Scott Shatford:                  00:00:00              I think our revenue management tools maybe not as robust as I think as in the market is the most accurate read on how the market’s moving over the next year, right? Like where are those blips in demand? What is the turn occupancy rate? What do you think that occupancy rate will be when we get here? Like, should you hold out, should you get rid of it price the higher level? Like that’s all super important, right? You’re running a business. How you’re pricing those that asset is, I think it’s the name of the game, right? It really separates the winners and the losers in this game. In my opinion,

Julian Sage:                       00:00:30              This is episode number 63 of the short term rental success podcast. Are you an investor that’s looking to have your home professionally managed, go to cohostit.com for more information.

Julian Sage:                       00:00:40              Welcome back to the 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 will help you become a better host and learn how to scale your business. Like any exceptional host that 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:                       00:01:10              Hey, what is going on? Host nation? I am super excited to be back again with you this week. This has been a super exciting week because just a few days ago, I finished a conference called veterans live, where I was able to speak with other military members and other people that are in the veteran space about short term rental investing. So I created a new presentation trying to just take everything about short term rental investing in this whole concept that we call the RCB model of investing and teach it to these veterans. So I only had 30 minutes to be able to do this. So I was talking very fast, but the feedback that I got from everybody that was at this conference was amazing. And what we’ve decided to do is I’ve actually updated our masterclass. So for those of you that don’t know my business partner, mentor and friend John Bell, who is also the cohost of another podcast that we have called the vacation rental machine podcast.

Julian Sage:                       00:02:05              And in this podcast, we’ve been teaching people how to be able to create a vacation rental machine, a business that’s able to run on autopilot using other people’s properties. So the whole model that we teach is this concept called RCB investing, where we’re utilizing things like rental, arbitrage, co-hosting and buy and hold and able to operate all of this within the same type of business framework. We have some really unique ways of how we’re utilizing rental arbitrage and co-hosting in our own business. And we’ve decided to be able to teach other people how to do that. So that’s what I taught on this training to these veterans. And they were just like mind blown. So like I said, we’ve decided to update our masterclass or John and I are actually teaching you these different concepts. Now there’s a lot more in this training. It’s actually a 90 minute training where we go over quite a lot of things such as RCB investing the four pillars of recession resistance, how you can actually take your short term rental business and make it recession resistant based off the things that we’re teaching.

Julian Sage:                       00:03:05              We also go over the 10 steps of the vacation rental machine formula, which is everything that you need. If you plan on scaling or starting this business at the end of the training, we also give a free gift, which is our 10 step Airbnb startup to scale checklist. So if you’re just starting off or you are scaling or looking to diversify your short term rental portfolio, this training is taking everything that you need to know in this business, putting it all into a very condensed and just action oriented, fast paced training, where you can just take away so much. And we also give you a resource at the end that you can use for yourself in your own business. If you’d like to attend that training, then go to short term sage.com backslash masterclass, and you can actually register for that recorded training where we go over a lot of different things.

Julian Sage:                       00:03:52              So it’s super, super powerful, and I’m excited to be able to hear your feedback. Just let me know what you like about the training, or if there’s anything that you think could be improved. I’m always open to feedback. Now, this conversation was actually recorded prior to COVID-19 and I withheld uploading it just because of how we were pivoting the podcasts and some of the different content that we were putting out. But I feel like now it’s an appropriate time because we’re also looking into different markets and looking to invest right now. Markets are starting to recover to where they used to be. And if you actually want to follow John and I, as we go over in detail, looking at market recovery, you can also listen to our vacation rental machine podcasts. We’re in the next episode, we’re actually going to be doing market research and identifying the markets that are recovering and analyzing properties in those types of markets.

Julian Sage:                       00:04:40              But because bookings are starting to come back and markets are starting to recover. This is actually a perfect time to be able to introduce Scott Shatford. Scott is the founder and CEO of air DNA. Air DNA has over 10,000 active subscribers and analyzes over 10 million properties. Scott was actually a host themselves prior to starting rDNA. And we actually get to hear Scott’s story about how he started and how he was actually teaching people how to be able to start their own short term rental businesses. Then Scott went on to found air DNA with all of the market research that he was doing for his own properties. So Scott had eight short term rental properties in the Santa Monica, California area until 2015, when they were shut down because of regulations with 15 years of experience, as a data analyst, Scott realized he wanted to discuss data instead of just purchasing or subleasing properties.

Julian Sage:                       00:05:32              So in this episode, Scott talks about what rental arbitrage looked like in 2012, how rDNA started. He also talks about how air DNA pulls their information and what kind of information you can expect seeing on the platform. We also discussed how you can utilize the information on air DNA to run a successful short term rental business. If you like my show notes for this episode, go to short term sage.com backslash STR six three, or if you like my show notes sent directly to your inbox every week you go to short term sage.com backslash with all that being said on this week’s conversation. Hey, welcome back, host nation to another episode of short term mental success stories. In this episode, I have these special, special honor of speaking with the one and only Scott Shatford Scott, if you please wouldn’t mind introducing yourself and let us know who you are and what inspired you to get into short term rentals.

Scott Shatford:                  00:06:17              Yeah, me too. Thanks for having me, Julian. Yeah, I’m Scott Shatford founder and CEO of airdna.co. I’ve been in the data analytics game for the last five years. But for the couple, few years before that, I was pretty early in on the rental arbitrage game. So at about eight properties in Santa Monica from 2012 to 2015 before they shut me down. But I’m sure we get into all of those fun details here in show.

Julian Sage:                       00:06:47              So, so rental arbitrage in 2012, what did that look like when you first started? Was that a common term or is this just pretty, it was that pretty new back then?

Scott Shatford:                  00:06:57              It definitely wasn’t a common term, right? It was, it was really easy business back then day, which was the beautiful thing. But we didn’t really know what we were doing. We didn’t know really how to think about this whole world and it was fun and it was definitely sort of at the trailblazer side of this thing. And so it was lots of learning, lots of failing and but it was a really interesting time to be in the business cause it was right when you can sort of just throw anything on Airbnb and demand was so much outpacing the supply in the marketplace and the prices were so much lower than what the hotels were charging, especially on big events. And it was just, it was the easy golden times is I like to think of him when it was just, it was easy. The expectations were a lot lower. Everybody’s sort of doing it for the first time. And it was when they have to think as hard, I think as you do now, it’s just much more competitive space expectations are all higher. And so I think it just continues to get more difficult as there’s more professionalization in the space.

Julian Sage:                       00:07:57              So when you first started, I wasn’t super popular, like you said, you could throw really any property up there and as long as it was, you know, a better looking place or a little bit better price, you could, you could do pretty well. When, when did it start to become a little bit more competitive. And when did you realize like, Oh, I can’t just pick up any property and throw it on there or do you still think that that’s still the case?

