Finding Good Deals in the Short Term Rental Business Q&A

There is no definitive good deal in the short term rental business. If you want to know if your deal is good or not, you need to know one simple thing first. It’s something that’s going to drive your reviews and the growth of your business, and that’s meeting your customer’s expectations. Figure out who you want to serve first and that will make the answers to your questions much clearer.  Questions and Answers   Are you still hunting for apartment deals?    J still loves apartments, he’s just changed who he puts in them. With apartments, net operating income is the name of the game and most importantly, if you can manage that properly the value goes up as well. J is not getting out of the apartment game anytime in the near future.   Do you think it’s a good idea to incentivize guests to do a load of laundry before they end their stay?   Quality control becomes an issue here. How do you know the laundry was cleaned correctly? There are other ways to lower your cleaning costs if that’s the goal. J tends to shy away from asking his guests to do anything, some guests will actually become offended by getting the request to do additional work. For this particular caller, the issue may lie in the cleaner that he’s using and their method of billing for work. Ideally, with a linen service, you should only be paying for your laundry that has been weighed while dry. When it comes to a guest checking out, if you have a checklist for them to complete, be upfront with the reasoning for the tasks so they don’t have to wonder why they are putting in some extra work.   What’s the best way to avoid bed bugs before they appear?   Bed bugs tend to come in with a guest, they don’t typically just appear. A good tip is using a metal luggage rack to reduce the incidence of a guest putting their luggage on the bed directly. Protecting the mattress with a casement is also a good precaution. Bed bugs are typically pretty rare, but there are still steps you should take to minimize your risk. Insurance is one example of a way to cut the cost, the trick is making sure the coverage is actually what you need. It’s not uncommon for a bed bug infestation to cost you thousands of dollars to remediate. Be sure that your insurance actually covers bed bugs specifically. You don’t want to get into a situation where you save some money on your premiums but aren’t actually covered from the risk you’re trying to mitigate.   How do we get around the key fob issue?   We tend to leave the key fob inside the unit and the trick is getting the guest to the unit for the first time. Module 3 of the Mastermind product covers this in more depth. Go to cashflowdiary.com/star to learn more.   Pricing in the Short Term Rental Business   As you enter into your slower season, pricing becomes even more important. If you aren’t doing dynamically adjusted pricing, you’re either leaving money on the table or having a lower occupancy than you should.   I have an opportunity to buy an eight unit apartment building and I want to use them for short term rentals, do you think this is a good deal?   There is no definitive good deal. What’s a good deal for J will probably not be a good deal for you. However, there is a customer that your business is best suited to serve. There are other factors that determine if the deal is right for you and it all stems from who your customer is. You won’t know it’s a good deal until you know who your customer is.  What’s most important, what’s going to drive your reviews and the growth of your business, is meeting your customer’s expectations, and you get to choose who you want to serve.   What markets do you search for apartment deals in?   Deals tend to come our way right now, so J isn’t on the search for apartments deals at the moment. If we were looking, some markets might include Long Beach, Phillidelpia, and parts of North Carolina would be on the list.   What are some ways that you can find owners that are willing to do subleasing for Airbnb?   There are a couple of things to understand. You are not subletting and you don’t have an Airbnb business, you have a short term rental business. If you start off thinking you have an Airbnb business, that will limit your capacity. That being said, finding landlords is fairly easy. Look for “For Rent” signs and call them. To get a better idea of what to say and how the system works, check out the free presentation at cashflowdiary.com/star. Owner controlled buildings are a great way to build your experience while also building your business.   I have three units and people want to rent them long term, how can I prevent that?   It’s not uncommon for a smaller square foot location to outperform a larger square footage space in certain markets. Since the clients that the caller is asking about are typically business people, there shouldn’t be a big issue with letting them rent long term. Whether the guest wants to stay one day or hundreds of days, it doesn’t mean you have to discount the price.  Offering an incentive like a free TV when a guest books long term is another good way to get the guest to work very hard to get their HR department to cover their stay.   I have a guest that has a service dog that they didn’t tell me about and I’m trying to evict them, what should I do?   This caller is creating a difficult problem for themselves by trying to evict the guest. If it’s an actual service animal, they may just want to leave it alone. If the animal ends up damaging the unit, they can deal with it then.  Since the guest has a service animal and the caller has caught them, they can now go to them and communicate that there are other rules that need to be followed. If they are going to call the animal a service animal and not follow service animals rule, then he may have something to work with.   What are ways to market your short term rental business, and how do you become a student?   You become a student by starting with the presentation at cashflowdiary.com/star. There are two products available. The Blueprint is meant for students to learn how to get their first unit, the Mastermind product is for those students who are ready to scale their business.  In terms of marketing, the most important thing is to first understand who you are serving. Once you know that, you will know where and who to market to. Don’t even consider marketing until you understand your customer.   With the TV incentive, do you send it to their home address?   We just drop it off at the unit and let the guest figure out how to get it home.   I’m looking to buy linens in bulk, any suggestions?   Go to cashflowdiary.com/silkysheets to get a 15% bulk discount for Cashflow Diary students.   Do you allow your students to use you as a reference?   We want you to be your own person, even someone new to the business shouldn’t need a reference from J. Getting into the Mastermind product will give you the specific approach to use and have the confidence to deliver the results so you won’t need a reference.   What do you do when a guest has rental remorse?   We simply stick to our cancellation policy and enforce it.   When should we use VA’s?   Since the caller is just getting started, they can comfortably run the business themselves until they have somewhere in the ballpark of thirty units. Doing the work himself initially will allow him to develop a system and SOP’s for how he wants to get the work done. Once he’s grown enough (or has had enough with dealing with guests directly), he can consider bringing on VA’s to help. J didn’t start running 24 hour coverage until he already had twenty units. At that point, it’s possible to run the business with a minimum of 5 individuals working 40 hour weeks. Links: cashflowdiarypodcast.com cashflowdiary.com/star Thank you for listening! If you enjoyed this podcast, please subscribe to the show on iTunes and Stitcher Radio!