SHOW NOTES & LESSONS
OBVIOUSLY - the first thing to do is to make certain that your STR is LEGAL where you are located. That's first and foremost.
01) Make sure you have Proper Insurance. Get our free download here.
02) Treat your business like a business, not a hobby. Form an LLC and make certain you never, ever co-mingle your funds. Keep receipts for EVERYTHING!
03) Hire a Bookkeeper, especially if you aren't good with numbers or you aren't very organized with taxes. You will need one!
04) Location, location, location! The location of your STR is absolutely key to creating a good income. You want the absolute best location you can possibly afford that will earn you money.
05) Cleanliness is next to Godliness! IT HAS TO BE CLEAN!! No excuses, ever!
06) Great mattresses are super important. Cover your mattresses and pillows with protective covers/pads that prevent Bed Bugs (nasty things that are difficult and expensive to get rid of). Make sure everything is comfy, from your mattress, the protective covers, the sheets, blankets, and duvets. AND... make sure the 'look' comfy in pictures, too!
07) Speaking of pictures, you must have professional pictures taken of your unit. There is no getting around it now with all the competition out there. You need great pictures, a perfect thumbnail, a marvelous listing header or title, and a full profile for you as the host.
08) Lose the keys - you must have electronic locks with codes you can program (and deprogram) remotely.
09) Automate right away. Two main things are your pricing, using something like Wheelhouse, and your messaging, using Smartbnb. Keep your introductory prices low until you get your first five bookings and some 5 Star Reviews under your belt BUT be careful to block high season dates and holidays before you go live with those low beginner prices. You certainly don't want people to be able to book your highest season at those low prices. Also, use instant bookings but make your cancellation strict and only accept guests with positive reviews and verified profiles.
10) Offer Insurance. Read our article on how to do this! It will help keep your cancellations low and you'll rarely get anyone asking for a refund. We cover our Strict Cancellation and offer Travel Insurance in our HOUSE RULES. Look below #14 to see a cut and paste of this message indented in green and feel free to add it to YOUR House Rules.
11) Gather emails of your guests and begin a newsletter to keep in touch, offer specials, and get rebookings without all the fees.
12) Whether you clean your place or not, you must pay your cleaners... which may mean paying yourself. Use Properly to find cleaning services and our questions to interview potential cleaners, if you need to.
13) Use Airdna and KNOW YOUR NUMBERS! What's the average number of nights people stay in your area? What the per diam rate? What is the average occupancy rate? What "grade" does Airdna.co give your zip? These are things you must know!
14) Don't ever buy properties using income projections from a Short Term Rental - we talked about this last week. Use numbers from a long term lease to run the numbers before buying "just in case."
Our Strict Cancellation Policy
Have no fear. We aren’t tyrants but we would like to ask that you go over the book within the next 48 hours just to make certain that we are a good fit for one another. If you decide to cancel within that time, there will be no penalty – no harm, no foul. If you do decide you can handle us (we’re pretty easy only asking for you to treat our property as you would a dear friend’s with just a few easy rules) then might we also suggest you take a moment to check out some Travel Insurance.
Travel Guard (an AIG Company) can provide you with inexpensive travel insurance in case you are forced to change your plans due to unforeseen circumstances. We are not affiliates of any kind and don’t get any kickback. However, as small business owners, we are unable to refund your money if you are forced to cancel. Our reservations book out farther in advance and we are often unable to fill openings that pop up unexpectedly. Therefore, so you don’t ask and we don’t have to deny any requests for refunds, we have found an inexpensive alternative and that is Travel Guard (dot) com.
Travel Insurance through any company is great to have and may cover your flights, lost luggage, and other unexpected events that could disrupt your vacation plans. We use them often or purchase Travel Insurance through American Express, our credit card company. They are wonderful when traveling outside the country.
WHAT BOOKS, PRODUCTS, SERVICES, OR LINKS WERE MENTIONED...
Airbnb has a great little article (well, not little... but great) on 60 tips for your bnb. You can find it by going here:
https://community.withairbnb.com/t5/Hosting/A-Host-s-guide-to-Airbnb-60-tips/td-p/409261
[00:01] 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 while creating greater income, is your host, best selling 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...
and in today's episode,
, we're going to be talking about what the newbies don't know. These are things
you have to know if you're a newbie when you're just getting into the business.
Before we get started. Though I wanted to remind you that today's podcast is
brought to you by Audible. You can get your first audio book for free and 30 day
trial into the audible membership by going to audible trialled dot com. Forward
slash S t. R revenue. That's audible. Trialled dot com forward slash S t. R.