Scott Shatford:                  00:08:19              I don’t think it’s the case anymore. I think it was really just when the reviews started to suffer, right. It was essentially the same property, the same decorations, the same, you know, decency in the, you know, the towels and the cleaning and everything like that. But the reviews are sort of like slowly getting worse and worse and worse than just expectations for just like cleanliness where the first thing that got me, like it was sort of, you’re staying in somebody’s apartment and you’re deal with a little bit of like whatever hotel property. But people, you know, after a couple years they were just expecting it to be as clean as, you know, a hotel property, any stains on them or the towels to be perfectly white. Right. And it was sort of in that stage, I was like, Oh, this is good. That’s, we’re getting more difficult.

Scott Shatford:                  00:09:03              I can’t sort of clean this place myself or like sort of, you know, mail this port part in and I need to get more professional about who I’m having to numbers. That was part of it. You know, I wrote a whole book on the subject experts playbook back in 2014 were sort of all my learnings. And how about just being a nerd in short term rentals? And I’m sure you can appreciate that, but you know, it was all about how I had to market it. You know, pricing became more competitive. You know, just everything that goes into having a more crowded market place, you got to stand out somehow, right? You can’t just be another place that doesn’t same stuff you got to figure out, like, what is your unique niche or how are you going to market to do musicians coming to town or families?

Scott Shatford:                  00:09:49              You just have to think a little bit harder about how to market your place and really keep the same level of numbers overtime. So when you were picking up these properties where you just like finding anything, or did you have the type of mindset that you have now with, you know, you have over 10 million properties that you’re pulling data from, but when you were just starting off in Santa Monica, I mean, what were you doing to be able to tell like this is going to be a profitable property? Yeah, that’s a good question. I was, I was fortunate enough to really be at one of these super hotspots for short for rentals. I was the brief story is, you know, I was, I was living in Santa Monica right in the middle of the third street promenade, which is like this massive tourist destination.

Scott Shatford:                  00:10:33              All the hotels are 500 bucks a night around that area as a time. And I went on vacation, my neighbor told me about Airbnb. I was like, what’s that cool? Took some pictures of my iPhone, went over to Bangkok and like listed on Airbnb. And I was like 95% booked for the four months I was on that trip and I was charging 300, two 80 a night for the property. Yeah. I was making like $8,000 plus on a $3,000 rent, maybe not $500 all in. And so there’s this massive arbitrage opportunity. Right. I didn’t know that was the word for it, maybe at the time. But there was this sort of the light bulb moment at that point in time, it was like, how am I making 4,000 bucks a month while being in like this is too easy. And so I didn’t at that time have to think too hard about where to go.

Scott Shatford:                  00:11:21              I knew that I could probably help in 10 places next door and have similar success. And so that’s kind of what I did, right. It was just like Santa Monica is great. Hotels are expensive. People can’t afford to go where they want to. So they go stay in like some other part of LA and take the train or whatever. So that part was easy to open up my first page, you know, it was just sort of replicate what I knew was working. That’s sort of the Genesis bare DNA started when I was thinking about, okay, I gotta get out of Santa Monica. Things were looking weird with the government. They seem like they might do some fishy. And just as any good business owner, you can diversify your investments. And so that’s when I started looking, you know, down in orange County or up in Santa Barbara, and that was sort of the Genesis of DNA. Okay. No, I need to start looking all through California and then the U S for where is this arbitrage opportunity? The highest. And then during the exploration phase, talking to a bunch of other entrepreneurs, you know, that was sort of the light bulb like, well, why don’t I just go South the data instead of going and buying properties, I don’t have a hospitality background. I don’t have a real estate background. I got a data background, so data business and stuff.

Julian Sage:                       00:12:31              So you were looking to expanding your rental arbitrage business, and you were looking at all these different areas. What was the type of data that you were pulling? Because obviously now you have like a full team and you’re, you’re pulling all this data that’s available. That Airbnb kind of like, I guess, has in the back. But you were scraping this probably manually. What, what were you doing to be able to find good deals?

Scott Shatford:                  00:12:53              Yeah, it’s, it’s very similar to what we’re doing today to the onus, to where it is. Just trying to understand exactly what a property is. Retinue, occupancy and break is for, they’re trying to charge charge, right? It’s the story. And the three basics hospitality metrics you can throw in ref par, which is sort of the one metric that sort of matters, but it’s just a, a combination of ADR occupancy. And that’s what I’m trying to get to, right? If you look at a calendar. Yeah. I was looking at calendars, looking help book our book. They were three months in advance. Right. That’s sort of what everybody does look necessarily like spying on the competition. But you know, what did he do the last three months for like, how likely are those others? Do you know those that are 40 days in our calendar to get booked?

Scott Shatford:                  00:13:32              You know, you know, if you do it once you can write down an Excel spreadsheet to do that scale and do it over a course of a year to really understand exactly what a property was doing. That was the hard part. Students were actually easier back in the day because you could look back a year and a calendar in the API, like scraping it, hitting the API. You can look at like, you know, last year a month and see what was available, what was not available. The life isn’t that easy anymore where they don’t show anything beyond yesterday and you can’t look at yesterday anymore. Right. And so it was pretty easy. You just go look at the last 12 months, he was sort of look at how many reviews they were, how many reviews they’re getting on a monthly basis. They just looked like a full time rental, full time rental.

Scott Shatford:                  00:14:15              This guy’s doing a pretty decent job. He’s got some revenue management in place. Yeah. It seems like he’s doing all right. And then you sort of select that as like top 20% of reformers, full time properties. And then you would just look at kind of what their unavailability and sort of just model probably works in that property. So that you would do that on every single property list on the platform. You know, it was only 200,000 at the time in the U S and so just kind of back into it, and then you can sort of overlay that, right. And Zillow was the easiest place to get that data. They got a free open, you can go to zillow.com/research, I think. And it just got like, here’s every zip code, one bedroom property and, you know, cost as much money. And so you can just do a really quick overlay of revenue versus the cost of the properties and sort of see what jumps off the page

Julian Sage:                       00:15:08              Were, were you looking for like a certain type of a certain type of number? Like if you saw that, you know, if you were looking on Zillow and there was a property for rent, let’s just say in California, it’s, you know, $3,000, but you saw that these properties were renting, you know, on Airbnb for let’s say six, were you looking for a certain number or how are you determining, like, this is going to be actually a really good deal.

Scott Shatford:                  00:15:31              It was all relative to me at the time. Right. I didn’t know what to expect. I didn’t know if like two times or three times as good or maybe there was four times somewhere. Right. I mean, but really I was looking at three times the time so I can get three times the rent best case scenario. I think that’s calmed down expectations is just, there’s more data out there. Yeah. Shame on me for publishing all the data. So like people know the good markets now, so there’s not as many amazing up and coming hotspots that nobody knows about. So I think like in the two to two and a half times, longterm rental is kind of what people are looking for these days. I think three’s is pretty hard to find unless you’re taking some crazy risk in legal areas and that’s allowing the opportunities are unfortunately, as you know, you gotta figure out, are there a lot of people, like if they’re New York or they’re in places where like you can make a killing, just don’t expect to have your doors open a year from now. And it’s only places that you can sort of expect to get, and then you still have to be times.

