Julian Sage:                       00:00                    In this episode, we’re talking about rental agreements and things that you can be putting in them to protect yourself in case of situations like a pandemic or recession. So stay tuned.

Julian Sage:                       00:11                    Vacation rental machine helps host just like you learn how to start, grow and scale your short term rental business. The show’s all about creating systems that help you automate your business, give any more time and money freedom. If you’re ready to start living the vacation rental life, then subscribed to this podcast today, come and join us on our Facebook group, the host nation, where we’ll be talking about starting automating and scaling a short term rental business. Now onto the show.

Julian Sage:                       00:37                    Hey, welcome back host nation to another episode of vacation rental machine. I’m Julian Sage and Jon is still in the garage or his library. So we’re talking about things that you could be putting in your, or what are you reading, Jon back then?

Jon Bell:                              00:52                    I’m just grabbing a book. That’s all.

Julian Sage:                       00:53                    Grabbing a book. Right. One of the things that we are learning right now is things that can be put in our contracts to best protect ourselves. Now, Jon, is this something that you put into your contracts to be able to mitigate some risks? I know there’s companies out there like Saunder lyric and right now they actually work with apartment complexes to say like, Hey, if we hit like a certain number or if the occupancy drops or if there is in one of these black Swan events, then they will be able to delay some type of mortgage payment or rent payment, whatever that is. Have you put anything like that into your contract to let your landlords know about these types of situations?

Jon Bell:                              01:32                    Unfortunately, I am not a big player enough to really do that and these types of agreements normally come out by huge players in this space or players that can come out and demand I need two floors, three floors of your entire building to use what for my uses. And when you can do that, then you have that technically swag power to try and just go out and say, Hey, if the market crashes 700 points, I don’t owe you a payment for that month. And that is a good indicator of the economy, right? If it drops down 700 points, then that technically means something is wrong and I get one month of free rent or maybe it goes to the back end of the contract. But these are things that we should start to think about because we are all experiencing this at this moment. Maybe our clause says in the beginning that in case something like this happens, I’ll be able to terminate the lease at just one month’s payment and then that’s your exit.

Jon Bell:                              02:36                    It possibly will not be as hard as what we find from Sonder lyric and some of the larger companies that have millions and billions of dollars to actually swing and throw around. So we need to kind of, I think a little smaller, but we do need to kind of protect ourselves getting an early termination out of some type of black Swan event. It’s something that I incorporate in all of my contracts from here forward. And what are the types of things that you will be putting in your contracts? Because what you do, Jon, is you’re actually working in primarily some of these larger units, buildings. They’ll keep on feeding you more and more properties. Are your contracts going to be modified or is that something you can bring up to the owner of smaller multi-families when you are a little bit closer to the investor themselves?

Jon Bell:                              03:22                    The smaller multifamily owners probably will be a lot easier.

Jon Bell:                              03:27                    It is something that I will talk to some of the larger reap managers about and then let them know, Hey, this is just some protection for myself because we continue to amass more and more units inside of your building. I feel as though it’s only fair that we have something that protects the both of us.

Julian Sage:                       03:44                    Now, Jon, we’ve been actually looking at a few leases that people have been signing, just people coming in through STR broker and offering for us to look at their businesses. What are some of the things that you’ve seen though with contracts that are coming in? Just one of the things that you do want to precaution people that are getting into this business model with the master lease rental arbitrage.

Jon Bell:                              04:03                    You know, one of the things that is a little disappointing because I feel like there’s a lot of good information out there about this one topic.

Jon Bell:                              04:12                    It’s really about what we are signing when we are acquiring units. And yes, even though somebody’s word of mouth says, Hey, you can do this, what’s your contracts say something different, it’s something that you really can’t hold up. They, if, if the management company switches out in the middle of whatever then you have somebody new that’s coming in and they’re going to challenge you and say, Hey, this is your lease, so you have to stop doing this. And then what, what can you do then? If you can’t market on Airbnb or any other marketing channel that’s online, or maybe they say, Hey, you need to rent it out for 60 days or more. So it’s very, very, very, very important to know what you’re signing, to write an amendment to something if you need to alter what it says in the agreement itself.

Jon Bell:                              05:05                    Yes, sometimes this is okay if somebody responds back to an email that says, yes, you are permitted, that’s fine, but you need something in writing that says, yes, you can do this. It has saved me on two of my units. When the management company got swapped out over the Christmas holiday and come the new year, there was a brand new face. I literally delivered chocolates to this office and nobody was there. So make sure you’re signing the right stuff. We’d like some of this stuff that’s coming in to STR broker. It’s just we can’t move forward when the leases or the contracts are set up just like that.

Julian Sage:                       05:47                    If you are trying to find the right example amendment for your business we do offer them as a part of the VRM formula. So when you do become a member of the VRM formula program those contracts for co-hosting, rental arbitrage are included. We will probably also be listing them back on the store available ala carte. So just follow us on shorttermsage.com and if you subscribe to our newsletter, we’ll also keep you up to date these things do become available again. But if you do want everything included, everything like our message templates, our contracts, everything that we use in our own rental arbitrage and co-hosting businesses, then you can get all of those through the VRM formula program, which still is going to be offered at the early bird discount price just due to everything that is happening with this pandemic. But as soon as this is over, we will be raising the price back over to our regular retail price.

Jon Bell:                              06:40                    Alright. And today’s question of the day is, have you signed the right agreement? Can you list on Airbnb and other platforms within your lease agreement?

Julian Sage:                       06:52                    Leave it in the comment section down below.

Julian Sage:                       06:55                    Until next time, host nation, keep on hosting. If you’d like Jon and I to answer your guys’ questions and be sure to go to the host nation Facebook group and use #askVRM. Hope you hosts found value in this episode. If you did, please go on over to iTunes and leave us a review as that would greatly support the show. If you’d like to connect with Jon, the community and I, then go on over to our Facebook group, the host nation, talk to you hosts in the next step episode.

Julian Sage:                       07:19                    Keep on hosting.