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Discover the incredible ways artificial intelligence (AI) is revolutionizing the vacation rental industry in this episode of Michigan Short Term Rentals.
From optimized pricing strategies to personalized guest experiences, AI is reshaping how we book, manage, and enjoy vacation rentals.
Join us as we explore five key ways AI is transforming the industry and uncover the future possibilities. Tune in to gain valuable insights and stay ahead in this rapidly evolving market.
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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: What’s up, brother? Man life is…
Tony Stancato: How’s it going?
Jordan Painter: Life is good. Another day sun shining, it’s been pretty nice weather the last few days. Loving it.
Tony Stancato: Yeah. Yeah, definitely starting to heat up here as well as the bookings, which I always get excited about. So we did just get a big booking for the five unit that we have and someone rents it out the entire place. So they paid about 2500 bucks a night. So that was that was exciting. Get a couple more of those and be well on our way.
Jordan Painter: Yeah, I’m excited to get some proof of concept with that one. You know, we kind of went on a limb with bigger property multifamily to combine it into one and and see how we could accommodate larger groups. So it’s kind of a test in the market and looks good so far. The other one. The four unit that one is getting real close and what do we got? Tony.
Tony Stancato: Uh the walk. Oh a pickleball court.
Jordan Painter: My pickleball court,…
Tony Stancato: Yeah pickleball court.
Jordan Painter: bro. Eat it up for…
Tony Stancato: Come on man. Yeah. Yeah,…
Jordan Painter: Let’s go.
Tony Stancato: that that is awesome. You know, I kind of just let it go and it resurfaced organically and we’re moving forward with it. So it actually just got poured yesterday. So I think we need to let it Cure for 30 days or whatever, and then we’ll get it coated and good to go. So, about five weeks, six weeks out, on, on the pickleball court. But I think, I think it’s gonna be a game changer. Hopefully, you know, we, I think we talk about it. Probably too much and probably captain under the rug for a couple years, have a little bit of an advantage, but that’s all right. It’ll, it’ll be a good amenity.
Jordan Painter: It’s gonna be a fun one, the pickleball court there and then we’ve got a really cool. It was kind of a par port, but it’s a huge carport. We screened in that’s gonna have a pretty unique indoor, outdoor living feel. I’m really excited about that one. It’s gonna be a very, very fun property.
Tony Stancato: Absolutely. Well, what do you say? We get into it. All…
Jordan Painter: Let’s rock.
Tony Stancato: Today we’re talking about three ways to find deals in this competitive market, as of late. I mean, a lot of people thought, Hey, the market’s cooling deal. You know, you’re gonna be able to find properties and, you know, put in that just a full price offer and you’re going to be good to go, but We’ve been putting in offers 30, You know, anywhere from 20 to 30 over asking price, on kind of move-in, ready houses? And I mean, they’re just still flying off the shelf. And we’re, we’re losing out on a lot of these different offers. So we just wanted to provide a few different options of like, Hey, maybe you could look over here and they’d be potentially less competitive.
Tony Stancato: So the first one would be low bedroom, count with lots of square feet. And if you listen to bigger pockets, I know one of the things that they talk about a lot is if it has a thousand square feet or higher, There’s likely three bedrooms in there. So if you can find a one or a two bedroom house that has, Over a thousand square feet. You can likely add another one and then get more occupancy, which can drive rates higher, right?
Jordan Painter: Yeah, I think, especially, especially if it has a unfinished basement, there’s just a lot of potential so where can you, where can you unlock value in? Working you add value to that asset. So it’s great with with rentals short-term, particularly the more people you can sleep, the more you can charge, you know, you spread it out between four people versus six to eight people and it’s a lot more affordable. You know, the larger the group is. So you can charge more, it’s cheaper per person but you make more as an owner. So those are great potential. A lot less expensive to finish interior space than it is to do an addition. And it could be that people are, you know, kind of missing those opportunities and not looking in those areas for houses, that that don’t have three four bedrooms. So definitely a really good opportunity to find something that you can add value to.
