Avery Carl - Connecting Investors Across the Nation with Great Short Term Rental Investments

welcome back to the short-term rental riches podcast I'm happy you're all here again we have an extra special guest today Avery Carl she's the Amazon best seller of short-term rental long-term wealth a lot of you may have heard her on her show the short term show which is a fabulous podcast as well she wears a lot of hats so I'm excited to dive into it with her today welcome to the show Avery hey thanks so much for having me yeah um yeah I'm excited to have

you on today I know you got a just vast knowledge and experience in the short-term uh Rental World You Wanna Give us a quick background oh yes okay um so I did not as a kid did not grow up saying I want to be a real estate investor a real estate agent when I grow up uh it kind of backed into it I think as most people end up doing um was working in the music business in Nashville for very little money it's very glamorous but

they don't pay anything because there's always an intern willing to do it for free um my husband and I I guess we need to start a little further back my husband and I when we moved from New York City to Nashville our real estate agent was really trying to get us to buy a house in this really hip appreciating part of Nashville called East Nashville and we said no thank you we are moving from Brooklyn to Tennessee we're tired of neighbors we want to go out

in the country so we did but we had a little bit of money left and she'd made such a huge deal about all this appreciation that we were like I don't know maybe we should buy one of those and we should like rent it out and the renters will pay the mortgage for us and we won't really have to pay anything and then by the time our future kids need to go to college we can just sell it and it will have appreciated enough that we

can pay for it their college with that instead of out of our own pockets and we I thought it was this genius personal finance genius totally stupid um but we did buy one we bought a lot of long-term rental and luckily we got really lucky that it was a really good deal and it cash flowed about a thousand dollars over the mortgage every month which when you did the the math on what I was making a month that was about what I was making after my

pay paycheck deductions so we went wait a minute we just doubled my income with this one house we need to buy more of these we need to make a business out of this so then we started educating ourselves on real estate investing after we'd already made the huge purchase started listening podcasts reading all the books and uh we had just enough enough money for one more property for a down payment and we said well what can we buy that's going to make us the most amount

of money the fastest so that we can go buy more and we landed on short-term rentals and we knew we did not want to do it in Nashville because the regulations already even at that time in 2015 were too crazy and we couldn't afford to buy something and then be told we couldn't use it for that so we just been on vacation to the Smoky Mountains which is about three and a half hours east of Nashville and we'd stayed in a cabin everybody else that was

there was staying in cabins so he said somebody owns these cabins why can't it be us and we'll figure out this self-management thing remotely because at the time the standard for that market was 40 of your gross and we were like we can't afford that we need that 40 we've got more real estate to buy and so we kind of figured out this was before any there was no podcasts uh there was no there was a get paid for your pad that was it um there

was no gurus there were no courses there were no Facebook groups so we just kind of had to like figure it out as we went um that very first one went really well yeah today had to go uphill in the snow both ways um first one went well scaled that to five over about a year and a half uh five and a half years later we've got 250 doors no Partners uh eight of them are short terms uh the rest are single family multi-family long term

I'm a big believer in a diverse portfolio yeah uh started the short-term shop on our second purchase because we realized there weren't really any agents in the space who could answer our questions about this specific type of investing so our first Market was in the smokies and now we've got 70 agents across 20 markets in the country and uh if you buy with us yeah we teach you how to manage it for free while you're still under contract so by the time you close you're ready

to go you already know what's going on you're not floundering around with a 500 000 investment you're like ready to turn the key and rock so yeah awesome yeah awesome awesome story awesome to see you uh practicing what or preaching what you practice uh and also great to see that you have the diverse portfolio I think a lot of people in the industry or a lot of times people really Niche down and it's the only thing they do I also believe that having a diverse portfolio

is a good idea not just um one asset class but across multiple markets even so so you guys have eight of those are short-term rentals you said out of your current portfolio Okay are they all do you mind telling us a little bit more about those are they all the same type like vacation rentals are they in the same areas or yeah so we like to stick to the vacation rental niche of short-term rentals so what I mean by that is in vacation markets that are

dependent on that tourism that are dependent on short-term rentals so in areas where there's not a lot of Hotel presents so uh we have five cabins in the Smoky Mountains in Tennessee so in and around Gatlinburg Pigeon Forge Sevierville Wears Valley everything from a studio to a five bedroom we've got three across the panhandle of Florida um two single families one of them is a four bedroom with a pool in Destin Florida the other single family is a four bedroom uh one house off the beach

