Is it Too Late to Start an Airbnb in 2023?

How are your occupancies doing this year in 2023? I know mine are down slightly. Not all properties though. As we know, all properties are different. All markets are different when it comes to real estate. But in general, the national average is down a little bit. So we need to be doing everything we can to boost our occupancies. I have one other place you might want to consider listing your property. Stay tuned. Let's jump right into it. Welcome to Short Term Rental Riches. We'll investing in real estate, but with a specific focus on short term rentals. Quick actionable items to acquire, manage and scale your portfolio. I'm your host, Tim Hubbard.

Welcome back to the Short Term Rental Riches podcast. I hope your occupancy levels are staying at a good level, at least a level that's allowing you to cash flow, right? And hopefully cash flow much more than you would be able to with a traditional long term rental investment. That's why I got started in short term rentals and that's why I'm still investing in short term rentals. But the economy has changed, right? The last couple years with COVID it really changed supply and demand and they're not really reliable numbers for us to look at. If we're going back trying to forecast a potential new investment, we really shouldn't be looking at 2020 and 2021 because those were just wild years, right? I remember I got stuck out of the country where I was living. I couldn't even really go back. The airline closed down and that happened a lot, right? We saw a huge ramp up in the supply in vacation type rental, short term rentals. We saw a huge decrease in the supply of urban and work type short term rentals. So the supply and the demand is always changing. But as we're getting into more normalized occupancy levels and more normalized paths of travel and dare I even say lower. Yes, I think they are lower. As we enter this economy and people are getting a little more squeezed right now with inflation, there's been a lot of big layoffs, unfortunately with a lot of big companies. So things are a little tough for a lot of people out there and that is affecting occupancy levels. So we need to make sure that we're doing everything we can to boost our occupancy levels. And one of the ways we can do that is by being on as many platforms as possible. When I talk about platforms, I'm talking about not just Airbnb, but having our own booking website by being on VRBO and homeaway and booking dot com. There's lots of other sites out there. We want to be on as many as possible. But every time we go on one of those, it creates a new set of challenges. They all have different procedures, different policies, and those are things we need to consider. I want to talk about one today that's really completely out of the realm of a short term rental. Actually, this is a listing site where your guests are not actually going to even sleep at your property. I'm talking about Peerspace this week. I don't know if you've heard about it before, but essentially this is for people that want to list their properties. Short term rentals are perfect for this. On an hourly basis. Yeah. Not on a nightly basis. So there's a lot of opportunities with this. There's also some challenges and we're going to cover all of those today. First of all, I just want to start off and give you a little more detail about what it actually is. It is a website, a listing site set up very much like Airbnb to allow us to advertise and to list our properties not, not by the night, but by the hour. And so as we know, lots of people travel to short term rentals for lots of reasons. I happen to think that the more reasons someone would want to stay at your short term rental, the less risky of an investment it is. Right. The more demands going at it. And there's a lot of reasons for people to want to use your short term rental, but maybe they don't need to stay the whole night. What are some of those reasons? Well, I know we've had lots of people do photography shoots in our properties. Of course they were running the whole night. I am not in fact on Peerspace yet, but I might consider it for a few properties. It's not going to work for every property. I don't think I will get into that. But this is one way we can boost our occupancy. You could even make more money charging per hour a few hours than you could for a whole night. And you have a little less expenses. So what are the reasons some people might want to book your property just for a few hours? Well, again, photography, events, parties, any sort of work related thing where people aren't staying overnight. Film crews. There's lots of reasons and I know a lot of you out there listening have amazing short term rentals, ones where people would love to gather. Family reunion, for example, where they might want to spend just the day. But everyone's not going to need to Stay the night. There's. So I suggest that you look into this. If you think you have a property that would attract guests just for a few hours, I think you might be surprised. There are a lot of reasons out there for someone to want to stay at your property just during the day. So Peerspace again is going to allow us to list our properties by the hour. Now they've got everything set up for us, so we don't have to worry about the contractual agreements. We don't have to worry about collecting their