STRSS 46 – Practical Things to Implement in Your Short Term Rental Business to be Successful w/ Joel Edwards

Video Transcript

 

 

00:00:01

So, what I’ve learned is you really have to step your game up. Now, if you’re gonna shine this last unit that I purchased, I, I bought a Pacman machine, which is something I would’ve never thought about doing before. It was a 400 investment, but it’s a really cool standup arcade. Pacman machine has a little stool with it. Since I’ve had that, I ran out, I literally had guests. Oh, I love the Pacman machine. It’s only been a couple of months since I’ve had the property up and running, but I know for sure, because people have told me, that’s why they booked the place was because they saw that Pacman machine.

 

 

00:00:32

This is up to number 46 of the short term rental success stories podcast. Are you an investor that’s looking to have your home professionally managed, go to cohost it.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 the short term rental business. My goal is that you’ll be able to walk away with practical information. That’ll help you become a better host and learn how to scale your business. Like any exceptional host. We all strive for five star reviews. So please go on over to iTunes. Let us know what you enjoy. This 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.

 

 

00:01:12

Hey, what is going on? Host nation? I am super excited to be back again with you this week. There’s a lot of stuff happening in the short Rental space. We’re finishing up January, which means that we are just about a month away from high season or also a month away from 50 episodes. That is so crazy. And I really can’t keep this a secret from you guys anymore, because I do want you all to start benefiting right away. We’re coming into a season where people are gonna be making a lot more money, and I want you guys to be making money to so a few things that you should be looking at for in the next few weeks is one. Jon and I are gonna be host a live training on starting and growing a Rental arbitrage cohosting business. So we like to talk about both sides of the coin because they are both really important in the short Rental space.

 

 

00:01:54

If you’re interested in starting your own Vacation Rental machine, we’re actually gonna be breaking down our Formula for how you can actually do this. Two is that we’ve been getting a lot of requests to open up the B and B empire builders mastermind group. Again, and guys, we will be opening that back up again. Maybe it’s gonna be happening during March. We’ll see high season. There’s gonna be a lot of stuff going on, but I do want to open that back up because I, I like talking with y’all and it is such an awesome community to be able to talk with everybody one on one and a little bit more personally, and see everybody grow. We’ve seen so much growth in the group so far, and people are really making big leaps and bounds in their Airbnb empires. And then three is co-hosted obviously I’m super excited for the returns that we’re gonna be able to see for our investors.

 

 

00:02:38

Imagine having a Rental arbitrage unit that you just have to put the money down and somebody else manages it for you. It’s really the best of both worlds. And if you wanna find out more information about our turnkey Rental arbitrage program, then go to cohost it.com for more information. But in this episode, I had the special honor speaking with Joel Edwards. Joel has been short term rental investing in Phoenix, Arizona since 2012, but transitioned to becoming a full-time real estate investor and real estate agent in 2015, Joel, own five condos has one Rental arbitrage unit and four cohost clients. And recently started to rent out two rooms in his own home. Joel got into short-term rentals accidentally when he and his wife were going on an extended Vacation to Europe and Peru, Joel asked one of his friends who had an Airbnb and was successful to see if they could take care of his empty property while he was away.

 

 

00:03:22

And three months later, Joel came back from his trip with more money than he left before. So he knew that he was onto something in this episode. Joel talks about a lot of the practical things that you can start implementing in your business to be successful and to stand out from the competition. If you like my show notes or anything else we talked about in this episode and go to Short Term, Sage dot com slash STR 46, or if you like my show notes, send directly to your inbox every week, then go to shorttermsage.com slash show notes with all that being said onto this week’s conversation. Hey, welcome to coast nation to another episode of short term rental success stories. In this episode, I have these special honor of speaking with Joel Edwards. Joel, would you please let the audience know who you are and what inspired you to get into short term rentals?

 

 

00:04:01

Yes. Hi, thanks Julian for having me. My name’s Joel Edwards, I’ve been doing short term rental now, since it really was by accident, my partner and I were going on extended Vacation to Europe and to south America. And we had a condo that we owned and it was furnished. So I had some friends that were doing Rental Rental units, and I asked them if they would take care of my property for me and manage it, they said they would long story short, three months later, I came back with more money than when I left before. So I knew I was onto something. So when I came back, I bought another condo I’m in Phoenix, Arizona, and just took it from there.

 

 

00:04:38

So, so you, you started you 2012, just, you had a fully furnished place, but you were gonna be gone for how, how long were you gone?

 

 

00:04:44

We’re gonna be gone for about three and a half months. So we were gonna be leaving mid January and coming back about mid April. And it just so happens. That’s the peak season here in Phoenix. That’s when we have spring training, spring training, baseball, golf tournaments, everything’s going on. Everybody wants to be here. So it was just great timing for that.

 

 

00:05:04

Did you know, going into that, that, that would be a profitable thing, like how’d you even know to price it and was there a lot of competition in the area at that time?

 

 

00:05:13

So 2012, it definitely was not like it is right now in 2000, 19, seven years later, there’s a lot more competition. So back then, I didn’t know anything of, I didn’t know anything about pricing, but I had a friend, him and his wife, they had three Vacation Rental units and they were just neighbors of mine actually. So that’s how it was just a casual neighbor talking to them, seeing how they’re doing. And then I asked them if they would be open to managing it for me. So they came up with the pricing structure, they did the cleaning for me, they did everything and I just paid them a percentage. So I said, well, comes in. They invoice end and that’s hands I Peru and Prague for six weeks.

 

 

00:05:58

Wow. So, so while you were away, you, you came back with more money than when you went on the trip and then something clicked and you’re like, wow, the there’s there’s something here. What, what was the next progression with that?