Tony Stancato: And I’ll give you a little example, it was last summer. um, we had, we had worked with a call it a vendor at the time, it was one of our stagers furniture and
Tony Stancato: Or interior decorators, right? And a property came out in the area and I knew they were looking. And I just said, Hey, why don’t you check this one out? And I’m like, Hey, it’s 1300 square feet. It’s one bed, one bath. So that’s gonna bypass a lot of people’s filters, right? Because a lot of people want kind of that three, two property and I’m like, Look, there’s 1300 square feet. There’s got to be ways to add some additional rooms to, to that one, based on that township rule. They would only be allowed technically, I think, too occupancy, if they were to keep it that way. So,
Tony Stancato: I didn’t walk through it with them, they went through it and ended up getting it at a pretty good price. And there was different areas of the house that they were able to section off. And now they can accommodate up to six people in one bed, one bath based on the the layout of that. Now it’s not like, you know, the ideal situation like there is a washer and dryer and one of the bedrooms, but they do such a good job at decorating and staging it and making it feel right at home. Anyway, nobody’s said anything. So it’s gotten five stars all the way all the way through. So again, just looking at different ways that the house is chopped up. And, you know, is there a door and a window that can be classified as, you know, a bedroom and would it be a good guess situation if they were to be staying there, so,
Jordan Painter: Yeah. And I think they bought that one for what was 180,000, if that was three legitimate bedrooms, it’d be 275 to 50 to 275 all day long in that area, maybe even three.
Tony Stancato: Yeah.
Jordan Painter: So they got a really good price on a very cool property and found some solutions to to add some bedrooms to in, to be able to rent rent to more people. So that’s a great example.
Tony Stancato: Yeah, absolutely. And then number two, another thing and this is something that I’ve just been thinking about a lot and talking to a lot of clients about and that would be Multifamily. We’ve already purchased a couple multifamilies. They’re a little bit bigger multi-families, but I think ideally my thought is get a duplex, get a duplex. One of the areas that we’re in, there’s just tons to do. I’ve never seen so many duplexes in my life, I feel like one out of bed before houses is the duplex in this area. And when they come up on the market, you can get those for essentially the same price as you could kind of a single family home. And
Tony Stancato: My thought right now and one of the things I’ve been thinking about is like we’re just getting so many midterm requests for properties. Like everybody is pulling off their their midterm rentals and turning them into short-term for peak season, right? So the supply of midterm rentals drops and there’s like nothing left but the demand still there for those midterm rentals. So would a duplex a triplex? Could you do some combination of midterm short-term, long term? I mean you can technically do a long term on one side and then do a midterm on the other side, just a lot of different ways you could go about it and I think you can get 2500 bucks a month per side on a duplex. Just mid-turning. It. So,…
Jordan Painter: Yeah, we’ve had to turn several people away from our Big Five unit…
Tony Stancato: what are your thoughts on that?
Jordan Painter: because we want to keep it open for occupancy for the summer crowd. So definitely we’ve we’ve already seen that to be the case. It definitely think that there’s opportunities there that are untapped to spread some risk, you know, if you have a single family house and it’s not rented or you’re having trouble filling it, One of the units is vacant on the short term, rental side, You’re losing money. If you have a multi-family, you have a midterm and the ability to do a short-term just gives you kind of the best of both worlds. And I think this does open up the door for people if you want to self-manage. And that’s one of the other things we’ve been finding recently. The margins are getting slimmer and slimmer. The expense of ownership is higher because of interest rates and the values when you add in those management fees, sometimes these deals that would make sense if you did salt management, don’t with a property manager and so, if you’re somebody who wants to get into this market and you don’t live in an area that is
Jordan Painter: super applicable for vacation rentals. There could be opportunities to unlock near where you live In a great example of that. I live in West Michigan, grew up in Granville and a couple years ago, I ran into a couple investors that were actually buying houses and duplexes in Granville Michigan. And for, for short-term rentals, and I remember asking like, who the heck comes to Granville to rent a house, you know, for, for weekend or whatever. And one of the comments that was made at one of the trains I went to kind of unlock my brain a little bit is Anywhere that there’s a hotel.
