STRSS 41 – What It’s Like Managing 25 Vacation Rentals in a Tourist Destination w/ Jason Clements

Video Transcript

00:00:00

Managing short-term and long-term, it’s very similar. You need to have some kind of knowledge, you know, you can’t just call a plumber every time there’s a drop of water on the floor or something you need to know. What’s, what’s causing that to manage the expenses.

00:00:13

This is episode number four, one of the short-term rental success stories podcast. Are you an investor that’s looking to have your home professionally managed, could a cohost.com more information. Welcome back to short term rental success stories. I’m your host, Julian Sage. This is a show where I talk to hosts about their journeys and starting and growing their short-term rental business. My goal is that you’ll be able to walk away with practical information. That’ll help you become a better host and learn how to scale your business. Like any exceptional hosts. We all strive for five star reviews. So please go on over to iTunes and let us know what you enjoy is it really helps support the show if you haven’t done so already going over to our Facebook group, the host nation to connect with the community and Merry Christmas host nation. I am super excited to be able to give you guys your present today, which is another episode.

00:01:00

So I’m actually in Columbia at this time. I recorded this just a few days before I left, but if you are listening to this on Christmas day one, thank you for allowing me to be a part of your family. I do feel like everybody from the host nation is a part of my family. So that’s why, you know, even say I’ll be going through and seeing everybody that’s a part of the community and sending my appreciation, my love to you all. So today I had the honor of speaking with Jason Clemens, even with 25 properties during the peak season, Jason only spends three to four hours per day, checking the properties all in the off season. He only works during Friday and Sunday mornings. Typically when the guests check in and check out Jason shares great insights on what it’s like having purchased someone else’s management company, how to work with traditional vacation rentals, the learning curve of going from 1 25 properties and what it takes to scale so quickly.

00:01:48

If you like my show notes in the success secrets for this episode to go to Short Term, Sage dot com backslash SDR for one, or if you like my show to send directly to your inbox every week, then go to Short Term Sage dot com backslash show notes with all that being said onto this week’s conversation. They welcome back to another episode of short term rental success stories. In this episode, I have the special honor of speaking with Jason Clemens. Jason, would you please introduce yourself to the host nation, let them know who you are and what inspired you to get into short-term rentals?

00:02:13

Yeah. Hi everyone. I got into short-term rentals. I’d actually been managing, investing and managing long-term rentals for over 10 years, but just living in Ontario, just the, you know, what the income I saw from short-term rentals was far greater than the long-term rentals, but also, you know, if anyone’s familiar with investing and managing properties in Ontario, the residential tenancy act is very strict. So I’ve just found that managing short term rentals, one they’re they’re kept, you know, kept a lot, a lot better shape because you got cleaners and people going in there and maintaining them on a daily basis. Also the income is higher and also you, you avoid the whole residential tenancy act and the time to get rid of a bad tenant.

00:03:01

Yeah, no, it’s, I, I think it’s pretty interesting. And I wanted to actually talk about, you know, how, how did you even get started into this? Because you said in 2016, you purchased your first bed and breakfast. Was that coming into the mindset like, like traditional, like when people think of Airbnb or is this more of a traditional bed and breakfast style home?

00:03:24

Yeah. So the bed and breakfast is what actually moved us down here, but, you know, my way, like we’ve chosen the Oregon lake as our, as our kind of destination of choice of running short term rentals. But, you know, we’ve been traveling, you know, Vacation here for 20 years and, you know, my wife was working perfect job. So she had decided she wanted to move down here, you know, by a bed and breakfast run that, but we’d already had a cottage that we’d been, we bought in 2014. So that was our weekend getaway. So we moved here permanently, you know, the cottage, it was, you know, make perfect sense to turn that into a short term rental, as I had been renting out long-term, you know, making, you know, low rent. So I’m learning that cottage to a short term rental, you know, made a lot of sense being here today, able to manage it hands-on and the income from it was a lot greater than what I was getting.

00:04:19

That’s awesome. You just love the area so much that you felt like you needed to settle down here and find some root and through that it was purchasing a bed and breakfast. And when I think of like moving somewhere that you love and starting a little bit in breakfast with your, with your significant other, I mean, that sounds like kind of a dream. Was it, was it as dreamy as, as it, as you imagine it to be? Or was it a little bit more challenging than that?

00:04:43

No, that was great. I mean, it always been our plan, you know, when we retired to move down here, which is why we had bought the cottage a couple of years before, but, you know, just things, things came into place where we moved here a lot sooner and able to enjoy the area. And, you know, I had a great, the bed and breakfast is a heritage home, big garden. It’s actually one of the longest operating that impact us, you know, so it already had established furniture and set up and guests in that. So that actually got us here, but it’s the cottage that kind of got us into the short term, rental myself into the property management of short term rentals. I had properties in London that it was managing as long-term rentals. So just in the transition since 2016, I’ve gotten rid of those and gotten into full-time short term rental.

00:05:32

Now I think your, your, your backstories is really interesting also how you got to 25 properties. So 2016, you, you, you started this bed and breakfast because he loved the area so much, but then in 2019 you actually purchased, you acquired somebody else’s portfolio. Can you talk a little bit about that and how that came to be?