 

 

00:06:08

Yeah, so, so when I got back, I got back around April may somewhere around that time of 2012. So then that summer of 2012, it was still, there still were lots of foreclosures and short sales here in the Phoenix market. My background is real estate. I’ve been in real estate since I started off in California and then came out to Arizona. And so Phoenix was hit really hard during the recession. There was lots of foreclosures everywhere you look. So I had saved up a little bit of money and I was looking, I wanted to be in the general area of where I already live because I gonna property. So I found one bath and it was a sale. And I was that property for approximately, so was really, really, and I went there, I bought the property. It was a relatively fast closing, closing about 30 days.

 

 

00:07:03

So it was fall of 12. And I wasn’t sure if it was gonna work. I knew it worked for my property when we were gone. So I said, OK, test it out. So I literally took all the, that we had at the condo we were living at, and I kind of just took it over to the new property and then bought us new furniture just in case it didn’t work. OK. Hey, I just, I lost some used. I bought like a futon, you know, used, we used everything pretty much. I, I decorated it pretty sparsely, but as, as I could do at that time, and same thing at that time, I, I actually started working with another company, evolve, Vacation Rental, and cuz I was working, full-time doing real estate, helping buyers and sellers. So I didn’t really, I hadn’t dealt with any of the guest communication.

 

 

00:07:48

I know the time that would take. So I started off working with them for a few months and it was great. I’d get an email and they tell me I have a reservation and they’d give the dates and everything. And then I was the one doing the cleaning. I was the one doing the turnover and I did like working with them, but I felt like I could do this. And I wanted to save more money as far as the percentage that I was paying them. So that, and I, and I was excited about it. And in that same complex, there was a unit that became available and I bought another one, another one bedroom, one bath condo. And I bought that one for around $58,000. And it just kept going from there where I’ve been trying to add one every year. So

 

 

00:08:35

Yeah, you have, you have seven properties that you own now for the, your cohost thing and you just picked up a Rental arbitrage property. What what’s, what’s pretty interesting though, is you, you got started really, you know, pretty, pretty early and you were picking up these properties, but you weren’t. How were you analyzing these properties? Did you know the numbers? Were you using comparables having a real estate background? I imagine that you maybe had a little bit of an advantage. How, what were you doing to be able to analyze these deals though?

 

 

00:09:00

Yeah. So just from the perspective having that real estate background, I definitely had comparables to know, I wasn’t overpay for any of the properties that I was buying so that because with MLS I up where I pricing on the Vacation Rental side of it, I would just look at the competition. I would look at the area that I was in and look within about a mile or two radius for similar properties that were comparable. And I would just normally when I’d start off, because I don’t have any reviews I was having, I was usually price about 10 to 15 below the market and the, then I would try to get my reviews. And then once I had about three or four reviews, then I could know that I could increase the price and just go from there. So it was basically just looking at the competition through VRBO, Airbnb flip, using all those sites, I’d even check out local hotels because of the fact that I had one, one bath, they were somewhat comparable to what a hotel room maybe. So I was just looking at all those and just putting the numbers into the system. And if it works, I would know I, cause I get bookings, I get occupancy. If I was a little bit higher than I would just bring the prices down. And I was very active with the pricing, looking at it active.

 

 

01:10:12

How, how big of a difference was it when you transitioned because you were using property manager first for that first property, second property, you were starting using evolve, but you were still doing some of the, some of the management yourself, but then you realized that, that you could probably do this business, maybe better yourself. How was that transition from going from using a property manager to managing it fully yourself and also scaling that business?

 

 

01:10:33

Sure. It went relatively smooth. And when I say that relatively smooth is because I’m a very hands on person. So one of the challenges for me personally was just kinda letting go because as I mentioned, I ne I was doing all the cleaning myself. When I first started, actually was meeting guests. I was meet, I was meeting the guests there, showing them everything, giving them a tour. And with my background real estate, you know, I love it was great. I got to meet people from all over the world. I had Canadians people from Europe coming all over and I’d at time answering the questions, but I realized that if I was gonna this to any degree, I couldn’t everyone in person. I couldn’t, I home finishing it because sometimes I’d day. So I, I realized relatively soon that in order for me to scale this in order to be successful at it any degree, I would have to kinda let some of those things go. So that’s when I hired a housekeeping service and I have couple housekeepers now. So that was really big for me being able to do that and that,

 

 

01:11:36

So you had your first property thousand 13, you purchased your second property and then by 2015 you had 10 properties and you were going full-time at this. What happened within those two year period? That’s a, that’s a big progression.

 

 

01:11:49

Yeah. So what happened is I, I picked up a couple clients of cohosting. So of those properties of those 10, four of ’em are cohost. And then I owned six and then the Rental arbitrage, that was something that was new. It really was because I was making a pretty good profit from each property and I’m good at saving. So what I was able to do was just go ahead and, you know, save up my money and then go get another one to go get another one. So the goal was to try to get a year and it was just from taking the profits from that and from real estate. And then just going to go get another one. And the price points were so friendly here in Phoenix is what made it possible. You know, it’s not like I’m California originally. So can’t and just so I think it was just really lucky. I was really fortunate to be here at a time where the price points were still REL relatively low to enter and to purchase.

 

 

01:12:43

What, what was the, what would be the difference of return? So let’s say because you started pretty early in picking up all these properties in a time where Phoenix wasn’t as the prices weren’t as exaggerated as they are right now. Sure. What, what was the price that you could get as a long-term Rental tenant though, compared to what you were making as a short-term, you know, even back 2013.

 

 

01:13:05

Sure. They weren’t even close. You can make so much more money in short term rental. I, I knew even though I’m in real estate, I knew I didn’t wanna be a landlord. And the reason was because I’d worked with so many clients, I worked with investors, but the profit margins were so thin that at the end of a 12 month lease, if the tenant messed up the property, you know, paint carpet, all of those type things, that’s your profit, you know, in the 13th, you have to get it ready for the next person. So I knew that didn’t really fit my personality for the amount of risk and for the return. So that’s why I fell in love with the short term rental is because, so your question was, how much is the rent? So a one at that time, a one bedroom, one bath in Phoenix would rent for about eight to 900 per month.

