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 your portfolio I’m your host Tim Hubbard.

Welcome back to the short-term riches podcasts I hope you’re doing well out there in the world staying safe staying healthy I wanted to record a special podcast today. In regards to the corona virus I don’t want to bog it down or weighed down with any negative news because I think we’ve all heard enough of that and we’re living in an unprecedented times there’s lots of uncertainty but I think there are also things to stay positive about we’re learning a lot from this the short term rental industry has changed overnight essentially and so I want to give you my insight on that in the several cities and I’m operating and my outlook and how I think some of us might even come out better.

So I don’t want to downplay the seriousness were still early on but one thing’s for sure. The whole world is working towards the same thing right now and every day we are getting closer to figuring this thing out. So I’m currently down in Florida Pulos Brazil came down here I guess it’s been over a month now and I had intended to go home to Columbia soon I was going to go home on April 9. Bye it’s our flight was canceled as the airline actually shut down its Copa airlines until the end of April as far as I know and it doesn’t look like I could go home even if I wanted to because the borders of Columbia have been closed they are in full on lockdown like a lot of different parts of the world that said I’m doing pretty well down here you know I I think I’m in a pretty good spot to be luckily people aren’t panicking here I’m technically on an island but it’s connected to the mainland Brazil and grocery stores seem to be full people aren’t rating them we’re still a little earlier on here so doesn’t mean that that can change and it doesn’t mean that you know could get worse. But I don’t see the benefit in thinking that things will get worse yes you have to plan appropriately but I’m not watching a whole bunch of news but I’m still getting the updates of course I know that were testing vaccines now and we’re getting closer so I’m staying hopeful but my business on the other hand has been turned upside down the travel industry is hit harder than almost all of them it’s been hit a little differently in each city. Bye I’m expecting it to be pretty empty for at least a couple months and so I’m preparing for that I have backup plans which I’ll share with you and actually I’ve shared them before in prior podcasts.

I know this is this is a difficult subject and it’s a lot harder for some people right now than it is for others I’m recording this podcast sort of is like a special one I had other podcasts already recorded and if you listen to the previous ones I just released one on reserves that was before we were in quarantine and all that and a lot of my prior podcast to talk about diversification luckily those are things that I’ve been doing in my investment career so I can write this out for you now indefinitely as far as I know but I know it’s not like that for everyone so I want to give you my outlook on the short term rental industry I think it’s gonna get better for some of us and for some of us we may not make it through it depends on our strategy last I heard you know bookings across the U. S. they’re down over 50 percent but I think it’s it’s more than that some places are fully restricted from traveling so which properties are getting hit the hardest right now what I would say those are probably bigger houses that have groups going to them the very limited business travel that’s still permitted to now they’re most likely staying in smaller units you know hotels are have been hard time they’re closing down. But I think. Some of the most difficult scenarios can be for those of us that are doing rental arbitrage. And these big companies you know once or even backed by venture capital now they have 3000 units and they’re paying for all those leases for properties that they don’t own find it really hard to believe that they may be able to make it more than a few months and so what does that mean for us on the other end for those of us that own properties that have backup plans like putting a long term tenant back in well means others are going to be there’s going to be last supply they don’t make it through and as sad as that is as much as I feel for people operating that way I think that is the truth who else is gonna get weeded out from the shore terminal industry potentially now we never know this is all hypothetical things could turn right back around but if they don’t the longer it goes on the more of us will be affected and and kind of the crazier things will get I think a lot of the first short terminal operators to go we’re going to be the ones that were just kinda half doing it OR hosts that maybe weren’t that good they just threw it up they’re not really going to be too concerned about this but for those of us that purchased our properties. And we purchased them in good areas.