Revenue To get your first audio book for free. I am in a contest with a bunch of
people and we're doing a book challenge. So if you're not a book reader, I'm
gonna challenge you to reading one book a month. That's 12 books a year, one
book a month and you can do this super easy by having an audible account. Now
I've been doing audible books for Boot Boy, probably 14 15 years. I've had an
audible account since 2006 I believe, and I have 750 books. Her more on Audible
have a lot of books on Audible and even someone Other platforms. But here's
the deal. This year I decided to do a challenge, was some friends and they
challenged me to 50 books and I thought, You know, maybe I did read 50 books
last year, so I got them all down and no, I read 34 books last year. It seems like a
lot of books, right? It actually felt like a lot of books. I totally thought it was 50
books I really did. But then when I looked at them and I was like, Oh my gosh, I
only read 34 books. That doesn't seem right. So this year I'm pushing myself to
read 50 books, and what's really cool about that? Is I already Here it is January. I
already had a pop up road trip and on that road trip 1000 miles each way, I
actually read five books. What's really funny is poor Amato. Ah, mottoes like
that's not fair. I'm like, Go on a road trip, man. It's so easy when you have to
drive places. If you're driving to and from work every day, it's an easy, easy way
to get into the book mold. And usually I'm listening to a book every single
morning while I'm getting ready and getting showered and doing my juicing. I
constantly I'm listening to books. So we started this year off with the Miracle
Morning. And so we've all been waking up at 5 36 30 in the morning and making
sure that we get the day's starting. When you do that, we're starting with
meditations and affirmations. I'm telling you, this year is moving incredibly fast,
but it's been incredibly productive because of the miracle morning. I really
believe that we've got a bunch of stuff planned. I don't know if you've been to
the website lately, but I encourage you to zoom over there because if you go to
the website, you'll notice that we've put a little recording place on there for you.
There's at the bottom. You'll see an orange and black fund, and there you can
hear a little message from me and you can leave me a message like a real
message, like a real voice mail message. Now, when you do that, I want to
remind you that you're giving us permission to use that on the air. But your
question or comment or whatever can be used on the air. You might hear it
here on the podcast. So go there, take a listen and every podcast. I'm going to
start asking you guys some questions and get some feedback from you on this
because I think it's really important to know what you want to hear or what you
want to say to others. Maybe there's some great piece of information that's
brilliant and just sitting inside you, and you're like, I got to get this out to as
many people as I can. This would be a great way for you to do that, so leave me
a message on there, but I also encourage you to please please join our book
challenge. It's not too late, and honestly, you can do in 11 months challenge and
say you only want to read 11 books. So it's not that bad. If you're getting started
late, it's not gonna be that bad for you. Just come in late and give it your all.
That's all you have to. D'oh! Okay, so so far I have read the loss King. The
Miracle Morning Failing forward Will Power doesn't work. Your ideal future. The
fourth agreement, the fifth agreement. Those were really good. If you guys have
never read the fourth agreement or the fifth Agreement, I read them years ago
and they were really good. But you know what? I didn't remember all of them
and I couldn't remember what the book was or how good the book was. It didn't
seem like it was there for me. But now this time I read it and it really, really
resonated with me. So I read the fourth and fifth Agreement. Great books and
the Alchemist, which is a great story. Everybody always talks about the alchemist
and I had never read it all the way through. So I decided to finish that I read
Peek. Oh my gosh! Peak is so good Peak is the same guy who they quoted in
outliers. They took his information that he wrote He's like a scientist, right? And
so an out liars. They said that you only have to work 10,000 hours to be an
expert at something, right? So you put 10,000 hours in and you're going to be an
expert at anything you put 10,000 hours in on. And so this guy wrote this whole
book about it and about how these people were hockey's people. And because
they had been born early, they had more hours in and therefore had a better
chance of becoming pro athletes in hockey. And he gave a bunch of other
examples. And he also gave, like, this violent example. Well, it's scientists who
actually created that data, came and wrote his own book called Peak. And I'm
telling you, that book was amazing because he basically said Yeah and know you
took it out of context because some of those people still are not expert violinists,
and they had an average of 10,000 hours, so some of them had 8000 hours.
Some of them had 12,000 hours. It doesn't matter but the whole thing was they
took it out of context. And he said Some people can do something 10,000 hours
and never get good at it, and some people can do it for 4000 hours and become
an expert at it. So what they said is you can become an expert at anything if you
put 10,000 hours and not true. But the book itself was really great because it will
let you know that there's really no prodigies, no one who was born to do
anything. So if you think that I can't do this because I didn't start when I was four
or I can't do this because it's not in my DNA or I can't do this because any other
reason, right? I'm not a savant. He basically takes those things and crushes them
and tells you you can do anything you set your mind to when you constantly are
focusing on improving. And so I loved, loved, loved the book peak, and I hope
you get a chance to pick it up and read it. I'm gonna put it in the show notes. I'm
also going to make a link for the books that I have read and the ones I really
recommend. Maybe Aiken take time out to do a little blurb on them. What? I
thought of them and leave a place for you to comment below that so that you
can comment on the book as well. If you read it and please do everyone a favor.
