Today I had the honor of speaking with MiLo Chan. MiLo and his wife Chandra were able to quit their full-time jobs after stumbling upon Airbnb and realizing how well it was in their market. MiLo and Chandra decided to move into their parent’s basement temporarily to rent their home and during this time they were able to save enough money to purchase another property.
From there they have been able to scale up to rental arbitraging 3 properties while owning 2 while also giving them the freedom to quit their jobs and focus on their vacation rental business.
In this episode, MiLo shares his journey in becoming a full-time host, how he uses dynamic pricing, and his strategy to succeeding in a market that undervalues their properties.
Video Transcript
00:00:00
Looking at those prices like holy moly, this is like at least double other people in Chinatown were doing. I was like, are people really gonna book those prices? And they ended up having so and generate even more money. So even just from one property itself, like one of us actually could have left.
00:00:20
This is episode number 12 of short term rental success stories. Welcome back to short term rental success stories. I’m your host, Julian Sage. This is 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. Since we are a new show reviews would greatly help us grow. So please go on over to iTunes, Spotify, Stitcher, Google play, YouTube Facebook, or wherever you’re actively listening. And please leave us an honest review and we’ll give you a review or rental a shout out in the next episode today, I had the honor of speaking with Milo Chan Milo and his wife, Chandra were able to quit their full-time jobs after stumbling upon Airbnb and realizing how well it was in their market.
00:01:01
Milo and Chandra decided to move into the parents’ basement temporarily to rent that their home. And during this time they were able to save enough money to purchase another property. From there, they’ve been able to scale up the rental arbitraging three properties while owning two, and also giving them the freedom to quit their jobs and focus on their vacation rental business. In this episode, Milo shares his journey in becoming a full-time host, how he uses dynamic pricing and his strategy to succeeding in a market that undervalues their properties. If you haven’t done so already going over to our Facebook group, short term rental success secrets to talk with Milo and other successful hosts. If you’d like my show notes for this episode, go to Short Term, Sage dot com backslash eat P 12. Or if you’d like my show notes center directly to your inbox every week, then go to Short Term Sage dot com backslash show notes.
00:01:47
So if you’ve been following this podcast for the past few months, you’ve probably known that we haven’t listed our unit during the, during these past few episodes because of some extenuating circumstances like dealing with contractor. And then we’re waiting for my wife to be able to finish the mural back piece. And I I’m very happy to say that we are officially Airbnb hosts. So your favorite hosts just got a little bit more host here. So we listed our property on the evening of May 22nd. And by the following morning, we had a weekend booking. And then during that weekend booking, we had a booking that was immediately following, like on that Tuesday. And then that booking ends on a Thursday and then we have another person coming in from Thursday to Sunday. And then after that we have a another month long booking. So, I mean, it’s just back to back to back immediately.
00:02:39
And we were not expecting that. It’s nice being able to implement some of the stuff that all these hosts have been sharing. You know, like I said, th this, this podcast is also kind of my success story because I want to share my progress of how the listing is going and what we’re doing. I’ll probably make another episode talking about some of the, some of the tools that we’re using to kind of automate the business and kind of the complications that I’ve kind of and things that we’ve kind of discovered while doing this because, so I do work full-time, I’m active duty coast guard, so that, that does take up a good, good portion of time. And I’ve also got the podcast and some other stuff that’s going on. So I really want it to be able to make this as, as automated and as, as easy as possible to relieving the burden, but still keeping that quality for our guests. So, yeah, so some exciting stuff. I just wanted to share that with you all that we are now official hosts, and we’re, we’re just excited to start sharing this journey of our success story and how this will kind of pan out with all that being said onto this week’s conversation. Welcome back hosts that I have the special honor of speaking with Milo Chan. Milo, would you please let the audience know a little bit more about who you are and what inspired you to get into short-term rentals?
00:04:00
Yeah, so my name is, yeah, my name is Milo and my wife and I started Airbnb about two years ago, June of 17, I believe. And we just have five properties right now. And we got started because randomly one of our friends, one nights kind of give us a call because she emergency situation. She needed to a place to live. And so she stayed with us essentially for a couple of months while she was transitioning through her life. And, and it seemed like it was going to be like a, like a long-term deal for the most part. And we were fine with it. And we initially, like, we didn’t actually expect her to pay anything. And so she ended up wanting to look for a place to stay and live, and we offered her, like, we just offered up our place pretty much free, but if you want it to pay, she was saying, just, just if you want to do something as in this, paid this much, and then it’s like barely anything compared to what she was looking at.
00:05:10
So in our minds it was like, oh, wow, that’s actually a, like a, an extra few hundred dollars every month. And that covers those to some, like our utilities and minor expenses and stuff like that. Like, that’s not nice. And, but then I, as quickly as she came, she, she actually had to leave too. And so we were thinking like, oh man, it’s like, it would’ve been nice to every month to have like a little bit of money coming in. And like that, especially in, we were in a we’re in the process during that time of kind of figuring out other things to do and other ways to make money as well. And I never really heard too much about Airbnb then or short-term rentals, but I knew I wanted to get into real estate. I was watching kind of tons of things and three sessions of the things about real estate.
