Serial Entrepreneur Club – EP65: The World of Airbnb Startups

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Today we are talking about hacks and tips and tricks that you can use to help succeed in the Airbnb business. And this is interesting because it’s a personal topic that Michele and I, um, wanted to talk about and, uh, really wanted to get some feedback for, and also get the community talking about what it is that you can do in the Airbnb business to be a success. And so if you’re in the audience, let me say this right outta the gate. This is about open mic today. We’re we’re gonna open up to everyone. Uh, please raise your hand. Come on stage.

We’re talking about Airbnbs. If you’re thinking about doing an Airbnb. Raise your hand. If you are, have an Airbnb, please raise your hand. Cuz we want to hear about what’s worked and what’s not worked with your [00:01:00] Airbnb. I mean, it’s interesting to see that. This market has exploded. I call it a paradigm shift.

And here in the incubator here in Fort Lauderdale, we run about six or seven companies. And one of them is a company called escape club. An escape club, uh, right now is about seven different buildings that we own, that we rent out as a vacation rental. And we’ve been going through the process in the last two, three years.

Um, and there’s, uh, Dave wat joining us as well. We’ve been going through the process of figuring out how to run an Airbnb business. So again, two, I need two things from you in the audience right now. First of all, if you’re running an Airbnb and you have some dos and don’t, please join us on stage. If you are thinking about running an Airbnb, please join us on stage and tell us about your idea, your concept, because we want to hear [00:02:00] that’s what this is all about.

It’s a very cool business, cuz quite frankly, it it’s one of those businesses you can do on the side. You can have a fulltime job and our case, we have multiple companies, tech companies, et cetera, but yet we run that on the side. So please again, raise your hand, Michele. I know you have been working hard to launch your Airbnb in Fort Lauderdale.

I’ve seen you now. What for four months, five months first, can you just tell us the story? Tell us from the very beginning of buying the building, why you think it’s a good, a good location and

I can’t hear you. Alright, so I’m gonna jump right in there since. Looks like somebody was calling Colin and I can’t hear him. So yeah. I mean, first of all, I’ll say I’ve learned a lot from Dave wat. Who’s [00:03:00] here on the stage as well as from Colin. Who’s here about Airbnb. In fact, Dave, um, has him and his wife have a phenomenal, um, Airbnb management company.

So I’m gonna tell you my journey. And, um, you know, I’ll look forward to hearing suggestions and other, you know, feedback of what other people are doing in questions. Of course. So, you know, just sitting here working so hard, you know, of course, I, I noticed that my friends here on the stage, well, they’re making like really like good money, you know, a good income flow I’m I’m not gonna say passive.

Okay. And in my case, I’m not gonna say it’s a passive income flow. Because we do do a lot of work on it ourselves and with other people, you know, that help us with different services. So what I had learned was okay, [00:04:00] location, you know, location is absolutely crucial. Okay. So the way I looked at location of course, had to also be through the lens of what I could afford.

Right. Of course, if I could afford a, you know, a big house on Fort Lauderdale beach, that’s one thing. So I got my budget together and then was looking very, very hard for a location that I felt would be a good property within those parameters. So my parameters were. That people could come and hang out and that the neighborhood would be accommodating.

So what did I mean by accommodating? I, you know, I didn’t want there to be like the police being called and me being shut down. So for me, what I decided would be maybe an area given my budget, which I’m gonna tell you what it was, was like $500,000 would be, you know, [00:05:00] not in like a class, a school district.

But in a very, you know, close to the beach, cuz we live in Fort Lauderdale, but not on the beach and not like the best neighborhood where you have like, you know, let’s just say a suburban house with, you know, your children. So I found a property that was on the very edge of a very good neighborhood. But it’s back in the back of it is some semi, you know, um, commercial and on one side is semi commercial.

Actually, it’s not semi it is commercial. So I only have really one neighborhood neighbor, which is to the side, because again, you know, I envision. Even though I know it’s against the Airbnb rules is that people do come, they wanna spend time outside. It is Florida. Like we said, it does get rowdy and it gets loud.

So location was critical. Price was critical. Um, and then, you know what I’ve learned from my friends here, as well as just, you know, [00:06:00] reading and studying is, um, a, as Dave said, it’s all about. Beds and heads, right? Dave beds and heads. So I wanted to find the biggest, most accommodating for the number of guests that I could.

So I was able to find, you know, a three bedroom house. Actually it was owned by, um, Zillow. It was part of their portfolio that they were mandated to, um, you know, liquidate. So, you know, it took me like three months because it was a corporate seller, but I, you know, worked really hard to get a good price. I actually ended up getting the house for $440,000 and then, you know, just started putting our finer touches on it.

Um, like Colin was saying for us, um, And, and I’m going based on his and Dave’s, you know, best practices is what we found is, you know, we treat it really like a boutique hotel. [00:07:00] So when you come to our Airbnbs, Um, we don’t want it to be like, oh my gosh, I’m staying in your grandmother’s house. You’re you literally are staying in a, you know, a house that is designed and outfitted top two bottom, not one, you know, um, detail is left out.

That is like a boutique hotel, high quality betting, cuz we all know people. You know, want good betting. Like that’s one of the biggest complaints you see about Airbnbs is when people have bad betting. So, you know, highend betting super immaculately clean was the other thing, which obviously is all within our control.

And then, um, like we said, we said location. So, you know, for me, I got in there. Actually my house actually needed more work than I thought it did. Um, even though we did have an inspection, we found that unfortunately, the [00:08:00] inspector we used was not very good. So, you know, we, we are putting money into it actually.

Between furniture and complete renovation. We’re probably about putting about $150,000 in it. And that is so you know, that we don’t have to worry about guests being upset. Plumbing doesn’t work. This doesn’t work, that doesn’t work. But having said that is it’s brand new, you know, top to bottom, um, high end furniture.