 

 

01:13:52

I was renting the unit out for approximately hundred night and I was getting, like I say, about 90% occupancy. So I was making 2500 2600 a month versus the 800 making three times as much money. And it fit my personality. Great. Because the way I had my cancellation policy, I was getting paid 60 days in advance. I didn’t have to chase anybody around for money. There was very low wear and tear on the property because most people, as you know, they’re just looking for a place that’s safe, clean. They’re gonna go there, maybe have some breakfast, watch CNN, and then they’re out. They’re gonna explore. They’re gonna grand canyon. They’re very, very low. And so it just fit my personality. Perfect. And it was triple the money. So it’s kinda like a no brainer.

 

 

01:14:42

Wow. I, that’s pretty crazy because that’s what people think when they’re getting into the space and they want to get into short rentals. They’re, they’re looking at that $2,500 versus the $800. But is that, is that something that any investor can get into or was it because that you were managing it yourself, that you were able to make these numbers possible?

 

 

01:15:03

I think it was a combination. I think anyone can do short term rental. If you have the right personality for it, if your customer service driven, it’s not really, it’s not really a real estate business in that sense. It’s more customer service. It’s how do you deal with people? How do you handle objections? How do you handle conflict? And so you always have to be able to say position customer and trying to that extra mile, if you don’t have that personality, if you’re really about the small stuff, like, oh, they lost a spoon, they lost a fork. How could they do? It’s probably not gonna fit your personality. It may be best just to get a property management company and you just get an invoice and a statement at the end of the month and you don’t know what’s going on the day to day.

 

 

01:15:44

It fit my personality because I’ve been doing real estate. So I know all about customers, how to handle different people and how to work with people to achieve what it is that they’re looking. And I always come from perspective of, I know people work very hard for that two week Vacation. So I wanna try to provide the best value for them and also provide the best customer service and nothing’s gonna run perfectly. So when there are those issues that do come up, try to resolve it as quickly and as easily as possible for the guest, not even about myself, but what’s gonna make them happy. And most of the time they just wanna be listened to, they wanna be heard. What’s, you know, that they’re, if there’s a complaint or there’s an issue. So that’s what I really try to focus on. But I think anyone can do the business, whether or not they can manage it themselves. Maybe, maybe not. It did fit my personality pretty well.

 

 

01:16:28

Yeah. I love, I love what you said. And that’s something that we always preach on on our other show Vacation Rental machine is that this is, this is not a real estate business. You know, there, there are components to real estate, but this is so much more hospitality. And you like what you said, having the personality to be able to do this is really what allows you to be able to reach those numbers and going off of that, you you’ve seen Phoenix really grow and the prices of increase and probably a lot more people are coming into the market as short Rental host. What, what what’s the numbers look like now? Is it still a green market? Is there still a lot of profitability or is it a little bit too oversaturated now? And there’s the rent’s too high, too many, too much competition. What, what’s your perspective on that?

 

 

01:17:08

My take on is that there’s always gonna be opportunity. Definitely from, I started in 2012 to where it’s at today. It’s definitely much more saturated. So I just have to change with the times. So for example, this past summer I bought another condo. I bought a two, two bath condo that cost me so you can prices haved since the last, but that cost me $160,000. I put another $20,000 for renovations into the property, head to toe new flooring, new paint, new, new countertops, brand new appliances. So what I’ve learned is you really have to step your game up. Now, if you’re gonna shine, cause there are lots of properties out there. You can click on them. And the pitchers aren’t done by a professional photographer are thelens are messed up. All those things that you could away in.

 

 

01:18:04

It’s not now. Definitely not. That’s not what I see. Especially with Airbnb plus programs, VRBO has the premier partner program, all those things you have to really step your game up. You have to have these moments, these social media moments for people. Now, this last unit that I purchased, I, I Aman, which is something I would’ve never about doing before I picked it up. It was a $400 investment, but it’s a really cool standup arcade. Pacman machine has a little stool with it. So I put that little investment there and put it in the corner for people that play Pacman, I felt like, okay, that’s gonna relate to my seniors. I could do get a lot of senior citizens and seniors that are coming down during spring training. It’s also gonna relate to younger people that a video game I that’s Bluetooth if you’re not doing professional photography and you’re not investing that hundred to, depending on what your market is and a professional photographer, you’re doing yourself a total disservice. So when I had my photographer there, I asked him, highlight these things, highlight the highlight record. And there are so many things that you do that one cost. Cause that’s the main thing for me. If I can have my one time cost, that’s fine. So long, it’s not a recurring monthly cost. And I’ve had my, since I’ve had that ran out, I literally had guess, oh, I love the PackMan machine. That’s the reason I picked your place. And that’s what I had envisioned for that based upon that simple investment.

 

 

01:19:49

Wow. So have you been tracking that and have you gotten that return on investment back?

 

 

01:19:54

Definitely. Definitely. It’s only been a couple of months since I’ve had the property up and running, but I know for sure, because people have told me that’s why they booked the place was because they saw that Pacman machine. I actually had one guest that I met in person and he said, man, they took me back. You know, that took me back to the mid eighties. It was so much fun. And he probably was in his, you know, fifties or something wow. Of that nature. So he really enjoyed it. So it was great.

 

 

02:20:17

Wow. I, I love, I love that jewel and I think that’s just so cool because that really is making the point that you’re doing things to be able to stand out. Is this moving forward though? Is, is it going to be putting in, let’s say those record players and those Pacman machines that’s going to make you be able to stand out if you just kept your properties the same. Do you think that you’d be able to do as well as you did prior?

