Vanessa Vargas:               00:00                    I think we’re also talking about how we can use this time wisely. What can we do to get better going forward? Can we focus on on boarding new property so they’re ready to go at the point in time when people are looking to start traveling again? Taking the time to learn those systems and create new processes and educate our team as a whole and work on getting better while we wait for everything to settle down.

Julian Sage:                       00:24                    This is episode 53 of the short term rental success storie podcasts. Are you an investor that’s looking to have your home professionally managed? Go to cohostit.com for more information. Welcome back to short term rental success stories. I’m your host Julian Sage. This is a show where I talk to hosts about their journeys and starting and growing the short term rental business. My goal is that you’ll be able to walk away with practical information that’ll help you become a better host and learn how to scale your business like any exceptional hosts. We all strive for five star reviews, so please go on over to iTunes and let us know what you enjoy because 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 what is going on nation. So I wanted to apologize as last week we did not schedule out a success stories podcast like we anticipated and the reason being is just because of everything that has been happening as far as the Covid-19 and its effects.

Julian Sage:                       01:20                    I didn’t think that it was appropriate to share a success story as there was a lot of stuff happening as far as Airbnb, just allowing this extenuating circumstance policy where all of our calendars were completely wiped. I really did kind of feel a funk for the past week thus the episode did not go out as anticipated but I was reached out to by some really amazing hosts who were prior guests on the show, Ray and Vanessa Vargas. And they actually reached out to me first asking if they could share just some words of encouragement with the host nation community. Right now as times are really uncertain and hosts who are affected such as like Ray and Vanessa where they recently quit their jobs so that they could host full-time and now with all these cancellations and things that are happening, they still want it to be able to share their message with all of you.

Julian Sage:                       02:09                    So moving forward, the success stories is going to be changing just a little bit where we’re not going to be sharing so much the strategies on hosting and taking on more clients. I just want to be focused on what are other hosts doing in the space to be able to really kind of stay afloat during these uncertain times. I think now is more important than ever that we start communicating more. And I do want to apologize that usually when things are happening around in the world, being an introvert myself, I tend to keep to myself and don’t really communicate that much. But I know that it’s not just me who I’m serving now and there are many of you that are waiting for more answers and for support and I do want to be able to help get those messages out to you.

Julian Sage:                       02:50                    So moving forward with the success stories podcast, we’re going to be featuring hosts who are going through these times. These are going to be shorter episodes, they’re not going to be the full hour long ones. We’re going to try to keep them around like 30 minutes or less just so that we can have more of the previous guests come on and share their stories. We are going to be posting more on vacation rental machine though with Jon and I. As you all might know, Jon manages over 22 properties that are rental arbitrage and then he has about the other half of his portfolio, another 10 or so being co-host clients. So Jon is definitely feeling this as well. So we do want to share some of the practical things that that he’s doing in his own business as well as things that you can be doing. So if you go and listen to our show vacation rental machine right now, we’re going back to publishing two episodes per week more on the subjects of what are we doing, what are things that you can be doing to be able to really keep your business afloat during these times.

Julian Sage:                       03:43                    Again, I do apologize for the episode not coming out as timed and also for our weekly newsletter, not going out as planned, but I did need to take a little bit of a break. I’ve been feeling a little bit run down recently, so please bear with me. This episode, this week, we are coming back and we’re going to come back strong and I am here for all of your support. If you like the show notes for this episode, go to shorttermsage.com/str53 or if you’d like my show notes sent directly to your inbox every week, then go to shorttermsage.com/shownotes. With all that being said, on to this week’s conversation.

Julian Sage:                       04:17                    Already host nation, Juliane Sage here. And we have Ray and Vanessa Vargas. Some of our success story guests and I believe which episode were you back? 28 or 30?

Ray Vargas:                        04:29                    30, yeah.

Julian Sage:                       04:33                    28 or 30. So we’re at episode 52 right now. So what we’re going to be doing though is we’re gonna be doing something a little bit different with the success stories podcast. First, I want to say thank you to Ray and Vanessa for kind of inspiring me. Some of you may have noticed the last episode of the success stories podcast did not happen in time because I was actually going to be putting out an announcement video saying like, “Hey, we’re going to be holding off the success stories podcast just, you know, due to this Coronavirus and its impacts for hosts.”

