From Yurts to a Million-Dollars in Gross Rents: A Short-Term Rental Success Story with Michael Holcomb

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Welcome to the Michigan Short Term Rentals podcast. In this

Welcome to the latest episode of our Michigan Short Term Rental podcast! This week, we’re thrilled to welcome Michael Holcomb, a short term rental owner and property manager with a wide range of experience. Michael started his journey in the industry by renting out a yurt but quickly evolved into managing a range of properties, from cozy cabins to luxurious lake homes.

In this interview, Michael shares his insider tips on everything from property management to marketing strategies and gives us a glimpse into the exciting world of short term rentals in Michigan. He also discusses surpassing a million dollars in gross rents for his management clients this year, proving that his approach is not only successful,l but profitable.

If you’re interested in the vacation rental industry or looking to break into the business, you won’t want to miss this episode. Tune in to hear Michael’s incredible story and gain valuable insights into the world of short term rentals.

Mentioned: The Karwells 

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This editable transcript was computer generated and might contain errors. 

Tony Stancato: Michael, thank you for joining the podcast here.

Michael Holcomb: Yeah, it’s great to be with you guys again.

Tony Stancato:  Yeah. So this is round number two, first one. My Internet connection was pretty bad. So here we are about a month and a half later, trying to redo it and hopefully get a little bit better sound quality this time. So really appreciate you carving out time twice for us, so, but it was so good. I think it’s definitely worth three visiting. So if you get a second could you just walk us through kind of your short-term rental history? How you got started? What it looks like today

Michael Holcomb: Yeah, absolutely. So my journey started probably about four years ago when I went and stayed at a year up in the Upper Peninsula. I was really into camping and traveling, and stuff like that at the time.

Jordan Painter: You.

Michael Holcomb: And when stayed in one of these, you’re glamping experiences, and I just thought it was the coolest thing ever. So, at that time, I decided I might want to live in one actually, so Start putting a plan together to build one of these things. And then, my father was was retiring and he decided that hey, it’d be kind of cool to do this as short-term rental. I had a buddy, I got into short-term rentals up in Grand, Traverse Bay area and he was netting 50k a year off a short-term rentals. So, I was a kind of a bug in my, my dad’s ear about doing these short-term, rental things. And when stating this year, and then Came back, We got to work. I’m building this year. It took about a year to do. And then after that, just started buying some cabins and cottages and it was kind of off to the races after that.

Tony Stancato: Well, that’s awesome.

Jordan Painter: But welcome. We’ve kind of looked into that a little bit ourselves, as far as the your concept goes. So give us a little bit of insight in that. So what what is kind of an average? Your cost? One of the big concerns. We’ve had is, what is the maintenance on those things? Look like when the wind blows does, the does the roof come off? And then what kind of township issues if you run into with getting getting those permitted?

Michael Holcomb:  Yeah, man. So I guess. Average cost really has to do with with the size of the year that you’re gonna do. And obviously the level of furnishing that you do on the inside. So I would say we probably had

Michael Holcomb:  We probably had almost you know 50 or 60,000 dollars into ours. The kids run, probably. anywhere from 14 to 25, 30,000, even just depends if you’re doing like a scene, a 20 or 30 foot, Maintenance wise, there’s not a whole lot of maintenance. Ours is held up really well. Ours came from Pacific years and yeah, no, it’s held up great. The, the top covers been secured and no leaks, no rips. No, major issues. I would probably clear away any big limbs are trees from from your structures. It’s not like a

Michael Holcomb: Like I’d want a big branch to follow it by any means, but from maintenance standpoint it’s been great power.

Jordan Painter: Okay.

Michael Holcomb: Wash it. Every maybe two years something like that. It’s right down.

Jordan Painter:  So you leave them up all year long, you don’t take them down. They step through the winter and everything.

Michael Holcomb:  Ours our stays up all year through the winter. We got the snow load kit, so it’s it’s it meets all the wind and snow load requirements for for Michigan. Which is, you know, I think it’s like 70 pounds per square foot or something like that. So it’s nice and sturdy. From a zoning standpoint. That’s that’s I think the biggest hurdle for people trying to do the camping thing if it is a permanent structure. We had to meet all the building codes and regulations just as if it was a house. So we actually pill pulled a building permit and it is built. Exactly to code like a house would be. Except the only difference is is it’s round. And The.

Michael Holcomb:  Covering is not your your typical. Siding or roofing that you would do on like a house. But if you can take them down, depending on your zoning. If you’re like zoned, recreational or unzoned land, they really don’t care what you do. You might have to pull a permit for like a deck. If you’re gonna put it on a deck, but as long as you can take it down, there’s not a whole lot that they can do about it in that case, but if they’re gonna be permanent, they might have a problem with it. So you always want to be upfront and give the zoning people a call before you do something crazy and spend a bunch of money. Okay. Yeah.

00:05:00

Tony Stancato: Makes sense.

Jordan Painter: Noted good advice.

Jordan Painter: Um, tell us about tell us about what your current management portfolio looks like. What kind of Reynolds do you manage? Where’s your target area? What kind of the numbers all those details.

Michael Holcomb: Yeah, our current management portfolio. It consists of about eight to ten of our own rentals. Then I manage two. Kind of boutique motels over in Ludington. For a guy, we have a bunch of lake houses and cabins most of them are waterfront. Cottages probably around the anywhere from like the three to six hundred thousand dollar range. So of our stuff is maybe more around the two hundred thousand dollar range. As far as purchase price goes.

Michael Holcomb: Obviously are your we have that, we have an A-frame and we’re gonna be building some more glamping stuff this year.

