​There’s no better insight into what makes a short-term rental business profitable than talking with a lot of short-term rental business owners. A lot of property managers, our guest today does just that, but not just that he actually helps them. Sell their business and he helps buyers buy property management business.

So you better believe he knows exactly what makes a short-term rental business profitable. Today we’ve got Jacobian from C two G advisors. He’s helped close over $750 million in transactions for short-term rental businesses. You’re not gonna wanna miss today’s show. There’s a lot of insight, a lot of details that are gonna help you make your business more profitable.

Catch the whole episode to find out the details.

Well welcome back to the Short-Term Rental Riches podcast. I’m happy you’re here. Again, there’s a lot of activity out in the short-term rental world.

I just got back from a conference. A lot of talk these days is about growing a property management business and selling it, and I have just the man on our show today because he’s been doing this for a long time. He knows all the ins and outs. He is the owner of C two G advisors. Jacoby, welcome to the show.

Thanks, Tim. Happy to be here. Yeah, I’m excited to have you here. Um, there really is a lot going on. You know, at least from my perspective, I’ve, I go to a lot of conferences. Uh, we of course manage properties ourselves. I’m in lots of management groups and a lot of buzz out there about growing and selling.

And I know you’ve been busy, but before we get into that, why don’t you give us just a quick background and how you got to be where you’re today. Sure, sure. So I’m, I’m probably one of the unique ones. Tim, I was, I was actually born and raised in this, this crazy pirate industry in the late eighties, and, um, grew up as a kid in the nineties, stripping beds, taking trashes out, probably breaking some child labor laws.

Um, my, my father was, was a kind of a big name in this industry in the nineties and early two thousands. So my brothers and I, um, we were, we were tangentially involved, um, in, in this industry really before Airbnb. I mean, VRB, VRBO was VRBO. I’ve got a, got a younger sister. She was the smart one of the bunch and, and never, never got involved in this, this industry, but.

Really grew up, grew up in and around it. Um, I, I went off in various directions, um, uh, got into the restaurant industry in, um, 2011 and had a restaurant for seven years in, in Nashville. My brothers and I, we all got, we all got sucked back into the industry around the same time in, um, 2017.

So I, I came back in the industry. My father had, um, the company called C two G Advisors. He was a semi-retired and it was just him doing some, some consulting work and some, uh, subject matter expert work. Uh, for a couple companies. And, um, yeah, I came in. I, uh, uh, he mentored me for about a year. And, um, and then I re really started, I, I, I saw the, the need for professionalizing the, uh, the m and a side.

And, um, honestly at that time as well, the, um, the lease arbitrage players, um, they were in the, in the middle of, of raising hundreds of millions of dollars. So, um, so I started, uh, reaching out to them and created really a, a service to help them scale and to, to assist them with, with finding new, um, apartment buildings in urban metropolitan areas.

Um, talking with landlords and negotiating full building master leases, stuff of that nature. Really, really just like hustling. And it was, , it was a fun time. It was, it was short. , Once, once, uh, 2020 happened. , Most of those, um, either went BK or, or kind of found some lifelines or, or pivoted to, to other, other sectors.

But yeah, so we were, we were doing, , we were helping those companies grow and then in tandem, uh, started like a buy side. , Deal origination business for the buyers out there in 2018. Uh, there weren’t many at that time. Um, and so for a couple years we were helping them find, find sellers across the country and helping negotiate those deals on, on the buyer’s behalf.

And then 20 2020 happened, which, uh, uh, I think everyone knows what happened then. Um, at that time, all deals paused for about six months. So it actually gave me a little bit of time to like think about what, what do I want to build C to G into when, when it grows up? And, um, decided at that time to really, really pivot and, and change our business model to, to really help sellers.

To, to work on their behalf, to, um, help them find the, the right partner in deals and, and also to, to help them get the, get the most amount of money they, they can get in a transaction. So, uh, 2020 going forward to now was really, really switching our, our business model to the sell side. And then since then, just building out the team, building out the systems and processes and, and really trying to go as deep as possible within the industry.

Yeah. Awesome. Well thank, thanks for the background and I know you guys have been busy. I know you’ve successfully handled dozens and dozens of deals for my records, over 750 million worth, and maybe that number’s much higher now ’cause things are moving quickly. Uh, but that’s. That’s no small undertaking.

Um, and I know, you know, I talk with property managers all the time, uh, and they’re all set up. There’s a lot of configurations, you know, they’re set up differently. Uh, their books aren’t always in line. They have different commission models, you know, all types of different setups. So I guess before we get into.

How much property management companies can be worth, uh, can you talk a little bit about how you would value a short-term rental property management business? Yeah, yeah. And it, it was funny hearing you say like, different business models, different ways of setting things up. Um, one of our four core values at C two G is, is curiosity.

And uh, just always being curious if, if we’re gonna try to try to be a trusted brand within the industry. Um, we, we always have to be kind of reading everything daily, listening, really getting our ears as close to, as close to the industry as possible because it is iterating and evolving so fast and, um, and we, which is fun, which is exciting.

So every, every time we, we, we meet a new, a new potential seller or client, like that’s the fun part about this industry. They’re all going to run things slightly differently. There’s not a college for short-term rentals. There’s 27,000 different resources that all give, give different advice and, and ways of doing things.

So it, it is definitely an industry with a lot of different business models, a lot of different ways that people do things, and it’s very entrepreneurial. Most everyone that runs these businesses are entrepreneurs. Um, but the, the, the negative of that is they can. They can be pretty siloed. So they have their way of doing things and they, they think it’s right.

There aren’t great, like best practices around, around the industry. Um, your question was around like, how do we, we value sellers. Was that right? Yeah, yeah. With all the models out there, I mean, what are some of the fun, fundamental things that you guys look at to determine the, the potential value of a company?

Yeah, so like in the end, in the end, um, it does come down to the financials and, and how the company is operating. So, um, we will, we will ask the, we will request from the sellers a set of their financials. Most of these sellers or, or companies are operating on, uh, QuickBooks Online or, or, or one of those, uh, accounting softwares.

And so we’ll, we’ll look at the last three years of their financials. And then, um, the, the PMSs that, that the sellers are on can be any, any number of a dozen of them. Uh, we’ll go through and, and run their reservation level reports so we can, uh, we can see what each individual properties contributing, um, to the company.

And then we’ll, we’ll kind of validate or verify their, their, their financials to the booking reports and see, make sure that those are being, being recorded properly. Um, in the end, buyers are the majority of deals. Buyers are going to pay a multiple of a company’s profits. So, um, we’ll go through their, their profit and loss statement, and we’ll help normalize that to how it should look day one, post close.

And so a lot of sellers. They run things through their business. Um, we are not the IRS, so it’s, it’s fine. I’m a small business owner. I, I definitely run some, some personal stuff through my business as well. I mean, we had, we had one seller at one point that had a yacht that, that he ran through his business, which was, which was pretty exciting, but.

So we’ll go through there and we’ll, we’ll look at their general ledgers and, um, we’ll take out certain like personal expenses or one time non-recurring expenses, um, and really kind of normalize that business to what it should look like on the go forward. And then, um, and then apply multiple to that and we’ll go over that multiple that’s applied to that is based on, uh, the quality of the company.

That’s where it’s a little bit more subjective. So we’ll go through and we’ll look at what does the team look like? Um, how much key man risk does the seller have? What about the quality of the inventory? Um, how is the company pacing, uh, with their peak season versus their peak season last year? Uh, what market are they, are they in?

There are just inherently some markets that are more attractive to buyers than others. Um, and so, so it’s a, it is a mixture of some like. Objective and subjective analysis that we do. Um, and then some, some companies are just not, not profitable, which is, which is fine. Um, and, uh, and for those, we look at those more on like a, a price per contract that, that a buyer would be paying.

And, and so those are more based on what those individual properties are bringing in. Um, like top line as as, as a gross booking value. Okay. Some interesting things there. Uh, yachts aren’t short term rentals also. Right? Uh, you know, if you can fit it in, uh, then fit it in. There are some, there are some companies in, in, uh, in and around like Mexico that do some like yacht rentals as well, which, uh.

It can be a pretty, pretty good business as well. Yeah, for sure. For sure. Well, um, I think a lot of our audience might not be familiar with ebitda, uh, and this multiple valuing system. Can, can you explain for those that maybe don’t know, just kind of what that is and what those multiples actually mean?

Yeah, yeah. EBITDA can definitely be a mouthful, and I feel like my life is, is talking in acronyms. Um, it’s, it’s just an acronym for earnings, which is your, your net income at the bottom of your profit and loss statement before is the B and EBITDA interest, taxes, depreciation, and amortization. So those other, those components may be on your p and l as expenses, and if they are, then we would remove those expenses.

So that would kind of increase your net income for, from those expenses that are removed. Um, and then we go through and so we find an adjusted EBITDA is what we find. So first we would remove those, the IT TDA in ebitda, and then we would go through and remove personal expenses non-recurring. One time maybe you switch from one PMS to another and the new PMS is charging you a $10,000 onboarding fee.

Like that expense would not continue in the future, so we’d be able to remove that specific expense. And, um, and so it’s a collaborative process because we obviously don’t know the business as good as you may, Tim, your own business. So we’ll go through ’em, we’ll make adjustments, some assumptions on them, and then we’ll, we’ll have a discussion with you and say, Hey, here’s, here’s what we see.

Are there any others that we’re missing or any that we, we think are some correct or incorrect? Because what we’re trying to do with the seller is to present. To present a picture to them before any buyer looks at them. And that way a seller can say like, oh wow, this is cool. This is kind of how my, the value of my company today.

Um, and they may say, oh, I’m worth a million dollars today. I really want to get to 3 million. And then we can say, okay, well let’s, let’s work on X, Y, and Z over the next year or two or three years. And then you can get there. Uh, but you, you always, as a seller, you want to know. You want to get a really, have someone, like an advisor hold a mirror up to your business before any buyer looks at you, because they can, they can do, they can find any skeletons or, or red flags, uh, early.

So I guess going back to it, once you kind of get to this adjusted ebitda, then there’s different thresholds of how multiples work to it. A buyer will, they’ll pay a multiple of that adjusted ebitda and essentially, you can think about as. Whatever the multiple is, is the number of years in the future.

They’re paying for your adjusted ebitda. So if they paid, if your adjusted EBITDA was 500,000 and they paid a four multiple, that’d be $2 million. They’re paying four years of that. Um, right. Which, which can be cool and uh, but it is also structured in most cases it’s, this is an ongoing business. Yeah. Most of these business, this is a relationship business.

And so a buyer’s not going to hand you $2 million, cash it close, and then tomorrow you can go down to Jamaica, sipping my ties for the rest of your life. Um, generally they may structure it and pay in this $2 million scenario, they may pay a million or million and a half, cash it close, and then pay the other 500,000 or a million a year later.

And, uh, put like a contingency on there saying like, Hey. If you had 50 properties or a hundred properties under management, there needs to be that many under management a year later, or tie it to like revenue. If you delivered $2 million of revenue to us, there needs to be at least $2 million a year later as well.

Yeah. Yeah. Awesome. Okay. Um, well, so yeah, good idea to work with an advisor, get your numbers in line, um, and basically make the best presentation possible, right? Uh, but even then, there are some requirements many times after the sale where. Maybe, maybe the owner’s staying on, maybe there’s management that’s staying on and, and you know, this is all up for negotiation, right?

Uh, you mentioned a a four X multiple. Uh, I’m curious, I’ve heard a lot of numbers out there recently, and some of them are quite high. So could you, could you give me just a, or give us a, an idea of the range of potential here, maybe from, from the lowest to highest, and then what might make them higher? Yep.

Yep, exactly. So, um, sometimes you will hear, or you will just hear sellers throw out multiples. And sometimes sellers don’t even fully understand what multiple a buyer paid for them. Because a buyer may say, Hey, we’ll pay you a million dollars, but if you stay on for a year and you crush it for that next year we’ll pay you another million dollars or something.

So then a seller will take that 2 million. And then say that was the amount the buyer paid at closing, where it was really actually a million. And then if they, if they do better, yeah. So like there’s, there’s some, there’s some goofiness there, um, for sure. But the, the, the thresholds that we’re seeing right now in the market is if a seller is between 250,700 $50,000 of adjusted ebitda.

Typically a buyer’s gonna pay around a three to five multiple for that. Mm-hmm. So in that, in that case where I said $500,000 for multiple of 2 million, um, and, and some of the reasons why they’ll pay that, why it’s a little bit lower of a multiple is, is typically at this size, the seller may be around 50 properties, maybe 75 properties.

It depends on the quality of the inventory that they’re managing. And the seller is going to be very involved in most cases. They’re gonna have a very small team, if any, um, they’re, the seller’s going to be very, uh, going to have a lot of key man risk there. Like the relationships with the homeowners are probably what the seller, there’s probably not a lot of like, systems and pro and processes built out.

Um, and, and the, the buyer’s gonna need the seller to stay on for a longer period of time to kind of help with the transition. As the company gets bigger in terms of adjusted EBITDA between like 750,000 and a million and a half, this is starting to become more of like an actual business versus like a, a small mom and pop.

And at that size, generally there’s going to be a general manager that’s not the seller. There’s going to be a, a decent team built out, um, and there’s going to be some professional. Uh, benchmarking and measuring and, um, uh, of, of your company. And so once you get to that size, typically five’s gonna be the, going to be the, the floor of what a buyer pay.

And it could go up to like a six and a half, somewhere in that range. 5, 6, 6 and a half multiple. Once you get above a million and a half of ebitda, that’s the, the, the actual tam of these sellers. Very small amount. So there’s around 30,000 property managers in the United States, short term rental managers.

Of that, there’s about 300 that manage 300 or more properties. So there’s about 1% of those manage 300 or more properties. And the average EBITDA per property is around $6,000. So if you do 6,000 times 300, that’s 1.8 million. So there’s only 300 companies in the US that have an EBITDA above 1.8 million.

So at that size, there’s much more buyers than sellers at that size. And so the sellers start to have leverage there. And um, and that’s where the multiples can really get pretty, pretty attractive. And really, like six and a half is going to be your, like, your bottom floor. And it can, it can obviously go up from there.

And, um. While I’m just talking about ebitda, typically, like indirectly with EBITDA as it’s growing means the company is getting more sophisticated and more professional. They have teams built out. They’re, they’re scaled, stuff of that nature. So it’s, it, it’s, it’s not like, oh, let’s just get to this ebitda.

It’s a lot harder to get there unless you’re kind of building this foundation. So tho those are really the, the various buckets there. Um, if a company is less than $250,000 a profit or is like unprofitable, and let’s say they’re at 27 units in Gatlinburg, Tennessee, and, uh, you listen to a TikTok influencer that said it’s, it’s a passive industry and super easy to get into.

You got to 27 units, but you’re just like burnt out. You’re like, get me out of here. Um, in most markets there, there’s willing buyers for your company, but even if you’re unprofitable, typically at that point, they’ll pay around, they’ll look at your commissions that your, that your, uh, units bring in and they’ll pay around like a one and a half multiple of your commissions is, is generally how that looks.

And then it’ll be structured as well. Yeah, so for an unprofitable company, still opportunity to sell. Uh, but basically the more systems in place and the more a buyer coming in knows that things aren’t gonna fall apart when, when. The name changes or maybe the name doesn’t change, you know, that stays, uh, on the backend, but that adds a lot more value.

Um, and in the grand scheme of things, I’m trying to just recap a little bit your, you know, ’cause there’s a lot of good nuggets there, but basically only a few hundred companies in the US that have achieved that, that high scale, at least in terms of property count. Ebitda. Um, so we, we also see an interesting thing happening where companies can roll up together, right?

And, and if one company is, you know, maybe operating 50 units, uh, and their friends also operating 50 units, and maybe if they were to join forces, now they’re at a hundred and they’re starting to get some of these scale. Are you coming across this more and can you tell us a little bit about this idea of, of roll-ups if you have come across it?

Sure, sure. So, um, so historically private equity entered this industry. They really, it, like a small one, entered this industry in 2016, but they really entered this industry in the last like three to four to five years. And so, like the traditional private equity play is a, they buy one brand at a time, maybe, maybe two brands at a time.

And the seller. The private equity group, they do this house of brands play. They keep the brand, the seller may sell all their company, but they roll over a, a portion of the purchase price into equity of, of the actual holding company. And then the private equity group then owns 20 or 30 brands around the us.

And, and then all these sellers have a small ownership of this kind of, uh, holding company. And that’s like, that’s like the, the typical private equity play. And there’s a couple groups in here doing it, doing a good job in, in the industry. Um, about a year ago was when, um, a group called Stakeholders kind of came out and started, started doing their circuit and, and talking to.

Talking to a lot of sellers and really, really saying, Hey, let’s, let’s kind of like accelerate this, this private equity play and let’s, let’s get some of the best names and the brands and, and people to all like, come together at once instead of one acquisition at a time. And let’s, and granted, I’m, I’m speaking a little bit out of turn.

It’s, it’s not my, my company, but from my understanding they’re like, let’s, let’s all kind of come together and join forces. Then, um, we’ll get a private equity company to come and kind of buy us all, or a portion of all of us. And, and that way we’ll have like a collection of the best, best brands around the country.

And, uh, and I think that would, I think they’ve done a, a great job. I have a lot of respect for what they built so far. And I think probably this year it’ll be, it’ll be announced to kind of their partner is, and, and we’ll be, we’ll be pretty cool to see that. Um, they got like, I don’t know, 20 or 30 plus companies to kind of come together all at the same time, which I had never seen in this industry before, which was pretty, pretty exciting.

But kind of falling out from that, over the last six to nine months, we’ve had countless conversations with groups saying, Hey, we want to do something like that, but much smaller scale or like, Hey. I’ve got 50 units, like you said, and my buddy’s got 50 units, like what would it look like for us to just like join forces and for all of that?

I’m like, yeah, that’s awesome. That, that all sounds great. However, you just have to be very thoughtful. If, if you’re gonna say, Hey, I’ve got 50 properties, or I’ve got a hundred properties, my friend’s got a hundred properties, let’s combine in a, a best case scenario in like a bull case. Yeah, one in one can make five.

Like, it, it, it could be great. Um, a couple things you want to just understand is if you’re a hundred percent owner of your company and your colleague’s, a hundred percent owner of their company, you’re now going to become partners and partners in any businesses. Um, I’m married. It’s, it’s similar to being married, but sometimes we’re even more, more involved with, with your, your business partner.

So you wanna, you wanna make sure. Both people have a similar kind of philosophy, philosophy and ethos and culture with, with the companies. You really want to be thoughtful about what is this going to look like going forward? Like, are y’all going to create one brand that both brands are going to roll into?

Are y’all going to keep two separate brands? Is one brand going to kind of eat the other brand? What about the, the staff? How do you communicate this to the homeowners? Um. What are, like, what is the reasoning to do this? Like, are you going to actually be able to save on cost? Will you get some purchasing power with some of the software vendors to where you can negotiate better rates?

Um, and, and so like, it is a great idea. It’s a, it’s a lot harder to execute this kind of like merger type of play. And especially the more groups you get involved, the more hands in the cookie jar, the more complicated it gets. Um. But, uh, what I would say is if, let’s say you’re able to do all of that and, and you’re all agreeing on everything, just because you’ve kind of integrated two companies, it’s not really going to move the needle a ton on day one from a buyer’s perspective.

