but on quite a bit more. So the impacts every little impact of things or changes that you make, like going on Google vacation rentals or adding your own direct booking site, or offering upsells or upselling gap nights or extending your average length of reservation.

All of those little changes are not impacting five properties, but they’re impacting 20, and so it makes a really big difference.

And to wrap things up, I want to come back to the mindset that you need to be able to manage these portfolios truly in an optimized fashion. Whether it’s the five units. Or it’s a 20.

The reality is that there are a lot of moving pieces in the short-term rental operation. If you have a full-time job, if you have family, well. The more properties you have, the more likely it is that some of these things are getting overlooked. I hope this channel’s helped provide some insights. I hope it’s helped optimize your properties in a lot of different ways.

Again, we have a ton of free eBooks on our website@sstrriches.com. Things that we’ve learned over the years.

And if you’re in a place where you’re just overwhelmed and you’re stressed out and you’re looking for other options, you of course have a full-time property management option, but you also have a virtual solution like working with us at Corley, and I would love to chat with you personally.

Again, you can head tot riches.com. I hope this episode gave you a little bit more insight and. Kind of the differences. It’s basically with your larger scale, everything gets magnified, and what we find is that a lot of people are not delegating, or if they are delegating, they’re not spending the time to train those people to truly be experts in those tasks that they’ve delegated.

Till next time, I hope your portfolio continues to grow, and I hope you have a fabulous week.