Jordan Painter: It.

Michael Holcomb: I got some cool plans to build a some unique structures coming up which I’m really excited about. But As what was the other question is you said something about numbers.

Jordan Painter: Yeah. What are the what kind of returns are you see in just in, in general,

Tony Stancato: but,

Michael Holcomb:  Yeah. So well, our management portfolios set to do over a million dollars this year in like gross rents for people which I’m really excited about. We’re hoping to scale that even further to the five million dollar range. so that’s kind of where we’re at for, for all of our management portfolio stuff on our personal rentals, we’re seeing You know. like, A average return, like a cash on cash return. I would say of anywhere from like 20 to 35% is kind of what I’m seeing. We we got in at a time where stuff was a lot cheaper around our area because we manage the Greater Manistee National Forest area and stuff.

Michael Holcomb:  Land and properties were quite a bit cheaper. Well, any properties were a lot cheaper five years ago, but We we’ve probably, I mean, not probably we have made a hundred percent of our money back. Even buying in cash. I’m on our properties in the past, you know, three years on most of them.

Jordan Painter: Good for you. That’s awesome.

Tony Stancato: So yeah, so it sounds like you manage a couple places in Ludington. You mentioned kind of manistee area. What are some of the towns or cities that people might know of where you manage?

Michael Holcomb: Yeah. Well obviously Ludington Silver Lake pentwater.

Tony Stancato: Okay.

Michael Holcomb: Baldwin. We got Luther Irons music, Big Rapids. I’d say some of the more popular ones are probably those ludington. And lakeshore areas Silver Lake, everyone knows that. But

Tony Stancato:  Yeah.

Jordan Painter: Good. You want within in Montague that we got one referred to?

Michael Holcomb: Yeah, yeah. The one that you guys referred to me was that one in on Lake Michigan in Montague? So Whitehall Montague area? So that’s a newer area for us.

Jordan Painter: Four.

Michael Holcomb: And we went checked out the town that town’s actually really sweet. I never really spent much time there, but they got breweries and all sorts of cool stuff.

Jordan Painter:  Yeah, it’s cool. Uncle has a bow at the marina right across from the little garage or the grocery store there. Cool, little town walkable and Yeah.

Michael Holcomb:  Yeah, lots of marinas and it looks like a might be a good spot to park a boat for the summer.

Jordan Painter:  Not bad.

Tony Stancato: Silver Lake. So that’s something that we were looking at. I went to a conference last summer and they said Silver Lake was actually like the number one place in the United States for short-term rentals. I went up there checked it out. I mean, it is a really cool spot. My only thought when I was heading out was like, man, what’s going on here during off season? Can you? Yeah, shed some light to me,…

Michael Holcomb: Nothing.

Tony Stancato: it looked like the town. Probably just completely shuts down and nothing going on outside of that. So was curious, Do you guys getting bookings during the off season? Or is that hey, kind of got these four or five months and and it goes really hard and kind of fizzles out.

Michael Holcomb: Yeah, I would say in a lot of those vacation town areas. We don’t. see a ton of bookings, you’ll still get some stuff but like in our drive-in areas or the unique rentals like my A-frame some of the more cabin looking stuff or like the ones with hot tubs,…

00:10:00

Jordan Painter: Okay.

Michael Holcomb: we get actually quite a few Quite a few bookings in the offseason. The Anne seasons anywhere from like 80 to 100% occupancy. Usually, and then Depending on the property if it’s a really cool unique property and people are coming not necessarily for the area. But for the experience of the property itself, that’s when you can keep your occupancy high in the offseason. And you know, I’ve I’ve seen Even up to 60% occupancy and some of the winter months on on some of our stuff. But it,…

Tony Stancato: What?

Michael Holcomb: it really just depends what your rental’s geared towards.

Jordan Painter: If?

Michael Holcomb: If it’s really just geared towards A beachfront lakefront property stay, you’re probably going to see really high occupancy and high numbers and in the summertime, but not a ton in in the winter time unless you have some of those winter amenities. So it just really depends. So it’s something for people to think about for sure when they’re buying, can it be a cottage stay in a cabin, stay. Or is it unique enough that I’m gonna draw people to the property and not just to the area? Um, that’s how you can insulate yourself from from some of those issues.

Jordan Painter: That’s really great insight. So when you’re when you’re looking for something, you’d kind of mention maybe like the cabin look or the A-frame but when you’re looking for something that you think is going to be strong in those winter months, like can you just describe that for us?

Michael Holcomb:  Um, yeah, I mean, honestly, the biggest the biggest one. Well, one of the biggest ones is definitely if you just have a winter, amenity, like a hot tub, or maybe offer something beyond that, like Snowshoeing, or being close to Canonsburg Crystal Mountain, you know, the ski resorts. Um, that’s one thing. But also the weirdest thing that I’ve found in is, if it looks more like a cabin, like I’m talking like like a log cabin or deciding, it looks like a cabin. Or whatever reason, if it looks more like a cabin, then like a Cottage. It does way better in the fall winter and spring months. I don’t know why. That is. Maybe it’s just like a mental thing for people like the Smoky Mountain look like what you would expect in Tennessee. That kind of look, does a lot better.

Michael Holcomb:  In the quote unquote offseason. So I when I’m buying for me, I look for kind of that style, at where it can be both. Waterfront. But has a cabin style or something. I can make into a cabin kind of vibe.