’cause the buyer is going to say, show me that one-on-one, that you guys are better together than apart. So what I would say is like, once doing it show a 12 months of together that the financials together are better and you’re able to grow more and whatever, uh, other, other KPIs are better together. And if you’re able to show that, then yes, you’re gonna get a, you will get a premium multiple.

You, you will get better and it’ll be, it’ll be a better outcome for everyone. But it’s, it’s, it is harder said than done. But, uh, I love the ideas for people wanting to do it. Yeah, great insight and that, that makes sense. You know, merging two business, two businesses sounds difficult. Merging a third or fourth or a fifth just, just grows in complexity.

Um, so I’m, I’m curious, you know, part of what buyers are looking for is. Stability, right? When they buy a business, uh, to know that they’re not gonna buy it and all the owners are gonna walk away, uh, because now maybe it’s under a new company or brand. Can you tell us a little bit, and I’m not sure how far, how involved you are in after the transaction, but do you have any sort of idea on what like the typical churn rates are when someone does buy a company?

Um, and then also a side note, maybe we can tackle this next, but. You know, us at Sly, we’re really excited about all the technology in the space and the opportunity to run a large portfolio with lower costs by being more efficient with AI and stuff. So I’d love to hear just your, your point on, on both those things.

Yeah. So on the, on the first one, um, we at C two G we don’t do, uh, post merger integration. We don’t do PMI work, uh, post-close. Um, what I would say is like churn post-close, it is very buyer dependent, um, for sure on how, who, who the buyer is. It’s also, it’s also dependent on really the, the, the seller, like where they are in their, in their process as well or, or in their, in their journey.

Um, I would say most. Most companies that we’ve seen recently, this was, this was worse earlier on, five to seven years ago, but I would say recently most of them are, are at 90 plus percent of retention. Um, within the first year. And, um, and then like the win-win is where like, not just looking at retention, but like what the net amount of units is at the end of the year.

So if there’s a net growth of, of, uh, greater than, than what was delivered, then that’s, that’s kind of the win-win there. And so like if we’re working with a seller, we’re, we’re trying to tructure deals that if there. Performance, uh, contingency where the unit count has to be the same, and if it’s lower than the purchase price is reduced by that percentage.

We’ll put in clauses that, like if the seller adds properties post-close, or properties come on post-close, there could re replace properties that may churn. And so with the ultimate goal that like, there’s at least the amount of properties, if not more post-close, and we see that actually in, in many scenarios.

Um, and the, the positive thing is like both parties are aligned. Like the buyer, they’re paying money, they want to buy properties and, and obviously the business, but they, they also want that business to grow in the future. And the seller doesn’t want properties to leave, um, because they’ve had these relationships for so long.

So, so it’s a good thing that both parties want the same outcome. And it’s then like, okay, let’s put our heads together on like how do we actually, uh, strategize to make that outcome happen? Yeah, yeah, that makes sense. And then what was your other question on wa Was it on software AI or something of that nature?

Yeah. Sorry, I threw a bunch of questions there at the same time. But, um, you know, uh, we’re, we’re focused a lot on just becoming as efficient as possible and adopting AI as possible. Uh, and so, uh. You know, the higher someone’s EBITDA is, right? I mean, the AI and technology can translate into a higher net income for a company.

And so do you see some of these buyers coming in, anticipating some savings in terms of operational efficiencies and things like that? Or has that not quite made it into the picture? Yeah. So, um, buyers will generally do this thing called like a value creation, um, throughout due diligence. And some buyers just do it internally and don’t share it with the seller.

Some buyers are collaborative with the seller and they kind of go, go through like, Hey, what is the seller paying for all these, these, uh, various vendors? What will it look like on, on our, uh, with our rates? Uh, what about employees? Where is their? Their overlap. Um, what, what rates are they charging the homeowners?

Are they, um, doing four rates a year? Or how are their DY dynamic pricing going? What is their actual like, um. Other ancillary fees they charge, uh, in addition. And how does that stack up to what we charge? So they’ll, they’ll go through historically, like that’s a, that’s a normal, um, kind of process that buyers are going through.

And like typically, so they’re, they’re immediately looking for what are, what are going to be levers that we can pull day one post-close. And it’s, it’s really, it’s lowering expenses and then it’s increasing revenues is kind of their, their thoughts. The, the like, easy low hanging fruit is typically, uh, the purchasing power for softwares.

So if they’re, if the seller’s on a PMS and they have 50 units, like they’re not gonna have a ton of negotiation with that PMS. But if the buyer has 2000 units with that PMS and they’re adding in another 50, they’re gonna be able to get it at the rate that, that, yeah. That their 2050 units are now on. So, so they’ll, they’ll find those savings immediately.

Um, on the AI side, I still think we are, we are a little early on on that in terms of like, we haven’t seen a ton of buyers discuss like what the AI savings are going to be. Um, I think that like internally with, with us at C two G, like we made a, we made a wholesale switch over to Claude at the end of last year.

And, um, and it, it seems like we’ve seen a pretty, pretty big like, step function in terms of what it can do, um, internally for, for our business. And, and really one of the things that for us is it’s, it’s made us be able to handle, um, much more kind of inflow than we would, would normally have been able to handle with, without having to call it like, hire more, more people.

And so I think, um. I think that’s, uh, that’s only going to kind of expand. And, and I think right now it is, there’s definitely a lot of work being done on like the guest communication side of, of ai. Um, it’s gonna be interesting to see how that kind of flows into, um, revenue management and, um, and just kind of other, other things that can be done.

For sure, for sure. Yeah. I mean, it, it basically is working its way into everything and, you know, our vision in the future is that, you know, one person with a good on the ground team, of course, you know, that’s foundational, but the core operations could be managed with a, with a lot fewer people, uh, inconsistency, you know, um, yeah, the, um, the normal margins in this industry.

Or, uh, or around 20 to 25% like profit margins as a percentage of a company’s, uh, net revenue. So like net revenue would be the, the commissions the company makes plus all their gross ancillary fees. So after the homeowners are paid, their, their, their, their components, um, yeah. And if, if buyers or even sellers, just companies are able to kind of increase those margins incrementally, that’s, that’s just.

Significantly increasing the value of your business. And I think that’ll, that’ll continue and we can all continue to have fun until AI and robots take over the world. Right, right. Um, well, Jacoby, you know, I mean all the insights, uh, I mean, I’m sure you can look pretty quickly at a deal and see a company that’s been run well and, and one that’s not running so well.

Um. Can you give us maybe just some of the top insights, like what could people out there do to, to start making their business a little more profitable today? Or what are some of the things that you find? Yeah, so, um, really I think first off is, is actually having visibility into your, your financial statements.

Just understanding what’s going on. Um, we see so many businesses under a hundred properties. Where the sellers like rarely look at their financial statements, or might be their bookkeeper may provide those like six months late. So they’re literally just like very reactive, just working, working day in and day out on just what’s going on in front of them and not being able to make like database decisions.

Um, so the first thing I always tell tell people is like. Hey, you, you don’t have to be an accountant. You don’t have to be a fi finance guru, but you sure as hell need to have somebody on your team. That is, whether it’s internal or external, it could be, it can be an internal bookkeeper. Uh, you can find a, an external, uh, strong team.

There’s a company called Howard Financial that is absolutely just crushing it right now in the industry. Um, and, and really making sure that you schedule. Every month, uh, a meeting internally to solely go over the numbers for that month. And you want to go as granular as possible so you can quickly find if some, some outlier thing that could be happening.

And so I think, I think really like getting set up there. I mean, we see so many companies that they have one line item for revenue and that’s just like a collection of, I don’t know, commissions. Um. Uh, cleaning fees, booking fees, limited damage waiver, whatever, but you don’t even know what it is. And then they don’t have any cost of those revenues.

They don’t have a cog section, so you can’t see what margins you’re making on these. And then if so, it’s just all thrown into expenses. So you just have no visibility into your actual financials, uh, to see if, like, Hey, does it make sense? I’ve been using this outsource. That this vendor for our limited damage waiver, but like, we’re actually losing money on this, like, doesn’t make sense for me to just bring this in-house and, and see, see how that works.

Um, was it, it like there’s just so much, so much involved with the financial side that I think, I think people, people definitely miss there. Um, one thing I would say is like the, your take rate is an extremely important, important like metric to follow. And the take rate is based on what the guest is paying at booking, whether it’s through Airbnb or through your website.

How much of that dollar amount are you taking to your company’s p and l? And so, um, on average the industry’s take rate is around 35 to 40% of what the, what the guest is booking. And so what I would do is this weekend, and it might take an hour, is go and do some secret shopping in your, on your top three or four competitors.

Go and book, do it on yourself first, but go and book, uh, some, some rentals on their websites for four different, for each season of the year. Go and book it on different unit sizes and then different stay links and see kind of what additional fees they’re charging the guests and whether those fees are static or dynamic, whether they’re percentage fees or flat rate fees.

And then see how that stacks up to what you charge, uh, the guest. And, and something will, something will pop out there. Maybe the market charges a 5% booking fee and you don’t charge anything, or you charge a 2% one. And at that time you can be like, wow, okay. You can either use that to either increase that rate.

Or you can use that as like a marketing, uh, plan to get new homeowners. You can, you can start, start reaching out to homeowners, let ’em know that, hey, our competitors are charging this. We don’t charge this. We are, we’re one flat rate, blah, blah, blah. So I, I think there’s a lot of, a lot of information that can be, can be gleaned from there.

Um, the, the largest expense for a company is going to be going to be the team, the staff. So on average, your team is around 20 to 25% of, of net revenue. And so keeping, keeping track of that, um, is, is super important. So if you’re, if you’re looking and your team’s 50% of net revenue, like you either have to grow into that or, or you’re, you’re overstaffed and, and that, that’s, it’s as simple as that.

Yeah. Yeah, those are some great insights. So first of all, we need to know our numbers, right? If we don’t know our numbers, then, uh, you know, then not much we can do, uh, need to look at our, our staff, a percentage of our costs from, from our team members. And I know that’s harder for smaller managers, right?

Because. They have less properties, they have less commissions coming in. And so that’s what we find, you know, a lot of small property managers is really stressed out ’cause they’re trying to do everything on their own. Um, you, you mentioned a 35 to 40% I believe, take rate. Uh, what percentage of that? So that’s include, that’s all the money coming to the p and l for the property manager, including fees and maybe damage waivers and all those things.

What would you say is the average commission rate that the people you work with are charging? Yeah, good question. So the, the commissions are very market specific, so that’s where, that’s where what’s more important to us is seeing what the actual take rate is. And it’s kind of funny actually because you’ll see in some of the, like mountain markets, their commission rate may be.

25 to 35%, but then they have very little, like ancillary fees they charge. Whereas in like Myrtle Beach, um, their, their commission rate or the outer banks may be 12 to 15%. But they charge a hell of a lot additional ancillary fees. So, so you’re just taking more money from one side or the other? The owner or the guest.

Yeah. Um, and then what we’ve seen in like urban markets, like those, those are younger than the more like leisure destinations. So most of those got built on the back of Airbnb and um, we’ve just seen that those, those are typically lower, um, lower commission rates in some of the more vacation markets. So.

You might see 15% or, or so, like I would just stress to people, if you start getting below 15%, like it’s a, it’s a pretty tough game to, to run a profitable company, even at 15%. Like you gotta get the money from someone, so you’re gonna have to charge additional fees to the guests. Like if you’re just straight 15% commission, you’re not gonna be a profitable company.

Um. Unless you’re, you’re taking on properties that are, that are all doing north of a hundred, a hundred thousand dollars a year. So it’s a, you don’t want to be a nonprofit. It’s, it’s enough work. This is a very operationally intensive business for sure. Well, I know, I know we’re wrapping up on time, uh, already.

Gosh, lots, lots that we could dig into. I mean, you’ve got the inside look at, you know, managers across the nation. So a lot to, a lot to learn from you. Um. What would you say? Just a couple quick questions. Would you say that commissions in general are going down the commission rates that people are charging?

I, I think they have gone down in the, the last couple of years. I think they’re, I think they’re probably. In a relatively stable spot. Um, there, there’s always going to be new comp. The, this industry, like in most states, is pretty easy to start a company. Um, most states are not governed by the real estate commission.

So like, there’s always gonna be new groups coming in, trying to kind of undercut the market or whatever. And then like, they may last for a year and then you realize, oh shit, I can’t run a profitable business at this. So then they, they, they sell and go away. But, um. I, I, I think that 15% is probably going to be the, the, the low watermark there.

Um, it’s, it’s just too challenging after that. I mean, long-term rentals is, is I think like eight to 12%. So, um, uh, yeah. Okay. What’s the fastest sale, uh, you’ve closed from, from start to finish? Oh my goodness. Um. We’ve, we’ve done a couple deals, like less than 30 days. Uh, they were, they were really, really small, really small, um, call it 10 to 25 units.

Our average, um, transaction time from like start to finish is four to six months. Um, our quickest. $20 million deal was, uh, we did one that was, uh, 50, like 57 days from start to finish. Which was, which was pretty, pretty amazing. A lot of it honestly is, is, is on the seller. Like there’s a lot that the buyers ask for and, um, it’s tough ’cause the sellers are trying to run their own business and, and get the information for the buyer.

So a lot of it is just like the sellers are like, Hey, I need, I need a couple weeks to, to gather the info. Yeah. Okay. Some of those pretty quick though. And then, okay. One other quick question. I guess in general, how are the multiples trending? Are they going down? Are they going up? Are they stack? They’re going up.

They’re, they’re, they’re going up. Um, and I’ll try to be quick here. Like, we had the 2021, 2022, just like COVID, froth, craze, every, every, everybody was having the best 12 months of their career. And then, um, and then 20 23, 20 24, everything we kind of got on the backside of the mountain. Everything was just slowly going down year over year metrics and almost every market were down.

It was pretty rough and expenses were, were going up. Um, however, I don’t know what went in the water in 2025. And just like a series of large m and a transactions all happen within like 90 days of each other. And so, uh, a company called Stay Terra entered the market with a large acquisition of Prime vacations.

Um, the largest private equity backed group called awayday, they traded hands to a company called Aries. Um, the largest luxury private equity backed called NOC Turn. They traded hands to a company called Calera Capital. Um, cago took Vac Costa Private and then subsequently, uh, CTG. We helped them sell off, um, the, the vast majority of the, of the markets.

And, um, and then, uh, just two weeks ago, um, town Bank announced that they, they sold their, their vacation rental division to, uh, Alpine for $250 million. And the stakeholders group is probably going to, I, I’m sure we’ll see an announcement at some point this year. So all of those companies, if one of those would’ve happened in one year, that would’ve been big news for the industry.

But like seven things happen in this same year, and the buyers of all of those companies now need to three to five x their investment over the next three to five years. So the buyers of those are now all highly acquisitive. And then in all of those processes, there were tons of people that came in, second, third, fourth, fifth, sixth place, and they did a ton of research in the industry and they just lost out on the bid.

So they’re all now looking for, for their first acquisition. So. I think the next, the next three years are going to be, uh, very right m and a wise. So if, if a company can, can build something relatively scalable and, and have a, a focus on, on having clean financials and, and growing their company, like there’s gonna be a, a line of buyers looking for them.

Awesome. Awesome. Well, as much as I’d love to keep digging into the details, I think that’s a good way to wrap up. Uh, for, for anyone out there that’s interested. There’s a lot of opportunity on the horizon. Things are already happening. You gotta get your finances in place. Uh, take note of what Jacoby said, uh, Jacoby.

Where can people find you and your company if, if this is something they think might make sense for them? Yeah, sure. So our website, c two g advisors.com. Feel free to email me, just my first name, Jacoby at C2 g Advisors. I’m on LinkedIn. We go to most industry conferences. We’d love to, even if you’re not looking to sell, we’d love to still have a chat, talk through.

We love talking shops, so if there’s anything you have questions on, um, if we can’t answer it, we’ll we, we should be able to point you the right direction. Yeah. Awesome. Awesome. Well, thanks so much for coming on. Love to have you on again in the future. Uh, and we’ll talk to you soon. Awesome. Thanks Tim.

​Most STR owners, operators, investors focus a lot on the photos of their property, the design, the amenities, their pricing, hopefully. And their housekeeping connection, but they don’t focus on the housekeeping organization and the actual operation as much as they should. And we all know that you can have the best property in the neighborhood, but if you start getting bad reviews because of cleanliness, well your revenue will certainly drop.

So today we’re diving more into housekeeping, how you can stay organized and the things that you need to consider working with any housekeeper.

Welcome back to the Short-Term Rental Richest podcast. I’m happy you’re here again.

After all these years in the short-term rental industry, one thing remains the biggest predictor of your guest reviews. That is housekeeping and your property’s cleanliness.

Small changes in your cleanliness score or your review score translate into massive differences in your revenue. I’ve gotta say that again. Small changes in your review score because of cleanliness, the number one culprit. They translate into massive changes for your short term rentals, potential and revenue.

We see in markets across the nation that the worst performing property can be earning three times less than the highest performing property with the same size property, the same size amenities, and most of that is attributed to reviews.

Now a lot of you have good housekeepers or you have good help that have the potential of ensuring that you never have bad cleanliness reviews, but you’re maybe lacking some of the organization or you maybe haven’t set the right expectations upfront with your housekeeper.

So we’ve talked about finding housekeepers before. Actually, that’s been a recurring theme throughout the last six years of this podcast because we know just how important it is. If you go back to episode 243. We have some great ways for you to find a housekeeper, but I’ve also got a new one for you because I just found a new housekeeper for one of my personal properties, and I gotta tell you, it didn’t take more than just a few minutes.

So here’s what I did. I went to Perplexity. Perplexity is an AI tool similar to chat GPT, or similar to Claude or Gemini. But it does a really good job at sifting through online websites. And I simply asked, where can I find a housekeeper in Davenport, Florida? That result.

Pulled up a Facebook forum, great place to find housekeepers and referrals. There was already a post there, someone looking for a housekeeper in Davenport, Florida. I simply copied it and reposted it with my contact information, and I got so many leads, I just couldn’t believe it. I actually had to take that post down later in the day.

Instead of include my contact information, , I included a Google form on there with some really important questions that you always need to be asking your housekeepers.

We’ll make sure you have a link to that Google form in the show notes here. But we’ll also be reviewing it in just a few minutes.

I wanna make a case for hiring your own housekeeper versus using a company. Now, this isn’t across the board. This isn’t a hundred percent, but there is a correlation in cleanliness, reviews, working with smaller providers. Versus working with bigger companies. And I’ll give you just one big example. If you are working with a property management company, a large national property management company, they exclusively work with large companies, right?

If it’s not in-house, because they need more staff, they need more backups.

But a couple challenges that come up working with companies is one, if it’s not the same person going back to your property each time, then they don’t really know if some little details are outta place. If the copy. If the coffee table was supposed to be on that side of the couch versus that side of the couch, they don’t have that eye like a individual housekeeper or a small team would have if they’re the one consistently seeing your property, and they also don’t feel as strongly about your property.

When we work with smaller housekeeping companies or individuals, they actually grow a, a sense of ownership with our property, right? They’re there, they’re the ones cleaning it, and they take pride in that.

