Questioning whether all of our properties need a hot tub at this point. So just kind of looking at like, hey, for five to six grand, what are some of those amenities that we can bring into the house to really draw the guests in?
Welcome to the Michigan Short Term Rentals Podcast, the show about on buying, optimizing, and managing short term rentals in the state of Michigan. Get insights and recommendations from vacation rental operators to help take your property to the next level. Are you ready to profit from your short term rental? Let’s get started.
Welcome to the Michigan Short Term Rentals Podcast.
[00:00:38.580] – Tony
Today I sit down with my business.
[00:00:40.080] – Tony
Partner, Jordan Painter, and we’re talking about what are the top five things that we look for when we’re going to do a walk through at a property.
[00:00:47.460] – Tony
The property just hit the market we’re excited about. It looks like it could be good.
[00:00:52.030] – Tony
From a financial perspective.
[00:00:54.150] – Tony
What is it that we’re looking for.
[00:00:55.990] – Tony
When we are doing that walk through? So let’s get started.
[00:00:59.350] – Jordan
All right, today we’re going to be talking about the top five things to look at when you’re analyzing a new potential property to purchase for a short term rental. So the first one hit them off, Tony.
[00:01:09.900] – Tony
Alright. The first one is looking at does it have an HOA? So we’ve looked at some properties. We’ve actually had a property under contract that did have an HOA. It was an awesome house. Every room had an en suite bathroom, brand new, nice little subdivision, had it under contract. But I got cold feet on that property. I think short term rentals, especially in some of the areas that we’re operating in, they’re not necessarily new, but they’re definitely up and coming. A lot more people are doing them in the area. So there’s already some built in risk, whether it’s with the township. For me, I don’t feel super comfortable unless it’s a heck of a deal going the HOA route, just because I feel like that’s another level of risk that could they could shut us down as short term rental. And this particular property would have been our biggest property in terms of at least the value of it in our portfolio. So I wasn’t comfortable with that risk. What are your thoughts on HOAs, Jordan?
[00:02:14.670] – Jordan
I think we had some pretty healthy debate going back and forth on that one. Could have been a good buy, but definitely understood the caution on it. And so in that case, they did allow for short term rentals. The fear is that they disallow it or you have problems with neighbors because in this particular case, also, the houses were a little bit closer together than what we’re comfortable with and we just didn’t feel like it was going to offer our guests the level of privacy so that they could have a good time and not bother the neighbors. So in that case, I think it was a good choice but it’s definitely really important to understand in each HOA what their different rules and regulations are pertaining to that. So that you make a choice that’s not going to end up costing.
[00:02:57.040] – Tony
All right. That kind of leads us into number two. The second thing to look for is a yard. So what do we look for in a yard?
[00:03:06.340] – Jordan
So primarily we want to make sure that as much as possible, there’s some level of privacy. Depending on what market you’re looking at, that may not be possible. However, it is pretty high in the factor of ratings that we use. We want to be able to provide our guests as much privacy as possible so that they can let loose and not bother people. And also the less neighbors, the less potential that you’re going to create issues for the people who live in the community. And so that is something that we really try to hone in on when we’re purchasing.
[00:03:38.910] – Tony
Alright, and number three? Number three is going to be amenity and amenity potential. So we’re under contract on a five unit apartment building right now. It’s a really cool space, but one thing that we were discussing over lunch today was what are we going to do about amenities. Now this is a little bit different set up than your typical single family home where it has a yard, you can put a hot tub, that kind of stuff. Now there is some element where we could put in a hot tub, but it’s like, okay, we’re going to rent it out as one big unit to large groups. But how do we also make it so when we rented out as individual units that they still have some of those amenities that really kind of bring in the guests?
[00:04:26.820] – Jordan
Yeah, we’ve looked for things like saunas and hot tubs and swimming pools and cool places to have yard games or volleyball or things like that. I think one of the things that I look for personally when I’m traveling with my family is what is that space that I’m going to enjoy and my family is going to enjoy using. And so I think having an instagramable type of amenities, whether it’s the things I mention, or a theater room, or a game room, or a pool table, something that gets people’s attention that’s more than just bedrooms, bathrooms and a television someplace.
