Which Is The Better Hospitality Investment: Airbnb vs Hotels

Welcome to the Boostly podcast where we give hosts all over the world the tools, the tactics, the training and the confidence to increase their direct bookings. And today I wanted to tap into the hotels versus Airbnb sort of thing that's flying around on social media at the moment. When you get into this industry and you're in a short term rental business, maybe you pick up property number one from whatever means maybe you've owned it, maybe you've arbitraged it, maybe you're doing the co host, whatever you're trying to do. But as you grow and as you scale, you may be more aware of different models, different verticals to go down. And one of the routes is hotels, boutique hotels. And this is what my guest today has done. Hotels are back. They're back to 2018, 2019 demand. And with COVID and everything that happened during there when hotels had to shut down, more people were made more aware of vacation rentals thanks to no cruises and all of those things. Right? And so many people got into this game because they were on a long term rental basis. They show the gains from short term rentals and dived into the market. And there's so many people that got involved. And it's what we're going to talk about today. The cream always rises to the top. And we'll talk about this today. But the one thing that is coming back is hotels now because of this and because of traditional hotels becoming outdated, maybe there's not enough young people coming into the industry and it just means that there's a lot of owners right now that are just tired and want to sell. And people with the systems and the structures in place that know how to run a very successful hospitality business are going into hotels. They're picking them up, they're acquiring them and they are pivoting them and changing them to a more of a short term mental method. And this is what our guest today has done. The topic is about boutique hotels, what they are, how to get involved, the benefits of it. And there are so many pros and the big lessons that TJ has learned along the way. If you want to find out more about TJ Tajani, go check him out on Instagram. He's got a fantastic training program. His Instagram account is packed full of knowledge and he holds regular free masterclasses where you can find out so, so much more. He's got a big summit coming up in Houston this year, following on from success of 2022. He's one to watch and more. And I'M so excited to get him back onto the Boosie Podcast to talk about boutique hotels. So strap yourself in, get a pen and paper out, make sure to make notes, make sure you like this video, make sure you subscribe, do all of the things, but most importantly, make sure you share it and tell a host I'm excited to learn about branding. I'm excited for you to learn about all of the things. Without further ado, let me flip it over and let's be with tj. I tj, first and foremost, can you just please give us a super quick intro all about rentalpreneur about you, where you are in the world and we'll get, we'll get stuck in and talk about boutique hotels.

Oh man. Well, TJ to Johnny the Rent a preneur and here in Houston, Texas. Here in big Texas. And you know my my real estate journey has been interesting, but I've been in real estate since 2015 is when I bought my first rental property and I did long term traditional rentals for a few years and then I found short term rental strategy right the tail end of 2017 and I haven't looked back ever since. The short term rental strategy is when I remember when I first launched, my very first unit was a house that I purchased. I fixed it up, I refinanced it and I furnished it. And I remember how nerve wracking it was. I had about $14,000 worth of furniture in this house and boxes were everywhere and I was like, man, what am I doing? Why am I doing this? I think I'm kind of in way over my head. But then I saw it through and I'll never forget the day I launched it. I didn't get a booking that day, but I got an inquiry that day. An inquiry was just a question and with my level of excitement just because I wanted this person to book the property so bad, nobody booked it that day. But I woke up the next day with two confirmed reservations. When I did the math, I saw the cash flow potential with this and the potential of it earning more at minimum two, three times what my what I would have made if it was a traditional rental. Just from those two bookings I was able to run those numbers and that's what has caused me to not look back from short term rentals. And this has been a strategy that has, that has really saved me. It's changed my life and I love the fact that I get to grow this business the way that we've been growing it. Also show people how to do this Business the right way as well. So.

So yeah, you never forget your first guest, you never forget your first inquiry, you know, and it's, and it's one of them like seven years in now. And you know, you're doing a lot of first. And this is why I wanted to get you on now and I wanted to get you on and particularly talk about the sort of the new venture where you're, you're sort of taking the traditional short term rental and combining it with the more traditional hotel and combined for boutique hotel. So I want to get you on because you are right in the midst of it. You have got all of the things going on and it's super cool that you can come on and chat to us about. So the first question is, what exactly is a boutique hotel?

