Tony Stancato: Jamie Jason, welcome to the Pod. Thanks for joining us.
Jason S: Thanks for having us Tony. Yeah, thanks. Thanks for having us appreciate being here.
Tony Stancato: Yeah. Hey, would you guys want to start out by just kind of walking through what your current real estate portfolio? Looks like whether it’s long-term or short-term,
Jason S: Sure, I can do that we’ve Got about a hundred and forty long-term doors and it’s A mix of mostly single family, but some small multifamily couple commercial over five units,…
Tony Stancato: and,
Jason S: but mostly pretty small stuff. It’s mostly based in Michigan. And Then we we veered off, we kind of started that, I don’t know. Three or four years ago, maybe five by now five, probably about five years, five years now, I’m flies. And in the last year we’ve been veering off the short-term rentals. And I believe we have Seven listings currently. and we’ve got
Jason S: two more on the way. And one in Bay City and one in Frankenmuth. And then we also not sure. We’re partnered with the with you guys done that southaven one so that that one’s not quite ours but we’re looking forward to getting that up and running too.
Tony Stancato: Yeah, I count that one. Wow. So 150 plus doors sounds like maybe close to 160 by now, maybe a little bit over that in five years. I mean that’s that’s no small fee are Any any insight on how one might get started going down? The path of getting a hundred plus doors and such a short amount of time.
Jason S: Sure, you know, there’s, there’s definitely ways things that we would have changed along the way. I guess. We’ll start off with that, that no system, perfect. When you’re putting it together. We, we ended up jumping into the market right around 2017, With about, with one property in the Michigan area. We had one rental prior to, that hadn’t really made much of a business of rental properties until until about that 2017 timeframe at that point. In time, we decided that we found a deal. We noticed that
Jason S: It a town near us Flint, Michigan, had a water crisis and place prices really had plummeted government was coming in with some some assistance bodies and we decided that that might be on the upswing. After a long downturn, there heavily reliant on GM, the auto company over the last 50 years, and that’s, that’s dissipated significantly. So it is a relatively economically, hit market. We we decided that it was going to see an upswing. We bought our first rental property, I believe. It was 2017 there for about 11 grand. And we
Jason S: Didn’t have to do much to it. I think we put about a thousand bucks into it and it was already pretty good shape. Actually, significantly improved above what the market was. Granite, counters and nice, condition, hardwood, floors and everything else, smaller two, bedroom house. We put a tenant in there, worked out well for the first year and at that after that first year we decided, Hey, this is working, we really should explore to it more of it. So we waited a little longer than we probably needed to…
Tony Stancato: If?
Jason S: but we were busy with another business at the time and so we we got that one going. Over that next year, when we decided to make it a business, we scaled it relatively quickly. Our goal was originally was to get to 50 houses. And that was kind of built on the number to replace our current income. And we did after about after getting to 50, we realized that.
Jason S: That might be a little little light, because expenses were a little higher than expected. So we got, we realized we really needed to get closer to 100 to just do a kind of an income replacement number. if I had to give advice on how to get there, you definitely have to be. Nimble in that market, you have to buy what you have to buy really low. You have to manage your expenses, really tightly and It works but it’s definitely. It’s definitely a job at that level. It’s a heavily management intensive class of assets, I guess and after getting to a hundred and change, we kind of decided that we wanted to take that shift into a short-term rental, but our system was working. So we kept, we did keep buying long-term rentals as well. It took us a few years to kind of make that shift into into long, into a short term rental market.
Jason S: Mostly because we were having a hard time picking the market. So we can get into more of that as we talk. I’m sure you have some follow-up questions on it but that’s kind of our story and if somebody wants to get into it just be willing to, you know, put systems in place and Make sure you’re really pinching all your pennies buying right managing, right? And that’s what I got.
Tony Stancato: Yeah, that’s awesome. And then I mean it sounds like you guys just got started into short term rentals. What? I maybe just over a year ago and then you’re already. Yeah, call it 12 plus doors on the short-term rental side as well.
