TREF Podcast #34 Joel Verinder

Podcast: Texas Real Estate & Finance Podcast

Episode Title: TREFP #34 Joel Verinder

Host(s): Mike Mills

Guest(s): Joel Verinder

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Mike Mills (Host) | 00:00:13 to 00:00:39

Boom, here we are. We are official now. We are live, rolling, and to tens and tens of people. My name is Mike Mill, and this is the Texas Real Estate and Finance podcast. And I'm a local lender here in DFW and do this usually once or twice a week, talk to people in different aspects of finance and real estate.

Mike Mills (Host) | 00:00:39 to 00:01:39

Sometimes I get off the beaten path a little bit just because I have my own interest, but this week is very specific to real estate and something that I have a great interest in and brought a good friend of mine, Joel Verinder, in to talk to me today about short term rentals, or STRs, as I've learned recently that they're frequently called. I'm not well versed in all the acronyms all the time. When we say STR multiple times, then you'll know that that stands for short term rentals. So, Joel, he's got several properties that he runs and manages as short term rentals, is working on his own podcast where he and his partner discuss this kind of stuff, and just where I got the idea to bring him in and talk to him, because I watched a couple of their episodes that they did and thought it was very helpful. So I want to learn a little bit about a little bit myself, because my wife and I have a couple of properties that are short term rentals that we run, and so I'm looking for tips, and I'm looking to how to fix all my problems.

Mike Mills (Host) | 00:01:40 to 00:02:01

So Joel's here to help me with all that, and we're going to dive into that, too. So, to start with, Joel, tell me about what you were doing prior to getting into all this, because how many years have you actually owned your properties? Like, the very first one you bought? Yeah. So we've been in long term rentals since maybe 2004.

Mike Mills (Host) | 00:02:01 to 00:02:10

Okay. So for a little while. For a while, but only long terms. And then we moved into short terms just in 2020. Okay, so not too long, just a couple of years.

Joel Verinder (Guest) | 00:02:10 to 00:02:20

Three years here. Okay, so. Well, that's even better. So you did the long term rentals previously and had done those for a long time and then got into the short term. Do you still have your long terms?

Joel Verinder (Guest) | 00:02:20 to 00:02:28

Yeah, we still have three. Long term. Dallas Fort Worth. All right. Did you have more prior to that and got rid of some and focused on this a little more?

Joel Verinder (Guest) | 00:02:28 to 00:02:33

I think we just had four, I think. And then we converted one. Okay. No. Okay.

Joel Verinder (Guest) | 00:02:35 to 00:02:44

Our plan initially was to get, like, one long term rental per kiddo. Okay. That was the college plan. Okay. Got you.

Joel Verinder (Guest) | 00:02:45 to 00:02:58

We still do 401 Ks and all that good stuff, but it was just a different way. Diversify. Right. We were very much rookies and had no clue, but it seemed to be working. But we didn't really have any good plan.

Joel Verinder (Guest) | 00:02:58 to 00:04:01

It was just you keep saving, maybe get a bonus and work, and then there's another 1700 square foot three two long term rental. Well, see, the reason I wanted to have you here is because I think if people go online and they're looking for things regarding short term rentals and long term rentals and how to invest and all that kind of stuff, more often than not they're going to come across the quote unquote experts, right. The people that I've got 35 of them and I've been doing for 50 years, and they have all the answers and all the solutions, and it sounds great, but for me, I always prefer to hear from somebody who is figuring it out as they go kind of a thing where nobody's claiming to know everything there is to know about it. Because I think when you learn about people's mistakes and pitfalls that they have as they go through the process, then you tend to get real world examples of how it actually goes, as opposed to some guy selling you an online course that he's going to charge you $60 a month to solve all the problems and answer all the questions. And I know anytime you start off, whether it be long term or short term, there's going to be stuff that you do that you're like, man, I really wish we hadn't done that.

Mike Mills (Host) | 00:04:01 to 00:04:22

We'd have done it this way. And you kind of learn as you get better. So initially, what kind of pushed you from going from long term to short term rentals? Like what made you make the switch? So first of all, I think it's pretty awesome you're asking me questions because when we first got to know you guys was back in 2017 when you were coaching Our Lady Wildcats.

Mike Mills (Host) | 00:04:22 to 00:04:29

That's right. Yes. Girls managing my best ability to coach. You are these subject matter experts? Yes.

Mike Mills (Host) | 00:04:29 to 00:05:01

Well, I know about the finance part of it, and my wife knows how to sell real estate and help people buy it. But when it comes to actually how to run these things, because it's one thing to buy and sell, it's a whole other thing to manage it and operate it, which is what you guys are doing. We got started like anything. People have a big change because some big event happens in our life, right, and requires some action and was kind of fueling it. And so for us, I had lost a job in 2020.

Joel Verinder (Guest) | 00:05:01 to 00:05:28

And I'm in healthcare, it. What I do is we've done for 20 something years, and it's just with COVID And hospitals weren't making as much money as they were. They were busy, but they were busy with COVID Pay the bills. So I lost my job, and we've got a property out in Cedar Creek Lake as well. And it was kind of sitting there, and at the moment, we're like, why don't we just try this, see what it works.

Joel Verinder (Guest) | 00:05:29 to 00:05:52

It'll be a little test at the lake. And we're about an hour and a half away or something. And so we turned it on, and we got going, and I think maybe we had a $10,000 a month in there in June or something like that, and opened my eyes, I'm like, wow, this would be awesome if we could do this at a place that actually had, like, an industry for short term rentals. Right. It's tough at the lake, right.

Joel Verinder (Guest) | 00:05:52 to 00:06:03

Because they've got a lot of cleaners and maintenance guys, but they don't really understand what it means to leave something, like, ready for a guest. Right? Yes. It's not like a hotel. It's just.

Mike Mills (Host) | 00:06:03 to 00:06:11

They're just coming in to clean a house or doing whatever. Our cleaners just want to show up on Tuesdays. No, I need you on it. Could be like, Monday, Wednesday, and Friday. Right?

Joel Verinder (Guest) | 00:06:11 to 00:06:19

A lot of money. They're like, no, just Tuesdays. It doesn't really work. That's where we got started. We kind of proved it out.

Joel Verinder (Guest) | 00:06:19 to 00:06:37

It was painful, I thInk, at start, just because we had no clue, and we were doing it all ourselves remotely. So we're driving out there because sometimes we got a cleaner that would show up on a Tuesday and sometimes not. We were cleaning it and not fun. But you don't have a job. You do what you have to do.

Mike Mills (Host) | 00:06:37 to 00:07:11

Yeah, you make it work. So it proved out that was in summer 2020. At that time, we had a long term rental that we had just kind of restored, I guess, after a tenant, and so we were going to sell it. And so we sold it, and we transitioned that long term rental into our first short term in July of 2020. So, yeah, we kind of did this little test, I guess, at the lake and worked and then opened my eyes to figure out where could we do this on scale.

Joel Verinder (Guest) | 00:07:12 to 00:07:36

I don't want to say at scale at that point, but it was just, where can we do this that has an industry that can support it? And we knew that at that time, we weren't looking forward to staying in Texas because all of our long term rentals are in Texas. Property taxes were killing us. Yes. And we were on my list, was looking at the states that have low property taxes and no state income.

Mike Mills (Host) | 00:07:36 to 00:07:47

Is there like two of those? There goes Tennessee. Tennessee is right on top of the list. Digging into it a little bit further, they've got. So wait, Tennessee has no property taxes and no state income tax?

Joel Verinder (Guest) | 00:07:47 to 00:08:09

Well, they have property taxes, but it's low. For an example, like on a comparable $300,000 home, your property taxes were like $600 or something like that. Wow. Okay. Whereas in Mansfield, where I'm at on a home that we don't have a homestead exemption on, we might be at like 6000 or 65.

Joel Verinder (Guest) | 00:08:09 to 00:08:25

Right. It's significant. Big difference. Yeah. So yeah, that got us going and got us thinking out of state and then we started looking, started digging into real estate resources out there with bigger pockets, some of these larger forums.

Mike Mills (Host) | 00:08:25 to 00:08:42

So you went online and found just different places that we're talking about where to buy them and that kind of thing. Yeah. And started to get some ideas. We've never been to the Great smoking mountains or national park up there and I discovered it was 14 million visitors go a year. Wow.