So if you have a different person going back each time, that level of detail is a lot of times just not there.

The other thing that happens with large companies is that some of their housekeeping team. Maybe it gets overworked. If we think about it. We’ve got, most of our checkouts across the nation are usually on Sundays. Mondays, you know, people staying on the week. And of course, it really depends on the type of property.

If you have a business property, for example, well then it could be all during the week.

But the more units a property manager adds, the more housekeepers they need to add and the more systems they need to have in place to be able to coordinate that. Now we’re gonna talk about some of those systems, and I don’t wanna say that this isn’t doable, but I just want to give you the reality, the the correlation between negative reviews.

And really large housekeeping teams, and I think we can see that pretty easily if we go to tools like Air DNA and we look at some of the nation’s largest property managers, uh, like Evolve Vacation Rentals, or Red Awning, or Vac Casa, what now is Cago, right? They have really bad reviews across the board.

And as we mentioned in the beginning of this episode, the number one culprit for bad review is cleanliness.

So I already made the case for hiring smaller housekeeping teams. Or individuals, of course with the backup, they take more pride in their work, they notice more of those small little details if something is outta place, and that all leads to better reviews and it also leads to a better relationship with that person, right?

You’re in communication with them much more often than you would be a larger housekeeping company that’s got various people coming in and out. And I’m happy to say that one of the very first housekeepers I ever hired over a decade ago, over 11 years ago, is still working with me today. She still helps clean some of my short-term rentals, but she also manages all the other housekeepers for my portfolio in various cities.

And so if you’re working with an individual, you have these sorts of opportunities as well.

So if you don’t have your housekeeper yet, make sure you go back and check out episode 2 43 if you’re in the process of hiring them. Well, I promised I would give you my questions off the Google form, so here we go. This is certainly not a hundred percent comprehensive. I didn’t wanna scare people off by having too many questions, but these are the most important ones.

The first one is their preferred method of contact. So sometimes that’s on WhatsApp. A lot of times it’s just normal text message. Phone call, whatever it happens to be. Our team uses Slack on the backend. You want to ask them how big their team is, or is it just them? Are they just an individual? Do they have backup?

Do they allow for same day turnovers? How far do they live from your property? And now I’m not asking this question. To find out how close they are in case there’s an emergency they need to run back, although that’s helpful. But the idea is we have things organized beforehand, so those situations don’t arise. I’m asking this question because I wanna know how realistic it is for a housekeeper to want to come to my property every day if they’re 45 minutes away, but then there’s traffic sometimes and it takes ’em more than an hour to get to my property.

Well, they’re less likely to want to continue working for me than someone down the street, right? So ideally they don’t live too far away. And also, just a side note, most housekeeping salaries are not like the upper echelon. You know, they’re not high income earners, so sometimes they might have car troubles and repairs are really costly. So the closer they are to the property, the less they have to spend on gas, uh, and the more likely it is that they’ll stay with you for a really long time.

Do they include cleaning supplies in their charge? This one is of course, negotiable. If they do, what do they include? Sometimes cleaning companies include everything. Sometimes they include nothing. Do you have a problem cleaning up after pets? So this is important.

Not all housekeepers like to clean up after pets. Uh, if they don’t have a problem, how much more would they be expecting to charge? Now it’s my recommendation, especially if you have a lot of housekeeping options. Maybe you used one of the methods. That we mentioned in the prior episode, or by searching online these days, if you have a lot of options, you can know pretty quickly what the going rates are in your market, and I think it’s better that you set these rates.

You know, if your rate to clean your house was $200 and they say they’re okay with pets, then you say, great, we’ll be happy to pay you an extra $30 per visit. Keep in mind, we don’t allow more than two dogs.

We don’t allow cats and uh, they’re not over this certain weight size. So the more you can offer up front, the better. But of course, it is a little bit of a negotiation.

You of course need to know how much they’re gonna charge for your size of property,

and you’ll want to know how much notice they need in order to clean your property. If you’re someone that gets really last minute bookings and they’re not currently on the schedule, you don’t wanna block your calendar. Because you’re waiting for housekeeping. And so if this person is not available with short notice, then you need to have multiple options and you need to let them know that upfront.

If someone’s not available, then you’re gonna go to someone else, but you would prefer to build a long lasting relationship and work primarily just with them.

Okay. So with a housekeeper in place and with some good expectations in place, it’s really important that we manage the turnover properly. And now there’s a lot of tools out there these days that help you create checklists. There’s one called Turno that a lot of people have used. We personally use breezeway.

We create a custom checklist for every property. We require photos before and after,

and then we also take it a step further. We let them know that if a prior guest mentioned something during their stay or after their stay, or it showed up in the review, we’re gonna grab it from any of those resources and we’re gonna include that item in their next checklist. And sometimes this just pops up in the private feedback, right?

Maybe the guest checked out and they said, Hey. Love the property, but you might want to check under that guest bedroom one more time. There’s a couple little dust bunnies there. Well, we’re gonna transfer that over to our housekeepers so that they know the next time they need to double check on that. And again, this goes back to working with smaller companies or individuals versus larger companies.

Uh, of course this is helpful for anyone, but if it’s a smaller individual, they’re gonna take a little bit more pride in that and they’re not going to forget those dust bunnies again. The other thing that we do is we let them know upfront that we’re really transparent with all of the reviews, both good and bad.

So it’s always nice to receive positive feedback, right? We want to show them that we want to send it over to ’em and we do. So if there’s something that mentioned cleanliness specifically, we’re gonna send it over. Uh, and that is a feel good opportunity, but we’re also gonna send the negative feedback, which is really crucial.

And I would say if you have a housekeeper that has the same issue three times, then you need to start looking for another housekeeper.

Of course, it depends on how long they’ve been working with you, right? Uh, if there were three times back to back, that’s much different than three times over the course of three years, right?

But the more often these issues are happening, even with all the feedback, then the quicker you need to be looking for a new team member.

Remember, poor cleanliness is the number one culprit for a bad guest review, and you cannot afford to have negative reviews back to back because of cleanliness. It will lead to a massive loss in your revenue, and it could even lead to you needing to redo your listings entirely and start from scratch.

So make sure to set these expectations up front. I know a lot of housekeepers don’t like technology, but the reality is it’s not hard to use these applications. If we go back to my manager that’s been with me for over a decade, she was very resistant to using breezeway, which we currently.

But I would tell you that now she could not live without it. It shows them the schedule very cleanly. It keeps everything organized, and it really only takes a few minutes for them to understand how to use it. Uh, breezeway also has different languages, you know, so if you’re working with someone that speaks Spanish.

Then you could do that as well. So highly recommend using a tool like that. If you don’t want to handle any of this, well our team at Cosley would be happy to do it for you. We already have all these processes in place.

You can reach out to us@strriches.com. There’s a little partner with us Button, and everyone on the team at Corley would love to partner with you.

Okay, just a few more expectations. So you’ve already negotiated your rate with your housekeeper. You’ve included other potential rates for a pet, for example. Or maybe if the property is really dirty, then you pay them an extra amount. But I would leave those to a case by case basis because the reality is sometimes guests leave the property really clean, uh, and then sometimes they’re not so clean.

So it really does average out. In the middle, right? And you don’t wanna set the expectation up front that you’re gonna be paying more for every little thing.

Another thing in regards to payment is the actual time timing of your payment. So how often are you going to pay your housekeeper? How are you going to pay them? There’s lots of easy a CH transfer options available with online banks today. We use a bank called Mercury. There’s another one set up for real estate called Base Lane.

If you’re using Turno, well then they’ve got that built into their system. They do charge a little bit more for that, and turnout does require that you’re only working with housekeepers in their network. Right? And so it can be a little bit more expensive, but it can be a good option as well.

So how often are you paying them? I personally pay all of my housekeepers every other Friday

how are the supplies handled on the property? If you’re responsible for that, do you have a locked cabinet? That’s what I would suggest. They sell these little digital door locks now that just replace the knob. It’s not like a deadbolt, like the sage lock, but it has a little code right on the doorknob that you can easily set for your housekeeper to get in and out.

That way, no one needs to hold any keys or potentially lose keys. Another option these days is Amazon and Amazon ships really quickly. Now, depending on where you’re at, you could either ship directly to the property, have it ready when your housekeeper shows up, or it’s usually a little easier just to send to the housekeeper in advance and they bring it to the property for you.

Another benefit to working with smaller teams or an individual is that they can keep an eye a lot of times on the little maintenance. So maybe that’s just changing light bulbs, for example, or changing batteries in your door lock.

A lot of times they also have a preferred maintenance person that they like working with, or maybe their husband or maybe someone in their network is a handyman and they can do some of that communication for you.

So those are my suggestions for now. I hope that gave you some insight, and I hope that helps you out a little bit. I can’t stress enough the importance of having good reviews because it really affects your revenue. And again, the number one culprit for not having a good review is bad housekeeping or poor cleanliness,

and there’s multiple things that lead to that, right? It’s not just the housekeeper, but it’s also the organization and the expectations that you’ve set up front.

Your housekeeping team isn’t just cleaning. They’re protecting your reputation. They’re growing your revenue, and they’re helping you scale.

So take some action today. Audit your cleaning process and decide whether a direct hire housekeeper could be the best thing you do for your short-term rental this year.

Until next time, I hope you have a fab this week.

I just got back from the Level Up Your listing summit in Phoenix, Arizona. Some of the brightest minds in our short term rental industry space, some people doing exceptionally well. A lot of common themes throughout the week.

In this episode, I’m unpacking everything. The boldest strategies, the biggest themes, and the one theme in particular that kept coming up no matter which workshop I went into are which person I talked. In between sessions,

let’s jump into what people are actually doing at the highest level. Quick tips for you and your short-term rental portfolio. Let’s get into it.

The Level Up. Your listing is hosted by Natalie and her partner, Tatiana. Between them, they’ve got a lot of experience and different experience. One of them is a designer. One of them is an. Operator, an investor raising funds and operating some really successful short-term rentals. If you missed my episode with Natalie, you can go to her podcast, which is the No Vacancy podcast.

It was episode 1 76. There we talk about Corley, our company, and all of the things that we’re doing to operate are over 230 properties now in over 40 cities.

And if you miss the episode where I interviewed her, well, you can go back to episode 3 28 on the short-term Rental richest podcast, and you can hear more about the properties that they’re acquiring for three to 400,000 that earn annually $150,000. Make sure you check it out.

So between Tatiana and Natalie, they have an amazing following. They attracted a lot of really great speakers and sponsors and just attendance in general. There were over 300 people actively working in the industry, and as always, there’s lots of little good conversations that come up even outside the session.

So we’re gonna break all those down today.

This conference was set up a little bit differently than most the ones I attend. It was very designed forward and we know how important design is in our short-term. Rentals just happens that one of the hosts is actually a designer, so there were lots of presentations on the way people are currently designing today.

The outcomes that they’re getting with their short term rentals.

But let’s take a step back first and just talk about some of the big themes in the industry today. We’ve talked about ’em on the show before, but every time I go to a conference, it just cements them in and makes them more.

A lot of people out there today are earning less with their short-term rentals than they were a couple years ago.

There’s, of course, a lot of reasons for this. There’s way more supply than there has ever been, and competition is higher than it’s ever been. At the same time, guests expectations are higher than they’ve ever been.

But nonetheless, there are still operators that are doing very, very well owners and investors that consistently exceed the market. In fact, if we look at the numbers for any given market, there’s usually up to or even more, a 300% difference between the bottom earning property and the top earning property.

And I’m not just talking about a small, one bedroom versus a five bedroom. I’m talking about equal properties, competitive properties in the same style, same space that are performing drastically different than the others.

So that’s a major theme. There’s a lot of question marks with you out there just in terms of revenue management. We’re gonna get into that a little bit, but the reality is people are searching for ways to earn more with their properties, and that’s led a lot of people into creating. Properties that really are the destination instead of having a property that’s already in a destination.

And a lot of that requires some really good design helping you stand out. A lot of people have also taken it a few steps further and actually gone into the development arena where they’re building boutique resorts, Airbnb, resorts, glamping, you name it. It’s very trendy right now. Uh, and I would say that you gotta be careful with that because there’s just like a lot of people added short term rentals.

Well, there’s a lot of people adding these boutique type resorts, but they can be a really good opportunity.

And one of the opportunities that they have more so than sort of your typical vacation rental is they have more opportunity for branding because they are unique. And if you can build your brand, which again is one of the industry’s leading topics right now, how do we get more direct bookings and go away from Airbnb or VRBO and bring everything onto R Turf. It’s a, it’s a major, major theme today, and that’s one of the things that these boutique type experience properties have an upper hand on.

Okay, so we’re gonna jump into more depth in each of those topics, but before we do, I want to talk about how to find the best opportunities out there.

For those of you who haven’t quite taken the leap and jumped into your first short term rental, well, I’ve got a five step framework to help you get a little bit more clarity on that, and this was put together by Matt Sanderson, who runs STR iq. I’m excited to have him on an upcoming podcast in the near future, but what they do is basically break down all of your short-term rental options across the nation.

And help you identify which ones could potentially cash flow the most. Now, you don’t have to use their software. There’s lots of data sources out there, but theirs is specifically designed to help you uncover that property. But before you can even use one of these tools, you really need some clarity in your mind.

So five quick steps for you to help you find your next property or to find your first one. The first one is you need to ask yourself whether this is a hundred percent investment or if there’s going to be a personal. Component to it. Do you plan at staying at the property? Well, if you do, then that changes things drastically.

If it’s just going to be an investment, then really it comes down to the numbers, right? We look at all the numbers, we analyze them, and the numbers tell us where the best returns will be.

So number two, you need to define what Matt would call your buy box. There’s a few elements that go into this. One would be your cash on cash return. There are some markets that the purchase price is simply much too high to have a cash on cash return. The other would be your budget.

How much can you actually spend on this property? How much will you need to invest in the property to get it ready as a short-term rental?

A third element would be how far away are you comfortable operating this property? If you’ve been tuning in this show for a while, then hopefully that’s not something that discourages you. As you know, our team manages over 220 properties in over 40 cities and in multiple countries, and we’ve been doing it.

For years and years. So I hope this show has helped provide some of those tips for you to give you the confidence.

If you have been tuning in for a while and you haven’t yet left us a review on the podcast or a like or a subscribe on YouTube, if you’re finding the content helpful. Well, that really goes a long way, and I would really appreciate it.

So step number three. Hmm. Step number three, we need to verify with comps. And now we don’t want to just look at what the most potential in the market is, right? We need to be realistic. So the best way to do that is to pull comps, not just at the top tier, what we call like the 90th percentile. The properties are running better than all the others, but also at the 75th, and then the 50th percentile.

And the 50th percentile would be your average, right? If you had a hundred properties in the market. And you average out all their annual revenues, 50 percent’s gonna land you right in the middle.

Number four, you need to run the pro forma. If you haven’t heard this term before, it’s basically an analysis of the property and that accounts for everything, right? That accounts for what your mortgage will be, what your property taxes are, your insurance, your housekeeping fee, how often you expect to have turnover, your supplies, your utilities, all of the normal expenses and income that go into your short-term rental.

We’ve talked about this quite a few times. In fact, we have an episode specifically on proformas.

If you go all the way back to episode number 60 a long time ago, I know we talked about proformas and these types of analysis. You can also find a lot of helpful information on our website, attr riches.com.

So after you’ve run your analysis, the last step is to execute on the property, right? But we want to do this with confidence and one way to be more confident about a purchase is to talk with trusted advisors and talk with local professionals. So this includes your real estate broker.

This includes people in the area, property managers.

Your lenders, you need to know that, first of all, you’re able to close on the property, so always a good idea to talk to your lenders beforehand,

and I highly suggest that you find a broker that has some experience with the investment side of things versus a traditional long term. Versus a residential only broker.

If you wanna streamline a lot of that process, well you can head over to STR iq. They’ve got a lot of those steps in place for you.

All right. Let’s get into one of the biggest themes, biggest takeaways from the conference, and that was on design. There were probably, gosh, I don’t know, 15 different designers or companies. The whole thing was sponsored by Wayfair. If you haven’t considered Wayfair before for some of your furniture, I just furnished a property recently and we certainly got a lot of things from Wayfair.

So check that out. But before you go into designing your property, you really need to understand your avatar, right? Who’s staying at your property?

Designing for multi-generational families is much different than designing an inner urban city apartment for a business traveler.

You want to focus?

Here’s a few practical tips. If you’re designing your property or if you’re in the furnishing stage, focus on things that actually get used and not so much decor and things that are gonna get broken or maybe get stolen.

Anytime you’re purchasing something, keep in mind is this product going to perform well? So think the bed, the couch chairs, things get used regularly. But also, is this product or is this furniture going to photograph? Well, we know our photographs are really one of the most important pieces of getting reservations, and so it’s a great idea to know in advance what your top five or your heading photos are going to be.

These are the first photos that show up on Airbnb and all the listing sites and really put a little bit more money into what goes into the design for those photos.

Another practical tip, try not to really mix designs. So having an industrial with farmhouse or modern

Try to keep your colors somewhat consistent, maybe focus on three main colors. Of course you can add in accent walls and things like that, but if you’re walking into different rooms and the colors aren’t part of the same theme, then it just seems, it feels a little bit chaotic.

Another practical tip, if you’re going to spend more, spend more on your master bedroom, because we gotta think who’s booking these properties most of the time. Usually the parents, usually the person staying in the master bedroom, right? So make sure your linens are better there. Make sure that it’s more comfortable and that will lead to better reviews.

Another practical tip. I’ve said this a hundred times on the show before, but use white linens. Guests know that they’re clean, you can bleach them. There’s reason most all the hotels in the world are using white linens, and so should we.

Now those are some practical tips for design, but a lot of people at the conference were actually creating experiences with their properties. Versus just furnishing them. And now you gotta be careful with this because your budgets can go up extremely high. You gotta do your due diligence. Uh, and I would say this gets a little riskier.

If you guys have been tuning into the industry shows for a while than you’ve undoubtedly seen Rob Built,

he has one of the largest YouTube channels in the industry. I was fortunate to go to one of the houses that they designed recently in Scottsdale. After the conference, it was a bit of like a house party. It actually reminded me of like my high school days, but they had designed every corner of this property.

Bright walls, an amazing backyard setup. Of course, they did this knowing who their guest avatar is, but these things are not cheap. Right.

So even with an amazing design and truly knowing our guest avatar. There’s some foundational pieces that are gonna help us earn more money with our properties, right? And so let’s get into revenue management. The first thing is you have to set those expectations perfectly, and you have to have a good guest experience, which leads to good guest reviews, so you can continue to have visibility.

But with those things in place, it really becomes a story of pacing. How are you doing against the market? Are you pacing ahead or are you booking ahead of the market? Are you booking after them?

If you’re using a tool like Price Labs or Wheelhouse, then this is data that’s readily available. Of course, you need to be monitoring it closely and you need to be looking at not just this month or next month, but really your whole booking window as far out as you need to go, where people are actively making reservations.

Now if you’re booking up equally with the rest of your market and you’re in a market with lots of data, well

your historic bookings can help act as a guide, but they certainly don’t tell the future, right? We know a lot of markets have seen a lot, a big increase in supply. So the ideal thing is to have a a range in your pacing.