Julian Sage:                       00:16:31              And I, and I know you guys do a really good job. Like you just recently published an article about some of the top places compared from rent to to what the actual profit on Airbnb is. With that article though, is, I don’t know if you, if you were the one to write it or if you were involved, but are those things taking into account like, like regulations, like if New York is on there is that specific to, I guess that has to be in relative to where the regulations are, right?

Scott Shatford:                  00:16:59              Yeah. And I’m not super familiar with the posts regularly. It really is a simple calculation for that post. But you know, if like San Francisco or New York pops into like the top place to buy, you sort of like get rid of it, but it’s not really a systematic rating system that says these are the best rental arbitrage opportunities. Thinking about regulations has regulation. You know what? It would be outdated six months from now, if we did that article one, it’s very nuanced too. It could be homeowners associations or other things that some of these markets would make it totally legal. And so we found just for having something that’s evergreen content, like it’s best not to include regulation because it’s outdated as soon as you write it. That being said, you know, we’re being much more thoughtful about how we can gather that information because we know from especially the investor community, it’s almost now regulations first opportunity second.

Scott Shatford:                  00:17:55              And there needs to be somebody that’s publicly doing this. Cause we know, you know, the cost has got a team of know dozens of people just looking at regulation. A lot of these other big firms do too. Cause that’s really the name of the game now is understanding what the regulations are, what makes a loop holes are in that regulation. And how does have sustainable pie in those markets? Do you have you to hospitality license or, you know, what, what, what are the work arounds like in terms of like commercial zoning or other things like that? So you, I think we’re being thoughtful about how to approach that in the future, but it’s not in that article

Julian Sage:                       00:18:28              When, when you first started scraping for this data, were you just using Airbnb? Cause now you’re, you’re also with rDNA you pull from like HomeAway VRBO. But you’re not accounting for, for all sites, correct?

Scott Shatford:                  00:18:40              That’s correct. Yeah. We would want, it’s just, how can we get the data, right. And there’s some things about some of the other platforms, how much did you get off of Airbnb? And Virto like, what if you’re not listing on one of those two? Like, you’re probably not doing that. Great. Unless you are like a hotel style property or maybe a mega mansion doing over $10,000 a night might not be on to one of those two classes, but the majority that’s called 90% of relevance apply to U S going to be on one of those two platforms. And so once he started getting more platforms and matching them together and trying to figure it out loud, you know, the, it becomes more complex. You sort of pull in a lot more data sources. And so we’re focused on those two at the moment, probably no plans in the near future.

Julian Sage:                       00:19:31              So, so when people are interested in using air DNA, like you said, there’s people that are investing into these properties. But that, that is being pulled from air DNA. It’s just kind of like, what is it just the average, if you could kind of explain how is air DNA pulling this information and a person that is maybe going to be investing into a property what type of information can they be expecting to be pulled from, from the platform?

Scott Shatford:                  00:19:54              Yeah. Maybe we can get into the intricacies of how it all works. So it’d be the years looking at every single properties availability in the world every single day and looking at the changes to that calendar. Right. And so we will, every calendar in the world, we will see, okay, Hey, next weekend was available yesterday, but not available today. And the last Delvaux rate was three 99. This call on all three days, right. We take that data. We throw into our algorithm and a algorithm says it spits out. Is that a reservation or is that the owner blocking you? Or is that like a same day booking block or like, you know, goes to all these things that looks like a recipe based off the host, you know, performance, they have seven properties they’ve been on the platform for three years. The average length of stay is typically three days in that market, 20 different things.

Scott Shatford:                  00:20:45              It goes through to say, okay, that’s the reservation. You know, we’re able to build this algorithm and the only people who build the algorithms, algorithm qualities, because doc in 2015, when we started the air DNAs, because Airbnb had a bit of an oversight and their system, it was actually revealing all the reservations on the platform for about six months. And so at that point in time, we were capturing about 20 million actual reservations knew exactly going to stay is how far in advance they were books. And so we’re able to sort of then when they shut that down October seven, 15, build an algorithm. Now we also have partnerships with 300,000 properties that give us their daily booking information. We get calls from tens of thousands of people. So we need all this data from all these different sources say, Hey, you know, what does a booking look like in Myrtle beach? And with this person, it’s all pretty sciency. These days, I’ve got a good data science team. I never would have figured out how to do this on my own. That’s for sure.

Julian Sage:                       00:21:39              So is it, is it pretty, pretty confident for people that are coming into the space? Let’s say they are interested in rental arbitrage and they’re looking at the market. Let’s say there’s not a lot of properties in that area though. How, how is air DNA able to give numbers if there just, maybe isn’t a lot of information in a particular area.

Scott Shatford:                  00:21:57              Yes. Good question. So what, what can you, so sample size is, is, you know, we’re not going to get every property. Perfect. Right? Some, some properties are just weird, right? There’s a consultant and he stays at his house every weekend and he rented it out every Monday through Wednesday. Right? Like the algorithm is going to break on that. It’s just, it’s an outlier. Doesn’t make sense. Right. So there’s always going to be outliers, no matter how you sort of try to solve this problem. So we get to a small sample size, it can be an issue, but you know, I think if you got over 10 properties where there’s enough, there’s enough there to give you a good read on that market, how those properties are doing. Because what we do is we extrapolate the biggest problem. This space is that a short term rental might be short term rental for seven days out of the entire year.

Scott Shatford:                  00:22:40              Right. And how much do you want to extrapolate from that one week of bookings to say this property would have earned $72,000 if it was available full time. But we do do a lot of that. You that’s a little bit of a read or profits book for 30 days and that’s a little bit of a read so we can take like small sample sizes and make pretty good predictions on like what that property would earn full time to get a bigger sort of sample set, even in small markets. If there’s over like 20 properties, I mean, I feel pretty good about what’s on the datasets.

Julian Sage:                       00:23:12              So, so just, just to kind of recap what you’re saying is like, if there’s an area where regulations are really strict if people just see other people listed on Airbnb, maybe they don’t realize that there are regulations. So they purchase their DNA. Air DNA is going to be showing them based off of what the property will do during that period where they’re only listed or is this like a general for the whole year? Let’s say it’s only listed, you know, you’re only able to list for six months.

Scott Shatford:                  00:23:41              Sure. No, that’s good. And I will try to be clear. I live in the data all day on our side. If you go to a city, right? The map is basically us saying, here’s the property. Here’s how many days it was available over the last year. Here’s the occupancy rates ADR. And here’s how much revenue we think that that property generated. That will be our estimates of what that property did over the last 12 months. No, no additional, you know, rounding up for days that it wasn’t available or doing any like special magic there, no, on our rental wiser product or revenue potential that we put together that really analyzes every single market and says, you know, let’s do this match, match that between Zillow. And we do a lot of this sort of rounding up his property is only available for three months is only for Mardi Gras and jazz fast and Christmas, like, okay, how much realistically, when does the native was available the whole year and the debt of the heat when nobody wants to go to new Orleans. Right? So that’s a lot of magic going on to understand market, especially when looking at the arbitrage opportunities.

