Here are the books Michelle referenced in today's podcast. Note, these are Affiliate Links. Plus, you can try Audible for 30-Days Free and get your first audiobook free. After that, you can pay by credit or purchase a membership. With a membership, you get 1 audiobook and 2 Audible Originals each month for only $14.95 per month.
[00:00] Over the last two centuries, nearly 90 percent of the world's millionaires have created their wealth through real estate. Here to tell you how you can ride this wave with less risk and less capital, is your host, bestselling author and speaker, Michelle Russell.
[00:21] Hi this is Michelle, the master of money mindset, and you are listening to the short term rental revenue podcast. OK this is it - the episode you've been waiting for. It's all about pricing and what are we going to tell you. How are we going to tell you stuff. Are we going to take you and drag you in. You know, how those people on YouTube another podcasters do, and say them. Yes that's exactly what we're going to do. Let me tell you, let me tell you why guys pricing is so difficult and nobody wants to give you the answer because pricing is unique. Every property is unique. Your property is unique and there is no cookie cutter way to really give you a real price how you price your your property. Nobody can do that. That's why they're beating around the bush. That's why it takes so long because nobody just wants to say yeah yeah.
[01:20] There is no really right answer out there for you. I'm just going to tell you there's no right answer out there for you. That's the answer or the answer is there is no answer. It's unique. Now you can get general ideas and we're going to go into that and talk about it and talk about how you can get a general idea. But there's no. It's just like selling your house if you are selling a house. You know there's no one price that you could put out there and that would be the be all, end all price that gets everybody to come in and buy your house. It does not exist even if your house is the same as the other houses. There is a property that we'd like to buy in in Orlando. And this specific set of properties is a whole entire there's a bunch of buildings every single place is like almost all of them can be furnished almost exactly alike, but the prices vary and let me tell you why some of the properties are looking at the parking lot.
[02:22] Some of them are looking at a lake, some of them are looking at a playground location. Some of the properties have different floorings, wood, tile, carpeting and some have different wear and tear on those carpeting and looking newer looking more used. Some have newer cabinets, older cabinets and granite countertops or Formica. I mean there's like a million different reasons. The appliances are different. The properties you might look at them and say well they're all the same. No they're not all the same. The upkeep has been different on some of them. I mean like there are so many even with something that looks exactly alike. It's different and that's why you have that variety and the prices right.
[03:07] Not to mention the market when the demand is higher then you have higher prices when the demand is lowered the prices drop. So that is going to be exactly the same thing that happens with your short term rental. Nobody wants to tell you that because they want to sell you some bs stuff. Now there are good programs out there and we are going to talk about them. OK now it's cool to be a geek when I was growing up and I was a math major. People just looked at you like you're crazy man, and you like numbers and you're like yes I do. I really do love math puzzle. I love things like that. But now it's cool to be a geek these guys are writing programs they're doing algorithms. They're doing all kinds of logistics in order to help you determine your pricing.
[03:55] And we're going to talk about all of that in this episode but I just gave you a little bit of really good background on why it's not a cookie cutter thing why it's not an easy thing. No one is trying to avoid your question. They just can't answer it. It's because it's hard. It's hard. It's really quick before we really dig into this subject. I just want to touch real quick on some upcoming events in January on the 10th. We're going to have a webinar. It's a free webinar to you guys. And what I want to do is help people plan your portfolio. And that's what the Web is going to be about. It's going to be about how to set up different portfolios and create, get your organization together and your accounting and all your payments together and then you know you start with one property and then you build a portfolio and then you start to build a retirement portfolio.
[04:52] So that's what we're going to be talking about that will be on January 10th at 7 p.m. It will be free. We're probably going to do it through webinar Jamm or zoom or something depending on the number of people who register for it but it will be live. Like I said you'll have to register probably at the Facebook page or on our Web site shorttermrentalrevenuedot.com And if I did not say that clearly enough guys the guys who translate my podcast into a transcript are always telling me I talk too fast but I listen to everything fast. I listen to podcasts really fast on higher speeds Audible books on higher speeds everything except for music. I love my music just the right speed you know and so let me just really touch on that. You're going to love this.
[05:43] I'm listening to. But I always listen to books. I finish at least four books a month and I was listening to a new book and I finally I finally did it. Man I got the go on f yourself. Did anybody see that book out there. Now the the title turned me off for a long time. But then one of my friends said Michelle it's you you have to read this book and I was like Really. And they're like ah, yeah, yeah. So I got the audible version of the book and immediately I have everything on 2.0.