Joel Verinder (Guest) | 00:08:42 to 00:09:28

And it's the largest national park in the country, which like number three is Grand Canyon. Number two, I think it's Yellowstone or Yosemite out there, which was amazing to me that had so much traffic. And mainly because it's drivable, it's just a central in the middle of the country and you have a radius of draw all kinds of folks that just hop in a car. Well, it's crazy when it comes to short term rentals. I think when people think about it, they're thinking the lakes know vacation type spots, which you don't think because if you don't live in those regions of the country and you go there on a regular basis, like somebody from Texas maybe wouldn't consider unless they looked at the Smoky Mountains as being a destination that people would go to and this would be an opportunity there for it.

Mike Mills (Host) | 00:09:28 to 00:09:49

But that's just because you don't live in that area. And I think there's probably some, there are some gaps or whatever you want to call it, where there are places that have a lot of frequent visitors that aren't as saturated as trying to buy something at a beach or a lake or something like that. Right? Yeah. Now don't get me wrong, there are a lot of rentals out in Smoky Mountain, right?

Joel Verinder (Guest) | 00:09:49 to 00:10:05

I'm not the only sure, sure yeah. You'Re not by yourself. It is a huge market, and I think that's a lot of what drove us out there or attracted us was that there's an industry there, there are cleaners that only exist for these things. You had the infrastructure for it. Maintenance got you.

Joel Verinder (Guest) | 00:10:05 to 00:10:32

The only reason why these maintenance companies exist is because of all these cabins and homes that rent. Right. They get 14 million visitors a year in a national park, and they don't have the hotels right to support all those visitors. And so these short term rentals have just been key to their local economy. We get taxed, we contribute, and there's a whole industry around it.

Joel Verinder (Guest) | 00:10:32 to 00:10:45

So I think it made it a little bit safer play for us, knowing that it was accepted. It's been around for 30 something years. Nothing new. But there is a lot of competition out there as well. So do you have to manage?

Mike Mills (Host) | 00:10:45 to 00:11:10

Because in those areas, when you have a lot of competition, do you guess you have to pay a lot of attention to what you're charging, what the rates are kind of the amenities within the house, and what you have, what you need to offer? I mean, this is the kind of stuff you spent a lot of time researching. Basically, when we first started in 2020, it was a perfect timing to start. People had just started traveling again. COVID had just been.

Joel Verinder (Guest) | 00:11:10 to 00:11:19

I don't want to say lifted, but it never really went away in Tennessee. Tennessee was a very. I don't know, like us. They were pretty open. Yeah, they open.

Mike Mills (Host) | 00:11:19 to 00:11:34

Yeah. There wasn't a whole lot of restrictions based on stuff. And people weren't exactly clamoring to go to hotels for all the reasons related to COVID. So a house that you were going to be isolated with your family by yourself was always a more attractive offer. Yeah.

Joel Verinder (Guest) | 00:11:35 to 00:12:05

So I think record. We started hitting the area, started hitting record high revenues, starting somewhere around, like, I don't know, July of 2020, October 2020, all the way till, I'd say, end of 21, where everybody's just driving. And you're right, you can stay in your own place. And so we hit that boom. And I guess the good thing about that boom is if you had a place, you made money, it didn't matter.

Joel Verinder (Guest) | 00:12:05 to 00:12:16

It had doors, it had a roof. It looked like they needed space. So they were coming. Yeah, you were going to get rented. So you wanted to definitely stand out.

Joel Verinder (Guest) | 00:12:17 to 00:12:32

And at that point, it was just make sure you didn't price too low. But it's changed. It's evolved a bit. It's getting a little bit tougher. And so now it requires you to look at things like value and make sure.

Joel Verinder (Guest) | 00:12:32 to 00:12:50

How do you make your places stand out? How are you different than the guy next door? What's your pricing strategy? That type of thing? When you were switching from long term to short term, what were some of the things that you looked at between, like, oKay, I've got long term rentals, and I enjoy this part of it.

Mike Mills (Host) | 00:12:50 to 00:13:05

This is good, but it's also got these shortcomings. And then on the short term side, what are the pros and cons of each one of those that kind of draw you? Obviously, you're going to gravitate to something. I mean, at the end of the day, it's about money. What's your revenue?

Mike Mills (Host) | 00:13:05 to 00:13:21

How much are you going to profit off of them? But in just the managing day to day holding those type of assets, what are some things that you kind of weighed the difference between the two? Yeah, I mean, the obvious answer is short term rentals. You're getting cash flow. Right.

Joel Verinder (Guest) | 00:13:21 to 00:13:34

Cash flow is the big driver for it. It does take more work, but you're getting compensated for it. Right. So you have a higher. Because you have people that can come in for a week, for a weekend and you can charge a greater premium.

Mike Mills (Host) | 00:13:35 to 00:13:49

You're getting more revenue from those on a monthly basis if you run it correctly. I mean, obviously, if you're in a place where it's not getting rented, that's a whole other thing. I've got a great example on that. So we do have a Mansfield home. You're aware your wife helped us decorate it.

Joel Verinder (Guest) | 00:13:49 to 00:14:02

Yeah, it's awesome. And we ran that as a long term rental for a couple of years prior. And an example on that, we could get 2000 a month, for example. It's like a 1600 square foot home. Right.

Joel Verinder (Guest) | 00:14:02 to 00:14:18

It's updated, but it's pretty run of the mill. Yeah. So based off twelve months, you're looking at $24,000 as far as a gross. We've had that for about ten months live. We've converted over to a short term rental.

Joel Verinder (Guest) | 00:14:18 to 00:14:45

So we will have a good apples to apples comparison on the same property, just doing a different method, and we plan. It looks like we're on track for somewhere around 50 to 55, really, on a gross. And so there are some extra expenses you have to take for now you're paying electricity, now you're paying water, you're paying Internet, TV, things like that. You got all the utilities because the person staying in the long term rental is going to pay that typically. Sure.

Mike Mills (Host) | 00:14:45 to 00:15:02

And you have the cleaning bills you're. Paying that now, and so those things take up, about average, around $500 a month. Okay. So, I mean, it's still very profitable to do the difference. Okay.

Mike Mills (Host) | 00:15:02 to 00:15:11

So that's a good thing or a good transition. So, this house is in Mansfield. It's not at a lake. It's not at a beach. It's not at a destination point.

Mike Mills (Host) | 00:15:11 to 00:15:21

I mean, look, if you want to come to Mansfield to go on vacation, like, more power to. But. But typically, that's not what's so. And I know it's hard. Or maybe you do know why people are coming and renting it out.

Mike Mills (Host) | 00:15:21 to 00:15:32

But do you know what type of people are renting out that place? That is a million dollar question. Okay. When we started this thing, I think that was our question, was, like, who's our target? Who stays?

Joel Verinder (Guest) | 00:15:32 to 00:15:47

I can tell you exactly a target market in the smokies. I can tell you that 70% of our folks that rent from us, it's the spouse. The female spouse in the relationship is booking with us. And so I know to. Directly to market to her.

Joel Verinder (Guest) | 00:15:47 to 00:15:57

Right. I know how to market my property and frame it for a family vacation. Right. Yeah. This Mansfield property is a little bit different.

Joel Verinder (Guest) | 00:15:57 to 00:16:08

We get all types. We get folks that are, hey, I'm about to buy a house. I need a place to stay for two weeks because I've got a two week gap. I had a flood in my house. Insurance needs a place to put me.

Joel Verinder (Guest) | 00:16:08 to 00:16:27

I don't want to go to a hotel for a month. Okay? It's, hey, we have a volleyball tournament, or we have a softball tournament at these places or whatever, at the areas we have around town, even like, hey, my daughter's about to have a baby, and we need to be in town for a month to kind of help them. We don't want to stay at their house. We don't stay at a hotel.

Mike Mills (Host) | 00:16:28 to 00:16:55

It's a wild bag over the map, and I've even heard I had somebody on last week or before that, we were talking about travel nurses, how that's such a big industry these days, because a lot of. And you might know, being in the healthcare world, a lot of healthcare professionals are kind of. I guess the word is, I guess they're staffed out. They're not employees of the hospital. They're not employees of the clinic.

Mike Mills (Host) | 00:16:55 to 00:17:09

Often, they're working for a staffing company or something like that. Now, for the nurse's point of view, they get paid a lot more money, typically speaking. But they're in contracts. They have to go to places they have to move around the country. Do you see some of that coming through too?