Julian Sage:                       00:24:52              So, so if you were to have, if you were to tell somebody or help someone to get into investing into the space, when do you think is a good time to be purchasing rDNA or starting to really dive into the numbers? Should they be looking at the numbers straight away, or should they be doing other things before they start diving into how profitable an area might be?

Scott Shatford:                  00:25:11              Yeah. I mean, I say, Hey, we got a lot of good blog content. Like we’re not trying to put this all behind the locking P you know, rental arbitrage content that you just talked about. We’re spending a month working in the best place to buy properties. I really want to make this interesting deep dive into regulation, into management, into like the differences between the long term rental short term rental. How do you do a calculator? How do you really forecast expenses? So we really are into giving away a lot of this good information for the beginner like where to, where to target the right market, the right type of property that is maybe better for short term rental or longterm rental, better or undervalued because it’s in a bad school district where you’re not sending your kids to schools. It doesn’t matter. Right. So some of those cool insights, you know, so it doesn’t go to the blog and check that out.

Scott Shatford:                  00:25:57              We, you just sort of take you about the investing, where do you go? Where’s the best cap rates, that sort of stuff. You know, we really do think about market and minder, really being an operational tool, right. And we know that people want to benchmark the performance. Did I have a terrible winter or does everybody have really terrible winters? That’s really insightful. You’re saying general market slowdown versus I need to pick up my game and get more competitive. I need to do better dynamic pricing. We want to help people price their properties. We want to help people be able to get more people to their platform, right? With like rental flies or different tools. Here’s how much we think your property would do is that they keep working until you 80% of that revenue if you come to us. Right. So we’re really thinking of ourselves as the operator tool, not an investor, but 30% of our subscribers are investors. So yeah, there’s definitely a big use case for that. Just think about underwriting a new property and think about estimating what this new investment would do. You know, there is a, there’s a lot of use cases for the investor. So we do a lot of residential real estate investors on the platform as well. Our sort of our roadmap is more of this all encompassing revenue management, market intelligence, benchmarking, all those sorts of tools all in one. So you can really understand your market and how you, how you’re performing against the market.

Julian Sage:                       00:27:15              You know, a lot of people are, are looking at the short term mental space and they’re saying, man, there’s, there’s a lot of potential here. And our DNA is, it’s really kind of like the first tool that people think of when it’s like, how do I get a good idea? You know, before, like when you first started out, you were scraping for the data manually going into the Airbnb and looking at the calendars. You know, now we have the luxury of having a tool to be able to help us give a more accurate information. But there is a lot of money. A lot of people are investing their life savings. You know, a lot of time, a lot of energy. How is, is DNA a tool that you can just solely depend on or are there other things that you should be doing to be able to help you come up with a good investment strategy

Scott Shatford:                  00:27:59              Purposely? We don’t really do a lot side outside of the short term rental data, right. If we really want to get into like the best investment side of things, like helping people get the property, get the chance, get the insurance, get the lender, find the property manager. Like we would go down that path. Right. So there’s a lot to do outside of just understanding where to go and what type of asset to look for. And so, yeah, you got to go to a lot of different places, right? You got to find out like, okay, maybe Biloxi, Mississippi is the best place, but there’s no good manager in Biloxi or whatever it is. Like, there’s still a lot of legwork. We don’t do the regulation homework for you. So we are one data point at the moment. We think we know where the best data point, but we also know this isn’t like an API to Airbnb.

Scott Shatford:                  00:28:43              It was that easy. Yeah. We wouldn’t be as valuable as we are. Right. Because we’re doing a lot of the hard work that you just can’t do or wouldn’t do quite as accurately yourself, but are there errors in some of the data, you know, are there those outliers for sure. And so you should, you know, kick the tires a little bit and make sure that it makes sense, make sure that one bedroom apartment isn’t really doing $400,000 a year. That doesn’t make sense. We try to catch those, but there’ll always be some of those, I think from a data perspective, I think we try to solve the full suite of problems, but it’s not just the data problem you’re trying to solve.

Julian Sage:                       00:29:22              [Inaudible] You said with, with you said previously with managing is this because you came from a rental arbitrage type of background and a lot of the people that know about air DNA it’s through this space but co-hosting and managing other people’s properties, being a short term rental property manager is something that a lot of people also want to get into. Is this a, that a property managers can utilize to be able to for, for their clients, if they were to analyze a property is this something that they can be using as well?

Scott Shatford:                  00:29:51              Yeah. I mean, I think it’s great for cohost and I should probably know more about that whole business model than I do. But it’s, it’s great. And you can talk to somebody and say, Hey, you know, here’s what you’re doing. Here’s what the market’s doing. Right. Here’s what I think, you know, with my expertise, I can get you another 25% of revenue on this property. You know, you’re going to make more money. I’m going to make money. We’re all going to be happy at the end of the day. Right. So to be able to prove that out with some different properties, with some different property, I do, even if it has no rights, history, super important for getting new customers on board. Yeah. And we really think our revenue management tools while maybe not as robust as other things in the market is the most accurate read on how the market’s moving over the next year.

Scott Shatford:                  00:30:35              Right? Like where are those blips in demand pricing during those? What is the turn occupancy rate? What do you think that the rate will be when we get here? Like, should you hold out, should you get rid of it? You price it higher or lower. Like that’s all super important, right? You’re running a business. How you’re pricing. Those that asset is, I think it’s the name of the game that really separates the winners and the losers in this game, in my opinion. So we have a lot of when you can really crank up rates when you need to get rid of it properties like, you know, low CS and just get rid of it nine months in advance, be the thought of 20% tile pricing to get rid of that. You’re going to have 20% occupancy and it’s not going to be your property. So just get rid of it. So like some of those insights are super helpful on the revenue management side of things, which I think is running a good business.

Julian Sage:                       00:31:21              And that’s one of the things that you guys are actually moving into now too, is you’re getting into the dynamic pricing.

Scott Shatford:                  00:31:27              Yeah. We are getting to dynamic pricing and you know, we don’t, people don’t want to think that hard, right? The average cohost, it doesn’t have an economics degree or not enough petition. Right. They don’t want to think about like, you know, supply curves and they don’t want to think about that stuff. Right. We know the person just wants to have it plugged in to Airbnb and just, and you know, it seems like a simple promise though, but you know, people have different needs and desires from properties. Most of the markets operate weird. Like long story short, we are in, we do have the recommended rates. So if you come to our website, you upload your IQ, he will spit out what we think is the best rate for your property over the next six months. You know, a lot of data science behind that, we feel pretty good about it. In most markets, we launched it in 50,000 markets our first day and we’re about six months into it. So it still is still a learning curve. We’re trying to figure out where it’s doing well, where it’s not doing well, but it has sort of day three included the market manager, you know, you know, where people get it for 20 bucks a month, you know, and in some markets definitely worth checking out. If that makes sense,

Julian Sage:                       00:32:34              You know, you’re pulling all of this data is, is rDNA DNA a little bit more, would you say it’s more accurate? There’s a lot of property is one within a particular area. So let’s say something like Miami where there’s a wide range of people that are maybe listing properties for very cheap. It’s a very expensive, does that do, does that maybe skew the data or if someone’s just looking at one particular number, let’s say it’s like, you know, 160, but the price ranges from like, you know, $40 up to, you know, a thousand, how does somebody know like what they could be pricing their property for?