00:06:01
And all of a sudden, I, I came across a video of this sky who whom eventually became pretty much my mentor in this, in this realm. And, and then I started learning about what Airbnb is and w w like how she was living, he was making a lot of money. I still actually have this big pot, but he’s making me more money now and says, okay, well, that seems, that seems pretty interesting. So we talked about it and we ended up just figuring, I was like, Hey, let’s, let’s do this. So we turned our original home, which was a three bed, one and a half bath condo into an Airbnb. And we spent like pretty much the month prior to when we first launched, like, we were just researching like day and nights constantly about everything. And, and then, yeah, we had, we ended up having to move into my parents’ basement to do it, and pretty much our, our lives over there and see how that, how will that will work. And that started mid June of 2017. And by October of that same year, it was going so well that we ended up getting another place for it. And, and yeah, that’s, and that was, that was pretty much, and that was pretty much it, the long, the short story.
00:07:40
Ah, I, I love, I love that, that entrepreneurial pursuit that, that you and your wife have been taken together, you know, I think that that’s so cool that, you know, it’s always interesting to hear how people start cause everybody’s got kind of like a different, different reason. And, you know, it’s funny because a lot of people don’t get into this initially with the intent to like, make a lot of money. Like some people, they just start because it’s like, Hey, I want to help someone out. And then they’re like, oh wait, I can actually start making some money off of this. And then you just took that idea and you ran with it. You said, we’re moving out. You know, it’s T tell your wife, we’re moving back to our let’s, let’s move back to our parents. Let’s rent out our place. And it did so well that you’re actually able to purchase another property. And, and now you’ve actually scaled this up before when we were talking, you said that you have five properties now you own two, and you’re performing rental arbitrage on three, and you’re actually transitioning from your, your full-time jobs to actually just doing Airbnb. Full-time do you mind telling me a little bit more about like, how that process is with transitioning from your job to now being able to just do Airbnb full-time?
00:08:52
Yeah, so we, we didn’t imagine how much, how much money that Airbnb generated. And so, like, when we first started, I, I kind of had an idea of our surrounding our comp our comps and, and, and most of the people in our area where we’re, we’re situated in Chinatown. So a lot of the, a lot of the operators here in Chinatown, the owners, they, they, they priced a certain way and they did stuff a certain way, which was kind of in my opinion, a little bit low standard sort of things. And so the things were priced really, really low, but even at the price prices that they were, they were listing, I was kind of doing like some, some, some of my calculations on that. I was like, Hey, well, that’s a shoot. That’s actually really good. Like, I see like their calendars, like pretty fully booked out.
00:09:50
If they’re getting folks at these prices, then I was like, wow, that’s, that’s, that’s really amazing because it’s essentially all the benefits benefits of have of doing real estate, but actually getting the, the awesome cashflow that, that you want from it. And, and then, so I immediately like with things that people talk about with dynamic pricing and all of this stuff that ties into the business, I just went full, full, full force into dynamic pricing. And I had a program that helped me do that, which is beyond pricing at first. And looking at those prices like, holy moly, this is like, at least double the amount that’s the, my, my other people in Chinatown were doing. I was like, are people really gonna book those prices? And, and he, yeah, they ended up having, so then generate even more money. So even just from one property itself, I, I could have, like, one of us actually could have left their job and, and pretty much done this full-time, which was amazing, which is why, like, we’re originally our plan was to our plan was to only stay at my parents’ basement for, for a few months, like just kind of through the wintertime.
01:11:19
So the slow seasons just kind of get a general sense of how that would go. And then once that passed, like we would find a place to live and then continue doing it, continue on with the business. And, and yeah, so we ended up with much student on that. My, my parents who themselves are long time business and entrepreneurs, they, they saw like, oh, how amazing that the business was. And so they were like, okay, well, let’s, let’s, this is actually cool. And let’s start in front of the places and start like, figuring how to, how to expand this as well.
01:12:03
So this is, this is a family business. Now the,
01:12:06
I mean, as, I mean, like with a lot of times with as well, our family is it’s, it’s, it’s everything, everyone’s always pretty close knit. So I mean, they, they wanna, they want to help us as much as they can. So, and they did help us quite a bit with some investing in us and stuff like that. But, but yeah, like there, my, my, my, my father is, especially there, he’s always interested in, in learning about other businesses and things like that too. So he’s pretty much been doing the same business for, for the better part of 30, 30 years and some, and so when we started doing this, it was kind of like, oh, it’s kind of, it’s kind of nice for him to USQ was he was kind of excited to do something, do something a little bit different, like as in like just helping out whenever he can and, and learning about how it works and stuff like that as well. And so, yeah, it’s, it’s a, it’s, it’s kind of in a sense that it is still kind of an, a family affair that stop.
01:13:05
And do you mind, do you mind sharing how much that you’re making off this first property that you’re saying that you could have left your, one of your guys’s full-time jobs?
01:13:15
Yeah, so we ended up on to pretty much for the first, it was pretty much five months and we ended up doing about 25, 24, 20 4,000 in revenue. And, but that first half year, we also were gone for a lot of, I think for at least like a quarter of that time or quarter or a third of the time. And at the time we, we didn’t have self check-in. We, we, we, we checked in ourselves, people ourselves and, you know, should we still do that for this specific property because of its location. But, so when we went on, went on holiday or weren’t in town for any reason we couldn’t operate. So when we were gone for quite a bit of time during that first half year, we, we blocked off those dates. So we realized that, and the time that we did and the prices that we could have gotten after, when we were analyzing it, like we probably could have gotten like maybe 30, 40, like just double, double that and half a year, just from the first one. And then now, now the fruit, like it’s by itself when we’re running it, now I’m being a little bit more efficient. It’s probably generating about, I think, at, at minimum 60 and maybe getting close to 70.
01:14:56
And this is after cleaning fees after, after any morning,
01:15:00
I think in profit, this one probably more like 50, $50,000 and profit probably.
