Brace Yourself for the Short Term Rental Valley of Despair

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Tony Stancato: welcome to the Michigan. Short-term rentals podcast, my name is Tony Stancato. I’m here with my co-host. Jordan painter. What’s up Jordan? How’s everything going?

Jordan Painter: What’s up, what’s up? Good Man. Day 19. A 75 hard so making progress. It’s Friday that we’re recording this on. So almost through another week. You just feel feels good to be moving, moving through it.

Tony Stancato: That’s awesome. Congrats on that, and then got a couple of exciting things, you know, at least as a company, we did take on our first co-hosting listing down in Panama City Beach, Florida. I know we had some discussions around that and if that’s something that we wanted to do, and I know you were Definitely excited to kind of jump into that market and take on that listing. Well, we’ll get you so excited about it.

Jordan Painter: Yeah, I really feel like the systems that we’ve developed in Southwest Michigan, have worked really well as far as getting rankings and excited to learn in a much more competitive, highly dense market, what kind of systems are gonna be working to get the clients, you know, closer to the first page. And, you know, anything that we learned there we can we can bring up here to a slightly less competitive market, and I think really continued to improve the services that we’re we’re providing and get better, bookings, and all those types of things. What about you?

Tony Stancato: Yeah. I mean it’s a fantastic property, brand new, build six beds, four and a half, baths sleep, 16 Plus people, you know, you got the pool. Um, yeah, just a great listing but I think you’re right. If we can really do well managing or it helping with the listing and improved bookings in that area. I think it’s just gonna go a long ways with, you know, the properties that we we manage here currently the properties listed on page, eight down there. So, definitely got some work to do. You want to be on the first page? So, definitely. Yeah, we got to see what we can do to get that up on the first page and excited to get to work on that.

Tony Stancato: In addition to that, we acquired a Facebook group, Michigan, Vacation, rentals, Facebook group, it’s the largest Michigan, specific vacation rental community on Facebook. Again, it’s a private group, you have to ask to join. So if you’re not part of that, definitely go over there but really excited about that. There’s a lot of opportunities in there for direct bookings. You know you always want to use caution. Make sure that you’re not getting scammed or anything like that, but I think they’re it is a great place where you can connect hosts and guess and eliminate some of those really heavy fees that you’re charged from the other platform. So definitely excited about that. We’ve got a hundred new members just since I think Sunday, so really excited about that. And then also like, Hey if we can use that group to, you know, let’s share our podcast.

Tony Stancato: With the group and hopefully, they’ll find some value of it. So, just seems like, overall, it’s just a great addition to what we’re already doing. What are your thoughts on, on the Facebook group?

00:05:00

Jordan Painter: Yeah, the same. I love the idea of being able to pair people looking for a place to stay with the actual owners. So it’s a good mix. It seems like a people who are actually owners in vacation rentals and people that are looking for cool places to stay. And I do think that there’s just a lot of opportunities for us to engage with both sides, particularly with the owners and and continue to raise the bar on what we’re offering through the things, we learn from them and hopefully help them raise the bar through the the things that we’re doing trying to add value to the group. So I think it’s it’s a win-win

Tony Stancato: Yeah, absolutely. Well what do you say? We get into it All…

Jordan Painter: Let’s go.

Tony Stancato: today’s episode. We are talking about the vacation rental valley of despair. It is definitely real and we just wanted to have a quick discussion about that I know online. You’ll see a lot of you know, positive. You know, cheery comments and pictures and and all that stuff. But there is this little highs and lows I guess you’d call it of getting your first vacation rental and then what it takes to actually get it online. So yeah, we just kind of wanted to walk you through that and the first part, obviously, is, you’re gonna be excited. You found your market, maybe you found your property already.

Tony Stancato: And you close super excited. You’re at the the peak and then all of a sudden you know the the real life situations come in and we just kind of wanted to walk you through the, the list here. So as soon as you buy it you know you’re gonna start doing the repairs, you’re gonna go through. You had your inspection done from your, you know, your purchase and they’re gonna kind of lay out some things that you need to get address there. You’re probably gonna need some paint, you’re probably gonna need some floor. So you start doing the rehab and there’s just a lot of work that goes into just getting it ready and able to take on furnishings. You know what, what are your thoughts on just kind of the repairs and the labor side of getting a property? Ready? Jordan.

Tony Stancato: Yeah. And I mean really it’s kind of on the front and I mean, there’s gonna be things that come up after you buy it. But initially you’re just gonna be super excited about buying your property, you’re gonna get into it. And your excitement is gonna going to dissipate very quickly as you start making these repairs. And if you’re even if you’re doing a lot of the legwork yourself, we can speak from experience on our first one, you know?

