Welcome to Short Term Rental Riches.

We’ll discuss investing in real estate, but with a specific focus on short term rentals.

Quick, actionable items to acquire, manage, and scale your portfolio.

I’m your host, Tim Hubbard.

Welcome back, everyone, to the Short Term Rental Riches podcast.

I’m really excited that you’re here with us today.

And this is a very special episode.

In fact, this is the first time that I’ve ever done a live interview.

I’m here in Nashville, Tennessee.

Been traveling around quite a bit.

And we are at the STR Wealth Conference, which has been really amazing.

A lot of great speakers here.

And I’m sitting down next to one that had an awesome presentation.

And he also has an awesome company.

Welcome to the show, Marc Hostovsky.

Great to be here.

It’s an honor to be your first live interview.

Did I butcher your last name a little bit?

No, you nailed it.

OK, well, that’s good.

That’s good.

I was practicing that one.

Marc, well, why don’t you just give us a little background real quick?

Yeah, sure.

So my background is in retail.

So I was an early employee at a company called jet.com, which is an e-commerce marketplace.

Incredible story there.

I mean, the business, we launched to the public in July of 2015.

And then a year later, we were already doing $80 million a month in sales.

So it was an incredible rocket ship.

Walmart ended up buying that business for $3.3 billion.

And then I spent three, four years inside Walmart working on the e-commerce side, the brick and mortar side with stores managing a pretty big P&L.

And my biggest takeaway from working in retail is that the best product experiences, that they weren’t happening on screens the way they do in e-commerce.

They’re not happening on shelves or in aisles the way they do in stores.

They’re happening in happening in real moments of use when you would actually use it.

And I had my own experience at a short term rental where I was just having incredible experience like sleeping on a really nice mattress and really enjoying the pillows, like really enjoying the fixtures and the shower head.

And I was like, this is where these brands want to be.

You know, they think that like the best place to be is Facebook and Instagram and TikTok and Google.

But real moments where someone can use your product, those are the most valuable things.

And then we kept pulling on that thread and we were like, well, wait a minute, then these brands like a West Elm, Wayfair, Powderbind, they shouldn’t view short term rental hosts as customers to profit off of.

They should view hosts as actual marketing partners and distribution partners.

And if that’s true, then the economic relationship should be different.

You know, hosts should get really good discounts on these products.

And then we kept pulling on that thread and we’re like, and also the way hosts are ordering for these properties, like, wow, that’s hard.

It’s a mess.

It’s a disaster.

And so then started investing in technology to help with the project management side and, you know, consolidating all your orders, seeing tracking all in one place, being able to filter by property.

And now we got Minoan in its current form.

It’s been a good ride.

Yeah, that’s awesome.

So, I mean, obviously, furniture is a huge piece to every short term rental.

Right.

A lot of people call them furnished short term rentals because they have furniture in them.

And we know that two, I say this all the time, but two short term rentals right next to each other can operate completely differently.

And a lot of that comes down to the design and the furniture in there.

And so I think it’s really cool what you guys have done at Minoan helping to facilitate owners, short term rental owners, to not only buy furniture from a whole bunch of different places, but also get it at a discounted price.

Yeah, really good pricing, I mean, market leading pricing, because the whole thing is getting the suppliers to view you guys as marketing partners, you know, and think about how they work with influencers, you know, they’re giving products away for free.

And so incorporating a little bit of that dynamic brings the prices down big time.

And we’re saving hosts between 30 and 50 percent on everything they’re buying.

That’s fantastic.

And for a lot of us out there, we talk about scaling on this show a lot and getting to that magical number where we can be financially free.

And so a lot of us are not doing this with just one property or two properties or three properties.

We want to start a business out of this.

Yeah.

And that requires a lot of furniture.

And I know that I’ve been there waiting for those Amazon boxes to come, waiting for the Wayfair boxes to come.

And they’re coming at different times and different sizes.

And some don’t come at all.

And it’s just a total mess.

So can you tell us a little bit more about that process, maybe like the actual ordering process?

Yeah, yeah, exactly.

So the way that the platform works is we actually send you to these brand partner sites to pick your products.

And then we have a Chrome extension that will grab the product information and bring it back to Minoans.

You actually browse on wayfair.com, West Elm, Pottery Barn.

And the reason we do that is because all of like West Elm, for example, the way they shoot their products, like photography, the way they write product descriptions, it’s all tailored to their products and their site.

So that’s a much better product experience for hosts.

So we send hosts there.

They use the Chrome extension to pick the products they like.

They bring it back to Minoan.

