Jon Bell 0:00
It is straight cash generated monthly literally reason why the program that we created is vacation rental machine is because this is a machine. It’s an engine that just spits out cash. And yes it is very lightweight on the maintenance and the kind of oversight that you would have versus owning the property, having to renovate it. Really the downpayment right? If you were to take $40,000 and put down on the home, technically that’s four units for me four units can generate me around 1500 dollars a month. So for I mean per unit.
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J Darrin Gross 0:56
Welcome Commercial Real Estate Pro Networks. CREPN Radio. Thanks for joining us. My name is J. Darrin Gross. This is the podcast focused on commercial real estate investment and risk management strategies. Weekly we have conversations with commercial real estate investors and professionals to provide their experience and insight to help you grow your real estate portfolio. Today, my guest is Jon Bell. Jon is an IT professional turned real estate investor. He’s a he specializes in vacation rentals, and today we’re going to speak with him about Airbnb. He’s also got a podcast he hosts the podcast Vacation Rental Machine Podcast. And he’s also the co founder of the Vacation Rental Machine Formula an online training. And before we speak with Jon about this, or about Airbnb’s and all that, I want to remind you That if you like our show CREPN Radio, there are a couple of things you can do. You can subscribe, like and share the program. And please consider leaving a comment We always love to hear from our listeners. Also, if you’d like to see how handsome our guests are, be sure to check out our YouTube channel. And you’ll find this at Commercial Real Estate Pro Network on YouTube. And also, please consider subscribing. With that, I want to welcome my guest, Jon, welcome to CREPN Radio.
Jon Bell 2:36
Thank you, Darrin, thank you for having me on. It is a pleasure to speak with you and your audience.
J Darrin Gross 2:42
Well, I’m so glad we were able to make this work. And looking forward to our talk. Before we get started, if you could share just a little bit about your background with the listeners.
Jon Bell 2:55
Gotcha. As you said, I started out as an IT professional, I still do that by day. That’s my full time job. However, I stumbled upon short term rentals just as a pet project to just find some extra money and it turned into this monster of a thing to where right now I have over 40 apartments or homes that I manage. And I’m actually just excited to bring that to a bunch of different people and also to try to grow my portfolio. So one day, when I’m stressed out enough, I can go ahead and just switch over and do this full time. But I’m all about systems and standards and that makes this business easy and I’m really in this whole thing just to tell people how easy it could be and how they can create a nest egg on the side.
J Darrin Gross 3:43
Awesome. Well, the side hustle as they call it. Sounds like you’ve you’ve definitely got a little more than a side hustle. In as far as the the short term rentals I was wondering if you could first kind of define what defines a short term rental.
Jon Bell 4:04
J Darrin Gross 4:05
And then maybe talk a little bit about how you got into it.
Jon Bell 4:08
Alright, so short term rentals are really classified as any rental that happens within 28 days or less. So anything that within the month of February shorter than that, that’s a short term rental. Anything longer, that means six months to 12 months is technically outside of that range. But then you have your yearly rentals which are really what people think are long term. So there’s short term mid term and long term.
J Darrin Gross 4:35
Gotcha. All right. And then as far as the how you got started, what what I think typically people well, Airbnb is a fairly recent phenomena. Can you tell us a little bit about how you got in into it?
Jon Bell 4:54
Yep. I was a home investor franchisee which basically made I was one of the We buy ugly homes people. That’s the national brand that that’s out there. I was visiting another franchisee who was having like some great success out in California who was also in my class when I went to study. So I’m out there visiting him and it’s I think it was Long Beach or somewhere around the beach. I can’t remember the exact location but it was a it was either stay at an Airbnb for the first time, or stay at the Ritz. There were really only the two options. Because I was going to be there for like 15 days or so I said, Well, I really don’t want the hotel feel. Let me stay at this Airbnb. I got there. And I discovered it was in a regular REIT. And I was like, wait, this is just a regular apartment building. I can tell nobody lives here. I can tell that it’s set up just for guests. And I already know how much they pay because it’s marketed right they pay. I want to say it was like $2,700 for this one bedroom apartment. I’m paying $170 a night; did the math, and I was like, wow, this is this is unique. I mean, I really know the cost. I mean, what are the utilities cost on top. So this guy has to be raking in 1000 $2,000 a month, just by renting this place out. That stayed with me for two years. Before I really acted on it.
