Everything You Need to Know About Short Term Rentals!

Topic for today is STRs, everything you need to know and everything we think we know about short-term rentals.

Hey, welcome back to the channel. I'm Christian. I'm joined by Cody and our co-host for the month, Sav, Investor Sav on Instagram, Investor_Sav. Follow her journey there. But today we're talking about short-term rentals. Sav is one of the best designers of short-term rentals of all time.

Thanks.

Fact.

At least the best one at this table. Yeah, well, yeah, that's a, that's a low bar. That's— yeah, well, we're going to talk about the setup of short-term rentals, how to actually run them, tips and tricks that we have learned, and I think most importantly, some of the things that you shouldn't do running a short-term rental. So I'm going to start off with the actual expert, as we've just bought a resort and we're learning it, and our short-term rental across the way is opening in a week. So I can't say a whole lot about running them. But how long have you been doing short-term rental stuff?

Yeah, a little over 2 years. It's like what I started out with. So I have had a few learning experiences to get where I am now, having a little more automated and having some regulations in place to prevent certain mishaps.

I'm excited to go into all those, but we're going to leave that as a teaser. So you keep watching this video. Yeah, write that down. Write that down. But we're going to get back to that. So you did this for 2 years. How many total short-term rentals do you have?

I have 7 right now, not including the motel that we're going to be transitioning over. That's 15 units, but currently in operation, 7 today.

That is fantastic. So 2 years, 7 operational units, and then you self-manage all those, or do you have a crew or team that does that with you?

Yeah, I self-manage. That's why I'm creating the short-term rental property management business, because 7 short-term rentals on your own is a lot. But outsourcing to other property management businesses for short-term rentals is expensive. That's why we're moving into that now. So we can, we can get more and more short-term rentals.

Are you doing that just for yourself or is that a third-party management company where you're bringing on other clients?

Yeah, it'll be third-party. We'll bring on other clients. It'll obviously manage online and the future ones I get, but we'll also bring on clients as well.

Fantastic. Cody Davis, how long have we been in STRs?

Oh, you know, forever. Most of my adult life. No, we've been in short-term rentals for about 6 months and doing great with the resort. Less great over there at the Hood Lodge, but we're figuring it out.

Yeah, one thing at a time. One of those big pieces is the actual setup of an Airbnb. We bought that and it was very, very close to turnkey. The only major glaring problems was all the fixtures were outdated.

Everything was ugly. Every wall was a different color.

It was insane.

We had like light green, dark green, medium green, puke green. They ran out of known colors, so they resorted wallpaper. Oh yeah, yeah, that was—

they just like mix random colors together, it's like made their own colors.

Yeah, yeah, it was pretty bad. Carpets were green and purple and brown in the bathroom.

That's nice. Oh, bathroom carpet.

Oh, you should sit in the pink bathroom with the green carpet.

But yeah, but the green carpet turned brown, so—

oh good.

Yeah, good. So, you know, other than everything being ugly, it was all perfect and functional.

Yeah, and we looked at the project and they're like, okay, so I need to remove some wallpaper, we need paint, and then we're hanging light fixtures. I've done that a million times. How hard can this be? Plus, we have staff right across the street. This will be easy. We allocated, we're like, ah, we could probably turn this around in like 10 days. Probably could have just called Savage. She said no.

Christian posted a video on YouTube, he's like, welcome to our 4-day turnaround. This is our 4-day flip.

Yep.

By 4 months later, we're still here. We're opening in a week, maybe.

I don't know, this video airs in 2 months, so if we're still not open, you know how well that's going. But I'm living there until it's done, so it will be done. Savage when you actually turned these, you've actually done this on your first one ever. How long did you think it would take? How long did it actually take to get it totally ready to rock?

Yeah, so my first one ever, I was like, it'll take the weekend because it was new construction. I was like, I still get furniture here. Little did I know furnishing a 4-bedroom house takes a lot more than a weekend. It did— it was ready to go though, so it did only take me about like a week and a half just to furnish it all. But it's definitely by far the fastest one I've ever done just because I didn't have to touch anything besides bringing in furniture. But it does make you realize how many like little things go into a house. Like every little thing in the kitchen you have to remember. And there was months went by before I really got it all dialed in because guests would be messaging me, you know, every weekend saying there's no can opener, there's no bottle opener, you know, things like that. And it takes you a while to get it dialed in on the first one for sure.

Yeah, I've been in Airbnbs like that.

I was like, oh, we got wine and we can't—

I'm like, I can't open this. This is horrendous.