Jordan Painter:  It’s yeah, that’s really good insight. I think it kind of goes back to the, the aesthetic of what people, you know, you’re painting the picture of this, this experience that they’re going to have and they don’t want to experience a house that looks like, it could be, you know, in their in their city block, they want it to look like it’s somewhere. That feels like they’re going on vacation and it’s different from from the normal so that’s really good. Good insight

Michael Holcomb: Yeah, yeah. For sure.

Tony Stancato: You.

Michael Holcomb: The biggest challenges is from a well, from a scaling standpoint. When you’re buying, if you don’t have unlimited funds and I don’t think any of us really do. I mean, but it’s If you’re buying and rule areas and some of these really cool unique properties, it’s it can be super hard to get. Loans on them. Unless, you know, like you can’t go get a commercial dscr loan on a rural property, and Baldwin,…

Jordan Painter: If?

Michael Holcomb: Michigan. I mean it’s it’s almost impossible to do so. You can do that and more. About areas like probably in a ludington or a like a Big Rapids.

Tony Stancato: If you.

Michael Holcomb: I just got one on the Internet. So if now that’s been the biggest struggle because we started, we started buying up a lot of Properties in these more rule recreational areas and they’re hard to fund. So we had to buy everything in cash so we ran out of cash reserves really quick from doing that. Other than that, scaling, the management company. Can be a can be a challenge. But, you know, we’re doing it. But it’s, it’s not always easy to find reliable cleaners or maintenance people and in areas where it’s a vacation town. Because everybody, You know, makes their money in the summertime and then it doesn’t attract. People necessarily like it doesn’t like Grand Rapids. They’re not high professionals necessarily in the area, great people. But it’s more like island time is what I would consider. It’s more like

00:15:00

Michael Holcomb:  like what you would find in an island town people, kind of just manage their own schedule and work when they want to, but

Tony Stancato: Yeah, so did you guys find some options over time for the properties that are in less populated areas or like some of the ones that you paid cash? Were you able to go back and maybe refinance some of the cash out? So you could continue to buy some new ones? Or are you kind of just At a point where you just leave the cash in and not have any mortgage.

Michael Holcomb: Any of the ones that turned out to be really good cash flowing properties.

Jordan Painter: Here.

Michael Holcomb: We’re just kind of riding them out, some of the other ones we’ve 1031 So we were able to kind of use that equity to go by maybe a little more expensive in it of an asset.

Jordan Painter: If?

Michael Holcomb: I’ve only refried one of the properties.

Michael Holcomb: But we’ve sold, we’ve sold a couple so we’ll trade in and out, get them cash flowing and making a good return and maybe hold it for a year to and try to sell it to someone we can manage for because then I kind of get to keep most of what I was netting.

Jordan Painter: That’s awesome.

Michael Holcomb: Anyway. Maybe and just get that management money while they’re making money and then I get to pull out all my equity. I found that via a good strategy to kind of build, build the business for somebody and then let them buy it. Maybe they can get a second home mortgage or something like that and then retain the management that’s that’s kind of been one of my bigger strategies.

Jordan Painter: So have you found when you’re doing that are you able to sell the property for more money because it’s it’s investment and making money? And you can show that on the books be singing that you’re selling them for more money than you’d be able to sell it. If it was just a normal residential type of buyer.

Michael Holcomb: Um, is that’s hard to quantify but it it seems like it’s easier to sell. If you’re selling it. With a track record of Hey this is…

Jordan Painter: If?

Michael Holcomb: what my expenses were. Here’s what your payment would be. Here’s what you would. Figured a net on an average year. I definitely get a lot more interest.

Michael Holcomb: From investors anyway, rather than just throwing it on the MLS and hoping someone wants a cottage to come use. So it’s, I would say it’s easier to sell. I don’t know if I get more money for them, maybe maybe a little bit. I’ve definitely some things…

Tony Stancato: well, in

Michael Holcomb: where I was like. That was higher than I expected for sure. So I guess I don’t know. But seems like probably.

Tony Stancato: Yeah, and…

Jordan Painter: Okay.

Tony Stancato: you take a lot of risk out of it. I mean, you have the track record if it has good reviews. I mean, there’s some comfort for whoever’s buying it knowing that hey, people enjoy this property as a short-term rental and then, the other aspect of it is like It seems like you should be able to get a little bit more for it based on if you’re selling it furnished and ready to go. I think people underestimate how difficult in time consuming, it is to actually get like a property up and running. So I mean, if you’re turning,…

Michael Holcomb: Yeah.

Tony Stancato: if you’re selling a turn key airbnb,…

Michael Holcomb: If?

Tony Stancato: that has a good track record, I mean, you’re really adding a lot of value to whoever’s buying that in really shortcut the process for them in the headaches. I mean, Us setting up. Our first one was just I mean it was very

Tony Stancato:  I don’t know, stressful, I guess we’ll say so. Oh yeah, I think you’re doing a big service to by taking some of that off other people’s plate.

Michael Holcomb:  yeah, I mean, we got over asking on this last one and it’s winter time and it was a little like 400 square foot cottage and we got over asking on it. So I would say the answer is probably

Tony Stancato:  Don’t you have a property next to the car wells? Is that?

Jordan Painter: Are.

Michael Holcomb: Yeah, I have one near them,…

Tony Stancato:  Okay.

Michael Holcomb: they’re they’re on a different lake. They’re on Petty, Bone Lake, I think. And this one’s right down the road. I actually live like two miles from from Pettibone Lake where they’re cottages…

Tony Stancato:  Okay.

Michael Holcomb: but and then this one’s probably another two three miles from there. But yeah, she she shared it and she she made a video on it and she ended up sharing it. I think one of the people that was in her audience actually ended up again from Indiana.

Tony Stancato: Not really awesome.