Julian Sage:                       05:05                    I didn’t believe that it was appropriate to be sharing people’s success stories. I was honestly kinda feeling a little bit depressed. And I was like, man, I don’t know what I should be doing. But Ray and Vanessa, hey reached out to me. They said, “Hey, you know, I wanted to say, this is what we’re doing in our business. I want to share with the community, with the host nation.” And that really kind of instilled a new fire in me. I was like, man we have to pivot in our business and you know, Ray and Vanessa from Home Sweet Hudson they are pivoting their business and I’m pivoting as well, in mine and I’m pivoting with the podcast. So what we’re going to be doing is we’re going to be talking about hosts pivoting what they’re doing in their business, how they’re able to either increase bookings, what they’re doing to be able to change their business.

Julian Sage:                       05:49                    Ray and Vanessa, now they’ve scaled quite a little bit. We’ll talk about where they were when they first were on the podcast and where they are now, what they’re doing to be able to change, and what are some of the things that this virus is impacting and how are they trying to increase that business again. So thank you so much again, Ray and Vanessa for coming on the short term rental success stories podcast. Please introduce yourself again for those of them that don’t know who you are yet, definitely go check that episode. I’ll include a link in the description, but if you guys want to introduce yourself and where you guys are at.

Vanessa Vargas:               06:23                    Sure. Yeah, we own a short term rental management company. We’re based in the Hudson Valley, which is about two hours North of New York city. We’re about a year and a couple months into our business. And you know, it’s been a really interesting ride. Our dog wants to be part of the conversation.

Julian Sage:                       06:42                    I think on the last episode as well.

Vanessa Vargas:               06:42                    We started out this time last year with about, I’d say six properties and grown really quickly due to a lot of different factors, but obviously we’re finding ourselves in a similar boat as many other hosts and managers right now where we’re trying to figure out what things are going to look like in a week, in a month, in two months. So it’s definitely really interesting time for business.

Ray Vargas:                        07:09                    Yeah. And I’m Ray, I’m originally from the Hudson Valley region. I’m from the Newpaltz Highland area and like Vanessa mentioned, we’re about two hours North of Manhattan so we’re dealing with some really unique challenges with all of these changes happening on a city and state level. And that’s kinda what’s made us to reach out to Julian because we felt like we were experiencing some stuff that we could share with other people that could help them during this difficult time.

Julian Sage:                       07:40                    Awesome. Now with you guys, you are doing just the traditional property management model. So you’re very asset light, just managing other people’s properties. You don’t have any arbitrage units. Correct?

Vanessa Vargas:               07:49                    That’s correct.

Julian Sage:                       07:51                    And so, so can, can you kind of walk through like right before this whole Covid-19, you know, this black Swan event happened that caused all these bookings that cancel? Where were you guys before that and what are you guys doing now?

Vanessa Vargas:               08:09                    Yeah, I would say the January through March time is relatively slower time for us. This year was a little bit interesting because we’ve had lack of snow, which usually prompts people to want to get away and enjoy a nice, beautiful snowy weekend in the country. So things were, you know, moving along. But on the lighter side. I think we were anticipating an increase in booking coming in the next month. So it was a little bit of extra shaky time when we started to get some cancellations come through.

Ray Vargas:                        08:45                    Yeah.

Julian Sage:                       08:47                    Right. So, you’re going through that slow season where typically most people are not getting those really high bookings and you’re kind of depending on March to really start to pick up.

Julian Sage:                       08:58                    When those cancellations started happening, you guys, I think in the last episode that we were talking to like, you guys more recently, like quit your jobs, you came into this full time, right? How is that impacting you? Like how are you feeling during this kind of time?

Ray Vargas:                        09:13                    It’s a little nerve wracking. I think we really don’t know where we’re going to land financially just because we’re having so many different cancellations sprinkled with some bookings. Some of our clients who live primarily in New York city that have a second home up here that we manage for them have opted to take over their house so that they could be there with their family. We’re not sure how long this is going to last. Luckily we do have a couple of properties that we were able to help people use to sort of quarantine and, you know, socially distance themselves. And so I don’t know yet. I think we’re just taking it one day at a time. But you know, luckily we have a great team and everyone’s been on board and doing a really good job.

Julian Sage:                       10:02                    Do you have any full-time people that you’re paying now? I think on the last episode you said you actually hired a full time maintenance guy that was like doing everything for you. How is that impacting when you have employees to be able to pay?

Ray Vargas:                        10:16                    You know, right now, we’re okay. We’re still able to afford salaries. They still have been working. We’ve added another full time employee since then. Her name is Brenda. She’s a property manager, absolutely wonderful. She oversees housekeeping, hiring, scheduling, quality control. Even now she’s doing some guest messaging. So we’ve been able to sort of delegate a lot of the day to days that we were doing the last time we spoke with youwhere we can just focus on growing the business and everything’s been great in that regard so far. Now that we’ve seen some bookings come in that are couple of weeks long, maybe a month or two, we’re going to see what our day to day looks like at that point and figure it out from there.