Scott Shatford:                  00:33:06              Yeah, no, it’s an interesting question. Right. and so for the purposes of revenue management, right? So let’s say you are in, so you’re in a market. It doesn’t really matter how many properties you have. Right. I think the hardest part is trying to say, what is the quality of my property versus my competitive set. And how do you want to define that competitive stuff? Yes, probably that can be every property in Miami. Yeah. You gotta get down to the property code and say, okay, Hey, you know, maybe two or three bedrooms, is she looking at both of those? Cause we both accommodate seven 19, whatever it might be. And so then at that point, you know, you need to figure it out. Where do you think your property fits into the spectrum? Right. Are you exactly average? Does your place just like sort of the average property in that market and that’s fine.

Scott Shatford:                  00:33:51              That is how it is, you know, a lot of times, or are you sort of a more exclusive luxury property? It’s less than one. He sort of did the research you have to do is looking at those comps saying, Hey, you know, I think I’m on the upper scale. I think, you know, people in the average charge two 40 I to come, no, the 75th percentile sort of a property. And that’s my dad, that’s my range. Those are my people. Right. I need to follow those people around the pricing game. So that’s one of the only thought that, you know, when you’re looking at our tool without loading up your property and us doing that analysis for you, that’s the sort of thought process. So if you’re in the 75th percentile, it means, you know, Hey, I’m better than 75% of the properties, 75% of a hundred properties.

Scott Shatford:                  00:34:31              And so that that’s, you know, that’s sort of the only thing that the user has to say, like be honest with themselves, like, you know, how does the quality of my property, the recommended rate section, this whole other story we geeked out on that forever about how to analyze the store performance, booking, lead times price, all that stuff is sort of scale up where we think you are within a comp set and defined three different concepts and do a bunch of stuff. I think we probably over geeked out on it. And so we’re trying to figure out how to, I’ll just strip it down a little bit. So I hope that answers your,

Julian Sage:                       00:35:05              Yeah. So, so from what, from what it sounds like you are when you’re, you know, because when you, when you go to air DNA and you’re just using the free, the free version, which is probably what a lot of people do you know, they look at like the average daily rate and in a particular area. And, but that doesn’t tell you, like, you know, what’s the size of the property or you know, what, what type of quality property it is. So when people are looking at this, you know, it might be challenging for them to be able to know like, Hey, I’m looking at a property that’s renting for, you know, a $2,000 a month. Am I going to be able to make a profit? But it’s until you start using the comparables, by finding people that are within a certain tier is how you’re able to identify if it’s gonna be a well-priced.

Scott Shatford:                  00:35:48              Yeah. I mean, it’s all very intentional on the product. You know, it is helpful for somebody just trying to understand the general marketplace, but you know, you’re not going to go spend 5,000 or $500,000 without really understanding the cops. That’s how to drill down to the relevant properties, you know, to get to the bedrooms and bathrooms was all sort of the paid version of the product. Right. So yeah, maybe we want to be able to share a bunch of data to get people excited about the short term rental market, but really to get actionable information of the tool. Yeah, yeah. Probably your credit card, unfortunately.

Julian Sage:                       00:36:22              That’s good. That’s good. And are there other people, are there like any, like what, what type of people are using this data? Is this like something that just smaller investors are using or are there like really big players that are utilizing air DNA to be able to help them make decisions? Like I know there’s a lot of companies out there, like there’s like Sonder and lyric, and they’re picking up these large apartment complexes. Are they using the same type of data or are they doing something different?

Scott Shatford:                  00:36:50              It’s the same data. So, you know, those guys saw hundred Acosta, all the customer, you know, there’s a lot, there’s a lot of those guys that are customers. The only thing, the only difference is is that, you know, for our market minor products, you know, most of these small time operators are co-hosts, you know, they don’t have a data science team to do these pretty visualizations, right? So we give you the package reports I’ve thought through the data was the most interesting. And I, you know, we put it into a prepackaged, you know, can you drill into every single property details? Can you export it? Can you do your own custom stuff? No. Right. And that’s why these bigger companies want the raw data is because they want to build their own visualizations. They want to match that up with other data sets, new construction, new home construction. Right. And so they’re doing their own stuff with the data. I think the only difference is, you know, the market minus the visualization tool and they’re just sort of getting raw data to incorporate into whatever data sets. They have, whatever pricing, but at its core, essentially it’s the same exact data being presented to the user.

Julian Sage:                       00:37:54              How, how important do you see data being, you know, like when you first started out, like you said, you, you could pick up any property and, you know, throw it online and you were able to make a profit. But like you said, now you’re looking at a lot of people are trying to do like, you know, double the note value. Do you see where do you see data and moving forward as more people start coming into the space?

Scott Shatford:                  00:38:17              Yeah. It’s a great question. I mean, I don’t think it would be the, I don’t know if I see it changing a whole lot in the future. I mean, I think as it is more competitive, you know, hazard more people in the market. Yeah. The hospitality is really cyclical. Right. And we’ve been blessed to be in a cycle, which is 12 years of like, you know, up into the right. Right. And that doesn’t happen forever. Right. I think what a lot of people have been able to have the luxury of not being particularly data driven, we’ll find soon who knows stock, market’s down a thousand points today with tremendous virus. But, you know, I think when times get tough, people have to figure out how to use data. It comes down to every marketing decision. Now you’re targeting your guests, how you design your profits on your pricing, your properties, where you’re investing your properties. Yeah. So I think, I don’t think anything changes, but things, arbitrage opportunities only go one direction. Unfortunately, that is the shrink right.

Scott Shatford:                  00:39:21              Only go one direction. I think that’s very important to remember, especially as technology gets better, the D and D gets better. Like, you know, the cost, how much it costs to operate properties. It used to be cheaper like that over time. Right. And so it’s more competitive. Right. And so I think the expectations have to be, you have to be on top of your game on everything in order to succeed. Right. And we see, I think you’ll see a big shuffle up. Right. And these bigger property management companies had had ambitions of having 20,000 properties under management. Yeah. I just don’t think it’s going to happen. And I think that’s the one real benefit co-host community and small local property manager. This is best run as a small business is best run with local knowledge and local talent. You know, there’s only, it’s hard to scale this business and it’s hard to scale it.

Scott Shatford:                  00:40:15              So I think there are some really, there’s a bright future for the smaller operators in the planet. You know, still 60% of properties around the world are managed by somebody with less than five properties. And I don’t see, I don’t see that changing any time soon. I think fell on these big players are gonna hit some tough times as it’s sort of a non growth at all costs games during the future. So I’m not sure where that’s my thoughts in the market. So you think, you think that we’ve reached the pinnacle of what you’d be able to see on a return for an arbitrage unit. And right now it’s more like squeezing a lemon. I know that’s not a really like, you know, probably a popular sediment. Right. But I do think that there’s no real way that the arbitrage opportunity will get bigger over time.

