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In this riveting episode, hosts Jordan and Tony dive deep into the world of vacation rental drama, exploring two shocking headlines that have recently shaken the industry. First, they unravel the chilling story of a vengeful guest who took extreme measures against their unsuspecting host by leaving the water and gas running, causing large utility bills. What led to this act of revenge, and how can hosts protect themselves from similar incidents?
Next, Jordan and Tony analyze the growing threat that larger property management companies pose to Airbnb’s profits. Will these behemoths expand and devour market share? Will Airbnb be able to adapt and maintain its position in the vacation rental landscape?
Don’t miss this eye-opening episode that will leave you questioning everything you thought you knew about vacation rentals!
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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: Life is good. Although our question you I live in Michigan I said all the wrong questioning…
Tony Stancato: And cold. What’s up?
Jordan Painter: why I live in Michigan.
Tony Stancato: Yeah, it’s good. And cold man. Went for a nice little run this morning, got the snow on the trees. after coming up a week of like, what 80s,
Jordan Painter: Was 80 degrees Saturday and I got sunburnt and then it’s snowing here on Monday. So, welcome to Michigan.
Tony Stancato: Yeah. Yeah, people love the Four Seasons man. You can get it all in one month all in one month. Yeah.
Jordan Painter: I see one weekend. Yeah.
Tony Stancato: What’d you do this weekend? Anything exciting.
Jordan Painter: Yeah, we had some lacrosse and some track and then I got together with our church family and was good. Yeah, it was good. They’re always too quick but we’re in the full full swing of Kids sports right now. So I’m trying to figure out how to carve time to actually work around carton kids around so adventure.
Tony Stancato: Yeah, man at least you’re close to, you know, kids getting licensed and eventually being able to drive themselves. I still got to get 10 years minimum. so,
Jordan Painter: Yeah, I’m wondering I got a 17 year old that still needs hours. So we’re pushing her to hurry up and Become self-sufficient. There
Tony Stancato: Yeah. well, today we’re just gonna go through some, some news headlines and a You know, a Facebook post that I came across in Jordan has no idea what they are just like last time so we’ll get started.
Jordan Painter: Before we get into that, I do want to make a correction, our last. Our last episode, we’ve mentioned, new buffalo in that short-term rentals weren’t allowed there. That’s not completely correct. So just want to correct that. So it it’s very limited and there are some licenses that have been issued but it’s very difficult to get new licenses issues. So just wanted to make sure that the listeners are aware. That that information was slightly off. So
Tony Stancato: Yeah, so it’s only allowed up their grandfathered in and I think there’s quite a few places like that they’re just so far and few between even Saint Joe. Um, we talk about a lot, it’s not technically allowed, but there are, you know, some instances of them being grandfathered in and we actually did go down to New Buffalo and looked at one of those unicorns that came on the market that had a rental permit included with it. So definitely adds little can add a little value to the property too. When you go to sell it,
Jordan Painter: Yeah, for sure, we got one of those permits. So hit me with the news. Let’s do it.
Tony Stancato: Airbnb shares fall after probe into unpleasant customer experiences, shares fall 6%. so, some of the things
Jordan Painter: Interesting. Who’s the customer? They’re referring to. Did you read the article? Is it the is it the consumer? Or is it the host?
Tony Stancato: A primarily is from the guests.
Jordan Painter: From the guests. Interesting.
Tony Stancato: Is what it’s saying, yeah. So one of the things they mentioned was last minute cancellations. Cleaning requirements, which I mean, I feel like hear about that all the time, where essentially, you pay, $200 for cleaning and you’re expected to clean it and make sure it’s ready for the next guests. And then they also mentioned competition from professional posts. So, there’s a There’s bigger companies that are going to try to, you know, that are hosting hundreds of properties and they’re going to cut into airbnbs fees. What are your thoughts on that?