Jordan Painter: There are people that are coming for a short-term rentals. It’s it’s the same kind of thing. So if you think about an area like that there’s actually several hotels there. So it’s like well there is a demand for people to come here. Whether it’s, you know, for a weekend or for a graduation or for whatever the reasons are that people travel. So there could be a lot of opportunities in areas that no one else is looking because you just assume no one’s coming that. Particularly if you’re open to doing the midterms that you can potentially have some extra income versus what you get for a long term rental, and if you have a little bit of both options it, spreads the risk a little bit to keep both of the, the units filled. So, I really love that concept and I think that there’s gonna be opportunities. I’d say that only negative right now with it is, there’s a lot of good data.
Jordan Painter: For what you can project for vacation rentals, but there’s really not as much from midterm. So it’s, you know, when when you’re trying to project what that income could be, it’s just a little bit more difficult. You’re kind of guesstimating a little bit more. I think than we have to on the vacation, rental side, but I still think you can grow long term.
Tony Stancato: There is a. Yeah, there is a good.
Tony Stancato: You know, tool that you can use to help with your furnished finder, I would go to furnished Finder.com board slash stats. You can put in your city and it’ll tell you, how many midterms there are in that area. And then it’ll give you a pie chart basically. And it’ll say, Hey, 15% are under 1500 dollars. 23% are between 1500 dollars and $2,000. So you can get a little bit of a gauge in a feel for it. Obviously the biggest one is like it says 25% or no 2500 and then it gives a percentage so you want, hey, 40% are 25, You know, 2500 or above. I think that would be a great, you know, thing to aim for is like but if that pie chart for the 2500 and above is super low, you know, you might want to second guess it, but again, it depends on what the price of houses in that area are, right? So
Tony Stancato: The area I’m thinking of it’s like, Hey you can probably pick up a duplex anywhere from 225 to, you know, to 85. But if you could get it at 250 and get, you know, two sides running out, 2500 plus each seems like it would be pretty good deal. The other thing I was there’s an influencer that that I follow on LinkedIn and I mean he was just basically saying that He thinks cash flow in real estate’s, Dad going forward and like now it’s all about investing in appreciating assets and, you know, the tax benefits and that kind of stuff, but I don’t think so. I think, you know, if you try hard enough, you got to be conservative, you got to be diligent and look for the right ones, but I think you just got to look where other people aren’t necessarily looking. And look for opportunities. The other thing with the multi families, like
Tony Stancato: Not always gonna be a great short-term. Like I don’t know, a lot of people probably don’t want to stay in a duplex for a short-term necessarily depending on what that looks like, right? But for midterm people don’t care, you know, it’s like, Hey I’m coming. I got a three month nursing, you know. Contract and I just need a place to stay, looks good. As long as you do the design right in it’s in a good location. Should be good.
Jordan Painter: Yeah, particularly again, if you’re gonna self-manage it, just takes a lot of the hassle and the stress of every weekend. You got to turn over, you got five hours to clean the thing, it really is a lot easier to manage if you’re gonna go that route. So
Tony Stancato: Yeah, and then the third and last one, one that we’ve been getting a little, all too familiar with is rehab projects. So a lot of people want turnkey, a lot of people want the easy button, but those are gonna be the ones, they’re gonna get five, six, seven offers on and can be a little bit more challenging to land. So finding a project that means a little bit of work or you know the more work it needs the last competition. You’re going to probably have, right?
Jordan Painter: Yeah, so if I want to known ahead of time, we’re gonna talk about this, I would have wore my T-shirt. So Tony got me a teacher,…
Tony Stancato: Yeah.