00:05:52

Yeah, so yeah, so 2016, we had the one cottage that we own, we managed and the bed and breakfast. So, you know, two short-term rentals, 2018, you know, just through different connections. I started managing someone else’s, you know, co-hosting, if you want to call it that way and property down here. And just through, through being in the circles of short term rental, you know, I ran into a couple of, you know, a few different times around town. They had a business called Niagara holiday rentals that had been operating for 10 years and they had actually bought it from someone else prior to that, no 25 properties, all, all in old town, which is like the tourist desired area of Niagara on the lake. So yeah, we started talking and working with them end of 2018. And so beginning of 2019, we became the owners of this corporation managing 25 properties. Yeah.

00:06:46

That, that is something else. So you, you, you purchased a business that other people own these homes, these are just like their vacation homes. And then you just took over the management for that business. How does that, how do you even bring that up or talk about that,

00:07:03

Like to bring it up to

00:07:05

Her that you’re interested in taking over purchasing the business?

00:07:11

Yeah, that was, that was an interesting conversation because, you know, as I say, just, you know, running around town, managing my own two properties, I would run into Eric who knows one of the, well, one of the owners of the previous business and we’d just be talking and, you know, and actually started when we first moved here, I talked to them about managing our cottage and they said, we’re moving to town. You know, we, we should do it ourselves. They were great just in helping, you know, provide information in that. And they actually referred one of their cleaners to us. So just in talking to people, you know, I found out, you know, they may have some extra properties and I thought, you know, maybe I could take on a few more properties and, you know, they might build a first and business. So out of the blue, they said they wanted to come over and talk with my wife and I, and I thought that was what the conversation was, was, you know, here’s a couple of properties you could, you could take on.

00:08:05

And, you know, there, they start talking about when we retire and looking for someone to find, buy the business. And they talked to a lot of corporate people, but they wanted someone on the ground, someone that was going to keep the cleaners and local and that local personal connections. So, and it went from there. We started working with them. I shadowed Eric for, for a couple months. My wife shadowed Janet for a couple of months learning the back end. And let me just kinda came to terms there. And we took over the business with a service fan, you know, with all the contracts, with the houses and with the cleaners.

00:08:42

What’s really interesting is this is, this is, was, was more of an established older when, when you, when you picked up the business, did it have like all of these really old systems in place, because you know, with, with Airbnb and hosting, there’s all these new tools, you know, dynamic pricing, automated messages, you know, PMs is channel managers, all this different stuff. Was this business utilizing all of these things or was it more, a little bit more labor intensive?

00:09:12

Yep. Yeah. So the business started over 10 years ago. It was actually interesting as the woman who started this business was actually owned a bed and breakfast that we own now. So it’s like, it’s come full circle, you know, but yeah, she started it 10 years ago, you know, I know, I mean, think she had a website, it was all word of mouth print, advertising, phone calls, you know, it wasn’t what it is today. So she started it, Jan and Eric took over the business 10 years ago. And, you know, as things progressed, I think it was a few years ago that they started researching different products, property management systems. And they found one that, that is a lot of the, the automated booking, the automated messaging and all that. And so they, when we bought the business, there was already listings for each property on BRBO and on Airbnb. And there was this property manager, a website already in place for direct bookings. So yeah, we just had everything in place when we started.

01:10:14

Wow. That is so interesting. So prior to, prior to you picking up just a few years before that they were doing everything by hand and paper and finally scheduling things on the calendar. Yep.

01:10:24

Yeah. The, the property management system we have now, I think there’s only three or four years old. So prior to that, you know, things were not as automated.

01:10:35

I think that’s super interesting. So, so you, you were managing a couple of properties. You found someone just by being out in the market that you were actually looking on offloading some of your properties because they were managing them. And then the conversation comes up where it’s like, Hey, well, we’re actually planning to retire and you say, well, okay, I’d like to pick up this, pick up this business. How do you, how do you evaluate something that is so seasonal and where you don’t, they don’t actually own the properties, that’s just a management. So how do you, how do you even talk about that or structure that type of deal?

01:11:05

Yeah, that was a challenge. I mean, I mean, they talked to a couple of different corporations that were throwing, you know, a lot of numbers out there. I mean the business itself doesn’t have, you know, really any assets, there’s one van, we have a Nissan and we 200, whatever it is, service San and that’s, you know, other than some, some cleaning supplies, that’s the only inventory or property for the business. The rest of it is all, you know, the systems, the contracts. So it was kind of hard to bring a number in place, but ultimately what really agreed on was what they had budgeted for 10 years ago. It what we paid them. So they got their money out of it.

01:11:43

That is so cool. And, and how does that conversation to work with the people that are, that, that own the properties? Because when you’re taking on a new property manager, there’s going to be obviously a different style of management and their income is dependent on the manager’s performance. So how does that conversation work?

01:11:59

Yeah, so it was, we were very, very cognizant of that when we took over. So basically, you know, back in the fall of last year, we started talking to the owners. We basically, you know, the old previous owners of the business started talking to the owners of the houses, just said, you know, we’re looking at coming on and helping them out, you know, and joining the business as it is. And just kind of getting to know some of the new owners that way, it was just kind of a slow transition. So even when we officially took on the business in January, you know, Janet and Eric were still there and we told the owners that are still there. So it was a very smooth transition for everyone

01:12:39

With picking up a multiple properties. There there’s a big difference from managing two properties to managing 25 properties. How, how, what, what was your business systems like prior to you picking them up? Was there a learning curve or what did that look like?