For example, if you’re 5% behind the market or you’re 5% ahead of the market, maybe that’s the range that you look at to decide if you need to adjust your prices or not.

I know this gets a little complicated, and again, we’ve done a lot of episodes on revenue management in the past. If you’re looking for help with your revenue management and all other aspects of your short term rental, well our team would be happy to help you out. You can head to st riches.com.

There’s a partner with US Button. I’d love to jump on a call with you personally, talk about your property and see if it makes a good fit.

All right. Moving on to branding. I know this has been a really trendy topic in the industry lately. Most all of the PMS programs out there today are offering direct booking websites, and they’re also improving them at the same time because people are trying to move away from the heavy commissions of Airbnb and booking.com, the 15 plus percent that you have to pay each time someone makes a reservation.

But getting direct bookings isn’t that simple. The more unique your property is, the easier it should be, but there’s still a strategy to it.

So I’m just gonna run through my notes. This was a presentation done by Ben Wolf who was getting amazing results with his short-term rentals. A lot of them were set up very unique properties again, so they lend themselves a little bit better to social media and capturing demand. His big point was that our direct booking engines are for capturing demand, but social media is actually what creates it. So of course you can do that across Instagram, Facebook, YouTube. There’s lots of avenues today,

but it’s not something that happens overnight, and you do need to put in a lot of effort.

You’re going to need to experiment a lot. And there’s lots of other YouTube channels out there that talk about social media marketing.

And it can get really detailed, right? Identifying your conversion rates, how many people are visiting your pages, how many people are going to your direct booking website, seeing it. If they’re not booking, why are they not booking? So all this is is pretty similar to the way it is on Airbnb, right? If you pull up your Airbnb listing, you can see that there are views.

You can see how many people viewed that page. You can see how many people clicked on it. You can see how many people actually converted. And so when we take that off Airbnb, and we do that on our own, there’s a lot that goes into that. Again, the more social media you have, the better the content. The higher the chances, you’ll drive more traffic to your website.

And then once you’ve figured that out, depending on your property, you can go as far as creating paid ads. If you have a very high priced a DR or average daily rate with your property, and you’ve figured out some of the social media marketing to drive traffic to your website, well then you can calculate pretty easily.

What your paid ad spend is returning.

So there’s certainly a lot that goes into this. This is something our company is exploring as well, and as we get more deep in the weeds, we’ll surely be back here with more tips for you.

One last little quick section for any of you out there that aren’t in a great position with your short-term rental, another opportunity.

This is actually one we talked about way back on episode 257 and that’s pad split. If you’re in an area that has a ton of competition, you don’t have a way to stand out, or you’ve identified that you can’t invest more into the property and expect to earn a lot more, maybe by creating a really unique experience, or maybe by investing in social media or investing in new photos or whatever it happens to be.

Well, you could look at pad split where you still have your furnished property. Larger homes are gonna do better, six to eight bedrooms.

But this is a way to have midterm reservations. I think their average guest or midterm tenant is staying for six months plus buy the room. Right? Earn more than you would as a long-term rental, and potentially more than your short-term rental is earning right now.

So that’s a wrap for now. I hope this gave you some insight into where the market’s at. Really today. We’ve talked about these things before, but it is the reality. People are. Investing in design. They’re investing in unique experiences. They’re investing in social media marketing to drive more direct bookings and more demand, and they’re really honing in on their revenue management.

Until next time, I hope you have a fabulous week.

Welcome back to the Short Term Rental Riches podcast. I’m happy you’re here again. One of the most important things that we all look for investing in real estate is actually making money. But I think a lot of us truly understand what our profit margins are and how much is left at the end of the day.

So I’m really excited to have our guest on today because he knows a lot about this. David Richter, and he wrote Profit First for real estate investing. So we’re gonna dig all into that. Welcome to the show, David. Thanks, Tim. Thanks for having me. Yeah, great to have you here. And, um, you know, there’s, we focus a lot on this show and with short-term rentals.

Mm-hmm. Um, but also traditional real estate. And I think when we get to the short-term rental side, there’s even more going on, you know? Oh yeah. When you have your traditional real estate, you’ve got your utilities, your property tax, uh, things like that. But with short term rentals, there’s all these other little expenses and, and I think it really.

Makes things fuzzy for a lot of people. And I, I don’t think a lot of our, our audience and a lot of people that I meet out at the conferences actually really know how much money they’re making at the end of the day, which is the most important piece. So why don’t you tell us, uh, about your journey and, and your book, uh, and let’s dig into the details.

So I would say that in the single family space, if there’s an exit strategy, I’ve probably been a part of it. Because in my early twenties I got linked up with a real estate company that we grew to about 25 residential deals a month. So we were flipping wholesaling. We had some turnkeys, we did rentals, we did lease options, so we did lots of stuff in that company in my early twenties.

So I got a huge just real estate education there because I was there for five years. I got to really learn how to they grew and how they scaled, but that’s where my eyes were open too. That. Even though we were doing 25 deals a month at our highest point, we were spending about 26 worth of deals out the door.

And it’s like, what are we doing here? So that really opened my eyes even to like, it doesn’t matter that we’re doing all these deals, if we’re not keeping anything at the end of the day, then I was going to masterminds and events. And once we got people one-on-one and not the people on the stage, but like one-on-one, they tell us the same stories.

Like, I don’t know where all my money’s going. I’m like, yeah, we’re doing lots of deals, but where’s all the money? Then I worked with another guy after that stint with that company that had about one deal a month and was in the same position. But that guy actually had about 19 short-term rentals at the time as well too.

But he was still chasing deals and chasing the money and didn’t know he, I’ll never forget one of the things he said to me. He said, I really don’t know. Where my money is. He’s like, I feel like I should have more in the account. But he didn’t have that clarity like you were talking about. And a lot of people just don’t understand when the business finances, especially if you start to do more than one property, and especially if you’re doing more than one property at a time.

Like if you’ve got multiple projects, plus you might have some in service, plus you might have, you know, things just going on six ways from Sunday. Especially like you said, in the short term world, I feel like. It’s there. It just happened so quickly and it’s so active. So that just really did it opened my eyes completely.

That doesn’t matter if you’re doing 25 deals a month, one deal a month, if you’ve got a small portfolio, if you’ve got a large portfolio, that a lot of people just struggle with that clarity, and a lot of people also struggle with financial freedom. Which is why we get into real estate or business or entrepreneur, you know, if you come into that entrepreneur, because it really doesn’t matter how many deals you do, it matters what you do with the money that determines the financial freedom.

So that really. Really set me on this path that I’m on now. I own a fractional CFO company and I wrote, like you said, the book Profit First for Real Estate Investing because I saw this as an epidemic. Like it doesn’t matter where you are on this journey, if you don’t know some of the rules of money and like that you’re actually playing the money game and not.

Date, then it’s like, we gotta teach these foundational pieces. That’s what drove me to Profit First in starting this business and everything. So that’s what we’re doing now. We work with about a hundred people on a monthly basis in the real estate world. So we’ve grown quite a bit over the last few years.

But ’cause a lot of people have just, they quietly raised their hand like, yes, I need the help. I’m, you know, I have no idea what’s going on with the money. Uh, so that’s just a brief overview of from the early real estate days to now. Yeah. And that’s, that’s, that’s the reality. Um. The more, the more you got going on, the more complicated it gets too.

So. Exactly. Um, what would you say, you know, I mean, where, where’s the starting place for someone out there? Yeah. If they’re like, Hey, I’ve got, you know, five, 10 short term rentals and, and I am the exact person David just mentioned, I feel like I should have more money and I have no idea where it’s going.

So I would tell anyone if you’re listening to this, the starting place is the same no matter what. Especially if you have nothing in place currently. Like if a dollar comes into your business and you have one big black hole bank account where that dollar comes in and it gets sucked out again, never to be seen and that swirling vortex of doom out there, I would say profit first.

Is a cashflow management system. So the book is called Profit First because a lot of businesses end up putting their profit last. They say, let me pay everyone else and their mother and maybe we’ll have something someday or maybe at the end of the year, or maybe I could take a draw next month. You know, they don’t have consistent money systems in place, but Tim, a lot of other books.

Have called that out like Rich Dad, poor Dad, like pay yourself first. He says that what about a thousand times in that book and the Richest Man in Babylon and just timeless books about money and the management of money. Tell the the listener, or the reader like you should be taking a portion of that first to be able to pay yourself and make sure you’re healthy.

Make sure the business is healthy, especially if you’re running a for-profit business. So I would tell everyone to start the same. This. What I like about Profit First is to, I think it took it a step further than any of those other books had before because it gave a system. It didn’t just say, you should pay yourself first and stop there.

It’s like, okay, here’s how. How do I start this? Where do I start? What do I do in order to get this magical profit into my pocket? You know, when I feel like all the money’s going six ways from Sunday. So Profit First is built on the envelope method. So that’s been around since the dawn of time, basically, where there’s been intentionality when you get something in, you’re intentional with those dollars.

In recent years, probably the last, I don’t know, 50 years, 60 years, it’s been very popular for the envelope method. Dave Ramsey made it popular probably within the last 20, 25 years in the personal finance space to put little envelopes and put all your expenses in there and name all the expenses. So it could be your, you know, your groceries, the gas, utilities, all that stuff.

There’s money that goes in there every month, and you’re very intentional with those dollars versus like it all comes in and it just all goes out and you have no idea what’s happening in business. I would set up some physical business checking accounts. The very first account, now it’s the profit first system.

So there’s five foundational accounts, but I would have you just start with one. If you’re like, what’s a good starting point? Because this is something anyone can do from this podcast. Like if you wanna learn more, I’ve got more content. I could go deeper and go through all the entire system. But if you’re gonna start somewhere, especially if you’re feeling like, oh my gosh, where is that money?

How do I get a handle on this? How do I put it in my pocket? I would set up one account. Since it’s the Profit First system, you would think I would say a profit account, but I actually call the very first account you should open up the owner’s pay account or the Escape the Rat Race account. It’s there to pay yourself consistently from what’s coming into your business.

Because if you’re not doing that. Probably a lot of other things in your life are affected. Like if you are feeling constantly stressed that you don’t have money or that you don’t have some regular consistent income, even in an inconsistent business, then you’re probably not gonna be making the best decisions for yourself, for your family, for the business if you don’t pay yourself first.

So open up literally a pay yourself first account. We call it the owner’s comp account because it’s the owner’s compensation. So for every dollar. Take a little bit from it. So if you have five to 10, just what you said, Tim, like if that’s, mm-hmm. If that’s who’s listening right now, if you have five to 10 properties, you might say, well, I can’t pay myself what I need from these five to 10, or like, I can’t, where do I start?

How much do I pay myself? I would start with what can you physically do that won’t take the business? You know, like even whether it’s a certain dollar amount or a certain percentage. In the book, we give target percentages even for, for buy and hold properties. Like if you’re this size of business and you’re making this much an income, this is how much you should put in different accounts.

But if you’re just starting out, I tell people, do what you can, but start with at least 1%. Like if you don’t have profit as a habit, it might be forcing yourself to do something you haven’t been doing. And that you might have some bad habits with your money currently, like dollars come in and they all go back out.

So I tell people, start with what you can do. If it’s as little as 1% great, if it’s as great as 50%, and you could take that much from the business because you could start to pay yourself because you’re trying to exit a W2 job. Like this is where I want you to at least have that guidance set up. One account, every dollar that comes in, you put money into that other account and you start to pay yourself consistently.

That’s how you can start this whole thing. So the, the, our industry, the short term rental industry has gotten pretty tough, uh, over the last few years. Yeah. You know, it has like millions of new rentals have entered and more supplies pushed, uh, prices down. And so I know there’s a lot of people out there just saying, David, I.

I can’t pay myself like I’m underwater, you know? Or I, I think I am again. Yeah. Like, maybe they don’t actually know, but I mean, what would you say to those people that are, uh, in that position? Those people, when they come to me, I think they’re trying to battle against themselves. Like, I can’t physically do this.

I always ask them. If you don’t have profit, don’t you think you have a system that should now help you to engineer that profit? Like are you, I usually lead with a question like, are you sick of being where you are? Like, are you sick of being underwater and not having the money that you want? Well, then we have to put good systems and habits in place so that way we don’t end up with the same result.

If you keep, what’s that right? The definition of insanity, doing the same thing over and over again and expecting a different result. And a lot of people don’t understand that. It’s really not the deal flow and it’s really not. I mean, obviously you have to have deals and you have to have properties, and you have to have income.

It’s less about the amount and more about what you do with it. So that’s what I tell people. If you’re not comfortable with where you are now, then let’s put some systems in place. And if you’re saying, well, I can’t do the recommended percentages, that’s why I say start with 1%. Like if you’re living off a hundred percent now.

Can you live off of 99? And if you are upside down, that’s where we have to force ourselves to take a look, to say, okay, if I really, if I’m living on above a hundred percent and you’re shoveling money into your business, do you really have a business, number one? And number two, is there. Do we have to stop the bleeding somehow?

One way is to set up a system like this that it’s no more guesswork. Like either you are living off a hundred percent or you’re living off 150% or whatever, and you’re shoveling your own money in constantly, and this just helps you get that clarity of how much can I put into this other account and take out?

If I can’t do anything, well then I’ve gotta re, I’ve gotta reconfigure things. Whether it’s taking the short term to long term or a midterm, or selling, maybe you have a stinker property. You thought was great on paper, but then now you’re actually in the business and you have the competition. Maybe you’re a couple years into it, it’s like maybe it’s not doing so well for you.

Or maybe you do refinance it if you have any equity, so that way you don’t get the tax hit and you do a different exit strategy at that point. But this is where it needs to give you that clarity. And a lot of people just don’t have that, Tim. So that’s where I would tell people. This is that system that will help you make better decisions in your business.

I don’t know if you’ve ever heard this one, but I was at a mastermind one time and the guy stood up there and he said, if you’re constantly fighting fires in your business, you’re the arsonist. And he said that, and I was like, oh my gosh, that that hits home. Because if you’re constantly running outta money or you’re constantly upside down, we need to do fire prevention versus, you know, like where we’re actively fighting the fires.

And that’s what this system does. It helps you to move from a fire. Fighter to a fire preventer, more like the fire marshal versus the frontline firefighter in your own business because you put one out usually and then another one sprains up and you put one out over there and it s springs up. Well, if the root causes, you have a leak at the foundation and like there’s gas lines and they just keep, you know, the flames keep popping up.

Mm-hmm. Well then we gotta take care of that. And that’s what I believe Tim, this system helps to solve is a lot of those root issues because you always follow the money. Follow the money. Like, okay, if we’re not making enough, we gotta do something different. But all, like you had mentioned before too, a lot of people just don’t have that clarity to know if they’re upside down or not.

Yeah. Yeah. Great points and I love it. You know, start starting with the profit. Um, the good news with our industry, you know, on one side it is complex because there’s way other, you know Yeah. Much more types of expenses, but there’s also much more types of income. Yes. And so there usually is a lot of opportunity for basically everyone out there to really find some of those leaks and move some things around to.

To, to create more profit, you know, whether it’s reconsidering how they’re managing the property, uh, maybe they bring it in-house. Yeah. You know, maybe they’re, they make some changes with their, um, their housekeeping or their supplies or, you know, they work on their, their revenue management strategies. So, okay.

So starting with profit first. Um. I love that. W what would be like the next step? Someone’s like, okay, I, I took a look. I’ve got this account set up and I’m putting 5% in each month. Where, where do I go from here? Well, first of all, you’re building great habits, so I would just commend you. ’cause a lot of people, you know, just they have never taken that step before.

I would also say another key thing you could do immediately that might put money in your pocket that you’re constantly shoveling out the door and you don’t even know it is doing a very simple exercise. To go over everything that’s going out the door. I call it the PR and U exercise from Profit First.

I think it’s in my book as well too, where you mark, you just print out your expenses for like the last two or three months in Airbnb or like short-term rentals or everything that’s going on there. That might be a lot. So like it might only be one to two months that you print out, but you mark every single thing that’s going out the door.

Is it p, R or U? Is it profitable? Like is this something that’s actually either making me money or saving me time? Would be replaceable. Like you had said, Tim, this might be in-house management versus external management. Like what if I replace that? What would that replacement cost be and what would the savings be, and what would the time investment be?

So it’d be like, okay, if I have these things that I’m purchasing, what if I replaced them? How much could I either save or save my trouble? And then you is unnecessary. So you would be like, why am I paying for this? Or the subscriptions that you never really use, or those types of things, or. This is if you start to get a bigger team.

That, you know, you might have someone that is a good culture fit or something like that, but then they don’t, they’re not producing and that’s really hard because usually the two biggest expenses in a business is marketing and payroll. And that’s where looking at your returns on ad and spend or however you’re getting, you know, the leads in the door.

Is a big one. And the other one is, okay, what are the people that are on the team? Is everyone pulling their weight? Especially in lean times. You gotta make sure you’re as lean and mean as possible. So that’s where going through this exercise and having an actual step-by-step process, go through, print it off.

P-R-N-U-P is obviously the things you’re gonna keep. It’s profitable to you. R is what you can look at to try and replace or remove or, you know, like to move to something else. And then you would just be, I gotta cut this. Why do I still have this? We, we’ve done this exercise so many times with the people that we work with, Tim, and like on average it’s at least a thousand a month.

People are cutting, you know, like they’re mm-hmm. They just have a thousand dollars of waste laying around. We’ve got some crazy stories with some bigger investors where they cut like 50,000 a month and I’m like, this is nuts. You know? And a lot of times they just never had a system to go through this.

Mm-hmm. So number one, I’d set yourself up for profitability. By making sure that every dollar that comes in goes to at least another account that gives you some profit and gives you a system. Then from there, I’d be like, okay, now that’s kinda like offense where a dollar comes in and I want to make sure that we’re offensively taking this and making sure that we have dry powder.

On the flip side, it’s like, let’s also make sure that we have as much coming in and going to our pocket and going to the bottom line as possible, and having an exercise like that would be another great step to take. Yeah. Awesome. Okay. PRU is it, is it profitable in terms of time or money? Time. Time is a big one also.

Mm-hmm. Is it replaceable or is it unnecessary? Uh, so basically we start paying ourselves. We look at all of our transactions, we identify if they fit in that PRU system. Um. One of the challenges with our industry is that there just are a lot of transactions there, there, and they come in from a whole bunch of different places.

So I know, you know, fortunately, like with AI today, like you can grab a whole bunch of transactions and give it to Claude or Yeah, a chat GPT and it, it can help out. But do you have any recommendations, uh, just on the structure, like setting these up with, you know, maybe a FinTech bank or something like that, that, that makes some of these, these structural pieces easier?

There’s actually banks out there that are like Profit First friendly. There’s a couple ones like relay fi.com. They’re Profit First base where they’ll let you set up, I think 20 accounts for free. So you can name those accounts. You can also do automatic transfers, so like when you get income in, you could set it on certain days of the week or certain days of the month, and it’ll transfer into the accounts that you want to either by percentage or by an actual dollar amount.

So that’s one of ’em. Another one’s base Lane. Com, which is more built for, I believe, the rental industry. So if you’re a buy and hold investor, then that’s another one to look into. Base lane.com. So yes, there’s a couple of them out there, Tim. There’s a couple others that we use internally as well. So those are just a couple of ones that are, um, they go out there and they are actual profit first type banks that help you set up multiple accounts and don’t have a bunch of fees attached to them, and you can do all the transfers that necessary.