01:15:10
And this is from a three bedroom, one and a half, three, three bedroom, one and a half. Yeah.
01:15:16
And so actually it’s, I should probably figure that out, but I haven’t recently, I haven’t really looked at like super, super detail about all those numbers in which how they’re doing, how they’re doing butts on average, on average. We’re pretty much actually, you know, I can look it up right here, see what we are doing for the numbers, because it’s a little bit more details now. Yeah. For the entire course of what I should say, I can go back to what started this start of this year. So January. Yeah. So since, so, since January, this year, we’ve only been at 55% on average for, for all of our properties
01:16:10
And the occupancy rate. Yeah.
01:16:13
And at the moment where a nightly average is throughout the entire year so far, so I’m putting January is 229, but pretty much once we get into, once we get into March pretty much March and April are our average nights is pretty much like close to around $300 a night. And that’s like, that’s pretty much at a low, low nightly average minimum. And then
01:16:44
Is the low nightly average minimum.
01:16:46
Yeah. For us at the moment. And then it only starts getting higher and higher a little bit. And then, so, yeah, that’s, that’s like trim. I originally started out thinking our average is probably going to be around $175 a night. And so this is, this is pretty much double that
01:17:08
You base that off of the competition in the area.
01:17:11
Yeah, yeah. Based up because PS, a lot of the people in our area actually just suck. So thank goodness for the ads. So I’m in, I’m in a really great area and my competition doesn’t really, they’re doing too.
01:17:25
I want to go back because you said that you used, started using beyond pricing and that when they were doing the dynamic pricing for you, just, just automatically that it was double what the competition was
01:17:38
For some, some days it was pretty much double P’s. I was getting so worried sometimes about like whether or not like people are going to book it because it was so high. I didn’t imagine these, the first time I started seeing PS, a lot of the competition, they didn’t even have dynamic pricing at all. I think they just priced it out like, oh, it’s 150, like straight up. And then the weekends, maybe you’d like a little bit more. And then for events that they would manually change it. And that’s kind of what I thought it was going to be. And then, then before, and then I learned about dynamic pricing before we actually started. And then once they hit, like, and then they showed me like the price ranges and I saw like prices of like $300 and south, like per night, I was like, holy moly, that’s so expensive.
01:18:28
It’s like, are people gonna really book it? So I ended up, I was really, we were really, really cautious and timid the first, when we first started. So I I’ve made, I made adjustments to a lot of, a lot of the prices. I almost every, actually all the prices, like even just regular weekends, I was like $300. No, I’m going to bring it back down to like, like maybe 225 or like $200 and stuff like that. And then I got booked and some of that, but then the following full year, January, 2018, I decided just to let, like, not make any changes at all, for the most part, except for like adjustments to bookings and things like that, like orphan nights and things of that nature and just let, let the program do, do what it does and I’m so, yeah. So I was like, that’s when I learned that like people were actually booking our places at these prices and I was like, okay, wow, awesome. Let’s see how far I can push it. Then it started, started slowly started raising and raising all our prices. And now, now I think we’ve gotten to a point where I think I know like where, where like the swish fold of how high I can pretty much go with my prices.
01:19:50
I think, I think that that is just super interesting. And I I’d love to, to know more about this because you know, there there’s, you know, there’s, there’s this concept in business where it’s like, you, you know, your worth, if you think that you’re worth a hundred dollars a night, then you’re going to be collecting people that are, you know, look at you as being a hundred dollars a night, but you just said, Hey, you know where we know that we can offer something better than our competition. And even though that these prices are a little bit crazy, comparatively, you just, you said, this is what we’re going to be worth in. And now you’re trusting this dynamic pricing model and you’re, you’re, you’re doing really well. How, how was it, how have you been able to, to work around, like, has, has the price increased being like double of what your competition is affected, affected anything? Like, are you finding that the price being higher is actually more profitable for you than if you lower it and your occupancy rate increases?
02:21:00
I think so. One of the things that is really lucky about us is that because we’re right next to a convention center March through almost like through November and even December, we are extremely, fully booked. Like we w we, we almost don’t even have to try and, and people will book us a case in point, like when we started getting new listings, we started creating them, like, especially how ordinances here in Chicago are. Like, sometimes we would have to just create an empty listing just so that we can register a unit prior before anyone else can register. So sometimes we had, like, we would have a listing that literally has nothing as one photo of like the real estate photo, like, so it could be just like the building that we’re in or, or like an empty kitchen, just like, just as a filler, we don’t even care.
02:22:00
And then even in the description, we would have coming soon and nothing and literally nothing else. And one of the craziest things at one time we were on holiday and we had, we had this pretty much the setup and we were getting bookings with no information. And we were getting messages like, oh, I’m like, I’m looking forward to staying with the guys. And, and when you guys get the photos, let us know. And like, or like, it almost seemed like it was, they didn’t even care that we didn’t have anything there. They just saw that like, okay, this is going to be a three room one and a half bath place and let’s stay there. So, so we’re in an area where it’s extremely high demand for tons and tons of business travelers. So we almost don’t even have to try as very, very hard.
02:22:48
And then we get like really high up accuracy rates. So I’m very lucky on that. But I would say sometimes for our preference, because we, we don’t, we do self check-in and we, we don’t check in our guests except for one property, for the most part. That’s we, we don’t really mind having really, really high occupancy rates since I know sometimes if we get a little bit burnt out because maybe they do all the work and something like that, what we, we wanted to early on, we wanted to make sure everything was as efficient as possible. Well, while not losing kind of like, like the personal touches that we ended up doing. But, but yeah, I don’t, I don’t think, I think when we were starting to push these prices up more and more, we were still keeping at like really pretty much at, in the high months, like at least 85%, which was really good.
