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In this episode, we’re sharing insider tips on what you need to watch out for when purchasing a vacation rental property.
We uncover common issues that are easy to overlook, but could end up draining your profits. We dive deep into what to consider before making an investment in property.
Whether you’re a seasoned vacation rental owner or just starting out, this episode is essential listening for anyone looking to avoid costly mistakes and maximize their profits. Tune in and gain the knowledge you need to protect your bottom line!
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This editable transcript was computer generated and might contain errors.
Tony Stancato: Welcome to the Michigan. Short-term rentals podcast, My name is Tony Stancato here with my co-host. Jordan painter. What’s up man?
Jordan Painter: Yo, what’s up, Tony? Man,…
Tony Stancato: How’s it going?
Jordan Painter: it’s day 68 Out of 75, woke up to eight inches. 9 inches of snow on March 10 in Michigan’s.
Tony Stancato: What?
Jordan Painter: Got my got my 45 minutes outside with my boots on.
Tony Stancato: Dang, that’s crazy. Um,
Jordan Painter: Yeah.
Tony Stancato: all right. Let’s start over. For some reason, everything’s like choppy.
Jordan Painter: You want to read log on?
Tony Stancato: More times your Bible study start eight.
Jordan Painter: What? Yeah, but we can go a couple minutes late. He can wait
Tony Stancato: Welcome to the Michigan. Short-term rentals podcast, My name is Tony Stancato and I’m here with my co-host. Jordan painter. What’s up man? How’s it going?
Jordan Painter: What’s up? What’s up, man? Good man is day 68 to 75. So I got one week left, man. Woke up. To eight or nine inches of snow. Had to put my boots on for my 45 outside. So yeah, man, spring can’t come fast enough for all kinds of reasons.
Tony Stancato: That’s awesome. What do you got going this weekend?
Jordan Painter: Um, yeah, I got my son’s last basketball game. We got to eat a business association. We got an event this weekend, that we’re gonna be hosting a booth at and then not really sure. Other than that. Hopefully, you spent some time with the Fam. What are you up to?
Tony Stancato: Awesome. Yeah, going over to the east side of the state, you know, my birthday is on Monday, so going to celebrate that. So looking forward to that, getting close to 40, you know? So, Yeah. Yep.
Jordan Painter: Me. Well, happy free birthday brother.
Tony Stancato: Thank you. Yes, so today we wanted to do a quick podcast on. There’s something that I’m actually pretty excited about. I’ve always questioned why they haven’t done it because there’s a lot of different platforms that already do what they’re doing, including some of its competitors. So Brian Chesky, the CEO of Airbnb recently came out and mentioned that they might venture into the sponsored listing on the airbnb platform. They did say they want to do it in a way that nobody else is doing it. So not exactly sure what to expect there. But
Tony Stancato: You know it’s sponsored listing is this essentially going to be you pay, you know, it’s like an advertisement, you pay to be at the top of the list and other platforms. Like, If you think about Google the first two or three listings, there are kind of those sponsored listings. When you go over to Amazon, One of the first things you see is the one or two that are actually, you know, paid to be in that spot. So I think that actually is a good thing on a couple different notes, but what, what is your take on being able to kind of pay for that number one, spot.
Jordan Painter: I think I think it’s interesting. I think it’s gonna it’s gonna definitely continue to make things more competitive in the industry. It’s going to make it more competitive to get eyeballs on your listings if you’re a host. So yeah. I think there’s there’s pros and cons with it. For sure. Definitely going to be opportunities for people who are willing to invest in their business to potentially increase. The revenue or maybe Continue the revenue that they’ve they’ve become accustomed to and it’s definitely potentially going to make it harder for other people who don’t want to put money in and aren’t willing to spend it. So, yeah, definitely, definitely give me some opportunities there. I think, for sure. So good. Good and bad.
Tony Stancato: Yeah. And I think I think the pain for those that,
Tony Stancato: They’re listing kind of already fell flat. This is just going to amplify that pain. Um, you…
Jordan Painter: If?
Tony Stancato: they might try paying for ads and if they haven’t gotten some track record with actually being able to get some bookings, I think they’ll pay for the the loose of money because still there, they’re listing isn’t resonating with people. So I think it’ll just make the ones that probably should, you know, Be off the platform or you know, kind of revise or redo their listing. I think it’s just going to make it that, you know, it’s gonna accelerate that and kind of get those people out of there quicker or, you know, make it so that they have to actually improve their listing a lot more.
Jordan Painter: Yeah, I haven’t. Haven’t read a ton about it yet. As far as it sounds like they haven’t released a ton of details about what they’re doing. But what I’ve seen in real estate over the years with the zillows and the trulias and those type of platforms is, You know, they start by going after the individuals, you know, the agents and you, you pay to market and get leads and whatnot, and it’ll be similar with I think with hosts and then what they started to do, which, which did make it difficult for some of the smaller people, as they would go. After the big brokerage is the big national franchises and those companies would pay a lot of a lot of dollars, so that their agents listings and their office listings could be featured. So, to be interesting to see
Jordan Painter: How this starts to impact the vacasas of the of the short-term rental world, as far as you know, do those companies get priority because they’ve got big checkbooks and they can they can pay to promote those listings to the top of the page. So it could be interesting to see how it it relates to to these smaller individual hosts in smaller companies to compete with a big ones. What we also started to see, I mean just paralleling to real estate is when I started in the business. 12, 13 years ago, whatever it was the leads, were much less expensive. There wasn’t tons of competition.