One day, I just happened just to flip a home and I sold it and I got my money. And I was just thinking, that was a lot of work for this amount of money. What can I do with it now and like, you know, you’re running from capital gains, and you got to find the next deal. And I just said, Okay, you know what, remember that idea I had a couple years ago about trying to pursue this. I just started going out trying to find apartments buying them or renting them in a business name. And I finally got an apartment or two in that group of four and the money just started coming In and that was really the start of this monster. That is technically my rental arbitrage portfolio slash co hosted portfolio.
J Darrin Gross 7:11
So just to make sure I’m on the same page here, so you’re not these are not properties you own their properties that you’re leasing that you’re then releasing or subletting on a on a short term basis.
Jon Bell 7:23
Yep. So there’s a couple different strategies. And the first strategy that you might hear a lot of people talk about is rental arbitrage. The best way to think of it is I rent from somebody to re rent or sublet. Of course, with their permission, that is key. You want to make sure you’re doing it with that. The next way of doing things is to co host a property. That technically means you’re the owner of the property. And you allow me to manage just like you would a long term rental manager, manage the home for short term rentals and you see a big jump in the revenue that you generate for month in and month out. Outside of that, there’s the bur method, which we all should be familiar with, with right? That’s when you buy your renovate you refinance. You get it all right going now your exit is Airbnb or short term rentals.
J Darrin Gross 8:16
So you, I mean, this is kind of an interesting twist on this because A, you’ve stepped out of all of the maintenance, kind of headache of a landlord. You also don’t have the investment needed for the acquisition, the financing, you don’t have the equity, kind of a gain or any kind of 1031 or any, you know, what are you going to do with any? It’s just straight up income, right passive income is that.
Jon Bell 8:46
it is straight cash generated monthly, literally, reason why the program that we created is Vacation Rental Machine is because this is a machine it’s an engine that just spits out cash. And yes, it is very lightweight on the maintenance and the kind of oversight that you would have versus owning the property, having to renovate it. Really the downpayment, right? If you were to take $40,000 and put down on the home, technically that’s four units for me four units can generate me around 1500 dollars a month. So for I mean, per unit. So now we see how the cash kind of just starts flowing in versus a regular rental, which I might make on a good day. $500 a month in profit. So it’s like three times with the less amount of money okay, yes, you can say I don’t have the equity. I don’t have the actual physical asset. But what I do have is a nice revenue. And if we listen to Rich Dad, Poor Dad, he says invest for revenue or cash flow.
J Darrin Gross 9:55
Oh, absolutely. And then also, you know, If things do get tough, if the market dries up or whatever, all you’ve got is at least that’s, it comes in, you’re done. You don’t have the weight of a mortgage. Yeah. That’s, that’s fascinating. I hadn’t I guess the way it’s always been laid out or presented to me has been more on the ownership rent model and then the rent being more of a, just a just a way to accelerate your income stream as opposed to the the traditional long term rental, where you make the little spread and it’s kind of more of the equity play I guess, long term even though that you know, Rich Dad, Poor Dad promotes the revenue stream. I think that for most, there’s it’s more of some sort of an equity thing in the in the end, unless you’re flipping and you’re doing a lot of the BRRRR kind of stuff, but interesting. Well, so tell me about how you go about selecting a market that you get in. And then as we go through this I where I’d like to get to is kind of understanding the way things were operating and pre COVID to, you know, the the situation that we’re in where we’re in right now.
Jon Bell 11:15
Alright, so really, the first thing that you want to do is before you go and look at a place, you really want to figure out who’s going to come stay. And that really could be based on the location that you’re at. So let’s just say you’re in Orlando, Florida. You automatically know you need to house families, because that’s the draw. That’s the type of people that kind of come in and out of there. Let’s just say we’re going to Chicago. Okay, well, Chicago, it’s got a big business presence, so you probably just need a single bedroom place. So once you identify the type of person that you’re actually going to have come in and stay with you, that helps you know what you need to go out and look for. I would highly just say don’t go get a three bedroom place. Chicago because there’s probably not going to be enough people that travel with that many people to come there. Versus I wouldn’t say just get a one bedroom place in Florida, because what are you going to do about all the kids? The kids need a place to go? I don’t want them jumping on the bed with me all night, and we’re going to Disney.