02:23:52
And, and yeah, that was, that was pretty much it. So I don’t, I don’t, I don’t even, I don’t even know yet about like lowering my price. Like, I, I, of course I lowered to, for like all like the odd dates and I wanted to get folks, but we don’t, we don’t do a one night bookings for the most part, unless, unless they’re like a specific day and also like a time period, like timeframe of how close it is to, to now and just to avoid parties and things like that. And there’s a lot of those, a lot of other safeguards that we do to afford parties. And, and, and because I think we don’t do one night bookings, our occupancy isn’t as high as some of our competition, but it’s okay. Like we, like, honestly, we, we, we, we do so much in, in revenue that like, it’s, it’s worth, it’s, it’s worth our peace of mind of not doing one nights to pretty much be a hundred percent
02:24:54
Now is the competition or not. Is the other, other people in that are, that are hosting, are they pricing? Have they kind of caught on and like are starting to price higher now, too?
02:25:06
Yeah. Most of them have, in fact, there have been there there’s actually someone who is copying our listings almost verbatim and like, like literally like, and that, in fact that’s kind of funny because that’s essentially what I did with my mentors listings and keep you as in the get listings, most of his listings in New York. And that’s what I did. I just like copied and pasted. And so like, sometimes I’m looking at what those guys do and like, I’m, I’m, I’m reading their wording and like, this is exactly what I wrote. And yeah, a lot of them, their, their listings are there’s, there’s a couple of them that, that they, their listings are much are much better. Their photos are actually not like, like old school camera, like mobile, mobile camera photos. And yeah, some of, some of them like there, I don’t, it’s kind of like mind boggling, how, how bad they do things.
02:26:03
But I mean, they still get booked, which is crazy, but like, you’ll have like just the weirdest stuff that they have in there. And, and, but yeah, a lot of them are now are starting to catch on. Most, most of them I think are doing dynamic pricing. Now I think maybe half of them more than half of them now are, and some of them are even actually priced higher than me, which is fine. But, but yeah, it’s still, still not, not too many, like in general, our area, especially in Chinatown, it’s very, very for, for people to come in and do this. So it’s, and then a lot of times people don’t really own property in Chinatown that we’ll be able to do something like this. So there’s not, there’s not too many whole, whole, whole home listings that’s that I had to really work through Pete with, but like comparative to some other neighborhoods in Chicago, like, like an area called like Lincoln park, where the zoo is and, and Wrigleyville where the Cubs stadium is and other, other popular neighborhoods, sometimes it’s just like, like just littered and littered, miss with listings and, and, and it’d be really, that’s what that’s, when you can feel like, like the competition of like, making sure that everything is good, because there’s just so many, so many people doing it.
02:27:42
And yeah, we, we actually made a miss, oh, well, no, I ended up being mistake. But then so w we ended up taking an apartment in a different neighborhood and what we’re used to last autumn, and we took a risk of Dave because it was a pretty much a fully furnished unit because the owner was moving to Australia. So I was like, okay, well, awesome. Where you can get a unit in a really popular neighborhood. The rent is actually very, very low and fully furnished. So there’s almost little to no investment involved aside from just paying rent. So under everything like normal circumstances of figuring it out as, okay, well, this is going to be great aside from the fact that we have to sign the lease starting in the low season. And I just didn’t realize how bad the low season is, and this in this area compared to where we normally are.
02:28:33
And it was, it was really, really bad. And we also made tons of like strategic investments during this time too. So we’re kind of getting kind of like in a danger zone of like, of our, our finances. And that’s what we learned is like, wow, it’s our areas so much, we’re lucky. The hire is so much better than what I originally thought of. Like when I first started, because I originally, when I first started, I thought that our was gonna be like one of the worst areas and being in the city. And then, because like I only saw like our competition being like charging so low compared to like all the other ones are charging so high. And then I realized that it was actually flip-flopped being in, I, I kind of, don’t really envy people being in the really nicer, popular pop, or not nicer, but popular areas that most people would imagine that people would love because yeah, they, they really suffer and in the low season,
02:29:32
And because you, you are stationed next to this, this convention center, you’re able to keep your occupancy rate high for the majority of the year.
02:29:45
Yeah. Even like December, we were, we were still at like 60, some 70%, our worst last year, our worst. I mean, the rather this year, our worst month was January. January was the only month in which we were actually, which were in the red, like by like just only a little bit, but every other month we were still, we were still in the black and like net positive, even if it was just like a little bit like a few thousand dollars here and there. But, but yeah, so pretty much, a lot of times with a lot of people we know too, and things that we can, we research like a lot of times in like December through March, even like some people just don’t even have books, barely any books at all. So they’re just taking a complete loss during that time. But usually during the summertime, then he’s usually March through November, we have a pretty long high season it’s they, they would make more than enough money to kind of cover and make as much what they would normally make. But
03:30:59
So you, your, your rental arbitraging three units now, and you also own another, are you strategically placing them next to like this convention center? Because
03:31:10
Yeah, China’s down is actually right next to the neighboring area of the convention center. And then, so we decided to own now pretty much only look for listings in our particular areas, just because a it’s logistically it’s much easier that all our listings in the area of speed, so we can get to them really quickly. And, and yeah, just the, the amount of business and traffic that’s this convention center commands is just, is just amazing because the area is also one of the, like, up and coming, growing neighborhoods as well. So we, we get the prices are so, so much lower than the rest of the city, but on average, we actually command our, our, our, our return is pretty much, I think definitely the best and the entire spend the entire city of Chicago. Sure. Yeah. I like to compare it to the price with, with, with rental arbitrage and property purchasing and the amount of return that you can get, if everything is done properly, I, I’m almost guaranteed. That’s where, if not the best we’re in the pretty much the top, the top three areas for sure. Of, of on average of getting a return and, and the highest money-making area for sure. In the city.
