Identifying The Right Market For Your Business

Welcome back to the Boostly podcast. This is the podcast that gives hosts the tools, the tactics, the trainings, and most importantly, the confidence on how you can go out there and get more direct bookings. Today we are going to be talking about how you can identify the right market to be in. And to help us do that, we're going to talk to a successful short term rental host and ask the questions which you can listen to the answers and take that information and perhaps implement that into your business as a host. So listen, let's dive in, let's find out all the information that we want to find out and, and go behind the host with him. So welcome along. Drew. Thank you for joining me.

Oh, thank you for having me, Liam. It's an honor to be here.

So I know we've, we've talked before, we've obviously spoke about websites before and I've kind of unfamiliar with your business, but for people who have just tuned in and don't know who Drew Pearce is or sage vacations, can you kind of give us the background? What kind of business model do you use, how many units, where in the world, all that cool stuff?

Sure, absolutely. So the, the business is currently located in the United States in the Florida market, Orlando, Florida market, as well as the Gatlinburg, Pigeon Forest, Tennessee markets as well. We currently have about nine properties. And you know, we're, we're growing, you know, every year fortunately. And, and so that's what we do though, that's, that's different than anyone else is that we, we try to focus more on the experience, I think with everything else. And we, we make it so we, that's part of a, kind of our business models. We're not catering to people who are just looking for a place to sleep, but they're also looking for, you know, that experience whenever they go and stay someplace, an extension of whatever it is that they're doing in that particular location.

Experience is so important. And more and more people are booking for not just, you know, like say a bed to sleep in, but actually because they're booking with emotions. They're thinking, hey, what emotions am I going to have? What kind of experience am I going to have? Which is cool. So we'll definitely dive into that. Those nine units that you've got at the moment, what kind of setup are they? Arbitrage? Are they owned? Are they managed?

Seven of them are owned by me and investors jointly and then two of them, I just barely started. So those are actually managed.

Nice, nice. So starting to diversify the Model, which is, which is cool. How did you identify these locations and what tips would you be able to share around that?

Yeah, I think honestly the easiest way to do that is just to take you step by step, like what my process is, which is actually pretty proprietary. I don't tell many people this, so you guys are getting an exclusive access to this, if you will. The first thing that I do is identify anywhere here in the United States. That's kind of where I'm currently just focusing on, is here in this country. And identify where all the top locations are for vacation destinations in each country. And so. Right. Or excuse me, in each state. And right now that list of markets I'm looking at is over 900 different markets that I'm looking at. So I go through and then I, you know, that's obviously easy, just, just a Google process with that. Then the next thing I do is I look at the travel demand using air DNA. You know, the air DNA score, for those of you who don't know what that is, that's it gives you a score and basically says is the market growing and is the demand keeping up with it? So it's a good sustainable market. And I go there and I, I look at what the rental demand score is in that market. The other thing that I do is because what's, I'm not just looking for a place to make a quick buck. I'm looking for, I'm looking to build a brand. So I'm only looking in markets that have already about a thousand plus vacation rentals in that market as well. So after I narrow it, so I narrow it down from about 900 plus markets to about say 200 markets where they have about a thousand plus. And then anything that has a rental Demand score about 80 or higher, that will narrow it down again to say 30 or 40. And then from there I narrow it down again to see which markets then are going to have the highest roi. And so I just look at what the average rental revenue rental is in that market. And then I also look at the average home price and from there you can just calculate a very simple roi. And then that's how I get it narrowed down to like say my top three markets that I'm going to be looking at. And if you follow this model, it's pretty much a 90% chance you're going to be successful because you've already narrowed it down to where the markets are going to be the best. And don't be afraid to look outside your own backyard. You know, I live Thousands of miles away from my nearest rental. And it's, it's very doable. And that's how I started. I didn't start my own backyard, I even started. The reason why I did that is because when you're first getting started, you're going to make mistakes. It's inevitable, everybody's going to do it. You know, the path to success is through failure. And so when you do make mistakes, it's nice to be in a market where that is, has higher margins and you can kind of, it's forgivable, you know, you can, you can stumble a little bit.

How do you manage the teams from afar? So you're in a number of different markets. You've got some obviously closer by some thousands of miles away. What is the secret source? Who helps you and how do you effectively manage from that far?