Minoan, you’ll see like all your products from different brands.

So maybe you’ll see a fire extinguisher and a coffee maker from Wayfair.

Maybe you’ll see an ottoman and a table from Crate and Barrel.

Maybe you’ll see the planter and decor from West Elm.

You request a quote, and then the quote, that’s when it really becomes like project management.

We’re like, okay, how much is this going to cost?

When’s it all going to be delivered?

Does that work with your install date?

So we’re helping you make sure that everything will work with the dates you have.

And then once you place an order, we route the orders to the brand partners.

We keep an eye on tracking.

We keep all that consolidated in the cart.

So you can, instead of having tracking emails from Wayfair and Crate and Barrel, it’s just all in one place.

And then also centralizing returns.

So you send some stuff or refunds.

Some stuff doesn’t show up at all.

Sometimes stuff shows up broken.

And man, that’s the last thing you need when you’re focused on an installation.

And so we do as much as we can to just make that process easy.

Taking care of the return with the supplier, figuring all that out.

That’s awesome.

And this really is one of those places of the industry where we see some people that do a really good job with this.

But then we see people that delay this part of the process and they take months, really.

And we have to remember that this is a business, right?

I mean, for most of us that aren’t splitting our time in our short term rental.

Well, even then, I mean, really, every day that we’re not renting the property is a day that we’re losing potential revenue.

And so I think that’s really awesome what you’ve done.

I’ve dedicated years and hundreds of thousands of dollars through trial and error to figuring out how to manage my personal portfolio remotely.

And it wasn’t always easy and it took a long time.

But now my amazing team can professionally manage my properties without me.

And good news, our team can also manage yours.

Let us save you the stress and headaches and some money by offering you an industry low fee.

To find out more about partnering with us, head to strriches.com, hit the property management button, answer a couple of quick questions and meet with me personally.

That’s strriches.com.

Rest easy knowing that with my team, your properties will be in excellent hands.

So for those of you tuning in, there’s a ton of people at this conference.

I mean, it’s a big one.

There’s like, I don’t know, two thousand, twenty five hundred people here.

Yeah, feels like it.

Yeah.

There’s just people everywhere.

You might be able to hear them in the background.

And Marc was up in front of all of them.

He gave a fantastic presentation.

And one of the things that he brought up, which we’ve talked about a lot in the past, is really the guest avatar and know who we’re who we’re reaching out to.

And we can do that a lot with design.

We talk about renting properties for business travelers.

They need certain things or certain amenities that maybe a family vacation home doesn’t need as much.

So can you talk a little bit about that guest avatar piece?

And then also mention the little tidbit on B&H camera.

I thought that was really interesting.

Yes.

Like I said, my background is in retail.

So a lot of, you know, I saw the retail industry change dramatically with the introduction, with the launch of Amazon.

And then a very quick move to e-commerce, and that industry is now very mature.

I mean, it’s professionalized massively.

When you look at the short term rental industry, we’re sort of in the middle of that maturation curve.

So it’s no longer a place where anyone with four walls and a roof can make money.

You got to be really on your game.

But it’s not as competitive and mature as the e-commerce industry.

And so with e-commerce, we can learn from how that industry played out, who the winners were, what really worked for them.

And so with the benefit of hindsight, when you do look back at e-commerce, the people who won really knew their customers the best, better than their competition.

And I think there are a few great examples of that.

One is for people who are into the outdoors, there’s Backcountry and REI, those businesses are still doing really, really well.

And it’s not like they’re selling anything that you couldn’t find on Amazon.

They just know the product and their customer ten times better than Amazon ever could.

And so that’s really solidified their mode and allowed them to do well.

And then B&H Photos, another one, there’s like no reason they shouldn’t.

Everyone else has gone out of business.

Circus City has gone.

It’s crazy.

But they know electronics and professional photography and videography better than anyone.

And if you’ve been in their store in New York, I think they’re on 9th Ave.

It is a spectacle.

I mean, these people are truly experts at what they do.

And they’re doing very well.

And there’s lots of people in retail who have not done well.

Sears, Kohl’s, JCPenney, Toys R Us, Circuit City.

Need I go on?

I mean, the number of retailers that kind of got stuck in the middle as this industry was really maturing is long.

And we have to look at this industry and understand that there’s risk in being in the middle.

And so knowing your customer very well, designing your properties to be hyper focused on that avatar, it’s just a great way to ensure that you will stay relevant and continue to share in the gains.

This industry is still growing at a nice clip, despite the fact that Airbnb’s booking volume is larger than the GDP of a lot of countries.

