Maximize Your Airbnb Gains With Proven Strategies

Welcome to Short Term Rental Riches. We'll discuss 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. We're here every week talking about the best ways we can manage our short term rentals with quick actionable advice. And I have another expert with us here today. I'm excited to have Daniel Rustin on. You may have heard of Daniel before from his book Optimize My BNB as a best seller on Amazon. He's got an excellent background. I know him personally, he's a friend of mine. And welcome to the show, Daniel.

Thanks, Tim. Nice, Nice seeing you. Thanks for having me.

Yeah, I'm glad to, glad to have you here. There's just a ton of information out there and about. Right. It's. It's hard to decide who we should listen to and what we should read. And I know you are an expert. I know you have arguably one of the top performing properties in Medellin, Colombia, where, where we met, I believe, for the first time. And so I'm excited to pick your brain today. Do you mind just giving us a quick background.

How you started in the short term rental business?

Yeah, sure. And you make a valid point. I was just thinking about the other day. You know, we've been in this game for a while, but it's like, I'm sure if there's new people in there coming into short term rentals, the problem nowadays is like information overload. It is like, who do I listen to? Do I listen to the property managers? Do I listen to the traditional real estate experts? Do I listen to the hospitality professionals? Do I listen to the short term rental? It's like, yeah. So hopefully I can clear up some of that. I just, I'll clarify who I'm speaking to, who I think of myself as. And I, I think of myself as speaking to hosts, short term rental owners with a few properties. One, two, three, five, maybe ten maximum. Okay.

So I got started in 2013. I was. When I worked at Airbnb for three years.

That's right.

I then, yeah, I then. And I became a host as well. In fact, I hosted the couch in my living room, which is the same exact way that Airbnb got started five years before. In 2008, I was, I was working at headquarters in San Francisco. So I rented my couch out. That's how I became. That was my first dip into the actual hosting side of things. And since then, I've had a lot of, I have a lot of experiences from working at a property manager manage company. I started my own property management company and then I wrote this book, Optimize youe BNB in 2018. It became the bestseller in the category. And something that I'm more proud of is it's. You can see on Kindle how many times it was highlighted. And my book was highlighted 11 times more than the second most selling book, which to me tells me that there was a lot of value given, which was the point of the book. And the other thing that I do is I live in Airbnbs, as you know, as a guest. So I am permanently an Airbnb guest. So I have that view of, all right, how to be a good host, how to find good properties, but also what is the guest actually, what are their complaints?

And in 2021, I purchased the Belmonte Penthouse in Medellin, Colombia, which you referenced in the introduction.

Yep. Yeah. So you got a ton of, ton of background experience.

And you know what you're doing. You know, I've seen your property. I know that it does well and I know that you're in this day in and day out. I guess it's an Airbnb is not what it was when we started.

Right.

It's become a little more competitive. And so a lot of our listeners on this show are trying to scale. That's one of the points of the show, to give some actual advice so we can delegate tasks so we can run our properties most efficiently. What would you say is the most important or maybe like the top two things that have changed now versus someone starting maybe like two, three, four years ago?

Yep, that's a lot has changed. The biggest thing that has changed is Airbnb used to be where you would, you would rent out the space you already had. Maybe you had a second home, maybe you had, you know, an in law unit. You'd kind of, that's how you kind of did it. Fast forward to the last year or so and in the future, you know, projects are going up, constructors are building projects for short term rentals. Investors are looking out from day one, not only like their market, but what market is the most profitable, what size of home, what neighborhood, what features does this home have? That's the biggest difference is it's getting more professional. And so that is also why you're seeing a lot of this Airbnb bust, hashtag is going around. And I think what's going on there is these past couple years, a Lot of influencers came in and they, you know, they have, they have some extra money. They bought some rentals and locations that are super popular. They probably overpaid. They probably don't know exactly what they're doing. And they lost money. And they, they posted videos and they're like, oh, Airbnb is not such a great deal. I lost money. Which is an interesting phenomenon going on the last six months.

Yeah, no, it's certainly changed. But just to go back from your point that you see it from the guest side, because you basically live in Airbnbs as well.

Right.

And I think that's a really exciting thing that's happened is that a lot of us are living in short term rentals now. It might seem a lot more common for those of us living sort of that digital nomad lifestyle or that are working 100% virtually, but the reality is more of us can work virtually now. And so more people are living in short term rentals. And I think that has attracted all this, you know, huge investment money and venture capital and these projects, like you said, now people are building projects just for short term rentals. So that is really exciting. I know you've got a new book coming out and we are definitely going to jump it. Well, let's just jump into it right now. I believe it's called Profitable Properties, Airbnb Insider Secrets, is that right?