03:32:34
And w w and you believe that it’s a lot of that is because of this convention center. Oh,
03:32:39
Yeah, for sure. I mean, the Chicago convention center is, I think it’s still the largest in the nation. Yeah. So, and then not only that, it’s, there’s also, they built a new arena. I think that the DePaul built a new arena right next to it. And a lot of events happen there too. And also we’re location. We’re situated very, very close to downtown as well. So our, our, our proximity and the ease of public transportation to get into a downtown is very, very easy. And we’re also one neighborhood away from, from the parks, like millennium park and grand park, where all the festivals happen like Lollapalooza and everything that happens in the summertime and very close to the lake. So we actually are in a, in a great kind of perfect storm area where, where prices are not only quite low in general, but for, for like getting a place, but also when you want for our nightly average or we’re, we’re really high. And, and like, the crazy thing is like, we barely have to try for it to, because there’s, so the demand is so high and because of our city ordinances as well, it’s a curbs, how many people can actually come in as well. So like, so I w I will never have really more competition than I than the now pretty much switches. Nice is this is a specific to Chinatown. No, it’s specific to the city. So Chicago ordinances for Airbnb are actually quite, quite bad.
03:34:35
I don’t think it’s as bad as New York and LA per se, but like, it’s, it’s, it’s up there. So pretty much the long, the short story is there’s limits to how w what kind of building you can do it. You can do a short-term rental in, and how many as well. So for the most part, what gets most people is, is that in a, in any given building a short-term rental can only take up 25% or six units, whichever is less, which for a whole, for a whole home listing, which means that any, unless it’s your primary residence. And so, which means that any building that is four units or less to not do it actually. So, so single family home, detached home, a two flat, three flat, a four flat, you pretty much cannot do it without some, some other adjustments that needs to be done.
03:35:41
And, and then because of the 25% roll, and only until when you get into eight units, could you possibly have two, because two is 25%. And, but even if you’re in a big building, the most you can do is six. So whichever was like 25% or six units, whichever is less. So even if you’re in a, like a big building that allows for it, the most you can have in legally is six. So pretty much even if like there’s like 20 or whatever amount of listings in there, and everyone registers the first six people who register it’s it’s first come first serve will technically according to their, their own laws. But I mean, the city of Chicago is, is, is, is beyond poor. And they don’t know how to do anything anyway. So, you know, you never know, but like, according to what they wrote, only six of them.
03:36:39
So the first six would be able to get their units registered. And so, which means that, and, and also short term rentals as it is, is, is kind of like a really negative thing with a lot of the buildings. So not only do that, does the city habit like the ordinances, but also all the buildings themselves and hos and big high rise apartments. They also put themselves on a ban list as well, to which the city will go through and automatically tonight, any listings in those buildings eventually. So pretty much, there’s a huge limit to where you can start short term rental and with, with actual longevity, like if you want to actually do it legally. So, which is great, which is great for people who are able to find these units and, and have them legally. But it’s, it’s really tough for someone to try to come in or just to expand in general.
03:37:48
So we’re, we’re expanding extremely slowly because I’m like, we don’t even bother doing the cat and mouse game of trying to like, like start skirt, the rules visa. We we’ve already had some issues in the past. And like, and we have a lot of friends who do that too. And it’s just, it’s a, sounds like a nightmare. So it’s really great for, for us that we have these units, because pretty much legally, no one would be able to even like big, big management names, they wouldn’t be able to come in because, or expand more than they already have, because they just can’t according to the law.
03:38:26
Well, so you’ve, you’ve kind of found a niche in the market where it’s, it’s, when you’re able to find these, these properties, you can almost like on them because it’s like, you just get in there and then you’re, you’re, you’re able to set up your listings and then nobody else is allowed to technically compete with you because of these rules.
03:38:46
Yeah, pretty much. We, we, we found a, a monitoring company that has a lot of apartment buildings and that was that’s and be friendly. And so I think we’re that we’re their favorite. So they always, they always let us know, like any listings that come up and buildings that may be may work. And so we’ve, we’ve gotten quite a few things from them. And so we, we, we do have a nice setup here and nice connections, but yeah, that’s, that’s, that’s, that’s, that’s a hard thing about Chicago. It’s, it’s, it’s an amazing market, but, but yet it’s being curved. It’s being regulated pretty heavily, which regulations good. But, but yeah, like it’s, it’s kind of stupid how you can’t there, there, you can’t like, if you own a home, you can’t, like, they’re telling you what you can and cannot do with your own home. So it’s like, if you had like a single detached home, like, it’s like, well, why not rent it out? I like, oh, you can’t, even though you own it.
03:39:48
Wow. So what has been the most challenging part of starting your short-term rental business?
