Tim Touchette:                 00:00:00              You know, it’s funny, I look back and I’m like, wow, 300 properties. I kind of remember being at 27 I mean the ebb and flow of our business that I have been tracking is that on general, we will add anywhere from 50 or more properties a year and probably shed 10 to 20 properties a year, so we’re always netting 30 properties.

Julian Sage:                       00:00:27              This is episode number 61 of the short term rental success stories podcast. Are you an investor that’s looking to have your home professionally managed go to cohostit.com for more information.

Julian Sage:                       00:00:38              Welcome back to short term rental success stories. I’m your host Julian Sage. This is a show where I talk to hosts about their journeys and starting and growing the short term rental business. My goal is that you’ll be able to walk away with practical information that’ll help you become a better host and learn how to scale your business like any exceptional hosts. We all strive for five star reviews, so please go on over to iTunes and let us know what you enjoy. It really helps support the show if you haven’t done so already. Going over to our Facebook group, the host nation to connect with the community.

Julian Sage:                       00:01:07              Hey, what is going on host nation. I am super excited to be back again with you this week. So as part of the ongoing theme of what we’ve been talking about on the show is mostly just about pivoting your businesses. So in some of the previous episodes, like one of them we had Jack Forbes who talked about creating a direct booking site away for you to be able to expand and grow your network. We also talked with Travis last week about how he pivoted his business to be able to accommodate mid and long term stays and also offloading properties. We’ve been having a lot of really good guests coming onto the show and sharing their experiences in different types of aspects of short term, midterm rentals. Being able to pivot your business and being able to pivot when things are needed is part of being an entrepreneur is part of what this business is about.

Julian Sage:                       00:01:55              My heart goes out to everybody that has been affected that hasn’t been able to, such as many of the hosts in Florida that have been unable to list their properties. I know firsthand that there’s just a lot of fear and there’s a lot of disappointment and it almost feels like, you know, you just want to give up and not continue moving forward when things start to get difficult, but I want to remind everybody that there is just so much good in this community. I hope that if you’ve been following me and this journey of you know, my own success story as well, that it’s helped to inspire you to keep going. There is a light at the end of this tunnel and it’s just a matter of time. I hope that during this time though that you’re looking at some of the other options that are out there and also maybe getting inspired to try new and different things.

Julian Sage:                       00:02:39              You know, as the cliche goes, as one door closes, another door opens. And with that, if you’re looking at other forms of real estate investing, there’s actually this conference that I’m going to be speaking at called veterans live. As you may know, I am still an active duty coast guard member and I was actually picked to be a keynote speaker at this online virtual summit that is all military people that have experience in different aspects of real estate investing. So even though the conference speakers are all either active duty or military people, this real estate event is open to the public and all proceeds will be going towards veteran charities and all the speakers are donating their time and money to be able to just help people and support these charities. So this conference, we’re going to be covering everything in real estate investing.

Julian Sage:                       00:03:27              So if you’re interested in maybe purchasing real estate, if you’re interested in syndications or multi-families mobile homes, every aspect of real estate investing is going to be in here. And I’m going to be talking on short term rentals. So if you’d like to hear me or if you’d like to hear any of the other real estate investors that have just so much experience, share their knowledge, or if you’d like to help support military charities, this virtual event will be held May 29th so next Friday, ticket prices start at a hundred dollars but what I’ve decided to do is that if you purchase a ticket through my referral link, again, I’m not getting any commission or anything off of this, all the proceeds go to charity, but if you decide to purchase a ticket for this event and you send me the receipt, then I will give you access to all of the bonuses in our Airbnb secrets revealed book.

Julian Sage:                       00:04:16              So part of the bonuses that we have for Airbnb secrets revealed if you decide to get the free ebook, you get to become a lifetime member, which means that you get access to one of our courses. You’ll get constant updates for the course every single week because every week we put out a new episode and then we update that course. You also get the audio book version of our newest book, Airbnb secrets revealed. You’ll also get another ebook that we have out called the shorter mental success secrets, which is the first 50 interviews that I’ve done on the show. And I’ve taken all of the success secrets and made it into one ebook. So there’s over 500 tips from 50 hosts that I’ve interviewed on this show. And the final bonus that you’ll get is access to a training program that I actually did with Shannon hide from guest ready.

Julian Sage:                       00:05:02              That was episode 50 where I interviewed Shannon, who’s the global operations manager for guest ready, which is the largest property management group in London and one of the top performing in the whole world. So we did a special two hour training with Shannon included in there. So you get access to all of these bonuses, the total price for that, if you were to just purchase everything yourself would be $39 so for the a hundred dollars that you’ll be purchasing a ticket, you’ll also get about a $40 bonus. And what we’ve also decided to do is that if you decide to purchase a ticket, you’ll be put into a lottery. So everybody that decides to purchase a ticket to this event and at the end of the event we will select one of the people and that person is going to be getting access to our premium course, the VRM formula, which sells for $2,000.

Julian Sage:                       00:05:52              So it’s a really, really awesome thing. You know, all of this is just to help military charity. So if you’d like to be able to purchase your ticket, go to short-term sage.com backslash veterans live 2020 and again, once you purchase your ticket, just send me an email@shorttermsageatgmail.com letting me know that you purchased it and I will give you access to all of your bonuses immediately. And you’ll also be put in for the lottery to get access to our premium course, the VRM formula. But with all that being said, though, I want to introduce Tim to Shea. Tim is the president and owner of stay at a Shea, a corporate housing company that has over 290 rental units in the DC area. When Tim and his wife started in 2001 they placed a $200 text only classified ad in the Washington post. Now back then it was really challenging to get businesses interested in such a small company, but Tim has been able to grow this company over the past nearly 20 years.

Julian Sage:                       00:06:53              And Tim’s also seen a lot of the economic downturn such as nine 11 in the 2008 recession and now he is also seeing the coven 19 pandemic. So Tim has a wealth of experience in this very unique niche being corporate rentals. Now I had no clue what really corporate rentals were and how they operated. And this conversation with Tim opened my eyes to exactly what corporate housing companies do, how they operate. And then we also talk about how some of the other players in the space such as like Saunder and lyric and how they are actually classified as corporate housing and how they kind of fit within that world. This is a really interesting and great episode because Tim talks about what a corporate housing company is, how they’re able to meet the expectations of both property owners and business clients and how their businesses have been affected during this time.