J Darrin Gross 12:16
Right, right. That’s funny. So, so more of just kind of like, think through. I mean, you’re not worried about schools, you’re not worried about, you know, employment, I guess would be maybe a sense if you’re looking for people that might be traveling to or from like, you mentioned Chicago with professional kind of downtown stuff. But I guess more just understanding the the attraction, as opposed to the long term. You know, fundamentals that, that somebody’s looking for a neighborhood would look for.
Jon Bell 12:56
Correct. There, there’s a thing called Walk Score. You know, that is one thing to really kind of look at the higher the Walk Score typically the, the better the rental is in general. But really what that means is you’re in a metropolitan area, so you have the most opportunity to grab people. But that doesn’t mean if you’re in a rural area that you can’t listed on any type of short term rental anything site like Airbnb, VRBO, whatever. That really just means you need to play up on the experience that the guest is going to have. So for instance, if you got like a little pet farm or something like that, you can have those attractions where people come, they can stay, they can play with the animals, or maybe they can come plant some crops for free. Just give people an experience that they won’t have a lot of city goers will go out and just Hey, I want to go get dirty. I want to go do this. I can’t do it anywhere else. Right. So that’s one of the advantages of short term rentals. That’s one of the things that Airbnb started out with. Doing great. They really built experience based travel.
J Darrin Gross 14:04
And I think who can’t remember who started that? Airbnb? Who who is the founder of?
Jon Bell 14:12
J Darrin Gross 14:13
Okay, I think there was an interview I heard on some podcasts and they’re talking about the experience and about from the beginning. And in the beginning, I guess they were going out and taking pictures of the properties themselves and getting the, you know, the learning from their, their hosts on how to do this kind of thing. And, and, but, but again, it kind of that experience model is really what remember resonated from the interview there. So that’s great. So what Tell me what market you’re in, you said you’ve got 40 of these right now.
Jon Bell 14:48
I’m heavily based in Virginia and DC, also in New Orleans, and we manage a couple down in Florida.
J Darrin Gross 14:59
Gotcha. And so let’s talk about your marketing. Being an IT guy, I’m assuming, correct me if I’m wrong but you you might be prone to systems and and you know not doing everything you know handcrafted solutions every time but you have more of kind of a steady like auto autoplay. Can you tell us a little bit about that and start with, I guess the marketing tool if you could,
Jon Bell 15:26
Gotcha. So so marketing in the business really, if we really think about all the booking channels, you should use them as all of your available marketing channels. Why? Because they pay for ad spend to actually grab new people. So Airbnb will pay for people like commercials and stuff and we’ll get it put on TV that’s more draw that you have Booking.com, TripAdvisor all the places that you would go and book your own travel, you can post your listing on those platforms and have it as a potential option for them to book. So that’s the easy part of marketing is you just put it on there for them. They take a commission from the actual reservation, but you also can direct book or have your own website and drive people or repeat customers to your website. I do a lot of pounding the pavement. So when I’m looking for my business travelers, I’m really going to go to the businesses that are around the unit and just let them know, Hey, I’m here, do you have anybody that ever comes and stays, and that has been one of those methods that kind of helps sustainability across the year, because, hey, you know, this place is going to have at least four conferences a year and they’re going to need at least every place that you have available in this one particular location, whether it’s two, four or eight. They’re just needed because they they have all these people coming. So when you start to, like reach out to them and they start booking your place, that’s easy marketing, because; one, they’re gonna get it booked for you. Two, the people that come and stay, if they have a good experience, they’re going to tell other people. And most of the time what I find in DC is those people will come outside of their business trip with their families to come explore the museums and everything else around. So it’s always a good thing to kind of go out and just let people know, hey, I’m here, I’m here and available for you, I have a great service. And once they figure it out, they actually stay that actually if you do do a good job, they will come back repeatedly over and over again.
J Darrin Gross 17:31
So you do have kind of the the long tail word of mouth kind of thing, if you’re marketing to the local attractions as far as opportunities. When you you do that, is it again, primarily attraction based? I mean, is it are you looking at you mentioned conferences? That makes sense I presume like conference centers are you do you have what would be somebody? What would be something to thing to look for when you’re out, kind of checking out the area?