Well, boutique hotel is kind of your, you know, some, some people, you talk to people in the hotel world, they will say, they don't even consider it boutique, boutique if it's not under like 80 keys. Right. So we'll say some, we'll consider it something smaller, but more of your family style. Cute. A boutique hotel you'll find has more of an experience. A boutique hotel you'll find tend to have more themes associated with it than a traditional flagship hotel. But what a boutique hotel is great because for me, this was something that I kind of fell into. I kind of discovered that like, okay, this is something that could yield me that can even take what I'm doing right now and take it to a whole nother level. And so with a boutique hotel, there's so much range with it, there's so much experiences that you can have with your boutique hotels. Right now we're already thinking about things like having our own brand and products. Like if you look at a traditional flagship hotel, a lot of times, especially when you say a really nice ones, they have things that are branded for themselves. Right. Maybe it could be coffees, even the bottled waters. Maybe sometimes. And why not? Why can't you build an own brand for something like that if you're growing a portfolio of boutique hotels? So the amount of rang that comes with the strategy has always been amazing as well.

You're definitely right. And I remember back to our family business, we even created a range of beers. You know, we just widen. We put our own beer and we created our own hashtag. There's so many potential that what you can do with a, with a hotel in terms of branding, in terms of people remembering you and you know, there's so many touch points to that which is Very exciting. I'm really excited to see how you're going to break it down. So the different boutique hotels you've got running up, are you running it under a brand? Are they going to have their own identities? Like what's the general theme or feeling that you've got going on here?

Yeah, yeah. So, you know, it was initially and kind of my thoughts have kind of changed on this a few times actually. I was thinking about running all of them under one brand. But if I want to truly create a boutique experience, I realized that it may be a good idea if they each had their own identity. Right. But I can still run everything under one, under one family. Right. I can still run in terms of the operations. So the way we plan on doing it is we're going to have our operation entity that's going to run it, but then each building will have its own identity. So if we have one called Samson's Corner, that. Samson's Corner, which you know, has 15 units but it's ran by Tajani Suites or is ran by my current company, Home Suites. Right. So it just kind of depends. And so we plan on kind of giving it that, that kind of branding. But yeah, we'll definitely plan on running it off a solid pms. We went with one solid one, which we're going with Guesty, which I know a lot of folks that have done this business at scale go with guesty and for good reason. So, so, so yeah, yeah, for sure.

So watch out Marriott. Here comes TJ to Jani. 30 different brands, you know, so I like it. You've got one core brand and you've got each individual because again, you make it Google Googleable.

Right, exactly, exactly. And this way you can actually give kind of each one its own identity in terms of like its own website. Right. Its own brand, but it can still have the same kind of identity in terms of operations across all of them. So, so that's kind of the mindset going into it.

100% love it. All right then, so I think the next question would be, obviously you said you came this just by total coincidence, by, by mistake, like what was the actual story behind this? I feel I've heard this story before, but I would love for you to share it with the booster peoples because it's a, it's a good and well.