Michael Holcomb: So that was kind of interesting.

00:20:00

Tony Stancato:  Yeah.

Jordan Painter: So, one of the favorite of our favorite questions for other property managers is what is your best guest story.

Michael Holcomb: Yeah, you get some crazy people, sometimes not to scare anyone away or anything. Most. I would say 99% of people are Pretty fantastic but some people are just weird. You know like You get some weird requests. I actually a last time we were on here, I told you a story, I can do that one real quick, but the one where we found a metal pizza pan in the bottle of a hot tub, they must have been having a good time, but I feel like I already told that once I got better on that just came in yesterday. I got. I got a message from some people. They’re looking to rent. Place called Lincoln Log Lodge.

Jordan Painter: it’s

Michael Holcomb: It’s called that because like a Lincoln Walleye house and it’s on a lake. And they must have thought it was maybe a little more secluded than what it is. and the message read something like, Hey man. So me and my wife are nudists and we were just wondering if we could sunbathe, you know, naked at your property, would you have a problem with that? And I was like, I mean, I mean, the neighbors might, I mean, I don’t know if you want the papers watching your wife son. Whatever you want to do. So there’s there’s some interesting There’s some interesting things that happen we had. got a call from a neighbor once on our year property, there was just like cars parts for like a quarter. Mile down the road at one of our rentals. And turns out they were having a wedding without permission.

Michael Holcomb: and so, yeah, they just like threw a random wedding at one of our rentals, which I didn’t know people did that, but I guess, It’s a cheap way venue.

Tony Stancato: Yeah.

Michael Holcomb: So that’s actually an interesting thing, because we’ve had a lot of people asked to get married at some of our properties. So that’s that’s a whole another income stream that people can do if they have some extra space at a rental. you know, make a cool spot where people could get married and, you know, you might actually get someone willing to pay a little extra maybe charge 20%. Say Hey, you can book a wedding at my place too.

Jordan Painter: Stuff.

Tony Stancato: About that. But yeah you can definitely charge a little extra. I know that some people call it like an event fee or something like that and we’ll go all the way up to like, five grand for those types of events. And you should, I mean, You’re gonna have catering and music and 50 like they’re like Hey can we bring 50 people in for the day they won’t all be staying and it’s like, you know, I mean that’s still a lot of traffic so…

Jordan Painter: If?

Tony Stancato: but a certain price it might make sense for the property. So

Michael Holcomb: All right.

Michael Holcomb:  Yeah, if you have a really cool property like a especially a high-end luxury property I say, Just throw it on there and say, Amen, five grand, you can have a wedding here for sure.

Tony Stancato: Yeah. Yeah.

Jordan Painter: Yeah, I would have a pretty especially for the the clients that we manage to high-end ones for.

Michael Holcomb: Out.

Jordan Painter: You better have a pretty big security deposit just in case because they’re there is some risk associated with that for sure.

Michael Holcomb:  Yeah, sure.

Jordan Painter: Not definitely a revenue generator. So so for people who are listening that are just getting started, what are some tips that you could offer? Like, one one tip you could offer, the one thing that they should know getting into buying their first rental?

Michael Holcomb:  yeah, I would say don’t I feel like a lot of people are just getting started. They’re probably listening to a lot of Influencer people and maybe they’re following someone on Instagram or you know, they’re hearing all these these stories about Oh, I bought one or two rentals and now I’m sitting on the beach and I’m watching my phone, I’m just getting paid and they take these screenshots of the payouts and it’s like, Oh, a thousand dollars, 600 dollars. I’m making more than when ahead of six figure that job, but you got to remember that those are gross numbers. You know, they’re not that numbers and seeing those are super fun but my biggest advice would be to Talk to someone like me, someone like you guys who’s managing them and sees all the expense numbers coupled with, like what you’re actually making talk to people at are actually in your

Michael Holcomb:  Area doing what you want to do. Not just some influencer from California or something like that. And see what actually gonna net. And don’t forget about all the extra expenses. When you’re buying the furnishings, you’re gonna be paying for utilities. Don’t forget about your taxes, etc, like that, because it property might Look romantic and great in theory but never make an emotional decision and always base it off the tree.

00:25:00

Jordan Painter: Good stuff. So nothing no numbers. I like it. So and it’s it, you know, you think you mentioned are you diluted earlier you’re getting some really good cash on cash returns on stuff, you bought three to five years ago. The the markets up since then the interest rates are up. So, yeah, it’s, it’s definitely the game has changed for sure. So, it’s, it’s even more important to know what those numbers are.

Michael Holcomb:  Yeah.

Jordan Painter: When you know, when you go from 30% margin to 12, the margin for error shrinks substantially, don’t get those numbers right. So

Michael Holcomb: Right. Yeah, and find your niche because that’s exactly right A lot of those properties went up. So high in value as some of them can be hard to cash flow now. So find a kind of cool niche, find something unique and figure out how you can maybe bump up that revenue farther than just owning a average property. Also,

Tony Stancato: Awesome. Great advice, is there anything that we missed any other?

Michael Holcomb: but,

Tony Stancato: Anything else that you wanted to cover or that you think the listeners should know?

Michael Holcomb: I’m on Instagram. Simple life.

Tony Stancato: There we go.

Michael Holcomb: Stays Come find me.

Jordan Painter: If you.