I don’t mean like Italian furniture, but you know, good solid commercial grade furniture that won’t break, you know, um, bedding is all standardized across the properties. All white. All the same quality hotel quality be, um, towels, linens, um, you know, soaps, everything, everything is completely standard, gonna look pristine.

So, you know, that’s where let’s start Michele. I mean, we are we’re, you’re, you’re, you’re [00:09:00] unpacking a lot of things here and, and, and Dave, I’m gonna ask you to chime in here as well, but, um, you know, let’s talk about location buying your first Airbnb. We have a thesis, as you know, is it it’s gotta be either urban or close to the beach.

It’s gotta be something unique and different. Uh, we don’t want to be in the typical residential neighborhood with the, like you said, a class schools where you’re gonna pay very high rates for the properties. You actually wanna find a, a sort of a niche, um, where it’s a little urban downtown, maybe not the safest neighborhood.

Okay. And maybe in the, but that’s where people, you know, are, or close to a beach or close to some type of, um, some type of amenity or, or, or something that can really attract them. And, you know, it could be the, it could be the desert, it could be mountains, it could be whatever it is, could be ski Hills [00:10:00] skills.

Right, right. So locations, let’s just unpack location. Let. Unpack that and get your thoughts on that. Dave, uh, Dave, by the way, runs a company that manages vacation rentals called vantage. And, uh, they do it under the Dave and Cape brand. So they have a brand for the people who actually rent the units and then they have a corporate brand that they work on with that they use for, um, companies.

And they actually do 98% of all the management of an Airbnb. So when we talk about Airbnb, we don’t necessarily mean you have to do a lot of work. And that’s the interesting thing, but we’ll get to that in a minute, but Dave, can we, can you add to this, um, topic with respect to location and the importance of figuring out the right location when you start your Airbnb?

Sure. Sure. Thanks for getting me on. I’ve got, uh, Kate’s with me as well, so, oh, so we have the David Kate team, the famous one. We’ve got the duo. We’ve got the duo. Yeah. [00:11:00] Um, so you guys kind of hit it. Well, I mean, it’s really comes down to what people are looking for. I mean, we talked to many different people.

Um, people have different goals, right? So some people it’s for ROI, others it’s somewhere. They’ve always dreamed of owning a place and they wanna supplement the cost. If you’re looking from an investment standpoint, you know, I think you just gotta determine what ROI you’re looking for and then we can easily, and there’s ways you can find out what the income was and, and, and kind of work backwards from there.

And Kate would jumping, cuz she’s been doing a lot of this research, some of the new rollouts with Airbnb’s algorithms that we’re kind of. Kind of interested in as we move forward with this, as far as targeting different locations, do you want to sure. Yeah, I’d be happy to. So Airbnb rolled out a release in summer, it’s called the summer 22 release and similar to what you were just saying, call and it really focuses on the location of the types of experience that a guest could have.

So as we think about kind of [00:12:00] an urban center or a beach kind of traditionally is where at least in Florida, we would, we would, uh, look at Airbnb is now pointing. To different types of experiences. So that might BR be a little bit more broad things like off grid, cabins, um, things, um, like, um, like the, a frames or different types of houses.

So we’re traditionally someone would search location and date now with the summer release, they’re searching by experience. And so, yes, we completely agree with kind of the urban center beachfront and then kind of building off of that. Now some of our biggest platforms are allowing. To even broaden that a little bit by location to hit on these different types of categories.

So it’s super important as you’re finding the Airbnb that you’re in a location or a category, uh, that will play into the algorithms of Airbnb or VBO to a lesser extent. So I think that also, like when you’re looking at re returns and if, you know, stretching budgets and [00:13:00] things like that, that gives you the opportunity to kind of get outside of those core markets that can be.

Prices at sometimes and kind of get on those little submarkets or Ansley markets outside to kind of get a bit of an edge and maybe, you know, bump up your returns a little bit as well. Yeah, it’s interesting cuz um, I hate Airbnbs and I hate hotels and yet there’s a combination of the two that really works.

Um, I just spent, um, two weeks in London. and I stayed at a five star hotel, beautiful place, the fan, you know, all the people in tuxedos, they meet you at the door and da, and I was depressed. I was, I was horrible. I hated it. It was small. The rooms were small. It was, it was like from 1920s or something. I don’t know whatever it was.

And I was, you know, and then, and then my daughter got COVID and that’s not good. Um, and then we decided to, uh, [00:14:00] extend a week. So we had to find a new place to, to move to cuz everything was sold out in London, almost everything. And we found a town home, but that was only $1,100 a night, which is for London, very cheap for a three bedroom town.

uh, and it was under a brand called Shael and it was phenomenal. Like we actually came in, were like blown away, 1500 square feet, right across from herds, downtown in London. And it had the very nice bets. And for me, I think that’s the reason. Number one reason I hate Airbnb and I’ve stayed at like many of them.

And I just can’t stand. I can’t get a good night’s sleep. They, their heart is rock, you know, they’re just, they’re I think a lot of people who run Airbnbs think, oh, you know, I’ll just throw the, the stuff that’s getting old, you know, I’ll just they’re renters. Anyway, they’ll destroy it. Anyway, we might as well just give them the, the crappy furniture and the crappy beds, but that’s not what we do.

At, uh, escape club, is it Dave [00:15:00] with all of our properties and, and, you know, we’ve been working on this formula together, myself, Michele and Dave, about how to create the perfect Airbnb. But Dave, can you talk a little bit more about what we’re doing? Like what it is that we do at these vacation rentals to make, and you do more, you bring in designers, you you’ve elevated way more than I’m.

Like you’re the mastermind behind it, not me, but can you add a little bit more and, or maybe Kate? I don’t know. Who’s the mastermind with us being or Kate . Yeah, I guess we can both touch on it. So, I mean, basically it’s like, and, and Michele mentioned either it’s just standardization. You know, we wanna know that.