Jon Bell 18:04
Literally I just go to a map. And I just look within maybe a mile radius, sometimes a half mile if it’s really dense, and I’ll just go and I’ll just send something either to the business by email, I might give a phone call, depending on the type of business, most of your consulting firms, they, they have people that come in and out. And hospitals are great, right? They have guests, they have outpatient treatments, where people might get, you know, go in for surgery, but they are not able or not comfortable flying back home just yet. So they need a place to kind of stay close. They don’t want to go upstairs, stuff like that. Those are great ways to just have some, some people come and stay without taking on the extra spend of, “Hey, I’m going to go do some SEO. generation” and you know, that’s just the bucket that you continually just throw in. And I think when people start out, they might think that it’s a good idea to just go ahead and start but remember, the travel industry is very, very, very populated. There’s so many places, people, companies that do all of this stuff, you can never really compete as a sole owner of whatever, to grab somebody. So you have to leverage what you can.
J Darrin Gross 19:22
No, that’s a great point. I mean, especially if you’re local and somebody coming in from out and they’re looking for a place to stay and they mentioned Where’s a good place to stay? And you know, especially if they’re you know if it means like renting a car and traveling, you know, great distance or I can walk there as opposed to not having to mess with that. That makes a lot of sense to me. So that’s awesome. So is that been primarily one of your best lead sources as far as it goes?
Jon Bell 19:52
That is the best! Now of course, I will have to say I did go out and I did try to do some SEO stuff, some blog, things and stuff. It just wasn’t fruitful. And that’s one of your lessons learned is, hey, if I go out and I spend $400 a month and I don’t make a single dollar from it, I need to stop spending it. I rather just send this email to this directive person.
J Darrin Gross 20:16
Right, right. It’s so true. It’s the the internet’s are willing. You know, they’re they’re glad to take all the money you want to spend.
Jon Bell 20:27
Yeah, worse than casinos.
J Darrin Gross 20:29
Yeah. It’s it’s definitely true. So, in normal times, conferences, I would guess would be a great opportunity mentioned hospitals, for procedures and stuff would be a great opportunity. Given that we’re in a, you know, pandemic, I guess we’re we’re coming out of it. Although I see cases increasing, I don’t know. I don’t know what that’s going to impact look like in a week or two. I you know, who knows? What that’ll look like but I guess my question, how, how has business been? Since March was March 13 ish, kind of, kind of a day on our calendar here.
Jon Bell 21:15
So, um, March, March is the start of our high season here in Virginia and DC. It’s starting to warm up, spring break, and then the museums are open, everybody wants to come in visit. So, right when all of this hit, there were so many bookings that I had on the calendar. From the 15th on, they pretty much all canceled. So it was a little depressing at that time, just because, hey, I had all this money on the books. Now. It’s never going to be realized to go on and going through and doing what we call now the pivot right, that is the pivot from short term bookings to mid term bookings and even long term. So because we have Have a furnished apartment, we technically can market ourselves in any one of those fashions, it’s just you have to accept the differences in revenue when you do that. So when we do short term, it’s higher revenue mid term, it’s pretty good. Long term. ahh, it’s the same as somewhat the landlord’s would get, but you kind of got to think that we’re overtop of the landlord. So you know where the landlord might make $500. Well, maybe you can only squeeze an extra $200 on top of it, just because it’s already got the profit built in and you got a furnished place. So there’s some value in a furnished apartment.
There was a lot of people in this area that needed a place to stay because they got sent back to the US via State Department or whatever. So having some of those alliances has definitely helped, because now I have mid to long term bookings, at a decent monthly rate. Now it’s not like I’m making 1500 dollars a month on each apartment. However, I am being able to to scrape by I’ll say, jokingly with $400 a month on those people that are coming to stay. Really, this was a big lesson in seasonality and how to manage cash flow. So, for me, generally, what I would end up doing is have just enough to get through the low season and then get right to the high season. So right around March, I’m like, Okay, great. I can spend all the cash that I got, because I got plenty of cash coming back. Well, that wasn’t the case this time. Luckily, I didn’t spend it. I did get some forewarning about this. So that that was good. Either way, just knowing and managing cash flow. That was that was key. Also, some of the SBA stuff did help out. We were included in on some of that relief. So all of the other hosts and I believe the gig economy, we’re all included. So that was a good thing that the government did for us? So that’s how we got through it. Now, this answer as far as the recovery keeps changing, technically daily, because as of the last three weeks, bookings have started to increase, people are back out traveling. And that is a good thing. But just like you just alluded to, I am fearful of a double lockdown. I know cases are going up. And I don’t know. It’s it’s possible. But is that when 200,000 deaths or is the news just going to stop covering it? And we just won’t know.