Joel Verinder (Guest) | 00:17:09 to 00:17:27

I don't think we've seen any traveling nurses yet. Now there are some platforms out there that you can post your listing to to try to attract to market to it specifically. But we haven't gone after the nurse. Because you haven't needed to. It's been pretty full.

Joel Verinder (Guest) | 00:17:28 to 00:17:37

I don't want to say full. I think we've been at like over since we've been live somewhere around 50% occupancy. That's good. It's completely fine. Right.

Joel Verinder (Guest) | 00:17:38 to 00:18:21

I think a lot of this, where we got started is that we kind of from the long term rentals got tired of the, it's going to sound backwards, but the person who's in there for two to three years and then they just feel like it's their property, but it's not their property. Right. They're leasing it from us and then, so when they leave, it's a chore to get it ready and then we might spend 2000 3000 to turn it. Well, I think what you're saying is the long term rental people, they treat it as their house, but like you said, it's not their house. But then that's not necessarily a good thing because when you say, hey, somebody treats it as their own, you think that that's, but it's not because they don't keep up with things.

Mike Mills (Host) | 00:18:22 to 00:18:41

They kind of let things fall apart because even though they live there, they're there, they still know it's not there. So if there's a hole in the wall, if the sink is not working. Right, whatever. So they just let things kind of fall apart and then by the time they leave, and especially when they know that their lease is up in six months and they're about to leave, then they're certainly not taking care of anything. Right.

Mike Mills (Host) | 00:18:41 to 00:19:03

Whereas the short term rental person is more like a hotel guest. They're there to live there for a little bit, but they don't really Want to go in there and wreck everything and mess it all up. And I would imagine because the short term rates are a little higher that the income level of the folks staying in those properties tend to be on a little bit higher scale too. Right? I don't know about that.

Joel Verinder (Guest) | 00:19:03 to 00:19:13

But I do know that we have eyes on the property. Like our average length to stay is like three and a half days. So we have people on the property twice a week all over. So you see stuff come up all the time. Whatever.

Mike Mills (Host) | 00:19:13 to 00:19:22

All right. So if it is something it's very minimal. It's nominal, and the house is ready to go. Perfect for next guest. Got you.

Joel Verinder (Guest) | 00:19:22 to 00:19:46

It was at least like something like a mental burden that we took off our shoulders. Right. Because you at least have an update on a regular basis as to what's happening at your place. And that's good, because then at least, you know, if stuff's breaking down, you're not taking it in the shorts on that because you can fix it quickly before it gets really bad. So kind of going back to your question, you were like, what are some pros and cons on short term versus long term?

Joel Verinder (Guest) | 00:19:46 to 00:20:10

I mean, cash flow, as we talked about, knowing that the house is always in prime condition, I think for us, mentally is a good thing. I'm trying to transition away from working and trying to pick up contract jobs. Cash flow is the most important driver for me. And then there's also a lot of additional tax benefits that you can get into. I'm not a CPA, so it's your CPA.

Joel Verinder (Guest) | 00:20:10 to 00:20:32

But when you're doing a short term rental versus long term rental with accelerated depreciation, potentially the ability to offset your taxable income if you manage it yourself. Right. And, hey, if your person that's in your house, if they're just giving you fits, the good news is they're gone in three days. Right. You'll have somebody new.

Mike Mills (Host) | 00:20:32 to 00:20:57

Your pain is short lived. You don't have to experience it for two years or however long the lease is or whatever. I would also imagine, too, if you have a renter that say, has it, I don't know what the typical these days is. A year or two lease, six months, whatever. If the market changes and your property can now go for a higher rent, you have to wait until that lease is expired before you can adjust your cost or, excuse me, your price.

Mike Mills (Host) | 00:20:58 to 00:21:24

But with a short term rental, you can change it whenever you want, right? Sure. Yeah. And when you all were doing your podcast last time, I heard you talk a little bit about, I don't know if it was like surge pricing or just where you were adjusting based on the time of year, and you kind of had some strategies that you use to price your properties a little bit more effectively during those periods. And I think you even mentioned that you had, like, a software that did it for you.

Joel Verinder (Guest) | 00:21:24 to 00:21:39

Yeah. So there are a lot of tools out there that make this all possible. I mean, we live in Texas. We have seven properties now in Tennessee that we manage ourselves. But it's only possible because of the amazing people that we have on the ground.

Mike Mills (Host) | 00:21:39 to 00:21:48

Right. Our cleaners, we just have a super tight relationship with. And we have a couple of maintenance people that specialize in different things. How often do you go there, by the way? Just out of curiosity.

Joel Verinder (Guest) | 00:21:48 to 00:21:58

I target, like, three times a year. Okay. I'm actually headed up next week just to spend kind of a maintenance kind of refresher week. Yeah. Just walk through each one of them.

Joel Verinder (Guest) | 00:21:58 to 00:22:20

Make sure everything is in the kitchen is how it's supposed to be, or your wine bottle opener walks away, that type of thing. Just get everything where it should be as we get ready for the new year. I forgot where I was going with that. Well, I was just asking you about, like, when you were saying how you have different tools that you. Yeah.

Joel Verinder (Guest) | 00:22:20 to 00:22:34

So, besides our people on the ground, we use, like, a property management tool. It pulls all of our calendars together. So we list on Airbnb and VRBO, and we have a direct booking site. So it brings all that together. Automates all of our messaging.

Joel Verinder (Guest) | 00:22:34 to 00:22:50

So if you were to book with us, you'll get immediate message with some instructions. And we have it scheduled to check in on you after the second day of the stay. Just see how you're doing. How can we make it better type of thing. Just give them an opportunity, if they have something to say to let you know, as opposed to the end and trash you.

Joel Verinder (Guest) | 00:22:50 to 00:23:05

They're very personalized messages. They're not like a robot. I think most people think it's us that are sending all these messages out. Yeah. And then we also have dynamic pricing software that we subscribe to that we plug all our properties in.

Joel Verinder (Guest) | 00:23:05 to 00:23:29

It's smart enough to know that, hey, what are your competitors listing their house at? What's demand like for the market for this weekend? And for an example, we just went through Christmas and the Smokies. And the week between Christmas and New Year's, it's like the Super Bowl Week and the Smokies. There are somewhere around, my guess, between, like, 1214 thousand cabins in the Smokies.

Joel Verinder (Guest) | 00:23:29 to 00:23:36

It is so many. Wow. And during that week, it gets, like, 99.9% booked. Booked. Yeah.

Joel Verinder (Guest) | 00:23:36 to 00:23:46

So it's very important that you price it correctly. Price it correctly, or else you'll be that guy who gets booked twelve months in advance. Right. You have that booking 200 a night or something. Right.

Joel Verinder (Guest) | 00:23:46 to 00:24:16

So it's very important. The dynamic pricing software knows that, and it escalates the pricing for you. So would you say those types of weeks are those two different softwares? Your pricing one, and then your kind of your management piece if you don't mind, generally speaking, roughly about what did it cost you versus how you see the benefit of what it's actually. You can even put in percentages on what it's saved you or added to the bottom line for you to have those tools.

Joel Verinder (Guest) | 00:24:16 to 00:24:33

There are people that have a lot of time and that like to manually do all their research, understand when the festivals are coming in town and the car shows and all these things, and they like to be in control and move them up and down. Sure. That's not me. Right. I'm still very involved, but I'm not going to study all the events.

Joel Verinder (Guest) | 00:24:34 to 00:24:51

But still, it's a flat rate on this particular software that we use. And I think it's roughLy. I don't know, I have to look at it again somewhere, $16 a month or something. So it's like one booking that you mess up on. You just paid for like six months of this software.

Joel Verinder (Guest) | 00:24:51 to 00:25:06

Yeah, no doubt. And just an example. And I'm not exaggerating, just tell you what it's really. So, like, for that one week between Christmas and like, we bought a couple properties and they had already booked it out like a year in advance that week. Right.

Joel Verinder (Guest) | 00:25:06 to 00:25:18

When you buy a new property, especially like through Airbnb, you can't just transfer them to you. The bookings. Okay. They have to cancel and then you can give them an opportunity to rebook if they want. Got you.

Joel Verinder (Guest) | 00:25:18 to 00:25:25

Okay. Or the other person cancels. The person who's selling the home. Right. And so he would cancel these bookings at 200 a night.