Don't leave a comment if you only read part of it because a lot of times I'm
reading a book right now by burn a Brown and I love her books. I've read a ton
of her books. This is her newest book, I think, and I hadn't read it, and I was
actually a little bit disappointed in it until I got about three hours in. And once I
got three hours in it got really good. And then I was like, Holy cow. I'm so glad I
didn't stop reading this because I would have thought when Bernet you let me
down, all your other books were fantastic, and this one didn't grab me right
away. But maybe it was just the fact there was a lot of, you know, old
information. That was she was repeating and going on And then suddenly, when
she started talking about a few other things when those key things hit and
around like it was just before three hours and then it was like Bam, bam, bam!
And she was going to us. Good. But I haven't finished that book, so I'm not
gonna give you that book yet, but do us all a favor. When you're leaving those
comments, make sure it's a book. You finished, Okay, and you can listen to them
like I listen to them. I listen to them all on fast speed, and that's how I finished
so many books. People always wonder, like, How do you do that? It's like, Well,
because I'm doing it in all my cracks of time when I can't be sitting down or in
front of something like my computer or something. I'm doing it in all those little
cracks of time when I'm driving, when I'm doing other things, like getting ready
or doing dishes or laundry that is playing in the background. Always be learning
guys because you don't know what you don't know. Okay, so speaking of what
you don't know, let's go right into what newbies don't know and what we think
they need to know. And again, if you think there's stuff to add to this this week.
Great. This is gonna be a great time for you guys to go on the website and leave
a message like, Oh, no, I wish I knew this when I was a newbie, because we can
add to this all the time. So, please, please go on there and leave us a message.
Okay? But newbies, what do you think? You don't know? Well, the number one
thing that most newbies don't know is about insurance. And I went to a real
estate event this past weekend given by an amazing real estate investor. I've
known this woman for a long time. I've actually been a part of a bunch of her
different groups and then to many of her trainings, decades like a decade ago.
Okay, because she's been in the business for a long time and she knows
everything about rehabbing. She's definitely the expert. She has rehabbed way
more houses than I have hundreds, probably more than I have, because it's
what she did. But she was giving a talk on short term rentals, and I thought, Oh,
let's go see what I don't know, Right? And I got there and I was amazed at what
she didn't know because she kind of fell in to this situation where her friends
were doing short term rentals. And she got into this great location in Branson
and bought one, and it was making a lot of money. So she bought another and
another, and I think she now has six there, and she is making bank right. But
when she was teaching everybody about it, she left out some really key areas
that are extremely important and one of them was insurance. So if you're
listening, I don't want to state your name. But if you're listening, here's
something you missed your insurance for. Your home will not cover your short
term rental business. Nor will a landlord policy cover your short term rental
business. Get this, you guys, This is a business, and it is a different type of
business than any other business. You are handing your keys to somebody you
don't have a lease with, and they don't have a lease with you even when you
create a contract with them. Because some people are going. Oh, well, I'm one of
those super smarty pants as, and I've got, you know, my attorney to draw me up
this cool little contract, and I have everybody sign it. Good for you. But guess
what? That's not going to rectify the fact that your insurance is going to treat this
like a business. And not like you are a landlord who have tohave a business type
insurance. And if you go to the website for free right in front, you will see the
three gifts we have to give you in. One of them is a sheet with eight short term
rental insurance businesses, insurance companies that you can hire and get
some policies through that will cover your short term rental. Now the policy that
we have is through proper insurer, and I love proper insure their back by Lloyd's
of London, which is the oldest insurance company that there is. And not only are
they backed by Lloyd's of London, but they have some really great parts of the
policy that you can put in there, and one of them is going to help you out in case
of loss income now lost income could be because, let's say somebody went in
there and filled up your tub on the second floor with water. And then there was a
leak down to the bottom floor. Or maybe the whole tub fell through down to
your bottom floor. Something crazy. But I mean, it's going to prevent you from
you having your next guest check in on time. That's going to create not just a
cancellation, but it's going to create a loss of income, depending on how long it
takes to clean that up and get it ready for the next gas, right? Could be weeks if
it was something devastating, like a fire or a flood. And you need to be covered
because this is your business. So you've got to have the right policies. I want you
guys to go in there, dig through those companies and their policies and ask the
right questions. Okay, But that is the number one thing you need to have. If you
are a newbie, you need to know about insurance. Don't be cheap, because I will
tell you something. Being cheap is going to cost you not just your business. It
could cost you your home and every asset you have do not be cheap. You need
insurance, you need the proper insurance. And don't listen to those Yodels on
the Facebook pages who think they know everything. Be like the redhead
chicken game of Thrones where you're like, you know nothing, Jon Snow. They
know nothing. They know nothing. You need insurance. Really great insurance.