[06:14] Like going twice as fast as what they're recorded so for some reason I'm like why the heck can I not understand this. This book the person who the narrator and that look and it's the author of the book and I'm like I can't understand a dang word that is coming out of this guy's mouth.
[06:33] So I slow it down, slow it down, slow it down he's Scottish.
[06:39] There's a Scottish accent are really thick Scottish accent if you speed that up Scottish is hard to understand when it's normal, try speeding up you cannot you cannot understand Scottish fast if you're in America and you're like what the heck?
[06:56] But what an amazing book. Love that book and. Oh and I also got a book for a friend of mine. I'm not sure if she listens so I'm pretty dang sure she listens. My podcast because she has a short term rental but I got her. I'm going to say it anyway. I got her this awesome book if you want to help people and you know give them something really cool for the new year. There is this amazing book called A Year of Positive Thinking. And it's like daily inspirations. It's kind of like one of those calendars that you tear off but it's not a calendar it's a book and it's by Cindy Spiegel. She's I mean honestly I started flipping through this and I was like dude I've got to get me one of these books. These are awesome. So if you want to get a present for somebody that's a great book too. All right. So we're going to go right back into this. We've got the portfolio covered the organizations stuff second covered. Oh. And really quick too. Happy New Year. I've got a great giveaway coming in January so listen up because it's only going to be a week long give away in the beginning of January. Your hint is the prize is awesome.
[08:05] You're going to love it. OK. So let's dig into pricing. Why is pricing so damn hard. It's uniqueness. There are no two alike. Come on.
[08:16] So when you know the gurus are avoiding you it's simply because they they just can't tell you. Your house could be exactly like your next door neighbor's house. And it's not going to sell the same because everything changes about it. Like the wind has changed, the tide has changed. The moon is doing something different. Everything makes it unique. OK so there's basically though basically three ways to price your house now or your unit, your room, your if you have an entire property, a guest house whatever it is there's we're going to just say your STR. There are three ways to price your short term rental. The first way is you can do it yourself. The second way is if you're on a platform like Airbnb or something you can have them do it. They have pricing tools themselves and you can allow them to do it for you.
[09:13] And the third way is you are going to pay somebody else to do it. So that's the way that you can do it. You're going to do it yourself. You're going to have somebody like you know your hosting site like Airbnb do it for you or you're going to pay somebody to do it. Now let's dig into each of those. Now if you're doing it yourself you've got a lot of variables to look at. OK. Obviously you're going to have to look at hotel prices in the area,you're going to have to look at other Airbnb properties or other properties on the same format that you're using. So if you're using vacation rental by owner whatever you're using HomeAway it doesn't matter but you want to go on that site and look at those other properties that are similar to yours. So if your property is let's say an entire guest house then you're going to want to compare your property with entire guest house.
[10:10] If your property is just a single room you want to compare it with other properties that are just a single room. So it's just like when you put your house up for sale if you had a three bedroom two bath house you want you know that was about 600 square feet. You want to compare it to another three bedroom two bath, 1600 square ft. house. You can't you can't compare a mansion or a McMansion to a small house because they're not the same. They're not in the same category. So you at least have to get yourself into that same category. OK. And when you do that I want you to also remember this is huge. The prices on the properties that you see and the properties that you see keep in mind that you're only seeing what is not booked so you're comparing you know it's kind of like if you had your house up for sale and you were looking at the houses on the market the houses on the market can't give you a real price on your house because they're almost all overpriced.
[11:18] Let's just be honest. They're all overpriced. That's why they're not sold and it's going to be the same kind of thing with the prices of the properties that you're looking at to price your your BMB against. They're not sold they're not rented out. They're actually open. There's a reason why they're open. There's a bunch more that you can't see that are already rented and you have no idea what those prices are but there are some people who do (hint) and save that for later. OK. So when you're looking at these properties keep looking and comparing to other properties that are like your property. So you're looking at hotel prices other BMB prices other properties that are similar to yours. Keep that in mind always that these are the ones that are unbooked and then you're going to weigh all the different things. Obviously you have to weigh what your property looks like in comparison to the ones that are available.
[12:16] Right. So if your property looks like the Taj Mahal compared to all these others you can definitely price it a little bit higher. And if yours looks like you know you were you built it in Sanford and Sons back yard if you are old enough to know that it was a junkyard you built it there. You're going to have to price it a little bit lower in comparison. OK so keep those things in mind. But look at also the number of reviews that you have and how many star reviews you have. If you have five star reviews you can price it a little higher if you've got three star reviews. You might want to price it more competitively. OK. You look at the season, is that high season peak season, or is it a low season. So here in Arizona and when I'm in Florida winter is a peak season.