When you stay at ANCAP property or a vantage property, you’re getting the same experience, whether it’s in Fort Lauderdale, it’s an upper Captiva or you’re in Pennsylvania, you know, wherever there’s properties, that’s, you know, the same experience across the board. So, and we’ve, we’ve managed to kind of sift through all the different vendors we’ve worked in different hosting masterminds and kind of got the best of the best, [00:16:00] um, for, for, I would say price.

And, and quality we’ve kind of found that perfect combination, um, that we can deploy across all the same units, buy and bulk and manage easily. Um, so the main things are the beds and the linens, you know, we use Western heavenly beds. Um, we use different brands for our linens, and then we use, um, another brand for our organic soaps and lotions and amenities and consumers.

So why Dave, why do you do those things? I think it’s, it’s quality. It cause you, when you walk in it’s it’s standardized, it looks nice and it’s high quality and it, it’s also some name dropping you can use in listing. So we can use that copy in our listings. So when people reading through, we look different and we are different.

And when you get there, you’ve got that same consistent experience that you get at a, at a nice hotel. So I think in the past, There’s been this big divide, right? So when Airbnb got started, it was your mom pops. It was a side hustle. People were just renting out their [00:17:00] basements or, or their, or their, uh, you know, mother-in-law suite in the back or whatever, have you.

And like you’d mentioned, they’re just going the dollar store, throwing whatever they have left over into their property. And just, you know, hoping for the best. And then you’ve got, what I think we’ve talked about is it’s kind of, it’s kind of transitioning into what we call professional hosting, which is what we do.

And we can give, go into deep into what the management things you should look for if, if you’re looking for a management company, but you’re bringing that level of service from a hotel and combining it with, with a, with a at home experience. So now, like us, I’ve got two young children. So for us hotel rooms are kind of super uncomfortable.

We need to make food for our kids. We need to be able to spread out, have our toys. So we like to stay at home, but we also like comfortable, nice amenities. So we’ve kind of got that formula. We bring, we meet in the middle. So we’ve got that at home experience, all the, all the things you expect of your own home, um, when you’re travel.

[00:18:00] Abroad, um, even down to things like every, every bedroom has a 65 inch TV. Um, every bedroom has a Western heaven leg, bed, every kitchen. Oh, and how much time did we spend talking about the stupid remote? The convers? Yeah. Right. Because so many problems with our first Airbnb and we’re like just three remotes or two remotes.

And now what, tell us how you solved that. Yeah. So we basically, we use Roku TVs. Uh, the reason being they’re dead simple to use they’re they’re affordable and they have one remote. So we used to have direct TV. We had all the, we had all the different remotes. Now we’ve got it to the one remote, and then we do all streaming.

Channel. So that eliminates all the confusion. We used to get calls all the time. How do I get the satellite on, how do we switch? It became like a, a nightmare and, and not as good of experience for the guests. So when they come, they use the one RKU remote, they’ve got access to Disney plus Netflix prime.

Uh, [00:19:00] sling. And I think we do direct, we added just added direct TV stream as well. So they basically get all the options and more with one remote. And then what we also do now in all the living rooms, we do, um, a Raku sound bar. So they get a nice kind of movie experience in the living room. Well, and again, that ties in with a TV and operates with a single remote.

So that’s just one little thing that. took away a layer of inconvenience for the guests and makes our lives when there are people that don’t know how to use it. It’s easy to train our staff, how to troubleshoot that one remote if we’re not able to contact the guests. Yeah. It’s interesting. So you, you know, by combining the sort of hotel quality with the vacation rental experience, it becomes a, it becomes phenomenal.

And I loved my place in London. In fact, we’ll be going back next. Uh, we have a place up in Canada that we use as a vacation rental. We have three, um, two duplexes in a Plex in Fort Lauderdale. We have four buildings in north [00:20:00] Captiva and we have seven or eight or nine building lots. I can’t remember how many building lots we have in north captive.

And we’re actually looking at building, uh, uh, purpose specific vacation rentals. Um, so it’s, it’s. You know, when you think about it, you know, it might just be a way of, you know, generating a little extra income from your, you know, uh, a second home. But if you really take it to the next level and you run it like a hotel, what are the results like?

What’s the benefit? I mean, the ultimate benefit is, is number is one thing, right? David’s reviews or, or maybe Kate, you want to talk about that? It’s like, cuz we had the first management company we brought in, they were disaster. And we had some bad reviews, but somehow you, you two have got a formula that gets us very high reviews.

We’re 4.8 4.9 5.0 and the last in our beach house there, one on the beach we’ve had now eight or nine reviews, all [00:21:00] five star. How do you do that? Yeah. So our goal is five star experience above all else. And so as we think about, so things will go wrong in the house. And so our main philosophy is how do we service that guest as if they were in a five star hotel?

So we will try to go above and beyond to, you know, internally with our team it’s to wow. And amaze the guests. And so even when things do go wrong, we’re still comfortable asking for and receiving that five star review. I think from, you know, property management perspective, you see a wide variety of kind of different management philosophies.

And our kind of main philosophy is guest comes first, five star service leads to a five star review, which then enables us. To maintain higher, you know, average daily rates and higher occupancy, which yields, you know, higher income for the investor or the owner. So from our perspective, if we can focus on that one thing as an amazing guest experience, [00:22:00] that then will put all the other, you know, puzzle pieces in place.

So that owners and investors are happy. No, that’s that’s awesome. And we just had a question on the. . Um, and again, if you’re in the audience, feel free to raise your hand, come on stage. It’s a community here. If you run an Airbnb, tell us about your, your Airbnb and what makes it unique and different. If you stated stayed at an Airbnb, tell us what you liked or didn’t like about the Airbnb.

Please. Come on stage, raise your hand. It’s an open conversation here. We’re not, you know, we’ve got some experts on the stage here. We’ve got some real. Um, life experience. Uh, and we’re gonna share that with you, but we have a question from the chat and the gentleman asked about art. Um, he said he stayed at a really, uh, an Airbnb had really cool art.