Yeah, it's frustrating.

Yeah. So you got that all dialed in. What's the hardest one you've ever had to do?

Probably the one that I just decided to renovate myself. Uh, it took like the whole summer. It was my second ever rental though, so I had a lot of ambition and a lot of time. So I renovated that one myself. It took— it was like a 3-month, 3-4-month process.

Okay, good. So we're not the only ones who take 4 months to get through a, uh, renovation. And we did a lot of the stuff ourselves. We did have some help with staff on the painting and the wallpaper, but even just managing people from afar on agreeing on how best to remove wallpaper Tricky subject. Lesson there, you need to have one decision maker on site.

It's okay to be wrong, but make a decision.

I would have been okay with any of the options minus the one option of let's just mud right over the wallpaper. That was, uh, that was seriously considered.

I bought some rentals that have that, and really so frustrating. Yeah, I'm like, okay, I guess this is staying here forever. And then there's like cracks in it, and you've tried to like patch it up, but you're not gonna take off everything because it's just a huge mess.

Now, is it all worth it? Because the amount of time we're putting time into that place over there, you put 4 months into yours, and that was the longest one it took. Sort of the 15 flex you bought that you're converting back into short-term resort living. But is it worth it? Are the returns there? Do you think the cash— because you've done both, you know, short-term and long-term— you think the returns are worth doing all that?

Yeah, I would say so. Besides the one unit that I've placed tenants, long-term tenants in, all of my long-term tenants are because they were inherited. I really think that it's worth it. Whenever a unit becomes available, I'll always switch it to Airbnb because it usually takes about 2-3 weeks depending on the level of renovation you want to do, which different for an Airbnb versus if you know it's going to be a long-term rental. So I would say all in, more realistically, about a month to switch over to an Airbnb. So that's a month of long-term rent essentially that you'd be like missing out on. So maybe, you know, $1,500 a month you're missing out on by having it off market to convert it to an Airbnb. And then you're looking at, you know, $3,000 per bedroom as a rule of thumb for furnishing. So then you're usually around like $15,000 all in to get an Airbnb set up, but you are making it a lot of markets 2 2 times or more the amount of cash flow that you are a long-term rental. So it doesn't take long for that investment to pay off and it's worth it.

That makes sense. So you said there's a difference between a long-term rental or short-term as far as the actual renovation setup. What are the key differences? Like, what's the biggest things that are just totally different?

Yeah, I would say when you're renovating for a short-term rental, you want to keep in mind how it's going to photograph because that's obviously how you're getting all your bookings is how photographable it is online and how like you're able to pull someone into your listing off of that key photo. So whenever I'm doing an Airbnb, I'll have like at least one really punchy like feature that photographs really well. For one of them, it was a full tiled fireplace that was like this really funky tile and then like a bright yellow couch, because I knew that that would just photograph really well. You just want to have like a wow moment somewhere because people want to stay in an interesting place when they're on vacation. If they don't have to live with it in their own house, they think it's cool to like stay there on vacation and experience kind of a more unique place to stay. So that's what I always kind of into when I'm doing Airbnb renovations.

So we'll just have to get a photo of Christian. Nobody has Christian out there.

I'll do the, uh, the Jesse Leal. I'll just be laying on the table. Shout out Jesse. But, uh, so we need a big wow feature, and you can get more dramatic and more interesting than you would on rental, where you just want it to be— generally speaking, you want to be effective. Yeah, cost-effective, fairly generic, so they can decorate it themselves. On rentals, really the biggest thing that we do to add pop is just nice stone countertops and stainless steel appliances. They're pretty generic, but sometimes you can get one that's a little showy. It's like, hey, it's a cool Cool space, nice stone. Outside of that, it's pretty much the same flooring, same white walls. They're not that fancy. That's why it's enough.

Yeah, a cool way to do it if it's like your first Airbnb and you're trying to save money is just paint your own mural wall that you know will photograph really well. I've done that for headboards, just like a whole like desert scape as a headboard that I just did a wall art mural myself off of Pinterest. I'm not super creative. I can just copy other people's stuff, which anyone can do. And it probably cost me like $100, but that's like my key photo in one of my rentals.

Love it. If I attempted to draw a mural on our wall, we would not—

it's got a tree. Be a good way to ruin a wall.

That sounds like something for someone else on our team to attempt. Okay, let's talk the real management and running of these. You've been on a few series, so if you haven't seen the past 3 episodes, go back because this is the end of our 4-part series.

Hi, Sam.

