Short-term rentals are unlike long-term rentals in that sometimes it makes sense to go the extra mile to renovate our properties maybe a lot more than we would a traditional long-term rental so that’s what I want to break down this week whether or not we should do that and what areas we should focus on when we’re renovating our properties

Welcome to short-term rental riches will discuss investing in real estate but with a specific focus on short-term rentals quick actionable items to acquire manage and scale in your portfolio I’m your host Tim Howard.

Welcome back to the short term rental riches podcast happier here again we’re talking this week about whether or not we should renovate our properties when we know it’s time to renovate our properties what sorts of things are worth the additional upgrades what are not and then also just a few tips on the timing of her renovations so for starters we know that short term rentals are not like long term rentals we furnish them they have a design element to omit some of them are over the top unlike our long term rentals where traditionally at least historically we painted them all the same colors we use the same flooring and all of the units we use the same hardware in kitchens and they aren’t really unique right it’s a good place for someone to live where they’re gonna bring their own furniture and they’re gonna add maybe their own design but in the world to short term rentals we’re doing that for gas in fact that is the reason that that’s one of the main things it’s going to bring our guests to our properties that’s one of the main things is going to raise our search rankings on Airbnb or V. R. B. R. home where booking.com or wherever you happen to have your short terminal so knowing whether or not to renovate our property and how far to go it is very important I have renovated a lot of properties if you listen to podcasts for a while you know a lot of properties are old and they’re really old like in the historic fashion I have a property from the 19 hundreds apartment building have apartment buildings from the 18 nineties that is the oldest one but along with the old properties comes a lot of maintenance and a Lotta needed work unless the properties. Renovated properly so I have gone through this lots and lots of times and I’ve also experimented with different renovations in regards to my short term rentals even in the same building adding additional features the one or maybe I wasn’t in the other one so I want to break that down for a little bit how you can figure out whether or not that is worth it I’ve got a couple tips for you but before we talk about actually running a property we need to know if it’s time to renovate our property of course if you bought an investment that needs a bunch of work and that was the main goal from the beginning a value add deal as we would say we’re adding value to it it was ran down it means a lot of work well then you know kind of what you’re getting into but if the property is just sort of in decent shape maybe already habit as a short term rental how do you really know if it’s time for you to renovate it well it’s pretty easy to know we get a lot of feedback in this industry is one of the beautiful things about it one of the things I really like if something’s wrong or not meeting our guests expectations almost always hear about it so reviews are the easiest way to know if it’s time for us to renovate our property if you’re getting a review from a gas that says the floors were quirky in the walls were dingy and it needs a paint job in the air conditioner doesn’t work in the ceiling for you know whatever it is if you’re getting lots of these maintenance type reviews and feedback then it’s probably time for you to do an overhaul now if it’s some individual item that keeps coming up well then fix that individual item and see if you’re still getting the other negative feedback if you’re not then maybe you are good to go so that’s a couple just quick ways to know whether it’s time whether you’re getting negative feedback on the property as a whole or on the specific item and if you’re getting negative feedback on the same item. Over and over it’s time to change that or fix that or whatever it is even if it’s an expensive item I have a property that’s older wasn’t very well suited for central heating and air system and it’s in a city where it gets really hot and it gets cold so I needed to keep an AC in there so we installed a mini split system if you see in these the only ones are very commonly used in Europe they’re becoming much more common in the US now but this was a multi head units mini split system meaning that there was one condenser that connected 3 places where air conditioning heat is coming in this unit and it just cab. Something happened there was a leak with one of them that that affected all of them and I spent a lot of money on this system but after several times of trying to fix it one of my gonna do I can block my calendar for another week at a time to try to fix this and so at some point. Not only is this affected our guests and our reviews but we’re losing more money than if we just pony up and fix whatever needs to be fixed to begin with so clearly if something’s happening more than once and you’re getting negative reviews that is the biggest things that can really hurt us you want to make sure that you fix that another way to know if it’s time to renovate your property so check out your competition and see how their occupancy is doing a look at their listings is yours fallen behind the curve well you can check that out and air DNA.C. O. or price labs is the pricing software that I use of talked about a bunch we have these resources available for you for free you can check out the links are website rest methods.com as well as a whole bunch of other resources tools and things that I use but those are a couple ways where you can check your competition to see if your occupancies Lagan if it is look at their list scenes if they look like they’re in much better shape than yours well it’s probably time so 3 reasons why it’s good to renovate your property the obvious one we’ve already mentioned are better reviews in the better reviews are the more occupancy you’re gonna have it higher at nightly rates that’s an obvious one number 2 is also obvious but it’s a real thing you’re gonna increase your property value right if you add new bathroom mori renovate all the flooring or whatever it is you’re increasing the property value that’s one of the really nice things about owning our properties right we’ve talked about lease arbitrage in the past