in Cape San Blas Florida and then the last one is actually a mixed use building that's commercial on the bottom which is I'm actually sitting in it it's my office on the bottom but the top is a three bedroom condo okay very cool do you have a do you have a favorite among those well I think the four bedroom in Destin is my favorite that one was a real turning point in our portfolio we were able to get a really good deal on it it had

been foreclosed on twice and the second person that it was foreclosed on had already they were flipping it or rehabbing it and they'd already done all the really expensive hard work so all that was left for us to do after they ran out of money was cosmetic so we were able to get a really good deal on it and it is a really great property uh it's it's a beach house but it's kind of like uniquely shaped and cool looking and it's bright blue and that

one really like the the income versus the purchase price versus what that property did for US income wise in terms of being able to expand our portfolio makes it my favorite yeah it's nice to find those properties to where a lot of the hard Works already done I mean you get into some of these monster Renovations and that's when you start losing hair and it turns colors and uh I I've I've been there as well um so well let's see a lot of ways we can

go with this conversation I guess it'd be interesting to dive into it since you guys have so many agents and you help so many owners buy properties and we are in sort of different economic times but I think the bright side of it is that we are in a buyer's market which we haven't been in forever right um so do you mind just filling Us in on kind of how you yeah how you see things out there at the moment yeah yeah so I'll tell you

like at all our clients yeah the interest rates are high right now there's no disputing that but they're just a line item on your spreadsheet like any other expense and the good thing about the interest rates being so high is they've scared off all the amateurs so two years ago when we had new clients come in to our office I would say hey guys you know uh you're gonna have to go in here and offer like 50 000 100 000 over asking immediately on every single

property you don't have time to analyze you analyze after you hit the contract you don't have time to do anything because there were a thousand people offering on every property and things were going in like 30 seconds so now because and that's you know when the interest rates were two and three percent and everybody could buy one so now that the interest rates are higher you have the space and time to really think through the property analyze it find Opportunities to increase its income before you

make the offer figure out exactly what number works best for you you can ask for closing costs to be paid you can negotiate purchase prices you can do all of those things to get better deals because all the amateurs are out of here they're you know all the people that just were buying these things not as weren't looking at them as the business that they are just looking at them as like a cool way to impress their friends and let me just slap this up on

Airbnb and get rich when I'm not using it that's not real life so all those guys are gone and the real investors who are really willing to do the work are all that's left so you have a lot of opportunity to get really great deals as an investor yeah yeah definitely it's nice to not have to make a decision under all that pressure I mean those were crazy times that we're under it's nice to be able to ask for things that are broken to be fixed

you know and we're uh um so with all that said I I mean what are your opinions on sort of the supply side of things so I sort of think that yeah we are in a buyer's market it's a great time um but there's maybe not as many people buying so for those of us that already have short-term rentals I think if we we hold strong uh and we learn to understand like the new economy that we're in that we're going to still do really well

because there's still a lot of demand for short-term rentals do you have some some thoughts on that yeah yeah so I think that on the owner's side of things that now the difference is really in optimizing your management having great amenities and your Decor so you know five six years ago you could buy an old grandma cabin and slap it up because there weren't really a lot of sophisticated operators in the market just yet and so now there's a lot of people who have really done

their homework who are really good at managing their properties so the bar has been raised a little bit and I think the people who have not raised their property with that bar are the ones that are seeing the real declines so um I I don't think that uh there's gonna be any sort of short-term rental crash in certain markets there may be in some markets because real estate is really Market specific it's not Nationwide so in areas that are the areas that I try to stick

to as an investor and with the short-term shop are typically true vacation markets that are dependent on people staying in short-term rentals not a lot of Hotel presence it's been the normal thing for people to come to these areas and stay in short-term rentals for decades and decades so it's not that I mean in some areas yes but it's not that there's all these brand new short-term rentals that were not short-term rentals before flooding the market necessarily a lot of the growth that we're seeing in