J Darrin Gross 24:39
Yeah, I mean, I’ve come to the conclusion that nobody knows. Anybody that’s trying to explain this is grasping at what we went through last time, trying to to, you know, find where we are on the line from last time that this time kind of thing and I’ve just I’ve concluded That is so different. The economy was doing fine for most. I mean, there was plenty of concern that we were at the top and it was overdue for a correction. But the banks were fine. And employment was good. There was no overbuilding of, you know, units kind of thing. So this is kind of a unique animal and I’ve given up on. I mean, I’m listening to it all, but I’ve given up on saying, Oh, that’s what it is. I think that’s interesting. Because I, you know, I just everybody I talked to is got either an opinion or you know, we share ideas and stuff and, you know, kind of think of where things are at, but I honestly I mean that, you know, the stock market is almost back to where it was. Today is what we had June 10 10th. Yep. As we record this who knows what the next Several months of Play, play on some but to the point about the the, you know whether or not we have an infection. I have a question for you about turnovers. You know, when you when you have a long term rental, it’s a pretty big deal somebody is announcing they’re going hopefully, they don’t just leave in the middle of night. They take all their stuff with them. Hopefully you don’t have place leftover stuff. And then you you basically may have to repaint free carpet, whatever you might have to do in this situation. You’re basically similar to a hotel. You’ve got nightly guests, they’ve left, sheets, linens, clean, how do you how do you do that in a normal situation? And then tell us what you’re doing now given the the concern of COVID.
Jon Bell 26:56
All right, so yes, just like a hotel. We have turns, which is what we call them. Pretty much before COVID-19, we would go in strip the linens, you know, mop, similar to you calling a maid over to the house, we would do all of those things, but because our places are cleaned pretty frequently, it’s not like a deep clean every time, right? We’re not we don’t have to wipe windows or anything like that. If somebody comes in stays for a week, and then they check out. We do do that on a periodic rotation, where we go ahead and just do all the baseboards and all that stuff. But for the most part turns for us for a one bedroom apartment takes about 45 minutes. And that’s really stripping linens, setting the beds, vacuuming, mopping dishes, stuff like that. Post COVID 19 we have a lot of extra steps. And these are actually steps that we’re going to continue on no matter what. Just because we’ve incorporated it in. It’s not too much of a heavy lift. It’s just more of a check. Like hey, did that Did I wipe down the door handles with something that is definitely going to kill the virus within 10 seconds or 15 seconds. So we do stuff like that we also ozone each room before somebody actually touches the linens because we want to make sure that one our crew is safe. Even though CDC has recently kind of come out and loosened up some of the transmission from surfaces, we still want to play it extra safe. Of course my personal team is where I want to keep. I want to keep them whole, right? They all are healthy, they all have families. I don’t want anybody catching anything from just working and then taking it back home. So we ozone, we make sure we get all the certain CDC guidelines stuff and we go back through and we just check everything. We also We ask our guests before they check out if they feel sick if they have been diagnosed and if they have we will block that apartment for the next three days. And then go in and clean And we won’t let anybody stay. So we definitely don’t want anybody to catch it by coming and staying with us. So we we approach it in two different ways.
J Darrin Gross 29:11
It’s interesting. How have your guests responded to these? I guess the communication from from you about this before and after?
Jon Bell 29:23
Well, everybody accepts the message. I just send it a couple days before checkout. They just let us know. I mean, I feel like this is just now the normal thing, right? Hey, how are you feeling? Are you feeling sick or anything? Have you had a fever? If so, would you let us know? Have you tested okay? No, I haven’t. But I had a great stay. That’s normally the response that I get back. Some people do say hey, but if I said yes, I mean, you still should be cleaning it. You know, whatever. We still let them know that. Hey, this is our cleaning process. If you were to say yes, we would just reserve the unit for three days. Make sure that it nobody enters or whatever. And then we Go in and still do the CDC guidelines. So we just want to make sure that everybody knows that we are actually being safe. And travelers I think are liking that more than a hotel at this point.
