In the short term rental riches will discuss investing in real estate with a specific focus on short term rentals quick actionable items to wire. Scale your portfolio I’m your host Tim Hubbard.

Welcome back to the short-term rental riches podcast happier here again as always and another fun topic and this is going to be a really good one for all the newbie investors were here maybe seasoned investors that are looking at exploring other options for short term rentals I’ve broken it down into 3 categories this is by no means a overview of everything because you know that we’ve had options to run short term rentals these days everything from tree houses to house boats take glamping to your ex to. Castles to you name it it’s out there now that’s an option but what makes the most sense that’s what we’re talking about this weekend I’m gonna break it down for you guys into 3 different categories we’re gonna talk about luxury vacation rentals the bridles on the ocean overlooking cliffs overlooking the sea is he’s really nice ones at higher price points that we’re gonna talk about this new and dare I say trendy category of short term rentals and I’m calling these exotic ones or or sort of the unique ones so this is gonna be all your tree houses is going to be your house boats your trailer parks these sort of different type of options which can be super profitable assigning a lump those into one category and then the third category is going to be I guess I should say a little more boring rentals and this is actually the section that I invest in and these are rentals they can actually be long term rentals as well we’re gonna break these down and just keep in mind this is this is a broad generalization within these 3 categories there are tons and tons of other options limits and some can return much better than others but in general I want to break these down and it really comes down to kinda like this risk reward scenario right actually all investing I’m sure you’ve heard this before the riskier it is the more chance we have for higher returns historically speaking generally speaking you know the investing money in bonds very safe but it’s gonna have a very very low returns so I’m gonna break these 3 categories down with that in mind so let’s just jump into it the first one here luxury vacation rentals so these are your amazing beach mansions these are your lake houses these are your traditional vacation rentals where people are going for vacation they’re not necessarily living in these properties in my. I’d be far from city centers this is our vacation rental category and I would say you know these are going to be these are the highest price point so this is one of the cons a break these down and pros and cons I would say this is the most expensive out of the 3 categories so between these unique exotic rentals and the the plain Jane. Men or more could commodity type Reynolds I’m vests and these are gonna be the most expensive but they also have really high chance return a lot of these properties are earning thousands and thousands of dollars a night so that is the reward side of it but another con and again this is a generalization to this category is that a lot of these vacation rentals might be more seasonal so keep that in mind as it and really nice cabin up on that the ski resort that only operates or is only gonna be full during the winter season so this is a little more typical these vacation rentals are gonna be a little more seasonal and we don’t want to bank on just these few 3 months or we need to keep in mind that this seasonality if this is where we’re making all of our money and something changes there’s a recession for example well is that amount of money going to be enough for us to cover all of our expenses so on the cons you know this is this is the most expensive and in terms of safety and terms of backup plans well I would give this a 2 out of the 3 categories said say it’s kinda in the middle one is because of the seasonality but another one is that these are vacation rentals for vacation and so if there’s a recession and people have less disposable income well then most the time they go on less vacations right now if this vacation analysts super luxurious super exotic you might be targeting a class of people that recessions don’t matter to them they’re wealthy they’ve got tons of income streams coming in and they’re still going to go on vacation so it depends on where your vacation rentals at that scale in terms of financing I’m gonna give this a 2 out of the 3 categories because there are financing options available for your vacation rentals based off the income and there are more more coming along but it’s not quite as easy as some of the other categories so okay and then on the the. Pros side we talked about we can make extremely high nightly rates that is amazing I I would give that a 2 actually though out of these 3 categories in terms of reward based on investment and then a really nice thing about vacation rentals great pro is that you can build a really good loyalty with your gas you get gas coming back year after year after year and you can really fill out your schedule in advance so that’s a great problem so that’s kind of the luxury vacation rentals again this is like in a nutshell financings me a little more difficult the backup options are kind in between the 3 categories in terms of safety if there’s a recession but you can make really really high and nightly rates. Hey just want to ask you guys real quick favor if you haven’t already left this review if you wouldn’t mind heading over to iTunes or Spotify wherever you’re listening to the podcast and just leave us a quick review we really really appreciate it and if you know someone that you think would find value in any of the episodes that you’ve listened to you could just take a screen shot send it over to that’ll help them but it’s also going to help us grow a little bit too and lastly we’re on YouTube so if you prefer you to you can head over to short term rental riches and you can find us there as well thanks for listening in and thanks for all of your great feedback. Let’s jump back in. Let’s jump into the next category in this is this is these are the fun ones right because of the exotic notification on ones aren’t but these are like the new ones that are popping up and I would give dis unique exotic rentals we’re talking again about not traditional housing right we’re talking about. 