Now, before I skip too far ahead, I wanted to make sure that you knew, really
The number one and the first thing to check before you do anything with a short
term rental is you have to make sure that it's legal where you would liketo have
it. And the second thing that I would d'oh after I made sure it was completely
legal is to go on air d n a and get the grade. And we're going to talk about that
just a few steps down. But those would be the 1st 2 steps that I did has a real
estate investor. It doesn't necessarily have to be the ones that you do, but why
spin your wheels, guys, if you wait to do that step and you find out it's illegal
after you do all the rest of this stuff, you're just negating the fact that you
needed to do it first, so those should be the first steps. But most of the time,
what I'm talking about here is, if you've already planned it, you've already got it.
You know it's legal and you're starting it, so that's where we're going here. So
the first thing was proper insurance, and the second thing is to treat your
business like a business. It's not a hobby. You have to protect it like a business.
You have to treat it like the business that it is in order for you to be taxed the
way you want to be, meaning that you want to be able to take legal deductions
from your business. And you can only do that when your business is a business
and you treat it like a business. So if your business is a business, you really need
to protect yourself by creating an asset protection plan like an LLC surrounding
your business with the protection of an LLC will protect your assets at home like
your personal car, your personal residents and everything else, as long as you
never pierce that veil that corporate veil of protection, and you always treat your
business like a business, not like a hobby. So I recommend that you given LLC
and create an LoC and put your business inside that and treat your business like
a business. Always keep your accounts separate. Always make sure that
everything stays within the combines of the business entity, the LLC entity. So
treat your business like a business. Another thing you want to do is get a
bookkeeper, especially if you are not good with record keeping. Or if you're not
good with taxes, you need to get a book keeper and I don't care. I don't want to
hear you guys tell me how expensive book keepers are. You can get a
bookkeeper overseas for a lot less than you think. Just find a bookkeeper
because it's imperative. And make sure to that your bookkeeper does not have
access to your accounts. We've got some really special guests coming up. One is
an ethics specialists, and she will tell you about the ethics of your business and
especially when it comes to accounting the ethics of business accounting
because the majority of time when someone rips you off inside your business.
It's your bookkeeper. Yes, it is. And so she's going to talk to us about that. You
will love, love, love her. And we also have an IRS auditor coming on, and she's
going to tell you about all the things that you can do to protect yourself from
an audit. Now, remember, if you're not breaking the law, you don't have to
worry about an audit. But kind of It kind of makes you sick thinking about it,
right, Because who wants to go through that? Theyre dragging you through the
mud. They're looking for everything. If you lost any little receipt, you could get
your butt handed to you, right? So obviously were all afraid of getting audited.
She's gonna make it easier for you to protect yourself against an upcoming
audit, so I really am looking forward to those two interviews coming up. But
again, you need to hire a bookkeeper. Another thing is the location location is
critical. I mean, I would put location above almost anything else. It's like, OK,
make sure you've got a great location, pick your location, then find out if it's
legal because location, location, location location. It is way more important than
just a regular rental property. When you have a regular rental, almost anywhere,
you can put it almost anywhere and someone's gonna rent it even if it's in a
beach location. They don't need to be right on the beach. But if you have a short
term rental property, you're going to get a lot more money. If that short term
rental is right on the beach, absolutely ul day and night difference from
something down the road, you can demand a lot more. The better your location,
the closer you are to amusement parks, the closer you are to anything, any
attraction that your city is famous for. So if you are in Texas and you're really
close to south by Southwest Booyah, you've got some money making activities
there. If you are close to Disney and Universal Studios again, yea, the farther you
are away, the less money you can demand. Even nicer properties go for less or
are booked less if they are farther away. So you want to stay as close to those
things as you possibly can, but still in a great area. Okay, still, keep your area but
location, location location is definitely important when it comes to short term
rentals. Unlike long term rentals, you can kind of get away with a lot more with a
long term rental. And I wanted to remind you two that cleanliness is extremely
important. So we've already gone into how the higher our cleaning companies
on previous episodes. So I'm not gonna get super into that. But I want to remind
you that right there on our front page, there are freebies there for you that will
help you out with this Because we've got questions to ask your cleaning
companies in order for you to hire someone that is really good at cleaning a
short term rental property. And you can also go toe a really great website that's
called properly and they're gonna help you find your house cleaners, and
they've got them trained really well, choose that they can just upload their app
and take pictures of your property, and everything looks the same. Each and
every time you're gonna love, love, love that. So if your brand new it that
remember, cleanliness is definitely next to godliness and nothing beats a clean
property. Another thing is having a great mattress. You really have to have a
good mattress. And what's really cool is nowadays there are mattresses in the
box that are really comfortable and not very expensive. Consumer Reports had
a great article on the best mattresses and guys. You don't have to spend a ton
of money to get a really great mattress with a really high ranking, so you can
keep it rather inexpensive. As a matter of fact, most people spend around five or
$600 for a mattress, and they're very high rated mattresses. But when you get
your mattresses, what new people forget is you really need to protect them and
you need to protect your house. You've got a lot of people coming in from all
different places, so you have to protect your place from bedbugs. It's important.