Joel Verinder (Guest) | 00:25:25 to 00:25:34

And I'm like, sorry, I would love. To have you, but not at 200 a night. But it's 700 a night, right? Yeah. And it books.

Mike Mills (Host) | 00:25:34 to 00:25:44

Right. Not with that person. Because they're going to go find a sticker shock, obviously. Sure. Well, yeah, I mean, to go from 200 to 700, they're not going to be real keen on, but you're going to have ten people lined up the.

Joel Verinder (Guest) | 00:25:44 to 00:26:03

Next day it goes. Right. So these dynamic software, pricing software, they just really help out. Yeah. To me, that's probably one of the most important pieces of what you're doing because it's not with the long term rentals.

Mike Mills (Host) | 00:26:03 to 00:26:13

You check a market rate on what the market is going for in that area, you get somewhere close to that, you get a renter, and then you just kind of. That's it. You don't have to think about it once a year. Yeah. You don't have to think about it.

Mike Mills (Host) | 00:26:13 to 00:26:47

But with this, this is that to maximize your benefits of that property to price it differently based on the season and make sure that, and I even think that I saw that or I listened to you guys and you were saying that for like your Christmas one, that you said the Super bowl, you may not even open up that booking until two or three months or whatever it was prior to, because all those other places get booked up and then the last minute people are like, we got to go. Well, now their price point is even higher. Now, true. There's always risk involved, I'm sure, because sometimes you may not get it and then you miss out. Who knows?

Mike Mills (Host) | 00:26:48 to 00:27:18

But having some type of a tool like that, a software that can guide you down that path, and I'm sure as you've used it, you've probably gotten better at it and recognized some trends yourself and maybe even made some adjustments. But if you have something that's kind of like your, hey, here's the roadmap for you, and this is how you do it. You can always change stuff as you go, but to have that, it's basically like having someone that's got 20 years experience doing it, telling you, hey, this is how you want to price it during these times based on this reason. Yeah, it's definitely not a set it and forget it. But you're right, it gives you the roadmap.

Mike Mills (Host) | 00:27:18 to 00:27:33

Yeah. And you're correct, we do block all of our properties between Christmas and the end of the new year. So if you were to look at any of our properties for 2023, they're all blocked. Looks like it's full for that week. Two weeks, actually, right?

Joel Verinder (Guest) | 00:27:33 to 00:27:48

Yeah. And so they'll probably remain that way until, I don't know, after Thanksgiving or early December. I just don't want to make inquiries. On them because it'll book. It's what it is.

Mike Mills (Host) | 00:27:48 to 00:28:21

Yeah. You're not worried about it booking up because the trends indicate that it will. Well, and that was one thing where, it was like an ahA thing for me when I was listening to you guys, because our two properties are both on lakes, and spring break obviously is a big, that's a big time of year. So it's like if your spring break is booked up twelve months in advance at just whatever the normal rate is at that time, you're not going to maximize your space for your dollar. And so if we held out and say, didn't open it up until February or whatever, like two or three months, I don't know what the time horizon would be for that, something like that.

Mike Mills (Host) | 00:28:21 to 00:29:00

But it seems like you get a 20% to 30% bump, if not more, in some cases on what you could charge for that space during that time. And I don't think that people getting into the short term rental space, these are the types of things that you just don't think about, you don't realize until you're doing it for a little bit. I think it's stuff that just gets, because you're so worried about getting the property, getting it set up, making sure you have all the amenities that you need, which is a whole other thing, all the tools that are within the property that are required, blenders and pots and pans and forks and whatever, that you just lose sight of. Wait a minute. This is a business that I'm running and I need to pay attention to my revenue.

Joel Verinder (Guest) | 00:29:00 to 00:29:14

You know what I think I've learned over the years now? It's, you have to be flexible. Right. And so one strategy that works in COVID isn't the same strategy that's necessarily going to work the next year. Right.

Joel Verinder (Guest) | 00:29:14 to 00:29:28

And so you have to kind of constantly kind of be checking yourself and looking at it. And so what I mean by that is when we first started up, everybody was traveling. They wanted to get out and they wanted to go. Like I mentioned, demand was through the roof. They had the highest revenue ever.

Joel Verinder (Guest) | 00:29:28 to 00:29:53

And so it was just keep raising your rates and, oh, I'm open next weekend. I've got to raise my rates. It's like the airlines, how they seem to raise their rates that you're going to get a flight, right? That's right. So now that economy is maybe going a little bit different direction, interest rates are higher, folks are, I'm not saying they're hesitant to travel, but it's a little bit different.

Joel Verinder (Guest) | 00:29:53 to 00:30:01

Maybe they're flying now. Maybe they're watching their pennies a little bit more because of the uncertainty in the market. That's what we experience, dealing with something different. Yeah. With buyers all the time.

Joel Verinder (Guest) | 00:30:01 to 00:30:31

And so now you have to be really looking at your seasonal calendars. And so a lot of these pricing, this pricing software we use is they have an option opportunity in there for a seasonal calendar. And so you can go and say, hey, from January 5 to the end of February, I want the minimum price to be this, and I want my average price to be this, for example. And I just need to be a two night minimum stay. Right.

Joel Verinder (Guest) | 00:30:32 to 00:30:43

But for, say, spring break, it's going to be a different minimum price. It's going to be a different minimum stay. Right. So you can kind of adjust that ahead of times. Once you've been through it a little bit.

Joel Verinder (Guest) | 00:30:44 to 00:31:10

You know where you can book, right? And so, you know, the summer and the Smokies, our top four months are June, July, October, and December. And so, you know that those months, that's where you're going to get most of your revenue. And so using these seasonal calendars, you can price it and put those kind of stakes in the sand to make sure that you don't accidentally lower the wrong month, if that makes sense. No, absolutely.

Mike Mills (Host) | 00:31:10 to 00:31:37

And I would imagine it probably helps you budget for your year a lot better, too, because once you can kind of build that pricing expectation, I mean, obviously you're going to get what you're going to get. But after a few years, I'm sure you develop some level of. I mean, we know, like you said just a minute ago, there are certain times, like COVID, when all that was going on, there was a little higher demand. Now there's probably a little lower demand. But once you get a couple of years under your belt with this stuff, you start to develop a little bit of a flow on what you can expect.

Mike Mills (Host) | 00:31:37 to 00:31:52

And then you can budget based off that, what your expectation of occupancy is based on the time of the year and all that kind of stuff. And that kind of sets your ability to know what kind of revenue to expect from those places and what you can actually profit off. Sure. Right. So it gives you a little bit better.

Mike Mills (Host) | 00:31:56 to 00:32:05

Like, let's say your best friend came to you tomorrow and said, hey, Joel, I really want to go get my first short term rental. I want to get into this. It's happened. It's a true story. Yes.

Mike Mills (Host) | 00:32:05 to 00:32:18

So how would you tell them to go about doing, like, what would be the first things that you would say? Okay, before you do this, you need to do this. Before you do this, you need to do this. Yeah. I think this is such a popular topic.

Joel Verinder (Guest) | 00:32:19 to 00:32:34

As you mentioned, you can find these. It's everywhere. Stories every day, like instant millionaires everywhere on TikTok and just, hey, here's all the deposits I had for this week, or blah, blah. Yes. Everybody's flexing, right?

Joel Verinder (Guest) | 00:32:35 to 00:32:40

Here's my bank state. I love those. That's my favorite. They start showing screenshots of bank statements. Right.

Joel Verinder (Guest) | 00:32:43 to 00:32:55

But just like any business, it's super important that you are financially ready to. I mean, this is a business, right? Yes. These are homes, there's mortgages. Right?

Mike Mills (Host) | 00:32:55 to 00:33:04

Yes. These are costs that you are going to have to incur. Right. And it's work, right? Yes.

Joel Verinder (Guest) | 00:33:04 to 00:33:22

It's passive income, I guess towards, according to the IRS. But it's active, in my opinion, still pretty active. You're still doing a lot of stuff, especially if you're running it yourself. But it takes reserves, it takes money that you're setting aside for capital expenses. It takes maintenance that you're setting aside.

Joel Verinder (Guest) | 00:33:22 to 00:33:45

Right. And so for me, I think it's just really important that you just don't like any investment. You don't just put all your eggs right in and you have nothing left. You don't have a plan. Would you say it's better to start if you're going to buy something, to buy something that's close to you so you can run it a little better?