Jordan Painter: Yeah, I mean, I think we did one of our, our prediction podcasts, we talked about this. There’s any, any form of advertising, there’s going to be competition. And essentially, you know, Airbnb is not a real estate company. They’re, they’re media company, they advertise rentals. You know, they don’t actually engage in ownership and management, all they are as a platform. So when you have a platform that advertises anything it’s it’s, I wish everyone I want to say it’s a low barrier to enter the market but it’s it’s a relatively low. You don’t have to buy real estate. You don’t have to have cleaners. You don’t have to have all that infrastructure, but if you have money, you can pay for advertising to compete on the Internet. And so the Internet is is the great equalizer and a lot of ways. And for companies that have deep pockets and can advertise
00:05:00
Jordan Painter: You know, it’s like we we can’t compete with Airbnbs International or even their national marketing budget, but we can probably compete in southwest Michigan where we operate. You know, if we put a lot of resources and in investment into a specific area, we we can we can compete with them. So they’re gonna see a lot more of that. I think it’s interesting to see, you know, how that competition, how much, how much they can, how many people they can pull off of those airbnb platforms, and get direct bookings. Be curious to see what further restrictions airbnb does to keep hosts from getting information. For them, potentially, take it harder to, to cut them out. So what do you think?
Tony Stancato: Yeah, I think it’s a bunch of baloney, honestly. I don’t really buy into the competition from professional hosts. So if I was to look and say, Oh well, vacasa is
Tony Stancato: Clearly a big competitor to to that, I guess it is good for the guests and that instance, Well, I guess he’s paying for it on the other end. It’s gonna be the host, right? So it’s like, Okay, we charge a 20% management fee to host to manage our clients property airbnb. They pay a ton of money billions, probably to advertise airbnb. Get people to the platform. So there’s a big marketing expense there. Now you go to bay Casa and it’s like, okay, well I’m a whole no homeowner and it doesn’t really make, you know, once I’m paying 34%, they’re using that 14% to market it. So I don’t know as a homeowner it’s like, well, under Big House it’s not gonna make sense for me to actually head over there. So
Tony Stancato: Yeah, the piece got to come from somewhere. You know what I mean. So and then, you know, in that instance do they have to charge more for the the home and then maybe all of a sudden, the home doesn’t isn’t a viable option to rent anymore and so they go off the platform or they are no longer a property. So then inventory starts to drop because it’s just not making sense. And then, yeah. So I know why the fees are there. And I think I did, you know, in our predictions podcast I did, um, predict and I guess this could go further. It’s a just, you know, solidified, my my thought on that, but these, that the guest pays are going to probably move more into these, on the host, right? So guess does it? Hey, it can still be the same price. But now, I just looks like, Hey, I’m paying a nightly, right? It’s a higher nightly rate, but I’m not seeing all these
Tony Stancato: So it is kind of, you know, a double-edged sword there. And then last minute cancellations cleaning requirements. Yeah cleaning requirements. I mean if you’re having yeah I mean we’ve gotten a couple messages when we’ve stayed just in the last six months and I’m like Yeah, you know, they’re not over the top, but you’re also like, well, we got there one that really takes me off is when you get there. There’s laundry in the dryer. Oh, hey, I just got done traveling for 12 hours. Let me fold your laundry. That your cleaner didn’t fold and that you didn’t have done correctly. So let me start my vacation by folding somebody else’s laundry. Awesome that really takes me off.
Jordan Painter: Yeah, we say in one way, they wanted you to take the trash out to the end of the driveway and it was over a quarter, mile long, driveway. So it’s like,…
Tony Stancato: Yeah.
Jordan Painter: you know, I get it. It’s hard for them to to manage that, but at the same time, I got a car full of, you know, suitcases and kids and crap. I don’t have any way to take that thing to the end, and we were there when it was not great weather. So, yeah, some of that stuff.
Tony Stancato: Yeah.
Jordan Painter: It definitely creates a barrier for the the positive experience.
Tony Stancato: In last minute cancellations. I mean, it’s like It is, you know. Look at the host. Look at the property. See what their reviews are. I mean, if it’s a five-star property or close to five stars with the great host, you know, you should feel really confident that you know, you’re gonna have a good experience and a good property. Now things happen Man, I mean it’s like
Tony Stancato: If a hotel is completely booked up and something happens, I mean, I’m sure there’s instances of hotels happen to you, potentially, you know, turn people away too or cancel something or, you know, not get the room that they wanted, but it’s like, Hey, this shoot, I was just out of property yesterday, right? And, you know, there’s leak in got a got to get that taken care of and obviously, in that instance, if somebody was staying there, the next day it’s like that one property isn’t isn’t gonna be available, right? So luckily we we have a lot of, you know, enough properties, where we can accommodate in new people around and that kind of stuff. But yeah, that’s the last minute and especially the last minute, southwest Michigan. I mean, it’s gonna be During peak season. It’s hard to find other accommodations.
