STRSS 37 – Converting High End Properties to Short Term Rentals w/ Ray and Vanessa Vargas

Video Transcript

00:00:01

Soon after we started getting phone calls and emails from local realtors, they were like, Hey, thank you so much for creating this business. We’ve been dying to work with people like you because we have so many interested buyers that want to rent their property Short Term.

00:00:16

This is episode number 37 of the Short Term mental success stories podcast. Are you an investor that’s looking to have your home professionally managed, go to cohost.com for more information. 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 their 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 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. Hey, what is going on? Host nation, family.

00:00:58

I just wanted to say happy Thanksgiving. So I wanted to just take a moment to not, not get like super OCI issue with you guys. I do that a lot with you. I just kind of pour out my feelings, but I want it to say that I am just super grateful and super thankful for this community that, that we’ve been able to build in this family. I love being able to, you know, read your guys’s posts in the host nation Facebook group. And then also being able to talk with some of you a little bit more personally, and finding out where you are and what you’re trying to do in the BNB empire builders mastermind group is just so cool to be able to be a part of something and to have some people that really, it feels, it feels like family I’ve met so many really good friends and, you know, continue to build these relationships with all these hosts that have been on the show and seeing where they’re going and staying up to date.

00:01:46

And I’m just super thankful. So really you, you all have changed my lives. So, you know, dramatically, I, I never would’ve thought that I’d be doing what I am today, you know, still serving in the coast guard and being able to, you know, really pour my heart and energy into you guys. So I hope that you’re able to gain some value from the content that we’re putting out, just because I really appreciate what we’ve been able to build together. You know, we’re 30, 37 weeks in now and it just feels like, it feels like it was yesterday when we started this podcast thing and the short-term rental journey together. So I’m continuing to grow co-host it is, is continuing to take on more clients and people. And we’re, it’s just so cool. I never would’ve thought that we, you know, we’d be doing this and I wanted to thank our special guests for today.

00:02:30

And that is Ray and Vanessa Vargas, the newly wed couple, they decided to convert their mother and daughter law live in space and their house into an Airbnb unit. And within 45 minutes of going live, they got their first booking since then it’s been rented every single weekend for the last three and a half years. Rain Vanessa realized that there was just a huge business opportunity within the Airbnb short-term rental space and thought what it would be like managing other people’s properties. In 2018, they took the leap and founded home sweet Hudson being the first in their market to provide property management services. And it gave them a huge advantage to starting to building their portfolio of properties. Now we’re in Vanessa manage over 25 properties and are continuing to grow and scale their short-term rental business. This is an awesome episode where we’re talking about, you know, really dominating in a niche and also the scaling factor because Ray and Vanessa really we’re dealing with a lot of personal struggles with, you know, hiring additional people because it would take such a big chunk of their profits.

00:03:29

So Raymond, so talk about that experience of hiring a full-time person and scaling and that whole experience, and really dominating a local market, which if you all have the opportunity to become the subject matter expert in your area. And I think that this episode is just so cool because it makes you realize just how network-driven this co-host model is and really how all of this can just happen so quickly. I mean, these two have only started in 2018 and now they have over 25 properties and this is a full-time thing for them. So if you’d like my show notes for this episode, go to Short Term, Sage dot com backslash STR three seven. Or if you like my show, it’s sent directly to your inbox every week, then go to Short Term Sage dot com backslash show notes, all that being said on this week’s conversation. Hey, welcome back. Host nation to another episode of short term rental success stories. In this episode, I have the special honor of speaking with Ray and Vanessa Vargas Vargas, correct? Correct. All right. Let me, let me redo that 1, 1, 1 time

00:04:28

Vargas next Saturday,

00:04:33

I’m including this. Now I’m including this now it’s we, we are officially because by the time that this episode is out, you are going to be and Vanessa. Okay, well again, congratulations on the, on the, the ceremony for, for those of you listening, they are actually flying out to Puerto Rico and they are going to be getting married. So congratulations to array and Vanessa, but so just, if you wouldn’t mind introducing yourself, let the host nation know who you are and what inspired you to get into short-term rentals.

00:05:08

Yeah, so I’m right. And I’m actually a native of the Hudson valley was born and raised here. Although I left when I was 18, I’m 40 now. And so I’m moving back into this area. About three years ago, it was a bit of a homecoming for the longest my career line in new business development, specifically in advertising for both print and eventually digital media. And I think what really inspired me to get into this industry really, it’s just the lifestyle that it affords and also the opportunity to give back to a community where I grew up in. And I think it’s really exciting to be able to, you know, how small businesses we’ve created jobs. So for me, that that was very, very inspiring.

00:06:04

And I’m an asset in my former life. I was a public relations manager for wine and spirits company. And I think very similar to Ray, it was just really inspiring to be able to give back to the community and really just be able to, to kind of make our own schedule and live our own life. I’ve never thought about being my own boss, but being on the side of is, is a lot of fun. So it’s been a really fun journey.