Scott Shatford:                  00:41:04              There, there is no way let’s say you still have to be thinking about, you know, your three year plan to zero arbitrage. Right. I do think that there is, there’s always gonna be arbitrage because it’s hard, right? There’s there’s risks, right? This was always in the garbage arbitrage, but it is the only arbitrage exist is for people that can manage this really cheaply really efficiently and really effectively and figure out processes still make that arbitrage opportunity work. Cause that’s the only reason that it probably still exists in a lot of one there’s risk and two it’s hard and they don’t want to figure it out. So they’re willing to sort of like let that arbitrage opportunity exist in the margin.

Julian Sage:                       00:41:41              So, so what you’re saying is that a property even though you might not be able to get a super high return, what, what people need to start doing in the future is figuring out how can they lower their operating costs? How can they save money on their expenses? Use economies of scale to be able to pull as much profit out of a property. Because right now the only on the, on the, on the profit side, it’s, it’s just going to go down.

Scott Shatford:                  00:42:07              I would imagine. So, and I think that’s a good, that’s a perfect explanation. And I think that’s what people are dumping and tons of money into Saunder and Domi out and stay off. Right. And lyric is because this does work well in economies of scale. It works much better. If you have 200 units in a building, then if you have two in a hundred different units, right. That doesn’t work well. That is the, that is the rationale between this investment. And that is, this is a hard call to off. And if you can solve it really well, really efficiently, there is a nice arbitrage opportunity capitalize on, but it does only come in economies of scale. If you think three, five plus years down the road,

Julian Sage:                       00:42:46              And are you doing anything to be able to cater a air DNA and the type of data that’s available for like, like we were talking about with co-hosting people that maybe are interested in purchasing properties and turning those into short term rentals is that information that you can pull from rDNA or is it, are you are not catering towards that specific demographic or market?

Scott Shatford:                  00:43:07              Yes. Currently we sort of only get down to the market level, right? Here’s the right zip code. And we think two bedrooms in this zip code are the best one. The best investments in the U S we will be launching in the next few weeks are sort of really solid attempt. I like answering this question in the U S for best place to invest and all of the things you need to think about to buy that property, we’re also making some moves into how do we get people? It doesn’t mean short term rentals is hard. It’s hard because, okay, great. Let’s just call it Moab, Utah, the best place to invest. Great. I live in Pennsylvania. Like, I don’t know anybody in Moab. Who’s the agent, what’s the broker, how am I going to get lending? Like, what’s that all about? Who’s the property manager, right? They said, we don’t know that problem exists. And we aren’t ready to reveal what we’re doing there yet, but st James, we are making some investments in that space.

Julian Sage:                       00:44:01              Very interesting. So you guys are, or maybe positioning yourself to become a hub for people that are looking to invest so that they could get connected with the right people, have the right tools and then also be able to price the properties the right way.

Scott Shatford:                  00:44:15              That’s exactly right. Yeah. I think we, you know, we can’t fight the tide, but I think we really realized that this is the short term rentals is a really a new asset class, as they say in real estate. Right. And so it is something that is here to stay and we have the best data to help people buy this property. We just can’t start it, take our customers thinking about a customer journey, like great, go buy a app, good luck. You know, like, you know, that’s not a great customer experience. So how do we get them to know who the specialist is there? Who’s the best property manager from that? Where are creative lenders that will maybe give you an, a suite loan, if you have another property or you can prove what his rental income is going to be. And so all of those things I think are really, if you look at a real customer journey, what you need to solve, and so we need to help people manage their property, but find the next property that they wouldn’t manage to kind of create this virtuous circle, where it’s like helping you operate it and price it and benchmark it, and then find your next property, then do it all over again.

Scott Shatford:                  00:45:15              And sort of what’s that flywheel create for the customer.

Julian Sage:                       00:45:17              So kind of, kind of like the, the credit karma for the Airbnb space.

Scott Shatford:                  00:45:22              Sure. I’ll take it. I’ll use that.

Julian Sage:                       00:45:24              And is, is air DNA also available for, let’s say people want to invest in overseas? Is that something that people can use it for?

Scott Shatford:                  00:45:34              Yes. I mean our data, I really try to make everything we do at here, DNA, like very global in nature. So, you know, we do track every property globally. Oh, just, it is hard, right? Because there isn’t Zillow’s and truly isn’t out there, right. There are just differing degree of quality and comprehensiveness of real estate data. And so I think right now we’re in, on the actual investing side, we’ve got to just sort of figure out the model in the U S and then maybe go to Canada and go to Australia. UK was there her options, but it gets complicated. It gets complicated once you get out of the U S just because the availability of the cost of the data and just how good is it? It’s a big question, Mark. So mental data is just as good know, the users would have to sort of have a different way of getting whatever that home price value of data is, or the rental price data, and do that sort of mashing up that information themselves.

Julian Sage:                       00:46:31              So, so is, are you saying that when you’re analyzing properties outside of the U S you’re having to look at different data points or you have to scrape different information? Or is it, is it the same?

Scott Shatford:                  00:46:44              [Inaudible] Right. We can understand what that short term rental revenue is for that property. I just can’t tell you in nice France, is that good? Is that a terrible place to invest? Every property is $3 million and your land do $60,000 revenue. I don’t, I don’t know. Right. I don’t have that cost basis sort of build into these best places to invest. I can just say, Hey, it’s growing fast, has high occupancy rate. I don’t know it has high revenue, but it’s in Monte Carlo nevermind. Terrible place to invest. Right. And so that’s, that’s the hard part about the international piece is just having that sort of cost base in the real estate.

Julian Sage:                       00:47:18              So, so the same, the same, I guess, are you, are you, because what you’re saying is for the investor, like if you’re purchasing a property, but are you pulling that information for like the, the rental, like the average daily rate for different properties overseas? Or is that not something you’re doing it

Scott Shatford:                  00:47:36              Being clear? So any of the data that you would see in market minders, the exact stanch day as it is in the U S and international, we cover 130,000 different markets market, the exact same product as New York city or Zimbabwe, it’s just the exact same product. But when you think about the future of how do we help target the best place to invest, we’re talking about our investment explore product, which is a product that does exactly this here’s the home values versus air or your DNA data that just doesn’t exist outside the U S because we don’t know what homes cost elsewhere.

Julian Sage:                       00:48:13              So you guys are moving into the space where you’ll actually be able to look at an individual property and say what the return on the investment will be based off of the purchase price. If you will do plan on short term renting it.