00:10:00

Tony Stancato: Rolling Paint for hours on end, your excitement for the project starts to disappear relatively quickly. So just something to keep in mind that it’s going to happen. You’re going to have those repairs. You’re gonna have those unexpected repairs. And then you’re also just gonna have to put in a lot of your own potentially time into the project, so be ready for the non-exciting part of doing the the rehab. And then after you’re done with the rehab comes the, the furnishing part. Now, some people really enjoy the furnishing and staging and the designing part, and there is some excitement around that, right? But on the other end of that,

Tony Stancato: someone has to assemble all the furniture. Somebody has to assemble. Those bunk beds. Somebody has to assemble the, you know, the TV stand and that kind of stuff and you’re literally taking a place, usually, a place that doesn’t even come with a napkin and you have to outfit this entire property, um, with with a lot of different stuff to me, a lot of different guests needs. You know what you have in that property for a family is gonna be different than what you would have potentially for a group of friends, right? So but,

Tony Stancato: You got the furnishing and all that and then the spending of the money to get all that stuff. And there’s just times where you question, if the spending will ever stop. I know, I definitely did and, you know, you spend 10 15 grand on it and you say, Hey I think we’re there. Oh wait what about this? This this and it’s all these little nickel and diamond things that catch up to you and you’re just like, Oh my gosh, like literally, or we ever going to stop spending? So I would say That’s kind of the second part of the valley of despair. What are your thoughts on like just that that furnishing budget and the spending and putting all that together? Jordan

Jordan Painter: Yeah, especially for your first one, it can be hard, our Michigan, short term rentals. Calm. If you go we’ve got the furnishing calculator that does help a ton to get rid of a lot of the guesswork and maybe bring bring front of mine. Some of the things you wouldn’t even think about, but just the process, you know, we’re trying to figure out how to do this efficiently in, you know, for us we’re we’re managing, and purchasing and in doing properties that we don’t necessarily live close to. And even if you do one of the most efficient ways we found is, You know, you order things through Amazon, right? Well somebody you know, who’s gonna be there when the Amazon package is delivered to bring it into the house, you know, who’s who’s gonna take it out of the box, who’s gonna assemble it? What are you gonna do with the piles and piles of boxes and trash that you accumulate as you’re going through that process? So every step of it just has so many moving parts that you don’t really think about until you furnish a full house from scratch. So just a lot of

Jordan Painter: The time and labor. That that’s hard to, you know really calculate what really goes all into it and then it’s like, you know, if you you’re not super desiring oriented even, just where should we hang? The, you know, the artwork and you know, How do we, you know, stage in in furnish it and where do we put the couches and those things that you you think are easy. You spend so much time once. Once you’re actually in the house, trying to figure that stuff out. So it really is just a lot of aside from just the expense. Just the amount of time that it takes to prepare one house is immense

Tony Stancato: Yeah, absolutely. So that’s kind of the, again, the second part of the valley. And now, once you’re done with that, you’re gonna run into one more, you know, one more valley part. And that’s gonna be kind of the listing aspect of it.

Jordan Painter: What?

Tony Stancato: You got to get the photos, which is gonna be spending more money. And those could range anywhere from you, call it 150 to $800. But again, don’t don’t try to do this yourself. I say this like probably every other podcast. Professional photos will make you 15% more money. So, spend the money even though you’re

Tony Stancato: Done spending money. Feel like you don’t want to spend another dime, you have to spend it here, but then you gotta, you got a list that you got a list on Amazon or Sorry, not Amazon Airbnb and you got to get the the pictures.

Jordan Painter: If?

Tony Stancato: You got to get the listing description. We actually pay somebody to do the listing description and then, you know, you’re gonna want to get the captions on the photos. You’re you’re probably gonna want to get price labs. So you’re gonna want to get these different tools and resources to just help optimize and make sure you get the best return that you can from this property. So,

00:15:00

Tony Stancato: spend the money there and then that’s kind of the home stretch and but there is one more very

Tony Stancato: I guess there’s one more spot where there’s a little bit of anxiety around it, so you just spent all your money. You spent all your time, you got it listed, it looks beautiful, you think it’s amazing and you push publish on airbnb and nothing happens. You know 12 hours goes by 24 hours goes by and now you start questioning. Will I ever get a booking? Did I just lose all this money? Did I spend it all for? Nothing is all my time wasted. Am I gonna recoup any of that? And that’s, I mean this is probably one of the the most scary parts of it. Some people get bookings right away. We’ve had listings where it’s taking six days and to take six days to get your first booking is You’re a nervous. Wreck waiting for that one to come in so

Tony Stancato: Anything on, on the last two Jordan listing waiting for bookings.