00:06:28

So you, you to give a little pre-contact, so you have a 25 properties that you are managing right now in the Hudson valley, New York area. When, because both of you quit your jobs, these are like full-time jobs. I know Ray, you were saying that you actually got laid off and that you were looking for some work and that’s what kind of led. So w so what was it, the initial, like what got you into the Short Term mental space? What was it about that?

00:06:55

Well, I think it actually started when we purchased our house here about three and a half years ago, and we both were working for companies based out of New York city. We were traveling a significant amount of time. And so we decided to convert the mother-daughter live in space of our house, into an Airbnb. It’s a one bedroom, it has a little kitchen and a bathroom with its own private entrance and the Nessa and I are actually avid Airbnb travelers. We’ve seen it from the other side. We love it. And so just for fun, really, we were like, Hey, let’s our apartment on Airbnb. And so we realized that there just wasn’t a lot of local resources to help us manage the property, you know, and being that we traveled so much, it created a lot of pressure and there like the business opportunity. And once we realized that, Hey, what would it be like to manage other people’s properties? I think that’s kind of what,

00:07:59

Yeah. And as, as we started doing research, we strangely enough found that no one was doing in our area. And if you don’t know New York, a lot of people are familiar with the Hamptons being like the, you know, quick getaway from New York city. But this area that Hudson valley has quickly become another one of those areas where, you know, people will just take a weekend and go up to the Hudson valley to get away. So it’s a good staycation area. There’s a lot of mountain climbing and things like that. And so it’s become a huge tourist destination and no one was doing it here. So we were the first to market, which gave us a huge, you know, kind of headstart in building a portfolio of properties.

00:08:40

Yeah. A couple of, couple of things that I want to go off of that. So I’m looking at your website right now, and while these places are absolutely beautiful, are these, are these units that you are designing and working with the property owners or are these like, are they like all staged homes?

00:08:57

So they’re all, I’d say almost every single one of those properties are, the owner uses them. We got really lucky, like these homes are beautiful. And we got really lucky in that. We have a lot of owners with impeccable tastes that kind of caters to the people that are coming up to our area. Sometimes we do give direction to the owners in order to make the properties, you know, ideal to market, to the person coming from New York city. That’s used to like, you know, luxury, style living. But for the most part, we’ve kind of gotten lucky in that. But I’d say we balance that along with kind of seeing what people are looking to rent and we’ve learned along the way and are slowly starting to filter out properties that might not be ideal. And trying to really focus on, you know, higher end properties with the amenities that you’re looking for

00:09:52

Now, the Hudson valley, I’m not sure exactly where that’s located, but I know in New York it’s, you know, I imagine that it’s very seasonal. Are these properties only rented out during a certain time, or this are these year-round?

01:10:05

Well, it’s interesting. We actually started our business last year, around this time. And at that point we had taken on about three to five properties and they all started to book pretty quickly through the fall and winter season. And the occupancy rates were significantly high, especially for properties that had never been on Airbnb. They were brand new to the platform and, you know, we were just getting started. So now that we’ve gone through a full year, you know, it doesn’t feel seasonal. I think we’ve been pretty consistent through every single season.

01:10:49

Yeah. It’s a, it’s a drive to market so people can come up last minute. So, you know, even if it’s snowing here, you know, it’s more fun and prettier to be up in the mountains than, you know, in the city dealing with slush. So I think people find reasons to come up. I think a lot of the times being that our homes are so beautiful, the home becomes a destination and there is skiing and things to do year round. So whether it’s spring, summer, winter, fall, it’s kind of become a really evergreen market.

01:11:21

Yeah. Actually this is our first time going through the foliage season where the leaves change color. So there’s a big demand of people coming into the area, just for that.

01:11:32

Now I’m looking through some of your photos as well, and whoever, I don’t know who’s doing the photos, but these are a very spectacular, and I love some of the detailed shots of like, I’m looking at this one where there’s like a guy sitting or laying over the couch. And then the next photo is like of this journal with this. It almost looks like a little Pinterest picture, like who, who’s the one that’s coming up with this stuff. Do you have a dedicated person or is that you guys?

01:11:56

We do. We work with a photographer Derek and he’s been awesome. He’s done almost all of our properties at this point and he’s just super creative. We don’t really have to give him much direction. He has a really great eye and I think he kind of understands our target really well. And so, yeah, it’s been a really great partnership working with him. He does drone footage too, of like the property. He does video tours that we can use to tease on social media. So he’s been a big part of our success for sure.

01:12:27

Right. Yeah. I definitely want to go into, you know, you acquiring the properties, you know, being in this high, higher end area, imagine that it’s, you know, maybe not as easy, maybe it is as easy as knocking on the door, but curious about that, but having this net, this marketing background, are you guys utilizing your experience to advertise your properties? What, what is your strategy with this?

01:12:49

Yeah, so we are working really hard to get to a point where we can focus on, on marketing and we have done some stuff through Instagram. Obviously Airbnb itself is its own marketing platform. But as you know, since we’ve only been in the business for about a year, we spent a lot of our time just learning what it takes to be a property manager. But yeah, I think we have a lot of great ideas that we want to roll out pretty soon.