Jason S: Yeah, we’re I believe we bought our first one. February of last year. So we’re probably just under a year all in. And we’ve done, we’ve done some heavy lifting renovation projects, we’ve bought some turnkey properties. We bought some that are partially furnished. and, That we, I think we had a little bit of confidence to jump into that a little heavier right off the bat because we had some experience in managing the long-term properties. Definitely more goes into the short-term rental, As a whole to get up and running management process. Tech stack all that to do it, right.
Tony Stancato: and just the amount of cash that’s needed to actually get it up and running is just, you know, that’s the, the mind-blowing piece just a little more especially when you’re furnishing it and then you want to make sure you have those kind of nice finishes and all that stuff. So it’s definitely In my opinion, a harder on the scale, but I mean, you got your definitely doing it uh, very quickly. So, that’s awesome. So can you give us a rundown of where something here in different markets? Can you give us a rundown of kind of where all your short-term rentals are?
Jason S: Turn around the We started off buying in Michigan City. Indiana after there’s about three and a half hours from us. We bought three there. Actually, four, we’ve got four there. And we did that because we we were looking for an area that we thought was a good vacation market Lake. Michigan, right there, my family and I have a vacationed in New Buffalo
Jason S: Just disagree area. So we we decided to look into that. The regulations were a little different in New Buffalo Michigan, then then Michigan City in Indiana. So right, it was a little bit more favorable for short-term rentals. So, we got our start there. New couple people found some contractors cleaning, people, and just just went in with both feet and it’s really been great there. And then we kind of by accident. Got started in Bay City. We were following that we have planned on doing a long-term rental for and hold some permits. We’re gonna do a triplex, It was kind of bought a shell of a place and they they gave us to go ahead and then
Jason S: ran into some complications with zoning there. You know, after we got started there like, oh, this is only zone for single family, even after they’ve given us permanent to start the work and we begged them like Well you know, you gave us He gave us to go ahead. Can we just keep keep going and and they’re like, Well, you know, won’t be a problem. We just gotta Get in front of the voting board and and we’re sure we’ll get get you approval. Oh okay. Great. Wednesday meeting, I’ll be in three months. oh,
Tony Stancato: Okay.
Jason S: Well, can we just continue working for those three months? No, you know, we’re you’re at the stop so we’re like, all right. That’s it. Let’s, let’s go back to the drawing board and we really like let’s just make a nice big single family. Short-term rental, they’re B&B and and give it a shot here. and, We did and it’s been amazing. We’ve now got two more there. We never thought that Bay City was going to be As great as it is, like we didn’t expect. It’s not as much of a vacation market as some of the other places, but we’re killing it there. It’s actually doing better than some of our Michigan City ones right now and it’s so happy that you know we ran into those problems and and just got to
Jason S: To switch and move gears and turned out really good. You have done that,…
Tony Stancato: You know, that’s awesome. And then
Jason S: we The first one like Jamie. Both said, We bought as a shell. And it was, you know, meant to go into that long term portfolio. And since then, we ended up buying one turning. One of our other properties that was bought as a long-term rental into a short term rental. which I think is a, if you’re in a market that you can Do. That’s definitely a good way to Try it out without having to buy a new property altogether, you know the furnishing we definitely the one that’s all that we bought as a long term that we’re shifting into a short-term right now. Definitely took a lot more work though. We
Jason S: Have to make it. You have to make it nice. So I think that’s one of the things that we’re hearing more and more about is over the last few years. A lot of people have just bought anything and listed it and we’re getting bookings. And I think those same people are seeing a slowdown at this period of time and Having those nicer properties in an area is really going to make the difference in the near term. On a short term.
Tony Stancato: Yeah. And then you guys notice that some people were coming to your Bay City property to visit Frankenmuth, right? And then you’ve got another one and in frankenmuth that right
Jason S: That’s correct. Yeah we we frankenmuth about a half hour from Bay City. And you know we we talked to people like Why are you looking here? You know like what you know what what are you coming for and you know the stuff with them and a lot of them were saying that they’re coming in town to go to Frankenmuth and we’re like Oh frankly you know I can’t believe we’re getting bookings all the way in Bay City for people going to Frankenmuth but we really figure that that there must be like really difficult restrictions to get airbnbs and Frankenmuth. So Jason kind of looked into it and called the Department there. I’ll let you go into it and how we plan on trying to move.