And how important is design in these Airbnbs? And that’s an area that I’m not as big on, but I know you two, when I stayed at some of the Airbnbs that we own. They were phenomenal. Like you, you, you had a [00:23:00] designer and you did this. Just, it was just amazing what you’ve done at, at, at a number of the Airbnbs.

Can you just talk a little bit about. Sure. I think we’re, we’re finding that it’s more and more important kind of as the months and years go on. You know, as Dave was saying before 20 18, 20 17, when we first started getting involved in Airbnb, it maybe wasn’t so important, but now, especially in larger markets, Where you’re seeing some oversaturation of, of different, you know, types of listings.

The design is becoming critically important. I think guests have higher expectations for the experience that they are going to receive. And so by having a top quality design, it enables us to market the property. Really really well. And so Colin, you’ve probably seen over time, you know, we’ve focused in, on design more and more, cuz that again goes into the marketing, the guest experience than enabling the higher returns.

And so. From an artwork perspective. I think art is very important. It should, the home [00:24:00] from our perspective should feel like a second home away from home with all of the details, the area rugs, the artwork mirrors, you know, et cetera, should feel like a cohesive space with a particular theme. So I don’t know how many of you guys have been to Disney, but some of those Disney homes do really well with coming up with a particular theme, you know, right down to the door knobs and door handles, you know, out on the beach.

And we’re working on one called turtle escape, where, you know, there’s gonna be kind of turtles throughout the home, uh, as part of your escape escape club portfolio, where there’s that particular theme. And it just enables the guests to feel as though they’re kind of part of the experience in their trip.

Um, so I do find that it’s more and more important and I’ll just jump in. You. You want it to feel special? Like people show up. They’re just, they it’s somewhere. They they’ve never experienced before you want them to feel like they’re they’re on vacation. And also you can’t forget about, I mean, major part of the marketing.

Is the listing itself and, and those photos are, are crucial. So people are [00:25:00] scrolling through and if you’ve got those wow images that stands out across the board, that just kind of opens it up and gets ’em started. And then they get the experience, they get the communication, the setup, and when they arrive, they get that, that wow moment when they walk in the house.

So from the day from our idea, our idea is from the moment. First view the listing to all the way staying to their home. They just have the most incredible experience that they’ve never had before. I think it’s cool too, because. There’s it’s a very high compliment, too many people come in and they’re like, oh my gosh, this is like nicer than my own house or cleaner or funner than my own house.

Like, that’s kind of what you want. Right. When you go on vacation, you really want to get your money’s worth and have that very, very special moment. Um, Uh, at least I think, uh, you know, with families too, Dave, I know you have a, a young family is making it family friendly. Right. That’s part [00:26:00] of the experience as well.

Yeah. I know that you yeah. Have done. Yeah. And that’s part of our thing, especially on the island, cuz most people are traveling with family. So. We make a point of making one of the rooms, a kid room. So we we’ll have a, you know, two sets of bunk beds, so you can sleep four kids and we’ll make it theme. So we’ll do fun wallpapers and fun light fixtures.

You know, we’re gonna start adding like Sony plays stations to the TV. We’ve got game set up. So the family feels comfortable. And I know as a parent, I mean, my kids are getting a little bit older now. Not having to worry about lugging around, um, uh, what you call pack and plays and strollers. And we even do the, um, what they call the, uh, monitors.

So we have baby monitors, we have baby cups and toys. So a family can show up and have everything. They need to have a relaxed with vacation. They’re not lugging all that extra stuff for well, so that’s important to us cuz we know, especially in our locations with the bigger. A lot of the home, a lot of the families coming have have young children.

So they make that fun for [00:27:00] them is, is icing on the cake for the kids. And why do you like dogs in.

Why do we let dogs in? I think two things, ones, dogs are a family member and we want the whole family welcomed and we want them to feel comfortable. Two more from a financial perspective, not a lot of listings ha allow pets. And so it’s a differentiator, uh, that allows us to increase occupancy in three.

We’ve tested it over time. Dogs do very little damage so everyone’s very, always worried about, you know, the dog dander and hair and, you know, different dog messes. It does happen, but no more than, you know, kids or other adults. And so, so long as you have trained your cleaning team sufficiently to how to turn over that property.

Well, we’ve not had any complaints about dogs, so there’s, I’ve found very little cons into letting dogs into the property. And again, People feel welcome that they can bring their whole [00:28:00] family and it enables us to increase occupancy cause it helps us stand out. Uh, I, I think it’s a smart idea and I know that when we do the renovations we use porcelain and things like that, that, you know, really you just over, you can’t destroy this stuff.

I mean, you build it correctly from the beginning or you renovate it and, and it lasts a long time. Agreed. And, and all goes back to. Having good management and you’re cleaning it. You know, you’re doing quarterly deep cleans and you’re scheduled maintenance and just stay on top of things and the place will look as good as the day you launched it.

If you keep up with it. So one of the reasons why I told you I hate Airbnbs and I hate hotels. You, I love the combination of both is the case of hotels are expensive. They’re small. Um, those long hallways, just, it’s just the experience sucks if you really think about it. Um, I mean, if every, anybody asks you to have an apartment with a room [00:29:00] that’s like tiny in a building that, I mean, you’d never want to do that, but the reason why I hate Airbnbs is cuz the beds, you, I usually cannot sleep overnight.

I’ve I’ve left Airbnbs many times cause I just couldn’t get comfortable to beds. We talked about that, but what I love about the Airbnbs is that they’re more, there’s more, there’s an experience. So you don’t just offer like a kitchen and a living room and a TV. You do a lot more, you add Tiki huts and you add games and you add like, you know, it’s, it’s more about, and I know Michele, you’re looking at doing a mega Tiki hut with a ping pong table and a TV, a huge TV.