01:13:18

Yeah. Yeah. And I think it’s, it’s interesting being that we were the first real company in this area. A lot of folks have found us, so we haven’t really had to do much. Yeah. So like Instagram has been a great platform for us because even with minimal effort, we’ve been able to kind of get our name out there and also through just like talking to realtors and, you know, Ray has a lot of friends in the area, so like just kind of networked and talk to people and, you know, friends have shared our information with others or they find us organically online, but we have tons of ideas on how we can build off of that in the future.

01:13:59

Yeah. What’s interesting is that my background is in sales. So when we were putting together a business plan, I had this whole strategy of how I was going to prospect and research and cold call people. And once we got our website live and we started to network with a few realtors and I started to tap into some people that I know locally, all of the business just started to come to us.

01:14:27

So realtors, if you can kind of expand on that because I know realtors, there’s gotta be something in it for them. They’re not just going to be giving you the rental properties. So what type of relationship do you have with these people?

01:14:40

Well, I think the realtors that we work with realize that there’s a lot of value in partnering with people like us that understand, you know, what are the projected revenues for certain types of properties. So to give you an example, it’s often where a realtor would say, Hey, listen, or have a prospective buyer from New York city. That’s looking to purchase a home in this area that they’re looking to rent short term. And so we put together projections based on the size of the house where it’s located. We know all of the market data of comparable homes that are already short-term rental properties for many years and how much they’re, they’re generating. And so what happens is that we’re able to provide them with that information to help them close sales?

01:15:34

No, I th I think that that’s, that’s brilliant from the way that you’re looking at it because you’re, you’re, you’re basically teaming up with them so that they can be able to make the sale. Maybe someone’s on the edge of, I don’t know if I should purchase this property because I want to be able to Short Term rent it. And a realtor happens to know that you guys are a subject matter experts and they can partner with you to be able to help get a person, you know, over that edge to, to make, make that purchase. I think that that’s a brilliant, are you w what, because you were talking about the sales process and prospecting, are, were these just from like a few major realtors or were you going out and what, what was your strategy with, with networking?

01:16:14

Well, interesting enough, you know, we didn’t really, realtors started to reach out to us once they realized that we existed and it was all really coming through Instagram. So one of the first things we did was we developed, we got our LLC, we created home sweet hudson.com and we created our Instagram handle. And so we just started posting content. And, you know, soon after we started getting phone calls and emails from local realtors, they were like, Hey, thank you so much for creating this business. We’ve been dying to work with people like you, because we have so many interested buyers that want to rent their property. Short-term

01:16:57

Yeah. So you were, you were, you created the website, this was before you had any properties. Correct. So you created the website, you created the Instagram, and then you started targeting real estate agents on Instagram.

01:17:09

No, they, they sort of organically started to find us really sure how that,

01:17:14

Yeah, they, they, I mean, it almost seemed like just a few days after we went live with our website and Instagram handle, they found us,

01:17:24

I mean, we, we had talked about the idea of actively reaching out and setting up, meet and greets with realtors to kind of educate them on the business. And it just sort of happened without us having to initiate contact with them. And Ray has some friends that are realtors in the area. We talked to the person that sold us, our house about, you know, he wasn’t that familiar with short-term renting. And so we started talking to him and the word just kind of spread. So I think talking, just talking to people, you never really know how to connect with others.

01:17:53

Yeah. Interestingly enough, during that time, when we were starting the business, we were doing some renovations to our house and the contractor who was doing the work, which is a childhood friend of mine that I’ve known since high school was literally there when I lost my job. And I was trying to figure things out. And I was like, there, like buildings out there. And I’m like, you know what, I’m just going to go all in on this business. And so once we went live, he was like, Hey, I know someone that just remodeled their house and may be interested in that’s actually how we got our first client. It was doing word of mouth.

01:18:30

So walk, walk me through the process because these are some, you know, really luxurious houses and you guys are charging, you know, significant, significant prices for these to a person. Are these just all people that are ready to start short-term renting their properties, or do you have to kind of come up to them? Do you have like a package, a presentation? What, what’s your process with onboarding a new potential client?

01:18:55

I think this, the first where it starts really is just having, usually it’s a conversation over the phone because they live in New York city. And so in that conversation, we ask a lot of questions in terms of, you know, what it is that they’re looking to do, what type of property, or what type of goals do they have in terms of short-term renting? How often do they want to use the property? Because obviously that’s very important in terms of us deciding if it makes financial sense. And then if we feel that it’s a good fit based on the conversation, we schedule a walkthrough and usually we’ll meet them on the weekend. And

01:19:37

Okay. And are, are these people that are like ready to start short-term renting? Or are you like giving, like pitching people that are renting their properties or anything like that?

01:19:49

I think the conversation is just more educational than pitching. I think most of our clients love the idea of it and where it seems to be super motivated from the beginning. What, what, where the lack was just really understanding all of the ins and outs in terms of, you know, the day to days, all the services that we provide, insurance liability, things of that nature. So I think really we focus on just helping them understand how it works and all of the benefits that come with converting their property to a short-term rental. Yeah.