You know, you know, for me is scaling my short term rental business. My first short term rental I own was a single family house and I didn't even get educated on the arbitrage strategy until I got into this business. Then I learned that you can arbitrage. So which I think that kind of bolder me well because I was so much so headstrong on ownership. My who I was as a real estate investor prior to getting a short term rentals, I think bolded me well as well because it made me kind of put a focus on owning more of my short term rental assets. Even though I love, love, love arbitrage. But I feel arbitrage is a cash flow play versus owning is a cash flow and wealth play, right? So for me, when I learned about rental arbitrage, that's when I started doing rental arbitrage. And so I started burning both ends of the candle because the way I saw it, it was like, why not? And I know a lot of people were focused on either one route, but for me, if I can purchase real estate leveraging other people's money, leveraging the same way. I was purchasing my traditional rental properties, but just converting them to short term rentals, buying them with my time, meaning I'm putting in time to do the remodel. We're putting in time to make these properties beautiful. I will buy with my time. And while I was remodel these properties, I'll pick up more arbitrage units and signing leases on this end of it. So then that's how I was able to scale both sides. Then I started buying small multi families, which is two to four units. And in scaling to two to four units, I realized something. I realized that I liked this multiple doors in one location kind of situation because for one, I realized I can make more money. How? Because I can rent each individual unit as one or I can rent them out together. And if I rent them out together, I was always able to charge a lot more money. Then I realized that I can create great experiences, right? And I realized how much easier the management was when multiple doors are in one location. How things are a lot more streamlined. I realized how much inventory management's a lot easier when you have multiple doors in one central location. So then I said, man, I want to just start doing this. You know, maybe if I can just start doing these hotels, if I can start doing small motels and, and that's kind of what turned the light bulb on for boutique hotels. And then I started looking for kind of these mom and pop motels that you will find a lot of them were pretty run down because. Because they have a very old traditional way of run. A lot of them were dated. And it's not that I wasn't Finding the deals. The issue I was having was the way I was able to take these deals down. For one, a lot of lenders weren't really to give me the capital to fund on these deals because for one, a lot of these owners didn't then keep paperwork. Right. So their paperwork was sucked a lot of. And then on top of that, I realized that the lending requirement when you want to fund hotels are a lot more stringent than traditional real estate lending requirements. And so then I said, okay, let me just start, Let me. How about I just purchase a regular apartment complex that's a lot easier to fund and then I'll just convert those into the boutique hotels that I envision. And so that's kind of what, what allowed me to open my eyes to say, okay, I'm gonna just buy apartment complex and just convert them to a boutique hotel. And I executed the play when I, when I saw, when I came out across an opportunity for my first 13 unit building, I executed the play on that one. And man, what a what, what a decision that was. So that's how I guess this whole boutique hotel play kind of came about. And I, I will say, Mark, I will say be wrong. Let me not say definitively, but I'm pretty close that I might have been one of the first people to start talking about boutique hotels because I know it's very, very popular right now.

I know you were, because we had a conversation about a year ago where we were talking about your website, the diary booking.

Yeah.

All right, just listen, just hold fire because, you know, I want to do it, but I want to do it for these hotels. We're trying to get over the line and it's like, yeah, and I totally can see it. And the benefits are massive. You talk about operations, right? When you've got a property that's everything's in one big building, operations wise, for cleaners, for inventory, it's, it's simple, it's just all stored there. You know what has been the other wins that you didn't expect before pulling the trigger? That is sort of, you're starting to tweak and go, oh, this is actually a win because like when it comes to hotels, instead of having like five properties spread all around Houston, you've got 10, 12, 20 rooms, doors, all in one plot of land, so to speak. What's like wins you're finding apart from like obviously the main one.

Oh, yeah. I mean, well, we talked about the main one earlier. Right. Inventory management easier. I think the kind of experiences you can provide is different as well. And what I mean by that and that, that, that goes in different ranges as well. For one, you can provide different experience to larger groups of people. Like we're already getting inquiries for corporate events, large corporate events. We're getting inquiries for large wedding parties that just want to, you know, they're, they're considering, oh, we have a huge wedding party. If our entire party can, at this one location for the three days will be here, that'll just, that'll just be amazing. So. But you can't do that if you're not running this kind of play right. If you're not having a lot of units in one location. And also think about how you can manipulate your calendars as well. Because, because you have multiple doors in one location, say you have a few orphan days and within a particular week and maybe you get a booking on another week that you want to leave, possibly to leave open, you can move that booking over to another listing, potentially freeing up the calendar for that other listing for a longer term booking or even more, more money. So the ability to move guests around to manipulate your counter is also a big plus when you have multiple doors in one location.