Jason S: Yeah. So I talked to a lady at the zoning department, she was really helpful but there was definitely some restrictions when it came to A1 versus A2 zoning. Frankenmuth is definitely if you’re not familiar with what Frankie with is, it’s a bavarian themed city that has one of the big draws is Broners, which is a Chris, one of the biggest, if not, the biggest Christmas store in the country and you get people that travel there all year long to visit this Christmas store and the rest of the city is very in German theme and has lots of festivals and just, you know, make kind of draw us for people. Tours to come there. It’s located, you know, kind of in that, that part of Michigan. So there’s not a lot of there’s not a beach draw. There’s not gonna be a mountain draw skiing any of those things, it’s just a very deep city that gets a push. So we always thought about
Jason S: Is kind of an area that we want to touch on and hadn’t. Really find two any opportunities. So we had some search criteria set up in the MLS. because not only had we had that city in mind, but now we are getting back up quantum, you know, I guess quantifying the fact that it that it would work because people were staying half hour away So without a property that met the zoning restrictions that was just outside most of the main city does have some restrictions that is in the A1 zoning, they’re not usually allowing new short-term rentals. So whatever that happens you find an area that as those restrictions if you can find something right on the cusp of it. I think it’s a good system or a theory.
Jason S: To go with because usually there’s demand in that area and then they’re gonna have a lack of supply which I think is a lot of the things that people are running up on right now in some of these major vacation markets and mountain markets that they’ve seen such an increase in supply. So they are seen a decrease in bookings. Right now we have an experience that’s in some of these small drivable vacation markets. Yeah.
Jason S: You.
Jason S: This was the Bay City one Frankenmuth’s, not operational just yet. We are we are furnishing it this week and we’ll have a We’ll have a full listing next week. We’ve got a couple intro. Preliminary videos on it but we’re not quite we’re not quite listed in FRANKENMUTH yet, the Bay City one. That you’re talking about we launched and we had initial success, not a high price listing, not doing a ton of revenue but we were over the last few months that we’ve been operational. I think we’ve averaged $6,000 a month in gross revenue. December was deaf, just November and December. We’re definitely up peaks that they were 65 to 7500 range. and,
Jason S: We’ve I think what was it, December? We had two open days. We booked every day but two days. Yeah, I think Tony was asking about Blue on Fifth, which is the one we launched mid December and that one, we we actually purchased it didn’t need work at all. It was a really good condition. So we furnished it like we purchased it in Early December two days later. We had everything ordered and and we’re furnishing it. We listed it. December 15th and for half the month. So we, we only had half a December and we did three grand.
Jason S: In December. So we purchased it and and made you know and got three grand in we were kind of going back and forth like Well should we paint the whole thing? So we make a little you know and we just decided it, it’s good enough and and we listed it it was a great decision.
Tony Stancato: Which is incredible. I mean I think that was 180,000 price point. Is that one
Jason S: No, it was last that we bought it for 142, but him probably was about 25 grand in furniture and then, you know, like touch-ups and stuff like that, some might have been maybe close to, I’d say 175 total all in.
Tony Stancato: Yeah, that’s incredible. Just I mean seems like you’re kind of offseason and you have no reviews right? For that particular house and to be able to just come out of the gate and you know get 3,000 plus just in half a month is is pretty incredible. Now let’s say you could only continue buying short term rentals in one of those three markets, Michigan City Bay City or Frankenmuth, which one, which one are you doubling down on?
Jason S: Here.
Tony Stancato: If you could only go into one of those markets?
Jason S: I suspect that FRANKENMUTH will be the best, but that’s also going to be the hardest because you it’s, you know, it’s really harder to find. Like we we could do tons of lease in Michigan City, tons of them and Bay City. Yeah, we could find find properties all day that’ll work, but Frank can move I think Will will be harder to find the right property to work like that that’s in the right zoning. Let’s just outside of the the town there.