I mean, so can you add to that experience? Element that people, of course there’s the, the beach or there’s the city or there’s the whatever. Like I understand that. But can you add, like, what other types of experiences do you try to integrate into these Airbnbs?[00:30:00] 

Yeah, I mean, sorry, go ahead ahead. No, you go please. Yeah. Uh, for me, what I’m thinking, and I don’t have as much experience as Dave. Is just like, like, like what would just put the icing on the cake? Like what really differentiates, cause you know, more and more people are doing this. It is, you know, there’s a lot of listings right.

For these kind of properties. So how do you make it really stand out for us? Um, we have a very kind of open area in the center section of the house. So we’re making it like, it’s like a very classy party house almost, or a family reunion, or, you know, you could even, you know, have a small wedding there. You know, there there’s a lot of like cool ideas.

I’m even thinking about people that wanna travel and work remotely. I’m actually thinking about putting, um, monitors. You know, that people could bring their [00:31:00] laptop and hook up to monitors and be able to work. It’s just like, what are those little extras? that you, you know, could just set you aside and, and like Kate said, give you that five star and, and I’ll just add on here.

Like, there’s a lot of things we’re talking about, but the, you know, it also is heavy, heavy duty, um, supporting, you know, your guests supporting them way before they get there. Helping them navigate the area and make an amazing experience supporting them, obviously when they get there. Um, you know, little surprises around the place.

Like I know Dave on their beach house, like they do, you know, like a really high end bottle of champagne and a basket full of, you know, sundries, like little things, you know, you need, but people just are not accustomed to getting. You know, otherwise, so yeah, for the outdoor space calling. Yeah. I mean, I, I want [00:32:00] people to really use the outdoor because we’re in Florida, obviously people like the outdoor, um, one of the things that I’m, you know, planning doing is I wanna also make a lot of, um, I’ll call it Instagramable moments because you know, people like to share on social media and that helps you, and it helps them feel good about where they are.

So I’m even looking at doing some murals, some, you know, cool murals that people could take pictures with a little hashtag like cool, fun things that just sets us aside from other people. Thank.

Michele, I think you hit the nail on the head from my perspective in Dave’s perspective. The only other thing we were thinking about that you didn’t mention that a lot of guests are searching for right now is a differentiator is kind of exercise rooms. I think it was super important during, uh, especially during kind of COVID lockdowns places to exercise, but we’re still seeing that as a trending search item.

And so I agree with. [00:33:00] Instagramable moments, all the little things that go above and beyond games, et cetera. But I think the only thing else we might add is, you know, a Peloton room or exercise equipment that seems to be really trending right now. I love that. That’s so funny. You said that I love that Kate it’s.

So it’s so funny. You said that. Cause I was doing, um, uh, a renovation up north in Canada and we had the designers this week and we’re working on it. and I asked them to, to put in a, in a, in a, in, in an exercise room, cuz I have one of my house here in Florida and I wanted it just personally. And I had no idea there was actually a selling feature for an Airbnb until you just mentioned it.

Interesting. Like, so it’s, it’s something that we are adding to our Northern, um, cottage. We call it cottage in Canada. I know in us they call it cabins. But uh, I never knew that that was actually. um, that would actually help the rentals. I was doing it for myself. . [00:34:00] Yeah, I think the two things that are currently kind of really highly searched right now is home office space, which Michele, you hit on, especially things like screens and other amenities that people can work from home.

And then also the exercise equipment. And we’re even seeing, you know, on, especially on some of the escape duck club, uh, listings is kind of longer stays. And so I think that all kind of feeds into that experience for that guest avatar. People are wanting to come stay 2, 3, 4 weeks work from home and really live there.

Um, and we’re seeing that, you know, continuing to trend into this year and I’ll jump into like, I think when we talk about, you mentioned your building locks, building lots. When we have a chance to go into design on those, that’s where we want to think through, like, our goal is to. The ultimate vacation home with that design.

So we want to think through every little nuance, like how can we make and not think of it from this is where I’m gonna live for the next five years. So how, how am I gonna [00:35:00] spend a week, two weeks, three weeks here? Um, so every square inch will be thought. Through thoroughly, how can we maximize, you know, dead space with maybe pocket offices, pocket gyms, little playroom or theater rooms, or that also come, come at it from a investment perspective, you know, be wise with the, the money being spent and keep it into kind of a small package.

You know, I don’t know what the square footage will be yet, but I know we’ve talked through kind of budgets and we’re gonna work within those constraints, but we wanna make something. Replica and repeatable over and over and just create that, you know, basically the, the ultimate vacation rental. Yeah. I just pined the, uh, sunset escape.club, which goes to an Airbnb listing that, that you two run.

Um, and, uh, you know, if, if you’re in the audience, you wanna check that out. You can look at it, but we haven’t talked about the marketing of it yet. The photos, the whole, I mean, you [00:36:00] just, I, I, I almost thought when you put up that listing. That he almost oversold this the beach house. I mean, it looked like it looked too good and then that could backfire and get, you know, bad reviews.

But the reality is, um, marking’s a big component of this. So can you talk a little bit about that as well? Yeah, I’d be happy to. Yeah. Marketing is a big component. There’s a, you know, a couple different channels. I think obviously Airbnb V R B O are the top channels. Uh, but then we can also do direct bookings and direct listings, but, you know, regardless of how you go about reaching the guests, You know, marketing is very important and photographs are, you know, probably the most important thing.

Airbnb is still where we get the majority of our traffic. And so from a marketing perspective, we think about a couple of things. Number one is the headline that’s become a little less important with summer 22 release, cuz it doesn’t show on the search results. But as soon as someone clicks in, you have about 50 characters to really get.[00:37:00] 

To that guest exactly what you want them to know. The second would be the photographs. They should be professional, high quality photographs, and your top five should show the guest everything you want them to see in the house. And so sometimes we’ll look at listings, review listings for other hosts, where you have two of the living room, because it’s a really nice space, but really you wanna use those top five as your most important real estate to show off that entire house.