It's tapping into things that hotels have done so well for so long, bringing it into short term rental world. Like, like you say, say for, for whatever reason on the day of a guest checking in, there's something wrong with the room, the water, the electricity or whatever it could be. You can quickly, with a hotel moving from room one to room two. And then on the wise end try doing that in a short term rental. A kickoff would be, would be huge. Like you talk about big bookings. Absolutely. And you'll be amazed at, you know, how much more money per room per stay they'd be willing to pay for say a wedding. You know, a wedding is a massive experience. It's you know, once maybe, you know, once in a lifetime, potentially maybe a couple of times. And it's like when, when, when that happens the much more revenue per night just shoots through the shoots. And as well we're sort of medium term rentals now. We start coming very, very popular. You've got people that are coming in as big groups of big groups of workers coming in for like a contract job or whatever. You've got your private parking, you've got all the security. You can block them up and they take care of you about.

Absolutely man. Think about like even flagship hotels right now, a lot of the flagship hotels and like think about their extended state products. Usually their extended state products tend to have, you know, full kitchen usually tend to be a little bit bigger and they tend to have a kind of a small kitchenette, but it's usually a full kitchen. Why? Because they're staying extendedly. Right. And so with you having a property like the kind of assets we like to buy and we convert these buildings to short term rentals, full size kitchens, units are a whole lot bigger. That's just a different kind of ball game and the potential to garner more midterm stays. Now you're putting yourself into position to get it, to get a lot of those stays for sure.

And am I right in thinking when you go down the route of boutique hotels, you don't have to worry about regulations as much as if you were a short term rental. Is that another one of the benefits?

Yeah, that definitely is another one of the benefits. And a lot of times, depending on the market, that may not even be a zoning required like the markets I'm in, but even some of the ones that do have requirements, it's a lot easier to actually just get the zoning for that. Even if there's no zoning in that particular area, you can still apply and get it. If you're operating like that, if you're operating as a business, as a hotel, not just, oh, Airbnb. Right. And so it's kind of a different ball game. You will 100% be able to navigate a lot of these regulations a whole lot better.

I know there's going to be a lot of people watching this, listening this, who may be starting out thinking, I want to go into the hotel game, but you got to walk before you can run. You know what I mean? Where your arbitrage model and the method that you teach now as part of, you know, rental, preneur, etc, is fantastic because you build this up, you get your cash flow, you maybe look to joint venture with a few people and who knows, then you can walk to this. But this is, this is fantastic. Sort of next level, like level 5, level 6 in the entrepreneurial journey of when you get to that and you're ready to sort of take that next step, this is perfect to look at in your portfolio. So really appreciate you coming into this. Now for people who are just getting started, tell us a little bit more about the coach and tell us a little bit more about how it works, how we can find out more and then just very quickly talk about the next step, which is your summit that you put on last year, the event that you put on and like the plans for 2023. Anything you've got to share on that would be much appreciated.