Jordan Painter: a couple years ago with my face on it and it says Just needs a little paint. And so, um, Don’t underestimate the amount of work that’s gonna go into fixing these things. You know, when you start a rehab project, everything you touch, whatever is next to it looks that much worse and so it’s, it’s It can be a challenge to know, especially with a remodel, what you’re gonna uncover when you start digging into things and how many more costs are gonna accrue when you’re doing a project. So, A lot of opportunities to add value through rehab and through finding sweat equity, just be prepared to know how much sweat that you’re willing to pour out to finish a project. If you’re on a tight budget and you’re not handy, maybe not a good idea. If you got a pile of money or you’re handy, you can, you can save a lot of money. In in Find these deals that need some sweat equity. But it’s, it is a challenging balance because even some of the
Jordan Painter: More rough properties can be selling a premium, but if you’re looking at the right places and you’re constantly looking, you can find property that people are sleeping on. I think, particularly in the fall, Tony mentioned at the beginning of the pod that, you know, people were expecting to see the market drop off and things, get a little bit more soft and they definitely did last fall. The Michigan market, pretty much anywhere in Michigan. There’s gonna be some seasonality to it. So we see the the values Don’t rise as much the houses sit a little bit longer in particularly the houses that need work are you know buyers in that time of year, typically are more, they’re more patient, they’re willing to wait. And so there’s some some I think
Jordan Painter: Also, when you’re doing this, you got to think of timing if you’re buying something in, you know we’re recording this in. Is it may, right? So if you’re buying a rehab project in May, you’re probably not gonna make money on it until next summer. So you gotta really be considering those caring costs. You got to be thinking about what it’s gonna cost you to rehabit and then not make a ton of money on it over the winter. So I love the idea of waiting till the fall when the market softens a little bit, the challenge to that is there’s gonna be less options potentially. But if you can find something, we’ve done this without with our second one bought something in the fall in the market, a little bit soft. We have pretty much the whole winner with not as a ton of urgency to get it ready because it’s not losing the Tony’s revenue anyway but timing. The market can be can be big and finding something that you can afford to rehab. Huge potential there.
Tony Stancato: Yeah. And the other thing I would say is We did a great podcast on the Valley of Despair. So before you jump into the rehab project, you’ll definitely want to give that a listen. I actually had somebody reach out to me. We were looking at this property needed a lot of work, a lot of work and then somebody bought it and posted. Hey, I bought this and I actually knew the guide been on the dumped, on the phone with him a couple times. I’m like, man, he bought the property, we were looking at and I mean we just were texting the other day and it’s taking longer than expected.
Tony Stancato: Going over budget starting to lose sleep, right. Sounds like potentially a contractor even ran off with some of his money, um, which you know, is, unfortunately, we’ve been lucky enough to never have to deal with that necessarily, but again, so he’s just freaking out, right? And you’re like, once the spending it stop, when’s my time gonna get freed back up, I just had to reassure them. I pulled up, you know, like hey here, you got a five bedroom, three bath in this area. Here’s the comps for all this. If you’re gonna be in at 3:50, I mean 500 is kind of what like five, you know, five beds, three baths are going for in that area. I couldn’t really find any that were much lower than that. I’m like, dude, I think you’re good to still do looking to do the burr, pull out some pull out all his capital that he has into it. Keep it rent it, short-term rent to actually, but just had to reassure them that like dude, the numbers still look good. Even though it’s
Tony Stancato: Over budget, it’s taking longer, but you still look like you’re in a good spot. So it’s all about buying it right on the on the front end, you know?
Jordan Painter: And making sure you have access to no capital, that’s the other thing. Once you start ripping stuff apart, I think anybody who’s, who’s been looking into real estate for any amount of time, you’ve seen a house that’s like halfway put back together. Um, most the time, the investor ran out of money now, they want to make it somebody else’s problem.
Tony Stancato: Yeah. Yeah.
Jordan Painter: So yeah, make sure you got enough money to finish the project.
Tony Stancato: Well, that’s the three. So if you guys need any help, looking at properties, analyzing properties. If you need a buy side agent or even a, you know, sellers agent. We’d be happy to help Jordan and I are both licensed realtors in the state of Michigan. And if you know anybody that has a property that is looking for property manager, and that property does over a hundred thousand dollars in revenue or is projected to do over a hundred thousand dollars in revenue. We do have a couple spots opened up for the book and gather property management services. So if, you know, anybody that kind of fits that criteria, go ahead and mention our name, we’d really appreciate it. And till next time,