[13:10] People come here from Canada, Minnesota, Idaho. I mean you name it Wyoming. We've get we get all the snowbirds. OK. You are going to have a peak season also. So know what type of season it is. If it's your off season prices are going to be a little lower because you want to get it filled right. Events. What kind of events are going on in the area. What's really cool about Arizona is we've had we've hosted the Super Bowl twice now. We've we host every year we'll host the Fiesta Bowl. We have down in Tucson, we have the Gem Show. There's a lot of really cool things that go on and then obviously you know my properties in Orlando speak for themselves. They've got Universal Studios, they've got Disney World. They've got like amazing things that you can you go to there. So those are like all the time events.
[14:08] But there are specific events that are only happening now and once. And boy you can you can make a lot of money on those week long ones but if you're not in the know, if you don't keep up with things you're gonna miss out. You want to make sure that you're pricing them high at those rates or they're going to be gone. Somebody is going to book that as soon as they find out. So make sure that you know what's going on in your town all the time. That's really important. And then the number of available listings out there. So you're going to have to look at the number of listings that are out there and compare what's left with the demand. So if there are eight thousand listings out there left open and available and you have one but only a few that you only recommend or tell you that a few thousand are going to be booked you want to get a little more competitive.
[15:04] Yes yes. So you have to look at all those things right and just be smart. I mean be the analytical person side of you that you know may or may not be there but tap into that tap into the analytical side of you and get analytical for a while. Now there's a lot of people who don't like analytics and they don't want to do all those numbers and they they don't want to handle that then wait for me to go into the next two because you're going to like those. But if you can handle it and you want to be all techie and you want to you know to me I I love data I love you know figuring out things. But guess what. No longer as I get older no longer do I waste my time with that. I'd rather pay somebody to do it.
[15:49] It's one of those MWA's. is what did I talk about minimum wage activities right. It's something that takes up way too much time for me. So I would rather pay somebody to do it. But then again I have the money to pay those people. So if you're getting started you need to buckle your self in and take that ride and just dig in and do it until you can afford to pay somebody for it. Right. There's you know there's going to be a ton of reasons. But remember to look at all those things and really be honest with what your property looks like in comparison to all those others that are still available. OK. So there's a reason there's other there's a bunch that you can't see that have already rented out. You don't know what their prices are because you couldn't compare them but you are comparing yourself with a bunch of other stuff that's still available.
[16:47] So you're the leftover counter at the bake sale. You know two hours before they close and all the good stuff has gone right. That's who you are. Just remember that you know even though you're not stale yet still the same day bakery what's left. What looks best it's like you know all the white chocolate macadamia nut cookies are gone now. Now we're down to the nitty gritty. OK. So just remember that and analyze that for yourself. You know and remember to. Are you going to play this game. The undercut the competition game because honestly that is if you have to if your property isn't a great property even if it's I would say if it's middle level or down then you might have to play that game. But if you've got a nice looking property I'm one of those people I don't undercut myself. And let me tell you why.
[17:43] Who was my mentor. Who was the big, the big guy, the big kahuna who taught me how to invest after I invested in myself. I always go after I invested in myself after I invested in myself. Robert Kiyosaki was my big guy and I read and did anything he said he was an amazing mentor, and I loved being those seven years. I learned so much from Robert but one thing if you think about it think about Robert's cash flow game if you've never played cash flow you have to by the way because I Rock at Cash Flow. I actually have a silver rat from the Cash Flow game that was given to me by Robert himself because I won this this competition. And I still have it. But the deal is Cash Flow Is this really cool game. Quite similar to Monopoly but like Monopoly on steroids. But you know how much Robert Kiyosaki sells that game for. It's a board game. OK. Take a guess, Two hundred and fifty dollars a game.
[18:49] Oh yes. I know, what? Some of you are probably going like this. What the? Yes. What the? Is the correct response. But guess what. I have a bunch of those games.
[19:03] I literally have a whole bundle of them because I used to host a bunch of kids and take them and teach them how to play Cash Flow all the time. We would do it all the time I just don't have that same time anymore. I've gotten older but the thing is those games are worth $250 dollars to me and the Monopoly game is when you go out to buy Monopoly. I don't know what they are now but you know 10 bucks 20 bucks for a monopoly board. Probably the same type of thing. I mean they're not like anything special. You're not going to open it up and there's going to be gold and silver you know pieces are novelties and they're the paper money is still made of paper money. The board is still made of cardboard. It doesn't look any different but the value is there and it's the same as you know think about this.