02:20:27

And I think, I think most of our clients, if not all, had already decided they were interested in the idea of short-term renting, but didn’t want to take on doing it themselves. So that part was kind of already there. They either have families or they’re traveling for work all the time or live outside of New York and LA or wherever and have said, you know, I want to keep this house. I want to be able to use it sometimes, but I don’t want to take on the responsibility of actually executing the rental management.

02:20:57

Okay. And so, you know, you guys created the website, you created the Instagram handle, and then you networked with people that are in the real space, real estate community. And that’s, that’s how you built up to your initial bundle of properties. And then from there, it’s just been all organic. You’re saying that they’re just coming to you now

02:21:18

For the most part. Well, now we’re getting a lot of referrals from our clients. We’re also have been in contact with the local chamber of commerce and in that we found some leads as well. So, and again, we live in a very small town. So just being out and about, and just constantly talking about our business with people, especially with local service providers, who we rely on very much. So I think there lies a lot of lead generation as well

02:21:51

Now, because you guys said that you were coming into a market where there really wasn’t a dominant player in that space and, and you guys are coming in here and you’re trying to basically set the standard. How, how are you able to communicate with, let’s say for the new investors that are, that are out there that maybe there’s not too many people that are short-term renting, how do you set the expectation with people that, you know, when the, when there is not maybe a good, a good amount of market data available? Well,

02:22:20

We actually are a lot of people that Short Term rent, but it’s a lot of people that either live locally or are managing it themselves. So there are, there’s a big pool of Airbnbs that exists in the area. I think it’s just, there’s less people or, or no one realized the need for those that wanted to do with, but just don’t live close enough to do it themselves. But I think that there has been enough Airbnb or short term rentals in the area to give owners a good idea of what they could stand to generate through their property. So I think we’ve set pretty good expectations and the owners have been happy with where they are today.

02:22:58

Yeah. And we also have our own Airbnb that we’ve been renting here for the past three years. So we had that data to share. And we also relied on air DNA, which you probably know is a platform that provides data based on homes that are renting on Airbnb within this area. So that was probably one of our first investment because it’s a subscription based that was very helpful.

02:23:28

And w what, so you guys decided on a 25% management fee, where did you come to that number and what, what, what type of services are you providing with that?

02:23:40

Yeah, I mean, it basically includes everything that comes with Short rental management. We came up with the number based on some research that we did with, within other markets across the country. And when you think about the type of properties that we manage, they’re pretty big, you know, they’re three, four or five bedrooms. They have pools, they have hot tubs. There’s a lot of different things that we are responsible for in terms of making sure that not only is the house ready for guests, but that it’s always in great working conditions for when the homeowners are using. So I think that’s kind of how we came up with that percentage.

02:24:25

Yeah. I think when we started, we actually were, we, we were originally going to offer three different packages of different percentage points and quickly realized that you want to be able to manage the entire process. And not really, because then you’re not in full control of how successful the property can be. So let’s just switch to one flat percentage.

02:24:47

No, I liked that. I liked that that’s, you know, the you’re, you’re trying to create a system that will make it easily easy for you to be able to track and manage the growth. And if you are kind of doing that all car, you know, maybe there’s going to be things that on the owner side, maybe they’re lacking, which can also, you know, ultimately hurt your guys’s performance of your portfolio as well. And this is how you’re making your, your income now.

02:25:08

Yeah. I think another point to make is that we offer a concierge service where we have partnerships with local business and service providers. So if a guest was interested in having a private chef, a massage therapist and yoga instructor to come to the property to perform these services, we actually helped create those itineraries, which is no cost to our clients. We actually don’t charge any money for organizing those experiences. We see the value in creating unique experiences for people so that a, they give us a nice five star review and also refer us to their friends and, and hopefully come back to visit the property. Again,

02:25:57

That’s like the, the, the Airbnb Lux experience. I know that that’s the concierge services, something that they’re providing. So w w what is you’re, you’re, you’re creating these relationships with these business owners, you know, that that’s good for the community. It’s also good because maybe they, you can also tap into their network as well. What, what type of, how are you doing this, that you’re able to get these, these good deals with these service providers for, for your guests,

02:26:22

Just really talking to people and letting them know what we’re doing, letting them know about the kinds of properties that we’re representing, and who’s staying at those places. And I think they inherently will see the value in offering maybe a small discount or, you know, something special that isn’t available in store, things like that. So I think it’s

02:26:43

Easy at the end of the day. Yeah. I mean, that kind of partnership is it’s such a win-win for everyone involved, right. Again, growing up in this area have a lot of friends who are business owners who own restaurants, who are massage therapists or yoga instructors. So it was really easy to access those people and sort of present these opportunities. What’s nice too, is that certain restaurants, which we’re working towards now are open to offering exclusive discounts for our guests. If they mentioned, you know, home sweet Hudson, we’re actually trying to create something unique in terms of coding, but there’s so many different ways to, you know, help the community in that way.

