What do you wish you knew when starting out?
Member since 2025 · 29 posts · 13 votes
What do you wish you knew when starting out?
Most Popular Reply
Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votesAs investors, we tend to underestimate the true costs of doing business. We underestimate repairs & maintenance, utilities, and insurance costs, and assume "best case." I think we also tend to overestimate our rents, because our place is just so amazingly good and better than the rest. Again, "best case."
Specific to short term rentals, we also underestimate the time that we will commit to making it financially successful. This isn't a stock mutual fund that you can just tuck away and watch grow. Short term rentals are a business - your own business - and it not only takes capital for that business to succeed, but willpower. The will to roll forward even when things are at their worst.
The reason that so many small businesses fail is often not only insufficient capital, but lack of will.
17 Replies
- 1yMike GrudzienPro MemberLender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
I wish I knew interest rates would go crazy in 2024.....
- Rental Property Investor · Northern Virginia · Member since 2022 · 127 posts · 123 votes1y
I wish I had purchased with the aim of 20% annual revenue instead of 10%-15% to cover All operating and holding costs.
I wish I had added Airbnb a month after I felt comfortable with my PMS and Vrbo.
I wish I had worked harder to achieve an earlier date-placed-in-service for tax purposes.
I wish I had attended the Avalara MyLodgeTax Lodging Tax 101 within days of closing to understand all the state, county, and local taxes and licenses.
I wish I had known I was responsible for collecting and remitting taxes from Vrbo bookings because of the API connection to my PMS.
I wish I had hired one cleaner at a time from Turno to build trust with one another and pride in keeping an orderly supply closet.
I just hit the first anniversary of the date-placed-in-service, and there might be other “wishes,” but these are what immediately came to mind.
- 1yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votesI would bought as many properties in 2008 as possible!
Quote from @Shannon Strickland:
I wish I had purchased with the aim of 20% annual revenue instead of 10%-15% to cover All operating and holding costs.
I wish I had added Airbnb a month after I felt comfortable with my PMS and Vrbo.
I wish I had worked harder to achieve an earlier date-placed-in-service for tax purposes.
I wish I had attended the Avalara MyLodgeTax Lodging Tax 101 within days of closing to understand all the state, county, and local taxes and licenses.
I wish I had known I was responsible for collecting and remitting taxes from Vrbo bookings because of the API connection to my PMS.
I wish I had hired one cleaner at a time from Turno to build trust with one another and pride in keeping an orderly supply closet.
I just hit the first anniversary of the date-placed-in-service, and there might be other “wishes,” but these are what immediately came to mind.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Christine Brown:
Hi all - I thought I posted this already but I can't find it, so hopefully this isn't a repeat. I'm getting ready to purchase my first STR. What are some lessons learned that you have, or what are 1 or 2 things you wish someone told you when starting your STR journey? Thanks so much!
Typically the people who do the most marketing and promotions are the people to stay the furthest away from.
7e investments53 Reviews - Member since 2021 · 46 posts · 57 votes1y
First one to come to mind is to get help with my bookkeeping a lot sooner. I'd say most investors are great with accounting and using QuickBooks....but I'm in the minority. I finally got help beginning of the year and it's one of the best decisions I've made.
For my wife and I, we wish we would have focused on a true vacation market. They're established, most already have established rules for STRs and rely on them for all the money they bring in, and , the best part of STRs, you want to actually go visit and stay there! Our first one is in a small town and it's actually been very successful but we really want a beach house we can go visit. So we're going to sell that and use the profits to go get one!
Now more universal ones:
What gets measured gets managed. I wish I would have consistently assessed my listing (photo order, title, description, etc) and my pricing way more consistently early on. Every time I stay consistent with my upkeep my bookings stay consistent.
I wish I would have utilized AI earlier on. ChatGPT has made guest communications and updating my listing soooooooo much easier and faster. Seriously. It's a game changer. Google ChatGPT prompts for STR owners and have fun.
The little stuff goes a long way Snacks on the counter for guests to have after a long road trip, cheap universal phone chargers next to every bed, digital guidebook with all the details, recommendations, and directions; all these are inexpensive, fairly easy to do and make a huge difference. There have been a couple times I was convinced we were getting less than 5 stars (a couple dog hairs found on a bedsheet or a tv remote with a dead battery) but we ended up getting 5 stars and I think it was all those little touches that added up to something greater than the mistake.
- Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes1yAs a real estate-focused bookkeeper/accountant, I'll second Joseph's advice!