Yep, Adios Resort, buddy.

I see you.

But, uh, going through that, when did you have to start building teams and adding systems beyond just yourself? Because you'd mentioned before you self-managed it for a while. You building out your cleaning company, you're self-managing How far can you go by yourself before you work?

I even cleaned, like, did all the turnovers for my first one.

I didn't know that.

Yeah, because I like— we weren't making a lot of money. I mean, not in the rental. The rentals are doing fine, but like, you know, it was a little while ago and we were like, every time we outsource this, we're losing $100. I would pay myself $100 to do the turnover every time. So that was quickly not sustainable, especially as you just like are valuing your time more and things like that. After one unit, I started to hire out the cleaning and And now my business basically relies on my cleaner. She's a co-host with me on all my listings, so I don't ever have to tell her when a turnover is. She just goes in and takes care of everything. She's like my eyes and ears on the property. She sends me pictures of any damaged items. She basically is my property manager, but she's my cleaner. So I would say that's definitely the key thing to have when you're self-managing is having a really good, responsive, and helpful cleaner.

That's definitely been how it is for us here at the resort. We could not do it without the team and the people we got here. We live or die with them.

Yeah, I am a huge fan of the predictable stable income, which is why we built our whole thing on multifamily. And then when we got into short-term, it's with the resort, which has staff. The only other STR we have is the house right across the way.

And we're really good at keeping it empty because it's not live yet.

When it goes live, we actually, it's a 3-unit building.

Triplex.

Yep. We have a long-term tenant on the bottom, standard tenant. And then we actually moved one of our staff who wanted an upgrade in their living situation. We moved them over there under the condition that, hey, you're going to keep an eye on the property. You maintain the keys. Oddly enough, all of the switchboards for the power for the top unit, the hot tub and sauna, and her unit are all in her unit.

I really didn't— we couldn't really rent that out.

We have on-site staff who's going to help us with the turns, who actually lives in the building. We had to add some efficiencies because, like you, I don't have time to drive— well, for us, an hour and a half south to clean a unit for $100 and then drive an hour and a half back north. We have to have systems. If you're going to do it, plan on building a business where you can actually scale it, which means from day one at least have a plan of how you're going to make this Yeah.

And then after the cleaners too, I was like, I can't keep spending a month per unit furnishing and setting it all up and everything. So then that's when I moved into getting some like Airbnb stagers on, you know, on my side to help me set units up.

That helps a lot because we did all of our staging ourselves.

Don't recommend.

That is a poor use of time. However, we bought a resort and then we bought a house and we spent what we had on the resort, the big triplex house.

Don't impulse borrow $900 grand to buy an empty building. Lesson learned.

Will make money, it will make sense.

But when you do that as an impulse, there's not a lot of thought into it.

We did it because we could afford to do it because the rest of the rentals could spot it. That's not a great reason to make an investment. Do I regret it? Only 49% of the time.

Does your wife regret it?

Every day. Ask me how I know. Oh yes, frequently. Why did you do that? Because we can. That's not a great reason to do anything. It's one of the weaknesses in seller financing. If you learn how to buy anything you want— I'm addicted When you can buy anything, you have to have the discipline not to buy everything. Uh, we learned that with that project. That being said, it is going to be very profitable. It's an awesome expansion to the Robinhood, and we're really excited to share it with you guys. For your rental portfolio, you're now going to take on this whole resort, and it's how many units again?

15.

Okay, 15 units. You're going from managing 7 or 8 to 15 additional units. You're using your existing team. What else are you planning to do to make that possible? Because I imagine that just takes a lot more, a lot more manpower. And by imagine, I mean I'm at a resort where it takes a lot of manpower.

Yeah, and that's going to It's all part of growing and learning. And with it this year, through the renovation, and I have someone who is, you know, going to be the proper— the renovation project manager who will be out there regularly. And as she phases out, you know, in over a year from now, once it's— she's going to be there for the renovation and then to get it up and going. And then once she's trying to phase out, we're going to assess what we need at that point and see how many staff, what staff we need at that point. Obviously trying to make everything as automated as possible to eliminate overhead, but that'll kind of be an assessment that takes place when she's looking to transition out.

Fantastic.

Well, that is it for talking short-term rentals with Investor Sav. So we have to say goodbye to our resort buddy. However, again, join the squad, make sure to follow these past few videos, subscribe to the channel, and subscribe to Investor Sav and her Packwood Resort on YouTube so you can follow the journey and do it for yourself.

Yeah, thanks for having me, guys.