Cause that’s what shows on a cell phone when people are scrolling through. And then from there, once we get into the descriptions, kind of there’s just as much, you know, importance in the descriptions, kind of just top things that come to mind. Bullet points. People have a very short attention span. So especially in, you know, the, the description area, you really wanna hit the top bullet points.

So if they’re only reading the first 250 characters, you’ve sold them on the best thing in the house. And then down below into the detailed description, you can get into more details. Um, but yeah, I think. You know, from a marketing [00:38:00] perspective, it is super important. The other thing I would say from a marketing perspective is to really research and learn a little bit about the Airbnb V R B O algorithms.

In terms of placements, there are some, you know, tips and tricks about touching your listings, changing the order of the photos. Um, you know, not blocking dates, et cetera. There’s some things that you can do from a listing perspective to help the placement, um, of the listing, which is also, you know, important to get eyeballs on the listing, which then leads to, uh, secured bookings.

Yeah. And I just posted another one that we own, and this is what in Canada and, and you can see, we have a domain name. We throw a domain name on it’s 10 bucks, a. Um, and the reason why I, the reason why I originally did that is I got so many people asking me about it. And they would say, well, go to Airbnb and search for the location.

And it was hard to find. And so branding, how, you know, how important is branding? I know I, we saw sunset escape. We’ve got a sign in front of the, uh, the [00:39:00] vacation rental, sunset escape. Um, in up in Canada, we have Ross point.club as well. How important is branding? Can you talk a little bit about that? Sure.

Yeah. I mean, I think it all, it just kind of, um, brings people kind of closer to the home, you know, makes it a little more personal. They’re staying somewhere special. And even for us, Being on, especially on the island. It’s so expensive, right? It’s like just a name. You just gotta come up with a name and you just gotta throw it on there and you gotta sign up.

I mean, it’s not expensive. Yeah. You can have a little bit of swag, you know, if you want to give out CUI or, or pens or anything that something unique to the house you can do as well. Um, but especially for us in the island being, that’s a small property, it’s also. You know, once you get people talking, you get people rebooking and it also helps kind of brand yourself on the island.

Once you’re established and people understand the quality of the, of, of the home, you’re putting out the, the experience they’re [00:40:00] getting. It’s easy to remember more so than an address. So you just want everything to be kind of memorable and you have something describes the property, why they’re there. And I just help it makes it more of a personal experience to find.

And it’s, it’s super easy to do.

Wow, you guys are amazing. You too. I shouldn’t say you guys y’all we don’t see y’all are amazing. You would say, I mean, what you’ve put together here and your business. And, uh, and I know it was, uh, a little bit of a risky business. It was something that you decided to do and jump into and just go all out and, and, uh, it seems like you’re getting some good traction and you know what you’re doing.

It’s awesome. Again. Uh, congratulations on your success, Michele, any other thoughts here about the experience, the, the branding, any of the stuff I know we we’ve, we’ve, uh, been, we’re leaning a lot on Dave and Kate here, so yeah, I’m gonna say a [00:41:00] couple things and then I’m gonna throw in kind of something that’s contrary to what we’ve talked about.

Um, first, just adding on to what Kate was saying about photos. I actually worked on a rental platform at the time that was owned by eBay. It was called rent.com. We actually did a lot of analytics around photos and we found if you had photos and you had really good photos, you would rent out compared to the ones that didn’t three X more.

So photos it’s really, really about photos. The second thing is, is we had very. Um, specific email drip campaigns, which I think, you know, we can all do that too. That are looking to get into Airbnbs. It helps tremendously like really set up a messaging sequence. Um, it will ensure people get there. They’re they, you know, if they have special requests, that’s waiting.[00:42:00] 

Um, if they have problems you’re responding and then afterwards you’re communicating email, right? Because you wanna keep them as a client and like us, we want them to stay at multiple properties. So we really look at it like a lifetime value. Now here here’s, here’s the crazy thing. I I’m just gonna throw this out there.

I, I, I’m one of those people that loves to, you know, look at Instagram and, you know, see what people are doing in the space. Um, you know, Airbnb, whatever it is, entrepreneurs, one thing that I’ve seen. Kate Dave and Colin lately is this trend where people are really, um, you know, like advocating that you can rent houses then with the permission of the landlord.

Do an Airbnb as a way to get started and as a way to get started making money and to grow quotes, air quotes, your real estate empire. [00:43:00] I I’m really curious if, um, any of the three of you, you know, have thought about that or have any, you know, thoughts on that. Yeah, we have thought about it. Michele, we work with, you know, within our mastermind, there are some, um, hosts that really have gotten started that way.

I think our perspective is in our market, at least the numbers don’t necessarily work. Long term rentals generally, and touristy parts of Florida are already quite expensive. And so we don’t find that there’s enough meat on the bone or margin less left for us to take the financial risk, to have to pay that rent and get an upside.

I know in other markets it does make a lot of sense. And so I think for, you know, us personally, it’s a direction that we’re not a big fan of in our particular market, but I think it’s very market dependent and also kind of the, the financial position of the. Or of that host whether or not they wanna take on that financial risk that way, or in another way, if that makes [00:44:00] sense.

And the models it’s called master leasing. So if you hear it, when you’re searching around, it’s called the master model. Um, and when you’re getting started, there are a lot of upfront costs as well. Cause you’ve got a first, your entire place, which, which you don’t own, you know? So after a year, the own, the, you know, the, um, owner of the property decides he doesn’t wanna do this anymore.

You’re outta business. You’ve lost that cash flow and you’ve got, you know, probably 10, 20, $30,000 invested into the startup of that property. So it’s definitely a model, something we’ve looked at, but have not engaged with in our markets. So it’s interesting this, this idea of an investment. So why, you know, we have these houses that we’ve bought, they’re a hundred percent dedicated.