Mike Mills (Host) | 00:33:46 to 00:33:58

Because there's the pros and cons. Right. If you live in whatever, if you live in Texas. Right. So you could buy a property on a lake or you could buy a proven market like the Smokies.

Mike Mills (Host) | 00:33:58 to 00:34:11

Right. Where maybe you have a little bit better track record, but it's so far away. So is it better to try to find something where you're close to so you can deal with whatever you got. To deal with or everybody's got their own why. You got to figure out what's your why.

Joel Verinder (Guest) | 00:34:11 to 00:34:22

Why are you doing this? For me, it was, I'm improving my cash flow. I want to be less reliant on hospital providers that don't have budgets for me. Right. Yes.

Joel Verinder (Guest) | 00:34:23 to 00:34:30

I mean, I've been in it for 20 years. I'm not the cheapest guy. Right. Yeah. And so that's my why is to increase cash flow.

Joel Verinder (Guest) | 00:34:30 to 00:34:42

So for me, that answer is, where can I go to get the most cash flow? Right. And it may take a little bit more work. It may make me more uncomfortable if the property is 14 hours away. But that's what I do.

Joel Verinder (Guest) | 00:34:42 to 00:34:56

Right. Others, their why might be, hey, I want to go find a place that I can vacation to and it'll pay for itself. That's what we did. That's why we're doing it. Cash flow might be nice if we get it, but that's not the main driver.

Mike Mills (Host) | 00:34:56 to 00:35:03

Right. Right. And so it kind of depends on what's your why. And you got to figure that out, I think. So it's probably step one, make it.

Mike Mills (Host) | 00:35:03 to 00:35:27

Yeah. Work for you. What are you trying to do? Do you want to have a vacation home that you can use and make some money off or really just pay for itself is probably the best expectation on that. Or are you trying to get some money coming in on a monthly basis to offset, maybe be able to stop working or whatever, when you guys bought your place, say, the first one in Tennessee, were you able to buy it as, like, a second home, or did you buy it as an investment?

Mike Mills (Host) | 00:35:27 to 00:35:46

Because I know when I do loans for these, for example. Wait, you do loans? I do. I do loans. I don't know if you knew that, but whenever I do these, if somebody's buying a property, the way it works for mortgages, which I'm sure you know, but for anybody that doesn't, is if you're buying a house in a vacation spot.

Mike Mills (Host) | 00:35:46 to 00:36:15

So, if you were buying a house in the smokies or you were buying a lake property or a beach property or somewhere near Disney World or whatever, then I can do it as a second home. If I do it as a second home, then it only requires 10% down as opposed to 20. But if you do it as an investment, then I have to put down 20%. So there's a true benefit if you were buying another house in Mansfield that you were trying to call a second home. I couldn't do that because there's no way for an underwriter to go, how is this a second home?

Mike Mills (Host) | 00:36:15 to 00:36:19

If you live in the same city? You're buying this as an investment, and. I like the vacation. Yeah. Right?

Mike Mills (Host) | 00:36:20 to 00:36:35

Yeah. It's a hard thing to convince somebody of. So, when you guys bought those in the Smokies, were you all able to do them as second homes, or did you do them as investments, or did you pay cash for some of them? How did you know? Like I said, we didn't know a whole lot when we were getting into this.

Joel Verinder (Guest) | 00:36:35 to 00:36:41

Right. Yeah, we bought our first. We used a national lender. Right. That didn't know anything about.

Joel Verinder (Guest) | 00:36:42 to 00:36:52

It was just same national lender we'd use for primary forever. Right. And we just did a normal investment. Okay. 20% down, percent down, got you loan.

Joel Verinder (Guest) | 00:36:52 to 00:37:24

And then after I got into it and I started connecting with other investors in the area, I'm like, oh, my gosh, why didn't I do a 10% down second home loan on our second property? Well, actually, our second property, we ended up doing a different type of lender. A hard money lender, okay. But somehow, on our third property in the Smokies, that we were approved for a second home loan, which I looked back with the other two, and I was like, how was that possible? How did that ever get passed an underwriter?

Joel Verinder (Guest) | 00:37:24 to 00:37:43

Because we already had two investment properties in that market. But whatever. It happened, and we're happy, and so, no, we have a second home loan there. Just one and then we have a second home loan in Gulf Shores, Alabama, property as well. It's a different market.

Mike Mills (Host) | 00:37:43 to 00:37:58

That's right. You can do it. Yeah. I mean, you could buy seven second homes if you wanted to, as long as they were in different parts. That's definitely an incentive about looking at a different market, being able to better terms, explore a normal, conventional Fanny Freddie loan.

Joel Verinder (Guest) | 00:37:58 to 00:38:17

Right, at a 10% down versus. It's gotten a little bit less attractive just with some changes over the years, I think, than it. Well, what's kind of a bummer. And this really just happened. I mean, this was probably during COVID After 2020.

Mike Mills (Host) | 00:38:17 to 00:38:46

So within the past two years is what Fannie and Freddie did was they put on a higher tiered pricing on second homes and they basically classified them the same as investments as far as rates and pricing were concerneD. Because used to prior to 2020, if you bought a second home, you would get a primary home rate. So your interest rate would be just like you were buying a house you were going to live in. Now it's more like an investment rate. You still get the 10% option, which is.

Mike Mills (Host) | 00:38:46 to 00:38:57

That's just a cash benefit, obviously. But when it comes to the actual terms of the rate and your payment and all that kind of stuff, you're going to be more subject to the investment side of things.

Joel Verinder (Guest) | 00:39:00 to 00:39:12

Well, the other downer is, I guess, on the second home loan, is that on investment loan, you can use a portion of that projected income. Correct. To go towards your. That's correct. Debt to income ratio.

Mike Mills (Host) | 00:39:12 to 00:39:36

Yes, but see, this is the part where they're going to have to figure out what to do with underwriting. Because if it's a long term rental, the way it works is if you buy a long term rental that you're going to use as an investment, I can take the lease that you have from somebody coming in and I can use that rent to offset it. Doesn't give you income, but it offsets the debt and it's used a vacancy factor. So I can take up to 75% of the rent. Basically.

Mike Mills (Host) | 00:39:36 to 00:40:18

It's hard to do that with short terms because there's no way that they've come up with yet to project and say, okay, well, this is what the rent is going to be, but it still falls into the thing where you could get it as a long term and then turn into. There's a lot of ways to pull that off. But you are correct, I can use income from rent to offset the debt, so you can have more purchasing power when you do as an investment versus doing as a second home where I can't do that. Yeah. So in our experience, I think on five of our properties that we purchased in the smokies, when we get an appraisal up there, our appraiser will have a value in there of what it would rent for.

Mike Mills (Host) | 00:40:18 to 00:40:28

For the short term. For a short term. Oh, wow. Okay. Well, that's probably because in Tennessee, because, like you said, the infrastructure is already there, that it's such a big business there that there probably was a high demand for it.

Mike Mills (Host) | 00:40:28 to 00:40:45

Because we do the same thing with long term rentals. We get a rent schedule, essentially, is what it is from the appraiser, and that tells us what the rent, because we get to use the lease. But if someone says, my lease is for $5,000, and they're like, you're not going to rent this place for more than two grand. Well, then obviously we're going to take the lower. It's very conservative, and it's not always accurate.

Mike Mills (Host) | 00:40:45 to 00:40:56

Correct. But in some instances, actually, we've been able to use, like, air DNA reports for that property. Oh, wow. Some lenders have done that. Yeah.

Joel Verinder (Guest) | 00:40:56 to 00:41:01

And they take just like what you're saying. They take 75%. Yes. Not a full 100%. Yeah.

Mike Mills (Host) | 00:41:01 to 00:41:24

It's just been a challenge. The short term rental industry has been a challenge because it's trying to figure out how they are going to measure those numbers, especially in areas where if you're buying a short term rental in Mansfield, it's going to be hard to get comps to know what your kind of rates you're getting for that. If you're buying it in the smokies, well, then it's easy because you've got, like you said, 14,000 other cabins that are being done every day. Yeah. That are being done the same way.

Mike Mills (Host) | 00:41:24 to 00:41:45

So it's easier to kind of come up with those numbers. But it does give you a little bit more flexibility in your financing of it, just depending on how you structure that stuff. When you guys first started looking for, how did you come, just out of curiosity, how did you actually come to doing it in the smokies? Where did you come across that and go, oh, this is where we should. Especially because you've never been there before.