Julian Sage:                       00:07:44              And a quick disclaimer that Tim is not speaking on behalf of the corporate housing industry. A lot of his thoughts and personal opinions are exactly that. It’s just his own thoughts and personal opinions on the matter. If you’d like my show notes for this episode, go to shorttermsage.com/str61 or if you like my show notes, send directly to your inbox every week. Then go to shorttermsage.com/shownotes. With all that being said, on this week’s conversation, a welcome back host nation to another episode of short term rental success stories. In this episode, we have the special honor of having a pretty unique first time guests for us. We actually have Tim to Shay. Tim is the owner president of stay at sachet, is that how you pronounce it? That’s right, yes. In the DC area.

Julian Sage:                       00:08:28              He is he’s got a corporate housing company where he has over 290 units that are in his portfolio. We’re going to be breaking down in this episode talking about, you know, Tim’s journey and starting all the way back in 2001 before nine 11. Going through now, this is, you know, three types of crisis and how the corporate housing company and how the corporate housing world is responding and, and how they’re impacted during this pandemic as we all know, this episode coming out during the covid 19 pandemics. So we did want to get someone on from a different sphere of the short term, you know world to talk about that. So, Tim, thank you so much. And if you wouldn’t mind introducing yourself, letting the host nation know who you are and what inspired you to get into corporate housing.

Tim Touchette:                 00:09:14              Sure. Well, first of all, thank you for having me on here. It’s one of the topics that I can talk about four hours, which is just generally real estate and rentals. So I’m excited to be on here and talk about this niche of a corporate housing. Basically my wife and I bought two investment properties in early 2001, and one of them is furnished. It was an English basement apartment and the other one wasn’t. And we basically took the one that was furnished already. The person who sold it to us said, Hey, you can make more money renting it on a furnished. And you know, back then it was maybe about 50 or a hundred dollars more. And I liked the idea as something different so that we didn’t have to compete with all the other rental properties out there. And eventually we furnished the other one up and decided to focus on that. Mmm. And this was back when it made classified ads and in the back of the newspaper and it was quite a lift ticket businesses interested in a really small company.

Julian Sage:                       00:10:29              So someone basically just said it’ll be, you know, you can actually make a little bit more money if you list it as a furnished you know, right now we have the luxury of, you know lots of people are going online for the internet. You have all these different sites where you can get this. We have, you know, we brought up before talking about like Airbnb and how you utilize that as well. But before you, or put in classified ads in the newspaper, how much, how much are you spending to try to promote your, your listings?

Tim Touchette:                 00:10:56              Well, the classified ads were really big on Saturday and Sundays and the majority of them are normal rentals. And then in the back of the back of the classifieds there another subheading called furniture rentals where there were one or two listings. If you went more than two lines that was about $200 just for that line. Yeah, for those two lines, if we went three lines just went up another a hundred dollars or more. So and you know, all you were able to do was just basically give a general overview and a phone number. Then we put our website on it too. But I mean it was paper and so, you know, you’re heading to be scrappy and kind of talk to not be afraid to knock on some businesses doors and shut flyers out and kinda, you know, to do it. I remember thinking early on if I’m gonna focus on this niche, it’s going to be a lot slower growth than a traditional rental company. But I felt there’d be a lot more rewarding because I, the, the clientele the renters business travelers just appealed to me and someone that I, I enjoy doing business with.

Julian Sage:                       00:12:13              So when you first started into real estate, you decided that you wanted to pick a niche, you said, okay, I’m just going to dive into this. And that was your first two properties. You listed these classified ads in the Washington, Washington post, he said, and were these individual renters that were contacting you because you said that there’s like two portions. There was a side where it was like regular rentals and then there was the, the furnished rentals. Where was the clientele that was contacting you different? Was it like businesses that was speaking with you directly?

Tim Touchette:                 00:12:43              They were well I will tell you that campaign wasn’t really all that successful being in DC. Having a contact at an embassy or two. We got lucky early on just talking to a couple of them. You know, to answer your question, the people from the classifieds were not traditional business travelers. There are more individuals who were either an intern or sometimes people relocating the small businesses that didn’t have a relocation office helping them out. So it was it wasn’t easy.

Julian Sage:                       00:13:26              So you, you were listening on these classified ads, but then you said that you, you found a couple a couple people from an embassy that we’re able to give you business.

Tim Touchette:                 00:13:36              Yeah. So, you know, the embassies were responsive and you know, and that helped us out for a couple more years as we continue to grow and manage other people’s properties. And then yeah, there’s a little website called Craigslist came out and pretty much decimated classifieds and newspaper industry. And I remember when that first came out, we heard about it because restaurants in San Francisco and they’re just open it at GC. And we were like, wow, this is great free classifieds. Does anyone know about it yet? And so that really helped us out early on to get the word out without having to spend a lot of money on and effective classified advertising.

Julian Sage:                       00:14:27              One of the things about corporate housing is can you kind of distinguish what the difference is between corporate housing and you know, for our listeners, which are short term, short term renters you know, in our space, you know, we, when we think of like corporate housing, we’re typically trying to go after like traveling nurses, like traveling nurses are kind of like our bread and butter for longer-term stays. But for you, you said like you, you spoke with an embassy and they were providing clients. Is that what a corporate housing company is, is just direct or what, what is it exactly?

Tim Touchette:                 00:14:58              Well, I think the easiest way when people ask me what corporate housing is, I usually define it as people who aren’t paying the rent themselves. And so well that could apply to a nightly, weekly rentals. You know, shorter term. Really we don’t deal with vacation renters. People are submitting expense reports and they’re standing for 30 days or longer. The corporate housing, the association, which I’m a member of, Mmm. You know, one of the unofficial separations from regular rentals or nightly weekly rentals is the 30 day a minimum term. However, as an industry, I can’t speak on behalf of them, but there’s been a lot of discussions about trying to differentiate based on that minimum lease term. And that’s not that’s not a global definition, but a lot of the, they tend to be longer term stays. You know, our average stay is between three and four months.