We should have a pretty good back up plan and this is my back up plan M. said in a 2 month marker at from today if all of my units are still vacant or very low occupancy I’m gonna look at putting some long term tenants back into cover those fixed costs. Luckily my properties in places and I think still have a good rental demand and that has always been my back up plan from the beginning so I’m gonna write it out for 2 months but in the meantime I’m going to try lots of different things try to get some more occupancy and what are some of the things that you guys can try as well with our short term rentals whether we releasing them or whether we bought them first off is just cutting our prices in the past I’ve learned a lot from pricing and sometimes when we come to borrow. We were getting bad gas or not ideal gas people that maybe just one of a party or didn’t actually care about the property I’m less concerned with those types of guests booking now at much reduced rates because I think that those types of gas were maybe a harder financial position so won’t be spending that money for a party or something like that so cutting the prices I think that’s the obvious first step for most of us but we want to be careful that we don’t cut our prices for all dates so I would say 60 days out is probably good rule and now if you’re using a pricing tool that’s pretty easy to do depending on which one you’re using I use price labs and so that’s what I’ve done I’ve cut my prices but not forever we don’t know what’s going to happen in the summer in the near future so we don’t want someone to go in and swoop up those high demand days for very cheap prices so just set it out a couple months you know let’s take this day by day.

Now we’re also gonna wanna journalists are cancellation policies I know that Airbnb has already done this I myself canceled to Airbnb users post go back to Rio de Janeiro but felt more comfortable here in Florida opulence I got a full refund just like Airbnb said and that’s happened to lots and lots of our reservations as well. But depending on when you made a reservation with Airbnb future reservations from this point on until they change something which it looks like they may aren’t refundable so I want to set my cancellation policies to 2004 hours regardless because if it’s that soon then the chance of the person actually come in is going to be a lot better and if they don’t make it that and we still are able to keep some of those funds so I’m to lower all my cancellation policies down to 2004 hours and I think that’s just the right thing to do anyways since it’s probably never been more difficult to travel in our lifetimes and has now I’m just gonna say no it hasn’t this is Simon countries closed their lines closed or lemon through some like never before but I am positive we are learning a lot from this and there’s also a lot we can do with this time in this new sort of environment we’re living in and so I’m going to go over some of those things right after talk a little bit more about the short term rental industry so as I said drop in prices but I’m not dropping them further than 60 days out I don’t want to give up some of those high demand days moving all the cancellation policies to 2004 hours that should be close enough for someone that if they make a reservation with you they know that they’re going to be able to show up I’m setting up a backup plan in making a mark 2 months from now if I’m still pretty much all the way they can I’m gonna start running out some of my short terminals to long term tenants to cover some of those fixed costs so those are 3 things that I will be doing and as I mentioned I think a lot of people sadly aren’t going to make it through this I think the people that are operating under the rental arbitrage model are going to have a very tough time unless they’re able to put long term tenants in but on the other end of. That if we lose supply when quarantines are lifted and airlines open back up and people that have been waiting to travel or postponing events and weddings and and just want to get outside because they’re missing social interaction I think travel is gonna boom. And with a smaller supply.

If we hang through this we’re probably gonna see even increased rates so that’s my outlook on the short term rental industry right now very hard to say these are just my thoughts my ideas and what I have observed from my own portfolio. In the meantime as we weed through this day by day what can we do to keep ourselves from driving ourselves crazy some of us that work from home haven’t really felt a huge change I talked to my buddy the other day and he’s like yeah I don’t know I still order food online and nice to work from home and and nothing’s really changed but the reality is the longer this goes on the more it’s going to affect all of us and it is much harder for some of us than others well first off if you’re not used to being at home and you don’t have a routine and maybe sadly lost your job or you just have a lot of time we want to make sure that we start with some good good habits you know so let’s. Exercise from home I’ve been doing that for quite awhile now actually before all this happened because it was just more efficient use of time but there’s some great YouTube videos for you can get. You know you basically have your endless list of personal trainers the try to get in the habit of doing that if you’re not already in use this time maybe to to read books that you’ve been meaning to a lot of people are getting a lot more time with their families now than they ever did if if foreign quarantine I know some places in Memphis for example things are not quarantine like they are down here in Brazil like they are in Colombia and other countries in the world and certain states in our cities San Francisco it’s it’s is different everywhere. But it looks like the corn teens you know going to affect a lot of a switch from make sure they were using this time wisely now for those of us that know someone personally that’s been affected my heart goes out to you to be able to look at the positive sides and find creativity I think that helps us all get through it so let’s use the time wisely let’s build good habits we don’t know how long this is gonna happen I think another potential upside from this Sir for many businesses that have asked all their employees to work from home they may find that there are more productive or they’re able to cut their costs way more than ever before and so a lot of people may be working from home when this is all said and done it’s kind of like got a 4 hour work week was one of my favorite books and life changing for me and he actually recommended years ago Tim Ferriss that if you’re working in a job that you wanted to work from home tell him you’re sick and work from home and be more productive then you were in the office and that was a way to earn the ability to work from home now the so many people being forced to work from home this might work out well for a lot of people that are able to be effective.