J Darrin Gross 30:14
It’s interesting, because I think that’s one of the other that well, the travel industry was the one that was kind of hit right, right between the eyes with this. From hotels to travel, you know, airlines to restaurants, all that hospitality was really kind of hit hard. You mentioned that traffic is picking back up. bookings are picking back up, how are they tracking compared to what you would have expected or experienced in prior years?
Jon Bell 30:45
I would say maybe at a 27% drop from what it would have been this time last year, as far as occupancy goes and really how I’m measuring that is how far out things are getting kind of booked up. I’m booked up Immediate. But as time goes on, there’s more gaps in the calendar than it would be if things just didn’t happen.
J Darrin Gross 31:09
Gotcha. And as far as the the types of bookings are they more of the mid term, long term? Are you Are they kind of trending back to the short term,
Jon Bell 31:19
We are definitely trending back to the short term. So some of our mid and long term guests are either being called back to the country that they came from, or they are just ending that reservation or it’s just ending in general and new shorter term bookings are coming in. Still about five days or so. So that’s still very good.
J Darrin Gross 31:44
Got it. Tell us a little bit about your systems. You mentioned kind of the cleaning and the turning kind of thing but but isn’t it guy I’d love to hear a little bit about how you have this set up. I mean, we talked about the different booking sites. If I go on one, I like your place I click Yes, it’s reserved, to me have some sort of a calendar on it.
Jon Bell 32:09
So So behind all of that is a unified calendar that we call a PMS or management system, everything funnels to there. And that’s how you keep double bookings from happening. Pricing is pushed out from there, that is really the lifeblood of just being on multiple channels. Without it, it’s very hard to kind of manage from one to the other. It also does help when you have something that integrates automated messaging. So like all the check in messages, and just that general check that we just talked about for COVID that goes out in an automated fashion. So most of the standard communication is just sent via a system questions outside of what the system can do. That has to be answered by person and right now it’s just me. I don’t have any VA’s or anything else because I don’t see a need, or I don’t have enough pain to actually just get somebody to go out and do it. The system that I use for messaging has an AI built in, so it can identify, hey, this questions about Wi Fi. Let me just send this Wi Fi information and I typed a response that is generic enough to reply back to anything you almost think I sent it.
J Darrin Gross 33:26
Right. That’s fascinating. You know, how much of that can be unless you have some sort of a real urgent problem, but I would think that as long as people can get in and out you know, you’d be in pretty good shape. This is fascinating. Again, just starting from the premise of you’re leasing a property and then subletting it as opposed to you know, having to do all the purchasing and then then leasing it. Have you It sounds like you. You mentioned the You’ve you’ve cleared all this with each one of the landlords Have you run into any kind of zoning restrictions or cities or others that have had, you know, rules or laws that have been created to?
Jon Bell 34:13
Absolutely. So, of course, there are state regulations, there’s local and then there’s also sometimes like an HOA in place that says, hey, although the state allows it, this HOA says you cannot do it. So you really have to look at each different layer of any type of governance to make sure you’re okay. And you should do that before you go out and look for a place. But most states and cities are somewhat coming around to the idea. Mainly the metropolitan areas. I have a lot of units in Old Town Alexandria, here in Old Town, Alexandria, if you’ve ever come here. It’s just one of those like towns where people just like to walk and find the local shops. So without The tourists technically, who’s really going to be buying from the shops on a repeated basis? So they openly welcome short term rentals and just any type of lodging.
J Darrin Gross 35:12
Yeah, that’s, that’s great. Yeah, it’s funny. I know. here locally, in Portland, I know, there’s been some resistance and stuff. And a lot of it’s been by I guess, you know, probably the people that invested in hotels in the first place, you know, that are like, Hey, you know, we’ve got this over here, what are you doing? kind of thing. But, you know, I think the great disruption of the economy continues. Thank you internet. Right. So we, we have the right to go with Is there any other you know, keys to, you know, successfully navigating the the pandemic that you’ve that you’ve uncovered?