Julian Sage:                       00:16:01              And where, where do you find these types of people that stay three or four months? Because for us, when we’re trying to market, you know, we use channels such as like Airbnb, VRBO if we’re trying to find like longer term stays, we’ll, we might go to like a site like furnished finders but where, you know, you’ve built up to 290 properties and you’re filling those with, you know, these three to four month long stays. And right now during this pandemic, a lot of short term rental hosts are like, Oh crap, you know, all my businesses dead. You know, everybody’s trying to turn to longterm rental. So where do you, where do you even find these types of tenants?

Tim Touchette:                 00:16:39              The quick answer is it’s, it’s tough because it’s really about a relationship. I mean, if you think about business travelers and they’re reliant on their employee are there new hire that’s relocating and you don’t have a good service reputation or you’re just kind of a one off, they’re going to be hesitant to work with individuals. I mean, they will. And you know, so I mean I usually say it’s, you know, we’ve been doing it for so long and you know, a lot of it is referral and word of mouth and just kind of building it out that way. I mean, I you know, as much as I want to work with Google and their relocation team, they are so big that they have contracts in place with companies like Oakwood that have corporate housing around the globe. For them to work with one provider and one market doesn’t make sense. So we try to target midsize, midsize and smaller companies and companies that are specific to GC the market that we’re in right now.

Julian Sage:                       00:17:48              So you first started,

Tim Touchette:                 00:17:49              Did you know what corporate housing was or what it would eventually lead to? Cause what it sounds like is you reach out to these, you reach out to companies and there’s some companies like Google where they already have like designated people designated companies that they work with. So you know, from what it sounds like a corporate housing company is reaching out to the companies that aren’t as large or maybe don’t already have those pre established relationships and you’re trying to have you be there, go to four furnished housing. Yeah. I mean it’s the way I also describe furnished housing is you know, it’s a niche. So if you think about hotels stays or nightly rentals, almost anyone can stay in a hotel for a night or two, almost anywhere in the world, you know, and then converse, if you go unfurnished year long rentals, most people are familiar with renting for a yearly terms.

Tim Touchette:                 00:18:45              Either they own a property or they were rent or they are renting. So those were the two huge buckets that we sit between. And so when you go 30 days there are fewer people out there who can commit for one month, let alone three or four months to rent a place. Yeah. I think about myself, like I wouldn’t be able to do that. And not many of my friends would especially have kids at home. You know, you need to be a consultant and even a lot of them, we’ll only you know, do three or four nights out and then be back home. It’s a small group. And I I find it interesting that a lot of the, you know, Airbnb and other providers are saying, Hey, this is a new group. And I agree it’s not their typical rental renters, but you’re also pulling from a much, much smaller pool of potential potential clients.

Tim Touchette:                 00:19:43              And I mean, I knew that going on or early on where it’s like, it’s not going to be this, the company that grows, you know, exponentially because there’s this worldwide need for furnished monthly rentals. It’s just a, it’s a nice niche to have. And my approach has been, you know, let’s try to be the best at it, at what we do and and have fun along the way. So what was the turning point for your business? You have these two units and when you first started, you were listening to them on the classifieds. Was it the embassy was that it was like this is a legit, this is a real business now where we have a reoccurring client or was it something else? I would probably say it was Craigslist getting a mass following just because we could then more easily target. Mmm. A better variety, Mmm. Of clients. Instead of paying a lot of money for that, it was all free. Now include photos, you know unfortunately Craigslist you know, suffers from what the eBay phenomena of trust and reliability. Once it becomes kind of free or easy to put something on there, a lot of bad actors kind of follow suit. So but I would say that was the big catalyst. And then, you know, from there we’re able to kind of get in with more companies and get more regular business. That way.

Julian Sage:                       00:21:15              So businesses were actually going onto Craigslist looking at the furnished rentals and contacting you because before they could only use things like the classified ads.

Tim Touchette:                 00:21:24              Yeah. Or they, I mean, or they didn’t even know where to find them or they would be stuck at a, a, an extended stay hotel outside of the city. You know, their options were really limited in terms of even providing that, you know, we tried to say, you know, we do corporate housing, unique corporate housing where we have no two properties are alike. So if you want a basement apartment, you want to have a row house, you want to be in different parts of the city. We have these options for you. I also, you know, what’s slightly different about, I mean within corporate housing, the majority of providers, our demand side, meaning they have salespeople out there calling companies, say do you have a need? And they’ll say, yeah, I need a two bedroom in November. It’s for three months at this price point. What do you have? And then they’ll go out talk to her apartment communities. I’m trying to get a rate, talk to furniture, rental companies, try to get it right. And then you know, so they, that’s the demand side of the business. We take a supply side, here’s our inventory. We hope it fits your needs. You know, here’s a great variety. And it’s okay. Again, a another variation on a niche industry of corporate housing.

Julian Sage:                       00:22:45              You know, that, that’s one of the things that you know, like I look at corporate housing and I’m just like, you know, I’m kind of shocked like what you’re able to do, like, you know, what you’ve been able to grow too, because like you said, you have that supply and demand for short term rental hosts. You know, we get all of our, you know, demand through these online travel agencies like Airbnb, VRBO, HomeAway. But where you’re getting your demand is directly from company. And then you need to get the supply. So growing that, so during this time when Craigslist, you were able to start advertising, all these companies started going onto their finding your units, did you just start, how did that grow from there? Did you just start finding people that had properties and you would lease them out and then furnish them? Or what’s, what does that relationship work with the owners and the supply?

Tim Touchette:                 00:23:36              Yeah, I mean, reaching out to owners is always been another aspect of it. Whereas you know, you have to educate them on, you know, it needs to be furnished. Okay. What does that mean? Or utilities included? Is that, or what if utilities, you know, what if they abuse the utilities and leave air conditioner in the winter. You know, I mean for a lot of property owners wasn’t an easy sell. But we primarily started with a lot of property owners who were looking for flexibility in renting their place out. They may be heading out of town for an undetermined amount of time and they didn’t know if they’re putting their stuff in storage or not. And so we kind of just targeted them. And then also it’s like most real estate, it’s location. It’s, they have a great place that everything lined up, but it was just a little outside of the business center of town. It wouldn’t rent. And sometimes we try and sometimes we get lucky and sometimes it wouldn’t rent. So it’s been just a lot of trial and error. And you know, at the end of the day, we, I always say a vacancy is the common enemy. And so getting high occupancy rates and great renters is kind of what appeals to most of our owners. And, and we try to keep our occupancy rate around 90%.