So you want to get mattress covers and pillow covers that protect against
bedbugs, and there are specific kinds. Make sure you get them and make sure
you clean them all the time. You should have a couple of different sets of them
Now. I know there are some people out there who don't clean them each and
every time but minimum once a month to clean your mattress pads. They really
have to be clean, and I like to clean everything between guests. But a lot of
people argue with me on this point. I don't care what you think I am super just O
C d. About shit. I want my place really clean. And when my people walk in, I
wanted to smell and look great. The bed sheets are crisp and clean, and the
mattress pads and the pillow covers are all bug protection. They're not just
comfortable, but they're protecting you against bugs. And that way, if somebody
does bring them in, they're not gonna get inside your mattress. And that's just
creates a bunch of problems because it's really hard to treat bedbugs. It takes a
lot of heat, which is really expensive that you have. Those guys come in and
steam clean everything out, and it's just disgusting. They have to go into the
electrical outlets and everywhere around the room. I mean, it's crazy, guys, you
sure as heck don't want them to get inside your mattresses and your pillow
covers, because once they are inside your couch, bye bye couch. I mean, and
that's expensive. You can't necessarily put a mattress pad over your whole
couch. But if there is a mattress inside your couch, if it's like a hide a bed, you
definitely want one in there. But a lot of times you may not be able to get them
out of stuff, and you might have to throw things away. So when you invest in
something, invest in the protection for that something also, not just the
mattresses and the protection, but you want to make sure that you're betting is
comfortable and nice. You don't want crappy, scratchy, cheap sheets. You want
very comfortable, nice soft sheets, and you want bed covering that is the same,
especially that looks comfortable for your pictures. So you want a bed that looks
like I just want to jump into this bed and curl up like a little ball and just sleep in
there like a heavenly pillow like a cloud. That's what you want. You want
something that just screams. I'm a comfortable bed, not just in pictures, but in
reality, so betting is extremely important. Do not do not slack on this. Do not
say Well, I'm gonna just get a cheap mattress from a goodwill. And I'm gonna use
that. No, no, no. And no. Because God knows what that mattress was used for.
This is your business, and your business is a place where people are going to
sleep. So this is important. Do not slack off on this. Now again, we're gonna
mention real quick the fact that you have to have professional pictures. I know
we all say it. Everybody's out there. Said this. And there's a few of you or holding
off on this saying, Well, I can get away with this. Yeah, you totally can. But guess
what? As the competition gets bigger and bigger and bigger, there are less and
less people out there because there are more and more properties available. If
you have crappy pictures, that's gonna be on you. You really want to invest the
few $100 that it takes, and it's only a couple $100 at the most to get professional
pictures done. They make all the difference in the world, especially if you have
somebody who's going to set it up and make it look as if there's somebody
there, you know, they're going to set up little scenes, and it's really going to be
an inviting environment that they're capturing on film. These are critical. So
don't skimp on the pictures. We talk about them all the time. And I'm sure
there's a lot of you going. Yeah, yeah, yeah, I've heard it. I heard it. But guess
what? Competition is tough. So you want really great thumbnails You want the
listing entitled to be super awesome Sort captures their attention. And you want
to make sure, too, that your profile is complete. Don't lack on the profiles in all
the different platforms that you're using and use more than one platform guys
cause we talked about this last week. Why competition's getting stiff. You have
to choose a couple of platforms, find the ones that you can afford and that will
move you for because it's really important that you're not just out there sitting
on one platform. It's getting tough. Okay, lose the keys. You don't need keys.