And they even help you with some of that automation too. Yeah. And some of ’em even pay you interest. Yes, exactly. Uh, you know, much more than like a brick and mortar bank like Wells Fargo. So, uh, I would check those out. I think we’ve recommended baseline on the show before we, uh, we use Mercury for our business, which is also another FinTech bank.

I mean, we can literally create a new account in like one second. Yeah. Uh, we can issue, uh, digital credit cards with limits and um, so they have some really good options as well, so. Okay. Um. What’s left after the PRU stage? David, where, where does someone go from there? Or if you have, have five to 10 rentals?

No, I, well, there’s there. I mean, I could tell you all the steps to the end of time here, but another great thing if you don’t have it in place currently is getting someone on your team that understands real estate. Like a good bookkeeper or a good accountant or a good, you know, if you need higher level help, uh, like a part-time CFO or something, making sure that the people on your team understand your industry.

’cause that’s one of the biggest mistakes I see people make, is that they link up with someone that’s cheap or overseas and they don’t understand. Real estate investing, especially if you’ve got a short-term rental with about a thousand transactions coming in and out and you, they’re not sure, okay, where do I classify this?

What do I do? Or if you ever purchase a long-term or short-term rental or if you’re just doing it even a flip or a project or if like you’ve bought one and it needs work and you’re doing that, it’s like, where do all those transactions go? You do not want to go to at tax time or like down the road and say all this is wrong.

You not, didn’t really have the clarity. ’cause that’s part of being a. Good business owner as well too, is not only knowing where your cash is going, but knowing what your numbers are telling you so you can grow the business like you want to. And a lot of people just don’t have the right people in place that are really helping them because either, number one, they don’t know real estate, or number two, they might do the transaction, but they’re not meeting with you on a regular basis to be like, okay.

What’s going on? Here’s something that I see. Here’s something that you could do that type of thing as well too. So you need to make sure you have some good people in your corner that actually understand your industry, and that will at least give you the time of day that will have some type of meeting schedule to go over the numbers because.

The $10, $20 per hour task is like the data entry, right? But like the a thousand dollars per hour task is taking that data and analyzing it and saying, what can I do with this? You know, so, so that way you could have better PRU conversations. That way you could have better cash conversations that way. You could say, okay, where do I need to put the money to grow this thing if I’m, if I have five to 10 now, how do I double to 20?

Doors and make sure that I don’t go crazy and don’t have too much things going this way that way. So this is where a lot of people forget that the financial side as you grow, should grow with you. So if you’ve got a bookkeeper, make sure they’re real estate investing. If you’ve got a good real estate investing, then the next step is like, okay, do you have a leader helping you get to that next stage and make sure you’re still profitable?

It’s like making sure your finances grow with the rest of the business. A lot of people, usually that’s the last area. That they worry about. It’s like, well, let me get the deals, the marketing, the operations, which is great. You gotta get all that front end stuff, but just don’t forget the backend because at the end of the day, we all want financial freedom.

And if you don’t have the financial systems to grow while you grow, you’re gonna say, oh shoot, where did all that money grow? What is going on here? So that would just be the next thing, and making sure you have the right people in your corner team. Yeah, no, great point. Um, I’ve recommend recommended a book, uh, a lot of times called Who Not How.

Oh, yeah. I think it’s, I think it’s by Dan Sullivan and Yep. You know, one of the things they talk about is if you’re, if you’re procrastinating in something and maybe that is organizing your finances, it’s probably because you either don’t like it or you’re not good at it. Right. But there’s someone out there that is good at it, uh, and that does like it.

Um, and so yeah, who not how, you know, if, if you’re in that position, you got a bunch of deals coming in and, and you have no idea what the numbers actually look like? Uh, probably, probably time to get some help. Um. Do you have any tips, David, though? I, you know, we’ve got a big range of listeners, uh, yeah. On this show.

Some people that are just getting started, some people that have really large portfolios, and I know some of the people that are just getting started are thinking, oh gosh, I, you know, I can’t afford to, to bring someone in and I want to do this myself. Uh, and I can imagine a lot of people get in and, and they maybe get this set up.

But then it falls apart like two months later. You know, one of the nice things with the automatic transfers is that it just happens automatically. Right. But, uh, do you have any other tips or suggestions for someone out there that’s like gonna try this on their own? They’re just getting started and how to.

To keep consistent with it. Yeah, so automate it as much as possible. So if you are going to start profit first, that’s the nice thing about starting there, is you don’t need to be a financial wizard. You don’t even know how to use spreadsheets. Like you don’t even know how need to know that stuff. All you need is to set up the bank accounts, and especially if you set it up at a bank that does the automatic transfers, a lot of that can happen automatically.

Okay. You get your first deal under your belt. You’ve got all the money, you’ve got, you start to get rental income, you know, or the short term income coming in. Okay. It hits your account and then by a certain day, whether it’s Friday or the 15th of the month or whatever it might be, it then transfers by how much you want to into those accounts.

And I would start with what the most you can do, what’s the most you can do to keep. You afloat and to keep the business afloat. Is it 50 50? Is it, you know, a split percentages? That’s why I would also recommend picking up the book. You know, if, just a shameless plug there, if you want more guidance. ’cause in there I just give you like the 1, 2, 3, here’s how you do this, here’s how you get where you want to with profit first.

But the best thing, Tim, is for them to be consistent. So make it as foolproof as possible by setting it up at a bank that allows the automatic transfers and you could just have it done automatically and then. From there, if you need help with the numbers and stuff, bookkeepers really even, even in the real estate industry, are still pretty cost effective.

So if you need someone like that, that would be one of the best First hires is either an assistant that can also do the books or an actual bookkeeper, but as long they have to have real estate investing knowledge. So getting someone to help with that side because you don’t wanna go to tax time and be like, ah, shoot.

You know, here we go again. Now I’ve gotta get all the receipts and all the things for the last year and I don’t remember what this was from, you know, a year ago. You know, that type of thing. You just want your future self will. Thank you. If you set some of these up right at the beginning and. Even if you’re at the beginning, profit first can be put on automatic.

The other parts, the parts that are the financial end. Unless you are just inclined to the numbers and the spreadsheets and that type of thing, you’re either gonna need to get someone to help you or just run a very simple spreadsheet or something. Can you just do all your transactions in and out for the month, or at least download your bank statements, you know, once a month.

So that way you can put it, you know, like for your account to do when you first file your taxes. But that’s what I would say first. Tim is profit first can be almost automated as much as possible. If you put some of these key pieces in place and just start with what you can do, then you just put it on autopilot.

So when money gets deposited, you know it’s gonna transfer on those specific days. Good points, and we wanna make sure everyone knows how to, to get in touch with you, find your book. Yeah. Uh, but just one other question as we, we kind of wrap up. So, um, we’ve already identified, we know, I mean, I know talking with managers and owners, investors, basically every day, like this is one of the areas in the short term rental industry where people just leave it.

In the back, you know? Yeah, for sure. And they don’t really look at it. And, and part of the reason is because it’s complicated. Uh, and so there are some, some accounting programs that have popped up specifically for short-term rentals. So we kind of have several pieces here, right? Like we, we need to get some structure in place to make it easier, you know, to facilitate automatic, automatic.

Transfers, things like that. We need to get a system like, or your system in place. Uh, but then there is the backend piece too, you know, like the actual accounting. And a lot of people use QuickBooks. So I’m curious, is that what you find most people are using still as QuickBooks? For smaller, smaller operators, it’s still the, yeah, even small operators, it’s still the elephant in the room at this point.

No one’s come to dethroned them. We’ve got a couple people using other softwares like Zero or FreshBooks or that type of thing. But yeah, I would say out of our clients it’s like 98% and there’s not many people on other things, but. If you have a system like that, the nice thing about a system like that, or any of the ones that I just mentioned there, a lot of ’em have automatic functionality where you can literally set up your bank account to sync with QuickBooks.

So at least, even if you don’t know where to put ’em, because you’re not an account and you don’t know how to, you know, categorize the all the transactions, you can at least pull all the transactions in for the month. So that way, even if you had a thought like you were doing a lot at. Transactions. You could still have everything there so nothing gets missed.

That’s the biggest thing, Tim is like, you just don’t want anything missed. So a system like that really helps you catch everything versus the manual entries or ledgers or spreadsheets, things like that. Yeah. There’s a, another one that I started using, I don’t know, maybe a year or so ago, called Monarch. I don’t know if you’ve heard of this, this?

Oh yeah, I’ve heard of Monarch. Yep. Yeah, monarch’s great. For anyone out there that is unorganized still and you got a bunch of accounts in a bunch of different places, uh, that can help you centralize. Never really low, you know, annual fee. Uh, and it’s a place where you could organize all those expenses so you could export them and go through the process and making sure that you’re profitable and identifying your transactions.

Yeah. Um. Awesome, David. Well, uh, you have a podcast. Uh, tell us about your podcast and your book and how people can get in touch with you. Well, there’s one site you could go to for all that simple cfo.com, simple, CFO, like chief financial officer.com. That’s where we have a podcast page, that’s where we have the link to the book.

The book is on Amazon, so if you want the physical book, you could get it there. I think we even give a downloadable version of the book on the site as well too. Like you could get the free book at our website. Uh, you could also book a call with our team there if you’re like, Hey, I’m running around like a chicken with my head cut off and I need some help getting this under control.

We have different services like the bookkeeping or the fractional CFO or the CPA things for real estate investors specifically, we work in the short-term long-term space. So if you need that, that’s at simple cfo.com. Kinda your OneStop shop for all things profit first for real estate investing. Awesome.

Well, uh, appreciate you coming on, David. What you do is, uh, super important. I mean, if if people aren’t staying above water, then, then, you know, it’s, it’s, it’s not a good ending. Right, exactly. So really important, uh, appreciate you coming on and, and thanks for all the advice. Thank you, Tim. Take care.

If you’ve been tuning into the show for a while, will you know that I’ve been investing in a project in meting Columbia, been building a boutique hotel resort for the last three years, and I’ve been teasing at some of the details.

Well, today I want to give you some insights, pull back the curtain and talk about some of the opportunities and some of the risks. ’cause I’ll tell you, it has not been a smooth ride. But there is light at the end of the tunnel.

So for any of you considering a new construction project or considering investing in a foreign country, well, stay tuned and welcome back to the short-term Real Richest podcast.

Well, you know what they say no risk, no reward, right? Well, I don’t think it’s any different. For a foreigner investing in another country, especially on a new construction project. So today we’re talking about my boutique hotel resort project in Meine Columbia that I’m currently building with a partner.

I am excited to say that we’re very close to launching the first units, but it has not been without a lot of struggles.

Lemme start off with the pros, the reasons why this project was appealing. First of all, I’m no stranger to Columbia. I’ve been going there for the last 10 years. I purchased my first property there back in 2017, where I lived pretty much year round for several years.

A lot of things have changed since then, and I now spend most of my time in Brazil, actually. And so this project is happening from a distance. But we do have a really good team on the ground. So some of the pros that attract, I mean, first of all, I was familiar with this area. I knew all of the market because I’m a real estate guy and I can’t help just understanding the local real estate markets, especially where I’m living.

And so I did see a lot of opportunity.One of the things that has been obvious is the amount of tourism coming into Columbia. Millions and millions of tourists are coming into Columbia and specifically ine each and every year. A lot of them from the us, a lot from Canada, a lot from Europe. You name it all over the world, people are showing up in Columbia because it’s a beautiful country and there are beautiful people there, And the cost of living for most of you, living outside of South America is considerably lower

Well. If you’re a US citizen, like most of our audiences, although we do have listeners in over 125 countries, so want to thank all of you for tuning in over the years. It’s been a fun journey. Uh, it’s definitely had its ups and downs and we’ve learned a ton, but we’re sticking with it and we know that professional operators in this space will continue to prevail and that there’s a lot of opportunity left.

So that’s the first thing. This market has more people visiting it each and every year, and it’s been like that since the last 10 years where I’ve personally been visiting the property now as a US citizen that earns most of my money in US dollars. The US dollar has also been at an all time high over the last few years.

Yes, over the last year. It’s come down considerably. And this is one of the risks with investing internationally.

But while your dollar is high, that means that if you’re buying construction materials in Columbia, for example, that it’s actually costing you less because they’re not adjusting their materials based off what the dollar’s valued at. Right? It also means that labor costs are less, even though labor costs are drastically lower in South America than they are in the us.

Another one of the reasons why I got excited about this project.

So strong demand, strong dollar and strong revenue potential because these short term rentals we’re building 20 are going to be rented to foreigners that are used to paying in dollars. So we’re actually able to build in Colombian pesos construction materials and run our operation using Colombian pesos, But many times receive reservations priced in American dollar prices.

But before we get into too many more details, let me start off by saying that I would not recommend an international investment for someone, first of all, that isn’t familiar with the country, that doesn’t speak the language, and that doesn’t have a local team to help accomplish the project that you’re set out to do.

I have a partner on this project. He’s lived in Meine for, gosh, I don’t know, 12, 15 years. He’s already worked with the same architect that’s building our project, and our architects also built other successful projects in the past, which I’ve personally visited. And so I had a lot of trust going into this deal before I got started.

If I didn’t have that team on the ground and I didn’t live in the area, well, I definitely wouldn’t have ventured out on this project

I know for a fact that my favorite thing in life is not to manage. A construction project. Uh, and so luckily we had a great person on our team that’s been helping us and has helped us through these last three years.

As I record this today, several years later, the US dollar has gotten considerably weaker. I did a podcast episode, actually, if you go way back to episode 79, where I purchased a property in Brazil. That was almost about five years ago, and that was at that time the highest exchange rate between the US dollar and the Brazilian real almost in history.

So I really lucked out with that one, and I’m happy to say that project has gone really well. That’s a property where I personally stay a good part of the year, and that city BA has grown to be the highest cost per square meter in all of Brazil.

So I really lucked out with that one. Of course, I don’t earn money back on appreciation unless I actually sell the property. Right, and I’m still living in it. But it does create some more opportunities, so just keep that in mind. The opportunity to have the exchange on your side can also go the other way.

So if you’re interested in purchasing a property internationally, you can go back and check out episode 79. I talk about a lot of the basic, fundamental things that you’ll want to keep in mind when looking for a property, working with a lawyer. All those sorts of fun things. But for today, let’s get back into the Metagene project, and I wanna talk about the supply and demand because just as all of the tourism has been growing really rapidly in Metagene, it’s also attracted investors.

And so we have new hotels entering the city at an incredible pace. There are literally thousands of units being added to Metagene for short-term rental approved buildings. And now if I rewind back three years ago, this was not as prevalent and the regulations were also ticking up. So a lot of properties in the area were getting pulled off the market.

So just as we’ve seen all across the US, as supply goes up. Well, if demand is not keeping up, if there’s more options, then prices go down.

So we always gotta keep an eye on supply and demand, and if it’s a new construction project with a really long timeline. You need to be prepared for that now, I feel really lucky because this project, this boutique resort, is very unique. It’s not a traditional hotel style setup. It’s not a tall building.

Actually, there’s three different designs on this lot. So the, the lot itself is a hectare, which is a little over two acres, and it’s situated right on the side of the mountain with a beautiful view of the city, 20 minutes or so from the airport, but also a quick Uber ride to some of the areas best restaurants and most trendy neighborhoods.

For those of you catching the video, we’ll make sure to put lots of images and videos of our progress and the construction over these last few years in the background so that you can follow along.

So this project is unique for multiple reasons. The location for sure is unlike most locations in all the city, you get the peace and tranquility while being basically in the city, and that is not very common.

The other thing is the actual design. And so our architect has done an amazing job. He brings a lot of nature elements into the project, and I observed this in his last project. For any of you that have maybe visited Meine, he built a beautiful project called Bosco out in Guap pe.

That’s this place that has all these beautiful lakes. And a lot of people visit when they come to Metagene for the first time. So I, I’ve seen his work before. And he’s brought that to our project as well. And so for our first phase of rental units, they’re sort of like cabanas, but they’re luxurious. They have kitchens, they have laundry, they all have jacuzzis overlooking the city.

And this is a type of property that really just can’t find

and so while there’s lots of supply coming onto the market, I do feel very confident that these properties are gonna do well because, and we talk about this all the time on this channel, and they’re going to stand out.

Now, getting these first eight units up, which are almost complete now, almost three years later was not that easy. There was a lot of struggles along the way. In fact, when we first bought the lot, which was about 3.25 billion pesos, and before you go out screaming and saying, Tim, this sounds absurd.

Billions of pesos. That’s not as much as you think. Yes, it’s still quite a lot. Depends on the exchange rate, but roughly $800,000 for these two acres. Remember, this lot is in town. It’s in a prime location, so it is likely more expensive than you were imagining.

And while I do know that I am an expert at all things short-term rentals, I’ve literally lived and breathed short-term rentals with my portfolio and taught about it on the show for over a decade. I don’t have an exact number of how well these properties are going to do because they are unique and because supply is changing every month.

So if you were to look up Air DNA, yes, it’s helpful. It gives you some good insight. But what we’ve done is basically come up with a range, and I expect these properties to rent anywhere from 150 to $350 a night. Obviously, that’s a big range. And so if you’ve got a project out there with a big range like that, you need to be comfortable with the conservative side, the $150, in which case we are with this project.

Now, there was a lot of infrastructure that went into this project. There was no sewer, there was no water, there was no electrical. And to go through the permit process and the licensing, we had lots of hiccups because this was a agricultural lot zoned commercially. We purchased it with an existing license.

Hoping to modify the license. That’s what we were told. And long story short, we weren’t able to do that and it took us about 18 months to get a new license. And so again, just like in the US new construction projects can take a really long time before you even start building because of the planning, because of the infrastructure and that infrastructure is also costly.

So at this stage of the game, we’ve got almost eight units built. We have an entrance building, which is very lovely. It’ll have a 24 hour security person. It’ll have reception, it has backup electrical. It has a spot for our it, it has a laundry facility. We have eight cabanas up and we have the infrastructure for the whole lot.

And we’re into the project almost about $2 million. Now, of course, the, the exchange rate has been fluctuating over the last few years,

but up until now we have had zero return. So you better believe, I’m excited to get these first units up and going. If we look at the cost of the actual units themself. They’re around $65,000. Now, you’ll see in the photos, these are unique properties, and if they rent for on average $200 a night at maybe a 65% occupancy, these eight units should bring in almost around $400,000 a year.

That is, of course, before expenses, but remember, labor in South America is a lot cheaper, so we’re really just looking at electricity, utilities, and some light supplies. 

Now, because of all the infrastructure, the time this took, the licensing, if you look at those numbers today, and mind you, this is all cash because as a foreigner it’s not very easy to get a loan outside of your. Your home country, if you look at those returns right now, they’re not that great, but they could be as much as 20% per year.

And again, that is not considering a loan. So if we were able to leverage the project. That return would go much higher. Now, where our opportunity lies is that we already have the licensing. We already have the infrastructure for 12 more units. So you can see our potential return can go up massively from here.

Now, a cool thing about this lot as well is that we have it licensed for a restaurant, and I am not a restaurant entrepreneur. I don’t know much about restaurants at all, but fortunately. I do have a partner that already has a restaurant, and I’m excited for him to bring in his expertise and for me and our team to bring in our expertise on the operations.