Julian Sage:                       00:25:06              Are you leasing apart because in the short term rental space, I don’t know if you’re familiar with this thing called a rental arbitrage or the master lease model. Is that something you’re familiar with?

Tim Touchette:                 00:25:16              Yeah, yeah. Doing my research. I, I just read about it, but I’m familiar with the concept. It’s what a lot of corporate housing companies have done in the past. With big apartment communities. It’s in, in our, in our industry it’s called master lease

Julian Sage:                       00:25:33              Master leasing. Okay. So, so the, so with the master lease model are you essentially master leasing from owners or are the owners taking a profit or how, how does that relationship work with your supply?

Tim Touchette:                 00:25:47              So our model is based on a traditional property management models. So what that means is we don’t let owners self-manage the property. And we do that for consistency of service across, you know, I always say one of our biggest challenges is to find a, a consistent guest experience across all 300 properties when no two properties are alike. So one way we handled that is by just making sure we are the service side of, you know, the inspections the repairs, maintenance requests, the arrivals, departures, the cleaning coordination, all that is handled through us. And the other question I got off topic, the other question.

Julian Sage:                       00:26:34              No, that, that, that, that, that was right. I w I was, I was just asking about with your owners, are they like personally, like if you don’t find a client to stay in their property, they not able to cover their mortgage payments, or is that something that you guys cover? I’m just, just trying to clarify on that.

Tim Touchette:                 00:26:50              Oh, I see. Yeah, we, we don’t

Julian Sage:                       00:26:52              We don’t guarantee. Right. But, but if you’re not able to supply someone in their property, then they’re not able to receive the money for their payment.

Tim Touchette:                 00:27:01              That’s correct. Yes. We just take a percentage of the rent when it’s rented. So like I said, occupancy is the common enemy. So if a, if a property doesn’t get rented, the owner doesn’t get paid and we don’t get paid. So we do everything in our power to pick up strategic properties that we think can rent well at a number of the owners are happy with and we share interest.

Julian Sage:                       00:27:23              I mean that, that, that’s, that’s gotta be, that’s gotta be kind of like scary for an owner, you know, having to, because they could, they could do a traditional rental or traditional property management company. Right. So what’s the difference from working with a traditional property management where that maybe they’re a little bit more guaranteed? Like they’re always going to have someone that’s in their longterm versus working with a corporate housing company where, you know, if you’re not able to supply, then they’re not able to cover their, their payment.

Tim Touchette:                 00:27:50              Correct. I mean, you know, one of the first questions we ask property owners is w, what are you, what’s your agenda? What are you hoping to accomplish? And if they want more security, we encourage them to go unfurnished for a year. If they want higher risks they sometimes have the option to do the weekly rental. And then, you know, we’re somewhere in between. So we do is we roll out kind of what the market rates are. We try to set realistic expectations and based on their nonce needs and agenda. You know, sometimes we’re a bit shit frequently we’re not. So that’s why, you know, this niche is, is what it is. You know, when we talk to people, sometimes they care more about higher quality renters then getting the highest amount rent possible. Sometimes they carry more about flexibility, you know, so the, those are, you know, sometimes we have people who have like really big houses and they don’t want it to be come a group house. And so, you know, I mean, well, we can’t technically prevent that. We do have fewer request for large houses and

Tim Touchette:                 00:29:14              You know, so that, that makes our options appealing.

Julian Sage:                       00:29:18              So when you’re trying to pitch a, a property owner and you know, tell them about the idea of corporate housing is what’s you know, you’re, you’re giving them this unique value proposition that they could find a better quality tenant. But are you also doing things like, are they because of the risk that maybe they’re taking on trusting you, are you offering them a higher rental payment or is it the standard rental rate? And this is just the bone, the benefits that you get if you, if they do decide to work with you.

Tim Touchette:                 00:29:48              Yeah, I usually like say I wish we were always the highest and best use of real estate and as a niche we’re not there are certain factors that will determine you know, if we can get a premium over a normal unfurnished year long rental, it’s factoring in the potential vacancy factor in utilities factor furniture. And sometimes we’re not, sometimes people will say, Oh, that’s all I can get. Well, I can get that. Yeah. Unfurnished. And I would say I didn’t do that. But like I said, sometimes there are other factors that convenience, the flexibility they want better. They want better terms. And so that’s why they choose to go with us.

Julian Sage:                       00:30:38              So you, you have, you have a owner that’s willing to work with you and now you have this, a new property, but now you go back to the demand, you have to have the people that are going to fill the property. Are you going back to the same people that you previously we’re working with and asking them for more if they need more housing or do you have to find new people? Like how does that balance work between that supply and demand as you, as you’re growing?

Tim Touchette:                 00:31:05              Yeah, I mean, we will highlight new properties that we get. We’ll talk to our existing clients and say, Hey here’s a new property or two you know, or you stayed with us last year and the property you stayed in, it’s now rented or it’s not available during your day, but here’s one that’s similar and location or style or size or features and you know, offer it to them that way.

Julian Sage:                       00:31:34              You know, during this time when Craigslist was, was allowing you to grow your business you, you were, you were scaling. What did that, did that look like where you, where you just saying, you know, now’s the time to really scale this up. Is that when the majority came or when was kind of like the next pivotal moment after Craigslist for your, for your business?

Tim Touchette:                 00:31:52              I don’t know. You know, it’s funny, I look back and I’m like, wow, we’re 300 properties. I kind of remember being at 27. There wasn’t, I mean, the ebb and flow of our business that I have been tracking is that, you know, on general, we will add anywhere from 50 or more properties a year and probably shed 10 to 20 properties a year. So we’re always netting, at least in the last couple of years, we’ve been netting around 30 properties. And you know, I mean it’s, it’s kind of part of the geo where we have some owners will say, Hey, I want to rent it and that need to wait for a year or so and then I’m going to sell it. And so having our option is a great option for them to do that. So we know going in that we’re getting a handful of properties that we may not have more than a year.