Keys are a pain in the ass. I mean, they are awful. The reason why is people take
them with them all the time. They lose them all the time. Even your cleaning
crew will lose keys all the time. And, yeah, you can charge people and then you're
just gonna piss people off and they're gonna leave bad reviews because you
charged him $50 for a key. Why do that? Just invest the money in a nice
automated door locked just like a sledge or on autumn or something nice that is
going to allow them to come in and out without a lot of problems. There's no key
to lose. That's what you want. Don't even mess around with it. Keys are a pain in
the butt. They get lost. You have to replace thumb, and it just causes a lot of
challenges. Lose the keys you don't want keys, get automated, get automated
quickly, and let's just go into getting automated. There's a couple of different
things that you want to automate right away, as well as your door locks, and
that's gonna be your messages right away. You should be using smart being be
your messages, automating those guys. Oh my gosh, it's going to save you hours
and hours and hours of communication time with your new guests so you
wanna save your messages and again go on short term rental revenue dot com,
and right there on the front page, there's a place for you to download our
messages for free. Download those messages, use them there. Right there. You
can cut in pace and make him your own right, But you want those messages in
there. You want them automated, and your guests will get all this
communication. It won't be done by you. You'll get a little message on your
phone or something. Set up your phone with Airbnb or Lincoln to whatever
provider you're using, and you'll get a message when they are returning your
message. So if they text thank you, you can see right away they're thanking you
for some automated message that you sent. Or maybe they're sending you
something else, and that's when you'll know. But otherwise it's gonna do pretty
much almost all the work for you. I'm serious. Not even getting 99% of your
messages are going to be sent automated through smart B and B, and you're
absolutely going to love it. And another thing you automate right away. You
guessed it prices. You don't want to mess around with that. It is complicated and
the prices are constantly going up and down. The demand is going up and down
events or popping up concerts or whatever. That's smart pricing, using
something like wheelhouse, which is used wheelhouse. That's their website. But
wheelhouse is my favorite. They do my smart price and they make it go up and
down as the market demands. And you need something like that because it's
going to do all the work for you. And that's what you need, because we're not
good at setting the prices yet. It takes us a while to really know our market. Now
you don't have to do that right away. Actually, the first handful of bookings
you're going to do, you're probably going to do yourself and you're going to book
them a little bit under market. Why? Because you're gonna have all that
exposure up front and you want five really quick reservations made into your
property right away. So here's some hints about that when you're getting your
properties started, bringing your prices down are gonna get people in there so
that they can leave you a five star review because you've never had any reviews
on there. So the enticing part of this is going to be the low price, right? But you
want to be careful. So let's say you're starting this in the spring, right before
your big season in this summer. Don't leave your whole entire calendar open for
summer months at a really low price because your peak months have to be
saved for peak months. Start off your calendar slower and especially, like if
you're starting off, let's say before Christmas you don't wanna have your
highest, most peak days booked out at those low beginning prices. So block
those dates. Block your peak dates when you start this so that they can't book
those peak dates on those low prices. Do you understand what I'm saying? That
basically what I'm saying is don't shoot yourself in the foot when you first get
started. Lowering your prices and having them get those really low prices during
your peak and most expensive days blocked those days so that they can't book
those out. Also, you wantto make sure that you're using something like instant
books. You're not constantly answering all these requests. Feel free to make sure
that your instant bookings are being made by people with at least two good
reviews and a full profile, and that they have a verified profile. So make sure that
you still raise your stipulations. And I know people are saying, Well, make your
cancellation a little bit more lax a daisy. In the beginning, you can or you can not.
I would not. I am one of those people. I have a strict policy, but I also offer
insurance to people when they're booking. So one of my automated messages
lets them know that we have insurance and that we offer insurance. We offer a
strict strict cancellation policy, but we also talk about that in one of our
messages to our guests. This said, OK, you've got 48 hours to cancel this with no
penalty. After that, we want you to get insurance, travel insurance, Go to travel
guard dot com, and we actually spell out dot com because Airbnb blocks those
things. So we write it all out travel guard dot com or Pablo and we offer them
insurance and we let them know there's like this nice verb ege that we say. But
basically it says we're serious about our strict cancellation We don't want to say
no if something happens to you. So we suggest that you get travel insurance to
protect yourself. It's very low cost Provo reservation. It's gonna protect you and a
link to the article that we have about that for you guys so that you can do that,
too. But offering travel insurance, especially on the instant bookings and having
that strict cancellation policy that really helps out. Another thing that we do is
we gather email addresses were always creating our list, meaning we want a list
of all our customers who they are, who stayed there, and we want to send them
out a newsletter. I really encourage you to create some kind of newsletter,
something that's going to go back and forth with people so that if they come
back out there, they'll stay with you again and again and again because,
honestly, the people who come over and over again, they're going to save you a
lot of money, which means you have to create a website or some way to grab
those reservations so you're not paying a commission on them and that you
have some kind of contract in there so that they can sign a contract with you
and everything is on the up and up. So that's a really good thing to work on.
That's probably gonna be one of the last things. You D'oh! You're gonna get
yourself up and running first. But then you're gonna work on your own website,
building your list, creating a newsletter and making sure that you have a way
for people to pay you and a contract for them to use when they book with you
directly. That's really, really important. So another thing I would like to remind
newbies is that either way, if you're cleaning your property yourself or you hire a
cleaner, you have to pay yourself. You have to pay your cleaner, whether it's you
or whether it's somebody else. It really it doesn't matter again. Go to our home
page at short term rental revenue dot com, and you can download our questions
for our cleaners, right? But here's the deal. You've got to pay yourself because
you've got to get used to running your business like a business. One thing people
forget is to pay themselves, and after a few years they're burnt out and broke
because they haven't learned to pay themselves. There's a really good book on
that, too. It's called profit first and actually the accountant, the one that were
going to be talking to. She's a profit first member. I'll ask her to touch on that
subject to because Profit First is a great book, and it's a great way to get your
business to run when you are an entrepreneur. When you're a solo preneurs
because you've never run a business before, maybe you have. But you've got to
make money first and profit first is a great book that's going to show you how to
do that. But when you're paying yourself for cleaning, that's why you do that.