There’s a lot going on there, but still growing at a nice clip.

It’s just making sure that you can share in that growth and it doesn’t go to somebody else.

Yeah, that’s a crucial, crucial element, right?

Making sure we get our guest avatar down and getting the right furniture in the first place to make sure that they’re comfortable and they have all the things that they want.

But one of the things that’s different with short term rentals compared to traditional long term rentals is that we have the furniture in there and it has wear and tear.

Not all furniture is made equally.

I know when I used to go to conferences back in the day, there was something always called IKEA, a four letter word, you know, like a cuss word.

I happen to like IKEA, but it depends on the type of furniture you get there.

They have some good stuff, but they have some stuff that’s not good.

All of it, you have to put together well, though.

Don’t get that one wrong.

But anyways, furniture breaks down is kind of what I’m getting to.

And people damage things on accident, and we have to make sure that we’re staying up to date with our furniture and our properties.

And you have some interesting stats on reviews.

I guess before we get into that, though, I just want to just reiterate, this is a slippery slope.

You know, when you have a property that is falling behind, maybe you’ve had it for a few years, guests notice that, and it shows in their experience.

So can you talk a little bit more about that piece?

Yeah, absolutely.

It is a slow death not updating your properties, because you’re not going to notice it day over day over day.

It’s when you zoom out and see years go by that you see an erosion on your ADRs or your occupancy.

And really where it starts to show up first is in your reviews.

And so we worked with a company called Riva Software.

They do analytics and reviews off of the Airbnb platform and seeing the impact.

And we found that 25% of negative reviews mention something around products and design, like the furniture or products that are on the property, which is really high.

And when you think about the industry is getting more competitive.

So what does that mean?

There’s more listings of 4.8, 4.9 stars.

And so when you think about the danger of a one-star review, you want to average out at a four and a half.

For a one, one-star review, you need to have nine five-star reviews.

Okay, now if you want to get to a 4.9, one, one-star review means you need 49 five-star reviews.

That’s a big counterweight.

It’s a huge lift.

You got to deliver 49 five-star experiences.

And so one way to avoid that is just, one thing I encourage is people to, we call this dog fooding your product in the tech industry, but go and stay at your property.

Be your guest.

You will notice things.

It’s really eye-opening.

I see a lot of best practice hosts doing this, and you’ll start to notice things.

This should really be upgraded.

This isn’t up to my standard.

When you’re remote, sometimes you just don’t make the time to do that.

The example I gave on stage is, like, your grandma wasn’t out looking for ugly furniture, you know, when you get into your grandma’s cabin or whatever.

What was being bought at the time was in fashion, was stylish, it was cool, it was getting it done.

But the times change, and just like we may look at the styles, I mean, things are cyclical, so now times like now the 70s style is kind of having a big comeback.

But just like we would look at stuff that cut it for older generations and their properties, people will look at the stuff that we think is in right now, that we think is cutting edge and really designed well.

And in 20, 30 years, they’re going to think that looks really outdated, and so avoiding that is really important.

Yeah, definitely.

And when you’re out there updating your furniture, which we have to do, right, it’s also a good opportunity to update your photos.

Oh, yeah.

I mean, new photos, we know how important those are, so you can kind of do them.

Obviously, you want to do these things maybe in your slow season if you have, most places have a slower season or not on the weekend, if you happen to be busier on the weekend.

So you want to make sure that you plan it out.

A lot of things break, too.

So I’m wondering, you guys have sold so many products.

How many products have you guys sold?

We’ve done over 100,000 orders, so man, across, I don’t know, I mean, I could do it quickly.

The average order has like many products in it, but a lot, enough to have some nice data to be able to look at.

I’m wondering, you might not know the answer, but I’m just curious.

I know that there are some items that tend to break more often than others, like one that just comes to mind.

And this has to do with the insulation, too, but like towel bars in the bathrooms, you know?

I’ve switched to just putting hooks into the studs because you put a towel bar, it’s just people hang on it, who knows?

You got kids going there.

So certain things are breaking more often than others.

And some things are built to last, some aren’t.

So you want to speak to maybe the quality versus price sort of ratio?

Yeah, exactly.

So there are a few areas where we would recommend really investing in prioritizing quality.

And that doesn’t mean you need to go and buy everything at Restoration Hardware, but you really do not want to skimp.

And it’s areas where people are sitting, sleeping, or eating, because all those areas are generally the focal point of the rooms that they’re in.

And so for photography, when you think how things are going to be presented, like the bed where you sleep, that’s the main part of the bedroom.

So when you’re photographing the bedroom, that’s taking up a big percentage of that photo.