[19:51] You can undercut and undercut and undercut and where does it stop. So if you are a gas station and next door neighbor is a gas station he's got one corner you've got one corner and you've probably seen as we used to see this a lot more before one gas station would lower there's a penny. Try and get people in. And then the next store gas station would lower his another penny and they would go back and forth just going back and forth Lowering at one more penny one more penny one more penny. Where does it stop. It has to stop somewhere because honestly you'll lose all your money. You can't win that game. And it's a terrible game to play. Now it doesn't happen as much as it used to. Now usually the name gas stations like Chevron or Shell they'll keep there is a little bit higher than maybe the Circle K or whatever but the reason why is they know they can't win the undercut games so they have to win you on one service and all the other things that they provide inside their stores you can use their credit cards the you know there's a bunch of different things that they offer you the quality of their gas that's going to bring you over to their station.
[21:09] So that's going to be the deciding factor. But I really want you to remember if you can't remember the gas stations scenario think about Walmart's. I'm in my 50s. OK. So when I was growing up we had mom and pop everything. Mom and Pop grocery stores. We had a sunny supermarket on the corner I grew up in North Aurora just outside of Chicago and there was a little Sunny's Supermarket down there and that's literally where we grocery shopped. We didn't go to a big store. There were no big stores by us not very close at all. I mean we had to go out to get to what was it back then Eagles and Dominics, right. So we had to go way out to get to the big grocery stores and we just shopped at Sunny's Sunny's was the place that we went. And when we went to a drugstore it wasn't a Walgreens people.
[22:07] It was this little Sun Drugs that was right next door to the Tastee Freeze. All of them right next door to each other was like Sunny's supermarket. The little Sun Drugs and the little Tastee Freeze. That's that's all that there was. And that's exactly where we shop that's where we bought our pharmaceuticals and everything else. What happened to those mom and pop stores in just a span of a few decades. You're talking undercut pricing. You're talking about Wal-Mart. You're talking about Walgreens. They came in and they wiped out from the face of the earth mom and pop stores. They are gone. You don't see them anymore. Why.? Because America loves low prices and they don't give a crap where they come from. That's why they don't care that they get tax advantages that other little places don't get they you know in the form of a Wal-Mart might want to build in your town and your state or your town might give them some kind of subsidy to build there.
[23:17] And sometimes it's huge sometimes like it's major major money hundreds of thousands of dollars. If you're a little mom and pop shop they don't give you even ten thousand dollars to build your store there. So they couldn't compete when it came to building right. Nor could they compete when it came to pricing. Wal-Mart does crazy stuff if you ever want to get into it. Watch the high price or the high cost of low prices it's a little documentary watch that that will break your heart and you'll see exactly what happened to the mom and pop stores in the United States. You can't you can't beat them. There's just no winning. There is no winning. So they are gone. And the same thing is happening with our health care too. I mean if you look there used to be optometrist's everywhere. Now the optometrist's are all stuck inside Costco's and Walmart's.
[24:14] I mean very very few people go out and go to an eye doctor inside an office. Dentistry is going to be moving the same way. I mean there's like you're talking. America loves to get these low prices but they don't really think about the cost involved and the fact that the corporations are making a ton of money and the pharmacists are making less and working more with less benefits. I mean they've got to pay for their education. Same thing with these doctors. They have hundreds of thousands of dollars in student loans yet they can only charge a patient $50 dollars for every visit. I mean it's crazy what's going on. So you think that don't even get me started on that and I know it's come back and everybody is just nodding just a Michelle. No no. They're giving me that that cut throat saying don't go there don't get Michele on one of her rants.
[25:07] But the thing is you can never win that battle. They undercut competition battle so be careful with it try to make your property the best property that you possibly can so that you can charge a better price or feel good about charging a better price. Try to. If you can't if your location you can't pick your location right and you can't you can fix what it looks like the furnishings inside. And you also can fix what you offer people. I've been in BnBs that offer amazing things like you get in and they have oh we've got this ready for you and this and this and you're like wow this is crazy. This is better than a hotel. I love it. So just be careful. You know that you don't try too low cut yourself low cut yourself low cut yourself into. You want to remember if somebody sees property out there for $19 dollars a night what are they going to think they're going to think that that's a $19 dollar a night hotel man.