00:10:00
Jordan Painter: Yeah. If you have some kind of an issue that makes the the house on livable, for sure, it can be difficult last minute. So Tony came through for a guest last summer when we had a roof problem and found them a better option with a pool. And so there you never know if you if you dig and and make it right by people, but it’s a huge frustration for sure to Again though the hotel example they’ve got a couple hundred rooms, they can move people around to if you have one house in the furnace goes out or there’s a roof problem or something like that, it can be difficult to find a backup plan. So That’s a good point to push though.
Tony Stancato: Yeah, I just
Jordan Painter: If you’re operating in an area, do some networking and find some other hosts around and try to have a couple of backup plans, where you can bail each other out in a pitch. So,
Tony Stancato: Yeah, no, we actually just got a booking probably three weeks ago, a property management company down in Florida, for whatever reason, the property was no longer available. So as they should, they start reaching out and trying to find accommodations for the person that they were gonna host. They connected us with the whole or with the guests and we were able to host some. So I mean, Yeah, you can definitely Get some, get some reservations that way, but then also, you know, move the help move them to other properties if you network and find people that can also accommodate some of that.
Jordan Painter: Yeah, so other being said, good hosts can can counteract some of the issues that are supposedly driving people off of that booking platform. So,
Tony Stancato: Yeah, but you should bend over backwards, to try to find different accommodation for them, you know, give them some extra money or whatever. Like I know, it’s unfortunate and especially if you have a roof issue or, you know, whatever it is. You already have a financial hardship, probably because of that, but make it right. All right, headline, number two, couple takes revenge on Airbnb host who refuses to cancel booking by leaving. Water running lights and gas on using 120 tons of water.
Tony Stancato: What are your thoughts on?
Jordan Painter: 120 tons. I’m trying to even picture. How many gallons is that?
Tony Stancato: Yeah. I have no idea a lot. Yeah. So
Jordan Painter: How? They jacket the utility bills for not canceling.
Tony Stancato: Yeah, and it was a 25-day stay and it sounds like they I mean it does sound like it’s kind of on the guess they booked place where they didn’t really. They didn’t like the location after they booked it, they didn’t spend enough time finding, you know, looking into the location. And so they tried to cancel the host, didn’t accommodate that. And so they still showed up, they apparently turned the the water, the gas and all that stuff on and then Typically left. They came in and out like five times, but sounds like they didn’t necessarily stay at that property. Maybe they booked another property and just went back to, I don’t know, make sure everything was still running.
Jordan Painter: So, they didn’t do any damage, they just jacked up the utility bills.
Tony Stancato: Yeah. Sounds like it’s like 1500 bucks. Yeah.
Jordan Painter: Wow. Wow. Interesting. Well welcome to deal with the public and sometimes people are kind of crazy. So that’s just I chalk that up to cost of business and hopefully, hopefully, the booking was worth more than 1,500 bucks.
Tony Stancato: Yeah, yeah, definitely. And I would say We try to accommodate, when people want to cancel a booking, we try to accommodate, right? I mean it all depends on how far out. Do they book one or they? Canceling. So, if this person booked 25 days, six months ago, and then two days before they’re gonna arrive, they want to cancel. I mean, that puts you in a little bit of a tough spot, from like, a host perspective, right? I think in that instance, we still try to. Hey, if we can get another booking, we’ll make sure, you know, you get refunded or, you know, try to, at least refund some of it but we can’t eat all of that special. If you’re talking about like, a peak season booking or something like that, but
Jordan Painter: yet it’s been a big challenge for us, too, because we, when we’re managing our own properties, We have the final call because we can say, Well, it’s our, it’s our loss. Yeah. When we’re managing for clients, it’s a little bit, a little bit different because they’re the ones they’re gonna be taking the loss and we’re at that point being generous with their money. So it definitely puts puts hosts in a pretty awkward position sometimes. So I think we have we’ve done a good job in the past of Trying to fill those spots. And in giving refunds, if if we’re able to and in a lot of cases, if it’s our own properties, we just take it on the chin and especially in PCs and the ones that I can think of off top my head. It seems like they always read book, so but it’s easier to get a couple days booked or a weekbook than a month. So, depending on the market you’re in,…
00:15:00
Tony Stancato: Yeah.
Jordan Painter: that’s definitely. Creates.