That's correct.

Okay, well, that's the question of the day, Danny. What is it? What makes a profitable property.

A profitable property or less.

No, I'm just kidding.

You. I'll try and do that in.

Profitable Properties is about running your rental more like a business.

And what that means is we're being more strategic. We've already discussed, you know, we're going in from day one about a lot of the, you know, you're the first decision you make, which is what market to go to, what property to buy in. That's going to be your most important decision because you're either going to set yourself up for success or you're going to be fighting an uphill battle the whole time.

And so, yeah.

That'S the short summary of profitable properties.

Yeah.

I mean, yeah, that's fundamental to any good real estate investment.

Right.

We got to be in the right market. And it's even more so with short term rentals because there's more things that we have to look at. We have to look at regulations and we're not just looking at maybe how many people are living in a city. But we need to have a general idea of how many people are going to be traveling there as well, and if there's seasonality and all these different types of things. So what might be some of your top characteristics that you look for in a profitable market?

I define. And this is, this is part two. This is the first main part section of the book, because it's so important and it's the place you're going to start. I divide markets into two categories, discovered and undiscovered. A discovered market is the ones that are well known. They're famous, you know, Miami, New York, San Francisco, and they have a huge incoming guest. They have a lot of guests. They have a lot of demand for the rentals. They also have a lot of supply, which is rentals. I like in general undiscovered markets, which are just not as well known. So that, that means there, there's also less guest arrivals. But typically what you find is there's even fewer rentals.

So it makes it just easier to succeed there. And oftentimes you can make just as much. So these are gonna be, these are gonna be markets where they have, you know, a few guest demands. It could be anything like a college or a medical facility. Maybe a city with a bunch of conferences coming in.

A national park could be at some place, maybe someplace within two or three hours from a few bigger cities. This is how I think about it.

I'm pretty conservative with all my investments, and most of them are in larger cities. I like to look for places that actually have like 500,000 or more in population. And we know that Airbnb can work in all different types, all different sizes of cities. I mean, and sometimes they work really well when there's only a few of them.

Right.

And they're in some of these undiscovered markets. But as a conservative approach, I always, as a conservative investor, I like to have backup plans a lot of times. And so you mentioned a couple of mine, which is medical. You know, I think medical is a great, long lasting, fundamental. That's not going to be going away in investment market. But how do you feel about investing in a smaller market? So maybe undiscovered, but smaller, with a very small population that maybe doesn't have some actual industry there.

When you say smaller, I think of true vacation rental market, where the actual population is small, but there's a draw in vacation rentals, and that's, that's going to be okay. If, if we're just talking about like a small city, you know, 500,000, I would say, is depending on if it's a metropolitan area. But 500,000 is for me also kind of a small city.

For it not being a vacation rental market. But for me the, the actual population of the city I guess matters less. The interesting thing about me is I don't and I think you as well, all of your properties are most of them outside the US be in 2023. After I get done finalizing this book, I'll be starting my search in finding a profitable market and property here in the usa which I don't have a property here yet. I manage, but I don't own a property. So that'll be an interesting experience figuring out what is what in this giant country.

Yeah, there's so many different markets and they change all the time and the regulations change all the time too. One of ways a lot of people are getting around some of the regulations. Maybe talk about this in your book, but I'd love to get your opinion on it is that a lot of people as we know are living in short term rentals and so most of the time it doesn't become a regulation risk if you're renting out 30 days or more and it becomes a medium term stay and it's not technically a short term rental anymore. What, what are your thoughts on the future of medium term stays and do you have any input on maybe some investment tips if someone was looking to go that route?

You know what I do short term stays. I was just on a virtual meetup where it was, they kind of, they said they phrased it as short term rentals versus medium term rentals. And I turned out to be the only short term rental guy there. Everyone else was medium term and I actually it was kind of new for me. I didn't know this was such a large industry, folks just focusing on 30 day rentals which, which is okay and I definitely get the strategy there. But short term rentals for my strategy I'm looking at a market where I can rent out on it and I even go down daily. You know my listings, they're available on a nightly basis. Yeah. So that's what I'm looking for and so are yours. Yeah, that's if you have your processes figured out that is going to be your most profitable by far scheme to this short term rental business. So I'm really not interested in looking for markets that are 30 days or more typically. Also it's what I found as a guest is when there's markets where there's only 30 days or more, the prices are really great for on the guest side because that's your only option. And so a lot of these people just come on and they kind of get a rental when they can. There's a glut of supply. Typically.