You have to pay yourself. You have to get used to doing that and hiring a
cleaner. That's gonna be one of your hardest, toughest things to Dio. Remember
to interview at least three people, at least three companies and they have to be
able to answer all those questions. And even if you don't hire them, leave that
open because you want to keep a really good report with these guys. Just in case
your cleaning companies something happens everybody gets the flu or
something on the same night, and you got to use those other guys. So you want
to make sure you do have a second and third choice in your pocket at all times.
And remember what I said about cleanliness being next to godliness. This is
imperative. So go to properly and you can find cleaning companies and their
two maybe in your area. They're not in every area, but they might be in yours, so
it's a good place to check. Also, you want to know your numbers. Now,
remember what I said, how I would check their DNA air D N A. Is the Holy Grail
for investors of short term rentals because you go on there, guys, and the first
thing they're going to give you is a grade for your area. So when you put in and
you purchase your zip code, the zip code you're talking about or the
neighborhood you're talking about, it's going to charge you because of the
population of B and B's in that area. So if there's not a lot, it'll be 1995 a month.
If there are quite a few, it'll be 39 95 a month, and if it's a great area, it'll be 99 95
a month, and you only have to do it for one month if you want. We do it for
every month because they also have smart pricing, which you don't have to use
you can, but it's also like the best place because we want to buy more properties
in the same area. And so we want to be able to look at those properties, plugged
them in. You can literally plug in an address, and it's going to tell you exactly
what you can expect to make in that property, and you're gonna want to do
that, Okay, But it's also gonna let you know. Once you pay that amount, it's going
to say OK, this is Ah, B minus area or a B plus area. If you're really lucky, you get
an A plus area. If it's a C or below, I would be really leery. I would never buy a D
or an F property. I wouldn't even invest in those properties because it would be
really hard to make money and it's not worth it. Go to a B or a area. Air DNA will
also tell you what you can expect. The minimum night stay is for that area. So it
will say in this area in a three bedroom two bath that sleeps eight people, you
can expect for people to stay four nights. That's the average stay in that area or
seven nights, it'll tell you, and then you'll take your nightly rate because it will tell
you your nightly rate, and you can multiply it by the occupancy rate, which it will
also tell you. So let's see. The nightly rate is $100 a night, and the occupancy rate
is 70%. So 70% of your month is going to be rented at $100. So how you would
do the math on that? I'm opening up my calculator so I can help you guys out.
But you're gonna take your nights. So let's say like March has 31 night's right, so
you're multiply 31 times 310.7. That's 70% of March. That's 21.7 nights. So let's
just say, 22 nights at $100 a night. So 22 nights times 100 means you'll bring in
$2200 every month for that property. Now that's the months with 31 days, right?
So if it only has 29 days because this year is a leap year or 30 days, you'll multiply
it. By that you'll get a different number. But you're gonna multiply each month,
the number of days by your occupancy rate, and then you're going to multiply.
How many days you had by the nightly rate. And when you get the nightly rate
than you're gonna know how much you can bring in now you're looking at
$2200 a month. Now here's where the average stays come into play. So if it's
every four nights and what did we say 22 nights, that's gonna be about five or
six cleanings in that period of time. Like if you're paying $100 per cleaning, that
means you're gonna have fire $600 expenses there so your 2200 will have toe
have five or $600. Let's take 5 50 off of that, so that turns into 16 50. It takes that
2200 down to 16 50 of riel money coming in and you're still gonna have
expenses. If you have a rent from that or mortgage from that, your utility bills,
cable, heating, cooling water, all the stuff that you have that come out of, that
they're all going to come out of there. So once you do that, you'll be able to
know exactly what you're going to have left in your pocket afterwards. Do you
see? So now you'll see why those air DNA numbers are so important to you
because they can literally tell you how much money you're going to make. And if
you're going to make any money, right, so you may not have any money at the
end. I mean, if you only had 16 50 but your mortgage was 1000 a month and
your bills came up to 400. That's $250 a month that you be making on that. And
that may or may not be enough money for you. It's really up to you. We don't
take any properties where we don't make at least 1000 were shooting for a
minimum of 1000. We have taken things as low as 500 but I don't even like to do
those. You have to say your own goals about what you want for income. Another
thing that you should d'oh that most newbies don't realize is you have to be
honest in your listings. So let's say, for instance, we've got this property down in
Tucson, and two son has thes old old sewer systems with big, huge palmetto
bugs. I love how people call him Palmetto bugs. Dude, their Roaches. Okay, big
Roaches in the sewer. So we have these big, flat plastic things that go over all
the drains, and then we have other ones that fit inside the drains of the kitchen
sinks. And at night we put like a little teaspoon of bleach down there, just like a
little capital or whatever, and just shake it down and that little bleach keeps
them away. But here's the deal. We let people know that, and so we're very
honest and our description of that property. And we say there are sewers here
that are very old and they have active little critters in them. And in order to avoid
the little critters coming in, we not only keep these covers on them every night.