 

 

02:20:38

No, I wouldn’t be able to do as well if I just kept everything the same. It’s definitely that’s the minimum bar for me now is to have at least a couple of focal points that can be highlighted or it’s some type of entertainment. I think it’s a given now you it’s a given everybody has smart TVs. That used to be something you could distinguish yourself with a few years ago. Oh, I have a smart TV with Netflix and you know, Hulu, everybody has that. Now. It doesn’t matter. Oh, it’s mounted. Okay. Everybody, their TVs now, you know, those things are all pretty standard. You should having those. You should have your TV as a flat screen should be a smart TV, comfortable beds. Everybody’s gonna have comfortable. Everybody has Casper and all these different companies out there that are relatively affordable and everybody knows you should have these comfortable beds and comfortable couch and dining. To me, those are just the bare minimums. So I think the things that you can do to stand out, whether that’s video games or that’s record the space for it, ping pong table, making it a game, you know, not where you’re gonna, but maybe monopoly and, you know, chess and checkers and all you highlighted that I have, but doesn’t

 

 

02:21:48

Agent and also purchasing a lot of properties yourself. You’re, you’re probably really familiar with what the market, you know, where the market is. Are you specifically targeting short term rental properties when you’re working with clients? Are you working specifically with Vacation rentals?

 

 

02:22:01

So no, I have all types of clients. So on the real estate side of it, I help out buyers. I help out sellers, people that may be looking for I, or even people that are looking for their primary residents. However, when it’s specifically short term rental clients that I’m working with, then yes, I can definitely them in the right direction as to which complex is gonna be friendly to it, which homeowner association is gonna be friendly to it, which ones stay of because they have things in the CCNs with restrictions as far as 31 to a minimum Rental, things of that nature. So it’s, it’s, it’s both.

 

 

02:22:33

And what, what are you looking for specifically with properties now when you’re planning on purchasing them, that would make sense as a good short Rental.

 

 

02:22:40

What I look for are amenities. If I’m purchasing in a condo complex, which is everything that I have right now, I haven’t ventured into the single family residence yet. But what I look for at minimum are a pools. Gym clubhouse would be nice. Things of that nature, barbecue clubhouse, all of those little extra amenities that you’re gonna have an HOA fee, but at least you’re getting something in return for that because that’s usually, especially when people come to Phoenix, that’s where they’re thinking about, they’re thinking about the pool, the hot tub, you know, Palm trees, those type things. So having amenities to say is the, but now when you’re outside you, the it’s a heated hot tub, barbecue lounge. I amen are a, I I’m sure everybody, it works for different people, but I wouldn’t personally buy something or recommend something that didn’t have at least those bare amenities that the community offers good location, closer to airport. That type thing.

 

 

02:23:41

What do you think are the biggest mistakes that people are doing? Because Phoenix in Arizona, it’s, it’s, it’s pretty short term rental friendly, and you’re talking about like HOAs and, and you know, condos. And those are places that, you know, the rest of the us, they’re like, oh, stay, stay away from those places. Stay away from, you know, certain states. But have you noticed that because it is so friendly there that people are coming into the market and maybe picking up the wrong properties or doing things wrong. What, what, what’s your perspective on short rentals in the Phoenix area? Because it is so friendly.

 

 

02:24:13

Yeah. So I think that you, there are a lot of people that have jumped into it have jumped into the Vacation Rental Rental market. Cause like you said, Phoenix is very friendly to it. I think some of the things that they could possibly be doing wrong is I pricing. like sometimes they’re pricing too low. Honestly. I think that sometimes they’re jumping into it and they may have been coming from an investor’s perspective where they’re used to a thousand dollars a month in rent. So if they can get 1500 or they may be leaving money on the table, I think sometimes not having a professional property manager or some type of insight into thing, you can leave money on the table. I also think that bringing up photography, I think that from I lots Airbnb and I’d say only about the market, have those photographs, lots of like, it’s just on the, that type response time.

 

 

02:25:05

It’s when I look at the competition, sometimes I see on there, they get back within 24 hours and that’s just way too long. And maybe that’s because they have a full-time job, maybe that’s because they have a family, they can’t respond. So I think that, I know for sure that the reason that I keep my occupancy so high for myself and for my clients is before even Smartbnb, as we talked about just been using that for last couple weeks before all of that, I would respond to people on average within about seven minutes. That’s just being on my own because as, as someone sends me message, I’m responding, I’m giving something, Hey, even if I’m a, you know, I’m that guy that will pull the, pull my jacket over. So it doesn’t disturb anybody else, but I’m, you know, I’ll, you know, you think, oh, I’ll get back in 30 minutes is good enough. No, whoever responds to that client first usually is gonna be able to have a higher probability of getting that booking, which is more nights, more money, more probability. So those are the top three things I would say you have to do in order to be successful. It successful.

 

 

02:26:28

And you’ve, you’ve got also a diverse portfolio. You, you do cohosting, you have a Rental arbitrage unit and, and you own, can you give some perspective on the different models and which is the one that you prefer?

 

 

02:26:40

Sure. I’m a I’m in real estate. So I love owning things. I think that Rental arbitrage is great. I, I really do, but I do like owning property for the equity that you can get potentially if the home appreciates, I like that the tax incentives are writing off the tax insurance. I like that. And ultimately, if it is a down market or if something should happen and Rental arbitrage become less friendly to that, at least I still own this piece of real estate that I can sell that type thing. So I say primarily I like owning things. I’m an owner. However, for return on investment, if you’re just looking at straight ROI on your, I think Rental arbitrage is the way to go this past summer, I got my first property and I was able to furnish that property for five to six, which is very affordable.