Yeah, yeah, it's a, it's an interesting space. I mean, I guess it's different in every market. Like I know I have some properties in some markets that are pretty seasonal and so it's approach that I use when it's not the high season and then when it is the high season we switch to a nightly rate model because the properties stay more booked during that time at a higher nightly rate. But yeah, it's an interesting, interesting space.

Well, let me ask you because I found this was interesting. For short term rentals, if you can make yourself pet friendly, that's gonna get you higher occupancy and price. But for medium term rentals it's required. So do you, do you on your rentals, are they already pet friendly or when you go medium term, do you change it to pet friendly?

Well, as far as I know it's as, I mean we have medium term saves that aren't allowing pets as well. But it definitely boosts your occupancy with a medium term guest because people, if they have a pet, they can't leave it at home for five days a week, two weeks. And so by allowing pets with the medium term stays, you definitely can attract a lot more guests for sure. But yeah, but then you got some other things to consider, right? And you got to make sure your property's protected. So it's a, it's an interesting space. You know, this industry is just changing so quickly and there's so much, so many new software tools. I'm a huge fan of implementing software tools and, and we use a whole bunch with my portfolio. Do you have some favorites?

Yep, I've got a bunch of favorites. Let me bring it down to five. I'll say my essential five. You need a digital lock, a digital guidebook which is like a house manual pricing software.

A way to capture. This is a new one, a way to capture guest information.

This is really nicely fit into what I said earlier. In 2023 we're running our rental more like a business. So people are now buying short term rentals. They're just buying a house that happens to be good for short term rental. When I go and sell a house, if I have a list of a thousand prior guests and a website with thousands of monthly views of social media with thousands of followers that has real world tangible value. So I'm now putting a focus on collecting guest data and also on my direct booking website, collecting guest data there who aren't. That's another thing we can chat about. You know, on Airbnb, you can't collect a lot of. You can't. If someone's looking at your listing, you can't collect any of their data. But if you have a website, if they're looking at your listing, your website, you can assume they're interested. You can at least collect some of their emails. And the last one, no surprise, is a PMS system for message automation, principally.

Yeah, yeah, I would agree. I would say all five of those, you nailed it. Those are, those are essential for me too. And I like what you said there about we're running businesses now and if we're building direct bookings, for example, we have a big list of contacts that can really increase the value of our property. So things are different where five, 10 years ago, if we had a short term rental and we were trying to get a loan on it, for example, a lender wasn't really going to look at the short term rental returns, but now they definitely do. And when it comes to selling the property, as you mentioned, having that information can really increase the value of our property. Excellent point, excellent point. Well, Daniel, you've got this new book coming out. Can you tell us some of the differences between maybe what the new Profitable Properties book has compared to your last book, Optimize My bnb?

The biggest difference is Optimize your BNB was specific for Airbnb and it was aimed at intermediate and advanced hosts. Whereas Profitable Properties, we take a step back, we look every aspect of the phase. It's a big book, it's going to be around 400 pages and it's meant to be read per section. So yeah, this new book, it will have the. Some of the new sections are Vacation Rental Market Analysis, which is how I tell you my strategy on identifying a market. But not only that, just as important, a micro market, which is like a neighborhood, but even more specific and the size of the home that you want. That was another thing you mentioned. You like to have your rentals in bigger cities. That's a profit. There's winners in every market. And so what you probably did is you didn't just stop at the market, you probably even looked at, well, what about the micro neighborhood? What neighborhood am I going to go to? And what size of home am I going to go to? Which matters just as much. There's supply and demand all across those different.

Subcategories. And then I have a section about pricing, which is a huge, huge topic on my consultation calls. It's 80% of the time they just want to talk about that. I have a whole section on that. On. I'm trying to demystify it. It's really not that hard. It does take some learning, just like everything else, you know, So I hope that's helpful. And then I have a section on direct bookings, which is also a very hot topic nowadays and I think into the future as well.

Yeah, no, those are all important things. And the things that I love reading. I'm a big reader and the thing that I love about it is that we can pick up a book and we can learn or take the secrets, you could say, from someone that's dedicated hours and hours and hours of their lives or their career and they've compiled it all into a book and we can read it all in a few days. And I think that's just magical. I don't know who says it, but there's some quote out there that says the book we don't read can't help. Right. So it's like. And these are important things. I think Airbnb has gotten more competitive or short term rentals have gotten more competitive, but there's still a ton of opportunity as long as we're managing our properties professionally. So we're, we're going to make sure everyone knows exactly where they can go to find your book and we'll make sure we get links out. And I am excited to read it as well. But what would you say maybe to someone that's getting started in today's market and that's never invested before? Do you have any quick advice?