01:12:54

Not, not really. I mean, when you’ve got 25, you’re managing 25 properties, you know, I mean, I had up to five, you know, maybe 10 units over the years of long-term. So you’ve got, you still got furnaces, you still got house systems you need to maintain. So it’s the same thing with the short term rental and managing these properties. But, you know, when it comes to short term rental, you know, I’d had two, three years experience of using VRVO using Airbnb. You know, I created my own spreadsheet. They own bookkeeping spreadsheet to keep track of everything that all the calculations, as far as, you know, what money’s coming in, what the expenses are going out, what the cleaning costs are. So, but I was familiar with VRBO and Airbnb from those, those two properties. So scaling up to 25, it wasn’t really that different. I mean, there was a learning curve learning the new property management system converting from my spreadsheet. But apart from that, there wasn’t a lot of learning curve. I mean, it’s, my wife has helped, she knows a lot more of the backend than I do. And I’m the one that kind of the boots on the ground going to the properties, making sure the cleaners have done the job when, when guests have left new guests comes

01:14:08

Well. So w w what is the difference looking back now? Would, would you, would you still acquire a business because a lot of people are going out there and you have, you have a marketing background. Could you have not gone out there and started just trying to build up business through like this co-host model going out there pitching people, or do you think that it’s, it was actually better to acquire a bunch of properties?

01:14:34

Definitely better to acquire a bunch of properties. I mean, if I would have taken me, you know, I started in 2016 with one property. It was, I wasn’t really putting myself out there. And then 2018, you know, I managed to find another property, but again, you know, I wasn’t, you know, marketing takes a lot of work. So being able to market yourself as a property manager and find someone that’s looking for that, you know, it’s hard to find that find that fit. And even this past year with the business, we’ve talked to a few different people about bringing on new houses, but there’s always different things going on. You know, one, the person’s moving out of the country. Some, someone has the house up for sale, and then you’re looking at managing it almost the house sells. So I think it’s, it’s a lot of work to bring on more properties. So definitely I would go the route of buying 25 contracts already in place. So definitely a lot of these.

01:15:28

And where you were you working full-time prior to you actually picking up all these properties?

01:15:33

I was so, so we moved down here in 2016. My wife was working corporate corporate life, doing a lot of traveling. She quit her job. I was luckily enough with the company I was working with to be able to work from home, you know, doing online marketing. So, you know, for the last few years I was just working from home, you know, managing a couple of properties at the same time, but buying the business gave me the opportunity to quit my job. So, you know, leave that job out of London and work full time with the properties. So, I mean, when I say full time, middle of summer, we got 25 properties fully booked. You know, my, my work day might be three, four hours checking on properties. Now that we’re in the off season, you know, I work Friday morning, you know, make sure how’s the ready for check-in. You know, I work Sunday, Sunday morning after making sure the house that I’ve been trashed when people checked out and that’s based on my work week,

01:16:30

You, you literally, you, you left your job and you purchase the job that you work a whole lot less.

01:16:36

Yep. A lot more responsibility, but a lot less time.

01:16:39

That’s awesome. That is so cool. Did you, so when you purchased the business, you, you knew that it’s like, oh, the income that it’s making, I’ll just be able to quit right there.

01:16:47

Yeah. There was a bit of a transition. I mean, we, we started the business as the owners in, in end of January. I didn’t, I gave my notice at my business at the, the company I was working for, but I put it for like April right before the busy season. So it was kind of making double income there.

01:17:06

Awesome. And what else has short-term renting allowed you to do compared to when you were working a full-time job?

01:17:13

Well, the skit, the flexible schedule is great. We’re, we’re kind of tied here. I mean, we used to do a lot of traveling before we moved here. I mean, ultimately, you know, why would you travel when you’re living in Niagara lake, which is, you know, wine country, we’ve always traveled here anyway, we are kind of tied to the town. Now, if we’ve got guests, no, I can’t go anywhere. I’ve got a great, we’ve got great cleaners, but I need to rely on, you know, if someone has something happens, I need to be available 24 7 on call. But if I have to go out after dinner and change a light bulb, that’s, you know, it’s not a huge, huge thing to do.

01:17:55

Now when you acquire the business that, that had already have like full-time on cleaner employees.

01:18:01

Yep. Yeah, there we have contracts, so we don’t have any employees, but we’ve got a team of five different five cleaners that, that do all the houses. So they they’re, they’re assigned certain houses. So they do all that.

01:18:15

What would you say, what is the most challenging part from transitioning from managing those, those couple properties to acquiring a 25?

01:18:24

I guess, I mean, the challenge most challenging would probably be learning the new property management system, but it’s, it automates everything. So, you know, we get bookings from our website or from HomeAway and it just, it processes everything it automatically communicates with, with the guests. It automatically schedules the cleaning. So it’s actually made things a lot easier, you know, it’s all, all in that system.

01:18:49

And are you, are you doing things to, to modify the business or have you kind of left things the way that they were prior?