Tim Touchette:                 00:32:53              And then other times people take jobs overseas and then it didn’t work out. And so they’re like, I gotta move back in and sit with me, work with them on getting their property back and other properties. Mmm. You know, there are market changes and conditions and you know, the vacancy is greater than they expected. And so they, they do something else with it. But I usually say I go, if we aren’t able to do what we say we’re going to do, we wouldn’t be growing every year. We pretty much have been. I’ll tell you the last year or two has been tough. But you know, in general we’re still adding properties and keeping places rented.

Julian Sage:                       00:33:35              So as you’re adding these properties, are you also focused on finding new clientele, like finding new businesses that need a constant flow of furnished housing? Like how does that work?

Tim Touchette:                 00:33:49              Yeah, I would say the majority of our marketing efforts are always about developing and fostering relationships with the business clients we have and find a new ones. You know, to a lesser degree it’s finding property owners. Because as I said before, a lot of property owners may not make sense to them. So for us to go out and try to convince them, but this is what they need to do with their property. Mmm. It doesn’t always resonate. Mmm. And so really we’re always focused on keeping the inventory we have occupied as close to a hundred percent as possible.

Julian Sage:                       00:34:25              You keep occupancy for your properties around a hundred percent, you said?

Tim Touchette:                 00:34:29              No. I mean, so in certain neighborhoods we average around 90 to 92% occupied and then, you know, citywide it’s probably around 85.

Julian Sage:                       00:34:40              Wow. See that. That’s the crazy thing to me too though, is that because you have these clients that are saying for like three or four months, I, you know, if someone takes a block of your calendar and now you have maybe like this wedge where it’s maybe you know, inconvenient for most, now you have to find a client from one of the businesses that you work with to be basically pair them with that little

Tim Touchette:                 00:35:02              Yeah.

Julian Sage:                       00:35:02              In your calendar.

Tim Touchette:                 00:35:03              Yep.

Julian Sage:                       00:35:04              And you’ve been able to stay around 90, 80% occupied in your units with that.

Tim Touchette:                 00:35:10              Yeah. And I mean, keep in mind, our price points are lower than you know, and this is a broad generalization, but the way I describe it is we are going to be 30 to 40% more expensive than unfurnished year long leases, but there’s flexible terms, utilities are included and there’s furniture involved. And then we’re going to be 30 to 40% less expensive the night, the, and some weekly rentals. And so, you know, when I talked to owners on both sides, they’re like, you know, if you have a, a three bedroom, four bedroom house that you’re doing 90 rentals for the high season, you know, people are getting four or five, $600 a night and we can’t come close to that, you know, so we know that going in. And if people want to do that and they’re okay with, you know, the quasi legality of, of it, you know, we don’t, we’re not here to convince you otherwise because the numbers just don’t always work out.

Julian Sage:                       00:36:14              So. So you said you spent the majority of your marketing efforts on fostering those relationships with businesses. What, what is that relationship building look like and what does your marketing, what does your marketing efforts look like when you’re trying to create a relationship with a business to provide you these, these clients?

Tim Touchette:                 00:36:36              Well, I mean it’s, it’s basically, you know, our efforts are like, Hey, you know, we have roughly 300 properties in this part of town and we have, you know, this variety and you know, visit our website and, you know, hopefully, you know, we’d be happy to meet with you and discuss, Mmm. You know, how we can help, you know, we’ll, we’ll reach out and show them new inventory that we have and, you know, just kind of find out what they’re looking for. And it’s, I mean, I, I can’t say much more complicated than that, but it’s also kind of knowing not everyone’s your customer, not everyone’s going to want what you have and, and still kind of pushing on and finding the folks that do resonate with what you’re offering.

Julian Sage:                       00:37:23              Well, that, that’s, that’s going to be my next question is, is that, how do you know who’s who’s the right person? Cause there’s plenty of businesses out there. But how do you know which businesses are the ones that can fill your units?

Tim Touchette:                 00:37:36              They’re either the ones who respond or you know, we, we ask are, is this what you’re looking for? So I mean [inaudible] you know, sometimes it’s surprising because you don’t think a bigger company would have a need for this. And then, you know, there may be their current provider can’t supply something, I mean, I’ll give you an example. Larger companies that use national or global corporate housing providers don’t always have houses in their inventory like freestanding houses cause they usually like the model of large apartment buildings. And so if they have a client that has a need for a, a Roadhouse or a freestanding house we work with them and kind of just say, Hey, give us a shot. When those requests come in. So, you know, it’s just kind of understanding our, our value position and talking to the people who have a need that they don’t, who have a need that they don’t currently have an Arabic story.

Julian Sage:                       00:38:46              But for, for like even finding these businesses, cause like there’s, there’s sites out there like corporate housing by owner. And I think that’s just what it’s just like a listing site. And you know, companies like, you know, like even even my properties, like I could list my properties on corporate housing by owner. You probably use that to marketers I imagine. Or you stay away from sites like those?

Tim Touchette:                 00:39:06              We used to when owners contact us for their properties in areas that we don’t service. I mean, for example, like Tyson’s corner, which it gets a lot of business travelers. But for us to manage it effectively, we’d be stuck in traffic. We’d almost have to open a, an office out there to do that. So we would we, we send them to corporate husband by owner as an option.

Julian Sage:                       00:39:33              And that’s like individual companies or individual people that contact you asking for for a unit, you’ll just send them to a site like that.

Tim Touchette:                 00:39:42              No, sorry. For property owners who contact us and they say, Hey, can you help bring corporate renters to the property that I own? And if it’s not in our area I’ll direct them to list it on corporate housing by owner.com.

Julian Sage:                       00:40:01              Got it. But for like how you’re even finding these, these businesses, are you, is there like a list of businesses that, like you you’re getting from somewhere, from somewhere else? Like, like you said, the, the national Corp housing association, or is this like you’re going out on the internet and just finding businesses that are there and seeing if they need need rentals in your area?

Tim Touchette:                 00:40:28              I mean, our, our approach is kind of all the above. I mean, as a member of corporate housing association, yeah, they have webinars and annual conferences that they go to every year. And you know, and it’s just talking with other providers and finding out, you know, that’s when I get to spend the most of my time talking to large corporate housing providers. And just kind of, I’m always there saying, do you have anything GC that, you know, it’s the house. We’ve got several and just kind of giving, you know, getting access to them at that opportunity. I would say that’d be hard to do just on a phone call. Randomize. So like at the networking events, those are, those are great conversations.