02:27:30

I love it. You, you, you guys are doing, doing all the right things. I love the, the website, you know, it’s simple, it’s clean. It’s beautiful. And you’re, you, you guys are going definitely above and beyond with your service. When, when though did it come to that point where it was like the tipping point where it’s like, okay, you know, right. You were talking about how you were laid off because of the downsizing and Vanessa that you decided to come onto this when, when was at that point where it’s like, we can actually really make this into a full-time income that we can, you know, scale and grow and, and be able to, you know, live off of,

02:28:04

I think we kind of knew that from, from the beginning in terms of the, the, the earning potential, I think the tipping point for us going all in together and just leaving our jobs a hundred percent was specifically on a day where I’m so in the morning. So Vanessa used to commute into New York city every single day. And I used to drive her to the bus station so that she could take the bus down at five 15 in the morning. And at this point she was doing an incredible job. I mean, literally two full time jobs, not to mention coming off of, of the very difficult help situation. And she, she was overwhelmed. And I remember vividly her being very upset at me for no apparent reason that morning. And I remember her leaving and I was sitting down at lunch and, you know, I thought about where are we financially? You know, we’ve got all these bills. We, we own a home, but at the same time, I realized that in order for us to really scale on tape, take off, we needed to be full-time. So I text message her that day. And I was like, it’s time for you to put it in your two week notice.

02:29:26

So being, being, you know, both being a team property managers, how, how, what, what type of responsibilities are you guys, are you guys assigning to yourself? So how do you split it up for, you know, a couple that that wants to get into the,

02:29:39

So I think in the beginning were both sort of like doing everything together. I mean, literally cleaning the properties ourselves and really just understanding what it takes to prepare a short-term rental property versus, you know, a regular residential home. But then as we started to grow and we started to find local people that were able to help us, we started to create roles and responsibilities. So I think for me, I was more of the new business slash operations manager. And Vanessa did basically all of the client facing client servicing.

03:30:23

Yeah. So all the client communications, guests, medications for the most part and a little bit of social media that we started doing, I was helping to put that stuff together as long as well as the listings. And so like managing the onboarding process was actually probably the largest part of my role in the beginning. So drafting listings, working with Matt to, to schedule a photo shoots and stage the properties, putting together a welcome book and kind of, you know, overall understanding of the property and how we wanted to market it.

03:30:55

Yeah. You know, maybe you should talk a little bit more about the welcome book and just drafting the listing and machine does a great job and really, you know, communicating through the listing, you know, all of the pre features and amenities that the property offers and that there’s actually a professional management company overseeing the property, which I think is super important in terms of short of getting in front of people that are looking to party or do anything that could be sort of, you know, unwanted at the property.

03:31:29

Yeah. I think my approach is really just to, so people might be looking to stay at a place for their own, you know, whatever reason if it’s a special occasion or just a weekend getaway, but I think it’s also nice to communicate the potential of the property. What, you know, its proximity to some pool areas might lead to for you. So kind of taking them above and beyond just like, you know, how many bedrooms and bathrooms and things like that to kind of, you know, is it someone’s birthday, would you be interested in having a private chef or, you know, you know, holding a wine tasting at the property or, you know, kind of teasing up some of the cool areas that you’re close by and what those places offer. And one of the things we started doing within the first few months of our business was so during the onboarding process, we do an overnight at each of our properties.

03:32:22

So we stay at the property ourselves. So kind of just pretend we’re guests walk around the property, test things out, see what questions guests might have use all the different amenities that are there so that we can sort of really tell people, you know, what, what they can expect. What’s really cool. What’s really special from a backyard. That’s perfect. You’re stuck stargazing to a really quiet property. That’s, you know, has a fireplace and there’s a perfect place to read a book. So just really making each listing super special and unique based on what it offers. I think that was a huge help in being able to do that.

03:33:01

No, I, I love, I love that you, you walked through that process because I feel like a lot of people are thinking like, oh, well I have to, I have to do a, a very low management fee because there’s companies like evolve that are coming out there and they’re offering like 10% and you know, they’re thinking, oh, well, if I’m going to be able to compete with that, then I’m going to have to charge, you know, something around there. But you guys, you know, your onboarding your process, you’re, you’re really invested into these properties. You’re going there, you’re staying in these properties, you know, the local connections, you’re, you know, this, this is your home, that these are your people. So I think that that is, you know, I think that that’s really cool because you, you guys, your, your value is there. And, and, you know, I think that that shows through the quality of the photos and the descriptions and the amenities that you’re providing completely for free. I think that is just really awesome. What has been the most challenging part of, of scaling this business? I know you guys made it sound kind of easy, but I’m sure that there was maybe something there, there was something there

03:34:06

We were talking about this earlier. And I think housekeeping was one of the things that was really challenging and learning how to schedule people and offer consistent turnovers, which Ray did a really great job of. And, and then just like operationally, you know, when you’re at even 10 properties, being able to physically go out and handle things, get toilet paper where it needs to go and handle any sort of damage claims. It’s a lot. So before we reached the point where we were able to hire an operations manager, it was just Ray and I running around to different properties and getting things where they needed to be, which becomes difficult from a logistical perspective in between reservations. Those were the biggest challenges. Oh. And accounting, which was the other thing we were talking.