Supply you know it's coming from data sources like air DNA which is a great source but it can only measure what's on Airbnb and verbo in a lot of these markets they're worth thousands and thousands of short-term rentals that were just on these big archaic old school property management companies that have been around since the 60s that this is how they run their business that's how they're still running their business and they're not on Airbnb and verbo so as those properties have been sold to newer

more sophisticated investors that are converting them from that management those types of management companies onto Airbnb and verbo you're seeing I think the growth numbers are a little inflated because of that because they weren't they were short-term rentals already they were a part of the inventory they just weren't measurable they couldn't be tracked because they weren't on those platforms and now they can so um anyway long story to make a long story long no no no that's a great Point um yeah I like the stability

in these vacation rental markets like you said I mean they're vacation rental markets and they've been that way for a long time and that's how the local economies Thrive right so the risk of having regulations change and preventing peoples is a lot lower than it is in like an urban city for example sometimes so um one of the the challenging things in some of these vacational markets I've seen though at least for individual homeowners are there Property Management options because a lot of times there is

like that one property manager that just dominated the market and they charge 20 30 40 percent and they can't do a really good job and now that we have so much access to all these OTAs there are other options available and I know or as you said you guys are self-managing I think this is something you guys teach about too so do you mind shedding some light on the SEF the self-management side of things compared to a traditional property manager yeah absolutely so we start started

self-managing because we could we needed that money we needed to cut costs wherever we could so that we could keep it and buy more properties so I think that depending on where a person is in their investment career in their life will determine whether or not a property manager or self-management is right for them most of the people that come to us just by Design are people that want to self-manage so um I call it growth phase versus Cruise phase or growth mode versus Cruise mode

during growth mode where you're really trying to squeeze every last dollar out of all your properties whether it's short-term long term whatever so you can scale and grow that's probably the time for self-management um in terms of if you're if you're already like okay you know what I've got enough properties I'm kind of tired of messing with this stuff I'm in Cruise mode then that's probably a good time for a property manager now in vacation markets when I first started all the property managers were like

Airbnb what that's kid stuff and they know Airbnb every now and then they'd be on verbo uh and they were only relying on Direct bookings to their website and a lot of times these guys were not like using SEO or anything like that to get they're just hoping that you find Uncle Ricky's cabins.com because your grandmother came here and um so now through the whole um kind of emergence of self-management has also come a newer type of property manager who understands why an owner might not

want to go use one of those big property management companies and they understand what it's like to be a self-manager and the proper tools to use to optimize the listings and they're kind of like a they're now becoming property managers but they have a much better hold on what's going on in technology now and what gets bookings and how to optimize then a lot of those those big old dinosaur guys so I think the whole you know the emergence of self-management has kind of created a

newer type of property manager that is better and more optimized and able to fill those gaps that the older school property management companies either couldn't or don't care to no great point I I mean I I think of myself as a techie guy I used to work for a software company um and I can't even keep up with all the software options you know and so some of these older establishments um you know unless they have a big team devoted to that it's hard to decide

what tools to use now um I know there's a whole bunch of programs out there I'm just curious do you have like a favorite maybe not necessarily the most important software tool you use but just like a favorite we use hospitable and price labs and touch day okay so you know three to do three different things but those are our key components there right okay I use the price Labs one we've we've talked about that quite a bit on on this channel before pricing obviously is

very important right I mean we can have a perfect property but if it's not Priced Right people aren't going to be booking it or at least not booking it too often and actually in your book you talk about affordability and I I think affordability is really important I mean a lot of people in the US economy are getting squeezed or really around the world with inflation and do you mind talking about affordability and how that that plays into how someone might want to make a decision

on where they're purchasing a vacation rental yeah yeah so I typically divide vacation markets into two types so blue chip markets and Emerging Markets so your blue chip markets are going to be the areas that are that are great places to own vacation rentals always have been probably always will be you're going to see really really really high gross annual income numbers there but you're also going to pay quite a bit to buy a property in those markets because of that so places like the Smokies