Julian Sage:                       00:41:15              So within the corporate housing world, do you guys work with other companies and if they,

Tim Touchette:                 00:41:20              For housing companies, absolutely. Okay.

Julian Sage:                       00:41:22              And if they’re not able to service, like if one of their clients says, Oh, we need properties in the DC area, they’ll refer you business and, yup. And, and you get like is that like a commission, a split? Like how does that work?

Tim Touchette:                 00:41:35              You know, it’s, it varies. Sometimes it’s you pay a referral fee sometimes they’ll Mark it up a little bit. Other times they’ll just say, Hey, this is a really valuable client, you know, treat them well and there there’s no money involved. You know, and it’s a good community because it’s it’s a small I mean it’s a niche. Again, I say that again, but it’s big. But compared to hotels, you compare it to vacation rentals you know, it’s, it’s, it has a community feel. It’s kind of weird.

Julian Sage:                       00:42:16              So, so let’s say for the people that are interested in starting a corporate housing company you, you said, you know, there, there’s people that will, they’ll, they’ll try to reach out to Google and say, Hey, you know, are you looking for corporate housing? But they already have a provider. So for a new person that’s coming in, how do they even know, like, where to start? Or like how to even grow a business if everybody else’s already has those established relationships.

Tim Touchette:                 00:42:42              I mean, I would say if you just have one or two, you’re probably just better off going on the internet. Mmm. We reached out to businesses. You really have to have something that would be appealing to them and you probably want a decent number of units that you can fulfill their needs for. So I mean to people who have been doing short term rentals and because of the coronavirus have a lot of vacancy, I, you know, you could say, Hey, you know, target, go online and try to find a bunch of different businesses. But I mean, you know, even traditional businesses that are, do business travel, have travel shutdown right now. So that’s why everyone’s talking about nurses and doctors. And I mean, that’s the smart thing to do because in this restricted age, you know, that’s kind of really the only people out there that are traveling and are looking for temporary accommodations.

Julian Sage:                       00:43:48              You know, going, going off of that, how, how has the corporate housing world than affected by this pandemic? I mean, you’ve been through, you know, three you know, major economic downturns, you know, nine, 11, 2008, and now with the Krone, I’m sure that you could probably find some others in between there. But you’ve, you’ve, you’ve seen the gambit how, how are corporate housing companies affected during these types of events

Tim Touchette:                 00:44:17              From what I’ve been able to gather? Mmm. I mean for, yeah, we’re in D C so I know DC pretty well. Corporate housing providers in other markets,

Tim Touchette:                 00:44:29              Mmm. Have had some significant losses in terms of a clients canceling. DC has been pretty good because of the number of hospitals here and and some government travel is still taking place. I had my CFO pull numbers of first quarter 2019 your first quarter, 2020, which obviously went through the end of March and we were down about seven and a half percent. Mmm. So it’s not terrible. We should, you know, I mean, everyone has higher projections, no one projectors projects to go lower. But our cancellations have been minimal to where as I, as I have a friend of mine has a 10 unit building in DuPont circle and zoned to do nightly. Mmm. Mmm. Yeah. He was at, yeah. For the first two weeks when this turned out, he was like, I’m not a hundred percent vacancy.

Tim Touchette:                 00:45:38              Yeah. Everyone was canceling. And you know, fortunately we haven’t seen that extreme level of cancellations and but you know, I would say it’s, that’s DC. There are companies in other markets that, or again, I would say in general, they’re fairing better than nightly weekly rentals because vacation travel has been really put, you know on hold. And so if that’s who you’re targeting, Mmm. It’s going to be tough. What has been the most challenging part of scaling this business? Corporate housing business. [inaudible] Creating a consistent guest experience. I’m across, Oh, the, you know, new two properties or like where, you know, we’ve got a studio of basement apartment and we’ve got a four bedroom row house in Georgetown and you know, coffee makers and supplies and everything is different. And so, you know, managing expectations, getting the experienced down well, Mmm. And and just being really good about customer service.

Tim Touchette:                 00:47:01              It’s just being out in front of everything, predicting and, you know, getting good processes in place. I mean our, it’s funny, once we hit a certain level where we had one person handling all the reservations and that got be too much for her. Even splitting that role into two people it became a challenge because, you know, communication breaks off if you’re talking to one person and you’re talking to another and then it’s like, where do we track that? It used to be in someone’s inbox and now you have to have a, I know the program to share. Mmm. What was said and and then you know, someone goes on vacation and you know, being able to make sure there’s a consistency of service from that level. And so taking the company from where everyone was handling their own little world to having kind of the next level of managers that then oversaw each department. But I think, yeah, you talked to any person owns a business. Making that transition is tough.

Tim Touchette:                 00:48:03              We felt it too. And w what are you doing to be able to set your units apart because you, you put an emphasis on keeping that you know, that similar experience, you know, your brand throughout all of your units and making it be the same even as you’ve been able to, even as you’ve been scaling your team and scaling your units, what are you doing to be able to set your units apart from all the other people that are offering a furnished accommodations? I mean, I think the exclusivity of our units were you can’t, you know, it’s a double edged sword where, you know, most corporate housing providers will have, yeah, for example, 2,400 M it’s a big apartment building in DC and a corporate housing provider Texas, California and Seattle will list a unit there on their website. Because that building has a bunch of not two month rentals in it.

Tim Touchette:                 00:49:01              And so, you know, and then the furniture packages are different. But really, you know, we have kind of one of a kind properties and if that’s what clients want, then we’re a good fit for them. If we have clients who want doorman buildings and lots of services because of our model, our units like those are our condo buildings and those kinds of buildings have six months minimum. So we have but they have to commit for six months and so other, otherwise we usually just w we don’t get those business. So I mean it’s, you know, we, we try to target business around what we specialize in, which were good locations, unique properties and you know, reliable and consistent service. And you have those, Cheryl, you’ll have I think we’re pretty good at business. And you said that your clients will say, like your clients will have maybe situations where they need a six month rental.