If you’re new to the show and you’re looking for help operating your property, well, my team and I have managed properties in over 40 cities and yes, in various countries. You can check us out@triches.com or our company website, which is corley, C-O-R-Z-L y.com. There’s a partner with us button up there.

We’d love to schedule. Quick call, see if your property makes for a good fit with our team.

Okay. So those are the basic numbers. There’s a lot of opportunity for this property. It is truly unique. And so I’ll be reporting back maybe in another six, nine months, let you know how these first units are going and how the new construction is coming along.

I don’t wanna say any of this has been easy though, even really intimately knowing the city and being a real estate guy, this has taken much longer than anticipated. So a few words of wisdom for you out there if you’re considering a new construction project. Well. Make sure that you’ve got the budget for it or you have options, and understand that the timelines could take much, much longer.

So really take a hard look at that project and ask yourself, if this took a year or two years, or three years longer than I anticipated, would I still be interested in the project?

Would I still see the opportunity?

The other thing to keep in mind, if it is an international property, do you plan on spending a lot of time there? Because a project like this does require some involvement, right? It’s not like you can just pop up a 20 unit hotel and be off to the races.

All right, so there you have it. There are some insider details. Yes, the project’s taken longer than expected, but it is turning out very nicely. It is truly unique.

You wanna stay in the property or have someone that you trust stay at the property and work out the kinks. I know for sure there were a lot of kinks that we’re still working out with these units. After having stayed in them. So stay tuned. In the near future, we’ll come back with the numbers and yes, where there is a lot of risk, there can also be a lot of reward.

It’s a little too early to say, but I’ve got my fingers crossed and I’m staying positive, and I think this project is gonna be a really, really amazing project for the long run. Until next time, I hope you have a fabulous week. 

Well, welcome back everyone to the short-term Rental Riches podcast. I’m happy to be seated here virtually with yet another founder, a tech founder, uh, and a company we actually personally use in our portfolio. Uh, today we’ve got Thomas t Wald with us, and he is the co and founder of Charge Automation.

Welcome to the show, Thomas. Thank you. Thank you, Tim. And, uh, thank you for supporting Charge Automation, trusting in charge automation being a customer. So happy to hear that. Yeah. Yeah. And we’ve been happy. I know, uh, we’ve given you a few shout outs, uh, on the podcast Before, you know, the, the podcast is really just about how we’ve been operating our personal portfolio and growing and, you know, changing with the times.

And technology is one of those pieces that’s always changing, especially today. I mean, it’s at like warp speed. Um, but would love to hear a little bit about your background and, and, and how you got to be where you’re today. Um, so I think my background is very similar to a lot of people, how they end up in this industry.

Uh, almost accidental when I’ve discovered that, um, you know, um, renting a property short term is way more profitable than long term. Um, I used to be a real estate agent prior to that, so I’ve had some, uh, property and real estate experience and this is, um, way back in 2011. So Airbnb was just a year or two years old, so it was new industry.

Most people didn’t understand or they have never heard of Airbnb, the word. Um, and I, um, had some investment properties that I started doing short-term rental on, uh, quite early. And once I kinda discovered that it was a good profitable, um. Business. I scaled it up, um, doing, uh, rent arbitrage model. Um, and we’ve scaled to as much as, uh, 200 properties, um, very rapidly.

Um, and would scale comes, uh, bottlenecks and processes and the, the disadvantage that we have as property managers. Is that we don’t, we’re not like hotels where we have everything in one building. We have scattered, um, locations. So you can’t meet all your guests all at once when they’re checking in, uh, or different times of the day.

It’s just not scalable. And one of the biggest challenges that, uh, we were having at the time, um, was Airbnb was growing, but um, booking.com was already established and I was, I put my properties on booking.com, um, and we start getting a lot of reservations. So unlike Airbnb, but with booking com, you do have to process the guest credit card yourself.

Mm-hmm. Um, so. Uh, that I, and with pushing the credit card also comes a lot of, uh, frauds and chargebacks, things that you’re not really exposed to, uh, primary with, uh, Airbnb. Right. And given that I’m a software engineer by education, I built a, a tool to help me, uh, collect the payment automatically for my guests, and at the same time do an extra authentication verification process when collecting the payment.

Um, and that kind of eliminated our fraud chargeback. And we, we literally, and at scale, we were doing about $20,000 that we’re losing chargebacks, uh, a year. Wow. And it literally went down to, to, to zero. Um, and we’ve added a little more, um, you know, guest verification process along the way. So that kind of reduced a lot of our issues that we’re having with our guests and frauds.

Um, and that was pretty much the beginning. Um, and when other hosts in the community kind of discovered about my tool that was having the same issue, Hey, you know, can I use your, your, your, your software? Uh, ’cause I’ll have the same issue. And funny enough as, uh, our first client or person that reached out to me was all the way from Australia.

Uh, I’m in Canada. Mm-hmm. And they had 600 properties. And far was the biggest issue, uh, they had and they said, I want your software like yesterday. Um mm-hmm. So there a bit of modification for them to be able to use it. And we did that. Um, and the revenue, you know, from that customer was about 10,000 a month.

Um mm-hmm. Which was pretty, uh, exciting. And I, I realized that, okay, there’s something here that people need and want. Um, and I start really to focus on the software component of it building, you know, there. What started as a payments and verification component that, but then, um, the customers start saying, Hey, since you already have the credit card on file, since you already have, you know, doing all these things, can I also have ability to sell extra services?

Like, you know, airport pickup, uh, early check in, late checkout services. Um, and then we’ve added that component. And then they say, Hey, you’re already doing this. Can I also ask them a little more questions about why they come into my property before they arrive? Then we added ability to add some custom questions as a part of the check-in process, and then they said, okay, you’ve got all of this.

It’s amazing. But once they do all of that, can I have like a guidebook where they can read the checking instruction and get the access code, and then we added a guest portal or guidebook. And there was no definition of what we’re building at the time was brand new, but it is what’s known as right now, guest experience software.

So we kind of built it accidental, but also, you know, uh, product led growth where our customers are requesting, um, for, for, you know, what, what they want software to be. And, and they built it. And this is what it is now. It’s a full guest experience solution that handles everything from checking to checkout once the guest makes a reservation.

Yeah, exactly. And so yeah, you built it first for your own portfolio, solved some problems. Uh, obviously lots of other people in the industry have the same problems and now here you are, you’re a software company. Exactly. It is software company. So yeah. Such a long answer for short question, but yeah. No, but, but your guys’ tool really does a great job at, you know, facilitating all of that.

Um, and you mentioned, you know, one of the big things, chargebacks and maybe, you know, for the operators out there that are just getting started or they maybe have one or two properties and haven’t made it onto booking.com, or they haven’t made it onto these direct booking platforms where we always take the payments.

Maybe chargebacks doesn’t seem like a big thing, but once you get to that stage and if you’re planning on growing your portfolio, I mean, they are. Dramatic. You know, someone stays at your property and essentially the chargeback is they go to the credit card company and say, Hey, this was fraudulent, or whatever.

They dispute the charge and the credit card co company gives ’em the money back and you’re out. You, you had someone stay at your property potentially, and uh, they stayed there for free, so. It is a massive Im, it, it’s, it makes a massive impact. It is, and I, I mean, I’ve had many, many stories. Um, and it’s not just a chargeback.

I mean, that’s one component of it. So one is obviously the guests, uh, you know, stayed enjoy their estate and then they filed a chargeback. Now you lost our money. But then typically those kind of guests are also trouble. So they will smoke in the unit, right? They’ll throw a part in the unit. They will, they will, yeah.

Destroy the place. Um, so your cost is not even the chargeback, it’s the whole process. And you have to block the property for a certain period of time. You’ve gotta cancel the next booking. It is extremely painful. Um, so if you can prevent it, uh, prevent it. And most people think that if I can just, um, have all the evidence, I have pictures that this person stated in my.

Property, I’m gonna win this chargeback. Um, unfortunately, you know, 99% of the times you don’t win those chargebacks. Um, right. And they’re fraud. It’s a hundred percent you don’t win. So, um, it’s better to avoid than trying to win it back. Right, right. Exactly. Yeah. They often are not sure most favorite guests.

Yeah. So having that go guest authentication upfront, uh, really goes a long way. Mm-hmm. Um. Let’s see here. So where do we wanna take this next? I know there’s a lot of different ways we can go. Uh, chargebacks is definitely a big one. Um, you know, payment gateways and sort of automating that. I think the reality is, is that the.

There isn’t unfortunately a single tool out there that does everything perfectly or everything in the most efficient way. Uh, and so one of the reasons we came to charge automation also is for your just payment gateway, um, you know, to have a, a more reasonable fee for processing charge, uh, charges with Stripe.

Can, can you talk about kind of what that payment gateway is for those of our audience? Probably don’t know. Yeah. I’m glad you touched on that point. So. I think most, uh, PMSs typically support one or two payment processors, usually Stripe plus somebody else. Um, and. If you’re using Stripe, obviously you could use charge automation to be able to be able to collect the payment and avoid fraud chargebacks, um, and save some fee along the way.

Uh mm-hmm. But let’s say you are in a country where Stripe is not operating or you’re in a country where, uh, you know where Stripe has banned the, or, you know, close your account for whatever reason that may be. So now you’re stuck. Now you, you need to work with another payment processor, but the problem is that does that payment processor that you want to work with does not work with your PMS.

And this is almost accidental also how we we, how we got into this Because the customer came to us and said, Hey, Stripe closed my account. Here’s the payment processor I want to use. Here’s the PMs I want to use. You know, can you do this for me? Connect. Connect this two. And then we’ve pretty much been able to integrate that new payment processor where we connect the PMS and the payment processor with the bridge and the logic in there.

Um, yeah. And pretty much every customer that came in requested for another one and for another one, and for another one, before we know it, we have over 120 payment processor integrations. So now anybody from any PMS can use pretty much any payment processor in the globe, um, which is wow. Uh, like I said, it’s accidental, but it opens a lot of, um, opportunity for people to be able to choose the PMs they want to use and the payment process they want to use without having to compromise either one of them.

Yeah. That’s amazing. Wow. So you guys work with 130 payment processors? Yes. Under 30 plus now at the stage. Wow. That, that seems like a lot to keep track of. Uh, I’m sure some of them are more commonly used than others, but how, how do you guys manage all of that? You know, it, it, it’s when you’re building it, you don’t realize it.

And then when we have to maintain, update the APIs and changes, it’s really, it becomes, um, a handful I would say. Um, and we’ve kind of, I mean, after building so many, you, you do have a process. And some of them are just one-offs. ’cause, you know, one customer with a large number of portfolio properties wants to use it and some of them are like concentrated where a lot of people use it in certain countries.

Yeah. Um, so, um, we, we don’t keep and maintain all of them. We, we see that the activity, the usage, and there, there’s still customers using it. Then we continue to, to make updates. But some of them customers don’t use them anymore. They just, you know, staying there. So those ones we just kind of. Keep them, um, off the shelf until a customer wants to use it, then we may have to, you know, update some of their content.

Gotcha. Gotcha. Okay. Well, most of our audience is in the US and most of the short-term rental operators, owners, investors are using Stripe. Curious to hear from you. What are maybe like the top three payment processors that you see out there in terms of functionality, flexibility, and, and maybe pricing, you know, what are the best ones?

Well, I would say. I think, like I said, Stripe is a default one because it’s, it’s already available in the PMS. It is the easiest one to get an account with. Um, but it’s also not the cheapest. Um, so most, most people, um, go with that at the default. But once you scale up and once you start doing. Some serious volume.

Um, then that extra, you know, 1%, that extra half a percent, uh, you’re paying, uh, becomes significant. Uh, when you, when you do the total. And that’s where then people start evaluating. What other options, you know, are there? Um, and this is where, I mean, um, in us, you know, obviously authorize.net is a, you know, a second probably most popular one, um, in the industry.

Uh, but also a lot of like, um, big payment processors, whether it’s Chase Payments, um, or there’s Elon, um, a handful. Um, I mean, a quick Google search will probably give you those ones, but, uh, these are some of the popular ones. Um, that, that, that we work with. And most people usually switch, uh, from Stripe if they, if, if cost saving becomes an important factor.

Mm-hmm. Um, and, and, and we’re the, and we’re the pretty much, I would say, the only company in the industry that’s solving that problem at the moment. Yeah. Yeah. Yeah, the more properties you add and the more direct bookings you do, or the more you know bookings you do outside of Airbnb, or if you’re taking payments directly on booking.com, the, the more important these, these little percentages, uh, become, um, right.

You know, and that’s just another way for us in the industry to be more efficient and to have more net profit. And I think a lot of people out in the industry right now are, there’s a lot of buzz about upsells, you know? Mm-hmm. Uh, I think just because the industry’s gotten so competitive and people are trying to find ways to, you know, squeeze a few extra dollars out.

Uh, but this is one of the things that charge automation does really well. Uh, and helps facilitate. Can you tell us a little bit more about, you know, what you guys have built and, you know, chargebacks in general, or not chargebacks, I’m sorry, but, uh, ourselves. Yeah. Yeah. So there’s a general shift in the industry, uh, because it’s gotten very competitive and now the old school way is, you know, let me maximize, um, my A DR, right?

Um, and average daily rate, right? But I think how you have to think about the new way of thinking is not about, you know, how much you’re making, uh, for that booking, but it’s how much you’re making for that stay. So, so you may be competitive on the rate, but then you have all the additional ancillary revenue opportunities where you maximize that booking.

So that booking might have been a $2,000 booking, but by the end, that stay end up become a $3,000 stay because the guest has spent on a few different I items, so. Mm-hmm. Whereas you might have lost a customer if you had priced your daily rate at very high, but not have any upsells. So it is a competitive strategy and it is, uh, the modern way of competing in, in the, in the competitive SDR industry, uh, even the hotel space.

Um, so having said that, um, that’s where then you wanna see, you wanna optimize your upsells, you know, how do you drive maximum conversion, upsell. And one of the biggest, uh, friction point in upsells is when you present the guests, uh, an opportunity to buy upsells. A, you don’t wanna bombard them with hundreds of upsells or like some third party website where you just load up everything.

It has to be very curated. Um, and then from the curated point of view, once they wanna select, you want to show the credit card that they already use with the reservation on at the same level. So you give the Amazon experience where when they see the payment methods already attached, it becomes a one click up.

So where you just add and complete the payment. Right. But if you ask the guest to pull out their card and enter the numbers again to complete that payment. Now, statistically, uh, and this is a, a data, um, that was on done on research is it’s about, uh, 17% loss when you don’t have the payment method on file in the conversion received.

Yeah, so, so now if you have the card on file, you’re converting 17% more, um, which is, which is huge. So you’re giving the Amazon checkout experience. Um, and then the second part is. D you have guests coming from different parts of the world and they’re used to paying the way they, they pay locally. So you want to give that local payment experience.

So if they’re used to paying by Apple Pay, give them an Apple Pay option. Uh, Google Pay, uh, if they’re from Brazil, let’s say they, they don’t wanna pay by picks if they’re from, um, mm-hmm. Uh, let’s say someplace in Europe, um, like Holland, uh, it’s, they pay by ideal. That’s the way of people have people pay.

So not everybody takes just raw credit card numbers as a way of payment. So adding that, and I can’t remember the conversion, but I think it gives you another seven, 8% better conversion. Um, so, and that’s what we do. We charge automation, is that we give the guest ability to pay. You could be using Stripe, you could be using any payment processor, would give the guests a chance to pay through all.

Preferred payment methods and based on where they are and based on their browsers and location, we’ll load up the payment method that is used by the guest, so he’s more likely to convert and pay that upsell. Uh, and with that, uh, what we looked at is so far our customers are paying, spending over $180 per reservation in additional upsell revenue.

Um, mm-hmm. Uh, which is huge. And if it, you know, so if a property is taking, uh, four or five reservations for the month and you’re already at, at a thousand plus, uh, an upsell income, but all these little optimizations is where you maximize not having, Hey, I have an upsell. I could sell it. But it’s how you sell it.

How you convert it is, is, um, is the most important part and. You know, we’ve spent years and years, you know, optimizing those things and looking at the data and what’s working, what’s not working, AB testing to say this is how customers are converting. So, um, using professional tools is what helps you convert more upsells.

Yeah, definitely. Yeah. Some excellent points there. I, I know there’s. Just over the years, over the last decade, there’s been so many guidebook options that have come out and, you know, they’re all helpful for the guests and the guests like to see extra information, but removing those steps, basically, you know, making it easier for someone to, to add things on.

I, I think getting the reservation in the first place. Is one thing, you know? And yes, you’ve gotta have competitive pricing and make sure you know, you know what you’re doing with your revenue management, know what your market’s doing. But then it does create a whole bunch of opportunity after you already have someone, and I’m sure, you know, depending on your market, you, you could come up with some data on, you know, how likely it is for people to purchase the airport transfer, how likely it is for people to, to purchase the chef service or whatever it happens to be.

Mm-hmm. Um, to really raise the overall net income. Right. Yes. Uh, go ahead. Yeah. Um, and so, yeah, making that easy is, uh, is a big part. I know before we were with charge automation, we, we tried a lot of different things. You know, the PMSs have their own versions of upsells. Uh, there’s other options out there.

But storing the credit card information, like you said, making it easy goes a long way. Goes a long way. Indeed, indeed. Um, and also, uh, when, uh, people are on vacation or on a business trip, I know they’re not there to read paragraphs of your, your guide or, you know, along information. Um, and the old way of doing it was like, you know, when once a guest books, you know, they will receive five messages, you know, and it will be like, Hey, here’s a link to complete your check-in.

Um, here’s a link to do, uh, ID verification. That’s a separate one. Oh, and if you wanna read our, our, about our, about property, here’s a link for it. Um, and if you wanna buy some services, here’s another link. So now you gimme four or five different links, uh, as a and as a guest, I, I don’t want to think, I just wanna, you know, know, do what I have to do, uh, without much thinking.

So. Of combining all that, you know, fragmented experience for the guests into like one smooth process where they don’t think, they just click, click, click, and, and they’re done with it, uh, is the way. Um, and like I said, the last component of the, the check-in is once they complete that process, they do, I know online checking.

Um, and they pay the secure deposit or the balance. They buy some extra services. Um, and then the last step is, uh, give them access to the guidebook where they can see the information without. Changing the links without going somewhere else. Just keep it in in the same journey. Yeah. Well that’s, it’s a big part of the guest journey.

What you guys have tackled, you know, from payment to, to upsells, to guidebooks. What do you, what’s next for charge automation? I mean, what’s the next big, uh, thing to tackle? Good question. Uh, so, uh, I mean, we have a lot of exciting stuff that, that we’re working on. I can’t just talk about yet. Um, but. In terms of, uh, the product, um, you know, we’ve been at it for quite some time.

Um, you know, I think almost, almost, uh, almost 10 years now. So it is very mature product from that point of view. Um, but at the same time, you know, we are still a company that’s working, like we’re an early startup. Um, we add, um, I think on, in every sprint, which is our sprints about, you know, uh, about a month or so, uh, in every sprint we know we we’re adding about.