03:34:53

Yeah. So I think in the beginning house keeping was a biggest challenge. I just finding people that understood how to turn over a short-term rental property versus a residential home where someone’s living full time. And so I think that’s why Vanessa and I decided to do the cleaning ourselves in the beginning, just so that we could teach ourselves and develop a home sweet Hudson cleaning standard, as you know, staging is very important, you know, hospital corners, holding towels, leaving a gift, things of that nature is all stuff that we had kind of compiled and put together before we started interviewing people to do these services. As we started to grow, Vanessa did a really good job of teaching herself, all of the accounting that comes with this business. And it’s, it’s, it’s tough. It’s a lot of transactions when we were at, you know, 5, 10, 15 properties we were okay. But then we started to realize we were in over our heads and think we’re happy to say that we finally found a company that we just signed with last week. That’s going to be taking that over, starting October 1st. So,

03:36:13

And is this a local CPA that’s going to be managing your accounts or,

03:36:17

And we, we tried a couple of local people and, you know, I think they did the best they could given that it’s such a new industry. I think it was a challenge for them to figure out. And so when it ended up happening was Vanessa, which is, she has a hard time letting, letting things go. So especially with our client’s money, I mean, it’s, it’s a very big responsibility. So no, we found, well, actually this company found us somehow. I think it was either through social media or a website and they reached out to us and we did a video conference and, you know, they, they seem to be exactly what we’re looking at.

03:37:05

Are these like a major company or are they kind of like boutique and just working with a select people,

03:37:12

Pretty boutique. I think they’re small. They are national. So, you know, that is great. And I think they, they all kind of work remotely around the country, but

03:37:22

Yeah, the name of the company is called stride and they’re very buttoned up. They’re very organized and sort of methodical in the way that they were explaining how they would manage our finances, which is what we were looking for. You know, a lot of, some of these local accountants were sort of pulling information out of us where stride was like, these are the processes and methodologies that we use that will help manage your finances. Right.

03:37:59

Okay. Very cool. Stride. Yeah. We’ll, we’ll include that in the show notes. I’m curious to look into them a little bit more. So I think that’s really cool. So the, the, the, your first initial challenge was finding those reliable cleaners. Your second was the, the accounting, but now you’ve built up to having an operations manager. And you also said that you also have some VA or multiple VAs. What, when, when did that point come?

03:38:22

So we hired our operations manager, which is Tony Garcia. He’s, I’ve known him since we were kids as well, which he’s been such a big value to us. We hired him about three months ago. And it was interesting. It was at a point where I don’t know if we were really able to afford him. I mean, basically it was like cutting into a big chunk of our revenue, but we also realized that it was necessary. And so we, we took on that investment, not an expense and definitely an investment. And, and we’re, we’re, we’ve been able to grow so much more.

03:39:07

Yeah. And I think it happened because we realized the onboarding process was taking longer than it should mostly because there are some things that sometimes need to get done in order to get up and running. So whether it be installing a security camera outside or painting that needs to get done to make the house look fresh and sort of those kinds of little projects that would halt an onboarding and, you know, for small projects like that, it’s hard to get a general contractor to come in and just do a one-off little, you know, camera installation or something like that. So bringing Tony on board allowed us to get onboardings done much quicker, and then also to address any repairs or damages that happen to our current properties really easily at low cost for the owner and keep things rolling without having to wait to schedule those kinds of things. So it really was a huge help to moving things along and getting properties up running and booking.

04:40:07

Yeah. And I’d say once we got to around 18 or 19 properties is when we decided that we had to get virtual assistants for guest communications. Vanessa was inundated with messages over the weekend, and it was, it was tough. You know, I’m actually impressed that you were able to do that with, with so many properties, but thankfully now we have virtual assistants handling that.

04:40:34

And yeah, I’m, I’m curious about going a little bit deeper into that because a lot of people are probably, you know, in that space where it’s like, they don’t want to give up that control because, you know, giving, you have to give it that control to somebody else, but you’re also taking maybe a significant hit on your income, which is also really scary. How, how, at what point did you decide, like, okay, we need to hire the operations manager. Like how many properties were you managing at that point?

04:41:05

Well, no, I think with Tony, we were probably around 16 or 17. And then shortly after that is when we decided to hire virtual assistants.

04:41:16

And, and, and how much, how, how much of an impact was hiring an operations manager and the VA’s to,

04:41:24

Oh, it was tremendous. I mean, you know, Vanessa and I were just so caught in the day to day with the business. Once we were able to delegate all of that workout to Tony and the virtual assistance, it allowed us to focus more on new business. So during this time that we were growing, I would say on average, we had anywhere between 10 to 15 prospects that were reaching out to us saying, Hey, we want to meet with you. We want you to come visit our property, but we weren’t able to spend that time with them because we were stuck, you know, trying to install rain cameras and getting the houses ready. So now most of our time is servicing our current clients, which I’ll be completely transparent. There, there were times where we learn getting back to some of our clients in a timely fashion. I think all of that just had, had to do with how quickly we were growing. But now we’ve sort of circled back to being able to make sure our current clients are super happy. And now we have a bunch of other prospects right now that we’ll be onboarding once we get back from our wedding.