[26:09] And that's probably got roaches crawling around and everything else. So there's just remember to weigh those things you want to get sold but you don't want to play that undercut the competition game. OK. Just remember so the second thing you can do is have Airbnb do it for you. And they look at all the factors that I told you. And then some they see and they know what's been rented on Airbnb they can see the fluctuations in how many people are requesting that area exactly which area the prices that they're looking for they know things that you cannot possibly know. And so they have a little bit of an advantage there right. They can tell what what's hot what's not what not just the location but the dates. They're like ooh. Suddenly everybody wants this around the state. Something must be going on. Remember I told you to be aware of the events in your location. But just like the Gem Show down in Tucson when that thing comes up we can we can up the prices by a lot by about $50 dollars a night. And in some places a $100 dollars a night because the Gem Show is going to sell out and because the location looks good, right.
[27:29] So they know all those dynamics and they can compare them all and they can do it quickly because they've got guys working on it and computers working on it and they've got the time.
[27:41] So this is really cool. You can let them do it and you don't have to pay them. So remember how I said you know you don't want those minimum wage activities.
[27:50] This is pretty much a minimum wage activity you can let Airbnb handle if you don't want to do it. What's really cool is to, you know they're going to look at the reviews they're going to look at the responses they're going to look at the areas they're going to look at all those things that I told you to look at.
[28:07] But they also let you set your high and low price so you can say well the minimum I can take for this is you know $75 dollars a night. But the maximum I would love to see is $150 dollars a night on this little tiny place so you can set the high and low whatever you want. Now remember when you do that they will still add in those weekly discounts they'll still give those weekly discounts if you offer those and those monthly discounts if you offer those. And remember I said I like the long stays but not everybody does. So if you're into the money you make sure you take those off if you go into the auto pricing because honestly you don't want them to cut your prices and then give a discount on top of it because you're like What the heck happened right.
[29:00] Those will still apply even if they're doing your pricing but you set the high and low still but your weekend pricing that goes away completely. So if you had your pricing set where your weekends your Fridays and Saturdays have a two day minimum and they go up they they won't do that. They they don't they do something completely opposite so that goes away. There's a couple of things that go away but the cleaning fees stay on there the extra guest stays on there. All that that stays on there so just be careful if you have them do that. But honestly they say and I think all of them say when we were doing our research on this we were like What are the prices. What do they say that they make more. They'll bring more income to everybody quotes about 40 percent more income. If you let them do the pricing for you. 40 percent across the board everybody says if you use our you know our dynamic pricing we are going to get 40 percent more than you would make on your own.
[30:02] And that's it. You never did any of your own analytics and you just priced it by yourself. If you don't do your own analytics and you don't do your own pricing then you are you know you're not going to get the same amount of money. So let's talk about number three, option number three, window and number three. Let's look behind that curtain. We're talking about dynamic pricing and paying someone else and that is the term if you're new to short term rentals dynamic pricing is the term that we use for letting another company figure out the pricing for you and we pay people to do that. There are literally companies out there that specialize in pricing for you. It's really cool because these guys are the data geeks they love love love gathering all that data all that information. They create these wonderful algorithms they compute compute their little butts off.
[31:09] You know they look up when events are coming. I mean these guys are on it. And that is their entire job. So yeah you'll want to pay them to do that. Right. Remember minimum wage activities. These guys are charging you a very low percentage to figure out for you what your prices should be. So pay them for it. Because for the most part the majority of them are very good at what they do. So they they do all the work they promise you those higher returns everybody promises you about 40 percent. That's that's the number I see on everything. 40 percent higher 40 percent higher. But these guys love numbers. They watch the markets. They watch out for events they boost. You know they look for boost in bookings and lags in bookings. You know like this area is hot, this area is not.
[32:01] They look out for area pricing. You know they can base a program on what you want so you know do you want a full calendar where you have no work to do because your calendar is full all the time. Do you want to make a lot of money and you don't care if your calendars full you just want the highest price and the highest return. Do you want your property just rented on weekends because you're there during the week. Maybe you have you know a place that you go to on the weekends, or you go home maybe you have a place in the city where you work all week and then you go home to the country, you know whatever you want, whatever you're looking for. They will base their program and their prices on while the prices will be all the same because it's just cut dry.
[32:45] But the program will be based on your needs and your desire. OK. So these guys love geek guys. Geek guys are so fun but I'm not going to talk about AIRDNA. So AIRDNA. If you know if you've been in the short term rental business for a while you know about AIRDNA and that's AIRDNA.com And they have way way more information than just pricing. I mean they do. They're more like an investment tool than a pricing tool to me. I didn't even want to compare them so I did not. I did not use them. So if you're if you're looking for an AIRDNA thing I just kind of kept them out of this thing. But you can kind of investigate them because they're amazing. If you're a geek like me you love AIRDNA. But I left them out.