50 60 improvements or features, uh, to our product. And it’s changing, uh, drastically, uh, every time. And this, at this point, it’s more, it’s not more one of the big things, but it’s more like on the micro little things that really impact the guest experience. How do you make everything extremely smooth without, you know.

And it’s every, any friction at all. Um, yeah, and it’s just, yeah. So it’s a, it’s a micro fine tuning. Uh, our solution is what we’re focusing on because we’ve tackled all the big important items and then making it to work very seamlessly with your PMS. So, you know, you’re not spending too much time switching tabs.

Everything is, you know, readily available to you. Um, so all this little increments, incremental improvements that we’re doing is our focus.

Yeah. Um, well, I know. Software has just gotten easier to make now, you know what I mean? It’s exciting. We can use AI to help us code and, and do things much faster. I’m not a developer, but, uh, I, I do like technology and I, I try to stay up to date with things. How do you see our industry playing out? As someone who’s been in the software side of things for the last 10 years, knowing that there’s lots of operators out there, especially the larger operators trying to do some of these things in-house, you know, or maybe they’re just like you have done over the last 10 years have have solved one little problem and then that turns into two or three.

How do you see that, uh, changing just the software landscape, I guess, in our industry? Yeah. And this is, this is. Much bigger question. Um, because we literally we’re talking about like, you know, how does, how’s AI gonna change our industry? Um, ’cause that’s how, you know, things have gotten much easier and faster to build.

Um mm-hmm. And what I’ve, I’ve, I’ve noticed is, you know, and we have some customers have also know, built some aspects of our product, uh, you know, in, in house. Um, so what’s gonna happen with, with our industry is that a lot of hosts. Uh, who built their own little product and they wanna expand it. You might be able to do 80% of the work, uh, fairly quickly, but then for the last 20%, for the all the little incremental changes that you’re going to do, uh, that’s where really, you know, where, where it begins.

And the way, the way to give you, um, an example is like if you’re building a house. You can easily just put up the brick, um, you know, or the concrete very easily. Mm-hmm. But now you gotta do the wirings and, uh, you know, the drainage, um, all the little things, you know, the, the tiling and there’s all this extra finishing.

That is gonna take you a lot more time. So they might kind of save money by doing in house, but in the end they would have to hire someone. They have to maintain it. So I don’t think it will become cheaper. They might have the con the you, you might say, you know, I’m gonna take the house and build it, but I don’t think it will be cheaper necessarily.

So it’s not a cost saving strategy. Yeah. Uh, if you have a plan to sell that product to somebody else. Uh, maybe, you know, there’s a bigger picture, but to build it in house. To continue to maintain it. And remember, I mean, there’s also security issue. There is, you know, maintaining servers, um, you know, DevOps, uh, I mean, it’s a much bigger project, right?

Um, that this is so, uh, companies who are doing it, like, you know, again, if you wanna build software tech company, yeah. You know, you can build things, uh, faster and then keep investing. But I look at it from our side, you know, you know, we use AI in all our developments at the stage. And we’re building things there and doing a lot faster, but I cannot see how it would be cost saving for someone to bring it in house.

Yeah. Yeah. Gotcha. Not quite there yet. Yes. Lots of, uh, uh, yeah. Well, awesome, Thomas. Um, let’s see. I’d love to hear you have your own personal portfolio that you’ve had, you mentioned, and that’s kind of where things have started. How do you mind talking about your personal portfolio, just for a few minutes and, and kind of how that’s changed and what you’re doing to, to stay competitive?

Yeah, so. I’m, I’m a user first. Um, and, you know, with my own product, uh, we, we use before things get released to the public, you know, we use my own portfolio product. Uh, and it used to be about 200 post COVID, you know, I went down to, to, uh, about, uh, you know, 80 or so. Um, and we use this as, as a testing ground, uh, for from, for a lot what we built.

And I, I really experienced everything firsthand and everything that we, we built it is to, you know, benefit my operation, which means I know by internal I’m benefiting, um, um, other companies, uh, as well because everyone has the same issue. Uh, and. Also, yeah, I’m at the stage where also I’ve been, I’ve been a host, uh, for about, you know, almost 15 years now, right?

Mm-hmm. Um, and I have a lot of deep, deep experience, uh, in, in the operation. And I, I live it every day, so I. To me, uh, optimizing every single component of, of the journey is, is what’s important. And then maximizing the revenue. Um, and it’s gotten very competitive. It’s got, you know, it has, and I realize it will not get easier.

So now you have to think of creatively how to do this. Um, and, and there’s obviously, I mean, there’s the pricing tools. There is. Uh, know in, in the, in the upsells, how do you want to test it out? You know, does it make sense? And then how much did I make? So I’m doing a lot of this research, uh, internally with, with my own, uh, before, you know, concluding if this is a better way to, to do it.

I don’t know if you, if you have any specific questions about how, how, uh, I’m doing anything else, but, uh, generally, uh. I think what I’m building is, uh, you know, what the product charge automation is, is, uh, this direct outcome of my own operation. Yeah. Well, a lot of good points there. I mean, um, yeah, the industry’s definitely gotten harder and, and returns used to be really good, and now they’re getting smaller and smaller, you know, as more people discovered short-term rentals.

And so we have to learn ways to be more efficient. We have to embrace technology and we have to learn ways to create better guest experiences. Um, and then outside of that, I mean. There’s a supply and demand equation, you know, in a lot of these markets have just seen a lot of supply growth. Um, yes. Mm. And you know, my, my philosophy, uh, in my operation is I don’t trust people.

Um, I trust process. Mm-hmm. Um, because I’ve been through a lot of stuff. People, you know, people get sick, people leave, quit. People do different things. So you can’t build a business around people. Um, there has to be a process whether that person is there or not. Business has to keep going. And I’ve built, um, no, the automation is really, does not rely on a person that doesn’t rely on a person’s knowledge, uh, or experience.

It’s really a process and, uh, and my goal is how do I create a business that, uh, can operate? Whether that person’s here or is not there, and how can I operate it with as little people as possible? Uh, because that saves you money, it saves you headache. And in a competitive space, you know, uh, human labor is the most expensive thing.

And if you can save that, then your, you know, then you can com You can stay competitive in, in this, uh, in this tough, uh, in the competitive industry. Yeah, for sure. Yeah, those are, we share a lot of those same ideas. I mean, that’s our idea behind quarterly is, you know, making things more efficient, using more technology, and, uh, excited to see where you take things with, with your, with your software companies and with your portfolio.

And would love to stay connected. Uh, how can, how can people find you and, uh, what’s the best way to get in touch? Uh, so best way to get in touch, uh, again, we have, uh, again, by email. It’s, uh, thomas@chargeautomation.com is, uh, the best way to reach us or our website, charge automation.com, uh, where you can find, learn about our product as well.

Uh, and I really wanna say yeah, and then thank you for giving us this opportunity. Uh, and, you know, it’s, it’s very, very good end. To see a customer that’s using our, our product. Um, and also, you know, to, to discover that you have a podcast and be part of it is, is quite exciting. So, uh, I would like to say thank you for this as well.

Ah, you’re welcome. Thanks for coming on and, and look forward to staying in touch. Thank you. Cheers. Thanks, Thomas. Bye-Bye.

If your VRBO bookings have been suffering lately, well, VRBO made a pretty big change on the back end that you might not be aware of. Today’s show. We’re gonna break down all the details.

Welcome back to the Short-Term Rental Riches podcast. I’m happy you’re here again. I’ve been traveling around again. I know you probably hear me say that quite a bit, but that’s just been my life over the last few years, and I’m not complaining. Lots of cool places out in this big, beautiful world currently in Florida where I’ve got a new property.

I’m excited to share the details with you. In some upcoming episodes, i’ll be going to another conference later this month, and excited to bring back always the latest and greatest for all of you out there.

Ditch that for, for YouTube.

Let’s go ahead and get right into it. VRBO recently changed their premier host status. This is what you could consider the equivalent of Airbnb’s Superhost status, which we know has a really big impact on your listing visibility.

So what changed? Well, they went from a portfolio wide. Status, meaning if you had more than one VRBO listing you and you achieved the status, it went to your whole portfolio. Well, now it’s just listing specific. So while you don’t get the visibility on the portfolio, you do get it on an individual listing.

Now for those of you out there that have portfolios and are thinking, ah, bummer, I no longer have the status, there’s actually a bright side to it too. Uh, if you have a property that you brought on, and unfortunately it got an early review that wasn’t so great. Before this would’ve removed the status from your whole account, but now it’s still going to give you the status on all of those great properties that deserve it.

So as of January, 2026, these changes are in place and there is a process to make sure that each of your listings qualify. We’re gonna break down exactly what those steps are. There’s actually more than one visibility layer,

And so we’ll get to that in a second as well. I’m gonna go ahead and read off my list here. The core requirements for you to achieve the premier host status, again, on the listing level, not on a portfolio level, are a booking acceptance rate of 99% or more. So yeah, basically every single reservation. You need to be accepting.

Uh, you can’t have any cancellations or the owner initiated cancellation rate has to remain zero. There’s a timeline to when they evaluate you for the status. We’ll get to that in a second. The third core component is an average review rating of 4.6 or higher, so that’s not that hard to achieve, right? In fact, if you have a 4.6 average with your properties, you’re probably not getting a lot of visibility.

You’ve probably got some operational things. Going on or some housekeeping things that you really need to get buttoned up because 4.6 in today’s world doesn’t earn you a lot of money.

The fourth core component, you need at least five reviews on VRBO to qualify. And the fifth one, your property has to have at least five bookings or 60 nights booked. So consider if you have a property that maybe has a week long rental period, you might consider shortening.

Shortening that minimum stay so you can get some more reservations up front, get the status, maintain those good reviews, and then you’ve got this status for the long run versus drying the process out for a long time and maybe earning less on the reservations. Because they had less visibility.

Now, you don’t need to meet each of these five core components every quarter. You don’t need 60 days booked. For example, every quarter VRBO is going to evaluate you every quarter, so every three months. And they’re going to look at the last 12 month period.

So you do need 60 days booked out of the last 12 month period, for example, to make sure that you get the premier host badge.

it’s pretty easy to find out if you have this badge already, if you’re looking at your public listing. Well, if you scroll down where your host badge is. It’s gonna have that status right there for you, but if you’re unsure, just log into VRBO.

You can go to the performance page, and there’s a nice little dashboard there that shows you your premier host. 

 for those of you catching the video version, while you can see the screen share that we’re sharing here in the background, real easy to find out if you’re meeting each of these five co.

Now, good news. For those of you out there that maybe don’t have a lot of reservations coming in from VRBO, there are still some milestones that you can achieve that give you more visibility.

All this information is available online, but we get the behind the scenes look sometimes because we do have an account manager now that we’re managing over 220 properties in over 40 cities. Around the us If you’ve got a property and you’re looking for a little help with it, well our team would love to chat with you.

You can go to str riches.com. There’s a little partner with us button. You’ll find some more information. We can book a time. I’d love to jump on a call with you personally to see if your property makes for a good fit.

So there’s actually three milestones. The first one gives you sort of this good status, whatever that means. It’s a little bit arbitrary, but it’s better than nothing, right? And so if you’ve met some of the core components, you do get a little bit of visibility. The second milestone is actually achieving the premier host status, but there is a third one that gives you extra visibility and you stand out more on the listings.

The way that VRBO displays these isn’t a hundred percent crystal clear, and even coming from our account manager, but for this third milestone, essentially, if you are in the top 1%, well you’re getting much more visibility and you’re going to be standing out.

All right, so let’s talk about some of the benefits. One of ’em I’ve been rattling on about already, and that’s that you get a little bit more visibility, but there are some other benefits. A very big one is that when people search on VR B’s platform, just like they search on Airbnb and filter out Superhost status.

They can now filter out Premier host status. And so if someone’s used to using the platform, they prefer VRBO and they know that they want to stay with a really good quality host and a good property, well, they can simply filter you out if you do not have the premier host status.

Another side benefit is that you do get priority support, and as much as we’d like to think that a hundred percent of all of our guests experiences are perfect and top-notch, we know that especially if you’ve been doing this for a while, that there’s going to come a time where you do need to involve support 

And getting on the phone with Airbnb or VRBO or especially booking.com is not the most pleasant experience. 

 So you do get a little bit of priority support if you are a premier host.

Now one last one, and this is a little subtle, hard to say how much impact this actually has. But VRBO does do promotions. Remember the OTAs, the online travel agencies, they spend hundreds of millions of dollars trying to do their best to market your properties so that they get booked and they earn a commission.

And so from time to time, they’ll be sending out email promotions, things like that. They can be targeted based on cities. And if you do qualify as a premier host, then you’re much more likely to be included in some of these email and marketing efforts.

Now, let’s talk about an actual takeaway for most of you that maybe don’t have the premier host status, but you are heavily on Airbnb, well, you could snooze your Airbnb calendar. For a short period of time to get this status on VRBO helping you to balance out your property across the OTAs.

Now, this might sound like a crazy thing, and obviously you don’t wanna snooze your calendar to the very last second if you’re not getting reservations. But let’s say you’re booking window, the amount of time before someone books your property is quite long and you have a longer grace period. Well, you might consider just snoozing your listing on Airbnb again, if you’re already doing well on Airbnb so that you get more visibility on VRBO 

Because what happens is if you’re primarily booked on one channel. Then you’re very likely gonna continue to stay, booked more on that channel, and you may be missing out on some big opportunities if your calendar’s always booked, which is a great thing.

Don’t get me wrong, it doesn’t leave any opportunity to get bookings on other platforms.

So just a quick tip for any of you out there that are looking for a little more diversification and remember, VRBO isn’t an amazing OTA in every market. It started as vacation rental by owners, so it is predominantly in vacation rental areas.

Of course, we always recommend that you’ve always got your property on VRBO, especially if you’re in the US South America, not so much Europe and those places, not so much. But if you’re in the us, especially if you’re in a vacation rental market, having the premier host status can go a long way to driving your visibility 

So this might not seem like a really big deal, especially if you’re not getting a lot of bookings on VRBO, but according to our account manager, these Premier host status can significantly boost your visibility, so it’s worth taking a look at. Until next time, I hope that gave you a little bit more insight and have a fab this week.

​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.

Well, welcome everyone. I’m glad you’re here today. My name’s Tim Hubbard. I’m the CEO of Cosley. Also the host of the Short-Term Rental Riches podcast, where a lot of you may have found us through. There’s a lot of questions in the short-term rental space and we talk with managers and owners and investors.

Every single day. And we also manage over a couple hundred properties. And so we’ve got a lot of insights and I’m looking forward just to having a casual conversation around the questions that you’ve already submitted.

So let’s go ahead and jump into it.

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. And I guess, yeah, before we get started, for anyone that I haven’t met before, my name’s Tim Hubbard. I’m the the CEO and Co-founder of Cosley uh Cosley. Our name comes from this idea of being your core operating center on the back end of all your short-term rentals. So I. You know, we’re making the pricing decisions.

Uh, we’re handling the guests, we’re handling task management. Uh, and excited to say we work with a lot of partners now in over 40 cities, which also gives us a lot of really good insight. And so along with our partners properties, uh, my properties, we’ve got some real world advice. Um, and, excited to share that today.

So, why don’t I. Just start off with this first one that has to do with pricing, and this came from Mark, uh, DaVita. Thanks for submitting this. It says, do you have any experience with hospitable Dynamic pricing tool? I currently use Price Labs, so for those of you don’t know, hospitable is a PMS program.

Uh, actually, I think I interviewed their, their founder, uh, not too long ago on the podcast. What is my experience with their dynamic pricing tool? Well, I can’t say that I have personal experience with their tool, um, but I know every PMS essentially has a dynamic pricing tool.

And why do they have it? Because. Dynamic pricing is an essential now, um, and a lot of the property management software companies have realized that their users are not using a dynamic pricing tool. So if you signed up for Hospitable, for example, you can hospitable, can see if you’re connected to Price Labs.

And if you’re not, then they wanna sell you the pricing tool. That’s just how it works. They want to, they want to get more from all their current users. Um. Price Labs only does dynamic pricing and that’s all they’ve ever done. Uh, and so for me, a company that’s focused specifically on one thing and doing that thing very well is usually always gonna have a better outcome at that one thing.

But we also use some other data pricing tools and there’s some. There’s some challenges with dynamic pricing tools. Uh, I also had the founder Price Price Labs on the podcast, so you guys can go back and check that one out.

But some of the main challenges with revenue management that we’ve identified is first of all. The data’s not a hundred percent accurate, so it’s scraped data, uh, meaning that they look at your Airbnb listing or VRBO listing. Most of these platforms are only looking at that data,

So the first thing is that the data’s not a hundred percent scraping means that they’re looking at your calendar, they’re seeing what your price is. They’re scraping that data and if your calendar becomes blocked, then they assume that you rented that night. Uh, but we all know, uh, at least about those that have been in the space.

There are lots of reasons why we block our calendar. Maybe, uh, there was a maintenance issue, maybe, you know, whatever it happens to be. You know, there’s a list of reasons. Maybe we’re using it personally for like two months. Uh, and so. That data is skewed. And, and that’s the same for Price Labs.

That’s the same for Wheelhouse, that’s the same for, um, really any dynamic pricing tool, air DNA. So what we like to do internally is we like to look at all the data we have access to, to make a decision. The more data we have, the more confident we can be with it. So I hope that helped answer that question a little bit, um, while we’re on the pricing topic.

A couple other things that we’ve noticed that are lacking in the dynamic pricing tools. For one, they don’t account for your review scores. I know we got lots of questions today on reviews as well. Uh, and rightly so. They are one of the main points to driving your visibility for your property. Uh, and we know that more visibility with our property means more people are looking at it and more people are booking it, which means the property, should be earning more money.

Um, and so to have a dynamic pricing. Strategy that does not incorporate that is a pretty big, pretty big miss. , Excited at Sly, we’ve got a tech team with us now. We’re, uh, bridging a lot of these gaps, and so that’s one of the things that we incorporate also a brand new property.

If you have a brand new property that just entered a market and it has no reviews and your competition has 55 star reviews, that’s different, right? So your pricing has to constantly be changing. so highly recommend using a pricing tool.

Uh, and then I’ll just leave you with one last. Flaw that we’ve found with revenue management and a lot of the current management practices is that it does a really, it does a good job at adjusting your daily price. Right. You know, just like an airline, if there’s an event in town, uh, if it’s a, a weekend versus the weekday, if someone’s booking five months out from now versus right now, , it’s adjusting all those prices, you know, based on market data and demand, but it’s adjusting.

Based off a base price. That’s what Price Labs calls it, a base price. So you launch a property and you say, yeah, I think my property should earn $200 a night. That is the base price at which the dynamic tool is, is adjusting it every day, uh, either up or down. But if your base price isn’t right. Then that means you’re adjusting off like a faulty base.

Right? And so the way that we account for this is by looking at market data and anyone using Price labs, anyone using their DNA, uh, or the tools out there, you can get access to market data. And if you are getting booked up much faster than your market 

, you’re probably not priced high enough, right? And then the opposite is true. If the market’s getting booked and you’re not getting booked, then your prices are probably too high. Uh, and so we look at those things and we adjust that base price accordingly.

Again, all based off, off market data, um, that is really our. Our benchmark, you know, for how a property is done. And if you’re in a market where there’s not a lot of data, then there’s a lot of testing that goes on, right? But again, you have to be adjusting that base price to truly know if you’re maximizing prices, or not.