04:42:38

So, so what does an operation, is this a position that you already knew that, that needed to fill these spots or, or you just kind of creating this, where, where you saw the need

04:42:50

In the beginning, as we were filling the knee. So Tony actually was working for the contractor that was doing the renovations in our house. And so we started to use Tony. Part-time like, you know, he would just kind of do it on the side and help us once we started to grow and realize that we needed him more than he was available, we realized we needed to make this a full-time a full-time job. And so we made him an offer and thankfully he took it. And so his responsibilities really are, you know, maintenance repairs. He now manages and oversees house keeping and scheduling. And he also is in charge of inventory. So, you know, we purchased shampoos. Bodywash all of the basics for the property in bulk. And he’s in charge of making sure that that stuff is sort of dispersed in each of the properties he’s done. He’s done a great job.

04:43:58

Wow. That’s a significant, significant amount of responsibility that, that was kind of taken off of you. And now that you you’ve been able to hire that out, that that’s, that’s big, how many properties do you feel like you’d be able to scale up to now, now that you’ve taken that, that those responsibilities off,

04:44:15

Oh gosh, I think sky’s the limit. You know, the way we see it as, as we grow, our, our goal is to hire more people, right. And we’re actually training Tony to be more of a property manager. So that down the road, we can find someone to sort of fill his shoes so that he could manage directly and help us with, you know, growing and scaling. I don’t think we know yet how many properties we want to sort of recap it. I mean, in the beginning, we, we had said 25 and now we’re like, we can get to 50 by the end of the year. And you know, it’s tough, you know, but there’s a lot of work that comes with this and there’s liabilities and all that other stuff. So, you know, I think that’s, I think 15 might be the number we’re shooting for, and then what we’re doing is trying to develop other revenue streams. So we’re working on developing an online course to educate other people across the country and have started their own management business and, and podcast eventually to

04:45:26

Awesome. I love it. Yeah. It’s, it’s, there’s, there’s so much, so much potential for educating people and, and training people up on. I love, I love that, that you’re, you’re training a Tony now to become a property manager. I think that that’s a, you know, such a cool thing when you, when you’ve reached a point where it’s like now, you know, you’re ready to train someone up and take them under your wing and start giving them that responsibility to be able to really change their life. I think that that is awesome. Is there, is there any products in your units that really is saving you time and money?

04:45:58

You know, we do work with a company called public goods, so yeah, they’re actually saving us time and money because public goods, they have an array of different products. So instead of having to go to different stores locally to purchase these products and stock the houses with, we can actually do everything from their website. And in fact, we’ve developed a partnership. And so we are buying these things in bulk and just literally stocking our basement. And they’re, you know, they’re, they’re great products. They’re expensive for our clients. Yeah.

04:46:40

Beautiful branding. They’re all sustainably packaged and like really healthy ingredients. So you know, that we’re giving people a safe products to use that look really pretty and kind of look really high end. So, you know, we’re not, I’m not hiding them when I’m taking photos of the houses, you know, they kind of add to kind of look and feel that we’re looking to achieve. So that’s one great product we love, you know, ring hammers are another thing that we absolutely love. And then I think the tool that saved us the most time has been using Guesty, which is RPMs, like that has been such a time-saver for us.

04:47:19

Right. And what, what are the other, you know, services and the, in the short-term rental space that you guys are using?

04:47:27

I guess he’s one of ’em, we’re also beyond pricing to help with our dynamic pricing tool, which has been great outside of that. That’s, that’s pretty much it.

04:47:41

Okay, great. And the, the messaging is, are you, is that for Guesty you’re using the automatic messaging.

04:47:50

Yeah. We use auto messaging for, you know, trigger messages throughout the booking process. And then we do our guest communications using, they have a separate guest communication services package, which we have opted into. So that’s kind of what we use for messaging.

04:48:07

Okay, great. And you guys being, you know, marketing sales in this business aspect, are you guys collecting emails and doing like marketing campaigns or anything like that?

04:48:17

Yeah, that’s a great question. So one of the things that we agreed to do when developing this business plan, we just got a new lead that came in. It’s almost, it’s almost every day. It’s unbelievable. Yeah. So we use the CRM to, so we proactively ask guests to share their contact information, essentially opting in to receive marketing from us because what we’re working to do is offer direct bookings through holes. We’d hudson.com is definitely couple of months or a couple months. So we definitely wanted to start doing email campaigns and social media stuff as well.

04:49:01

Okay. And, and what are you, what are you doing? What’s your call to action in order for them to, to want to sign up for an email?