Michael Holcomb: We post some really cool content. I’m partnering with some Influencer people and people that take really cool photography and videos and stuff. So I’d say find me there and I’m gonna start doing some more stuff on my purse personal Instagram here soon and you’ll be able to find me from my business one, but I’m gonna start doing some More influencer style videos on there to educate people in a in a real way. And not just so you’ll buy my program or something like that. Just actually give some people some real information and not just trying to monetize off them by making them by B&B Calc or something like that, that kind of stuff. It’s kind of Right here. But

Tony Stancato: Yeah. Awesome. Well, thanks again for joining us today and Yeah, we’ll talk to you later.

Michael Holcomb:  Yeah, thanks for having me again, guys. Appreciate it. Yep.

Jordan Painter: Thanks for the time.

Tony Stancato: Michael, thank you for joining the podcast here.

Michael Holcomb: Yeah, it’s great to be with you guys again.

Tony Stancato:  Yeah. So this is round number two, first one. My Internet connection was pretty bad. So here we are about a month and a half later, trying to redo it and hopefully get a little bit better sound quality this time. So really appreciate you carving out time twice for us, so, but it was so good. I think it’s definitely worth three visiting. So if you get a second could you just walk us through kind of your short-term rental history? How you got started? What it looks like today

Michael Holcomb: Yeah, absolutely. So my journey started probably about four years ago when I went and stayed at a year up in the Upper Peninsula. I was really into camping and traveling, and stuff like that at the time.

Jordan Painter: You.

Michael Holcomb: And when stayed in one of these, you’re glamping experiences, and I just thought it was the coolest thing ever. So, at that time, I decided I might want to live in one actually, so Start putting a plan together to build one of these things. And then, my father was was retiring and he decided that hey, it’d be kind of cool to do this as short-term rental. I had a buddy, I got into short-term rentals up in Grand, Traverse Bay area and he was netting 50k a year off a short-term rentals. So, I was a kind of a bug in my, my dad’s ear about doing these short-term, rental things. And when stating this year, and then Came back, We got to work. I’m building this year. It took about a year to do. And then after that, just started buying some cabins and cottages and it was kind of off to the races after that.

Tony Stancato: Well, that’s awesome.

Jordan Painter: But welcome. We’ve kind of looked into that a little bit ourselves, as far as the your concept goes. So give us a little bit of insight in that. So what what is kind of an average? Your cost? One of the big concerns. We’ve had is, what is the maintenance on those things? Look like when the wind blows does, the does the roof come off? And then what kind of township issues if you run into with getting getting those permitted?

Michael Holcomb:  Yeah, man. So I guess. Average cost really has to do with with the size of the year that you’re gonna do. And obviously the level of furnishing that you do on the inside. So I would say we probably had

Michael Holcomb:  We probably had almost you know 50 or 60,000 dollars into ours. The kids run, probably. anywhere from 14 to 25, 30,000, even just depends if you’re doing like a scene, a 20 or 30 foot, Maintenance wise, there’s not a whole lot of maintenance. Ours is held up really well. Ours came from Pacific years and yeah, no, it’s held up great. The, the top covers been secured and no leaks, no rips. No, major issues. I would probably clear away any big limbs are trees from from your structures. It’s not like a

Michael Holcomb: Like I’d want a big branch to follow it by any means, but from maintenance standpoint it’s been great power.

Jordan Painter: Okay.

Michael Holcomb: Wash it. Every maybe two years something like that. It’s right down.

Jordan Painter:  So you leave them up all year long, you don’t take them down. They step through the winter and everything.

Michael Holcomb:  Ours our stays up all year through the winter. We got the snow load kit, so it’s it’s it meets all the wind and snow load requirements for for Michigan. Which is, you know, I think it’s like 70 pounds per square foot or something like that. So it’s nice and sturdy. From a zoning standpoint. That’s that’s I think the biggest hurdle for people trying to do the camping thing if it is a permanent structure. We had to meet all the building codes and regulations just as if it was a house. So we actually pill pulled a building permit and it is built. Exactly to code like a house would be. Except the only difference is is it’s round. And The.

Michael Holcomb:  Covering is not your your typical. Siding or roofing that you would do on like a house. But if you can take them down, depending on your zoning. If you’re like zoned, recreational or unzoned land, they really don’t care what you do. You might have to pull a permit for like a deck. If you’re gonna put it on a deck, but as long as you can take it down, there’s not a whole lot that they can do about it in that case, but if they’re gonna be permanent, they might have a problem with it. So you always want to be upfront and give the zoning people a call before you do something crazy and spend a bunch of money. Okay. Yeah.

00:05:00

Tony Stancato: Makes sense.

Jordan Painter: Noted good advice.

Jordan Painter: Um, tell us about tell us about what your current management portfolio looks like. What kind of Reynolds do you manage? Where’s your target area? What kind of the numbers all those details.

Michael Holcomb: Yeah, our current management portfolio. It consists of about eight to ten of our own rentals. Then I manage two. Kind of boutique motels over in Ludington. For a guy, we have a bunch of lake houses and cabins most of them are waterfront. Cottages probably around the anywhere from like the three to six hundred thousand dollar range. So of our stuff is maybe more around the two hundred thousand dollar range. As far as purchase price goes.

Michael Holcomb: Obviously are your we have that, we have an A-frame and we’re gonna be building some more glamping stuff this year.

Jordan Painter: It.

Michael Holcomb: I got some cool plans to build a some unique structures coming up which I’m really excited about. But As what was the other question is you said something about numbers.

Jordan Painter: Yeah. What are the what kind of returns are you see in just in, in general,

Tony Stancato: but,

Michael Holcomb:  Yeah. So well, our management portfolios set to do over a million dollars this year in like gross rents for people which I’m really excited about. We’re hoping to scale that even further to the five million dollar range. so that’s kind of where we’re at for, for all of our management portfolio stuff on our personal rentals, we’re seeing You know. like, A average return, like a cash on cash return. I would say of anywhere from like 20 to 35% is kind of what I’m seeing. We we got in at a time where stuff was a lot cheaper around our area because we manage the Greater Manistee National Forest area and stuff.