Jordan Painter: And we may start to see this and we did a podcast about this previously, but as new platforms pop up and people start looking elsewhere other than those top two for for vacation rentals. The the in order for the companies to get your eyeballs, the lead cost the lead acquisition gets higher and higher and higher and that’s why we start to see some of the companies, do what they’re doing like this with having the, the listings featured and everything else, they’re having to pay more and more get eyeballs. So to be interesting, also to see what other what other companies, start to pop up and try to compete for the eyeballs. Especially if it starts to cost the hosts more money, you know the hosts are gonna be more incentivized at that point to go shopping other places. So lots of lots of different changes that this could definitely bring
Tony Stancato: yeah, and I would say the number one piece of advice that I would recommend to, to the listeners would be It almost seems like when these types of platforms turn this type of advertising on again, think about Facebook, you know, when they turned advertisement on or Google AdSense, you know, people used to be able to pay five cents, a click or, as you’re saying with a realtor being a realtor, you used to, I don’t know what you used to pay for a lead back in the day.
Jordan Painter: yeah, so they kind of break it down the platforms to it differently but typically you would buy a zip code and you get a percentage of that zip code and let’s say, you get Six to eight leads or inquiries a month and when I started doing it you could buy a zip code for 50 to 60 dollars a month when I stopped doing it. It was it was literally thousands of dollars a month. Thousands for that same that same six or eight leads. So the the amount that you paid for leads went from you know five or ten dollars lead to 500 to a thousand dollars per lead in those leads aren’t even guaranteed. You know. That’s a it’s somebody that’s inquiring about a house. So it really is got got to be very very expensive and competitive in that and that arena. So,
Tony Stancato: Yeah.
Tony Stancato: And again, like That’s that’s what I’m hinting at here. Is again, Google AdSense. If you would have caught that wave on the, you know, back in the day, you could have paid, you know, pennies for a click, to get customers over to your funnel, get them through the funnel and convert that. So there’s gonna be like this arbitrage there. I I think because it happens on a lot of platforms where don’t like, wait and see like jump in and you know, kind of push that that throttle to the max and see, see what happens again, Facebook, back in the day, you could probably 10 25 cents, you could get a click and now people probably pay five bucks a click right? So definitely and I think Pinterest was a big one. I mean, never really done much with Pinterest. But I’ve seen some things where you could get like thousands of visitors to your site in a day for pennies, you know, when they turn on their advertising, so don’t don’t miss out on the opportunity of kind of being one of
Tony Stancato: The first wants to try the advertising here and play around with it. And you know, a lot of times there’s people that Can develop a skill around this. And even if you think about like Amazon Amazon advertising, I mean, you’re bidding on keywords. There’s, there’s some skill that you can develop there. That could actually be very valuable to the marketplace. So, you know, maybe if you’re looking for some additional, I don’t know. Revenue in that area, you could definitely become an expert relatively quickly and help others implement what you’ve learned.
Tony Stancato: The other thing I would say is I look I think they made eight billion just over eight billion dollars in 2022. In their projecting that this would bring in 1.2 billion dollars by 2026. This is from just an online news article on skiff. So I’m a big buyer of airbnb stock so I’m pretty excited about that not that that’s investment advice. But if you think about like 12 and a half percent additional, you know revenue in three years or less buy something that isn’t gonna take a ton of effort once it gets rolling, pretty exciting.
Jordan Painter: Yeah, that’s awesome. So what do you think the danger is if you decide you don’t want to To advertise this way.
Tony Stancato: I mean, I think the danger is going to be more to the middle of the road or, you know, those bottom, you know, the people at the bottom already, they’re just gonna fall further to the bottom. I think the ones in the top again, if you think about Google being number one in the Google ranking, Um, you know, people will typically skip over those listings and still click on that first one but they’re gonna, you know, the ads are gonna steal some clicks from you. So I think it just reiterates how important it is to make sure get your reviews, get you know, a lot of reviews and try to be in those top three spots still.
Tony Stancato: You know, but I’ll tell you what, if you got a bunch of good reviews, you know, call it 55 Star reviews and you’re kind of in a little bit of the middle or upper middle of the pack. I think you’ll be able to pay to be on that top. And people are gonna see those reviews and they’re gonna feel really confident about booking that and I think you’ll be able to get a lot more bookings by doing that.
Jordan Painter: Yeah, awesome, it’s exciting. Exciting news. Hopefully they make it to…
Tony Stancato: Here.
Jordan Painter: where it’s still affordable and palatable. I would imagine When they first kick it off, it’ll be relatively inexpensive. And, you know, especially if you’re hosting for other people. You’ve really you gotta you got to make that investment.
Tony Stancato: Absolutely. Anything else on that?
Jordan Painter: No. Like I said, I’ll be excited to continue to follow the news on that and see where they decide to go and how what what unique angles they come at it with. So,
Tony Stancato: Absolutely. All right, guys, until next time,
Related: How to Scale Short Term Rentals