Jason S: You read Jason. Yeah. If we had to answer your question directly, I do agree with what Jamie said, we had to answer your question directly. We would probably have if we had to choose one and only one, we probably choose Michigan City because I believe that it’s a larger more larger vacation market than the other two. Even though it’s not a real large market, you’re dealing with a draw that’s on Lake Michigan, 45 minutes from Chicago so it’s a bigger market to compete in. It would allow us to scale the way we want to scale. We do plan on scaling, we’ll probably buy more in all three markets. If we had to pick one in Michigan City because it allow us to scale the best.
Tony Stancato: Capture. Um now is there a must have amenity? For your properties, is there something that you say, Hey, this is going into all of our properties, whether that’s a hot tub, or, you know, is a little different based on the type of market that it’s in.
Jason S: Yeah, I’d say we’re playing with that. We we started off with hot tubs and and they are expensive and a lot of work, but we are noticing like in Michigan City, two of our properties have hot tubs. Those two are doing better right now in the winter. So I would say that we probably are going to make sure the other ones have hot tubs to Bay City. I’m not so sure we do have one that I thought we’re discussing putting them in on the other two but I don’t know that it I don’t know that we have the same competition so I’m not sure on that.
Jason S: Any other Jason, what do you think? Amen. Anyways, we are yeah, I’d say hot tub would be number one. We are, we’re kind of holding back on a couple of our new listings and we want to see how they perform in comparison to the ones that you have hot subs. So that we have some hard numbers.
Tony Stancato: It.
Jason S: We do figure, you take a hot tub and you break it down. What? All the maintenance, everything goes into it as well purchase cost. Usually we kind of took a five year time horizon on the amortization of a hot tub. Even though hopefully it should last longer. It came out to just shy of a thousand dollars a month that you really want to make it revenue. Think we came out to 500 a month, maybe as the cost and we like to see an amenity double as double its costs in revenue for the year. So we’re looking at
Jason S: Making sure that the hot tub does add $1,000, at least gross revenue. Compared to a property that doesn’t. So we’re playing with those numbers. But right now, if I had to pick one, hot tub would be
Tony Stancato: My arm. How about technology wise, what is kind of the one? you know, technology in your tech stack that you highly recommend or is kind of a must-have
Jason S: Yeah, I think I would go with Price Labs. In the beginning, when we first had our first listing, we definitely manual. We manually adjusted pricing. You just can’t physically do that. As accurate as price labs does. So that’s been a, that’s been a huge help. Not to mention when you go with multiple properties. Definitely becomes more of a difficult time. You’re going to miss certain compression events. You’re going to, you’re going to, you’re gonna, you’re not gonna necessarily be able to adequately. Consistently monitor, the supply, demand curve, I think accurately.
Jason S: On a lot of properties, overall, for many years or three over period of time. So price labs has been a huge thing when it comes to helping with our pricing. We definitely been surprised that some of the days that have elevated pricing you know just because it what it does is it takes the the whole market. It’s it monitors how many bookings there are what the other competitors are priced at and it you set your you set some parameters but then it’s going to automatically do it for you. It’s you can change things when it comes to minimum days but you can you can adjust your your highs and lows a little bit to give it a little bit. A little bit more of a boost if you need it. So there is some work involved in it, but it definitely takes a lot of a lot off your plate. They think it maximizes your revenue by quite a bit
Tony Stancato: Yeah, I agree. It’s kind of a double-edged sword though, too. Right. I mean you guys find yourself having to go in and adjust the prices a little bit. There are times where we’ll get like we got 1650 on one of our properties for a night and we would have never been able to send it that high. But there’s also times where like, it’s kind of set our two bed, one bath that 950 dollars for the weekend, and it’s just like, there’s no way and maybe we just got to get better at. Let it ride. But we’re just like, there’s no way we’re gonna get 950 for to that one bath. So are you guys having that you guys see them being a little aggressive too and having to rain those in a little better not necessarily.
Jason S: Yeah, you said the parameters and and you can change, you know, adjust it, depending on you know, seasonally we’ve we’ve adjusted things up and down But that was kind of throwed with it. I don’t be adjusted too often and say We adjust more in the near term If we have independent open days. Yeah, we have more open, do it gives you some parameters of what to expect on. Where you should help? What percentage you should be booked 30 60. 90 days out, I believe. So it might be those parameter that those TYPEFRAMES. Might be a little further out. And so we watched that a little bit. Usually we’re, we’re concerning ourselves more with what’s open in the next 30 days. And if so, we’re adjusting our price points there, we’ve been surprised just like yourself. We’ve been surprised and some of the stuff that’s booked.