Michael Holcomb:  Land and properties were quite a bit cheaper. Well, any properties were a lot cheaper five years ago, but We we’ve probably, I mean, not probably we have made a hundred percent of our money back. Even buying in cash. I’m on our properties in the past, you know, three years on most of them.

Jordan Painter: Good for you. That’s awesome.

Tony Stancato: So yeah, so it sounds like you manage a couple places in Ludington. You mentioned kind of manistee area. What are some of the towns or cities that people might know of where you manage?

Michael Holcomb: Yeah. Well obviously Ludington Silver Lake pentwater.

Tony Stancato: Okay.

Michael Holcomb: Baldwin. We got Luther Irons music, Big Rapids. I’d say some of the more popular ones are probably those ludington. And lakeshore areas Silver Lake, everyone knows that. But

Tony Stancato:  Yeah.

Jordan Painter: Good. You want within in Montague that we got one referred to?

Michael Holcomb: Yeah, yeah. The one that you guys referred to me was that one in on Lake Michigan in Montague? So Whitehall Montague area? So that’s a newer area for us.

Jordan Painter: Four.

Michael Holcomb: And we went checked out the town that town’s actually really sweet. I never really spent much time there, but they got breweries and all sorts of cool stuff.

Jordan Painter:  Yeah, it’s cool. Uncle has a bow at the marina right across from the little garage or the grocery store there. Cool, little town walkable and Yeah.

Michael Holcomb:  Yeah, lots of marinas and it looks like a might be a good spot to park a boat for the summer.

Jordan Painter:  Not bad.

Tony Stancato: Silver Lake. So that’s something that we were looking at. I went to a conference last summer and they said Silver Lake was actually like the number one place in the United States for short-term rentals. I went up there checked it out. I mean, it is a really cool spot. My only thought when I was heading out was like, man, what’s going on here during off season? Can you? Yeah, shed some light to me,…

Michael Holcomb: Nothing.

Tony Stancato: it looked like the town. Probably just completely shuts down and nothing going on outside of that. So was curious, Do you guys getting bookings during the off season? Or is that hey, kind of got these four or five months and and it goes really hard and kind of fizzles out.

Michael Holcomb: Yeah, I would say in a lot of those vacation town areas. We don’t. see a ton of bookings, you’ll still get some stuff but like in our drive-in areas or the unique rentals like my A-frame some of the more cabin looking stuff or like the ones with hot tubs,…

00:10:00

Jordan Painter: Okay.

Michael Holcomb: we get actually quite a few Quite a few bookings in the offseason. The Anne seasons anywhere from like 80 to 100% occupancy. Usually, and then Depending on the property if it’s a really cool unique property and people are coming not necessarily for the area. But for the experience of the property itself, that’s when you can keep your occupancy high in the offseason. And you know, I’ve I’ve seen Even up to 60% occupancy and some of the winter months on on some of our stuff. But it,…

Tony Stancato: What?

Michael Holcomb: it really just depends what your rental’s geared towards.

Jordan Painter: If?

Michael Holcomb: If it’s really just geared towards A beachfront lakefront property stay, you’re probably going to see really high occupancy and high numbers and in the summertime, but not a ton in in the winter time unless you have some of those winter amenities. So it just really depends. So it’s something for people to think about for sure when they’re buying, can it be a cottage stay in a cabin, stay. Or is it unique enough that I’m gonna draw people to the property and not just to the area? Um, that’s how you can insulate yourself from from some of those issues.

Jordan Painter: That’s really great insight. So when you’re when you’re looking for something, you’d kind of mention maybe like the cabin look or the A-frame but when you’re looking for something that you think is going to be strong in those winter months, like can you just describe that for us?

Michael Holcomb:  Um, yeah, I mean, honestly, the biggest the biggest one. Well, one of the biggest ones is definitely if you just have a winter, amenity, like a hot tub, or maybe offer something beyond that, like Snowshoeing, or being close to Canonsburg Crystal Mountain, you know, the ski resorts. Um, that’s one thing. But also the weirdest thing that I’ve found in is, if it looks more like a cabin, like I’m talking like like a log cabin or deciding, it looks like a cabin. Or whatever reason, if it looks more like a cabin, then like a Cottage. It does way better in the fall winter and spring months. I don’t know why. That is. Maybe it’s just like a mental thing for people like the Smoky Mountain look like what you would expect in Tennessee. That kind of look, does a lot better.

Michael Holcomb:  In the quote unquote offseason. So I when I’m buying for me, I look for kind of that style, at where it can be both. Waterfront. But has a cabin style or something. I can make into a cabin kind of vibe.

Jordan Painter:  It’s yeah, that’s really good insight. I think it kind of goes back to the, the aesthetic of what people, you know, you’re painting the picture of this, this experience that they’re going to have and they don’t want to experience a house that looks like, it could be, you know, in their in their city block, they want it to look like it’s somewhere. That feels like they’re going on vacation and it’s different from from the normal so that’s really good. Good insight

Michael Holcomb: Yeah, yeah. For sure.

Tony Stancato: You.

Michael Holcomb: The biggest challenges is from a well, from a scaling standpoint. When you’re buying, if you don’t have unlimited funds and I don’t think any of us really do. I mean, but it’s If you’re buying and rule areas and some of these really cool unique properties, it’s it can be super hard to get. Loans on them. Unless, you know, like you can’t go get a commercial dscr loan on a rural property, and Baldwin,…

Jordan Painter: If?