 

 

02:27:32

I have my lease. I right now for the, of, I have approximately of bookings and my rent at that property is 1200 a month. Yep. 12 bucks a month. I signed a five year lease. This is a private homeowner. So I signed a five year lease with this gentleman because he was looking, he, he knew that, oh, that’s great. I get somebody in here for five years. He didn’t to have that. So my, my rent, there is 12 a month with internet electricity, Netflix, that type stuff. It’s another 2, 2 50. So my break even on that is about $1,500 per month. I divide that by 30 days, I’m looking at about $50. So anything over $50 a day is profit January. I’m renting out approximately 175 to 200 per February, March, same way. So during those three months, it’s gonna pay almost for the entire year’s worth of the rent.

 

 

02:28:34

And then in the summertime, the goal, again, prices are gonna drastically, but if I even, and then just wait for those months gets up, I think I have about tens now, Airbnb, I’m a super host on Airbnb. So all those different type things help. So for my investment, I’m not a mathematician, but it’s gonna be a much higher return than my that I spent on the property that I bought and renovated. So I think every model can work. It just depends upon what you, what your exit strategy is. All those type things. I love it all.

 

 

02:29:10

I mean, I mean, no, no one, you know, now with the Rental arbitrage model, is that something that you would double down on or are you still kind of keeping J that as just maybe a way of taking that money and then diverting it into your own owning them?

 

 

02:29:25

That’s a great question. So I’m actually in right now last weekend because the Rental arbitrage is going so well with that first property, which is a two bedroom, two bath. I went to six different complexes in the Phoenix area. That’s around area and just pitch them, you know, this is what I’m doing. This is what I’m looking to do. And I nos, but I’ve even offer to pay three months in advance if that would kinda the pot. So Rental is definitely something that I add to, I don’t see there’s, there’s add. And it’s just diversify it’s that’s that’s.

 

 

03:30:18

And in that in market, you know, Arizona, it is such a friendly market for short rentals. Has, has, has that gained a lot of attention of a lot of people that are trying to, you know, take advantage of that or using these types of models, like rent, like run subleasing.

 

 

03:30:35

Yeah. Yeah, it definitely has. And historically Arizona has been very friendly, but I just read an article that in the new year in January, I guess it’s going to the state legislature, there have something on the ballot with regards to short term rental and maybe limiting days or some. So it hasn’t been voted on yet, knock on wood that they still remain friendly to it. The governor has maintained that he wants to be probusiness and friendly to short term rental. So I’m, I’m hopeful that it will continue that way, but it definitely has brought a lot of people to the, to the market for that.

 

 

03:31:08

Also your perspective on cohosting. How, how has your relationship been with the cohosting and the clients and, and the returns on that as well?

 

 

03:31:15

It’s been great. So I have three clients. I have one client that’s on the east coast in Maryland, and they’re wonderful people, husband, wife, and they, they have a couple of units that I helped them purchase last year and they rent those properties out and I do the cohosting for them. And then I have two other clients. One client has a two, two bath, other client has a one, one bath. So that’s great as well. The, the model that I have with them is I do everything. I just invoice them at the end. So I handle all the guest communication. I handle all of the supplies. I handle housekeeping, coordination, guest communication reviews. So it’s totally hands off for them, which I think is great for them because that’s what they wanted. They wanted something that would kinda just run for them as a, and the way that I work, I look at those properties as if they’re my very own.

 

 

03:32:05

So the same eye, the same eye to detail. When I look at it, I give it the exact same care, the exact same detail, because I know that I take pride in what I do. And I know that the, if I want somebody to do the same thing for me, you know, it’s a, win-win that the best job that I can do for them, it’s gonna get more revenue for them, more revenue for me. So that’s the way I look at those properties. And I love, I think it’s a, again, it’s another way to diversify. I think that any way that you can diversify yourself in this day and age when it’s, so do so, there’s so opportunity, that’s Rental cohosting, you can make it, you can that’s, you know, that’s something for all the listeners out there. Don’t study things too hard. Don’t overthink things too much. Do it, you know, do your research for sure. If you, if you have that personality, but ultimately you have to pull the trigger. You have to go out there and you try it. And I think for somebody that’s limited, I think Rental arbitrage is a no brainer. That’s the way don’t loan. That’s pictures

 

 

03:33:20

Comes a point when you can only own so many properties and then you have to, you know, cause are you, are you taking all of these with cash or are you getting loans on these?

 

 

03:33:29

So I’ve been fortunate enough that the condos I’ve been able to buy a price point were afforded me the opportunity to buy them all. So I’ve been very, very fortunate with that. So those properties, our own free and clear there’s no mortgage or anything of that nature on those. And then the cohosting, you know, obviously I don’t own the properties there. So Phoenix market has been very good to me.

 

 

03:33:51

Would you, would you keep on doubling down in the Phoenix market or would you be open to going to new markets as well?

 

 

03:33:57

You know what, that’s a great question. At one time I went to Florida. This was about three years ago. I went to, I went to Orlando. I also went over to Tampa cause they have training. So I different and were to, would be for, and I considered that market, but I one there, I didn’t know anyone there and I still don’t. So I would be open to it for the future. I’d never say never, but it’s not something I’m actively looking at right now.

 

 

03:34:30

What has been the most challenging part of scaling your short Rental business?

 

 

03:34:34

I’d say the hardest part is finding good partners as far as housekeeping and cleaning, because I don’t do any of the cleaning myself, unless there’s like an emergency or if it’s a really, really busy time, then I’ll jump in. But the hardest part is really finding a cleaning service. That’s reliable, somebody that’s gonna do a good job, have that attention to detail because that’s what guests are looking for. That’s the main thing when they’re there, if they walk in there and they see a, on the bathtub, they could be a great property with everything else. But if they that that’s gonna give you a four star instead, five star, you get, you know, it’s just negative all the way. So thinks whether that’s housekeeping handy that are that’s.

 

 

03:35:22

And is anything that you’re doing to be able to have your guest leave positive reviews.

