All Forum Posts by: Ethan Cooke

@Jonathan Pacilio

@John Underwood

@StevieAnn Nance

I would love to swap furnished rental experiences with you at the conference. I manage 19 furnished rentals in San Francisco and San Mateo Counties and I’m finally free of needing to do corporate work.

Be sure to also talk to

@J Martin, who is a devil and a whiz when it comes to systematizing your furnished rental business and traveling the world.

@Wendy Schultz - Thank you for the examples, I agree with all the risks you have outlined. I think the biggest mistake to avoid in investing in Short Term Rentals is to invest in Short Term Rentals. Regulations are changing so rapidly that if you buy a property simply for its STR cash flow potential, it's easy to get caught with your pants down as soon as regulations go south. A great way to take advantage of STR cash flow without the risk is to rent properties from landlords, furnish them and re-rent them as STRs (or longer term furnished rentals). I manage a portfolio of 19 furnished units in the San Francisco Bay area and make a decent income without owning any of them. I would not buy any property as a STR unless I would want to buy the exact same property as a traditional long-term rental property. I fully agree with @John Underwood that the critical considerations are to buy right and to have multiple exit strategies. 

@Christopher Fordinal - If you are seeking cash-flow on furnished rentals and you don’t have a lot of cash to spend, look into rental arbitrage. You can rent a property in a good travel market (business or vacation). Then spend $5-$15K in total start-up costs (including the refundable deposit, pre-paid 1st month’s rent, furniture, etc.) and then rent it out at a premium. Depending on location and your rent costs, you can make $500-$1500 a month, cover your start-up costs in less than a year and then make very good profit starting in year 2. 

I am part of a community of folks who do this, some of us as our primary income. Of course you don’t get the appreciation of ownership (I also own investment property). But there’s much less risk and you can scale fairly quickly.

Ethan Cooke

www.baypillow.com

@Ken Latchers - Sometimes it can be really advantageous to speak prospective guests. Most of my guests are inquiring about a 30+ day stay in the Bay Area and paying $5000 or $10000. Even with Autobook on, they want to speak to a human to get their questions answered and get reassurance that the place and the host are legit. This works in my favor, since I also want to know who is staying at my places. Sometimes they want to stay longer than their online request, and I can negotiate a longer lease on the spot. I enjoy talking with people, which I think is a big advantage: providing furnished rentals is fundamentally a hospitality business. 

I fully agree with 

@Nancy Bachety and I like the concierge solution suggested by

@Anand S. —outsource what you don’t like.

“Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness that most frightens us. We ask ourselves, 'Who am I to be brilliant, gorgeous, talented, fabulous?' Actually, who are you not to be? You are a child of God. Your playing small does not serve the world.”

- Marianne Williamson

Courtney Radmall -

Good recommendations from Jon Crosby (Foremost Insurance) and Lucas Carl. If your insurance policy does not offer sufficient coverage for short-term rentals, I recommend Comet home insurance. I have researched Comet, CBIZ and Proper Insurance. They seem to offer similar products, but Comet offered me a better price. Good luck!

@Brian Armstrong - Ruben Arce with AGCI out of Greenbrae, CA is a great GC and a great guy. He remodeled my primary home in San Francisco, my investment home and the homes of a few of my friends. He lives in Richmond, CA. Feel free to PM me for his contact info.

@Ken Latchers - I agree that rental arbitrage is not for everyone. Like you, I have read my share of arbitrage posts that make it sound like “easy money,” which it is not. But there are many ways to build a successful, scalable arbitrage business with minimal risk. I have been growing a furnished rental arbitrage business in the San Francisco Bay area for about 16 months. I have more than 12 units, all of which are profitable ($300-$1200 monthly profit on average). 3 of them came furnished already, so it’s not unusual. 

On the places I need to furnish myself, it takes me 3-6 months to earn back enough profit to pay for all the furnishings, bedding, kitchenwares, etc. And then another 3-6 months to earn back profits to cover the first month’s rent and deposit. Then year 2 is when profitability is really good!

Whether you own furnished rental units or rent units from someone else, the revenue opportunity is typically the same (except in places like SF where subletting others’ properties has a 30-day minimum and renting out your own property is allowed for short-term rentals). So it’s mainly a question of cost and risk. As long as I can use a place as a furnished or unfurnished rental, the chances of losing money on it are very slim. The kinds of low-risk places I rent and then re-rent are:

- below-market rent (I find these on Craigslist and sometimes Zillow)

- nice neighborhoods where I can easily convert a furnished rental to a long-term rental if regulations change

- low rent per bedroom

- easy parking

- decent kitchen

I am part of a community of 200 rental arbitragers with varying levels of experience and success. The people who do well are curious, persistent, methodical and positive.

@Gururaj Iyer - It sounds like BS to me. But on the off-chance that it’s true, you can counteract any negative affects on search results by asking all of your friends to “heart” your listing on AirBnB. I know from speaking with several multi-unit AirBnB hosts that gaining “heart” votes improves your listing’s search results. Another tip: get Daniel Rusteen’s book, How to Optimize Your AirBnB. He worked at AirBnB for a few years and knows exactly how to create AirBNB listings that get a ton of clicks and a ton of bookings.

Good luck! 

@Neil Henderson - Check yelp.com for “house cleaners” and “home cleaners” in your area. I found dozens of highly-rated ones by searching yelp in Las Vegas. I run a furnished rental business in San Francisco and just south of SF and have found good cleaners this way.

I agree with @Paul Sandhu - you’ll have much better luck with mom & pop shopS than big cleaning serviceS. I’m sure there are several individual cleaners in your area that would love the flexibility and frequency of a quick and ongoing $40 gig. 

Good luck!