3 houses and trailer parks and houseboats and Europe’s out in the desert glamping 0 my gosh you’ve heard of glamping right I mean this is like the newest newest craze even down here in Columbia where I’m out we were on a little trip a couple weekends ago and right across from our traditional Airbnb there’s a whole set of glamping going on I would give this category a number 1 out of 3 categories for return potential investment return and now this is based off the amount of money invested in the mount that you can get back because if we think about it these weird exotic rentals tree houses and stuff they don’t cost that much to build right 2030 0 box but a lot of these are ready for 100 200 300 plus dollars a night so you can get your initial investment back really quickly so that’s that’s a pro we’re gonna talk about the cons but that’s a problem you can also build a reputation with these and and brand loyalty just like we can with the vacation rental so this is definitely a pro and not will help you if you have this time for rental and there is a down turn there is a recession if you have brand loyalty you’re a rock star at the marketing on Instagram and all that stuff well then you can have your calendar booked up literally for like years I mean this is happening with some of these types of rentals so that is that is definitely a pro another pro is it these properties don’t have a lot of like carrying cost you know the utilities and stuff this again this is a generalization some obviously have more than others but the telly is in these types of costs are going to be lower in this category now let’s talk about the cons and again this is all risk reward scenario right so I’m gonna say these are the riskiest investments in the short term rental world in the short term rental space why I’m gonna give you my main reasons right now well if there is a recession again these types of places are going to have less gas going to me. Definitely like a disposable income type of vacation or escape do you see someone working out of a year or 2 for 2 months you know as a at work in a virtual job not as likely as someone in the city center or even a vacation rental and I don’t think it’s really that fitting these are usually more for like quick get aways to in 3 nights so they get there is a recession these are going to get hit the hardest there’s also fewer financing options because this is not a traditional investment you go to your local lender your bank you say Hey I want to turn this small trailer park at 10 units into short term rentals or I want to put up some tents with air conditioning and and make this glamping resort well they’re not as familiar with that so there’s going to be less financing options so I would say out of the 3 categories that this is gonna perform the worst in a recession you’re gonna have the hardest financing options of course they’re lower entry points a lot of times and it’s going to be hardest to sell what if you want to sell this project or you want to sell these tree houses where you have a short term rental gas coming it’s going to be a much smaller market this can be interested in buying that compared to traditional vacation rental or compared to a urban type rental in the city center so I would say that these do these weird unique ones have the highest potential for return but they’re also the risk yes so let’s move on to the third category and this is the category that I invest in yes because I’m a little more conservative 5 model boring whatever you wanna call it I put a lot of value into the security in these types of investments in the long run so I’m in this for the long run so what are these types of properties well these are going to be are more affordable properties I guess you could say more traditional these are going to be properties that either have currently a long term tenant in them or. Have the easy ability to put a long term tenant back in them so they’re likely going to be in the city or near the city or in the suburbs right we’re not gonna be off in the forest somewhere we’re not going to be 2:00 hours away it’s a beautiful lake destination these are more of our city type properties. Rose best financing options if there’s a long term tenants in there are banks can be comfortable that they’ll give you a loan as long as it makes sense so that’s an easy one I give that a one out of the 3 different real estate categories definitely the easiest financing options and I’m also going to give it a one in terms of safety this is the safest sector to be end because if there is a recession. I have less disposable income they’re not gonna be going on these exotic trips as much the knocking me staying at beautiful vacation rentals a cost $5000 a night not as much I should say and not all economic classes but what happens in a in a downturn a lot of times people that are running for example they might be running a really nice apartment somewhere