[33:40] Instead I'm going to talk about the two main ones and the two ones that I think you should probably use one of these two. But you can find others. OK. But these are just my recommendations. And the first is my recommendation to almost everybody usewheelhouse.com is like I like these guys. They're kind of geeky kind of. I mean c'mon their numbers guys they're geeky but use wheel
[34:07] house. I think their costs are a little bit lower. And I'm like that they offer you like more service. They look they give you like a questionnaire. I like the fact that they really try to take the whole program and really focus it on you the the customer the end buyer you know the buyer of their products and they say OK what are you looking for specifically. And they gear it towards you.
[34:34] That's why I like usewheehouse because they just seem like they're more customer oriented and that they read Ask. So I'm like oh these guys must Ask because they ask questions all the time so their cost is 1 percent. If you have less than ten properties and it's going to be 1 percent of the bookings that you get through them the automatic bookings and if you have 10 or more properties then it's .75 percent. So you can see they they charge you a tiny bit more but if you're making what they promise 40 percent more dude wouldn't you pay that all day long. You would pay that all day long. You know give somebody if I if I told you hey give me a hundred thousand dollars. And in the next year I'll teach you how to make a million dollars. Wouldn't you do that all day long if you had an ATM where you put a dollar in and a ten dollar bill came out wouldn't you do that all day long.
[35:40] Like yeah you do it all day long. So remember when somebody is making you money and it's working. Pay them for it. It's a small percentage and you're making more than you would have before. So they also they have a free 30 day trial that you can try them and use them. So don't be afraid to go on there and use them because what's really cool is they'll look at let's see. I give them one of my properties and the majority of the property is filled up like 80 percent of it is already booked and there's only 20 percent left to fill. I only have to pay that percentage on what they fill automatically. So that's pretty cool. I like that. And then the second and another really good one. Almost everybody I know uses that one is BeyondPricing BeyondPricing.com. And here's the the one thing that kind of irks me about BeyondPricing. Now I know they're good. Everybody's going to sit and go but Michelle they're really good.
[36:40] They are they're really good. So if you take advantage of their free 30 day trial you get a penalty on their annual fee. You pay a little bit more. And I know it's only .1 percent but still come on. So their cost is 1 percent of your total prices and doesn't matter the number doesn't work the same as Wheelhouse.
[37:04] So it's 1 percent of their automated bookings that they do for you if you pay on an annual basis. Meaning if you pay for 12 months at a time all at once you with no trial it's 1 percent. It's 1.1 percent if you use the free 30 day trial.
[37:25] I know. Right. I know. But and get this if you pay month to month. It's 1.25 percent.
[37:35] But what's really funny is you can use the free 30 day trial and do the monthly thing. They they don't penalize you on the month to month one. But it's still 1.25 percent. So it doesn't seem like a lot but I want you to kind of calculate what you make. All right. Now remember this is all your income. This isn't less your fees. This isn't your profit. This isn't your net. This is a percentage of your total income from your bookings in some cases I don't think they charge on top of your cleaning fees but they do on taxes for the most part.
[38:10] And any other fees. So that's going to be before Airbnb fees or the RBO's fees or whatever. So if you're pulling in total let's say $5000 or $6000 a month on a property that that percentage can be a lot of money and it can add up over 12 months to a lot of money.
[38:33] So really take a look at it if you've got a little place and you're only pulling in a few thousand a month like one or two thousand a month it's it's not that big of a deal and it might get you more bookings because you know they teach you how to be a little bit more aggressive than you would probably be on your own. So you might be OK taking it. But they say they can raise your revenue 40 percent like everybody else. I don't know how they can make that promise. They must have some statistics some kind of testing that they did where they have it because they wouldn't let them announce that if somebody didn't do some kind of study somewhere. And that's probably why all of them use that same number. That same statistic.
[39:18] But remember those are the three ways that you can do pricing. You could do it yourself. You can have your Hosting site do it like Airbnb do it for you. And they don't charge you for that. Or you can pay somebody else to do it. OK. So you have to decide you have to take all of those factors into consideration and decide for yourself. Now Airbnb just came out with something recently and I clicked yes on it. And I'm not sure if anybody else listening has seen it yet but they're doing a beta test of this really cool pricing feature that you see at hotels. OK. Have you ever been to one of those Web sites like hotels.com or even even going directly to like Marriott.com or something and you're booking a hotel room if you pull up the rooms that are available for that night.