Destin Florida Broken Bow is becoming one of those um and then you have what I call emerging markets and they're not emerging in terms of tourists finding them these are still air mature vacation rental markets where tourists have always gone but they're emerging in terms of there's not a lot of sophisticated managers there yet so maybe they're they're smaller markets and some of them are not necessarily smaller vacation markets so um like Western North Carolina would be a good Emerging Market Cape San Blas where I

bought my most recent one would be a good emerging one but the problem with those they are more affordable you're but you're not going to see a lot of great data because the reason they're emerging is that the majority of the properties are still on those dinosaur property managers like cape sandblast like something like 85 of the properties are still on one to two property management companies that have been there since the 80s and you can tell their website is not like Sleek at all um

so because of that there's not a lot of great data so you're kind of trading that lower price point for there not being a lot of data but there's a lot of opportunity in those types of markets because they are more affordable the Smokies was one back when I started buying in 2015 but now you know the cat is very much out of the bag a lot of really sophisticated operators have moved in so you know it's not what I would call emerging anymore but looking

for those Emerging Markets the price points are going to be a little lower the income data is going to be a little lower but you know that's the trade-off that you have and um lower price point versus you know where the interest rates are right now yeah great great points there um a couple things I sort of want to dig into I guess one is like when we don't have a lot of data how we can really educate ourselves to get a a fairly accurate idea

of what that property might do I get you guys talk about or in your book you talked about the enemy method uh which is a very catchy name uh so stuck do you mind just breaking that down real quickly kind of what what that is yeah absolutely so you can have the best data in the world data can tell you what a property is doing but it can't tell you why a property is doing that so it can say this four bedroom is doing this amount

but without looking at it and looking at the other properties around it or your enemies you kind of can't tell whether that's underperforming is that over performing is that about where it needs to be so um you're using the enemy method to look at what your enemies are doing and how your property could outperform or maybe not perform as well so you know if if your data says this property makes this much but you go look at it and the pit in the pictures the paint's

like peeling off and the windows are broken and it's missing shingles and the yard looks like crap well you know that's not the best it can do because it looks like crap and if you spruced up the outside it would do better so um basically you're using the enemy method to kind of run comps and see where on that data spectrum that you have a property that you're looking at might fall because there's a lot of intangibles that go into how much a property could make

other than just the data like can I add X Y and Z amenities or does it already have that what are the ways that I can improve this to get this to the number that I want it to be at versus where it's performing right now yeah great point I um we talk a lot about comp sets and that's that's pretty much what that is right your your enemies are your comps and we need to understand them as best as possible to have the most accurate

picture of of what we're kind of getting into so super super important for anyone out there looking into getting a market we want to make sure we know what the possibilities are there and what opportunities we have another thing uh Avery that I think's playing into the affordability and sort of the migrations across the U.S is our ability to work remotely now people are more virtual than ever um I I really like the fact that people are living in airbnbs now or they're they're at least

staying there for much longer I think that it's just a it's it's kind of the way things are going I know it impacts certain types of short terminals differently than other like Urban properties for example it's much easier or much more common I guess you could say to see the the much longer Extended Stays are you guys seen uh since you focus mainly on vacation type markets are you guys seeing those reservation links uh extend a little bit as well so we don't get as many

of the digital Nomad types as we just get like families on vacation I'm sure there are some you know that I haven't just drilled down on that data but for us personally we're all vacations all the time yeah gotcha okay well people always want to take vacations I don't think that's ever going to go away right uh it doesn't doesn't mean we always can um but we're always going to want to I think and uh a lot of times in a down economy two people they

maybe jump off that very top tier of Vacations or the most luxurious travel options and maybe they settle for something kind of like a little less than that do you have some thoughts on that and how that might play out in some of these more like higher end vacation rental markets yeah yeah so in the Blue Chip markets that we focus on they're still cheap so we'll take like the Smokies for example or like Panama City Beach so the Smokies is always going to be cheaper

than going to Aspen or Vale or Breckenridge or any of that stuff because it's most of the tourists are driving in same thing with Panama City Beach um it's a lot it might not necessarily be cheaper than Mexico prices but it's less of a hassle if you live in the Southeast to just drive four or five hours go to the beach at Panama City Beach uh then fly to Mexico so in a potential downturn where people you know maybe wages have decreased or maybe they're a

little tighter on money they may not be taking those Aspen trips but they will still be able to drive to like the Smokies or Shenandoah or somewhere like that um where it's not as big of an expense on travel but it's still a mountain vacation so we try to focus is on that and on Regional drivable because it's still always going to be more affordable than those big huge like Hawaii destination vacations where the whole family has got to get flights you got to get there