Julian Sage:                       11:05                    So what are some of the things that you’re actively doing right now? If you could kind of explain what the market is like in your particular area in New York, and what are the things that you’re actively doing in your business to be able to keep it afloat?

Ray Vargas:                        11:24                    Over communicating with guests. Right. So for example, we’ve had some bookings that are towards the end of the March, early April, that were just two or three day reservations. And so we proactively reach out and said, Hey, look, we understand the circumstance. If you want to cancel, we totally understand that and we’ll give you a full refund. And we support that. I think the reason why is because we want to make sure that A, we’re just doing the right thing. B leaving a good impression so that when we get through this when people are ready to travel again, that hopefully they’ll come back and visit us in the future. And if they’re interested in extending their stay because maybe they don’t want to go back to New York city we can have that conversation and we’ve had a few opportunities where people have said, “Hey, extend my reservation for another two weeks,” or “Hey, I’m getting out of here. But thank you very much.” So we’ve also been getting a lot of direct bookings.

Vanessa Vargas:               12:25                    Yeah. We are, I think, seeing a lot of people that are families that are looking to say, “Hey, you know, we have to home school our kids for the next few weeks and we’d love to have more space and access to a yard versus being in an apartment. Soto be able to take them sort of transition from an Airbnb booking to a direct booking where there is a savings for people that didn’t necessarily plan for this to be where they are. It feels good to be able to help people make these decisions and not break the bank, so to speak. That’s been really I think helpful for and believing for a lot of people.

Ray Vargas:                        13:09                    Yeah, I think another good thing to point out is that a lot of people are losing their jobs, right? Including our clients. And so, most of them are trying to get creative in the way that they can still sort of generate income. And I had this one gentleman who we were going to onboard about two months ago and right as we were going to sign a contract, someone decided to make him an offer on this property to purchase, even though he didn’t have it on the market. And so he decided to move forward with that and recently called and said, Hey, I lost my job. I live in Brooklyn and I’m not going to sell. I’d rather just help other people. They’re looking for places to quarantine and trying to generate a little bit of income to kind of soften the blow with losing a job. So I think that’s another way that we’ve been kind of been able to help.

Julian Sage:                       14:02                    How are you guys handling your clients? So all your clients have these properties and now, this virus and all the cancellations s this causing them to reach out to you more? Are they expecting more out of you or are you guys just like, how are you guys handling your clients?

Vanessa Vargas:               14:23                    Yeah, we sat down last week and said, you know, let’s let them know where we are and what we’re doing and what things are looking like for us. So we sent an email to all of our clients, just letting them know that we’re aware of what’s going on. We’ve proactively figured out what the best practices are for making sure the houses are safe, they’re disinfected and sanitized.

Vanessa Vargas:               14:48                    We sort of let them know that we are seeing cancellations but we’re doing everything we can to try to maximize whatever revenue we can generate for them and have full transparency with them. And I got immediate responses from so many of our clients. They said “Thank you for letting us know,” Or “thinking of you.” And really just banding together and being partners in this whole situation. I think it was really important to just reach out to them. Acknowledge that we’re all dealing with this together and give them our best recommendations on how we can move forward as a team.

Julian Sage:                       15:31                    Are there particular things that you’re doing in your business now that you weren’t doing before? Has anything that maybe has happened? Caused you to maybe shift to try to get maybe more creative or find ways to be able to increase your bookings?

Vanessa Vargas:               15:45                    I mean right now I think that we’re looking to find the best opportunities for the inquiries that are coming in. I think that we’re thinking about calling all of our future guests that are maybe scheduled for April and May. See where they are, see if they’d like to extend and see if they’d like to reschedule. And just sort of take the pulse on that so that we can really plan for where we need to fill in the holes and what we can do in those cases. I think we’re still sort of feeling out where everyone is in terms of guests for the future.

Ray Vargas:                        16:21                    Yeah. And also educating people on the ability to book our properties through our website because everyone’s looking to save money right now, rightfully so. And so we’re also motivated to help make this as affordable for people as possible. So, just over communicating, letting people know that we’re here to help, we’re going to get creative. I’ve had scenarios where an owner says, Hey, look, I know we’ve got bookings in the month of April, but I need to use the property so we need to cancel those. So rather than just cancel without any notifications, like I emailed the person and said, “Hey, look, I’m sorry, this is what’s going on.” They understand obviouslybut we have other properties so we can move you into another spot depending on availability. And we’ve been successful with that for quite a number of people so that’s helped us retain some of the revenue and also give other people a place to stay.

Vanessa Vargas:               17:24                    Yeah.