[40:18] A lot of times the same room you're going to see two different prices one will be higher and one will be lower the lower price the first price will be lower but it will tell you that it's non-refundable. So like once you pay it you can't you can't cancel it. You're locked in but you get you pay more in order for you to have a more laxadaisy cancellation policy. Have you ever seen that. Do you know what I'm talking about. Guess what Airbnb is doing that now. And because I have a strict policy set for my properties they know they have this thing I said do you want to be involved in this blah,blah, blah. And I was like yes sure I'll do it. The they raised it I believe it was 7 percent. They take the current prices that you have and if you if they so choose the strict policy they get the price that you have there.
[41:16] But if they want the more laxadaisy one they charge them 7 percent more than what your current nightly rate is. So for instance if your property is at a $100 dollars a night and they are willing to go strict and stay with your strict policy they get it for $100 dollars a night. But if they want a more laxadaisy policy and they want so many days to cancel they charge them $107 a night. OK. So you make a tiny bit more money. So I was like Yeah let's see let's see how this goes. But I don't know. And you know the more I thought about it after I did it I was like 7 percent I don't think I would rather spend that seven dollars to be on this strict policy. Because I don't like filling my books. You know all over the place. I like everything to be set and forget it. But to be honest I really don't have that many properties that I manage myself anymore. The only reason I'm managing the few that I manage is so that I actually did it on purpose and bought a few more properties that I could do it so that I could know what was talking about when I did this podcast because I've been on autopilot and I'm going to teach you to do it.
[42:34] I've been on autopilot for a long time because that is your goal people. I am a busy busy person. I have five kids. I love that everybody is growing up and moving out. My son he started college when he was like our youngest started college when he was 15 because he was home schooled and I'm telling you I did like a happy dance like this. Yes. This is great. I got time to myself again. So I really cherish my time. I've got a lot of stuff I do. I keep busy. I am not sitting on my butt eating bon bons and watching soap operas or anything. I'm doing things but I like I like to just get a paycheck. That's all I want when I have properties. My favorite thing is just buy the property invest it. Set it up and then go. And then everybody else worries about the headache stuff they have to worry about you know heaters being broken or sinks leaking or somebody not getting in or somebody being locked out. That is somebody else. I don't even have to worry about it. So I decided when I was you know I'm like you know I want to do a podcast about this and I thought you know I really got to get my feet wet in this again. I'm going to pick up some more properties and I'm going to manage them myself. And holy cow you should hear me with my husband.
[43:59] I can't handle the stress of it. I don't know how you guys do it.
[44:03] Because like every little review it's like that's a great place. What do you mean they gave it four stars or four and a half stars or whatever. Well I'm like how does this happen?
[44:17] I stress out about all of that. So I think you know all these things depend upon your personality. But let me give you a light at the end of the tunnel if you're anything like me. Here's the deal. Once you have three or four properties actually you can start sending things on autopilot right away. But there are great companies that require you to have three or four properties and they do everything for you. And Guesty is one of them but I'm going to do a whole episode on that. But the whole thing is you should be setting this stuff on on autopilot. Why. Because you are now a business owner. Remember that. This is a source of income for you. That is why you're going to be doing this if you're doing it for another reason. Like I said companionship or you know for the fun of it then that's different.
[45:10] But if you're doing it for a business you're a business owner and when you get started in a business you do almost everything by yourself you're like you you set this up you do this you know you get the cleaning. You might even be cleaning yourself but eventually your whole purpose as a business owner is to hire other people to do those things and you put yourself in a different position. A money making position where all your time and all your effort goes into creating more revenue for you meaning find the more properties or by finding other investments or ways to invest your money or whatever it is but that your time will be better spent in the future doing things that make you money rather than doing all these little things that are just I mean there are things that have to be done but they're not making you money.
[46:05] The reservation is already there when you're claiming it's not making you money. It's just a job it's just a job that somebody else can be doing when you are looking at other properties and signing new leases or buying new properties and setting them up. Guess what you are creating more money and that's what I'm going to teach you to do. That is the entire purpose for this is so that you can become a business owner and start duplicating this so that when you are ready to retire that you can sit back and enjoy that pina colada on a beach somewhere and listen to reggae music with me right. That's what I want for you. I don't want you working your butt off the rest of your life so I immersed myself in this business again with a bunch of rental properties that I had to manage because I really wanted to get that feel again.