Scott Shatford:                  00:48:27              Yeah. We have a product right now. It’s one of our, one of our beautiful little babies it’s called rental wiser. And you put in any address in the world, and we will tell you what that property will do over the next 12 months. No know when a property Hearns in revenue, you probably know better than most is, is very highly subjected to a lot of things, right? How did you decorate it? How’d you manage it? It’d be marketing, all that stuff. Right. So looking at the cost and the area triangulating based on how they’re doing, how similar we are, you know, we’ll give you an estimate of what that property would do. No, the U S will be a lot more accurate, right? Cause we know that one, two, three main street is where the hundred thousand dollars. And we can look at the other cops and sort of triangulate based on the intrinsic intrinsic value of that property. We’re in Madrid, Spain, I don’t know. It’s close by. I don’t know if this one has the ocean to you and this one’s has a view of the gutter over there. I don’t know. The accuracy will always be a little bit less accurate outside the U S

Julian Sage:                       00:49:27              But what I’m asking is like, with, with the property, if you were to put in the address, the rental wiser, I don’t believe that it’s actually showing you if you purchase a property for, let’s say 500,000, this property could short term rent, potentially for, let’s say, you know $200 a night for that 80, for the average daily rate, thus your return on investment for that property could be X amount.

Scott Shatford:                  00:49:49              So it will tell you what the revenue Haiti, our occupancy would be of that property. And we are building up little thumb calculators to put in there. So when you can figure out your cap rate or your cash on cash return, you can build in some basic estimates. Oh, that’s by about 30 days out, calculators are easy, right? Like, what was he at revenue cost? Like now it’s just like, what do you want to bake in for property management or maintenance, insurance, whatever, like, those are, those are easy. And so we do know and use their desk as for, to just see some more of that. So.

Julian Sage:                       00:50:24              Awesome. And, and just, just kinda wrapping up, I mean you’re w w where do you, where do you see short term renting going in the future? I know that there’s a lot of people that are coming into the space. A lot of new management companies, a lot of people like Sondra lyric that are capitalizing on the rental arbitrage. But where do you see it in like five or 10 years? Cause you mentioned before, you know if you’re looking at a property, you kind of have to have that three year mindset, you know, how, how, how long can an arbitrage property go for, but do you think that this is something that could be going for 10, 20 years?

Scott Shatford:                  00:50:56              Yeah. You know, I was going have like better news. I mean, I think that there is a, there’s a timeframe where we’ll see just the natural evolution and professionalization of an industry, which has been traditionally very antiquated, right. In terms of how they manage properties, looked at competition, price, their properties. So you’ll see this proliferation of new tools that are tools, more automation that will help the local operators sort of stay up to speed for a while. I mean, it’s you to JD and running your company because you still want to see that the cars are always in the stack gets the small guy, I guess, the small operator. What do you think about regulations or you’ll think about technology enforcements. When you think about like how you have to buy a whole building to get Airbnbs in it, you can’t just rent one anymore.

Scott Shatford:                  00:51:46              You gotta buy the whole building. That’s not plausible for me. And so, you know, I want to be, you know, commercial is, you know, when this gets really popular and as this becomes, Oh, really a better way to monetize space. It’ll only sort of get the big boys in here. Right. You know, get Blackstone and to go buy all the properties and then put them on Airbnb and have a board. And so, you know, I think just stay tuned for that. Cause, you know, as companies like invitation homes or created like residential homes as an asset class, you will see people coming in with billions of dollars to buy short term rentals. The one thing I’ll never want to do is opera. I don’t say right. They don’t want to do the maintenance on it. They don’t want to do anything related to the maintenance operations. So I think there’s still an always will be an opportunity for local operators to have very, very beautiful profitable businesses, but the real estate side of things. You know, I think we’ll be gobbled up by, you know, much more institutional investors than ourselves at some point in time.

Julian Sage:                       00:52:52              So, so you’re saying that in the future, the arbitrage model is going to be maybe squeeze out a little bit by these big operators that are just picking up properties and they don’t, they don’t care about maybe as large of a margin as a smaller operators are looking for. And the cohost model is maybe more, more in line with for future profitability.

Scott Shatford:                  00:53:13              Yeah. So yeah, I don’t really know how you define your cohost model. Right. Did you, cohost model is rent to, you know, renting a five bedroom home in Myrtle beach and like having that as the property. I mean, I think it’s a beautiful business, right. And I think a beautiful business to not have a real job, you’ll be a second income winner and have that be a really nice income stream. If you’re thinking about how co-hosts like, how he’s think about it is get, you know, 20 people in a building and rent those one bedrooms out. I just think, you know, metropolitan markets, big CDs, small operators, you know, up to these building owners, bad neighbors, like just like just, I feel like that model is, is going to have more challenges. So it just depends on how you sort of classify co-hosts. I would say I still like traditional vacation rental markets, large homes, group travel. I think that’s all going to have a really rosy future. But hotel comparable stays in cities. You know, I think unfortunately the hotel lobby is too powerful and team to win those battles in the top 25 cities.

Julian Sage:                       00:54:18              Where do you see, where do you see us in the cycle? If you could kind of say like, if you started back in 2012 and you’re, you’re kind of projecting the future that, you know, more people are going to come into this space where, where are, where do you see us right now for arbitrage investors?

Scott Shatford:                  00:54:34              Where do I see you guys in a cycle? Yeah, I think, I don’t think your cycle’s any different than the general hospitality cycle. Right. I think we’re all going to live and die the same, same thing, same life and deaths. Right. And it’s really, Oh no. At this point of time, I think the unknown is we know hotels are at the end of their cycle, pretty much a fact. And if it wasn’t a fact yesterday with coronavirus and all that stuff, it’s a fact, right. The cycle is sort of over are 12 years of having increased year over year. Our growth has now finally ended. Right. It’s so interesting. I think what we don’t know is how tightly correlated short term rentals are to hotels. Right. obviously you can make a case for business travel to one bedrooms in New York city. It does seem to be tightly correlated, but you know, we don’t really know. And there are a lot of theories out there that maybe short term rentals are more resilient, right. Because they’re more like maybe drive to towns. Maybe they’re more affordable staycations. And maybe traveling in groups is also a better discount to like actually having a great state at a cheaper price. So I think it’s still unknown in terms of like how much they are poorly or not. And so I don’t like to pontificate on things I don’t know much about. And it’d just be a total of guessed at this point,

Julian Sage:                       00:55:55              Looking at the data, w w would basically, what would seeing the profit kind of shrink be an indicator of the lifeline of the arbitrage model. And have you seen the profits shrinking down pretty dramatically recently? Or is it pretty steady?

Scott Shatford:                  00:56:13              I don’t actually have the real numbers on that. I would say we do this thing called the STR index. And then your launch quarterly at this point in times for shows year, year, month, month by city, can we sort of rank metropolitan market markets and traditional vacational markets? Just what we’re seeing in terms of revenue, how is the index moving? It’s been pretty flat over the last year. I say, we’re having like, just tremendous growth, like go check out the index, but like 30, 40% growth over the previous two or three years. So I think we’ll see it’s flattening out. And that is just because, you know, their supply and demand are just growing much more congruently now. Right. Like people know like, Oh, okay, cool. But it’s still great. Well, let me add two more. And they’re like, Oh, now it’s not doing as well. So I’ll stop adding properties. Right. So just a much more like dynamic, much more rational market. And so I wouldn’t say that, like, it’s going to go down, I’ve seen going to see as sort of like relatively flat as supply continues to catch demand for traveling the future.