Julian Sage:                       17:26                    With a decrease. You said that people are actually coming back to their homes. Was it your guys are in Ithaca, New York?

Ray Vargas:                        17:35                    No, we’re based at Rosendale New York, which is near Kingston. People are probably more familiar with the Kingston Poughkeepsie area, so we’re about an hour and a half, two hours North of New York city.

Julian Sage:                       17:48                    And those people that they’re kind of retreating back to their homes to stay. And that means reservations that you did have. You’ve been having to cancel on those?

Ray Vargas:                        18:00                    In some cases, cancel. In other cases, we’ve been able to move them into other properties that have availability.

Vanessa Vargas:               18:08                    Yeah.

Julian Sage:                       18:08                    Okay. Is there anything that maybe you’re going to be doing moving forward? I know that there’s like different strategies out there like changing the title or offering discounts, all these different things? Have you done anything and have you noticed any direct impact on your business?

Ray Vargas:                        18:30                    Yeah, I think, definitely offering discounts also creating minimal stays. And the reason for that is because most of the inquiries we’re getting right now are for either two weeks, a month, even up to two months. And so rather than having several one night reservations sort of get in the way of those other bigger opportunities, we’ve put minimums so that we can avoid losing out on that kind of revenue. I think something we’ve learned too is like our contracts, right? I think we realized moving forward that we need to protect ourselves better in the event that a homeowner says, “Hey look, you got to cancel all these reservations.” And you know, we’ve all worked hard to get those reservations. And so now we’re left without any revenue.

Vanessa Vargas:               19:21                    And I think it’s tricky because obviously they own the home and we don’t want to feel like we’re in a combative situation because I can understand if I were in their shoes, I’d probably want to do the same thing. But I think we were in a new world and there’s a lot of lessons to be learned. And I think just having set protocols before you come to a place like this makes it easy for everyone to know exactly what should be happening.

Julian Sage:                       19:51                    So you’re going to be modifying your contracts moving forward and that if the homeowner wants to cancel all reservations or stay in a particular property, what’s going to be like the plan of action for those guests that did stay.

Vanessa Vargas:               20:05                    Yeah, I think it would be something along the lines of “If we can’t find alternative accommodations for them, that we would retain our commissions and either take it from revenue that’s already been generated for that month or future revenue.

Julian Sage:                       20:19                    Andgoing back to employees because you guys are pretty unique in that you guys do have full-time people. How, how do you communicate with your teams about something like this that’s happening and the impact that this is having on the business?

Ray Vargas:                        20:36                    Well, most of it has been remote, right? Like we’re practicing social distancing. Usually we’d meet here at the house, but we’ve been doing everything remotely. And just being positive and keeping an optimistic mindset and being supportive of each other. I think we all realized that there’s a lot of uncertainty that’s going to happen over the next couple of months or so. Right now we are in the process of looking at our finances and seeing how long we can last the way that we’re set up right now. So we’re just taking it day by day. If it weren’t for them, we wouldn’t be where we are right now. So I’m not really of the mindset to just say, Hey, we’ve got to create layoffs. Maybe it’s some sort of a reduction or something like that, but we’ll figure it out.

Vanessa Vargas:               21:27                    Yeah. And I think, you know, we’re also talking about how we can use this time wisely. Looking at our processes, I know it’s hard to concentrate because we keep looking at the news but sort of trying to recenter and say, you know, what can we do to get better going forward? Can we focus on on boarding new property so they’re ready to go at the point in time when people are looking to start traveling again? We actually just decided to add breezeway as a new way to help with maintenance and housekeeping. So taking the time to learn those systems and create new processes and educate our team as a whole and work on getting better while we wait for everything to settle down is I think a good way mentally to deal with it all. Sort of refocus a bit. So that’s another thing that I think we’re trying to move the focus,

Ray Vargas:                        22:21                    Just a little bit of house cleaning, looking at past reviews and see if there’s any information there that can inform us on how we can do a better job with some of these properties which we’re doing with both of our employees right now. So there’s plenty of work to do in the meantime so I think we feel good about that.

Julian Sage:                       22:43                    I think a lot of people when the booking stopped the traction really slows down. When you’re sitting on your hands for a while, you can start to eat away at yourself. So I really appreciate what you said about finding different things that you can start doing and your business, learning a new complex system like breezeway and trying to taking the time to really understand it and how it can impact your business. But I think that what you guys are doing is a positive thing. What you said moving forward though, how are you guys planning for future? Like if we don’t know how long this could last. We don’t know the lasting effect on the short term rental market. How are you guys trying to position your business or yourselves so that you can be best prepared for whatever’s to come?