Quote from @Joseph Sauer:
First one to come to mind is to get help with my bookkeeping a lot sooner. I'd say most investors are great with accounting and using QuickBooks....but I'm in the minority. I finally got help beginning of the year and it's one of the best decisions I've made.
- Member since 2022 · 1k+ posts · 1k+ votes1y
That you are either 1 bedroom or 5+ bedroom. 2 & 3 bedrooms (and in most cases/markets 4 bedrooms) are the saturated and squishy middle. Too much space and high of a cost basis to compete with hotels, along with being excessive space for 1-2 person stays, while also not big enough for multiple families. You end up spending the extra money to purchase, rehab, furnish, clean and heat/cool the extra space for a return that doesn't scale with the added costs and often ends up underutilized. Which is not to say that the right property and location could not work great with that bedroom count, although you probably need an A+ location to really make that work given how many of them are out there.
Even with what I said above, I would only invest in a 1 bedroom project if there were multiples of them on the same property like a hotel or group of cabins. You are directly competing with hotels at that point so you will have less lead time and shorter guest stays for a solid portion of your bookings. Whereas with 5+ bedrooms people plan much further in advance and don't mind 3 night weekend minimums. Which IMO makes 5+ bedrooms the winner.
- Attorney · UT · Member since 2025 · 33 posts · 59 votes1y
Many of my clients wish they knew about asset protection strategies when first starting out. Real estate investing, including short term rentals, come with a lot of inherent risk. Mitigating and planning for that risk is important, both to protect yourself and your personal assets, and to protect your business assets. An asset protection plan is all about planning ahead. Once a liability event occurs, it is often too late to do anything to mitigate it.
Have good insurance from the start, and consider setting up an LLC structure to protect yourself from investment liability, and to isolate liability so your whole portfolio is not affected by one event. These strategies only work if they are set up ahead of time.
- 1yCollin HaysBusiness MemberProperty Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
As investors, we tend to underestimate the true costs of doing business. We underestimate repairs & maintenance, utilities, and insurance costs, and assume "best case." I think we also tend to overestimate our rents, because our place is just so amazingly good and better than the rest. Again, "best case."
Specific to short term rentals, we also underestimate the time that we will commit to making it financially successful. This isn't a stock mutual fund that you can just tuck away and watch grow. Short term rentals are a business - your own business - and it not only takes capital for that business to succeed, but willpower. The will to roll forward even when things are at their worst.
The reason that so many small businesses fail is often not only insufficient capital, but lack of will.
- Real Estate Agent · Salt Lake City, UT · Member since 2020 · 490 posts · 205 votes1y
I honestly wish I had an agent who would told me it was possible to get into a house when I was younger. I didn't really have good guidance and truth be told, I believe I could have gotten in to RE years earlier with the guidance of a great agent. Many rush through the process or don't explain how they have done it.
- Member since 2024 · 48 posts · 23 votes1y
I wish I had done it years ago! So my biggest piece of advice is to just get started. It is easy to overthink things but do as much due diligence as you can to learn as much as possible on BP, podcasts, etc, but then just take the leap and do it, you will learn quickly.
One BIG thing that I think is important is to have stayed in STRs before. I try to think about the things I liked and disliked about every property I stayed at or every host I dealt with. Then make your place the best version of all of those things.
And remember, this is a hospitality business. You need to be nice, accessible, professional, and friendly in all interactions with guests.
- Member since 2025 · 6 posts · 8 votes1y
I wished I knew that it is not at all "passive" income when you are working in the STR space. We were successful and reached top 1 % of the properties within 3 months on Airbnb. But that came with the mindset of constantly innovating, personalizing...etc. Good luck! It is a fun space to be in if you enjoy the work of hospitality.
- 1yAndrew SteffensBusiness MemberTampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
One piece of advice not already mentioned is to keep in mind that STR is a marathon, not a sprint. Spend a little extra for durable materials and items. Get pro photos. Invest a little in your new biz. Also have reasonable expectations. Cash flow is important but you'll always have your biggest payday when you sell, so appreciation and principal pay down are the biggest factor to your net worth.
Good luck!
Vacation Rentals of Florida53 Reviews - Property Manager · Chattanooga, TN · Member since 2018 · 178 posts · 134 votes1y
I like a lot of what everyone has already said.
