All Forum Posts by: Julie McCoy

@Jenessa NeSmith I fully support the decision to get the police involved, and am appalled that AirBNB encouraged you to not contact them!  Seriously, you may want to go to the media with that, that's an incredibly dangerous position for AirBNB to take - for you, other hosts, and for them as a company.  

I would hope the police can track these people down using their identification they had to supply to AirBNB in order to make the reservation.  

Good call with getting the additional security and making your instant booking more stringent.  And I imagine in general you'll turn down future requests from locals - I've heard more than one story about local guests being the worst (though yours takes the cake!).  

I hope your next booking goes incredibly well and helps you shake off some of the nerves this brought!

@Ben Jacoby I think it's a good idea if the property is in a high-demand area for STRs AND is well in the clear when it comes to conforming with local regulations. You won't want to be trying to fly under the radar or just hoping unfavorable regulations don't come into play if you've got a syndication. I see you're in Valley Village - if that's where your buildings are, I'd proceed with caution; Los Angeles is poised to implement some unfavorable regulations in the coming years, and beware of trying to STR with rent-controlled units.

What you may look into is: AirBNB has what they call a "Friendly Buildings Program" where they've partnered with certain long-term landlords to allow their tenants to AirBNB their apartments in an above-board manner, and the landlord gets a cut.  I'd recommend looking at this model when considering your different options.

Another thing you'll want to consider is how to present your investors with a realistic idea of returns, as the STR market incurs both more price/income fluctuation and more expenses than traditional LTRs. Depending on the market, the end return can be (much) more attractive, but it's a bit harder to quantify.

I think it's certainly possible and profitable to do what you're proposing, but there will be even more due diligence than usual in finding the right market and putting together the right deal.  Good luck!

@Luke Carl Yep, Booking.com has been a waste of time for me.  I haven't tried it with my cabin, but I did list my CA house for a brief period.  Can't remember what I did re: proving ownership, might've sent them a scan of my deed.  Onboarding was incredibly onerous and confusing (they'll schedule a phone call with you so they can have someone walk you through it), and once you get a reservation, communication with guests is difficult and they do not process payment for you.  I had three bookings; one went through with some effort, two cancelled when I tried to secure payment.  After that I got rid of them because it was waaaay too much effort.

I like the idea of reaching a more international audience that they apparently reach, but they need to get out of the stone age before I'll be willing to try them again.  I'm not interested in paying a third party just to integrate with them.  

Getting a social media presence is on my list to do, but haven't actually done it yet - I'm interested in possibly doing some pay-per-click Facebook ads too.  I'm of the opinion that a social media presence gives you legitimacy and increases the chances of direct bookings, but I have no evidence to back it up yet!

I have some friends who have a little website with their properties and they leave business cards in their rentals, so guests can easily remember/find them again, vs. "Remember that cute little place?  I wish I knew how to find them again..." (since not everyone thinks about just going to their past messages with a host).

I believe Evolve provides a service like this, which they charge 10% for, which is excessive to me.  I spend very little time communicating with guests for my two listings (and 95% of that is canned responses).  The only time I'd feel I really needed something like this would be if I knew I'd be unreachable most of the time, or for a period of time - e.g. if I were traveling out of the country, or my W2 job wouldn't allow me to be able to respond while I was at work.

The most time-consuming things to me are coordinating repairs or doing the work myself, and bookkeeping, which in your scenario the owner would still be doing.  I don't think you'd really save much time or hassle farming out guest communication.  Take a day to write out some thoughtful messages and answers to FAQs, save them as templates, and boom, you're done.  And I've got some automated emails set up to take care of sending check-in details and other ordinary things.  

@Jenessa NeSmith I live 200 miles from my duplex (which is really a house with a garage apartment), so I do rely on my housekeeper and a local property manager. :)  However, it's also a place I enjoy spending time, so I do as much as I can myself.  It's a fairly simple setup - my housekeeper turns it over (cleans, does laundry primarily) and my property manager meets guests, does post-stay walk-throughs and is on hand for any emergencies that might crop up.  I've arranged for my PM to take a smaller percentage since I'm still the one handling bookings, doing small maintenance and keeping up with supply inventory.

A better example is the service I get from my housekeeper at my new rental in Tennessee: she does the post-stay walk-through, cleans, and provides or maintains the inventory of supplies (she provides quite a bit: trash bags, toilet paper, basic toiletries, dishwashing soap, hand soap; the things I provide, she'll let me know when supplies are low, and I'll have new items shipped to her house).  She also takes the laundry with her and does it off-site, so there's no lost time waiting for loads of laundry to finish.  She'll get her husband to do occasional small maintenance chores, as well.  I love the service she provides!  That's what I would expect from a turnover service.