Michael Holcomb: Michigan. I mean it’s it’s almost impossible to do so. You can do that and more. About areas like probably in a ludington or a like a Big Rapids.

Tony Stancato: If you.

Michael Holcomb: I just got one on the Internet. So if now that’s been the biggest struggle because we started, we started buying up a lot of Properties in these more rule recreational areas and they’re hard to fund. So we had to buy everything in cash so we ran out of cash reserves really quick from doing that. Other than that, scaling, the management company. Can be a can be a challenge. But, you know, we’re doing it. But it’s, it’s not always easy to find reliable cleaners or maintenance people and in areas where it’s a vacation town. Because everybody, You know, makes their money in the summertime and then it doesn’t attract. People necessarily like it doesn’t like Grand Rapids. They’re not high professionals necessarily in the area, great people. But it’s more like island time is what I would consider. It’s more like

00:15:00

Michael Holcomb:  like what you would find in an island town people, kind of just manage their own schedule and work when they want to, but

Tony Stancato: Yeah, so did you guys find some options over time for the properties that are in less populated areas or like some of the ones that you paid cash? Were you able to go back and maybe refinance some of the cash out? So you could continue to buy some new ones? Or are you kind of just At a point where you just leave the cash in and not have any mortgage.

Michael Holcomb: Any of the ones that turned out to be really good cash flowing properties.

Jordan Painter: Here.

Michael Holcomb: We’re just kind of riding them out, some of the other ones we’ve 1031 So we were able to kind of use that equity to go by maybe a little more expensive in it of an asset.

Jordan Painter: If?

Michael Holcomb: I’ve only refried one of the properties.

Michael Holcomb: But we’ve sold, we’ve sold a couple so we’ll trade in and out, get them cash flowing and making a good return and maybe hold it for a year to and try to sell it to someone we can manage for because then I kind of get to keep most of what I was netting.

Jordan Painter: That’s awesome.

Michael Holcomb: Anyway. Maybe and just get that management money while they’re making money and then I get to pull out all my equity. I found that via a good strategy to kind of build, build the business for somebody and then let them buy it. Maybe they can get a second home mortgage or something like that and then retain the management that’s that’s kind of been one of my bigger strategies.

Jordan Painter: So have you found when you’re doing that are you able to sell the property for more money because it’s it’s investment and making money? And you can show that on the books be singing that you’re selling them for more money than you’d be able to sell it. If it was just a normal residential type of buyer.

Michael Holcomb: Um, is that’s hard to quantify but it it seems like it’s easier to sell. If you’re selling it. With a track record of Hey this is…

Jordan Painter: If?

Michael Holcomb: what my expenses were. Here’s what your payment would be. Here’s what you would. Figured a net on an average year. I definitely get a lot more interest.

Michael Holcomb: From investors anyway, rather than just throwing it on the MLS and hoping someone wants a cottage to come use. So it’s, I would say it’s easier to sell. I don’t know if I get more money for them, maybe maybe a little bit. I’ve definitely some things…

Tony Stancato: well, in

Michael Holcomb: where I was like. That was higher than I expected for sure. So I guess I don’t know. But seems like probably.

Tony Stancato: Yeah, and…

Jordan Painter: Okay.

Tony Stancato: you take a lot of risk out of it. I mean, you have the track record if it has good reviews. I mean, there’s some comfort for whoever’s buying it knowing that hey, people enjoy this property as a short-term rental and then, the other aspect of it is like It seems like you should be able to get a little bit more for it based on if you’re selling it furnished and ready to go. I think people underestimate how difficult in time consuming, it is to actually get like a property up and running. So I mean, if you’re turning,…

Michael Holcomb: Yeah.

Tony Stancato: if you’re selling a turn key airbnb,…

Michael Holcomb: If?

Tony Stancato: that has a good track record, I mean, you’re really adding a lot of value to whoever’s buying that in really shortcut the process for them in the headaches. I mean, Us setting up. Our first one was just I mean it was very

Tony Stancato:  I don’t know, stressful, I guess we’ll say so. Oh yeah, I think you’re doing a big service to by taking some of that off other people’s plate.

Michael Holcomb:  yeah, I mean, we got over asking on this last one and it’s winter time and it was a little like 400 square foot cottage and we got over asking on it. So I would say the answer is probably

Tony Stancato:  Don’t you have a property next to the car wells? Is that?

Jordan Painter: Are.

Michael Holcomb: Yeah, I have one near them,…

Tony Stancato:  Okay.

Michael Holcomb: they’re they’re on a different lake. They’re on Petty, Bone Lake, I think. And this one’s right down the road. I actually live like two miles from from Pettibone Lake where they’re cottages…

Tony Stancato:  Okay.

Michael Holcomb: but and then this one’s probably another two three miles from there. But yeah, she she shared it and she she made a video on it and she ended up sharing it. I think one of the people that was in her audience actually ended up again from Indiana.

Tony Stancato: Not really awesome.

Michael Holcomb: So that was kind of interesting.

00:20:00

Tony Stancato:  Yeah.

Jordan Painter: So, one of the favorite of our favorite questions for other property managers is what is your best guest story.

Michael Holcomb: Yeah, you get some crazy people, sometimes not to scare anyone away or anything. Most. I would say 99% of people are Pretty fantastic but some people are just weird. You know like You get some weird requests. I actually a last time we were on here, I told you a story, I can do that one real quick, but the one where we found a metal pizza pan in the bottle of a hot tub, they must have been having a good time, but I feel like I already told that once I got better on that just came in yesterday. I got. I got a message from some people. They’re looking to rent. Place called Lincoln Log Lodge.