it's a huge deal or you can just you know drive to the Florida Panhandle today yeah no no excellent point gosh you cut out just the airfare and then if you think of this in terms of like a family going there and there's five people in the family and you you chop out five flights and they settle for a drive to destination like you're talking about that's a huge savings I can't believe how expensive uh flights are sometimes these days it's it's crazy um well really

good really good points there I think one of the most important pieces of being successful with the real estate Investments finding the right property and of course you guys have been helping lots and lots of people do that so do you mind uh telling us a little bit about um the short-term shop and and what you guys do and how you can help some people in our audience yeah absolutely so um we are a team of real estate agents across 20 markets where the all we

do are short-term rentals so we don't even take clients who want to buy a primary home or sell a primary home or a long-term rental we only do short-term rentals most of our agents are short-term rental owners um if they're not they're on their way to being that but we are all um just live eat sleep and breathe short-term rentals um so basically what we do uh When Buyers come to us we have a little consultation call we talk about what markets might be best and

let them you know figure out some questions because you know sometimes there are your price point like what you want to spend is a lot of times going to determine which market so if you want a single family on the beach Destin Florida is probably not the place for you unless you want to spend a million dollars um at which point the investment may not make sense but you know maybe we scoot over to Carolina Beach North Carolina and now that single family on the each

makes sense so we'll have a consultation call kind of figure those things out um then we'll get you with one of our specialized agents in the markets you want to buy in will help you choose the right Market we teach you how to analyze we don't analyze for you because there's just too many variables and like we could never no one can really account for The X Factor of anyone else so um we help you through that and then we teach you how to manage your

property so most of the clients that come to us want to self-manage and so we've got a whole back-end program we call it management Mondays where our clients can go and learn how to manage their property they learn everything from how to set up their Airbnb and verbo listings to how to use the property management software to you know getting help sourcing their local local boots on the ground cleaners to handyman Etc and we do it all while you're still under contract so by the time

closing date rolls around you're already confident you know what you're doing you're not like oh my God what do I do I've just closed on this expensive house and I don't know how to run this thing you already know all those things and then we provide support for you basically forever so if you have ever run into a guest problem that you don't know the answer to you can come to us we've got a private Facebook group with a bunch of all of our past clients

I'm helping each other and us helping them so you know it's a community and we're here to make sure everyone else is successful as well so that's that's what we do it's awesome it's a One-Stop shop right pretty much and you guys obviously have tons and tons of experience if anyone out there hasn't heard Avery's podcast yet I highly highly suggest that lots of great and a lot of great interviews a lot of good information um let's see here well shoot uh let me ask you

one other thing Avery I the the title of this podcast is short-term rental riches and a lot of times when someone thinks of the word riches they sort of think of the financial side of it but that's not all that life is about obviously right people there's lots of rich people that aren't happy so is there one thing in your life or something that you've changed in your lifestyle recently that's enriched your life but not in a financial way well really just the ability to stop

working when my kids are out of school uh so when they get out of class every day at two I'm there to pick them up so they're the ability to be able to give them the stay-at-home parent experience while still having a job and and bringing in income has been really really invaluable um because you know they're only little for so long and uh so investing in real estate and short-term rentals has given me the ability to do that like I picked my daughter up from

Theater Camp the other day and she goes would you like to go see a movie with me she's four I was like uh hell yeah I want to go see a movie with you let's go see a movie we went across the street and see a movie so you know real estate investing has given me the ability to do that for them and that's you know Irreplaceable at that time definitely definitely that's that is that's the goal right leaving the the rat race and having and

having that flexibility well I want to thank you Avery for coming on tons of great Insight I'd love to have you on again in the future I know that Industries just changing really really quickly we'll make sure that um we have all of your contact information or show notes and everything but any last words before we jump off I don't think so thank you so much for having me I hope to have you on my podcast soon and uh thanks again awesome thanks I've dedicated years

figuring out how to manage my personal portfolio remotely and it wasn't always easy and it took a long time but now my amazing team can professionally manage my properties without me and good news our team can also manage yours let us save you the stress and headaches and some money by offering you an industry low fee find out more about partnering with us head to str-riches.com hit the property management button answer a couple quick questions and meet with me personally that's str-riches.com rest easy knowing that

with my team your properties will be in excellent hands