03:39:54
I think the most challenging thing starting was, I was actually not really, I don’t think starting it wasn’t really much w we, we actually, it was, there was no, both my wife and I were like, let’s do this. And then I didn’t imagine that she would be really on it to be, I grew up in kind of like a, like an entrepreneurial family. So that’s very, very normal for me. But then for this, for her was a little bit different, but then she was just like, yeah, let’s do it. Like I’m serious. Let’s, let’s, let’s do it. So we, we didn’t have a challenge too much on that. Like kind of like figuring out how to do it. I think the biggest challenge for us was immensely kind of like being scared, what our neighbors would think about it and not messing up the relationship, but like, hopefully like no parties and stuff like that, but really like for short-term rentals, I think the biggest challenge, if you’re doing everything else properly, is, is the cleaning, making sure that your unit is, is properly available to get those that done, because that’s probably the, the biggest follow neck and biggest challenge of all like, pretty much all, all short-term rental operators, I think.
04:41:13
And we found a company that does it pretty well, and it’s pretty good setup right now. And, and things seems to be going pretty well, I suppose.
04:41:22
And what has been the most challenging part of scaling your business?
04:41:30
I think we’re getting to the point where the most challenging part is kind of like how, how to pretty much kind of delegate some things, because it was five properties. Sometimes we’re losing, we’re losing track of who’s who, and sometimes the messaging. So which, why would we add, we automate everything that we can. So a lot of the like messaged strings that we do, that’s all automated except for the very first one. And the cleaning is all automated. That’s kind of sent to our cleaners. And I think scaling is pretty much figuring out how it, like, like getting, getting a, like, just a good team to do it because once you get to like, maybe like 10 or so, it’s going to be kind of difficult to, to keep track of everything. So we’re trying to figure out how to have maybe in the future, having someone like hiring someone to be like, kind like they’re like, like hands and feet on the ground, because sometimes we’re going to be out of town.
04:42:36
These we’re spending, we’re looking to expand in another states and also just like maybe just going out of the country, just having fun and stuff like that. So when we’re not here, it’s like making sure that there’s someone that we can have that can take care of certain things that may come up that needs someone physically there. And so that, that might be pretty much the challenge of how to get someone on board as well, to help you be able to do all these things, because once you get, even with the channel manager and like some of the things are automated, like you have to make sure that there are some safeguards that’s that you can, you can be able to tackle any sort of challenge that may come up. And then I think that’s probably the biggest, the biggest challenge of, of having so many, so many units that you can’t be in all places at once.
04:43:29
And you can’t do all things at once. If things, if pretty much, if, if things go wrong all at the same time, which, which has happened, like we were in Japan, like a lot, like there was one, a few days where like, we’ve never have had any sort of issues and all of a sudden these issues that we’ve never had before all came up for, for multiple properties. And, and there was nothing we can do about it because we were in Japan and we didn’t have anyone on back at home except for our cleaners. Our cleaning has helped us a lot because they, they do spend time sometimes to, to, to do some things that you ask them to do. But, but yeah, I think that’s probably the bigger thing is that if you, if you wanted to kind of like do this remotely and scale, especially like when, when you’re not, there are other states and stuff like that, you’ll, you’ll definitely need like a team to, to make sure you get that done.
04:44:29
And what do you, what do you do to set your units apart from everybody else?
04:44:37
We try to just make everything. I mean, like everything feel good. Like a lot of the, a lot of the people, a lot of them listings, like people have like just random thing, like hodgepodge things in there. And then one of the things that is, is it’s necessary, but not as, as it is sometimes I can people go overboard what’s necessary to put in your units, but, but sometimes people are a little bit too bare. So having like a lot of just simply even having some, like some what I would imagine just necessities in there, like plates, there’s some, there’s some listings in, in, in our, in Chinatown that don’t even, they don’t even have plates and like, they don’t have enough towels and stuff like that. And this, this, this is pretty much making your place really comfortable. Like I’m imagining pretty much like you’re a hotel and having all this, like a lot of the amenities that you would get at a hotel and being comfortable and being like you’re at home is, is really, is really important. Just having those things to, I radically it’s just sets you apart because funny enough, a lot of people, a lot of our competition doesn’t have those things.
04:46:04
So just making, making sure that you have everything that, that you would need in, in like a home, but not going over the top.
04:46:11
Yeah. So there’s, I think we were, I was talking to this once I mentioned one time before it was like, it’s, especially if you’re in a, like an, a, I guess what I would call like a general unit, like just not like, not like a high end place, but just some, a place that you, you you’re, you’re, you’re wanting, it’s just, I guess a, for lack of a better term, it’s just generating money and money money is that you like, this is going to come to a point where any, any more added things to it does not give you a better return. So, so like, if I had like, like adding like a per day or something like that and your toilets or all these other things, like it’s, it’s actually kinda, it’s cool maybe, but it’s not gonna raise my PR. It’s not going to raise my profits necessarily.
04:46:55
So, and then it’s also like a worse than like a break. So I like E I, what what’s really nice to go off of is like, you want to go give your guests everything of what they expect and imagine they would have, and a little bit, just a little bit more so that you exceed their expectations, but you don’t have to, you don’t need to go overboard because after that, like, then you’re not really getting, you’re not really getting a return on it. And it’s not, it’s not really necessary to, for, for like the metrics of like getting your five star review.
04:47:30
I think that that’s really wise advice. And in real estate, you know, when you’re selling, when you’re selling a property, you know, people are always thinking, oh, I need to fix this. I need to do this. I need to do this. But there comes a point where it’s like, Hey, if you’re just looking to make money off of this property, then just put in what is expected. What’s the minimum that people are wanting. Cause when you start working on like the fine trim details and stuff like that, if your property isn’t located in a area where the fine trim details are really nitpicked and people are really caring about that, then you’re just, you’re wasting your time and money. You know, you’re, there’s no sense in putting lipstick on a pig, if you know it, you know, it just doesn’t, it doesn’t make sense, but if you can just make your unit stand out, you know, have everything that everybody else, you know, doesn’t have in yours and just make it unless you’re, unless you’re, your competition is highly luxurious apartments, then you you’re going to want a highly luxurious apartment. But if yours is just another apartment that is just kind of maintaining that, that minimum standard than any, I don’t don’t need to go overboard. I th I think that that’s, that’s really wise advice from your mentor. Is there any products that you couldn’t live without and your rentals that has saved you time and money?