 

 

03:35:27

Yes. So one of the things that I do and I it’s, something is just implementing. I check in with them the day after they check in. So that right after that morning, when they wake up, I have an email waiting for them and I just am asking them, Hey, you know, hope I see everything, hope everything’s going well, that you checked in smoothly. So that I feel that little extra touch that shows that you really care. Another thing that I like to do is when the day before that they’re checking out, I just send them a quick text or message through Airbnb and B them for their visit, just giving the reminder friendly reminder of the checkout time and also welcoming them back. So those are key points. And then after they check out, usually Airbnb will send a request for review. And I just ask them, you know, if they, if they a, that, and I tell is I say, you know, is to try to earn a five star review. And hopefully I did that in your case. And if there’s anything that I can prove upon, let me know, but I do use the word earn and not, not give it to me.

 

 

03:36:28

And I wanted to go back on something real quick, because you’ve been, you know, just realizing that you’ve been full-time short Rental property managing for nearly five years now. What, what is, what is a day in the life of a full time for five years look like

 

 

03:36:44

It’s a long day. I’m Al you can ask my girlfriend I’m always on. And what I mean by that is I’m very attentive to my guests and what it is that they need, what it is that they want. So usually when I wake up in the morning, I check my email inbox, check Airbnb VRBO, flip key. Usually it’s a good morning when I wake up and I see that there’s money. That’s there waiting that I had a reservation that came in. So it’s just responding to those guests, thinking them for their reservation, checking to see. And I have all this automated now, just checking to see what time they would be arriving. What time did they, would they be checking out if they needed an early check in early checkout, that type thing, asking for their contact information, what brought them to the city? What brought to Phoenix and I, all those.

 

 

03:37:34

So for I’ll give you I husband, unfortunately. So she was here with her husband and they live locally, but they live in the east valley. They live like in Chandler and his treatment was gonna be taking place closer to where I have one of my condos. They stayed with me for about 13 nights. And she told me that. And because I asked, oh, what brings you to cause not everything is a happy Vacation. So I wanted to know what the reason was. And she told me that her husband had a stroke. And so I told her, you know, I’m really sorry about that. And hope that has ay recovery. And I related to that because my father, I have past experience. My father had a stroke back in. So I sent her personal message and I just told her, you know, I know that having a can be difficult, not for the stroke victim, but also for the loved ones.

 

 

03:38:23

I said. So, you know, I really just wanna commend you for taking care of your husband, tell your husband to stick in there, you know, with all the treatment occupational therapy. I know there’s a lot that with that. So, and she was really moved by that. You know, she was really thankful that it wasn’t, and it wasn’t just like a Rental experience. It’s not just, you know, you’re my guest and I’m the host. You know, I really try to bring a person experience when I can to each guest. And she checked out this past Saturday and she said that she was gonna be coming back the following week. And she would love to stay at one of my properties. The one that she stayed at was not available, but I did have another unit that was available and she’s gonna check in tomorrow and they’re gonna check in for three nights and it becomes, you know, more of a friendship, so to speak though. I’ve never met, never seen her or anything like that. So that’s, that’s really powerful to, you know, that’s that I really enjoy this business is because I get to host people that are on Vacation they’re for just a great time, but then people that are real life stuff that happens. So if I, for a to, and you know,

 

 

03:39:36

Really like that, you shared that because it, it, you know, especially with when, when we’re talking like on our other show, Vacation Rental machine, we’re always talking about like automation, but we talk about the hospitality and, and it really goes in hand in hand, but I really like what you made a point is that it can’t just be fully automated because you would’ve missed something right there a hundred percent. But that, that point to be able to relate with someone, to be able to add that human touch where, you know, maybe she wasn’t expecting that, or maybe she wasn’t looking for that, but because you were able to provide that, that human aspect, you’re never gonna get that any anywhere else.

 

 

04:40:10

Yep. I with that. So yeah, I mean, that’s a typical day coordinating housekeeping, taking care of all that, making sure all the payments get sent out, making sure my housekeepers get paid on time. All there’s, there’s lots that goes, goes along with it, but it’s all fun. I mean, it’s all great. I wouldn’t have it any other way. I have worked as an employee before and I’ve worked for some great companies and I’ve worked for some good companies and I’ve worked for, I’m not so good companies. So I know what it it’s like. And I wouldn’t trade it for anything in the world. The fact that I have freedom, that’s what successs, to me, the fact that if I wanted to go, my niece graduated from UC Berkeley. The fact I don’t have ask anybody. If I can go see her or go see her for her graduation or to Hawaii, I don’t have to with anybody, anything.

 

 

04:41:00

And if you have the right systems in place, if you have the right partners in place and you treat people the way that you would like to be treated, you can be successful. Not only in anything, but especially in short term rental Vacation. So I wouldn’t change anything in the world with owning my own business and expansion. You know, you can grow it to whatever you envision it to be. However you, however big you want something to be. You can do it. And I think with the short term rental business, that’s, that’s evident, you know, if you wanna go out and get another Rental arbitrage property, there’s nothing stopping you. You can go do it. You just have to be persistent. And it gives you freedom. I mean, there’s not many people that can say, I wanna go on Vacation for a month or I wanna go do this.

 

 

04:41:42

They have to check. They have to check somebody and there’s nothing wrong with that. You know, everybody has to start somewhere, have a job. But if you have an entrepreneurial and you have a drive to wanna become a owner, I think that short term rental is a great way to get started. And you never know where that might lead to, you know, that might lead into something else or something, something there, but you get started in it. And your mind starts to, you know, you start to think differently. You start to think as an owner,

 

 

04:42:06

You’ve been in the space for, for a while now, you know, seven, seven years. And you’ve, you’ve seen the progression of Airbnb. You’ve seen the market. Are you not worried that there’s too much market interest or that there’s oversaturation or all the new people that are coming into the space? Or what’s your take on that?