I'll answer that, but I've got to say this because I feel the exact same way on books. You've seen the Matrix, right?

You remember that scene when I think her name is Trinity? She like buzzes up and there's a plane in front of her and they're in a situation and she's like, you know, download me with how to fly a plane. And her eyes roll back into her head for like three seconds and they download it and then she knows how to fly a plane. You remember that scene?

Yeah, yep.

That scene does the same thing with.

Like karate or something like that too.

Right? Exactly. Yeah, exactly. And that, that is. Books are as close as we have gotten to that scene where you can take someone, he has a decade. I have a decade of knowledge now, and I'm putting it in this book. But I Read a lot. I have in fact, 1, 2, 3, 4, 6, 7, 8 books in front of me right now.

They're magical. They're really magic. Any subject. So anyways.

What some tips for new hosts coming in starting in 2023.

Yeah.

Okay.

Anything that comes off.

What I want you to think about.

Yeah. What I want you to think about if you're a host coming in 2023 is think about how you can differentiate yourself from your competition from the get go. Now I'll be a little bit more specific about that. Everything from the online listing, you know, look at your competition. How can you upgrade what your competition is doing? Typically competition, let's take titles, for example. You know, they're having all of their titles look the same. So how would I do a title? I use the title to just advertise my most important amenities and features, but not the thing that's shown in the COVID photo. How I do the text is similar. The text is actually, it's kind of a realization of me recently. The text is actually the most important section of your online listing because if a guest is actually reading your text, they're just about to book because they're not reading everyone's text. They're looking at more photos and reading text. If they're reading text, they probably just got a few listings left. They're probably having trouble differentiating these two listings and they're reading. Just, just give me a little bit more. How do know which one is my best option? Here's the price, here's what I'm paying. I want to know what am I getting. And a lot of hosts, they have block text paragraphs and they have the most important features buried inside there. Guests aren't going to. You don't need the typical sales process. You know, typical sales copy is like explain the guest's problem and then how you have a solution, you know. No, no, just bullet point it out. Let them know what are they getting. Bam, bam, bam. What are they getting?

Yeah, excellent, Excellent point.

Yeah.

And something we incorporate in our listings too. So you, you've got a ton of experience, Daniel. How can people find you?

People can find me via the. The brand name Optimize my Airbnb. You can type that those three words in on Google and my YouTube will come up. My Instagram, my website. And I want to give your readers something special. I'm going to give them a 50% discount code to my new course. I'll be. The course will be released in conjunction with the book. That'll be good for Three. Valid for three months.

Okay, awesome. Well, we will make sure to get the links in our show notes and I'm excited to read your new book, Any last, any last words, anything you want to leave us with?

Let's see. Change your. A lot of new hosts. Also, they're employees. They typically have desk jobs and there's nothing wrong with that, but it's a mindset thing. If you're an employee with that employee mindset, I talk about it in the book changing your mindset. If you're an Airbnb host, a short term rental host, you're a business owner now. You need to, you need to have an executive mindset. You need to be planning for str. Not putting out fires, but planning how to avoid fires and how to be more strategic and improve your business slowly but over the long term.

Great advice. Great advice. Yeah. I think to sum it all up, we're running businesses now, aren't we? And we've got to run them professionally. As long as we do that, there's still a ton of opportunities. So thanks for coming on, Daniel. We'll make sure we get all of your details in the show notes so our audience can find you and look forward to seeing you soon, maybe later this year in Colombia, seeing you in person.

Yeah, for sure. I'm looking to it as well. Thanks for having me on and maybe I come back and I hope I've offered a lot of value to your audience.

Yeah, for sure. Thanks for, thanks for coming on.

Ciao.

I've dedicated years figuring out how to.

Manage my personal portfolio remotely and it.

Wasn'T always easy and it took a long time. But now my amazing team can professionally manage my properties without me. And good news, our team can also manage yours. Let us save you the stress and headaches and some money by offering you an industry low fee. Find out more about partnering with us. Head to str.com, hit the property management button, answer a couple quick questions and meet with me personally. That's strriches.com rest easy knowing that with my team, your properties will be in excellent hands.