01:18:55

We are, we’re trying to make things more, more automated. What we’ve really noticed this year, you know, we’ve got four or five years worth of data. And what we’ve really seen is that Airbnb has really taken over a lot of the bookings, you know, whereas it may have been split 50% direct from the website 25, VRVO 25 Airbnb, you know, just throwing numbers out here, but it’s now Airbnb is really taking over the BRBO booking. So, you know, we’ve had to really scramble with, with how we manage the listings for, for Airbnb to make sure they were, they were optimized and just, you know, trying to grow the business, trying to get more direct bookings. My winter is gonna be spent doing some online marketing, just promoting Niagara on the lake, promoting our houses and promoting our business.

01:19:47

Yeah. I was going to say, what is it, what does a typical day look like for you and having a marketing background? Are you more aggressive with how you’re advertising the properties or what does that look like?

01:19:59

Not so far. I mean, we’ve been really busy and our October was really busy. So November, I just kinda took the month off. You know, there’s always, you know, changing furnace filters, checking the smoke detectors, you know, normal property management stuff that needs to be done. So November, I just kind of took the month off and just did the minimum stuff I needed to do. And so now, now we’re in the Christmas holiday season. So, you know, and I’ve, I’ve got my real estate license as well, which I don’t really work full-time because, you know, the property management keeps me busy enough and pays the bills, but it’s a nice, you know, it’s a nice pairing if I’m, if I can focus on real estate sales with that and breakfasts and vacation rentals, and I’m in that industry, managing them, you know, it’s a nice pairing, but yeah. So I think January is going to be when I really focus. But again, no online marketing, I’d probably spend two or three hours a day just promoting business. And then I got the rest of the day to do what I want.

02:20:59

It’s a good, good life sense. Sounds pretty sweet. Yeah. Awesome. So with, with, with, because this has been an established business and these have been properties that have been with one prop company for over 10 years. I imagine that, that, that, I mean, that’s a long relationship with one particular company. Are these, have you had to, how do you handle that relationship with property owners where you feel that, you know, times are changing? You know, Airbnb is taking over a lot of listings. People are, have a certain level of expectancy or they’re, they’re looking for maybe a certain levels of amenities or even more competition coming into the market. How are you communicating with these property owners to be able to help them boost their listings?

02:21:43

Yeah. So yeah, so, well actually some of these owners, they don’t live in town. Some of them I’ve never even met face-to-face so, you know, it’s phone calls, it’s emails, just communicating with them, letting them know that, Hey, Airbnb is getting a lot more bookings. You know, we’ve had to change some of the descriptions, you know, we may need some more photos. So each, I mean, each owner is different. Some of them, we may be phone call, phone call. Some of them may be texts. Some of them may be email, but we have our property management system actually has, you know, a CMS, a client management system where all the owners are in there. So we can send a global email to them, just letting them know. Yeah. I mean, so we basically got to two customers, we’ve got the guests that are coming to the houses.

02:22:32

We also got the owners. So, you know, we have to make sure that the owners know that, you know, they can’t come to the house in the middle of the summer. They want to make money or they can’t come when there’s guests. So, you know, sometimes we’ll send some and a bulk email, everyone just reminding them that, you know, if you’re booking the house, you still need to leave at 10 30. You can’t learn, arrive until four. So, you know, some of them need more, more individual communication. Some of them, we can just, some of them we don’t ever even hear from,

02:23:01

And specifically, are you, are you ha are you making changes to the home or asking or saying like, recommendations, like, Hey, you know, there there’s a lot more people that are coming here. We should be doing these things to be able to improve, or are you doing everything yourself?

02:23:16

Yeah. Again, 25 owners, you’ve got 25 different people. Some of them are more hands-on, you know, some of them, you know, if something breaks, you know, if like the lamp breaks, so the couch needs for your place. So I do that myself, you know, some loom, I need to run that by them. Some of them, they want to have that decision. So it depends on the house, but yeah, so we want to make sure that, you know, we’ve actually introduced a new, a coupon packs. So it’s, you know, whereas there may have been an envelope with some coupons in it before we bought this design thing, which actually promotes ourselves and promotes the town and it gives coupons and maps for the guests. We’ve just created some postcards that we can and hand out, you know, have a stack of in, in the houses that people will take with them.

02:24:03

I’m looking at doing, starting some Google ad words in the, in the new year, we were talking about Shaw. The Shaw festival is a big tourist attraction here. It’s like plays every summer. So we want to be annual advertising where we came with them. Oh yeah, there hasn’t been a lot of advertising spend over the year. So that’s something we’re going to start doing is getting your name out there and getting in front of people so that when they come here, they know too, how’s renting a whole house as an option. And you know, we’ve got some twenty-five.

02:24:39

And what was, what was the management percentage when you purchased the business?