 

 

04:42:23

No, I’m not worried about it because I set a very high bar for myself and for my properties. And I think that the attention to detail that I give, I think that because it’s that personal touch, none of us can be replicated. You know, Julian can’t be replicated the personal customer service that you give that can’t be replicated that only belongs to you. And you know, the customer service that I have, it can’t be replicated. You know? So I think that so long as you can stand out because so many people are getting into involved in it, they’re getting involved with it many times for the money. It, and don’t, money’s great. You know, we all need money, we all, but if you’re at which they’re, and that will eventually over time, reflect in the reviews, reviews are the bread and butter of any business nowadays and especially Vacation Rental.

 

 

04:43:24

So somebody gets into it strictly for the money side of it, which I don’t know what percentage that is, but let’s just say half of people get into it just for the money side of it. That’s gonna reflect in the reviews over time, because there’s not gonna be the care. There’s not gonna be response. There’s not gonna be those things that are in place, but the fact that I’m not in it solely for the money, but it’s also provide an experience. It’s also to provide all those different things to my guests. I think that’s, what’s gonna make it different for me or for the next guy that does it that way or the next gal that goes that way. So I think competition is a great thing. I really do. I always encourage people to there’s more than enough business out there for everyone. I don’t feel like there’s anything that’s in short supply because you will always, the, the good will always rise to the top and everybody else will kind of plateau.

 

 

04:44:14

And there’s be certain people that get out of it. So competition is there, but it, what it’s done is it’s enhanced my business development. It’s enhanced my eye. It’s enhanced my key to detail, all those things, listening to your program, all those things have really helped to say, like when we talked earlier, I just started using dynamic pricing. I never used it before I started recently using I never used automation with Smartbnb. I start using now all of these things are investments that I have to grow. And I realize that because if I don’t and everybody else is using it, where is it gonna leave me? So I think that saturation is there, but you can still do it. There’s still an opportunity there. And you just have to see what makes you unique and what’s different. And then bring that to the table.

 

 

04:45:02

Are you because you, you are a real estate agent and you’ve been doing this for, for quite a long time. Are you doubling down on the property management or are you just holding the, the real estate there? Are you, are you playing with both? What what’s, how do you manage both of those?

 

 

04:45:16

So with the property management so far, it’s just been word of mouth. It, it hasn’t been something that I’ve actively been going out to seek or anything of that nature. That’s something that for the new year, for 2020, that’s definitely on my business plan to go out there and develop to do more of the property, manage. I’m open to that. And I think it’s a great way to grow, to grow my business in a different way, because I can’t own all the real estate. I can’t own everything. So it’s better to go out there and help others. So, so it’s definitely something that I’m looking to grow.

 

 

04:45:45

And as far as your, your real estate background, are you planning on still actively pursuing that? Or is it because of, you know, short term rental and, and this type of, you know, the business and the returns that you’d be more interested in going that way compared to traditional real estate transactions?

 

 

04:46:05

Sure. So traditional real estate, I will always have my real estate license. I’ll always practice real estate cause I love real estate right now, though. Most of the business is gonna be referral business, past clients, things of that nature, word of mouth. What I’m really looking to grow is the short term rental side of it. That’s through cohosting Rental arbitrage, purchasing properties. That’s where I really envision myself is delving even more so into that space. And then the real estate of it will play a key factor because there are gonna be people that are looking for to get into that space and I can help them purchase the property or sell the property. That, that type thing.

 

 

04:46:43

What’s your, what’s your reasoning? Is it just because you enjoy the property management Airbnb stuff or is it because it’s more scalable?

 

 

04:46:51

I think it’s both of those. It’s definitely more scalable. I enjoy the lot more sometimes with the real estate side of it while I, that is my background. That’s what I’ve done. I, I like new challenges. You know, it’s something that when I, I start, like I said, five, so I’ve been doing it now for about 14, 15 years. And it’s something that I’ve enjoyed, but I want something new. I want something that’s different. And that’s what the short term rental really brought to me.

 

 

04:47:17

And, and what would you do if you did have to start from scratch?

 

 

04:47:22

If I had to start from scratch, number one thing would be don’t overanalyze. Anything too much, just get started. I have done that so many times where the opportunity then passes by because by I, so I started that’s number, number, try to finds handy that type to get that, try to get the help, ask for the help. I would say yourself, you know, I wasn’t, I wasn’t videos or anything like that’s asking the right questions, seeking people that have been where you want to be and reaching out to them, asking that usually people are very helpful, you know, using people are gonna do that. I’d say that’s gonna be key. And then also just having the confidence to know that if this is something that you wanna do, you’re gonna be successful in it. You know, everybody’s gonna be a little scared or insecure when they first start anything new, but with enough practice, enough time, you can get there and your partners treat your partners.

 

 

04:48:37

Well, your cleaning staff, your cleaning partners, your handyman, all of those things treat them well, treat them with respect because they’re going to be, and they are the bread and butter of what it is that you who do. And if they care about your property, it’s gonna be because they care about you. If you’re just saying, I’m gonna pay you 75 for cleaning, go do my job, go do the cleaning. Cause I don’t wanna do it. If you look at it with that attitude, they can see that they will know that. So treat your partners. Well, treat your guests well be customer-centric. You know, those are all just a few things that I can think of off the top of my head in order to be successful in this space.

 

 

04:49:18

I know you mentioned quite, quite a few things, but if you could give one piece of advice, who’s looking to get started into this business. What, what would that be

 

 

04:49:25

Start today? That would be my advice. If you’re doing Rental arbitrage, you might be scared. Go to an apartment house, tell ’em what you wanna do. Just get started just because what’s gonna happen. It’s gonna become easier. When, when you wait too long, you become scared the opportunity passes. So just, just go do it. That’s that’s what I would recommend. You know, if you get started in that space

 

 

04:49:51

And because you have, you, you have done all, all the models, you’ve done the home share, you’ve done the arbitrage cohost thing owning where, where do you see would be best fit for people that are just getting in into the space?