Uh, of course if you have historical data, that’s always a big help too.

We’ve got some other pricing questions here. Here’s one from Ann says, how far do you turn on your dynamic pricing? how far out do you turn it on? So our dynamic pricing is turned on for all of our available nights.

Uh, we wouldn’t wanna have our property open for the next 12 months, for example, and only have dynamic pricing turned on for 10 months. Um, so that’s a pretty easy one. We wanna make sure it’s, it’s turned on. All the time.

, This one’s from Mohammed. Uh, I want to learn about revenue management.

Um, well, it is, uh, it is a bit of a study. Um, you know, it didn’t used to be that way, but it should be that way, you know, in a hotel. It’s the second highest paid position after the general manager, the person that runs the hotel, for example. Um, but we know, like in the airline industry, I mean this, this is where we see dynamic pricing going.

We see it all being run by machines, right? I mean, you don’t have someone at American Airlines that’s like, ah, I’m gonna. I’m gonna add a 5% discount on my Dallas to Charlotte flight today. Uh, it’s all pulled off from data, right? And of course that’s, that’s really, really complex. These dynamic pricing tools are allowing us to do a lot of these things easier.

But at the end of the day, um. Algorithms that can act accurately predict all this based off information is where the, where the industry’s headed. Um, so if you’re not using dynamic price right now, it’s a huge advantage to jump on those tools. Uh, if you do jump on it, uh, there is a lot to learn.

You know, these, these tools have a lot of it built in themselves, but make sure that you’re keeping account for some of the things that those tools don’t, currently incorporate.

Okay, I think that’s, that’s a fair amount on pricing. 

 there are a lot of guest management, uh, questions. Um, so, you know, there’s really three parts to having an optimum property. we have to have a really good listing, one that stands out. we have to have really good pricing, but if we have a really good listing and we have really good pricing, all the things we just talked about, but we don’t have.

Good guest management, then your property’s not gonna do well, unfortunately. So guest management is critical. I think a core component to starting with that is setting the right expectations, right? So we don’t wanna advertise something in our property that’s, that’s not there. if the backyard does not look great.

People are still gonna see the backyard when they check in your property. So, we always encourage everyone to represent their property exactly as it is. Doesn’t mean you need to put the backyard photos like your header photo, of course. but we wanna make sure we have it in there.

 this question came from, Beth Russell. she said she has one property. what if any PMS should I use. Well, that’s a good question. with one property, you know, the, the need for PMS is, is a lot less than, you know, even with two properties. I always highly recommend using technology because it helps us, it helps us create better guest experiences, be more efficient.

I worked my, my prior life, uh, I worked for a software company in a different industry with, um, automotive shops. And w and I sold business management software similar to what you, you would see in A PMS. The software I worked with helped manage the businesses and what I found consistently, the ones that really embraced technology.

they had better customer experiences, so in our case, guest experience, they made more money, and they were less stressed out and everything was more efficient. So I highly recommend using, a tool. Uh, there’s several PMSs that can work really well for smaller amounts of properties. Hospitable is one that’s kind of catered towards, smaller portfolios.

Host away and Guesty are probably two of the biggest ones in the industry right now. Um, there are new ones popping up that promise. A lot of AI technology, which we’ll get to that in a second too. That’s another common theme that came up. but the reality is none of them are perfect. Right. just coming back to the original question on using, hospits dynamic pricing tool, they built that tool to accommodate.

Better tool, basically. And so all of these PMS programs are trying to do that with every, every feature. we internally used to use guestie Great program. we currently use Host Away, which we feel is one of the leading software programs. I mean, they’re valued over a billion dollars. They’ve raised over $500 million.

 and so they’ve got a lot of, Resources to continue adapting their, their software. But any of those would, would be good. And, and the main things that those are helping with are channel management, right? To help you get on all these different OTA platforms, which is a really big piece of your performance with the property,

So I would check out any of those.

 here’s one from Laura Lopez says, are you still using Notion? At your pretty database, please share how it’s used. So, uh, Laura I would imagine is probably a long time podcast listener. ’cause I’ve pretty much talked about everything I was doing in my personal portfolio and, this notion episode came out a long time ago.

The answer is no. we do not use Notion as our property database, although I do think notion, for any of of you that don’t know, it’s essentially a program that allows you to organize all your notes, all your data, your video, your links, your files, everything that you can imagine in, in lots of visually pleasing ways.

 and they’ve branched out to connect with all kinds of other software, but, they’re not designed specifically for short-term rentals. Uh, and because we manage a whole lot of short-term rentals, it’s imperative that we have our information a hundred percent accurate.

And so we currently use a program called Conduit, that houses, Well, we’re building our own internal database, I guess is the, the long story short. we do have developers on our team now, and, the reason that we’re building our own internal database is because we do use multiple programs in the industry.

Which we think that any serious operator has to be doing. That kind of goes back to that idea of using, using the best tools. but those tools don’t all fully integrate all of the information with each other. so Hostway, for example, is a PMS that integrates with the OTAs or the online travel.

Agencies like Airbnb or booking.com. but it doesn’t actually integrate a hundred percent of the information. and then we’re using this tool I mentioned called Conduit, which is an AI tool that helps us with some guest messaging. And, it also stores required information for property, but it’s slightly different than what’s in the property management software.

So hopefully I’m not losing people here. But the idea here is that. Each of these tools has its own data that it needs, and it’s not all the same. So we’re basically building our own central database. and you could do this with notion still, I mean, if you’re managing, a smaller amount of properties, notion has a lot of flexibility, to track information properly.

 so nope, not using that anymore. we’ve brought things in-house, but I still love that program. it’s, I use it every single day.

So let’s see what else we have on guest management. Jenna Jacobson best reservation management system to handle guest communication. Um, so this is something that’s, that’s changing. it’s changing because AI’s entered the space, right? And one of the things that AI is excelling at.

More so in any than any other industry is customer support. and I know a lot of us may have the idea of like really bad chat bots, or entering, you know, customer support with like Comcast and getting an AI agent that asks the same question like 10 times. That’s not the reality today. Reality today is that there are.

Really, really good LLMs or language learning models, that can answer questions a lot of times better than, than humans can more consistently, you know, they don’t forget things. They can access unlimited amounts of data. and so in terms of guest management with messages. It used to be a PMS, so you know, hostway or hospitable you would use to help you manage those messages.

And that’s still a really good tool. But most of those are not as developed with ai, as. Tools built specifically for customer support or guest support. they have what you would call automations, you know, so they have ways to automate check-in instructions, for example. or they could automate, a request for review, but we know that those automations don’t fit every guest equally.

 let’s just say your check-in time is 3:00 PM and. The guest doesn’t arrive till midnight. Maybe they have a late flight or something like that. If you use a programmed automation, maybe it was set to send a follow up at 8:00 PM to say, Hey, Josh, just wanna make sure you checked on the property.

Okay, but they already sent you a message that said they weren’t showing up till midnight. Well, that doesn’t look that great, right? and that’s something that most. PMS programs are still not able to accurately, handle, because they haven’t involved all the AI yet. So with AI it can read the messages and see, oh yeah, Josh said he is coming at midnight.

It ends it at 12:30 AM So there’s just so much more flexibility with ai, uh, to the point where we don’t use our PMS for messaging anymore. the internal tools and host away, we do not feel our nearly as, as good as the ones that we’re using outside.

In a tool called Conduit. and so there are a lot of AI tools being developed specifically for the short-term rental industry.

 one of the big promises that you’ll see is that they automate 95% of all your guest communication. You know, you can set up a property, you turn this thing on, it knows everything. But we know that that’s not the truth. there’s lots of situations where we need humans involved, to.

Handle tougher decisions. maybe there’s information that a guest asks that you don’t have stored in your database, so there’s no way for it actually to answer. all these things we handle on the backend through escalations. You know, we have, we spend hours and hours literally every single day, adjusting this, testing this.

And just the side of testing it is really challenging. So, um, we test with my properties, which is nice. I know not everyone has, test properties around. but we do that. We have quality control, and we’re just constantly, constantly, messing with it. AI programmers have promised that.

Yes, maybe they do a really good job at sending the basic information, like, you know, Hey, what’s the wifi password? Or, what’s the code to get into your property? but where they don’t automate things is. When you have complex workflows, so let’s say just as an example that you wanna allow early check-ins at your property.

We know, basically everyone asks for an early check-in, right? And basically everyone asks for a late checkout. I’m guilty. I do it as well, whether I’m at a hotel or a short-term rental. But there’s a lot that goes into that. first of all, we need to make sure the property’s available, if it’s available.

Has it been cleaned? Did we just have someone check out? how far in advance does the guest actually wanna check in? Maybe it’s like eight hours in advance, where. It’s justified for us to charge them extra and the guests would be willing to pay extra. but then how much do we actually charge the guests?

 do we charge them on as a percentage of what the nightly rate would be? Or do we charge them on like an hourly basis? So you can see how some of these workflows get really, really complex, and these are everyday things like literally everyone asks for, a check-in and, and maybe your process isn’t, isn’t that complex.

 But for a lot of people it is, or you know, for larger portfolios it is. So that’s the part that is not being, that’s not accurate. When you’re looking at AI tools in the market today, when they say that they’re automating 95% or whatever it happens to be, they’re considering just the basic guest messaging.

 So hopefully that gave you a little clarity. I think it’s a super exciting space because, it’s improving the guest experience, you know, assuming we have all of our information accurate, right? and if you are building a portfolio, whereas we had multiple people responding throughout a guest stay, maybe it’s a week long stay, if you have someone helping you, you have multiple people helping you, there’s different.

Tones that maybe were going out, maybe someone gets sick. And so the messages was delayed a little bit. And so there’s all kinds of benefits from, from ai and it’s, it’s getting better by the day. I mean, it is really, really impressive.

Well, we received a ton of really good and important questions. Questions that are undoubtedly on a lot of your minds that didn’t actually ask them as much as I would love to answer all of them in this episode. As you know, most of our episodes are quick and actionable,

so we’re gonna go ahead and save some other important questions for a part two.

Stay tuned. As we jump into those next week

There is a pet friendly debate going on in the short term rental world. Some of you swear by the increases in your bookings, while others are fearing the damage from hosting pets. So today we’re gonna answer the question, should I allow pets in my property? And we’re gonna cover all the bases, what you should be charging, damage considerations, housekeeping considerations.

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

Well, welcome back. We’re gonna break down everything you need to know about allowing pets at your short-term rental property. But before we do, let’s just start off with the big one, the nice one. The positive one is that you will see very. Big boosts in your visibility. If you allow pets at your property, and this is really easy to see, you can simply go to Airbnb, you can pull up your market, you can see how many properties are there, you can select the pet filter, and then you can see how many disappear.

So for those of you catching the audio only version, I’ve got my computer screen pulled up. I put in Destin, Florida, a very popular vacation rental destination in the us. I zoomed in on a map location that’s currently giving me over a thousand homes within that map area. Now, if I go to this little filters button, Airbnb’s filters, and I scroll down just a little bit and I click the Allow pets button.

That thousand homes drops to 484 for this map location that I’ve selected. Now imagine you’re one of those 484, and imagine all the people that love to travel with their furry little friends.

So the visibility boosts are massive, and you can do this across a whole bunch of different markets and see that very often, as many as 70% of the listings in that market do not allow pets

The other bright side of this for you hosts out there allowing pets, is that you can very often charge more. We’re gonna get to that in just a second, but before we do, let’s talk about the housekeeping consideration.

Because I know a lot of you are thinking, I have allergies. I don’t want to accept them. My housekeeper would kill me if I turned on the pet filter. And that is the reality for a lot of you. But if you’re struggling in a market, you’ve gotta do what you’ve gotta do. So take a look at your market, see how many properties are not allowing pets.

And decide whether or not you want to, if you’re charging more for that reservation, well, you could also afford to pay your housekeeper a little bit more.

If you are renting a property for a little bit longer, will then our team and I highly recommend that you have a bit of a midterm. Cleaning and you can charge us back to your guests. Make sure it’s in your rental agreement or your house rules. But it’s a way for you to check in on the property. And of course, you want to have a camera at your entrance of your property as well to make sure if your guests said they were showing up with one little Chihuahua, they didn’t show up with four great Danes.

So let’s get to the financial side of things. Yes, you very often can charge more, but it depends. And what does it depend on? It depends on your market and how many other people are already allowing for pets. So you want to use a tool like Price Labs or Air DNA to find this information and you want to build some comp sets of other properties that allow for pets.

And if some top performing properties in your market are allowing for pets and you’re already charging the same rate, then unfortunately you’re probably not going to be able to charge more for allowing pets.

Because when we add a pet fee, it’s really adding to our overall reservation price and people are booking our properties based on the overall reservation price. As you probably know, housekeeping fees, for example, don’t show up in the total price anymore,

so you’ve gotta consider that. But let’s assume that you do have the flexibility because most of the people in that market are not allowing pet. You have some options when it comes to charging for pets, and it does vary a little bit depending on the OTA or the online travel agency. Airbnb, for example,

 allows you to charge a flat rate that spread across the reservation, But that rate cannot exceed your average daily rate. So if you’re charging a hundred dollars per night, you can’t charge a $300 pet fee,

although there is one little workaround you can charge based on what you have in your rental agreement or what Airbnb refers to as their house rules. So let’s say you wanted to charge for two pets. And you allowed up to two pets. Well, you can simply have that in your rental agreement that it’s $50 per night per pet.

And if your guest books your property, they accept those terms and you can charge them via the resolution center for those extra fees.

Now VRBO has a lot more flexibility. You can charge a per stay price. You can charge a per pet price, or you can charge a per night price.

booking.com. Not so easy. Most of you are collecting payments on booking.com through a platform like Stripe, although booking.com does have payments by booking available, depending on the market and depending on your account. But let’s imagine that you are collecting the payments from booking.com, then you do have flexibility similar to putting those arrangements in your house rules.

You put that in your rental agreement on booking.com.

 Next up we wanna make sure that we have some good rules in place. So rules around pets could be size and breed restrictions, could be the number of pets. If you’re on Airbnb, you wanna make sure these are in your house rules. If you’re using a platform outside of that, this is going to be in your rental agreement.

I am gonna go ahead and just read our rules off. I am gonna go ahead and just read our pet rule off to you. You’re more than welcome to copy this, and you’re more than welcome to grab the link in the show notes with all of our house rules that you can use as a template. So ours, if we’re allowing pets in a particular property, it says This is a pet friendly property.

We’re glad if you were able to bring your pet along, but please note we have a few additional rules. Please note that a $50 pet fee will be applied per pet. This helps us get around Airbnb’s flat PET price. Please disclose pets at the time of booking. All pets must be added, your reservation, so the applicable pet fee can be applied.

We are unable to host cats and breeds of dogs deemed aggressive per our insurance policy. No more than two animals. No larger than 20 pounds. Pets are not allowed on furniture. And please clean up after your pets. Do not leave your pet home alone unless crated.

So quite a few potential pet rules in there for you to choose from. Of course, you don’t need to have all of those, but it is good to consider all of them.

Okay, so let’s assume that you decided to allow pets at your property. There’s a couple other things that we want to put in place when it comes to damage protection.

We always recommend having either a damaged waiver, which you can use a company like Wavo or Safely or charging a deposit. Now, if you’re accepting pets, you may want to consider raising that deposit just a little bit. And one of the nice things about a deposit is it’s not raising your total reservation price, right?

So you’re staying more competitive with your local market. But you’re also providing a little bit more protection on the backend.

One last tip. You do wanna make sure that your short-term rental property insurance policy covers pets.

Some policies exclude it entirely, and I know these policies are like a thousand pages these days. So another quick tip, just download that PDF document, give it to chat PT and say, Hey, Mr. Chat PT. Please give me any verbiage that excludes or restricts pets staying at my property.

All right. With those precautions in place, you wanna make sure that you’re marketing your property well online, remember, we wanna stand out. That’s the name of the game because there’s a bajillion short-term rentals out in the world these days, but there’s a lot less. That allow pets. So if that is you, consider adding some photos with pets in your listing.

Consider adding some pet amenities, you know, dog food bowls, all those types of things, doggie, dooo bags and leashes.

 Add the nearest dog park to your local map. Maybe even have a little pet welcome basket.

Those will go a long way, and they will surely help your reviews. Now for all of you out there like, Tim, I don’t care about the visibility or earning more money. I’m just not going to allow pets.

Well, the reality is pets are still going to stay at your property and they will come in the form of a service animal. According to Airbnb’s policies. A service animal doesn’t even necessarily need to be a dog. It could be a cat or a bunny rabbit, or a small horse.Yes, there are no restrictions on service animals, and you are also very limited at what you can and cannot ask someone that’s bringing a service animal.

Now service animals different than emotional support animal. We’ll get to that in just one second. There are only two questions you can ask a guest Bringing a service animal. One is, is if they have the service animal based on a disability.

The first question is. Is a service animal required because of a disability,

and the second is what service task has that animal been trained to do? Now, sometimes by asking these questions, you might filter out some people that are trying to bring a service animal. It’s not actually a service animal, but outside of that, you really don’t have any flexibility, and yes, you’re going to have people staying at your property.

With service animals. Now, what’s the risk of denying them or asking them more questions? Is that your listing can get taken down from Airbnb’s site or any OTA site that has these restrictions, which most of them do it in the form of discrimination. If you don’t allow someone at your property that has a service animal, Airbnb will take you down via their discrimination policy.

so if a guest says they’re coming with a service animal, or you saw them checking into the property on camera and they showed up with a dog and they said, it’s a service animal, you can’t require documentation. You can’t ask for certification. It is very restricted.

Now, where you do have some flexibility is when someone says they’re showing up with an emotional support animal.

Otherwise known as an ESA

with an e, s, a, you do have flexibility. You can ask questions, you can charge. You can’t charge for a service animal.

You can apply your standard pet policies. Now, keep in mind, if you get damage from any type of animal, whether it’s a service animal or emotional support animal, you still have a right to charge for that damage.

If you happen to be in New York or in California, well, I’m sorry, but yeah. Emotional support animals for you are treated just like a service animal. So we wanna make sure we know these little details. To recap, in a nutshell, we want to check our market, see how many properties are actually filtered out. We want to talk to our housekeepers and make sure that they’re comfortable and we’ve worked something out so that they know we’re going to have pets staying at our property.

We need to look at our market data to see how much more we can actually charge. We need to have the right policies in place.

If you want to use our House rules template, just grab them in the link below. We wanna make sure we have some protection in place in case there are damages. So that would be in the form of a deposit or a damage waiver. Of course, you want to check with your insurance. And then lastly, you just want to make sure you or your team or whoever’s helping you out.

Understands the difference between an emotional support animal and a service animal. If you don’t wanna look into all this stuff yourself, well, our team would be happy to help you out with it. We’ve managed properties in over 40 cities, over 60,000 guests now, which you better believe a lot of those showed up with pets.

A lot of them showed up with pets without letting us know. But because we have the right policies in place, we’re able to charge appropriately. You can partner with us by going to st riches.com. There’s a little link there. I’d love to chat with you personally. I hope these insights helped you answer the question, should I or should I not allow pets in my property in 2026? Until next time, I hope you have a fabulous week.