02:24:44

We haven’t changed a change that it’s 21, 20 1%

02:24:49

21. And are you, what, what, what are you paying for like the amenities or what’s included with the 21%?

02:24:56

Mostly just us looking after the house, someone books, a house there’s initial cleaning fee. Like the guest pays. It’s not exactly, you know, one-to-one with the cleaner pays, but the cleaner has a set fee for each house. So one house may be a hundred bucks. You know, the guests may pay 75, the cleaner goes in and cleans the house. They charge a hundred bucks and it’s basically a pass through. So the owner, the owner is paying for that, you know, lawn maintenance. The owner pays for that. You know, we’ll, we’ll actually coordinate all the relationships with like maybe the lawn and what the cleaners and the money, you know, the money just comes out of the, what we collect. So we collect the, what the guest pays all comes through us. So we, some of the guests, some of the owners we pay monthly most, you know, a lot of them, we pay quarterly and they’ll just get, they have access to, to the property management system as well. They get limited access to see how much money is coming and going.

02:25:53

W was there a big difference from transitioning from long-term rentals to short-term rentals, as far as the, the scale, because now, you know, when you’re talking about managing 25 properties and Ontario Niagara, I’m sure that it gets a lot of snow. There’s probably a lot of things that you have to take care of, like, you know, ice on the pavements. These are also big houses that I’m looking at. That’s what that looks like a lot of space that has to be taken care of. Is there, was there a big difference from managing long-term to these?

02:26:22

I mean, a house is a house it’s, whether it’s long-term or short-term, it’s got a driveway, it’s got, you know, it’s got a furnace. So, so that hasn’t changed. We’re actually lucky being a negative, the way that we’re, we’ve got the lake effect that the, the escarpment, so we don’t actually get a lot of snow. So we’ll have a contact with the snow snow company, you know, and we actually, we have, one of our cleaners actually goes to the house on the day of check-in and does an outside clean. So in the winter, you know, she might do some, some minor snow shoveling, you know, some, some ice melt stuff. So in a longterm property, you need to, you need to be looking after the riding, the ice melt and shoveling the rivalry as well, the walkway. So it’s not, not really any different.

02:27:10

Do you think that anybody could just purchase a property management company and then just learn as you go? Or was it because of your experience prior to managing a couple and having that long-term rental experience as well, that allowed you to be able to do this because 25 it’s, it’s a different level of systems and that that’s a lot of work.

02:27:30

Well, yeah, I’ve got 25 different thermostats. Twenty-five different furnaces, you know, 25 different, you know, light switches and things that I need to figure out. So, but I mean, I’ve, I think, I don’t think you can just walk, you know, walk out of an office, building and walk into to property management. You need to, you need to have some property knowledge. I mean, you can hire someone to do all this stuff, but that’s also going to kind of cut into your income. So, I mean, I’m, I may be more hands on than a lot, a lot of property managers, but you know, if I’ve got the time, you know, I don’t mind going to diagnose a leaky faucet or something. And if I can tighten a tightness screw and get it working, then, you know, I might charge them 25 bucks for my time. Or if it’s beyond that, then I’ll call the plumber. And so managing short-term and long-term, it’s, it’s fairly, very similar. I don’t think you need to have some kind of knowledge, you know, you can’t just call a plumber every time there’s a drop of water on the floor or something you need to know, what’s, what’s causing that to manage the expenses. And then as far as, you know, managing guests, you need some kind of customer service, you know, communication. You can’t just, you know, get upset when everyone calls you or trying to look at house.

02:28:46

Yeah. I was going to ask, did you, I mean, you, you had, you had some experience managing those, those couple of properties for those those two, three years, but when you started managing over 25 D was it like a, like a shell shock with the amount of messages and the amount of type of customer, you know, situations that might, might happen?

02:29:09

It’s I mean, it’s definitely, it’s greater scale. I mean, you know, one house you, you get into really know the systems, you know, but 25 houses, it takes a bit more time. So there’s a bit of learning curve. I mean, now someone calls me, you know, they start randomly calling saying, you know, the light switch isn’t working, or I have the doorknobs not working. So I have to ask them, what house are you in? Whereas before I would have known by the name of house, but I’ve actually gotten to know, you know, they say they’re at an street cottage. I can picture the thermostat in my mind, or I can picture the door knob and I can walk them through how they get into the house. So it just takes some time to learn learning each of the systems.

02:29:51

Yeah. It sounds like you, you, you, you’ve gotten a really intimate relationship with every house and you know, what, what, what it is that every house it’s like, oh, there’s, there’s the Anne home again. There she goes with those, those flickering lights.

03:30:05

Yeah, exactly. I mean, you that’s, if you hire all this stuff out, then you lose that touch. So I’m, I’m, hands-on, I’m jumping in the service fan and driving around every day to, you know, for a house for a check-in or a checkout or something. So I get to know, you know, the houses in that way, I can provide better customer service. If someone calls, you know, they’re late checking in and they can’t see that figure out how the code works on the door, or you can’t figure out how to get the fireplace to come on, you know, like I can help them with that.

03:30:35

What’s I know this is kind of early in the conversation, but what’s your goal with this? Is it to, are you planning on managing this, you know, the kind of the, the rest of your retirement and then passing it off to somebody else, or are you trying to create systems to, or a way to be able to replace yourself and scale this? W what’s your goal with this?