Joel Verinder (Guest) | 00:41:45 to 00:42:12

Yeah, it was really, like I'd mentioned earlier, it was looking for states that don't have a state income tax. Okay, so that's where you started with it. That's where we started. And then I also started looking at property tax, and they had checked the box there and then with great Smoky National park with the 14 million visitors, that was the other piece. So when I'm looking at markets now, I really try to look for at least two driverS.

Joel Verinder (Guest) | 00:42:12 to 00:42:21

Like, why are people going to go from a vacation market? Two different reasons. Yeah. Let's leave Mansfield out. But we talk vacation, like, need two things that are really going to attract them to the area.

Mike Mills (Host) | 00:42:21 to 00:42:39

Right. And so, for the pigeon Forge Gatlinburg area, it's the national park. That's an obvious one. But Pigeon Forge and Gatlinburg are pretty different in themselves. They've got very different personalities of cities.

Joel Verinder (Guest) | 00:42:39 to 00:42:50

They are about 20 minutes away from each other. Okay. But I call it the Vegas for families. Right. Just go cart tracks.

Joel Verinder (Guest) | 00:42:50 to 00:43:00

And they've got, like, a titanic museum that's got, like, $50 million worth of artifacts that they dug out of the ocean. Okay. That you can see. I mean, Dolly Parton, obviously, is huge up there. Yeah.

Mike Mills (Host) | 00:43:00 to 00:43:04

Is that where Dollyworld is? Dollywood? Yeah. Is it Dollywood? Is that what it's called?

Mike Mills (Host) | 00:43:04 to 00:43:21

Yeah. She's obviously been big and just recently. I mean, she just hosted a New Year's Eve recently and has been pushing. She had a big musical, I think a big network recently. So she's been big in the news, but she's invested huge in a pigeon forge.

Joel Verinder (Guest) | 00:43:21 to 00:43:31

There's a lot of dinner shows, so. There'S reasons for people to go there outside of the park. Massive family attraction. Got you. But if you're not into the tourist trap thing, which it is a lot.

Joel Verinder (Guest) | 00:43:31 to 00:43:42

Right. Sure. You can go all of these hikes in the mountains and go to waterfalls. It's very scenic. Lots of bears, lots of things to see.

Joel Verinder (Guest) | 00:43:42 to 00:44:07

So it kind of has a little bit of both. So that's what we look for. We look for places that have multiple draws so that if something were to come around, like with a COVID and let's just say pigeon Forge was shut down, well, they can still go to National Park. There's still something that draws tons of visitors. So you're not just held to one thing.

Joel Verinder (Guest) | 00:44:08 to 00:44:32

When COVID came through, Florida had a ban on all short term rentals. Like, the state banned all short term rentals for. I don't remember the exact length of time, but about at least a month, really, where it said hotels can take travelers, but Airbnb and VrBO cannot exist right now. Why? The governor is really popular.

Joel Verinder (Guest) | 00:44:32 to 00:44:42

Yeah, that seems like an OD thing. For him to do. Mean because you're basically shutting down the individual investor. It was an OD choice. Yeah.

Joel Verinder (Guest) | 00:44:42 to 00:44:51

We were happy we didn't have any Florida. I mean, I guess it was just for a short amount of time. So he obviously changed his mind or reversed that, but that's an OD stance. I didn't know. Know.

Joel Verinder (Guest) | 00:44:51 to 00:45:00

And the beaches, obviously are super popular for short term rentals for a good reason. Absolutely. And we have one there. You have so much stuff, like, you just need a lot of places, but. That'S your beach, right?

Joel Verinder (Guest) | 00:45:00 to 00:45:13

That's your driver. Now they might have music festivals or baseball tournaments or other things that drive traffic to your unit. Yeah, that's just something to look at. We have kind of look for places that have multiple draws. Okay.

Mike Mills (Host) | 00:45:15 to 00:45:33

Since you started having these properties and marketing them. And obviously, I know, like you said in Tennessee with the Smokies, it doesn't take a ton know rocket science to market it. But what are you doing aside from the basic stuff? I mean, you have your listings, but what are you doing to try to promote the properties themselves? Are you doing anything extra?

Mike Mills (Host) | 00:45:33 to 00:45:47

Is there other things that you're trying to work on that are actually trying to drive? Because I don't know the structure of it. But if you say you get a booking through VRBo, okay, or Verbo is what they're calling themselves now, is that right? I saw that on a commercial the other day. I was like, so old school.

Mike Mills (Host) | 00:45:47 to 00:45:58

Okay. Yeah. So I would imagine that they have a certain price that they take a certain cut of it that they take as they're booking through their site. Same thing with. What's the other one?

Mike Mills (Host) | 00:45:58 to 00:46:25

Airbnb. So what about you have your own site that people can book through, which I'm sure you get 100% of it versus whatever percentage that the other ones. So the idea would be I drive more people to my site if I can because I get a greater revenue. But you have more eyeballs than the other two because they have more traffic coming through them. So are you doing anything marketing wise through social media or through websites or whatever to try to drive people to your site to book through there?

Joel Verinder (Guest) | 00:46:25 to 00:46:51

Yeah, I'd say that we have a direct booking site, Redglidergetaways.com. And if you're a traveler, when you go to Airbnb and you make any booking at any short term rental, there is a fee that they call. It's basically their booking fee, but it ranges anywhere between 10% to 20%. The Airbnb is a service fee. That's how they make money.

Joel Verinder (Guest) | 00:46:51 to 00:47:00

Right? They charge that to the vacationer. Oh, not to you. It gets charged. This part gets charged to the vacationer about 10% to 20% of the stay as a booking fee or a service fee.

Mike Mills (Host) | 00:47:00 to 00:47:09

Okay. And then there's also an Airbnb charges 3% to the host for the fee. Okay. So they get both sides. Yeah.

Mike Mills (Host) | 00:47:09 to 00:47:10

Good racket. Yeah.

Mike Mills (Host) | 00:47:12 to 00:47:25

And they own nothing. Yeah. VRBO charges a little bit less for the vacationer. It's a little bit cheaper. Usually for the vacationer, they charge the host a little bit more than the 3%.

Mike Mills (Host) | 00:47:25 to 00:47:41

Okay. I think I charged 8% to the host. Yeah. It behooves you to try to find a direct booking site, even if it's the exact same rate. If you're booking through Airbnb, you could save 20% just because you don't have to pay a service fee.

Joel Verinder (Guest) | 00:47:41 to 00:47:49

Right. Same thing with VRBo. It's a little bit less, but you're saving that service fee. Right. For me, it's a wash.

Joel Verinder (Guest) | 00:47:49 to 00:47:59

It's like, I'm not necessarily going to have more revenue if they're all direct bookings because I still have to pay a 3% credit card processing fee. Okay. Right. To process your payment. Got you.

Joel Verinder (Guest) | 00:47:59 to 00:48:13

But what it does help me. There's some smart people out there, and you don't want to build your business on somebody else's platform. Right. Because if that platform falls apart, then you're toast. Something happens.

Joel Verinder (Guest) | 00:48:13 to 00:48:31

Like, it's crazy stories out there. You can YouTube this stuff and it's like, hey, somebody vacationer left, they brought a handgun and they left a handgun and a drawer and a dresser, and the cleaner didn't see it. Right. Because they didn't open all the drawers up. The next Guests show up and their kid opens, know, finds a gun or something.

Joel Verinder (Guest) | 00:48:31 to 00:48:35

It's awful. Right? Yeah. These are the stories that my wife's always heard. She's like, this is going to happen.

Mike Mills (Host) | 00:48:35 to 00:48:53

Like, this happens one time. Yeah. But all it takes is once. What happens is a lot of know we've got nine properties on Airbnb, and if that were to happen, is an opportunity where Airbnb could suspend all nine listings because it's my account. It suspend my whole account, not just that property.

Joel Verinder (Guest) | 00:48:53 to 00:49:09

So my point is that whatever I can do to be less dependent on these platforms, the better. Right. And so I want to drive people to our direct booking site just so I'm less reliant on others. Yeah, that makes sense. I'll even take a little bit less money.

Joel Verinder (Guest) | 00:49:09 to 00:49:22

Right. But it just kind of helps grow it. It just diversifies a little bit. So, yeah, we do have a direct booking site. A lot of our marketing is focused on people who stay with us.