The impact on our environment with very few people driving or or given the environment a little break I think that’s pretty good with less carbon emissions the streets are empty the birds are chirping and a lot of places I’m using my time personally to study Portuguese I was kind of one of the reasons I came down here so now I don’t have an excuse you know so just a few of the ways you know let’s build good habits let’s just do a little bit each day get some exercise and stay healthy sleep try to avoid getting into bad habits especially if we’re gonna be doing them over and over again however this is a time to be creative to reach out to family haven’t talked to in awhile to spend more time with your kids and I know it’s it’s more difficult for others but we’ve got to make the best bet so there’s a bit about my portfolio what’s going on some of the things are going to do with my short term rentals how I plan to spend my time being productive continuing to learn and avoiding so much of the negativity out there ultimately the the questions we asked ourselves and the thoughts that we have Schaper feelings and so if we’re constantly monitoring the news and the 6 count in the death count all that that’s probably not going to be very beneficial.

There’s a great book one of my favorite life changing books also it’s called the power of now if you haven’t read that one or listen to the audio book actually I recommend the audio book because author is very soothing voice but take a look at that one and take a look at the happiness advantage another one of my favorite books the talks about.

How happiness is something that we learned part of it they say is genetic but it actually is a habit to look at things positively so that was a really really good book and being happy and positive relieve stress and stress is bad for bodies who want to be as healthy as possible right now so check out those books if you haven’t already if you haven’t heard about him and alternately finely what are the major lessons that are coming from this as an investor we want to be diversified so even if we are focused primarily on real estate we want to be diverse fight in multiple markets maybe with multiple property types as a short term rental operator I’m diversified between short term rental guests and long term I still have plenty of long term rentals and that’s gonna help me weather the storm so if you haven’t diversified your real estate portfolio yet consider that for the future but also consider diverse fine and other financial instruments gold and stocks I know the stock market has just had its third largest drop in history. Maybe that means it’s time to get in of course don’t get into something that you don’t understand and stocks are very complicated. I mean the lesson here is that we just want to be diverse fight because we never know when something like this is going to happen and we want to have reserves for these rainy days so hopefully you have some to get you through this already I think we’re gonna come out stronger on the other end if we make it through because I think there’s gonna be less supply for short term rentals which will mean the demand will be higher there may be even be less people staying in hotels maybe people will be preferring smaller places because there’s no doubt about it this whole coronaviruses changing the whole world and it’s gonna change the way that we react when we see someone sneeze when we don’t see someone wash your hands that’s going to be at the top of most people’s minds for for quite a long time to make it through this a short term rental operators I think we’re going to be really well positioned I think the real estate market could even go up. Because interest rates have been cut to 0 percent and when money is more affordable more people buy real estate so what to wait and see on that one but hang tight hopefully some of those tips how hopefully guys are staying healthy and using some of this time if you have extra time to be with our families and talk to our friends we haven’t talked in a long time to learn new things to read the books that we haven’t read in a while and let’s keep ourselves isolated from some of the news we don’t need to be watching it every minute we will hear the important things they will come out for sure so until next time we’ll be back on track next week which is some normal information about your short term rentals stay safe stay healthy catch you guys next time.

Want to get on the fast track to financial freedom through short term rentals what all searching the properties you. You want to make sure that you acquired the right properties I want to give you my. Yes there is no charge to you for being one of our subscribers the rest methods.com that’s R. E. S. T. methods.com.

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