Jason S: Right now, if we just took bookings in the last 30 days for July, and we’ve been surprised that some of the, some of the prices we’ve gotten pleasantly surprised. So I’d probably win the priced at that high…
Tony Stancato: Yeah, absolutely.
Jason S: but price labs did we let it ride and you end up getting partial booking and we’ll save some as the last man standing. Theory. But we want we definitely like coming in with a partially full calendar.
Tony Stancato: Yeah, and then we met at the short-term rental wealth conference back in. I think it was June. You know, is there any like key takeaways that you guys had from that? Or is there anything that you guys came back and said, Hey we’re we’re gonna implement this right away. So yeah, that that came out of that.
Jason S: Yeah. So we were really new going into the short term, Rental, Love conference with both faith and that’s when we did get price labs. We also signed up for owner arrest, which is a management system, kind of integrate all the airbnb vero. It has a website. So we have had some direct bookings. Definitely. It. You know, just just like with anything we had, we’d listen to podcasts and we have, we had heard it before most of it, but being there and being around other people like yourself but and learning from others and and listening to their stories that it definitely helped. So I I don’t think there’s anything new that I took out of that. But it reinforced, what we
Jason S: What we’ve been trying to listen to and read and learn previously.
Tony Stancato: Yeah. so, the other thing would be
Jason S: You.
Tony Stancato: What kind of tips would you guys have for somebody looking to get into the vacation rental industry? Someone brand new, they come to you and say, Hey, what’s up some Some key pieces of advice that you would offer up to them.
Jason S: Yeah. Okay, with that, I would say like like Everything else?
Jason S: The the main obstacle is is yourself. You just gotta, you got to push yourself and move forward and move through the fears. And, you know, just Pick something and go with it, and
Jason S: I I don’t think you can pick a bad market, it’s as long as, as long as you’re allowed to do it there and you check with the city and and you can do it. Like I would, I would research it and then give it a shot and then you know, you really have to Um, decorate them, nice, you know, make, you know, get professional photography, make it look attractive to people, but I’m just surprised by the reasons that people book them, you know, like who in Michigan City Bay, City all the time we’re getting bookings for for construction people like, you know, Monday through Friday that they’re, they’re doing an electrical project or, you know, whatever and and they book it for their, their staff. Um and we’ve had a ton of those and you know that that wouldn’t have been.
Jason S: Avatar is construction workers staying in our house but that that really, you know, takes up during the winter on time, it really gives you a boost. You know people book it for on the weekends for like getaways. But Monday through Friday like we’ve had a lot of work crews and it’s it’s been awesome.
Tony Stancato: Yeah, that’s great. Um, all right. Last last and final question. What has been the wildest guest story that you’ve had?
Jason S: You have one in mind. Ah, this last New Year’s Evely. we kind of had a some issues where
Jason S: We let some younger people rent, one of our houses. And, and They they definitely made a mess in smoked weed throughout our unit. Um and that that was definitely a problem. They didn’t really damage anything. We we haven’t had any Any damages? I don’t think. I think we’re yet to ever charge a guest for any damages, but that one we had, what’s the machine that that we had bought earlier, Jason, do you remember?
Tony Stancato: like, Ozone machines.
Jason S: Yeah, ozone was on machine. Yeah, we have one of those. It does it kind of does the trick after hopefully one or two applications. So You know, I think we we consider ourselves. Lucky. We haven’t been in the game too long. You know, just under a year. Like we talked about, we haven’t had any Super exciting stories on the downside to tell, I don’t think. Yeah, we can relatively lucky, they’ll be more to come. We’ve we’ve X when it when it comes to those kind of stories on our long-term rentals, we have We’ve had quite a few destroyed homes and so we’ve it’s hard to shock us at this point in time. We, you know, once in a while we have our computers come back to us for the short term rentals and…
Tony Stancato: Yeah.