03:30:52

Yeah, I think know we might try and grow it with maybe a few more properties. I think with two of us running the business and with the cleaners we have now probably 30 properties as the next, you know, I don’t, I don’t really want to over-complicate it by, by expanding. So, you know, Niagara and the lake, it’s a huge covers, a huge area, but it’s a lot of farm land and it’s made up of a lot of little villages. Virgil old town is so all our properties are all in old town. We live in old town. So if someone calls me with a problem, I can jump in the van. I can be there within a few minutes. So you, I don’t want to, you know, kind of dilute things by expanding beyond Meghan lake and having to rely on someone else, you know, and I don’t want to add more complications, but I haven’t done manage, you know, manage more people or manage more locations. So, you know, I like it being just, you know, just, just as it is maybe a few more properties, but staying within diagonal, I don’t want a lot of employees. I don’t want a lot more red tape. Or

03:31:56

If you could go back to, you know, farther back before you even moved to the area, would you have purchased a portfolio of properties to be able to retire from your job earlier and, and do this? Cause it sounds like you’re, you’re, you’re working a whole lot less with, with this new job, but it’s with a different set of challenges.

03:32:14

Definitely. I mean, it was always my goal to, to continue buying properties. I mean, it was long-term at the time, but you know, just various different things that it wasn’t, I mean, my heart, I’m actually a lazy person, you know, I don’t want to sit at a desk and work nine to five or, or be working a lot and doing a lot of running around. So, you know, I could have found this sooner, you know, I definitely have jumped

03:32:39

Think, you know, you haven’t purchased having managed and, and purchase long-term rentals. Do you think that any real estate investor that is looking to get into the short-term rental space can just go ahead and kind of do what you did and purchase a portfolio of properties if they wanted to get in on the space or, and, or do they have to basically have a manager unless they plan on being a manager full-time themselves. Yeah.

03:33:03

Yeah. I mean, if you want to get into managing, managing more people, you know, you, if you had a manager with the experience, you know, that would work as well. I mean, I had 10 years experience managing properties long-term and then I had a couple of years of managing two property Short Term. So, you know, I had think I had the experience, you know, to be able to jump in and do it myself. But, you know, if you had the money and you had a business and you had some experience that you wanted to pay them to manage it, now that’d be, obviously it cuts into your interior income, into your, your investment. If you’re paying someone full time, you basically have to, you need someone to be on call. They may not be working 28 hours a day or even four hours a day, but they need to be on call 24 7. So you need to be able to pay some,

03:33:51

Do you think that there would be enough margin for profit that would even potentially be greater than long-term rentals if you were to purchase a portfolio of properties with, and then just with maybe I’ll manage your already in place?

03:34:06

Yeah. If you mean, if you had something already in place. Yeah. I mean the income work we’re bringing in is basically, you know, my, my wife’s and my salary. So it’s two persons, you know, full-time salary. So, you know, the money is there. If someone’s got someone buys that and we have a manager in place.

03:34:26

Yeah. Because I guess it’d be the same, like if someone could own those 25 units and then they just decide to sell the 25 units through an investor and you would just be managing those as well. So I, I, I guess I, yeah, I guess for people that had a lot of money that can just pick up a bunch of properties, that there’s potential,

03:34:44

It’d be great if I could buy another property myself and make more of the income from it. But so the cottage that we own, I’m actually funneled that through the corporation, you know, the business is managing it now. So I am paying the corporation 21% to manage it. But I mean, in our case, ultimately it’s just, you know, money, you know, switching from one pocket to the other. But yeah, if you owned all the properties, it’s a lot of money to buy 25 properties. But, you know, if I can find someone that wants to help wants me to manage for them and they keep 80% and I keep 20%, you know, that works for me.

03:35:23

That’s gotta be a really kind of a good positioning on your part because you’re, you’re in this area where you have over 10 years of history, people know who you are. They probably know the Niagara holiday rentals when they’re in the area. Does that, have you found that, that, that people in the space, in the area, if they are looking to rent are to short-term rent, that they would be more inclined to go with you? Or H how, how are you, how would you be able to position yourself so that you would be able to acquire more properties?

03:35:55

Yeah, there, there is definitely is word of mouth. There’s a lot of regulations. Like Negrin lake is actually had a short term rental licensing bylaw for almost 10 years. So we’re lucky in that we’re not like Toronto, where they’re coming up with new laws and a lot of places across the country. And, you know, down in the states, they’re coming up with new laws and they’re very restrictive. And they’re saying it has to be your principle residence. So we’re lucky that we’ve had laws in place for 10 years, but yeah. So you got to make sure that, you know, you can buy, get someplace that has regulations.

03:36:28

Yeah. That’s gotta be, that’s gotta be a pretty scary thing to even think of that, that, that just made me think. Cause you’re, you’re purchasing a business that is dependent on, you know, good regulations. Was that a big concern or fear from you before getting into this business?

03:36:45

We’re lucky this area, or we had the regulations now, so there are going through, you know, there’s some problems in the area. There’s, there’s the odd house that has a pool and it’s, it’s the party house. So, you know, we, you know, those one or two house that has the negative reputation and you have to deal with that. And the town is looking at know, you get a lot of neighbors complaining. The town’s looking at redoing the current licensing. So, you know, I I’m here. The company has been around for 10 years. So, you know, if someone is thinking about getting a property and getting someone manage it, you know, hopefully one of the ones that they think of, but because I’m in this, I mean the industry and, you know, and listening, I’m hoping that I can address the town when they, when they go to update the bylaws to not make them through the restrictive.