[47:00] I did it before I did it. You know when I first got started I handled all that stuff but I was like you know let me refresh my brain. And now that I have refreshed my brain I'm like oh my gosh. So I promised myself I was going to do it for a year and then kind of blend you in with me as I blend and put it all on autopilot. So I'm going to take you for that entire ride right. How to you know obtain the property and secure it. Get it running. Get it cash flowing you know get it from breaking even to where it's actually creating an income and then move you gradually into. OK now let's put this on autopilot and go to the next one and keep setting up another one and another one and then open an IRA and set up an LLC and take the LLC and then form another company for your retirement that we don't touch over there.
[47:56] But we've got the income coming in creating our lifestyle right now and we've got the IRA going and creating the retirement income of the future. And then you can sit and relax because all this stuff will be on autopilot and if you want to you can buy this awesome house anywhere the heck you want to. And bake cookies for as many guests as you want to do all that you want to because you will be secure in the fact that you've got a residual income coming in every single month and you've got money being created for your future and being put away for the future as much as you want. OK. But that is your goal. That's your end goal is to not have to work your bottom off all the time and it is completely and totally possible. I don't like the worrying and I know you might think I'm lazy it's not that I'm lazy. Believe me I've got a lot of stuff I do.
[48:55] I work all the time. You can ask my husband you know he looks forward to the times where I'm like OK he goes off she's stepping out of the office thank God because I do I work all the time in all my businesses. But the problem is with that is you know what is really important in your life your family that time. That's the most important thing you really have to keep track of those things. But what I do right now what I'm doing is just basically securing the future for my husband and making sure that he can retire and sit back and relax and making sure that when we retire that we have the money you know to retire the way and live the way that we do now. I take an entire month off in September- October. You've probably heard me because I've talked about it.
[49:49] I've been on other shows. I was on insider which is a show about Disney and it's all about insider for Orlando and they did an interview with me and I talked about the Halloween Horror Nights and I do that every year I take a month off here a month off there. I do take time off and I love that I love to go travel. I spend an entire month in Australia,I've spent an entire month in Panama. I do that all the time and I like that lifestyle. I like what I do. I like walking into a store and being able to buy whatever the heck I want to buy or sitting down in a restaurant and not having to look at the prices. So I've worked hard for that. I was raised very poor. I mean we did not have a lot of money. We were I was just teaching my son about shit on a shingle the other night and he was like what.
[50:41] And I said oh this is way better than shit on a shingle and he was like What is that. And he goes Are you saying shit. And I said yes shit as SHIT, Shit on a Shingle. I said when we were young my mom would make toast, butter it, take a can of tuna, cream it with some flour and some milk and take it. Dump it on the toast and that was dinner and we called it Shit on a Shingle and I said that's you know you come from that you really work hard and you appreciate the things that you have. But I don't want those to stop when I retire. I like the lifestyle that I've built and I want to keep it for ever and ever and ever. For the rest of my life I don't want to go back to Shit on a Shingle and I don't want you to either. I want you to work hard but work smart. And then remember that you're a business owner now. You're going to relinquish some of those duties to other people. MWA's, minimum wage activities. Not that those people are less than you. Not at all. We are not placing ourselves above other people we're just saying that we are a business owner and as the business owner we need to be doing activities that earn more income.
[51:49] That's our job. Our job in this whole scenario is to make more money, right. To earn more money so we can pay those people what they deserve to be paid so we can pay them well and so that they're happy and what they do.
[52:03] OK. So you are now a business owner. So anyways that's my rant for the week. God bless you. I'm so super excited because it's Christmas time but I want to thank you again for listening. I want to thank you for all the reviews. I want to thank you guys. Oh my gosh my inbox is getting crazy there's a ton of people asking questions and I'm trying super hard to get to everybody and give them really great answers. So just help me keep up with you if I haven't answered you yet. It's just because there are so many of them. But I want to get to each and every one personally and make sure that you get your questions answered but keep asking those questions because they give us the ideas for the upcoming podcast and we really want to help you.
[52:44] We are here for you. God bless you. Have a great day. Go and grow.
Audible is offering a free audiobook download with a free 30-day trial to give you the opportunity to check out their service. To download your free audiobook today, go to audibletrial.com/STRRevenue or just click on the image above. Audible is a proud sponsor of the Short Term Rental Revenue Podcast.
We've got something AMAZING in store for this year's class! You won't believe all of the trainings and videos that we've added... plus
We've added interviews with some amazing experts in all areas of our business. People to help you build and grow what could potentially be the very business that carries you to financial freedom!