04:48:45
Yeah. I mean the channel manager, it’s kind of like, we primarily only list on Airbnb because particularly like in our area, like VRVO has barely gotten anything and, and this was before they upgraded their, their platform. So it was like the old one, which sucks. And like, it was so bad that I didn’t even, I didn’t even care to, to continue with it, but since then they, they upgraded, but we never got any, we barely got any bookings for them. And so we just pretty much stick with Airbnb and we’re only going to grow and expand on doing direct bookings and kind of growing like our own brand and that sort of, that sort of way with bookings. But I think having a channel manager to kind of like integrated all that and doing all the automated things, like your messaging is really useful. So you don’t forget to do something sometimes.
04:49:40
So we ended up like figuring out that we send the same messages all the time and, and especially like proper information and check information that aside from the very first one that they do with inquiries or bookings, like we will always have something a little bit something more customized, but we still have a template, like a general template. We would always send no matter what, but we want just want to make it as personalized as possible for the first couple of messages. But then like once they actually stay, we used to be the exact same message. So pretty much automated doing, sending those messages and making sure that everything is okay and then dynamic pricing for sure. These are just losing money. If you’re not doing dynamic pricing for the most part I say, and we use, I started out with beyond pricing, which is great. And, but now we use price labs because there’s a lot more customization in it. And it’s also cheaper for the fee structure for us now. And,
05:50:42
And which, which channel manager are you using your quarter?
05:50:47
That’s also a piece I don’t, I don’t need to very much like, because I have a channel manager, but I don’t have any channels that I actually listen. So I actually primarily just really use it for like some basic things, like, like the automated messaging really that’s, that’s pretty much it and reporters extremely cheap. So like it’s very, very basic and it’s very light. So it does those, exactly the things that I needed to do recently. There’s an as a, does actually a free app. That’s, that’s super, super convenient with my seniors and it’s called turnover BNB. And that is, it does exactly, exactly what you wanted to do. And it does it the way that exactly how it should be. So that’s very, very convenient.
05:51:31
Why, why don’t you use the Airbnb’s cleaning, cleaning program,
05:51:36
Airbnb. Yeah.
05:51:38
Yeah. Now, now they have it so that you can actually sync up cleaners.
05:51:44
Oh no, the team. So the teams thing on Airbnb is pretty much like, I think whoever designed it just, just completely has a lack of understanding of how to like how things run are. Things are done with the business, because there’s almost nothing on the teams, the teams tab of the actual site that’s actually useful. So we don’t even, we don’t even use that at all. And, and especially the way that like, sometimes a lot of bigger, like people have a lot of units, like they might have other ways to do it. Like this other app is it’s just does it so much better, which is kind of stupid. And the shame, because I think everything should be done through, or at least it was so much easier. Everything could be just done through Airbnb, but there everybody’s dynamic pricing is a joke and their team’s thing is doesn’t do anything. So, so that’s not really useful. Okay. Yeah.
05:52:44
In, is there anything that you do that has helped your guests leave positive reviews?
05:52:49
Ask for it? So we, we, we set it up right from the beginning. So let the moment they actually book, we just tell them like, Hey, I hope like, I hope you’re, I hope we, we will provide us something. Like, it’s pretty, I forgot how I word it, but like, it’s, it’s pretty much like, I hope you have, like, I hope we’re going to provide a great state that warrants a five star review and stuff like that. So like right from the get go, we, we set our standards and we set, we set up like, just getting that, telling people like, we’re here to give you a five-star stay and then stick at that in their mind. And then during the, during like the messaging, like we keep on saying, that’s like, Hey, thank you for staying with us. Like, we hope you had a great time.
05:53:34
That’s that warrants a five star review and stuff like that. And it’s surprising. Like we all, we almost like, I think 90% of the time we get reviews and, and almost every single one of them is five stars. So a lot of times we’re afraid to ask for it. So it doesn’t, they just, as long as you ask for it properly, like sometimes you have to do it, not just like saying, Hey, leave me a five star review, but like being like hospitable about it and, and just asking for it is just, it’s just a really simple way of actually getting it. So we, we don’t really have any trouble of having people doing reviews and five stars at, at, at.
05:54:17
Okay. And is there one house rule that has saved you before
05:54:21
How’s role? The only thing is just the only thing, major thing that we used to worry about is just this parties. So a lot of times we create fight hours and, and we also put in our listings to, or like in our, in our messages that we have family or friends who are our neighbors and to live with us. And we usually tell like, this is one of the things that I, I, I wanted to do in the beginning is that when we were welcoming guests, it sounded like, Hey, you know what? We live, we live in the building, our family and friends that live in the building. So if we’re not able to help you in time with something that comes out, we can, we can call on them to help you to so pretty much give it like subliminally letting them know that like, they’re, I guess they’re like being watched is not the greatest, the greatest way to describe it, but like they’re being watched, but like in, under the guise of being helpful, it’s like, Hey, you know what, like, we’re going to help you as much as possible.