03:37:33

Have you noticed that there’s a lot more people coming into this market that are just listing their properties on Airbnb?

03:37:40

Oh yeah. No, definitely. I mean, as I say that Airbnb is really taken over as far as the bookings and people, people use the word, Airbnb is just regular noun or a verb or something, you know, they just think that they can just buy any old property and start Airbnb. They don’t realize that there’s tat there’s bylaws that you have to follow. So definitely there’s a lot out there. And that’s what I keep pushing back with the town is you can’t add more rules if you’re not enforcing the ones that are already there, you know, there’s already, you know, noise bylaws or there’s a new pool by law. So just enforce the ones that are there and make sure that people that aren’t licensed are getting licensed rather than just trying to make it more complicated for someone that’s already following the rules. But in the summer, we’d get maybe one call a week from someone calling us up saying, I’m going to buy this townhouse and I want to Airbnb it.

03:38:33

Well, you guys manage it for me. And then we have to get into a long discussion on exactly, you know, saying a time of house, doesn’t meet the town’s bylaws. This is what you need to buy to get those bylaws. So yeah, we had at least one conversation a week, but we ended up adding one property in the summer. But, you know, it’s, it’s just trying to find, find the right property that will make money. And, and the real estate prices in the iron lake. Now they skyrocketed, I mean, we were lucky to buy in 2014 and even 2016, you know, right after we bought the prices skyrocketed. So you can’t even buy a property now and make money. But we moved from London a few years ago and I’m talking to all the investors and the people I know they’re telling them, buy a place here. You’re not going to make money, but it’s your weekend getaway. And it’s, you know, the expenses are getting paid for by the guests. So it’s hard to find someone to move down here and buy a place. And you know, you have to educate them on what, what they can and can’t do.

03:39:35

I think, I think that’s really cool. And that you positioned yourself because you got that license now that, that when people are calling you, you can advise them and educate them on, you know, where are the best plate type of places that you can purchase? I think, I think that’s, that’s brilliant. Brilliant marketing on your part.

03:39:52

Yeah. I mean, I, because now you’re in like such a big area and there’s all these little, little tent, little hamlets kind of thing. Old town is the desired spot. Clean street is our main street. Whenever you want, someone’s looking for a place to say to book, they say, how close are you to clean street? So all the properties we manage are, you know, at most 15 minute walk to queen street. So you can’t, you can’t buy in Virgil or in St. David’s and expect to get the occupancy that you would if you had a place in old town.

04:40:23

And because you have that 10 years of, of data and experience, it’s got nothing to compete on. Let’s say like, like air DNA or one of these tools where it’s just looking at the, you know, Airbnb and HomeAway, you, you have this, this data that goes back, you know, you know, almost a decade now.

04:40:39

Yeah. I mean, when you’re looking at real estate, anyone investing or buying properties, you know, you can’t just look at the, the Niagara region prices or even the Niagara falls or the St. Catherine’s prices because nagging the lake is its own market and old town is its own market. So, you know, whereas overall, the average price in the Agora region might be five or 600. You know, the average price for a negative lake might be eight 50. But when you’re looking at old town, the average price is like million plus. So you really need to know that the area in the market, before you even think about buying an investment property,

04:41:15

I’m just curious, has anybody gotten into the, the subleasing rental rent model in, in your area yet? Or is that still

04:41:23

Not that I know of. So, you know, our, our company, we’re managing 25 properties. There are, there’s another company that’s, you know, probably managing about the same member. You know, he’s a bit more, I’d say a bit more aggressive. He’s expanded from the Niagara region. I think he’s even managing properties in Toronto. There’s a couple of little people I know who, who are managing for brother, other people. I’m not sure what kind of arrangement they have with them. But one thing actually, if you’re managing an Ontario is we have the travel industry council of Ontario as well, that you either need to be a travel agent or a real estate agent to manage properties for someone else in Ontario. So I’m, so our business is actually a Trek registered travel agency. You know, I’m a registered real estate agent and registered travel agent. So now we’re insurance, we’re following all the, all the rules. So, you know, people can get away with it. If they want to manage two or three properties on their own, they pot by under the radar. I’m not sure exactly what agreements they have with the owners when they’re managing.

04:42:32

Yeah. I, I think that’s so cool. You’re, you’re following all the right, all the right things. You’re checking all your boxes across on all your T’s and you’re, you’re, you’re, you’re not looking at this business as just like a Short Term, you know, cash engine, click gain. You’re looking at this as like, this is, this is where you love to be. You, you wanted to retire here. And now you’re invested into this, this area with, with these homes that have, you know, that have been invested here for years. If you could do anything differently, if you had to start from scratch, what would you do?

04:43:01

Well, if I can go back three or four years, I buy five or 10 properties before the prices went up. So, I mean, if you, when you talk to any real estate investor, you know, he kind of fingered what got them into it. I mean, if I go back 20 years ago, rich dad, poor dad was, was the book that got me into real estate, you know, but you know, it was don’t know five or 10 years after I read that before I really got into doing it. So definitely I’d say, read, educate yourself and just start moving. If you don’t have the money or not, you can find the money from,

04:43:34

And if you could give one piece of advice to someone who’s trying to start their short-term rental business, what, what would that be?