So making sure that that looks good and is comfortable, people are spending eight hours a night on that thing, you know, really important.

And then that’s sleeping, sitting and eating same way, like the living room sofa, kitchen table, dining table is really important to focus on that.

Stuff that breaks often, glassware, especially people who have pools or patios, people bring the glassware out the patio, and we have people who have ordered hundreds of bowls and plates and plates and then we’re like, why don’t you look at something else?

Or why don’t you mix in the glass stuff with some plastic?

Sometimes there’s certain types of tableware that is made in a way where it’s more durable, and it’s worth looking at that.

I think towel bars and stuff like that is the things that people can hang on to and pull off.

Outdoor furniture, depending on where you are, the sun really crushes stuff.

If you’re beachfront, sand coming up in the wind really crushes stuff.

If you’re in a market that has snow or ice, then so outdoor furniture, we see some people come back and rebuy that every year, and then they’ll switch to a brand like a Polywood who uses a, it’s like a proprietary recycled plastic wood blend, and they last forever.

And so we see a lot of people who will buy like wicker outdoor furniture, and then they buy it in April for the upcoming summer, and then the next year they come back and buy the exact same thing, and then by the third year we’ll convince them to switch to a brand like a Polywood or something more durable, and then they don’t buy as much from us.

We don’t mind when people come and buy from us every year, but we want to be as helpful as we can, and it’s just not smart to do that.

Yeah, great points there.

It’s definitely something you want to put thought into first and those big use items like you mentioned, bed, Massive, obviously.

I did a whole podcast, a sole podcast, on the most difficult furniture item in my opinion, and that was the couch.

And that’s been for me because people use it like a dining table.

They sleep on it, they stand on it.

If it gets a stain on it, you can’t hide it.

And it’s a big item.

Sometimes it takes…

The delivery is never fun.

The deliveries can be a pain.

And so investing in good materials and something that’s going to hold up, especially for these more difficult items, is going to save you in the long run.

You don’t want to be penny rich and pound foolish.

Don’t skimp on the couch.

Ultimately, you need to generate revenue from bookings.

And so if you’re cutting corners on stuff like that, you’re going to see it in ADRs, you’re going to see it in auctions, you’re going to see it in reviews, and then the whole foundation of your business gets eroded because you wanted to save some money on something like that.

I need to tune in to that one.

I would love to hear that.

So do you guys, Marc, because you work with all these different providers, literally any furniture item you can get through Minoan?

Yeah.

I mean, we work with Wayfair.

Just Wayfair alone has 18 million SKUs, I think, on their website.

And so them and you add in Pottery Barn and Wayfair and Burrow and Rove Concepts and Articol and Walker Edison.

And we do work with Restoration Hardware and our house.

So we have like 40 furniture brands, and then electronics, rugs, artwork, soap, shampoos, linens, pool towels, pool furniture.

I mean, really everything.

The goal is that we can be a one-stop shop.

One-stop shop, make everything easier for you, save you a bunch of money.

That is awesome.

How can people find you?

Minoan is the name of the company.

Yep.

So minoanexperience.com.

And then on Instagram, we’re posting a lot of content for hosts and tools and tips of what we’re seeing from our vantage point.

So our handle is just minoanexperience on Instagram.

And yeah, and I’m Marc at Minoan.

So pretty easy there.

You can shoot me an email.

I love to talk to hosts.

Well, awesome, Marc.

I know furniture and design is one of those things.

When I first got into industry, I never knew that I was going to enjoy, but I really like the interior design piece.

And so I think it’s really cool what you’ve done to help facilitate that for a lot of us and save us a lot of money and time.

It’s a super, super critical piece of all of our short term rentals.

If you have not updated your short term rental lately, make sure you do that.

Really great having you on, Marc.

And I’m sure you guys have got access to some awesome data on furniture and stuff like that.

And so make sure you guys follow Marc out there.

Check out Minoan.

And until next time, I hope you have a wonderful week.

If you’ve been listening to the podcast for a while, well, then you know that I love technology.

And we can save a ton of time implementing AI, artificial intelligence, in the right ways.

My team and I have been playing around with this for months, and we’ve written the perfect prompts that you can just plug in to your favorite AI tool like ChatGPT to help you uncover exactly who your guest avatar is, help you write your listing descriptions, help you write your photo captions, and so much more.

It’s a living, breathing document that we’re consistently working on, and I’d love to give it to you for free for being one of our loyal listeners.

You can head over to restmethods.com forward slash AI and get your copy for free.

I hope it helps you along your short term rental journey.