Tim Touchette:                 00:50:05              Does that mean that you’re going to go out and find a rental that can accommodate a six months? Because you said that there’s like specific locations where that’s the minimum. Are you growing your portfolio as your client’s needs grow? Yeah, I mean, we’re adjusting. I mean, it’s, I will tell you it’s been good. It’s been harder. The trend the last couple of years have been for businesses, even though they say I’m going to be here six, nine, four months, my company is only letting me sign on for three months. And so Mmm. As that has become more of a standard we’ve lost some of our six months minimum buildings just because they’re not able to rent as well. So, you know what I mean? There’s nothing we can do about that. Because those are the bylaws. But, you know, we, we kind of try to adjust to market trends.

Tim Touchette:                 00:50:59              I mean, the other I’m big trend is just, you know what I mean? People like new people, like really nice places and, you know, for us to talk to a property owner who had up, we’ve had a property for eight years or more it needs to refresh. And sometimes those are hard conversations to have with them because they’re like, what do you mean it’s rented so well, why? Yeah, it was the market not good anymore. And you’re like, no, the market’s good. Your property needs an update. And Mmm. You know, so it’s always kind of balancing that out and Mmm. You’re paying attention to supply and demand and market trends.

Julian Sage:                       00:51:42              How does that impact your, I mean I’m, if your clients are growing and they’re, they’re asking for more units and you’re trying to scale along with them, what happens when you lose a client? Do you have, is there any experience or any time that you lost maybe a clientele or something happened and you know, maybe it scared you or put you in a situation that you didn’t think that you’d be able to come out of?

Tim Touchette:                 00:52:05              Yeah, I mean, every day is a little bit scary, right? I mean, I, I mean like we lose, Mmm. I mean we, we lose property owners cause they sell or move or we lose businesses because guess what? We messed up. And I mean, you know, you see these perfect storms about know, Oh well the keys should have been there and they weren’t. And then then the air conditioning doesn’t work. And Oh, by the way, the oven went out on day number two. And, you know, I mean, these things do happen and it’s, you know, one side, it’s almost comical because it’s like he couldn’t even plan for these, what I call a perfect storm of, you know, just series of bad things that it started with one small mistake, but then, and you try to recover. I mean, I think we’re good at admitting when we’re at fault and we’re good at you know, learning from it and thanking people for their negative feedback because a lot of times when people are upset, they just kind of go away and you never hear from them again.

Tim Touchette:                 00:53:12              And so I kind of relish Mmm. Hearing bad things. I mean there’s a, I’m sure anyone can Google you know the phrase like, hug your and I, you have to take that to heart. I mean, it’s painful to read, but then if you really see what they’re trying to tell you, it’s a, you know, Hey, this didn’t work and they’re giving you an opportunity to fix it. [inaudible], You know, if you just say, Oh that hurts, but don’t do anything about it, then really it’s on you. But the gift that they’re giving you about an opportunity to make it better it gives you an opportunity to act on it and you can fix it.

Julian Sage:                       00:53:53              W how do you see the, this this master lease model? Is this something that you see other corporate housing companies using effectively? Is this something that you could even consider doing yourself? Because you know, you have two expectations. You have the expectation that you’re trying to please for your, your, you know, the demand, your, your, your businesses, and then you have the expectation that you’re trying to meet for your owners, your, your, your supply. If you use this master lease model now it’s really just more on the, the main side with your businesses. Is that something that you see as being a workable model in the corporate housing world or something that you could even do yourself?

Tim Touchette:                 00:54:36              Yeah, I mean, it’s cyclical. I mean when, Mmm, I remember early on, you know, companies would rent a, an apartment or a couple apartments and just have their staff rotate in and out. Mmm. And because that was still cheaper than a hotel, and then as people got more efficient, they realized, Oh, I don’t want to just do that. I’ll I’ll rent it only as needed. And so then corporate housing companies would, you know, become the economies of scale where they would rent out a block of apartments you know, commit to a three or five year term and you know, rent the furniture and, you know, figure out the furniture side and you know, if they planned it well could make some money. And then the other, you know, then the trend became with technology and efficiencies, it’s, it’s more of yeah, some companies I feel the bigger trend is basically on demand.

Tim Touchette:                 00:55:45              It’s like, Hey, I need a place for four and a half months in this part of town, this price point. And then they go out and find it, but they only sign on their risk is, you know, tied to their client, you know, after four and a half months, their, their lease ends two days after their client moves out and you know, then it gives them time to move the furniture out. Mmm. And so, you know, it’s, when I see master nieces popping up again, it’s like, yeah, I mean it works. And it’s, it’s one way. I don’t know if it will ever go away and I also, you know, you just see these things pop up again and again and yeah. At the end of the day it’s kind of like, you know, what, what makes the most sense? How is the company or how is my business structured best to, to adapt with their question with my clients.

Julian Sage:                       00:56:42              Do you have any, any opinions or thoughts on the, on the short term rental model and specifically like that master lease? We, we’ve, you know, during this time, the short term rental world has really been impacted you know, vacancies, you know you know, no vacancies at all or you know, they’re, they’re completely vacant. And these people that are using this master lease model at scale you know, specifically a couple of companies like like let’s say Saunder lyric where they rent out full of apartment buildings and they’re leasing them. And now they’re struggling with their vacancy. Do you have any thoughts or opinions on on that? Cause right now everybody’s looking at, you know, something like what you’re doing and you’re saying you only have a 7% decrease in occupancy which is kinda crazy right now during this time. But so what, what are your thoughts and opinions on this?

Tim Touchette:                 00:57:38              And by the way, I want to let you know, every day is a new discovery where, you know, Hey, we’re doing great. And then three people call and they say, we need to cancel. So, I mean, April has not Ben great. And it’s slow. So I again, that snapshot in time Mmm is, is, is accurate. But, you know, we, we thought April was looking good and now you’re roll, you know, every Jay, we get other updates, so it’s not a waterfall of massive cancellations, but it’s, you know it goes up and down and I mean, we’ve been signing a couple of people too, so it hasn’t been just all down, but I just wanted to bring that up so that it’s not a Oh that bad. So

Julian Sage:                       00:58:28              Your question, sorry, I got off my tangent. What are your thoughts with these companies like you know, like we work, we work, they, they went under, these companies are dropping everything. All right. Sorry. Sorry. For those that are listening for the audio change, but Tim, Tim’s battery was dying so we, we had to improvise, but we’re working.