Um, that’s one model. I know another model is, you know, your. Home or a second home, but why would we not like why vacation rentals versus just rented out as an apartment are, you know, are you, you know, and I, obviously I have [00:45:00] sense of the answer to that, but I was just curious if you could add some, something to that as well, Dave or Kate.

Yeah. I mean, I, from our perspective, we think that it’s just yields higher income. And so if we look at kind of a traditional one bedroom rental in Fort Lauderdale, if you were to do an annual traditional lease, I don’t know, Dave, maybe 1700 bucks a month, something like that. 18, 2000, somewhere in that range.

Or what do you exactly for a traditional one bedroom, right? Yeah. Yes. Where we can generate, you know, double or in peak season, triple that amount. And so I think from a straight investment perspective, the income can be higher. And I think it’s also just kind of a feel good. We really just like it. I love getting the reviews and an exchanging, you know, stories with the guests and just learning about their vacations and their families.

Definitely kind of a feel good business when you’re in the day to day and being part of building lifetime family memories. And so I think [00:46:00] that’s kind of our, our perspective. And I think, I think also too, from an ongoing maintenance perspective, It gets you in the property more often, right? So we’ve got someone cleaning it every two to seven days.

It’s being cleaned. Again, we’re able to walk through the property whenever we like we’re able to make more income to make better improvements, have more CapEx. Like you can keep the properties nicer, where you may have, uh, a long term renter in there. He could, he could be tucked in for, for three days. Or three years, sorry.

And we, we don’t really get, get in there to do anything. Um, and you’ve got those big turnover periods, you know, he may have left the place a disaster and you may take a month or longer to, to get that place up to a rentable standard again. So I think for upkeep it’s better and it just, it keeps a property nicer and it gives you something to be proud of.

We always say, that’s, it’s, it’s having a portfolio. You can be proud of somewhere. You’d send your family and your friends and they could enjoy it as. Yeah. So, um, the [00:47:00] costs for a management company. So you can do it on your own, like Michele does, and you’re gonna have a lot of headaches. I I’m, I’m convinced of that.

I mean, that’s maybe the, the, the argument for, for going with long term rentals is you just, you know, you rent it, you don’t have to come back for three years. You know, obviously these little things along the way you may have to address. But it’s not this constant, you know, neighbors complaining and, or not neighbors, but your guests complaining and they want this, or the satellite’s not working or, you know, it’s obviously a much higher touch environment, which is why, you know, I, uh, you know, hired your company to manage my units.

And I know we’ve, we also are a partnership in a, in a unit we own together, but just what are the costs to do? What are the management fees generally for companies? What should people be looking for? sure they range. I think some of the, you know, there’s different types of models. And so there’s some models where you can just hire kind of a national company to [00:48:00] do just the marketing it’s, you know, generally kind of from a call center type perspective to kind of make an equation kind of high capacity, you know, low personal involvement, but it can be as low as 10% for that type of a model all the way up to.

35 or 40%, you know, in your very touristy areas with very good, uh, rental companies. And so the range is quite large. I find that kind of most. Hosts are around the 25 to 35% right now, kind of your standard host. That’s gonna be doing a full service model, everything from pricing, revenue management, um, setup of the home supplies, linens, you know, standard amenity inventory, guest, marketing, and operations, kind of that full service host is about 25 to 35% on average.

Wow. I feel like I’m getting a bargain. We won’t talk about that [00:49:00] anyway, Olivia, but somebody stage here, you stayed at one of these vacation rentals, Olivia you’re on stage. Did you have any thoughts to this topic at the. Yes. I’ve actually stayed at two different ones. And let me tell you something. It’s like being in the little castle, like I didn’t have to worry about anything.

I usually travel with my son and it’s all taken care of. And Dave is always like helping me with my last minute, like arrangements and flight changes and stuff like that. So all I can say is like, My experience has been always amazing. Um, but I did have a couple questions. Like I don’t, well, I’m thinking of a million things right now, but like, if I’m starting, like besides the investment and all the business, part of things, like what would be the advice or what do you guys think it’s better to like, maybe start with, I don’t know, like listing your property on Airbnb or making up your, creating your own [00:50:00] website and like doing a more traditional.

Digital marketing or marketing or just, I don’t know. What are your thought? I’m happy to jump in. I think Airbnb is gonna be your fastest route to getting heads in beds. It’s an extremely powerful platform. And so for starting out, I would say number one is Airbnb kind of number two would be V R B O or other large OTAs.

And then number three would be a direct booking channel, direct booking channels. They do take, you know, time and money to actually make conversions where you kind of get. Is built in with Airbnb. So my point of view would be definitely lean into Airbnb first and then expand if you’re just starting. Yeah.

I know we’ve talked about, you know, off season trying to target different segments, like, um, conferences, um, especially when you’re able to get. You know, a larger number of bedrooms [00:51:00] or, you know, what we also have done is we, we, we position, we try to buy, um, properties, um, beside them, beside each other so that we can, um, do, do multiple listings.

I’m I’m bringing up two concepts here, but one is. This idea of, you know, sort of alternate market segments to fill your off season like corporate events. And the second is, you know, we try to hack, I guess don’t tell Airbnb this, but I don’t know if we’re allowed to do this, but we set up multiple listings.

So if we have like, uh, we have one place, that’s got a Plex and a duplex beside. Total of seven bedrooms. So you could rent the entire thing. You can rent a duplex in a Plex, or you can rent a single unit. And now you got three listings on Airbnb or V R B O. Um, do you wanna add to that Dave or I’m not, not supposed to talk about this probably, but.

No, it’s completely above board. It’s called a [00:52:00] parent child listing. It is definitely allowed only like word of warning to anyone kind of new doing that is the calendarization on the back end. So kind of operationally ensuring that you do have a property management. System or a calendarization system. So you don’t get double booking.