Mike Mills (Host) | 00:49:23 to 00:49:40

So the people that have come and stayed with you, you're going to market directly to them because if they've been there, they're familiar with it, and then they're more likely to come back anyway. Yeah. We try to build advocates for the brand. Right. We ask, hey, if you'd like discounts on future stays, shoot us over your email, for example.

Joel Verinder (Guest) | 00:49:40 to 00:49:59

And then we do some email campaigns a couple of times a year with discounts for bookings, things like that. We try to have some signage. Do you do that through your management software or you just do that on. Your own, separately, collect the email? Well, like whatever emails you're sending out.

Joel Verinder (Guest) | 00:50:00 to 00:50:07

Mailchimp. Okay. Got you to send out. Create a campaign, that type of thing. It's pretty manual, right?

Joel Verinder (Guest) | 00:50:07 to 00:50:20

It's like any crm, I guess. Sure. So, yeah, we do that. There's some other technologies out there that I'm starting to look into that are a little bit sexier. Like with Stayfi, for example.

Joel Verinder (Guest) | 00:50:20 to 00:50:40

It's a WiFi solution you can put on your home network. And basically, if you come to our unit and you want to use our Internet, then, hey, it says, hey, put your email, your email and you can have Internet. And that way you're not just getting the person who books, you're getting anybody and your unit that hotels do that all the time. That connects, right? Yeah.

Mike Mills (Host) | 00:50:41 to 00:50:54

Go to Hilton and see what they ask for. So now you have their contact information. That's genius. If they don't want to be a part of it, they can always. But, you know, we're looking at that as another opportunity to get it.

Joel Verinder (Guest) | 00:50:54 to 00:51:29

And I guess lastly, in all of our listings on the platforms like Airbnb or VRBO, we have some verbiage on the top of our listing that basically says, if the name of our cabin is Whiskey Ridge, it'll say Whiskey Ridge by Red Glider Getaways. Gotcha. At the title of the Know. And so we probably have, I don't know, two or three people a month that are smart enough to copy and paste that little phrase and put it in Google. And then our direct booking page will be the first thing that pops up finding.

Joel Verinder (Guest) | 00:51:29 to 00:51:38

And then they can compare prices and then they'll book there. Right. Gives them an incentive to book there because they can get a cheaper rate. Yeah. Than going through VRBO or whatever.

Mike Mills (Host) | 00:51:39 to 00:52:02

Do any of those platforms. I don't even know how they would know this, but do you ever feel like you get punished for charging less for your property than it would be listed on. Does VRBO ever have a service that goes out and says, okay, yeah, we're listing your price or your place for 500 a night, but you've got it listed yourself for 480. You're undercutting us. No, terms of service are very.

Joel Verinder (Guest) | 00:52:02 to 00:52:10

You don't want to mess up. Right. You don't want your account suspended, hundreds of thousands of dollars going away. Right. So you have to be very careful.

Joel Verinder (Guest) | 00:52:10 to 00:52:22

You're following the rules and you're staying in line. Kind of what they say to do. If somebody messages me through Airbnb and says, hey, I'd love to direct with your direct booking site. Do you have one? I'm not going to respond.

Joel Verinder (Guest) | 00:52:22 to 00:52:28

Say yes, and here's a link. Right. Yes. No, that's not going to be it. I might respond, shoot yourself in the foot.

Joel Verinder (Guest) | 00:52:28 to 00:52:35

Try Google or something like that. Right. But I'm not going to send them right to it. Right. Yes.

Joel Verinder (Guest) | 00:52:35 to 00:52:54

Going to be safe. It's not worth it. Right. Do you find that in dealing with the VRBOs and the Airbnbs that the insurance and stuff that they cover for you, for the guests that come in, if there are any issues, what is the insurance situation like for you? Have you had any incidents?

Mike Mills (Host) | 00:52:54 to 00:53:13

What has your experience been with that on guests causing some sort of damage to the property and then what you're responsible for versus what you had to pay out or if that stuff covered. Have you had any of those incidents yet? Yeah, man, I know. As soon as I say this, it's going to be like it's going to happen. So just some context.

Joel Verinder (Guest) | 00:53:13 to 00:53:25

Right. So over the last twelve months, we've hosted somewhere around 1700 nights. Right. I looked at it this morning. 486 reservations, something like that.

Mike Mills (Host) | 00:53:25 to 00:53:34

Wow. It's a lot of volume. That's awesome. Yeah. And I say that just to say that we have yet to have some sort of catastrophic event.

Joel Verinder (Guest) | 00:53:35 to 00:53:40

That's great with a guest. Right. Stuff happens. Yes, I get it. Yes.

Joel Verinder (Guest) | 00:53:41 to 00:53:53

But in my opinion, it's like you should be budgeting for stuff to happen. Sure. Right. And so I put away a certain amount every month, my maintenance or to a capex category. We have reserves.

Joel Verinder (Guest) | 00:53:53 to 00:54:06

Right. I see it as a business expense. It's kind of a polarizing topic. When you talk to different hosts, it's like customer service. I know I'm in the.

Joel Verinder (Guest) | 00:54:06 to 00:54:17

Right, but they're the guests and they are leaving me the review. Right. And here's a great example. Our second guest we ever had, we have no pets. Right.

Joel Verinder (Guest) | 00:54:17 to 00:54:23

At our first cabin. And they showed up with a pet. Right? And how did I know that? Because I'm staring at my camera, right?

Joel Verinder (Guest) | 00:54:23 to 00:54:37

That's over the door. And I see them bringing their dog and had my realtor at the time, I texted him like, hey, what should I do? Right? And he's like, well, you're watching your cameras, aren't you? And I'm like, yes, I stop watching your cameras, right?

Mike Mills (Host) | 00:54:37 to 00:54:46

You're driving so crazy. Yes. You're never going to get anywhere if you're staring at this the whole time. And I'm like, you're right. And he's like, what's going to happen?

Joel Verinder (Guest) | 00:54:47 to 00:54:56

Let's play this out. You're going to reach out to the guests and you're going to say, hey, I see you brought a dog. You can either charge them a fee or you can ask them to leave. Right? Right.

Mike Mills (Host) | 00:54:56 to 00:55:02

Those are two choices. Both of them are bad options. Right. Both of them are going to make them mad at you. They're going to be set and then they're going to leave.

Joel Verinder (Guest) | 00:55:02 to 00:55:14

And they're probably terrible if they give you anything less than a five star. Hurts your ranking. Right. Like, you can get delisted for having a sub four ranking, right. So they'll give you a three.

Joel Verinder (Guest) | 00:55:15 to 00:55:20

Great, we got your $100. Right. But now your ranking dropped. Right. Right.

Joel Verinder (Guest) | 00:55:20 to 00:55:39

Now you're on page five because you don't have very good guest rating. Right. So it takes a little bit of a mindset kind of thinking to figure out what's really worth it to go after. In another platform, I had a guest that broke a window. It wasn't broken when they showed up.

Joel Verinder (Guest) | 00:55:39 to 00:55:48

It was broken when they left. Right. It just crack. And I charged them. Their deposit was $500.

Joel Verinder (Guest) | 00:55:48 to 00:55:58

And of course I got a bad review. Of course. It's one of those things thinking moments where I'm like, man, what is it. Short term versus long term thinking? Basically, is it worth it?

Mike Mills (Host) | 00:55:58 to 00:56:10

Right? Is it worth it? That's kind of where I'm going with this, is like everybody's got a different answer and it's right for them. And I don't mean people should run over you or not treat your property with respect, that type of thing, but you just need to think through those things. Yeah.

Joel Verinder (Guest) | 00:56:10 to 00:56:33

There are some different tools out there that you can use. You can require your guests to buy insurance on every stay. I think most of the platforms allow you to put that in there as a requirement if you wanted to. They don't have a. And then, you know, it's fairly straightforward to pull that out.

Joel Verinder (Guest) | 00:56:33 to 00:57:03

Airbnb has made some changes recently where it's made it a little bit more friendly for the host to go after some things that guests know. It used to be that if you were to check out on Monday and another guest came in Monday afternoon, you as a host would have to file the claim before the next guest clinch checked in. Okay. Because once they're in there, then they don't know who did what. So your cleaner would come in and maybe the cleaner leaves at three, the next guest rise at four.

Joel Verinder (Guest) | 00:57:03 to 00:57:15

And so you got an hour window where you had to decide, is it worth it? Right. Wow. Right. As soon as you do it, the first step in that process is it goes to the person who just stayed with you before they submit the review, by the way.