which is an excellent way to generate cash flow that’s if we lease the property from someone and run as a short term rental but if we actually own it and we’re investing this money into the property well there were increasing the value of the property as well so by remaining we’re gonna get better reviews we’re gonna increase our property value and we’re gonna have a less headache because their email blast things breaking down right if we do a full run of. Asian and then that properties me good to go for a long time 3 renovations that I think personally are a waste of money or that you got to be really careful with if you’re investing short term rentals. The first one. Remove in a bedroom to add more space to your unit now there’s a cabbie out here if you’re a movie in the fifth bedroom of a 4 bedroom home and there’s no real difference in the rental rate between a 4 and 5 bedroom home then it’s not gonna be that big a deal but let’s say the 4 bedroom homes in your area running for $500 a night and the 5 bedroom homes are running for $750 a night well then you definitely don’t want to remove that better mine and that’s information that you can find easily on Priceline’s or near DNA if you break down units in your neighborhood by bedroom or size so you can do that make sure you’re not removing a bedroom when you don’t need to or potentially even major revenue lower so make sure you’re not removing in a bedroom unless it’s not gonna impact your revenue number 2 biggest waste money I would say and again this has a cabbie on is going with top notch appliances so we know that we can buy a stove a cast for 600 box but we can also spend $4000. That’s not necessary unless your short term rental happens to be advertising or C. keen and that person that wants a chef’s kitchen and then maybe you can charge a premium but I would say that gets a little more risky so I wouldn’t overspend on your plants is a course we want to get good ones so that they’re not breaking down all the time science is just don’t seem to last like they used to write I don’t know about you guys but I know my parents still have a fridge in their garage if they’ve had a longer than they’ve had me and that’s the whole point is used to be they don’t last very long anymore but so make sure getting a decent 1 but don’t overspend on them the third thing that you want to consider putting extra money into in those are extra amenities and your property so do you want to add a jacuzzi in your property you need to do a little research before you pony up you know 1015 grand or whatever it is for an amenity like that and again you can use those same data resources air DNA or price labs price labs has a way to actually separate properties by amenities I’m not sure if their DNA does but I know that data is available so make sure you’re checking it out before you’re adding any really expensive amenities any sort of amenity or appliance or you know same thing with toilets for example you mad toilet for 100 Bucks it’s probably not gonna work that will say suggest you spend a little more on a nicer toilet but you can also buy that $3000 Japanese toilet have you seen those that you walk in the bathroom they open up automatically they play rain sounds they clean new they dry you they have a heated seats they’re awesome my when I build my dream home. I think I’m gonna throw one in there but for your short term rental it’s probably not going to raise your nightly rate maybe not even at all so really consider the actual cost and some of these appliances and things like that they’re just going over the top so lastly I want to finish up just want some tips on renovating in general we want to do this in the off season right if you’re in a seasonal place you don’t want to do it during the peak season and make sure to allow yourself more time and then you actually need especially with the big renovation because we know these things tend to go a little longer don’t they another thing on it considers a longevity again that goes back to appliances and toilets making sure we’re not buying and the bear models are gonna break down we do get a lot of wear on our properties are short term rentals everyone uses them differently I utilize our small spaces at a desk in there if you’ve got space needle have one somewhere else and then lastly is the curb appeal the exterior of the property if that’s not looking good wall and that is money well spent because that is the first thing that your gas is going to see and that’s our first impression and if they have a bad first impression that’s not a good start right now especially if it’s bad on the outside and then there’s even little things on the inside it just starts to kind of snowball so short term rentals are not like long terminal sometimes it makes sense to spend a little more money but we want to make sure we’re spending in the right spots so check out some of those data sources if you haven’t when do we know if it’s time to renovate well if we’re getting bad reviews that’s the basic easiest way to know is if we’re getting batters views or something continues to keep breaking remember the renovations aren’t going to just raise our views but they’re raising the value of our property as well which is good news and it’s making army. Yes my E. 0 because less things are breaking down make sure not overspending on some of those appliances so lastly make sure that you are renovating at the right time you don’t want to do it during the peak season hopefully I gave you a little bit of insight if you haven’t done a big renovation yet I’ll just leave you with my last last tip is that it’s very likely going to cost more than you expected it’s going to take longer ask any real say masters been around for a long time and they don’t have their own team that’s just kinda how it goes but it can be well well worth it so if it needs to get done go ahead and jump in there I hope you are doing really well out there today wherever you are in the world thanks for joining and again if you didn’t already know you can check out all our past episodes at S. T. R. riches.com we got a bunch of resources on their Fauria thanks for joining until next time have a fabulous day. I want to get on the fast track to financial freedom for short term rentals what all searching the properties you choir you want to make sure that you acquired the right properties I want to give you my you doctor will show you how to do just that there is no charge to my gift to you for being one of our subscribers just go to restmethods.com that’s R E S T methods.com.

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