04:43:40

Yeah. If you can’t, if you can’t buy a property, find someone that has a property, you know, I mean, so I talked to a lot of people in London that are doing the Airbnb co-host thing, but Niagen the lake is its own market. You know, we’re a tourist destination, you know, Toronto may get a lot of business people and some tourists, but negative lake is solely tourist industry. So, you know, I mean, I’m, you know, all my information is specific to, to the tourist industry, but you know, if you want to get into this, if you live in Niagara on the lake, find someone who’s got a cottage here that’s sitting empty, you know, for a couple months in the winter for, you know, the weekdays during the summer and say, Hey, you know, you want to make some more money, pay your expenses, you know, just find someone that’s got a property and, you know, start listing on Airbnb and get some, you know, get some extra income.

04:44:37

Do you think that you could really do this? Like anywhere? Could you have like picked anywhere that, that you wanted to be able to, let’s say retire in and then just start kind of managing properties and be able to live there?

04:44:49

Yeah. I mean, if you’re talking retirement destination, those are desire places. They’re normally tourist places. I mean, I know a lot of people are doing this in London and they seem to be having great success with, you know, kind of like people coming to work for a couple of months, you know, at the hospital or, or students or something. So yeah, I mean, it could work anywhere. It’s just, you know, how much, what your occupants can like, whether your rate’s going to be, you know, look at the hotels, whatever the hotels make, move a night in there, they are, they booked up, you know, you should be able to find someplace that has where the numbers work.

04:45:23

And w where do you see short-term rentals going in the future?

04:45:28

Well, there’s, I mean, I’m trying to, I keep falling all the news. I mean, I read that there was three or four companies that are competing with Airbnb. Now. I don’t know what they are being me, whatever disappear, you know, definitely regulation is going to be a big, big direction where things are going, but, you know, there’s people, as long as you’ve got a place that people always want to travel, you know, especially the benefit our houses have over hotel is the cost. You know, you can get like five people in house versus two for probably the same price. You know, you can serve breakfast, you can bring your dog, you know, our bed and breakfast. We don’t allow kids or other pets. So, you know, a house you can bring your, you know, you bring your kids, you can ruin the whole family. So I see it. I mean, I see it growing. There’s going to be a lot of regulations that are going to, you know, especially if the, if the town’s really start cutting back, you know, I know some towns don’t allow any short term rentals, you know, a lot of them that are their home, your principal residence, which makes it really hard for someone to expand. So I hope we can kind of reach a happy meeting with regulations and with what people want to do, but I could see it keep growing.

04:46:43

Awesome. And what question would you have for maybe another person that is maybe in a similar situation or maybe the next kind of step or progression in automation or, or their business? What, what would you ask them?

04:46:59

Well, the property management system we use, you know, I think it’s great, but it also has some flaws. I mean, I guess I’d want to talk about what their systems are and what’s what, what software they’re using to see what challenges they have. We have a bed and breakfast association here. So we’re always having events where you can kind of throw ideas around with people, you know, it’s, you know, you get, you know, you get the odd question, you know, people are always asking, can I come early? Can I come late? So, you know, just being able to network misery with people about what, what people can be like is gonna be interesting. But yeah, I guess just talking about what systems are working for them and what, what tips they may have, or,

04:47:42

And you mentioned rich dad, poor dad is being kind of one of those most influential books. Do you have any other books that have really influenced your business or changed your life?

04:47:53

There’s a couple of different books. I’m Michael Masterson, add some books, Robert ringer, Dale. Carnegie’s how to win friends, influence people.

04:48:05

Awesome. Okay, great. Great. And yeah, I, I, I love your website. Did, was this already the way that it was when you, when you acquired the business or did you

04:48:15

That’s that came with the business and it’s actually tied to the, the property management system. So I don’t think it’s the best website. I think it could be better, you know, that’s kind of one thing I need to work on through the winter, as well as, you know, what can I do to fix that? So when we bought the business, you know, it was January, we had a bit of learning curve trying to figure things out. And then we were like right into the peak season, running madly. So, you know, we, we haven’t really changed a lot in the business since we bought it. But now that the busy season is over and we’ve had a chance to catch your breath. Now we can really look at what we can do.

04:48:51

I love that because I’ve, I’ve been sharing actually in some of the emails is, you know, a lot of people are, are kind of this, you know, people that are just getting into this business. Maybe they were riding that high and they’re like, wow, this is so awesome. There’s just so much money. And this is so cool. I, I can throw anything up and people are booking it, but then you started hitting that low and it’s like, oh, am I, am I a bad host? Am I doing something wrong? Like, what am I doing? But I like, what you said is now is the time to really start focusing on how can you best optimize your business? What are you doing to be able to, you know, maybe improve those websites where you didn’t have enough time to be able to do that, or, you know, maybe start marketing and reaching out,

04:49:29

Try and get some more lows off of those off season.

04:49:32

Awesome. Well, thank you so much, Jason. I think it is just so cool. Your, your story and your, your transition into managing over 25 properties. I’ll include all your links and everything in the show notes. If anybody is interested in purchasing in the Niagara area, I’m sure that they have, they have an expert in that market who can best advise them. So I thank you so much for coming on the show. Is there anything else that you want to pass to the audience?

04:49:56

Thanks, Jolene.

04:49:58

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