@Lance Peterson Will you be spending weekends at your parents' to help them out anyway? If you're going to be making the trip regardless, your strategy is plausible - I doubt you'd actually profit off of it, but it could/would offset some of your costs.  But definitely consider the "hassle" factor - you'll need to make sure your personal things are locked away or stored elsewhere, and make sure the apt is guest-ready with fresh sheets etc. prior to your leaving (or paying a cleaner to do it) and then also having it cleaned when the guest leaves and you move back in.  

Look on AirBNB at places similar to what you're looking for, see how much they're getting each night and how booked up their calendar is.  How much can you reasonably expect to make from this venture?  Does it outweigh all the hassle?  

I definitely applaud you thinking out of the box, and it could definitely work, just make sure your expectations are realistic and it's a better option than, as @Joe P. suggested, just getting a roommate.  

I was looking into them yesterday and couldn't *quite* figure out the business model, though I agree with @John Underwood that it's a way to match up homeowners and professional PMs - just a different approach to the normal homeowner/PM relationship.  They need the capital because their angle is guaranteeing the homeowner a specific payout each month.  (I'm a bit fuzzy on how exactly this works for the PM, though - presumably the PM gets whatever's left over after homeowner's cut and RC's cut)

As for whether or not Big Capital is taking over, I'd argue that overall, the involvement of major companies like AirBNB and VRBO/Homeaway is necessary to scale out a business like many of us are doing.  Having a service that acts as a centralized database and invests their own capital in advertising, etc. has taken VRs from niche to mainstream, and has basically created a whole new industry of STRs in urban areas.  Without them, we'd be left relying on our own websites jockeying for attention at the top of Google searches, or handing our properties over to pro PMs with their own websites and access to local markets.  

Can it go too far?  I'm sure it can and probably will, but for me, at least, they've made this whole venture a realistic strategy and not me just trying to offset costs from my second home.

To elaborate on @Luke Carl's point - cities/towns that are driven by tourism are inherently more friendly to the STR market, as a large part of their economy is already driven by vacation rentals. Usually this has been true since long before the birth of the internet age, much less VRBO or AirBNB.

That said, still look at the local laws and regulations, because the local governments want to capitalize on that industry, and there can be local pushback against the plethora of STRs now that "everybody" can do it.  I have one rental in a small town in CA; I'm required to register with the county and pay a 10% occupancy tax.  I have another rental in TN; there I'm required to register with the state and the county, and remit both sales and lodging taxes.  There aren't caps on STRs like there are now in places like South Lake Tahoe or Palm Springs, but there are still some legal hoops to jump through.

I believe urban markets tend to be less friendly to STRs, as the housing is generally more regulated and neighborhoods have an interest in retaining long-term residents vs. seeing people come and go on a daily basis.  The regulations there are often in flux, and can either become very friendly or very unfriendly to STRs once the dust settles.

I'll be interested in seeing what areas others come forward with - I'm of the opinion it's better to target a market that already has some sort of regulation in place, and then go play by the rules.  That's less risky than going to a market with no regulation, which might then pass something that yanks the rug out from under you.  

@Jenessa NeSmith congratulations on expanding your business!  I agree with @Tyler Work that STRs are hardly passive, but I also agree they ARE fun, and certainly a great source of income.

Re: management percentage, I'd say a minimum of 20% for what you're offering.  The high-end and very vacation-rental oriented markets can charge up to 40%, but in Omaha I don't think you're going to see those numbers.  You may want to take on your first couple of units/clients at 20% (a special introductory deal) and once you have some traction bump it to 25%.  Make sure you pencil out what sort of return you're getting on your time investment so you know this whole venture is worth it to you!

As for the initial setup, I think a flat rate is the way to go - outline specifically what is involved in the rate, but note that of course you'll customize it depending on client needs!  You'll end up drawing up specific rates for each client, probably, but that'll give them (and you) an idea of what you offer and what sort of price point they're looking at.  I know that personally I shy away from very open-ended "inquire for pricing" sort of models, but give me a guideline and I can make a decision on whether my expectations are realistic.

(I'd also say offer a couple of options - for example, you've got one fee for consulting with owners to analyze if their unit is a good fit for STR, another for actually transforming it, etc. Don't make it too complicated, but I bet you'll get some traction on intro-level consulting, even though some of those owners will decide STRs aren't a good fit for them)

Good luck!