Vanessa Vargas:               23:35                    Yeah, I think that that’s going to be an ongoing conversation for us. I think in the next few weeks, hopefully we’ll have an idea of where things are going just from an overall financial perspective for the country and for consumer trends moving forward. I think that what’s going to be essential is being nimble and being able to sort of think on our feet and be creative. But I think a positive mindset is important, remembering that people will travel. This industry will continue I believe very strongly that it will and just being prepared to make those quick decisions as things develop. I can’t remember a time when we’ve ever all been sitting and sort of waiting like this. So it’s an interesting time and I think we’re just going to have to kind of wait and see a little bit.

Julian Sage:                       24:26                    I’m just curious, what are your thoughts with Airbnb and kind of what they just did as far as the extenuating circumstance? Are you guys listed on multiple platforms or were you a majority of all your bookings coming through Airbnb? You said that you do have direct bookings, but how much of Airbnb has impacted your business?

Ray Vargas:                        24:47                    Well, a lot of our bookings come through Airbnb, so it’s hard to say how the new policy impacted our business so far. I think, from our standpoint, we really want to be as flexible as possible because people are put into tough situations, right? They need a place to stay. But every day there’s a new announcement by the governor and you know, so people are making drastic changes in real time and so we’re just trying to be able to accommodate as best as possible without losing too much revenue. But if someone needs to cancel and they need a full refund, I think we’ve been pretty open to doing that.

Vanessa Vargas:               25:30                    Yeah, and I think it’s easy to think about how it impacts us, but I think that you also have to realize that I think their strategy makes sense in terms of how they’ve gone about it. I understand that they want to just sort of do the right thing for people right now and sort of look at the larger picture. We do get probably, I would say 90% of our bookings came through Airbnb, so it’s a significant source of lead generation for us. But I think even if they hadn’t, we would probably be doing it ourselves.

Ray Vargas:                        26:07                    Let’s face it. A lot of industries are dealing with the same challenge; airlines, restaurants, bars. A lot of people losing their jobs. So, I think we have to be focused on what’s important from a moral standpoint and just be sort of nimble and save our money. We loaded up on a lot of rice, pasta, beans. We haven’t really left the house much to be honest with you and so just trying to do our part.

Julian Sage:                       26:45                    Awesome. I appreciate you for taking the time and coming out here. I think it’s really inspiring what you guys are doing. During these uncertain times you guys are keeping a positive mindset. You want to share your message with the community. I love that. As we are inside, now’s our time to be vocal and over communicate like what you said with your clients. We should be over communicating with everybody and letting them know like, “Hey, we’re, we’re healthy. We’re safe.” To our guests. “Hey, We’re taking care of our properties. We’re making sure that they’re sanitary.” To our clients, Wwe’re doing our best to be able to make sure that your places are trying to get occupied as well as take care of ourselves.” That it’s not just about profit and design. It’s about the safety and well being of everybody. So I really appreciate you taking the time to jump on here. Is there anything else that you wanted to share with the host nation?

Vanessa Vargas:               27:40                    We’re all in this together, I guess.

Ray Vargas:                        27:45                    Keep your head upand be strong and identify any kind of costs or business expenses that you can get rid of at the moment and just try to get back to where you were when you first started the business when you were doing everything yourself. I think that for us has been super important, so just wind up and we’ll get through it.

Julian Sage:                       28:05                    What are those types of expenses that you have identified in your cutting out?

Ray Vargas:                        28:11                    There’s a combination of personal and business stuff. We were using key data, but right now we had to put a pause on that just because if you just didn’t think it was that useful for us given the circumstances. What else? Gym memberships, just really everything that we can sort of minimize on. It’s important to cut back right now.

Julian Sage:                       28:40                    Well, I appreciate it. And you know, we definitely want to stay in touch and see how you guys are going through your journey. I would love to get you back on when we are further down the line and see you guys still thriving and growing and you guys are making a serious impact.

Ray Vargas:                        28:55                    Yes. Thank you, Julian. It’s always a pleasure talking to you. I appreciate it.

Julian Sage:                       28:58                    Thank you so much. Ray and Vanessa.

Vanessa Vargas:               28:59                    Take care!

Julian Sage:                       29:01                    Say goodbye for the puppy too.

Ray Vargas:                        29:03                    All right, buddy. Take care.

Julian Sage:                       29:09                    Take care. All right, keep on hosting everybody.

Julian Sage:                       29:10                    Hope you hosts benefited from the show. If you found value, please go on over to iTunes, leave us a review and let us know what you enjoy about the show. If you’d like to talk to the hosts that had been featured in these episodes as well as the community, go on over to our Facebook group, the host nation.