Jordan Painter: Yeah definitely a couple things to add You know Tony’s Tony handles all of our operations and getting the listings live. But another area that I think you really need to spend the time on is house rules and regulations and making sure they’re communicated well and making sure that you’re you’re within whatever the township regulations and guidelines are for all that stuff. And it’s a balance between making sure that you convey all the information. And also not sending a 35 page book that nobody’s gonna read so that you kind of get what the messaging lost. So really does take a lot of time to do that. Do it? Well,

Jordan Painter: It for sure. So take the time to do that and maybe rip off and duplicate what,…

Tony Stancato: If?

Jordan Painter: what you can find from other people. And then yeah, as far as just waiting for the bookings, you know, every day that passes is one day closer to your next mortgage payment and the utility bill, and the trash bill and all of these different things that, you know, you’re going to have to pay whether that property produces income or not. So there is definitely a lot of anxiety around making sure that Those bookings come through and you know, once you’ve done all the right things, there’s really not nothing. You can do to control that until people find it and start looking. And so depending on what time of year it is that you’re going live, just something else to think about, you know, every market’s a little bit different, but certainly what we found in southwest Michigan is that in the summer, you know, our first listing, we put that thing out and it was, you know, it was

Jordan Painter: Getting booked right away, lots of activity, lots of excitement. But another one that we had we put in, I want to say was What may or April last year and that one took a lot more time to to really get traction and start booking. So if you’re buying stuff in the offseason, you just have to understand going in. Not only you have all the all these costs and expenses to prepare the property, but you also may have some carrying costs because you don’t have a, you know, full bank account from the peak season. Bookings, to help to offset some of that. So making sure I’d say the one one thing to do is to make sure that you have realistic expectations Based on the time of year you’re going live and make sure you got those cash reserves in the bank, ready to cover, you know, any difference between what the property brings in and what’s your costs are because it can be difficult to make money every single month of the year, right? So as a whole it’s great but not every month is great.

Tony Stancato: Yeah, absolutely. Now, did we do this podcast to scare everyone away? Make sure that we don’t have any competition and that no more. People are kind of getting into the market.

Jordan Painter: You know what? So for me it’s all about it’s, you know, we’re not just doing this for ourselves. We’re doing this for other people. So one of the passions that I have in the businesses just being able to educate people and so you know, I think to me a lot of this stuff is they are things that if you know that’s going in, it’s less scary. But so what, what? Definitely my my goal and your goal in. This is to just educate people so that they understand that it’s not going to be all sunshine and rainbows, and you got a plan for these types of things. So, once again, when you’re budgeting, always have extra money in the budget for the unknowns and and again, having that that reserve of, this is a business and, you know, there’s highs and lows and there’s there’s sometimes where you’re in the red and sometimes where you’re in the black. So you just have to plan accordingly so that when these types of things do come up, it’s a whole lot less stressful because you plan for it, and you say for it, and you, you’ve invested wisely

Tony Stancato: Yeah, absolutely. And I think you mentioned just the word earlier is expectations. I think for us sometimes, again, it’s easy to be on Instagram or, you know, maybe even LinkedIn and everything’s just seems super cheery and all that stuff. But you could have realistic expectations, knowing that these things are going to. This is kind of the journey that you’re about to go on when you buy a short-term rental and, you know, once you enter it, you’re gonna feel when you enter the valley and then you’re gonna be like, Oh yeah, hey Tony said, this was, This is normal. This is gonna happen. I mean, right now we’re for machine, I don’t know. Eat 11 11 different properties or 11 different doors, right? And you know, the valley still there, even though, you know, we’ve already gone through it on other ones. You still feel it might not be as bad as it was on the first one, but you still feel it and you like Oh my gosh is this spending?

00:20:00

Tony Stancato: Ever going to stop. So yeah for us. It’s just sharing what that looks like. Making sure that you have a realistic expectation of what that journey is going to look like once you you close because you are super excited. And then you know kind of feels like the world comes crashing down a little bit for a good month or two. Why you get that property ready to go. So that was it and you know, if you enter that valley of despair on your next purchase, vacation, rental, purchase just send me over a LinkedIn message and say Hey just enter the valley of despair you know, and I can just shoot you some words of encouragement, you know. Just get through it. And yeah I think that’s that’s it for this one. Anything else?

Jordan Painter: Yes, sir. Surround yourself with people who are gonna lift you up and encourage you for sure. And, you know, yeah, I’m just just that planning that goes into it. You have to to be successful in this business, you got to go in with, with your eyes wide open and being realistic. So if you don’t plan for this stuff, you’re gonna not be successful. And you’re gonna be one of many, many people in the near future, that try out short term rentals and fail and our are gonna have to, to move on and try something else. So, yeah, give yourself a good safe, runway and everything will be much smoother.Tony Stancato: Absolutely. All right. So make sure you go over to Facebook, search, Michigan. Vacation rentals. Join that group. I’ll try to leave it in the The show notes as well, so you can click on that. Go join that group. Connect engage in there with us and we’ll talk to you later.