Jon Bell 35:58
Yeah, I mean, Literally the pivot. And I’ll just keep calling it the pivot because we all had to do it. And the pivot was was something that we didn’t expect. But it is something that we’ve learned and it will always be a part of business, I never knew that I can book a place for eight months at a great rate. It just lets me know that, hey, I don’t always have to play the short term game, I can play a little longer play and still be satisfied. Of course, you would do it for the winter months here or the slow season, but then you’d want to kind of kick those people out so you can get back to some higher profits. Well, okay, maybe I don’t, I won’t be so much in a rush to kind of kick those people out. I’ll continue them until they can’t stay anymore. And then I’ll just go ahead and backfill some other stuff. It really just helps the overall portfolio in a sense. So before I was looking to create a portfolio that manage seasonality, so for me that meant in December, it Had a high occupancy maybe like in Vegas. But now I’m looking for Hey, let’s just try to keep some of this sustainability keep the cash flow the same year round. How could I do that?
J Darrin Gross 37:12
No, that makes good sense. Have you are you actively looking to grow your your unit count or?
Jon Bell 37:23
J Darrin Gross 37:24
Jon Bell 37:24
Absolutely. Literally I challenged myself to figure out when it’s too much for me to actually just quit my day job right right now because I’m doing all the messaging for the 44 units. It’s still not enough, right? There’s my phone isn’t like just bothering me. It’s not messing up relationships or anything like that. So there’s really no pain there. And that’s really all that I would need to just say, Hey, I’m just going to jump into it. Now. I do have a small team that do run the day to day I just meet with them in the morning. And that’s it. So, for me, I am looking to grow. I think, right around 500 units or so I’ll probably say Okay, enough is enough.
J Darrin Gross 38:10
Gotcha. Well, this is a, this is a very interesting you know, like you said, your model from a basically, you know, leasing and and releasing and marketing and turns and having to pivot. I think that’s a, that’s a, you know, definitely an experience that you can use in any business. Things are going to change and there’s nothing that’s guaranteed to life, that’s for sure. So I appreciate you sharing it.
Jon, if we could, I’d like to shift gears here for a second. As I mentioned you before we started recording by day I’m an insurance broker. And I work with clients to assess risk and determine whtat what we can do with the risk? There’s a couple of strategies we look at. Typically we consider, can we avoid the risk? If we can’t avoid the risk? And we look to see, can we minimize the risk? And if that’s not possible, then we look to see if we could transfer the risk. And that’s what an insurance policy is. And I like to ask my guests if they can identify, you know, what they consider to be a or the BIGGEST RISK. And just for clarity, I’m not necessarily looking for an insurance related answer. Risk is everywhere. But if you’re willing, I like to ask you, Jon Bell, what is the BIGGEST RISK?
Jon Bell 39:50
I’ll answer it and maybe the most common risk that people assume when they think of short term rentals or specifically Airbnb s and that is major parties. People messing up your your place. With my experience, it’s not the major risk, it is something you can hedge off. And this is how you do it. You pretty much need to make sure that you have proper systems in place and technology. And that really looks like you need to have some type of external camera and a noise monitor or a noise monitor, in general in every place if you cannot put a camera that lets you know before anybody else is pissed off enough to contact anybody else or call the police that something is going on that you need to pay attention to. And you can back that up with evidence and you can evict the guests and keep the revenue without creating a major problem.
J Darrin Gross 40:48
Got it, got it. So let me ask you with that. You mentioned you’ve got some that are in varying states not all of them sound like they’re local near you, do you have people on the ground that you could deploy if, if something like this happened in one of your distant locations?
Jon Bell 41:07
If needed, there is somebody that can go. But really, we got it down to a science we can really just communicate with the guests get it tamed down. If not, we just go ahead and just call the police and they can technically just handle it for us without us being there.
J Darrin Gross 41:28
Well, Jon, this has been just very entertaining and very educational. Where can listeners go if they’d like to learn more or connect with you?
Jon Bell 41:39
Definitely. You can find all of our resources that we offer, through Shorttermsage.com, you can connect with us within our Facebook group, which is The Host Nation. And yeah, we’re always in the group. You can always just ask a question for free to answer if you’re looking for management, you can also find that through Short Term Sage or CoHostit .com.
J Darrin Gross 42:06
Got it. Jon, again, I can’t say thanks enough for taking the time to talk. I’ve enjoyed it. And like I said, learned a lot. And I hope we can do it again soon.
Jon Bell 42:18
J Darrin Gross 42:20
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