 

 

05:50:03

I think if you’re just getting started and you have an opportunity, an extra room, I think a shared space and your personal space would be a great way to start there. Reason is because you’re already there. And so long as you’re comfortable with new people in your home, trust me, Airbnb people, everybody’s good. You know, 90 those horror stories that you hear, that’s exactly what they are. They’re horror stories that happen every once in a while. It is not the truth as far as what the standard is of what it’s. So, as you mentioned, I do cohost, I’m sorry. I do have a shared space in my home. I have a five bedroom home and I rent out two rooms. During the peak season. I rent out an upstairs bedroom and bathroom and a downstairs bedroom bathroom. And in a year during the peak season, I have about 60 different guests that come into my home.

 

 

05:50:54

Everyone has been great. You know, you meet new people, you have some experiences that you get to talk about. And most of the time they’re just gonna be out and about. They don’t wanna hang out there at your house. Most of the time, they’re just want a place that’s, you know, clean. They can get a good night’s rest and then they’re outside seeing. So if you’re just getting started, if you have an extra room or an extra space, I’d say, throw it on Airbnb and, and rent that out as a shared space. That way you’re gonna get used to having customers. You’re gonna get used to having people coming to your space, what their questions are. I think that would be an excellent way to get started and help to that your mortgage and or rent.

 

 

05:51:30

And going off of that, is there, is there a house rule that you’ve started, including from all of the guests that you’ve had that you, that you, you wouldn’t leave without

 

 

05:51:40

That I wouldn’t leave without, I would say yes, I am a big strict, no something that you can’t smoke inside my home or in the backyard. So that’s a rule that I have not only for my own personal home, but also for all my Rental properties. My number house rule is no, because I don’t, I that its how many guests have told me, oh, I chose your home. Cause it was non-smoking. So I think that would be the number one rule for me. No, no drug use that type stuff.

 

 

05:52:19

And what’s a question that, that you have maybe for someone that’s in a similar place than you, or maybe the next step in your progression for scaling, what’s a question that you would ask them

 

 

05:52:31

Wanna know because I’ve been fortunate enough to buy the properties, cash. How do you really scale as far as if you wanna use leverage? I know there’s hard money lenders and things of that nature out there, but what would be their, their recommendation as far as using leverage to get let’s say like a four unit. Cause that’s something that’s also been on my is getting like ax four unit or six unit place. That’s all in one and I can run it just as an Airbnb. So you have the economies of scale with being able to have housekeeping all there. So that’s something I’d really be interested in knowing how do you get that leverage? What do they recommend as far as getting it and then also the aspect, what people that are running four unit three unit, six unit places, what would their advice be on getting those properties and maintain them? Well, what amenities would they provide? If you have that space, would you get a pool? Would you put in a pool? I think that’s something that I’d be interested in hearing from somebody that has more experience than I do.

 

 

05:53:27

Awesome. Well thank, thank you so much. And is there, is there anything that you’re doing now, like any books that you’re listening to or books that you list you can tell? I, I only listen to audio books, but are there any books that you’re reading or are things that you’re following or something that has really changed you before?

 

 

05:53:43

Yeah. As far as things that I’m doing, I’m listening to I to is how I, which NPR and I think it’s it’s I or so. And it’s I, what he does is he interviews different people, just like what you’re doing. And it’s people from all different types of walks of life. He’s interviewed people from Birtch to mark Cuban, the guy that started Dyson vacuums. He has dozens of people that he is interviewed and listening and usually between like 30 to 60. So it’s not that much time. And it’s really interesting to hear where they started, where they were at, where they’re going. And it’s really, for me, you know, ITT like it. But it’s like started does that everybody, usually they have have, they have these things it’s it’s very far and few in between that things start off a hundred percent. Right. And I remember one thing I listened to a podcast with mark Cuban and the guy asked him one of the things he asked him at the end of each podcast is do you think that your success comes by about by luck or is it’s just through you and your hard work ingenuity?

 

 

05:55:09

Which one would you recommend or which one would you say? And Cuban said you have be to be a billionaire in his opinion. He, he sold company at the right time. It was at, you know, Yahoo or whatever. He said, you have billionaire, but you away tomorrow. And I can be a millionaire, like no doubt. He said, what I would do is I’d have a sales job in the daytime. I’d be a bartender at night. And in the evening time I’d work on my own plan. Those would be the three things that he would do. So I kinda agree with that. I think that you have to be pretty lucky, kinda like win the LA to be a billionaire, but I think anyone could become a millionaire it’s it’s achievable. And I think that if you, you work hard, you go at it. You can definitely do it. So I’d say listen to more podcasts. I, I think that would be my recommendation.

 

 

05:55:59

Wow. Thank, thank you so much, Joel. I, I just wanna comment. I, I think you just have such a wonderful personality. You’re very, very bright and very warm. You even have the sun shining down in your face right now. It, it, but thank you so much. You you’ve shared so much really golden information in this episode. If anybody does wanna reach out to you, if they have any questions or if they’re maybe looking in the Phoenix area, what’s the best way to be able to reach you?

 

 

05:56:21

Yeah, you can out my cell phone number. If you want that. It’s 6 0 2 6 8 8 4 0 5 9. Hopefully I don’t get blown up too much now, but that’s dangerous. Or my email, my emails, Joel Edwards, Gmail dot. So I’m pretty. Anybody has any questions? Just

 

 

05:56:38

Awesome. Well thank, thank you so much, Joel again for, for taking the time and until next time host nation, keep on hosting. Hope you host benefited from the show. If you found value, please going 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.