Yeah, that's actually the number one question I get from people, you know, because they're all very nervous about, you know, they want to be able to see the property themselves, go be within 20 minutes or something like that and go check on any time that they want. And it just comes down to picking up people that you trust to do it. And that's the most important thing, is just making sure you have people there on the ground that you can trust. So the first thing you got to do is find a really good housekeeper, housekeeping company, or just somebody that you hire individually. It's difficult to hire an individual until you have at least four or five properties that are constantly booked, you know. So I'd recommend probably starting off with the cleaning company first and then transitioning to hiring your own housekeeping crew just to save on that cost and you have more quality control.

Things like that, having a checklist for your cleaner. I know a lot of people, when they start doing short term rental, they just go, hey, let's send my clean around. And they've cleaned it great. But especially for people listening to this who are in the early days, you just need some sort of what does that clean involve? What is checked off? You know, especially if it's a cleaner who might not be familiar with doing short term rentals, you know, they, they. It's slightly different, isn't it, compared to standard home cleans because at the end of the day, need to check all drawers that are empty, you need to check the cutlery drawer, you know, check everything is, is, is in good condition. And it's just great having those kind of apps which you can then view the clean and all the information from a thousand miles away. So that makes sense.

And something to add to that as well is that Turno has a marketplace so you can find housekeepers on there as well, cleaning companies in particular. So yeah, so it's, that's how I found my first cleaners as well, is just through there. Like I said, because not everyone, it doesn't make sense for most people to hire a full time housekeeper with one property or two properties. There's not enough work for them to do. But a cleaning company makes sense because, you know, they supposedly will have something like, you know, 20 plus properties that they're cleaning. So adding on one, just yours, makes a lot of sense for them. The nice thing is that they know what they're signing up for, they know that industry and kind of what's expected of them because they're already working with lots of other homeowners in the area. And so it's a great head start. And then that way you can kind of still tweak and refine, you know, the things that they're doing for you. But it gives you a huge boost when you're first getting started. I feel like it just makes your life a lot easier when you're working with a professional who's already familiar with the industry.

And one of the hardest things to do is to find good people. So anybody listening to this, looking for a cleaner turnover, turnover, BNB or Turno now, you know, it's a great, great way to find your first, first cleaner people who will really help push your business forward. How did you get into hospitality? What was the thing that, that started this and what did you do before your life in hospitality?

So I had always just wanted, I always thought it'd just be fun to be a homeowner essentially. Like, you know, one day what I want to do is just buy a house wherever I want it to be in this vacation destination and design it how I wanted, you know, then just get a management company to manage it for me. That was initially my goal. And then I went with my family and another, another family. We went together on a vacation down to a place called St. George. It's design national park here in Utah. And we just had a great time there and we, and a lot of it had little to do with the area we're in because we really didn't go out and explore much. It was really just an excuse to leave our houses and hang out just together for a few days. And we just kind of just. I just noticed a lot of things that they did that were just little things that Just made the stay really enjoyable. You know, they, they, everything was marked about how to do this, how to do that, you know, with the TV remotes. And like I said, the check in instructions were just super simple to follow. And you know, we went into, they even said, hey, if you, if you kids want to ride a bike, we provide these bikes in this little garage area. And I think here's the code to get into the garage and you know, even use those. And it was just a great experience. And I remember just turning to my wife at the time and saying, you know, I think, I think I could do this. You know, I think we could do this. At no point in waiting, why don't we just go ahead and do it? And, and that's kind of how I decided to get into it. So I wasn't like what most people are, accidental hosts, you know, things like that. It was definitely a conscious decision. I'm going to get into this and I'm going to do it to make money. And I guess leading up to that, you know, I didn't have a lot of experience in hospitality prior to this. My experience was, you know, in business management. Fortunately, both of my parents are entrepreneurs. They, my dad's a chiropractor and a martial arts school owner and I did very little with his clinic, but I did a lot with his, with martial arts school. I started teaching there. I mean, not like a full time, but, you know, I remember teaching my first class when I was just 8 years old teaching 4 year olds some stuff. And then I, you know, was involved with it pretty much my entire life leading up to it. And as I got older, I became more and more involved in the business. So I understood kind of how to make a business tick, how to make it run, how to market it and things like that. So I was learning all those great skills just along the way. But unfortunately I was working for my parents, so I wasn't making much money. So then I had to get into sales. And that's kind of where I was at at that time. I had about eight, nine years of sales experience at that point is when I actually got started into the hospitality business. So that's what I was doing prior to doing Airbnb full time, you know.

Vacation rentals, having a blast. Gonna get it on the Bruce Lee podcast. Bruce Lee, like Bruce Lee. Cause it's so hard and the tea is loose leaf Making up those rhymes don't write it, just do it loosely.