[00:05:00.860] – Tony
Yeah, and we did just on board a client that does not have a hot tub. And they did a really good job. They got a Nintendo Switch down in the basement. They have foosball, air hockey. I’d say foosball and air hockey are kind of the bare minimum that you have to get, but when you actually combine it with the Switch, the ping pong table, they have several yard games, they got a nice fire pit. They just did a really good job on the staging and decorating as well. So they’ve been booking up really good. They actually got me questioning whether all of our properties need a hot tub at this point. So just kind of looking at like, hey, for five to six grand, what are some of those amenities that we can bring into the house to really draw the guests in? And the fourth one is going to be offseason.
[00:05:46.140] – Jordan
So one of the things that most vacation on our markets have is some sort of draw based on the geography. So whether that is a beach town or a ski town or boating or snowmobiling or whatever those things are that people look for. We really try to find an area in making sure that during the off season. When there’s not much else going on as far as whether the beach theme or whatever it is that people are actually going there for. What are some secondary things that we could promote and that are going to draw people in and making sure that when we’re designing our themes and the different ways that people can utilize the property. That they’re in line with whatever that is. Whether it could be wineries in the fall and winter or sledding or skiing or whatever it could be, is just making sure that we have some kind of plan for the off season. If there’s, for example, a nuclear power plant or something like that, that has services where you can bring in longer term, short term rentals, things like that are important to determine, to figure out how you’re going to strategically market and make it profitable your own.
[00:06:55.110] – Tony
I’d also say take a look at what type of rentals are available. Long term rentals are available in your area. So the area that we operate in, there really isn’t a ton of long term rentals, which has been extremely valuable from getting some of these long shorts in on the offseason. So take a look at that. I was looking at Nashville, I think, the other day, and there was just it seemed like there was hundreds of long term rentals. So just seems like you’d have a harder time renting out some of these short term rentals for extended periods of time. But if there’s not a lot available and you’re one of the only options, I think you stand a pretty good.
[00:07:30.580] – Tony
Chance in the fifth and final one is going to be the overall functionality of the property. Let’s say you’re looking at a three bed, two bath, and you’re anticipating sleeping twelve people. What is the dining room look like? Does it accommodate twelve people? Does it seem like it would only accommodate eight people? Okay, well, if four people have to eat somewhere else, where would you anticipate that they would eat? Would it be the living room? Is there an outdoor dining area? Is there a deck? So you just got to pretend that those groups need to be separated because you can’t adequately hold that in the dining room. What does that look like? And does that seem like a good set up for that group of twelve? Same with the living room. Maybe the living room is a little bit smaller. You can still maybe see eight people. But what happens when twelve people are trying to be in that space? Now you can try to on the front end obviously show, hey, this is the set up, this is how many can help just to let people know this is what they can anticipate. But if you’re saying you can hold twelve, you really want to make sure you have spaces where all twelve can get together.
[00:08:41.680] – Tony
So that would be the fifth and final. If you’re not on the michiganshorttermrentals.com email list, head over there and join. You’re going to get on an email list that is going to send out value add only emails. It’s going to show you how to find those hot spots in your area, how to analyze properties, what to look for. And there’s also going to be a calculator to help you determine how much it’s going to cost to furnish your property. Also you will find a property greater. So all the things that we look for, we built a custom tool to give a letter grade. All our properties are letter grade B. And if you go over there and put your information in and it gives a letter grade of a C or a D, you might want to second guess it. So the other thing, if you don’t mind, head on over to your podcast player. Give us a five star review that’s just going to really help us. We’re a new podcast. It’s going to give us a boost up in the rankings. It’s help others find this podcast. So if you could do that, we’d appreciate it.
[00:09:45.220] – Tony
And until next time.