Jason S: send us some pictures and say, Oh I can’t believe these tenants made a mess and
Jason S: And we’re kind of laughing, like, they’ll take pictures of like two coffee cups in the sink or something that they didn’t wash and, and really,…
Tony Stancato: Yeah.
Jason S: oh, my God, you know, like if you saw what some of the long-term rental tenants into our house. So that, I mean, that’s one of the nice things that we’ve really like, it’s a breath of fresh air dealing with a short term rentals. Like, Very rarely. Do we have any problems people leave it so clean and spotless like compared to some of the destruction. And and damages we see from long terminals, like the short-term rental, like, you know, I I read and, you know, like all these articles but people worry about the short term rentals and I just God, I don’t see it at all. Everybody who every guests that
Jason S: Rents, our house Almost, everyone is like so respectful and nice and enjoyable and, you know, it’s families, having getting the other and having fun or you know you even if it is like you know a group of girls going out for a weekend like they leave it so nice like it’s been so enjoyable compared to the long term miles. So I have one good.
Tony Stancato: Yeah, that’s the
Jason S: How we got? How I got started? Yeah, so back.
Jason S: This is prior to covid, kind of our first taste of short-term rentals is I decided to rent my house out as a short-term rental my personal residence and so this would be one thing as a considered advice to guests would be to check the the regulations and if you’re in an hoa definitely expect some pushback I’m not my house. Worked out really great. We went into the summer months and decided Hey let’s rent the house out, I’ve got to walk out basement, don’t entrance on a lake here, put the house up in March and I read and I rented out my blockout bay, so the separate entry and I was surprised because I put it up there, thinking all get some bookings, maybe in the summer, a couple weekends here and there will be all the time. It’s just a little bit more supplemental income and it started booking right away in March. This is people coming to stay in my house and wish Michigan kind of Metro Detroit area, but
Jason S: Outer suburbs and we are we don’t really have a we don’t have a draw in this area. For bookings, but we got I got lots of people even in March that came to stay in my basement. We worked out really well as summer months opened up. We opened up the whole house and figured we would go on vacation for. I I priced it relatively high, this is in the back in think late 18 or 19 and Ended up booking the house for four weekend. Four weeks. Out of the year we took our family vacations during that period of time.
Jason S: Eventually we ended up, we ended up shutting it down because it became a whole, it became a whole thing with the neighborhood and hoa, and got got relatively sneaky. And you had a lot of people that were very scared about a short-term rental. So if you’re in an hoa, I would definitely, I would stay away from it. I would, I wouldn’t venture that way. It worked out well for me but not in the long run, we ended up shutting it down.
Tony Stancato: Yeah. Thanks for reinforcing that because I mean, that’s one of the key factors that, that we’re looking for when we are looking at short-term rentals. Hey, does it have an Hoa in almost? You know, 100% of the time that’s kind of the deal breaker. Like it would have to be a very good deal, very little risk with some some different outs to actually purchase property that in an hoa for us and…
Jason S: It.
Tony Stancato: we even build out that property grading tool in like the most weighted factor on that is going to be the age of play. So that just reinforces that. Well, thanks for joining us. If any of the listeners want to connect with, either? One of you, where’s the best place? And then, don’t you guys, host the Meetup in Southeast Michigan. If you want to maybe put that and let them know when it it occurs every month. And and we’re at
Jason S: For sure, we’re both on Facebook, I’m on Instagram as well. You can always if anyone wants to talk short-term rentals. Always happy to receive a phone call as well. My number is 248 is Jason 248-396, four, five, three, seven and otherwise hit me up on Facebook. Or going to email me at BPO Jason at Gmail.com and our Meetup is the second Tuesday of every month and it’s located in Congress. Michigan. Love to have anybody that wants to call talk real estate. We typically are focusing on short-term rentals. It will be tonight. But if by the time this podcast, the air is, if you can catch us on the second Tuesday of February, we’d love to have you.
Jason S: Yeah, I’m also on LinkedIn. J A M I E K A R B, E L. Yeah, would love to see you guys if you’re local Commerce, Pub and Grill, we’re find some properties. We’re, we’re doing it. Second Tuesday of every month,…
Tony Stancato: I’ll take care.
Jason S: and I would love to meet some of you. Thanks so much.
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