payment. They're going to do all that for us. They do charge a 15% fee, but they're collecting our payments for us and we get paid before that person enters our properties. We can send them our check in instructions, whatever. It happens to be very similar to what we would with a short term rental guest, although they don't have the right to stay there overnight. I know you might be thinking, tim, this is crazy. I don't want to host parties. Renting by the hour sounds a little fishy. I've heard of hotels and things doing this. Now we're not going down that path. We can vet our guests just like we can with our short term guests that stay overnight. So we get to pick and choose. So I really think you should consider this and I know you might be concerned about the protection side of that. We always are with our properties. So they have a million dollar liability policy in case there are damages. They also have a review system, so you can see people that have used this before. If you've been listening to the podcast for a while, you know that I do live events occasionally and I'm planning on doing another one this year, maybe in a different location. I've done them all the past four years in Memphis, but I'm considering using this to look for a new event space. I think there's some cool ones out there, so check it out if you haven't already. It's called peerspace.com and I want to give you just a few more benefits here with Peerspace. One is that a lot of times when people want to rent a space for just a few hours, a work event, for example, it's during the week. So if you're one of those properties that's staying booked on the weekends, but you're really slow during the week, well, this might be a good opportunity for you to collect a little more revenue. You might also have a property that just got hit with some strict regulations. I have a friend that has a beautiful wedding venue and had multiple short term rental units on that property. And unfortunately the city came around, said, you know what, you can't rent these as short term rentals anymore, but it's still the perfect place for weddings. And so this could be a very good option. They can still do the weddings there, but as long as no one actually stays the night there, well then you don't have an issue with transient occupancy. No one's staying the night there. Make sure you check your local jurisdiction that there's no commercial type regulations in place. But this is another way that you might be able to get around some short term rental regulations. A couple other benefits. If you are thinking about renting out by the hour, at least checking it out, you're going to have a little less expenses or you should have a little less expense, I would say because someone's not using your property for the whole day, your cleaning expense, people aren't sleeping in your beds anymore. So you don't have to have such a high cleaning expense with linens and things like that. Again, it depends on the type of space you have set up. If, if you've got a space where people are going to throw a rager, well, it might be a little dirtier and I wouldn't suggest that. So if this is at piquing your interest, I highly suggest you really think through who your guest avatar would be. Is that someone that wants to use your space for a couple hours for a work meeting, for a photo shoot, for a wedding, for whatever it happens to be. You want to make sure that you know who you're attracting first and that is the same for any real estate investment. For example, someone's not going to build a class A apartment building and put it in a D class neighborhood. They're not going to attract people there. Right. So this is really important when it comes to any real estate investment. We need to know who we are attracting. Okay, so a bit on the opportunities. It's worth checking out a few negatives. Well, it's a different listing site, right. Which means we have a whole bunch of different listing policies and we got a few things to figure out. If this is something we want to do. It's very likely not going to integrate with your property management software if you are using one already. Which means that if you want to take a reservation, you're probably going to have to do it manually. Remember that they're going to take the payment for you, so that'll make that part easier. But you want to make sure that you block your calendar and you don't get a double booking. And it is just a new platform, right? Or newer platform. I know they have been around for a while and they've had millions of people use it. So it's not that brand new. But take a look at it. If you're in a place that just got regulated but you've got a beautiful property, well maybe you can get around those regulations by running out by the hour. Remember, you're probably going to have a few less expenses and you might actually be able to charge more by the hour for just a few hours than you could for the whole day. So as we continue into this economy that's a little slower than before and the occupancy levels are dropping a little bit, we need to do everything we can to make sure that we are exposing our properties. We're getting as much visibility as possible so our occupancies stay high and our returns stay high as well. Until next time, I hope you have a fabulous week and I'll talk to you soon.

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