04:49:07

Most people have kind of offered it up pretty easily, but I think what we’ve been thinking about doing is often like a percentage off of their next booking, if they share it email category.

04:49:21

And I’ll tell you like the feedback from guests that visit these properties have been super positive. I mean, we read our reviews, they’re just, this is amazing. This is the best Airbnb I’ve ever stayed at. Definitely coming back. So when we make them aware that if they were to book direct, where they can save on that 10 or 15% Airbnb fee, it’s pretty easy for them.

04:49:46

Yeah. I was, I was, I was just going to say, what, what, what is, what are you doing that has helped guests, your guests leave positive reviews?

04:49:52

I mean, I think a huge part has been housekeeping, just doing an impeccable job of making the house clean and presentable, you know, and really checking in with them to make sure that they have everything you need to have a great day offering up suggestions on things to do. And kind of, I try to offer enough information so that they don’t have to ask many questions and then just, you know, provide additional suggestions whenever I can. So I think that’s been a big part of it. And then just having properties that are ideally set up for folks to entertain, or just relax and focusing on.

05:50:33

I also think it’s, especially Vanessa is been sort of spearheading the guest messaging from the beginning. She’s done a great job. It was just, you know, taking the initiative to reach out to folks before they get to their property to understand what it is that they’re looking to do, you know, and really asking the question so that we can provide local recommendations. And I think guests really appreciate that. And you can see it in the reviews you mentioned,

05:50:59

And is there, is there one house rule and thing that you’ve started, including maybe in your co-host and contracts that is really kind of saved you before? I really kind of benefited you guys now.

05:51:11

Yeah. I mean, you know, obviously no house parties, you know, in fact we have a pretty interesting case study. It only happened once, which is interesting because we’ve been doing this for a year. We’ve hosted hundreds and hundreds and hundreds of people, but we had detected through our rain camera that there was just, I was getting notifications all night from motion. And I don’t typically look at them just because we use it as a, sort of a safe code in case housekeeping reports that there was a party, but I just happened to luck. And we saw that there were like 20 young kids from, I think was at west point and they were gearing up for a party and they were, you know, you could tell that it wasn’t going in the right direction. So we called Airbnb and we were able to take care of that. So having that, that rule, given that he broke that rule, we were able to ask them to leave the property and didn’t have to deal with any damage.

05:52:17

Awesome. And is there one thing that you’ve started, including within your co-host contracts that is really benefited you guys now, or that you’re going back? You wish you would’ve started.

05:52:27

So he recently added or adding in an availability clause. So just like asking owners to give us a certain number of days of availability, just to make sure that, you know, at the end of the day, our partnership remains profitable for everyone involved. Sorry, our dogs, a beneficial addition to our original contract.

05:52:48

Awesome. Okay. Very cool. Very cool. And last question, if you could do, if you, if you had to restart and do this all over again, what would you do differently if you had to start from scratch?

05:52:58

I think doing a better job of managing our client’s expectations. So like we recently started doing onboarding calls that would allow us to kind of really explain to them what to expect. We can assure them that we do, and just really understanding the process. Most of our clients are brand new that never Airbnb before educating them on what they can expect is the number of questions we get emails. So I think that’s really been essential.

05:53:36

And do you have just like a checklist or something that you’ve been going off of to be able to help with that onboarding process?

05:53:42

I think we sat down and just brainstorm all of the things we’ve learned and said, you know, what can we tell people when we’re first starting out in order to get them ready and have them understand what this process looks like? And so we’ve just gone through an outline based on our best practices and the things we’ve learned mostly by mistakes and, you know, can now help to manage their expectations of future.

05:54:05

Awesome. Awesome. Very cool. And the, the last big question before, before we let you go to, to send for the dog is what question do you have for a, another professional host, maybe someone that is in a similar split place with you, or maybe that next level?

05:54:21

Ooh, that’s a good one. I think for me it would be, at what point do you start to in-house managed services such as like trash removal and landscaping, like we were talking about, do we start doing like our own laundry? Like, should we get into laundry services and things like that. So I’m trying to see, like at what point is that really scalable and a smart investment. So I think that’s some of the things we’re thinking about now.

05:54:50

I would agree. Housekeeping laundry is a big one. So if we could ask any question, I’d love to hear how companies that are 50 plus, how are they handling their laundry?

05:55:04

Okay. Very cool. And that, and that’s the, that’s kind of the, the ambition for you is that 50 plus? Yeah,

05:55:09

I think so. Check back in about two months.

05:55:14

Definitely. Well, of course that’s going to be so, so cool. And I’m excited to see where you’re going with all the resources that you’re going to be providing to the community. And definitely I’ll include everything in the show notes, but thank you so much rain Vanessa, for taking the time to, to tell you guys a success story. And I’m excited to maybe have you back on the show once you’ve reached that 50 plus mark, and then we’ll see how your operations are going at that point.

05:55:40

Yeah, that’d be great. Thank you, Julian. This has been great.

05:55:43

All right, well thank you so much and I’ll let you guys go get that door. So next time, host nation, keep on hosting Hopi 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, the host nation.