So I don’t know if Olivia, if you’re in that position or if that would apply to you, but totally allowed, it’s called a parent child listing. Um, but you, it does open you up to double bookings. If you have multiple channels at your marketing on that’s great advice. Thank you. Yeah. This has been, this has been great.

I’ve learned a lot today. I’m gonna go back and listen to this episode. Um, let’s just do some final thoughts. Uh, Michele, going back to you, your live case, um, you’ve got this building you purchased in Fort Lauderdale from, you know, Zillow when they were dumping the inventory. It’s in a bit of a weird location, [00:53:00] but works well.

You’re building the experiences. You’re adding the Western heavenly beds. you’re um, you’re, you’re running this property. Any other last thoughts that last, I mean, you invested a lot of money. I mean, it’s like a third of your wealth or whatever it is. It’s a lot, you’re not nervous about this. Of course I’m nervous.

Is it? I actually think of it multiple ways. Like when I went. You know, when my husband and I actually did the investment, we actually looked at, you know, different scenarios, you know, like what were the top ways to make money? 1, 2, 3, if what would we do if it went all bad? So before we jumped in, we looked at what was the potential.

We did, you know, real, you know, research on Airbnb and some other platforms. Then we did research in terms of, okay, if that doesn’t work out, what could we get for rentals? So we have all kinds of backup plans, [00:54:00] right. You know, we, we can’t afford to lose a bunch of money, so we’re trying to proceed very cautiously.

And then fortunately for us, we, you. Here in south Florida, we’re in a hot market. If all else fails, we could sell it. And at minimum recover all of our funds. So for us, we went in, you know, with our business Bo model and made sure that we weren’t going to lose money. So just, you know, know what you’re getting into, have a budget and, and have, have backup plan.

Yeah. And cater Dave. I mean, there’s air DNA. I know that’s a tool aird.co where you can punch in your address and it gives you an estimate of the it’s free, gives you an estimate of, of how much income you can make from a vacation rental. Uh, any thoughts about that or anything else we’ve talked about today before we close out?

Yeah, I guess we can both sign off, but I mean, obviously, you know, we’re all in on the industry. We’re pretty bullish on the whole market going [00:55:00] forward. And, you know, we’re all in as a family, you know, we’re both full-time in on this business and, and we invest full-time in this as well. Um, I think the horizon looks good.

I think people’s traveling, um, patterns are changing and are people looking for this experiential stays, which I think only we can provide on a small level. So we’re just trying to stay hyper focused on like the areas, you know, we’re working in. And just kind of dominate those segments, think air DNA. The nice thing about this industry is you can kind of get a good forecast.

You know, all that information is public data. So the air DNA, you can get a pretty real time idea of income you expect to generate on your investment. Um, so you can pretty make, make a pretty good sound decision. And if you put in all the, the good practices we talk. You can and provide the experience and provide the customer service.

You can outperform air DNA [00:56:00] pretty confidently. Well, that’s cool. And then also we never even talked about mortgages or getting loans on these. There are some banks that, um, are dedicated. We’re working with one right now called bright star. And, and I know that they’re looking at the vacation rental, but there’s still a bit of a traditional commercial bank.

But there was one that you introduced me host. So. They just look at the only look at the actual vacation rental income, they don’t go into the whole backend story of your income or your, and all that other stuff. What was it called? Host financial host. Financial. Yeah. So they’re, they’re one of many, they’re starting to crop up.

So. If you start Googling, uh, Airbnb investment finance, you’ll start getting served ads like crazy. So there’s, there’s multiple options now and they’re all kind of commercial lenders. So they’re not looking at your debt to income. They’re just looking at the performance of the property, um, and then structuring the deal that way.

So. You’ll be able to accelerate your, your [00:57:00] portfolio growth using somewhere like that and not be limited to, you know, your debt to income and what you do personally. And I think it’s projected income and it’s usually based off of that air DNA is my understanding, right? Yeah. So before in the past, these commercial lenders were pretty hesitant on the Airbnb.

Data. They, you know, they were look looking at traditional sources, like long term rental comps, and we all know that the Airbnb revenue outperforms that. So the, the leverage you get is gonna be much better when you work with these commercial guys. I mean, you’re gonna pay more points. um, but I think it’s worth it in the end, if you want to kind of accelerate the growth of your portfolio.

Right. And if you, you know, if you do have the income from a, a job or something else, a stable income, you can get a traditional loan with the Fannie Mae or Freddie Mac as long as less than four units. Yeah. Um, and, and then that has some advantages of lower interest costs, et cetera. Um, so that’s something to think about as well.

Well, this has been a great [00:58:00] show and. Honest. Yeah, I, I just told, uh, David, Kate, I texted them this morning and said, Hey, we’re doing a show on this today. Hadn’t even thought like through the show and. Realize we really need an expert on the show and, and you two have delivered. Amazing. We just really, really appreciate you.

Just jump in on the call, your vacation like that, and, uh, helping us out. I know a lot of people here, um, in the room and on the replay or in the podcast. You know, really do appreciate all the, the tips and tricks that we deliver today. Next week, we are talking about 27 ways you can save money with your startup.

So please join us next week. On our episode 66, this was our 65th episode. And by the way, we have. all of these episodes available on startup.club. You can also sign up to the mailing list if you want to hear about great shows like the one today. And, uh, if you also wanna go to your favorite [00:59:00] podcast network in serial entrepreneur club, uh, you’ll find podcast as well.

And we have had so many guest speakers. I’m telling you this, you listen to these shows. Uh, and you will have an MBA, an entrepreneurship. We try to crack the code of what does it take to succeed as an entrepreneur with startups. And today, I think we did a little bit of that with Airbnb. Thank you, Kate and Dave and Michele and Olivia.

It was real pleasure. Thank you so much. Thank you. Have a wonderful weekend. Take care everyone. Bye bye.