Jordan Painter: it’s

Michael Holcomb: It’s called that because like a Lincoln Walleye house and it’s on a lake. And they must have thought it was maybe a little more secluded than what it is. and the message read something like, Hey man. So me and my wife are nudists and we were just wondering if we could sunbathe, you know, naked at your property, would you have a problem with that? And I was like, I mean, I mean, the neighbors might, I mean, I don’t know if you want the papers watching your wife son. Whatever you want to do. So there’s there’s some interesting There’s some interesting things that happen we had. got a call from a neighbor once on our year property, there was just like cars parts for like a quarter. Mile down the road at one of our rentals. And turns out they were having a wedding without permission.

Michael Holcomb: and so, yeah, they just like threw a random wedding at one of our rentals, which I didn’t know people did that, but I guess, It’s a cheap way venue.

Tony Stancato: Yeah.

Michael Holcomb: So that’s actually an interesting thing, because we’ve had a lot of people asked to get married at some of our properties. So that’s that’s a whole another income stream that people can do if they have some extra space at a rental. you know, make a cool spot where people could get married and, you know, you might actually get someone willing to pay a little extra maybe charge 20%. Say Hey, you can book a wedding at my place too.

Jordan Painter: Stuff.

Tony Stancato: About that. But yeah you can definitely charge a little extra. I know that some people call it like an event fee or something like that and we’ll go all the way up to like, five grand for those types of events. And you should, I mean, You’re gonna have catering and music and 50 like they’re like Hey can we bring 50 people in for the day they won’t all be staying and it’s like, you know, I mean that’s still a lot of traffic so…

Jordan Painter: If?

Tony Stancato: but a certain price it might make sense for the property. So

Michael Holcomb: All right.

Michael Holcomb:  Yeah, if you have a really cool property like a especially a high-end luxury property I say, Just throw it on there and say, Amen, five grand, you can have a wedding here for sure.

Tony Stancato: Yeah. Yeah.

Jordan Painter: Yeah, I would have a pretty especially for the the clients that we manage to high-end ones for.

Michael Holcomb: Out.

Jordan Painter: You better have a pretty big security deposit just in case because they’re there is some risk associated with that for sure.

Michael Holcomb:  Yeah, sure.

Jordan Painter: Not definitely a revenue generator. So so for people who are listening that are just getting started, what are some tips that you could offer? Like, one one tip you could offer, the one thing that they should know getting into buying their first rental?

Michael Holcomb:  yeah, I would say don’t I feel like a lot of people are just getting started. They’re probably listening to a lot of Influencer people and maybe they’re following someone on Instagram or you know, they’re hearing all these these stories about Oh, I bought one or two rentals and now I’m sitting on the beach and I’m watching my phone, I’m just getting paid and they take these screenshots of the payouts and it’s like, Oh, a thousand dollars, 600 dollars. I’m making more than when ahead of six figure that job, but you got to remember that those are gross numbers. You know, they’re not that numbers and seeing those are super fun but my biggest advice would be to Talk to someone like me, someone like you guys who’s managing them and sees all the expense numbers coupled with, like what you’re actually making talk to people at are actually in your

Michael Holcomb:  Area doing what you want to do. Not just some influencer from California or something like that. And see what actually gonna net. And don’t forget about all the extra expenses. When you’re buying the furnishings, you’re gonna be paying for utilities. Don’t forget about your taxes, etc, like that, because it property might Look romantic and great in theory but never make an emotional decision and always base it off the tree.

00:25:00

Jordan Painter: Good stuff. So nothing no numbers. I like it. So and it’s it, you know, you think you mentioned are you diluted earlier you’re getting some really good cash on cash returns on stuff, you bought three to five years ago. The the markets up since then the interest rates are up. So, yeah, it’s, it’s definitely the game has changed for sure. So, it’s, it’s even more important to know what those numbers are.

Michael Holcomb:  Yeah.

Jordan Painter: When you know, when you go from 30% margin to 12, the margin for error shrinks substantially, don’t get those numbers right. So

Michael Holcomb: Right. Yeah, and find your niche because that’s exactly right A lot of those properties went up. So high in value as some of them can be hard to cash flow now. So find a kind of cool niche, find something unique and figure out how you can maybe bump up that revenue farther than just owning a average property. Also,

Tony Stancato: Awesome. Great advice, is there anything that we missed any other?

Michael Holcomb: but,

Tony Stancato: Anything else that you wanted to cover or that you think the listeners should know?

Michael Holcomb: I’m on Instagram. Simple life.

Tony Stancato: There we go.

Michael Holcomb: Stays Come find me.

Jordan Painter: If you.

Michael Holcomb: We post some really cool content. I’m partnering with some Influencer people and people that take really cool photography and videos and stuff. So I’d say find me there and I’m gonna start doing some more stuff on my purse personal Instagram here soon and you’ll be able to find me from my business one, but I’m gonna start doing some More influencer style videos on there to educate people in a in a real way. And not just so you’ll buy my program or something like that. Just actually give some people some real information and not just trying to monetize off them by making them by B&B Calc or something like that, that kind of stuff. It’s kind of Right here. But

Tony Stancato: Yeah. Awesome. Well, thanks again for joining us today and Yeah, we’ll talk to you later.

Michael Holcomb:  Yeah, thanks for having me again, guys. Appreciate it. Yep.

Jordan Painter: Thanks for the time.

Related: How to Scale Short Term Rentals