in the city centre in a class apartment well if they start making less money times are tough they’re going to move out of there and they’re gonna move somewhere until like a B. class type investment or even C. class that’s not as nice but it’s more affordable and these are the type of properties that I invest in these are the ones I teach about of course a lot of things that I talk about plies the all these different levels the operations are pretty much the same no matter what type of property or investing in but I like this category because it’s more resistant I just got to say that that’s that’s the truth so it’s more resistant to downturns in fact. Know where your property is if there is a recession sometimes he’s rents even go up because of everyone’s leaving these class a luxury properties to go to other properties B. or C. class that puts more pressure on those properties and that means rents can actually go up so I think they have the best backup plans and another one of those is it’s easiest to sell if you decide you want to be in the business anymore or your rentals not working out or whatever it is you can put that thing on the market it’s a normal type property you’re gonna have more buyers because they have more financing options just gonna be easiest to sell sell what are the cons to these well there are several I would say that. The pros this is number one in a lot of categories because it’s it’s this the safest but cons you’re just not gonna make it high return with these again this is across the board this is Anna you know there’s all different types of properties returning different amounts within these 3 real estate categories but in general these are gonna be more like a commodity these are gonna be you know there might be I. 0 or 2000 in a relatively large city but they’re not gonna be that much different than each other it’s gonna be a little harder to build brand loyalty you can do that very easily and and we do that as well we get lots of guests returning because they’re comfortable staying at our place already but it’s just a little more challenging that’s a little more competitive of a space it’s also easier for someone to enter the market right someone can add a rentals down the street from you much easier than they can out of the mansion alongside a lake house or you know summer place out in the woods or tree houses or boats or whatever that is so keep that in mind it’s it’s it’s more prone to to competition and that affects our returns it can affect our returns so in a nutshell those are the 3 categories we talked about vacation rentals which are a luxury vacation rentals with much higher price points they can do very well and again I just try to break these into 3 categories within each category there’s lots and lots of different options but I would give the luxury vacation rentals in terms of safety and returns I would give them a 2 out of 3 so they can have fabulous returns and they’re gonna be a little safer the exotic rentals these are the tree houses and the houseboats and the unusual type of rentals I’m gonna give these a number one for having the most potential for return but on the flip side I’m gonna give my 3 for being the least safe in a downturn in recession the more risk so they can have the best returns but. Also the risk is and then we’ve got the affordable rentals or the traditional type short terminals that maybe how long term tenant in the before these are the types of properties I invest in I would give them a 3 in terms of returns being the worst in terms of return member these returns are still much better than if we have long term tenants in there a lot of my properties making 358 times what I was making a long term tenants so even though a lot of these categories the potential returns are a little less it’s still much better than long term rentals of course depends on your property we talk about that a lot on this channel so I would say it’s 3 in terms of returns but in terms of safety. I’m gonna get a onetime gonna say it’s safest there’s just more backup plans you can sell these here we got more financing options it can actually do better sometimes in a recession just depending on where your properties are so I hope this helps you guys it doesn’t mean that you should just be in one category as long as you’re aware of what you’re getting into I think you can have properties and all 3 of these categories and it can be really fun right so hopefully that gave you a little more insight and your guises investment journeys are doing awesome. Rowing you’re learning a lot and until next time have a wonderful day. There’s so much money to be made the short term rentals but it all starts by having the right property if you guys haven’t yet seen my free ebook on our website rest methods.com head over there and get a copy it’s going to break down what I look for in a property in some great short cuts so that you don’t have to spend hours and hours researching at over rest methods.com and you can grab your free copy there if you want a crash course in everything I’ve really learned to short term rentals in over 5 years managing over 15000 Gasol recorded on our last live event I am happy to say we broke it down really nicely into a bunch of different modules that you can watch at your own pace it takes you from start to finish from finding a property we talk about analyzing the property but then also some of the more important pieces how to find your team and how to set up everything so that you can run your operation is passively as possible and free up your time you can find that it rests methods.com forward slash virtual.

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