I would add this...when shopping for a property research the top amenities in the market and make sure you have the SPACE for them even if you don't have them yet. You can only add a firepit, hot tub, or game room if you have the space for it and by space I don't mean carve out a firepit in the side of a slope or something that's not going to make sense financially.
In that same regard pay careful attention to the amenities other comps have. You might have a 4 bedroom in the mountains but if they have a view and you don't you're not going to achieve the numbers they are and it's hard to add a mountain view!
- 1yJosh SedivyBusiness MemberSt. Louis, MO · Member since 2024 · 134 posts · 55 votes
Congrats on getting ready to purchase your first short-term rental! Here are a couple of things I wish someone had told me when I started:
Be very clear with your guests about your house rules and what they can expect during their stay. This includes things like check-in/check-out procedures, passwords, parking details, and any quirks of the property, including damages if there are. The more info you provide upfront, the less confusion you'll have later, leading to better guest experiences and fewer issues.
Trustworthy and consistent cleaners and maintenance people are essential, as you'll want the property always looking its best for guests.
As you’ll soon find, there are always new challenges, whether it’s an unexpected maintenance issue, guest concerns, or a change in local regulations. Even after years in the business, you'll still encounter new types of guests and unexpected situations. Be prepared for a learning curve. Every guest interaction is an opportunity to fine-tune your approach.Ultimately, the STR business is a continuous learning process. Embrace the new experiences that come with it, and use feedback to improve your property and guest interactions.
Wishing you the best of luck!
- Rental Property Investor · Chicago, IL · Member since 2016 · 22 posts · 20 votes1y
What @Collin Hays said about the costs is a huge part of it, so make sure you understand your costs. A few other more operational things to consider:
1. Vacancies: Understanding the seasonality of the market you're going into and getting a good grasp on your vacancies is important. This can really make or break your STR - if you are able to reduce your vacancies while still caring for the place, then it can really help you drive revenue.
2. Quality of the finishings: I had an interesting experiment a couple of years ago. I was renovating an apartment building with the exact same unit on each floor. When I finished the reno, I rented it short-term until it was summer & I could get better rates for a long-term lease. Then I moved to the next unit and did it all over again. On one of them, I started renting it short-term before it was finished, and got a lot of 3- and 4-star reviews. I had only gotten 5-star reviews with the renovated units. Once I renovated that unit, I started renting it again and have gotten all 5-star reviews since then. Having a clean, nicely done, well-furnished and designed unit is really important to the overall performance. Build this into your budget and don't just furnish it with old stuff from one of your places or a thrift shop...
3. Guest screening: Communicating with guests during the booking process can teach you a lot about them. If they answer your questions, are responsive, etc this is generally a good sign. We always screen guests that don't have prior trips or prior host feedback, and I think it will save you a lot of headaches. Ask them questions and make sure you feel comfortable -- and many times it's better to decline a booking than deal with the aftermath of a bad guest.
4. Smart devices: Everyone is talking about door locks these days, and yes they are a huge added bonus to your property. But there are lots of ways you can use smart devices to help take care of your property. I spoke with Proper Insurance and they say their biggest claims are related to water damage since the properties are typically vacant more often. Something small can turn into something big. For us, figuring out how to turn the water on and off and having a smart thermostat to monitor the temperature at our property remotely made a big difference to our mental health.
5. Neighbors: Think about the neighbors or the people nearby. An STR can be really disruptive to people. For example, I have friends who sold their house and moved to a suburb because their neighborhood had a lot of STRs pop up. The mother was saying she didn't feel comfortable letting her kids wander around the neighborhood when there was somebody new next door every night. I've always talked to my neighbors about it and made sure they know how to get in touch with me if they ever have an issue with a guest or anything happening at my property.
Those are the ones on the top of my mind, hope this helps!
- Accountant · 100% Remote · Member since 2019 · 497 posts · 216 votes1y
The #1 piece of advice I offer is to focus on making money and your customers' experience over anything else in the beginning.
Then, once you have cash coming in and some equity, begin to think about things like tax strategy, asset protection, etc.
Too many rookie investors get this backwards and end up sinking cash into services they don't need in the very beginning before they've made any money or have any equity to protect.
If you already have a high net worth, you'll obviously want to separate your RE activities/ownership from your personal stuff from the beginning, but I'm just speaking in generalities.
I'm not an attorney or CPA. Just what I've seen as an REI and the owner of a bookkeeping firm that serves REIs almost exclusively.
Hope it helps!
Join the conversationCreate a free account to reply, vote on answers and follow this thread.