Tony Stancato: you know I mean yeah you bring up a good point of like Hey when it’s ours we just take it on the chin but then also it’s like even if we’re it’s somebody else’s property, right? We have a lot of different obligations more than just like the money coming in and there’s the short game in the long game, right? Short game is hey they got it 500 bucks from this reservation. Long game. They get a bad review because their ticked because they couldn’t get a refund, right? So the review is terrible. They give you a two or three star review and if you don’t have a ton of reviews, you can’t necessarily eat that review and all of a sudden. Now you got a four star at your property that you’re managing for somebody else. Now long game. I mean you’re gonna be, you know, you’re gonna kind of move to the bottom of this. You can probably fight to get that taken off in maybe be able to do that. But then again,
Tony Stancato: Leave water running be disrespectful to the property, so there’s definitely a fine, you know, balance there on just trying to do what’s right? And you know, look at all aspects of it from, you know, the guests and the owners and that kind of stuff.
Jordan Painter: Yep. Again the the joys of dealing with the public people ask me what’s the what’s the best part about real estate? And I always tell them the best parts, the same as the worst part, it’s the people. So depending on people,…
Tony Stancato: Yeah, nice.
Jordan Painter: you’re working with, it can be great.
Tony Stancato: Yeah. All right. And then just a Facebook one that I came across had a lot of comments. A lot of engagement, it was more of just a tip and I was like, Oh man, I love this. So the post was talking about, they have their outdoor faucet for their hose, right? And they had their plumber install, a warm and cold bosses so that they could refill the hot tub clicker and make sure it’s warmer for yes. If they have to turn the water over. What do you think about that idea?
Jordan Painter: um, I like it, I think.
Jordan Painter: It depending on how easy it would be to plumb that. And if you’re doing the management yourself to save some money, it can be, it could be a good solution. I think the, the only thing that comes to my mind is especially working in the Michigan market. At least for six months while I don’t know about six months three or four months of the year you gotta have all those exterior spigots turned off anyway. So it’s a good solution for part of the year but you gotta you got to protect those and winterize them in the winter. So and…
Tony Stancato: Yeah.
Jordan Painter: and I wonder also, Again just from the E standpoint. How long how long a how long does it take to empty that thing and then be. How long does it take to fill it up. So we got up a four or five hour turnover and you got housekeeper scramble to get everything done and they got a somehow empty it and fill it seems like a pretty tight timeline. So
Tony Stancato: yeah, it is extremely expensive to turn those over to I think it’s, I think it’s 350, 400 bucks to have the hot tub company, come out and turn those over. But they do refill it with warm water and it’s ready to go. Yeah, I thought that was a good idea, also. Hey, kids sprinkler, you know, warm water. Turn it into. So a lot as I thought I was a good idea. But yeah. How expensive is it to actually get it installed in? How usable is a cross the entire year, but you know when I look at those $350 to turn the water over just another reason why I guess I’d love to find a way not to have hot tubs but Not looking good.
Jordan Painter: Yeah, they’re big of a draw unfortunately so you know I think it could it could be it something a certain point, those things would make sense and then you you got as long as you have somebody that you know to me it would be you’d have to have somebody lined up other than the housekeepers to, to help do those turnover for the hot tubs. I just don’t think that typically, there’s gonna be enough time to do all that. So, And…
Tony Stancato: Yeah. Well.
Jordan Painter: then you got to have with the chemicals in and yeah there’s some some liability and some risk there that we also like to delegate to the professionals.
00:20:00
Tony Stancato: Yeah. And depending on how long they say was, I know when we just got a hot tub up and running and hot tub company was like Oh yeah if it’s just for a couple days like you can just use regular water and we’ll come by and and add it later. So there’s ways around it but yeah it’s a week long stay yeah you definitely gonna need need chemicals in there so Well, cool, that’s it for the headlines. You got anything else?
Jordan Painter: I don’t think so. I mean, we’re gonna, I guess, maybe do another shout out, just to keep getting more people on board, but I went out shopping this weekend and got some new running shoes, and some shorts. And people are telling me all this different, the different things that we need to be thinking about. So, you know, got it. Gotta get some Some what my friends. I’d make sure to get some Vaseline for the chafing and all those things that I guess the runners deal with there you start you start having having problems that you don’t really think about when you’re you’re doing the 70 mile or so.
Tony Stancato: Yeah.
Tony Stancato: Yeah, I’ve seen that that’s uh, Yeah, if you’re interested, let us know. May 19th starting around 4:30 am in Southaven and walk into Kalamazoo and back.
Jordan Painter: Nice little stroll.
Tony Stancato: Cool, till next time.