Tim Touchette:                 00:58:52              Yeah, I apologize for that. I I thought they had a full battery, but also the choice of working from home. Mmm. I don’t have my full equipment. So yeah, to answer your question, my thought on that model, given a pandemic, which, you know, it hasn’t happened for more than a hundred years now, you know, really doesn’t fall in any business plan. You know, so it’s shock to everyone and it’s going to be a lot of people holding the bag because you know, what it, you know, who should pay for this pandemic, meaning, you know, should the renters suffer, should the landlord suffer, should the companies that are guaranteeing the rent suffer. Mmm. And I don’t think there’s an easy answer to that. I mean, I know there’s a lot of talk about rent forgiveness and help, but Mmm. I also don’t think that I don’t think that it means everyone should get a, a free handout or survive and Mmm. As someone who owns a small business, yeah. If someone can, I always said, if somebody can build a better mouse trap and my company becomes irrelevant, you know, hand my hats off to them and shame on me for not being nimble enough to kind of prepare for that. So I know it’s, you know, I, I’d like to think that if the whole industry goes away, I’d find something else to do, but maybe work on my jump shot. I don’t know.

Julian Sage:                       01:00:30              And, and what, what would you do differently if you had to start from scratch? 10

Tim Touchette:                 01:00:35              I would tell you I’m, I’m completely bipolar on technology where we decided to go down and build a custom website and do PHP and programming. And it’s the best thing in the world. And it’s the worst thing in the world. The technology side, I’m always afraid of getting stuck into a platform that becomes irrelevant and so expense, you lost a lot of money investing in technology that has delayed rollouts that has, but the customer service that has put us behind the April. But I believe that being in control of the technology, Mmm is the right path. And ask me tomorrow, and I’ll say it’s the wrong path, but if I could do anything differently, it would be trying to have a more longterm solution on technology rather than the patchwork. And it’s a bear.

Julian Sage:                       01:01:35              And if you could give one piece of advice to someone who’s trying to start a corporate housing company or trying to establish those corporate client relationships what, what would you tell them?

Tim Touchette:                 01:01:49              Gosh, I’d probably say patients. Mmm. I mean, like I said, it’s a niche. It’s not you know, if you have a good property in a good part of town and you do nightly rentals, you’re going to keep it rented the majority of the time. If it’s a loud, and you know, if everyone good at it, you know, when you, if you choose to go furnished monthly, you’re going to be pulling from a smaller pool of potential renters. Mmm. The rates won’t be as high occupancy should be higher. And it’s, you know, it’s, it’s kind of a, it’s a good path to go down, but it’s not going to be high flying like you know, the vacation rentals or the urban, you know hotel, alternative rentals. It’s just a smaller group. So, you know, and learn from your mistakes. Use that as a, my other piece of advice is like, you know, do something with it. Don’t just good at bad reviews and brush it off, but you know, act on them.

Julian Sage:                       01:02:58              Do you think that short term rentals and you know, corporate rentals that there’s a blend between the two, that there’s a world where they can both work together? Or do you think that it’s two separate niches and they both kind of have to stay within their lanes if they really want to be able to you know, run a profitable business?

Tim Touchette:                 01:03:16              No, I mean, I think the inflexible, I mean I think they’re similar enough that you could make them work, but my advice usually is to choose one or the other and make that a primary. Because I mean I’ve worked with developers and we’ve toyed with ideas of, you know, having a building where, you know, based on the size and the floor and the features. Mmm. So mean would be unfurnished year long. So I’m going to be 90, weekly and some would be monthly. And, yeah, to me that makes a lot of sense because it is, it’s neighborhood, it’s size teachers, you know, each one has different needs from closet size, you know, sunlight access, you know, which, which do the clients want. And then the hard part on that then is, you know, marketing it, it’s like, you know, how do you describe a building, you know, you’re targeting all different three clientele. So I mean, but back to your original question, I think it is possible to do both. And we just choose to stay in our little world of 30 day rentals, you know.

Julian Sage:                       01:04:37              And last question, where do you see corporate housing going in the future? Do you see a change? I mean, you’ve been there since the beginning you know, nearly 20 years now and you’ve seen you know, the internet, Craigslist, all these different things. Where do you see corporate housing going moving forward?

Tim Touchette:                 01:04:55              It’s always going to be there. I mean, it’s all, there’s always going to be a need to have something that’s larger than a hotel room. And something that is a dedicated space for longer term stays projects relocations. It’s always exciting to go to annual conference, the chip corporate housing prior association, and just kind of see where technology and ideas and you know, how that impacts and makes the, the offer in spatter. But I mean it’s, this is not going away. It’ll always be there and it’s just, it’s a nice little niche.

Julian Sage:                       01:05:40              Awesome. Well, thank you. Thank you so much, Tim, for taking the time to, you know, to come on here and share, share your wealth of knowledge and experience. If anybody wanted to be able to reach out, find out more about you know, corporate housing or what you do specifically being in the DC area. W what’s the best way that they can reach you?

Tim Touchette:                 01:05:58              I’m pretty good on email, Tim@stayattache.com. Yeah, let’s just go on the website. I can be found on LinkedIn. Mmm. I’ve I’ve written a couple articles on LinkedIn, sharing my ideas on a couple of these things. So, yeah, happy to. Like I said, I can talk this stuff all day, so happy to help people out and give advice and see what I can do to you better.

Julian Sage:                       01:06:25              Awesome. Well, I appreciate it. Thank you, Tim. I’ll include everything in the show notes as well as your contact and stay attache. Thank you so much again, Tim, and until next time, host nation,

Julian Sage:                       01:06:35              Keep on hosting.

Tim Touchette:                 01:06:36              Thanks man. Take care.

Julian Sage:                       01:06:38              Hope the hosts benefit from the show. If you found value, please go on over to iTunes, leave us a review and let us know what you enjoy about the show. If you’d like to talk to hosts that have been featured in these episodes as well as the community, go on over to our Facebook group, the host nation.