Julian Sage:                       00:57:17              Do you see in other other markets that maybe are not outpacing? Oh, the, the demand like, are there particular areas? Cause like right now a lot of people and a lot of the highlights on all these reports are more metropolitan areas, but are there other markets where the, you know, you still can see that three times return off of that investment.

Scott Shatford:                  00:57:39              Yeah. New York city, but that’s a problem. Right. And that every time I sort of find a city, I’m like, Whoa, that’s a cool new city. I’m like, Oh right. Like Charleston, like, you know, like, Oh Charleston, that’s great. Oh yeah, that’s neat. I can’t go there. And so, you know, I tell a lot of people that like, Hey, I just need to be on for 12 months. I’m looking for a quick hit and they’re going to go to Charleston and I’m going to go like bribe the guy who owns the property and I’m going to go put a fake name in there. That’s not a sustainable business, but you know, there is always this sort of this balance between risk, have you worked that’s going on in the market. And so anytime you go to a top 20 cities, there’s always going to be arrested.

Scott Shatford:                  00:58:17              Yeah. Even if we thought Phoenix was fine and then Phoenix now is going to be like 90 day cap, all of a sudden people dumped, you know, hundreds of millions of dollars in that market. There’s nothing that’s completely certain I’m not doing a good job running a cohost business by the way, but it is, it is what it is in the industry is it’s hard to see exactly outside of places that have been vacation rental since the beginning of time, their whole economy is based on tourism. You know, I think you see the sustainable investors going there and the other people, you know, international or some other options outside of the U S

Julian Sage:                       00:58:59              So, so you’re seeing international there there’s a lot more potential gain.

Scott Shatford:                  00:59:02              I think the, I think there definitely is. Yeah. There’s just, yeah. Office in Barcelona. Like it’s just, you know, it’s just a different game than us, just in terms of like taking risks, having like, you know, being at the cutting edge of something like really trying to figure out, you know, something that’s innovative, the new model, it just isn’t there as much as it is here. And even in Barcelona where it exploded in Paris, they had these massive, you know, they had massive unemployment. It’s always going to be scraping by trying to find a good business opportunity. They just aren’t as, not as professional. But if you think about like central America or South America, like there’s just, there’s lots of opportunities everywhere. And I just sort of noticed that U S it might make me sound bad. And for all my European customers, this sort of five years ahead of the curve. So there’s always an opportunity for me to start looking in. You have Mexico and San Miguel, or like, you know, there’s always going to drop outside the U S

Julian Sage:                       00:59:56              W what’s the most revealing thing that you, that you’ve seen from analyzing all this data. Like if there was something that was just like, wow, I just was, you know, no, nobody else knows this,

Scott Shatford:                  01:00:07              But one thing I’ve been keeping for your show here, Joanne what is the most interesting thing I’ve seen? I don’t know if I’ve got an amazing nugget for you. I think, I think the one thing that is interesting is that we’re doing some research on it right now is that short term rentals are moving markets in a way that nobody’s really looking at or analyzing. But by that, I mean, home values are either rising to meet what is the sort of revenue generated by those vacation rentals, right? Where regulation goes into place thinking really quickly of supply in the marketplace. And nobody in this sort of the real estate market is really analyzing exactly like what is the impact of real estate like in Palm Springs? And they made it illegal. And, you know, a thousand properties came on the market over night, or the opposite, like in Galveston, Texas in Gatlinburg, Tennessee, where there’s still like amazing margin there, how quickly real estate values are, are for catching up to what is that cap rate in the marketplace. So I think that’s a, I don’t know if that’s a really fantastical stat, but I think it’s something that’s under appreciated is that short term rentals are moving markets in a way where home values are very dependent upon what the short term rental activities, those markets.

Julian Sage:                       01:01:30              So, so, so just to kind of wrap this up is what you’re saying is that th there’s, there’s a lot of opportunity in people being able to purchase properties and seeing a return that people really aren’t looking at, because right now a lot of people are just thinking the arbitrage space, you know, how much can I rent a place for? How much can I get for the profit? But what you’re saying is that people, maybe aren’t looking at the, the power of purchasing a property and the return that that can bring in.

Scott Shatford:                  01:01:58              No, I mean, so I mostly work with you abide by properties, right? And so what, what we’re basically saying is that you can always bake in general appreciation for a property, but if you’re buying the properties in the right places, Gatlinburg, Destin, Florida is, or whatever it might be, that you can sort of predict more appreciation that property as more people by noticing that they can get a good cashflow out of these assets that, you know, we can predict there to be another 10, 15, 20% rise in home values. As you know, people are thinking about real estate, not just as sort of traditional valuations, but as a cashflow commercial business, it has a new valuation. And so residential real estate debt can be short term rental. Yeah. We’ll eventually be valued more than commercial real estate with a rent roll with cap rates, cash flows, all that. That’s sort of the interesting trend now is as you know, as real estate sort of being valued like commercial properties and what that does for valuations

Julian Sage:                       01:03:05              And air DNA is planning on being the tool that can help you analyze those prompts.

Scott Shatford:                  01:03:10              Yep. Okay. Well, we’ll be there for you.

Julian Sage:                       01:03:13              Is there, is there a time timeline for that one?

Scott Shatford:                  01:03:17              I mean, I think over the next three months, you know, so it’s a, you worry now. So by the summer time, we’re gonna have a lot of, we’re gonna have a lot of cool tools. Let’s tell people, buy the properties, but do further analysis and calculators.

Julian Sage:                       01:03:29              Awesome. Awesome. And I think, I think people would Lynch me if I didn’t ask you this, but where, where should people be? W where’s Scott, Shatford investing in his, his properties.

Scott Shatford:                  01:03:40              Yeah. Yeah. That question. Yeah. No, it’s a great question. I’m terrible. I have a terrible answer, right? It’s like it’s in the blog post. It’s not a secret. I don’t carry around like the three markets that I really liked my back pocket. It just is what it is. So go check out the blog posts. Like I said, we’d be coming up a really deep dive soon. I’m so sorry. No spoilers here.

Julian Sage:                       01:04:01              I’ll, I’ll, I’ll include, I’ll, I’ll include a link in the description as well as for those that are interested in in checking out air DNA. But I just wanna thank you so much, Scott, do you have anything else that you wanted to share before we end this conversation?

Scott Shatford:                  01:04:13              No, I’m good. Yeah. I’ve already come check out the website. [inaudible] Dot co. I mean, we got a lot of your blog content, all of our contents free and the market minder products, they go, go check it out. And you know, hit me up on social media or Facebook. If you have any complaints or praises, I’m here to hear them.

Julian Sage:                       01:04:32              Thank you so much, Scott, for coming on the show. And until next time, most nation keep on hosting, 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 going over to our Facebook group, but the host nation.