05:55:24
Like it, like, I’m sorry, if we’re not able to address something as quickly as possible, we can always get our family members to do it and then put them and let them know that like, okay, well, if they’re, if they’re planning on something or even if not, but like, they just, they’re making them more mindful of that. Not to be like rowdy or anything like that, especially, and that’s actually helped us a lot, a couple of times that I think only one time we’ve ever had a group of guys that were just that really problem problematic, but it’s, I always, I always add that in like my messages and, and, and just in case like a certain group that I’ve like, if, like, if I might have some worried about them, then we’ll actually like meet them in person and be like, Hey, you know, what do the spiel? And I think that’s definitely given us peace of mind, but also has definitely done the job in which it was designed to do.
05:56:20
And w what would you do differently if you had to start from scratch?
05:56:31
I don’t know. Actually, I think we’re, we’re, we’re pretty lucky in which like the things that we’d done, but done, and like a place that we’ve been in have all been like, I can’t, I couldn’t really imagine it anything else. I, if I were to do it again, I mean, I would not have gotten this unit that didn’t end up working really well, but I mean, I, I couldn’t have figured that out. So prior to that, because we got such a good, great deal and set up for that, but I don’t know. I think I would’ve, I didn’t realize, I guess in a sense for me, it’s I think the business is actually very, very easy as it’s quite simple, I guess, real the real estate in general, but even short-term rentals, it’s actually quite simple too. So I think what I would have wanted to do is actually be more aggressive in finding rentals because that that’s so much easier to scale and it doesn’t cost nearly as much money to, so, so I wanted to scale up faster. I would have probably started searching for the rentals a lot sooner and getting on that, because maybe in the time span that we’ve, we’ve done recently, if we did that kind of lots of sooner, we could have maybe had 10 by now or more. And, and yeah, I would say that that’s probably the only thing that would have done different. Okay.
05:58:08
And if you could give one piece of advice to someone who’s trying to start their Airbnb business, what would that be?
05:58:17
Just find someone to knows what they’re doing and, and learn from it. There’s so much information now for like letter, like YouTube people do it. The guy that my mentor, who is a YouTube person as is a really prominent user person. And I actually like, I, we hosted him, like we did meet ups with him and stuff like that. So we ended up getting like a personal relationship with him too, which is great, but finding someone who knows how to do it, like there’s a lot of, there’s a lot of information to, to go for OFA and just looking at people who do it well, listings that do it well and just do what they do and just do. And, and literally just do it. I there’s apprehension like with anyone who starts anything new, especially with business, there’s too much, like just too much, like thinking that goes wrong and they don’t end up doing it is like, you have to just in order to learn it properly, like you, like, you’re going to have to go through the problems yourself too. So, you know, to do that and you have to just, you just have to go for it. So the best advice is like, learn everything you need to learn. But once, once you, once you have it, like the only other thing left is just to pull the trigger.
05:59:34
Great, great, great advice. Let’s, that’s what we’re always preaching on this podcast is, you know, once, once, once, you know, you know, once you kind of know the basics, just, just do it and you’re, you’re, you’ll, you’ll, you’ll learn as you go on. It’s not going to be perfect when you start, but, you know, it’s, we just had someone recite a really awesome quote being, you know, it’s hard to get a ship going than it is to, to turn, you know, to turn the rudder. It’s a lot more power to do that. Where do you see? Short-term rentals in the future.
06:00:04
I see. Well, for me personally, like the direction I want to go is more through experiences. And so I want to, I want to create short-term rentals that are like places that are kind of like aspirational properties that people want to go to to have great, great emotional attachment integrates transit is like, like things like tree houses, or I think like the greatest value come with when, when people are, are being able to stay at places that they never imagined that they would be staying at, especially with like more like, this is like, this is here to stay. And a lot of big names are starting to get into it, which people are worried about, but I don’t really care. It’s not, I mean, it’s, it’s, it is it’s whatever, but like they can, they can only move in a specific way. Whereas like, as an, as an individual or as a much smaller organization organization, you can create something that is extremely unique and, and make a lot of, a lot of profit off of it. Just from doing, creating a much more like a cool experience, like things like tree houses or, or things like that, that, that, that, that a lot of people don’t don’t do essentially. And you can get a lot of a return on that.
06:01:25
No, I think, I think, I think you’re spot on, you know, I think that the way that Airbnb is can kind of stand out amongst the hotel industry, is that unique experience. You know, you’re not going to be able to stay in a tent or you’re not going to be able to stay in some really unique, you know, shabby chic or something, just creative that generates an emotional response that you could in a hotel, you know, there, there are some luxury hotels that, you know, beautiful views and stuff like that, but nothing, you know, nothing like staying in a tent, you know, it’s, it’s pretty, that’s pretty
06:01:57
Different. Yeah, for sure.
06:02:00
And is there any way that anybody can reach you Milo if they have any questions?
06:02:05
Yeah, you can. My, you can reach me at my email. I met Milo dot Byron dot Chan at Gmail, and it’s pretty much it, or even Facebook, me, Milo Chan. There’s not too many out there. It’s quite niche.
06:02:19
Okay. Yeah. And I’ll, I’ll include everything in the show notes, how to contact you and, and everything that we talked about. Milo, it’s just been such a pleasure to speak with you today. I think, I think you’re, you’re killing it. I wish you the best of luck. And I hope that you’re, you’re, you’re able to keep on succeeding and I’ll talk to you next time. Host nation, keep on hosting, hope your hosts benefit from the show. If you found value, please go on over to iTunes or Stitcher, leave a review and let us know what you enjoy about the show. If you’d like to talk to the hosts that have been featured in these episodes, as well as the host nation, then going over to our Facebook group, short term rental success secrets, talk to hosts, and the next step sewed keep on.
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