Absolutely, man, absolutely. Well, I'll tell you what we have, you know, one of the. What I feel and I feel like, you know, when you are, when you consider yourself somebody who's a student of the game and what you do, and you consider yourself one of the best at what you do, you also by default want to produce the most successful people in this business. Right? And it's always interesting when people ask me, like tj, why do you teach this business? Aren't you creating more competition in the marketplace? There's more and more people doing Airbnb, trust me. There's. We do not have a shortage of people doing it right. When I tell you we should have a shortage of people, go this business the right way, think about it. Even when, when guests right now, and I'll throw this in there when guests right now, because you may hear things about guests kind of moving back towards the hospitality of the traditional hotels and whatnot. So things are kind of becoming. Hotels are kind of, you know, you hear stuff about hotels and Airbnb and things like that and guests are, are going to hotels if there are guests. If there are people that book an Airbnb and then essentially go back to booking hotels is because of one or two reasons. They had a bad experience and they're not having enough consistently good experiences on a platform. Right? And so that tells you something, that tells you that we still need good consistent experience on this platform because there should be no reason why people use an Airbnb and then decide that they want to go back to a hotel because us as hosts are keep dropping the ball, right? And so what, what I love to produce in this business as competent hosts, investors that have their identity as an operator hone in. And our goal is to help hone that identity in via all the, all the, the right course content that you'll need. One of the big things that I think is very crucial right now to master, especially on an acquisition perspective, is creative financing. Creative financing. There's a very, very amazing kind of marriage. There's this amazing intersection right now with creative financing and short term rentals. How you can purchase a property, for example, lease options and exiting with a short term rental, buying a property subject to an exiting via short term rental. And I can be, and I'm exactly excited about the fact that before I started doing short term rentals, I was a real estate investor closing these kind of transactions on a daily, doing lease option deals, doing subject to deals. We were being doing Owner finance deals. And now we're able to kind of merge the two with this intersection with credit financing and short term rentals. And so I say all that to say is that along with the knowledge that people get from our, from our Mastermind or mentorship is the knowledge of not just short term rental as a business because you will learn how to do it the right way as a business, the proper way to structure your short term rentals along with the right acquisition strategies, creative financing, which we're heavy on in our community. Our students are closing creative financing, sub two deals, lease option deals and exiting with the short term rental strategy and scaling their portfolio that way along with that. Then it's the meetups. I think a lot of times with, with Mastermind, the most valuable thing is when we get together, right? When we get together, you get to learn not just from me, but other experts in the industry. We meet on a weekly basis, two meetings a week. We're going to meet twice. I want to meet you to answer all your questions every single week. I want to meet you to hold you accountable as well. We have a whole accountability sessions that we do. Along with that, you're going to sit with experts, expert attorneys, expert CPAs that can help you structure your business, that can help you manage your business for a bookkeeper perspective as well. You're going to deal with experts that'll help you take the guesswork out of where to start. Where do I get this thing going? We have the people right there to tell you like hey this, these are the best zip codes based on analysis. These are the best zip codes, performance zip codes in your marketplace. The entire Mastermind is crafted to literally give you everything that you need from a knowledge perspective, community perspective, coaching perspective. Right? Only thing that'd be missing is you. It's not this that everything else work, everything works is do you work? Right. And so that's really the only, that's the only piece missing piece that you will need to go crazy in this business and just a real estate in general. I know I was winded, but I get super passionate about this day, Mark.

No, massively you're right. And I love what you said right at the very start that is that the core message is the cream will always rise to the top and there will be bad eggs. There will be so many people who drop out of short term rentals this year and a large, large level because they maybe got into it at the wrong time or the wrong message or the wrong reasons. And with training like yourself, and I've been part of it. You know, I'm very lucky to be able to dip in every now and again and sort of like lend a, like a market in a hand to this. And I see it. It's fantastic. And it is. You know, what you want when you join a program is you want accountability. You don't want it to be just like any other program that you join because there are a lot of people that have that shiny object sort of thing and they just got to join 555, all these sort of things.

Yeah.

And they never implement. So key part of it is that. And so, yeah, really, really glad you're doing it. Thank you for doing it and looking forward to being part of it.

Yes, yes, definitely. You definitely. Like you mentioned, you mentioned the summit earlier because you're definitely going to be a part of that this year too. The summit this year is happening in 2023. We had our first annual the rent a Preneur Summit last year. Insane turnout. The impact was crazy. I'm still still kind of at a high from what that event did for people's lives, for people's businesses, the kind of relationships, the connections that were made at that event. And so by default, we are 100% bringing the rentpreneur summit back as largely requested by a lot of, of by a lot of folks. And so be on the lookout for that as well. Tentative, tentative months. I. I don't know if I should even throw out months, Marcus. It's not. I ain't sound. I, you know, saying when you ain't even locked it in, like the sign of paperwork is hard to just kind.

Of get on the Instagram, get on TJ's Instagram, get on the waiting list and just do all the things. We'll get all the links where all need to be. But yeah, very big things happening. A pleasure to check in as always. Checking in more and watching, watching all of us and fall behind the behind the scenes and you know, getting all the websites up and helping use of all that. I'm excited. So well done. Massive steps. Massive. Such a pleasure to watch the journey unfold from. From behind us. Cheering on so hey, if anybody could just go one place and one place only to. To check out your best stuff, where would that be?

One place, one place only. Ig. Go ahead, follow your boy. Go ahead, follow your boy. That Instagram @tj to Johnny. That's at T J T I J A N I. If you decide to just type in rentpreneur, I'm sure I'll pop up as well, so either way.