We poor little capital of bleach in there to deter them from coming into our
property. Please keep the covers on them and guess what? People do it, and
they're not really bothered about it. Some people have said like That's gross or
disgusting. Well, yeah, it is. But there's really nothing you can do about it there,
because it's just the way it is. But the whole point is you don't want to surprise
people or have them leave those little plastic things off and have them have
guests joined them in the middle of the night. That's not cool, right? So we let
them know we let them know everything. If there's a dog barking next door, we
let them know, you know, maybe you cut treats in the drawer. We talked about
that before, too. We let them know everything that could affect their stay. Why?
Because we have to. We have to be honest. We have to be honest about our
locations. I talked about it last week about looking for that property in Orlando,
in the area where we have most of our properties, where I have my house. I
can't get into my house. So I was looking for a house near it. Somebody had on
the map. I was using the map and somebody had their house there. And when I
clicked on it, it said in the listing that it was Champions Gate. And I know that
Champions Gate is down in Davenport. It is not up in Dr Phillips. So the fact that
they had it up in Windemere, Dr Phillips pissed me off because there's a big
difference between Windemere and Dr Phillips and Davenport. Big difference if
you're in Florida, so don't lie to people. Tell them the truth. Make sure you're
putting everything out front in the nicest way possible so that there are no
surprises when they get there. Now, remember, here's the deal. If you misguide
your guess and give them inaccurate information, they can literally ask for their
money back, and you have to give it to them. And you could be taken off the
platform because you lied to guess. You have to have accurate listings. It is your
responsibility to have accurate listings, so make sure that you d'oh! And one of
the last things I want to cover. I know this is going really long, but one of the last
things I want to cover is buying these properties. Remember, we're at the top of
the market right now. Guys don't buy a property if you can help it, unless it's a
really great deal. And if you're using the income to reject use on Lee long term
income to project whether or not you'll be able to pay the mortgage on it Now,
I'm just saying when you're doing your calculations on whether or not to buy,
because you have no idea if it's going to be illegal to have a short term rental
there in the future so you don't want to shoot yourself in the foot using
projections two and 1/2 3 times greater than the long term projections, and then
all of a sudden it's illegal and you are screwed, and you're gonna have to sell
that at a loss and you're gonna lose a ton of money, right? So what you want to
do is always by using projections with numbers from a long term rental, and
when you get the loan and stuff, if you have to get alone. You can let them use a
short term rental income, especially if there's been one in there. But you did
not use that in order to buy. You are buying using long term. If you don't
understand that, we'll have another full episode about it. But you never want to
say I know this is gonna make me 3000 month when the long term renters are
only pain $1000 a month. I want you to pretend that that long term $1000 a
month is the Onley income You will have coming in. Do those numbers work
with just that income? If the answer is no, then don't buy it, okay? Because it
could change now, once you buy it, that short term rental income of 3000
month is all gonna be gravy to you. And that's gonna be well and good, but y
ou'll be set in case the shit hits the fan and they no longer accept short term
rentals in that area. Do you understand? Hopefully you d'oh! All right now in
the show, notes Paige, I'm goingto also put 60 tips Ah, linked to the Airbnb
Article 60 tips it was actually done by, I think, one of the hosts and it had a whole
bunch of little tips in there. And we really, really like that. We keep giving that to
our people all the time, too. Look back at their 60 little tips in there, and if you're
a new person, it's probably a good article for you to read. But we're gonna have
that in the show notes for you. But all these tips are going to be written down in
the show notes. You can go back to him. We're gonna have links to the articles
and everything else for you again. If you have any questions, guys, make sure
you go to our website. There's a lot of free information there, not just the free
information, but the fact that you can ask us questions. Now I love this. There's
a place for you to literally say, Hey, Michelle, I don't understand this or I need to
know about this. Or did you know about this? There's a lot of information out
there, and information is changing every single day. I want you to be informed
and in order to be informed, you have to always be open. You have to always be
learning. Just keep open to everything and God bless you. You know what? This
is a great time. Just because it's getting busy does not mean that the ride is over.
It just means that you have to compete better. You have to be a better
competitors. Er Okay, so remember, we never compete for the bottom. Always
for the top. We're going to be the top of the market. Also remember to that
we've got the power of affirmations program discounted heavily for you guys
for the beginning of the year. Because we're all doing that miracle morning with
the affirmations. Amazing. So make sure you do that. And the goal setting and
dream board Webinars are right on our website also free. Lots of free stuff for
you guys. So make sure you go there. Have a great day. God bless you. Go and
grow.
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