Joel Verinder (Guest) | 00:57:16 to 00:57:21

Right. To pay it. Right. And then if they say no, it goes to Airbnb. Well, how is that going to go?

Mike Mills (Host) | 00:57:21 to 00:57:37

Yeah. So Airbnb has changed it now where now they give you a 14 day window as a host to claim something under air cover. Okay. The best scenario is that the vacationer goes ahead and they submit their review. They have a 14 day window to submit a review.

Joel Verinder (Guest) | 00:57:37 to 00:57:43

They submit the review before the window is over, and then you can file it if you want to. Right.

Joel Verinder (Guest) | 00:57:45 to 00:57:51

You're not going to get a repeat guess. Right? You probably don't want them if you're filing it. Yeah. If they did something to damage it or whatever.

Mike Mills (Host) | 00:57:51 to 00:58:02

You brought up pets a second ago. So these days with the short term rentals, what are your thoughts on pets? Do you allow them? Do you think it's a good thing or a bad thing? Where have you guys landed on that?

Joel Verinder (Guest) | 00:58:03 to 00:58:30

Yeah, so we've got nine places and two of our places now accept pets. We had one place that was amazing last year and revenue this year, we've seen about a 20% drop on this one property. And it doesn't match with my other in the same neighborhoods. It's just a general vicinity, but I don't know. I cannot figure it out.

Joel Verinder (Guest) | 00:58:31 to 00:58:39

It's got amazing reviews. I'm almost at 100 reviews at like 4.96. It's way up there. Okay. But it's just struggling to get bookings.

Joel Verinder (Guest) | 00:58:40 to 00:58:59

That was a lever that we pulled. End of November was, all right, let's try pets at this place and see if that helps how that fires it up. Yeah, I did some research just in that market, and this is a market by market thing. Sure. How many in that market allow pets?

Joel Verinder (Guest) | 00:58:59 to 00:59:16

How many don't? And so you can just go to pull up your browser and go to Incognito mode and just do a search and just see particular dates. Without pets, it's usually about 10% of the properties that take pets. Okay. So it makes you way more marketable.

Joel Verinder (Guest) | 00:59:16 to 00:59:25

Right. It just depends if you want to take on that potential extra wear and tear. Right. Well, I don't know. I would think.

Mike Mills (Host) | 00:59:25 to 00:59:46

I mean, this is all anecdotal, just my opinion of it, but when it comes to pets, how many people are traveling with a 200 pound dog? Right. If you're traveling, aren't you just bringing along your little poodle, your teacup dog? I don't even know people that travel with cats, really? I guess sometimes they do, but it's rare, I would think.

Mike Mills (Host) | 00:59:46 to 01:00:03

I don't know for sure, but I don't know. I think my wife and I were having discussions about that because we actually built in our Cedar Creek property. We built like a place for pets to be. And then that's an amazing little place under the stairs. Yeah.

Mike Mills (Host) | 01:00:04 to 01:00:13

But then it says in there, I don't think we allow pets. How are we having the dog kennel without any pets? But whatever. I mean, I get the. You have the wear and tear.

Mike Mills (Host) | 01:00:13 to 01:00:28

People don't take care of me. It's just like anything else. You're going to have any, I will say. Because when we had our lake property, and I told you we were doing that as kind of a pilot when we first got started, we allowed pets because we've got a great fenced and yard. We have three dogs and we're.

Joel Verinder (Guest) | 01:00:28 to 01:00:34

But it was so close to Dallas Fort Worth. There's your whole little pet theme. Yeah. That goes out the window. That goes out the window.

Joel Verinder (Guest) | 01:00:34 to 01:00:53

They're just going to jump driving in the car and come. And so we had a lot of big dogs. They're bringing the bull mastiff along with them in the back of the Ford. What I will say is that was so close and so easy for people to get to from a major metropolitan area. I think you would see a little bit different at the lake.

Joel Verinder (Guest) | 01:00:53 to 01:01:06

Yes. And the smokies. I think you were completely right because our average guest has like a six to seven hour drive. Right. So, yeah, you're not necessarily going to load up some giant dogs in the back of your truck for six, 7 hours.

Mike Mills (Host) | 01:01:06 to 01:01:28

So again, same thing. It's market to market. It depends on where it is. Another thing to notice we've seen, like, if you have really big homes, like five, six bedroom homes, there's really not a big difference there, allowing pets because that's multiple families coming together and usually multiple families don't want to bring multiple dogs. Right.

Joel Verinder (Guest) | 01:01:28 to 01:01:37

And then you just have dogs, dogs. Running all over the place. It's nuts. So I think it also depends on your property size, too, not just your market. Got you.

Mike Mills (Host) | 01:01:38 to 01:01:59

Another thing you said was you said something about cameras. So what is the current position for these different sites on cameras on property and where can they be located and what can you actually have out there versus what you're not allowed to? Yeah. So you're not allowed to have any cameras inside the home that are not disclosed. Okay.

Joel Verinder (Guest) | 01:01:59 to 01:02:11

I think it's best not ever have any cameras inside any home. It's creepy. Yeah. And you're also not allowed to have any, I guess, what are assumed private spaces. Right.

Joel Verinder (Guest) | 01:02:11 to 01:02:24

And so I see that as don't have a camera over the hot tub or something like that. Right. So even though it's outdoors, it's not inside. But you don't want to watch. Like you said, it's creepy.

Joel Verinder (Guest) | 01:02:24 to 01:02:31

You don't want to know what happens at your property. You don't. You just want it to be clean. Ignorance is bliss. And it's gReat.

Joel Verinder (Guest) | 01:02:31 to 01:02:42

You don't want to know. No, it's bad. So, no, we have cameras at the front, over the front door of all of our properties. Just see who's coming in and going. See who comes in and goes.

Joel Verinder (Guest) | 01:02:42 to 01:02:56

And it's more for me to understand if I have work that has to get scheduled, something get repaired, I want to make sure. I want to see who's coming in when there's no guests. Right. Yeah. I really don't watch these things when we have guests coming in and out.

Joel Verinder (Guest) | 01:02:56 to 01:03:09

I don't count people coming in. You said you had four, but you have six. It just would drive me crazy. We average somewhere around 50 reservations a month. Yeah.

Mike Mills (Host) | 01:03:09 to 01:03:30

You don't have time to do. They wouldn't exist. You'd just be sitting in a room watching the screen. Well, then again, but that goes back to what you were saying earlier about pick your battles, I guess, is essentially what you were saying about, hey, look, if somebody damages something at your property, you can surely charge them, you can take their deposit, you can do all those things, but at what cost? They're going to give you a bad review.

Mike Mills (Host) | 01:03:30 to 01:03:43

They're going to have something negative say that you don't get a booking again, which you may not want anyway. But same thing. If someone has somebody else come to the property and you're like, I saw a 7th person walk in. You're only supposed to have six, my aunt was coming over to say hi. She lives down the street.

Mike Mills (Host) | 01:03:44 to 01:03:59

So it's like, choose what you want to fight with somebody over. But we use ring cameras at all our properties, and I tell you, it is amazing, because in one app, you could just scroll. You see all your properties, every single one of them. If you're on your computer, you can use, like, a dashboard. It looks like you're at, like, a mall security camera.

Joel Verinder (Guest) | 01:04:00 to 01:04:11

That's kind of cool. And then we use, like, for locks. All of our houses have the same. Lock, so it's all operated from the same app. Just streamline everything.

Mike Mills (Host) | 01:04:12 to 01:04:28

That's what we have too. And so basically, you can just go through all, scan through all your codes. And see who's coming and going? Yeah, you can add codes, or you can turn them off. There's a lot of systems like that, I think, that make it a lot easier to automate.

Joel Verinder (Guest) | 01:04:29 to 01:04:37

We use Honeywell thermostats at all of them. They're all WiFi thermostats. It's all in the same app. So you can change and adjust anything. Just on one screen.

Joel Verinder (Guest) | 01:04:37 to 01:04:53

I can scroll and just make sure that when somebody checked out, they didn't put the heat at, like, 80 or something. Right. I can just adjust it. Just double check it there. Another cool thing that I've seen at your properties is maybe it's not at all of them, but you seem to have an affinity for it.

Mike Mills (Host) | 01:04:53 to 01:05:26

Is the video games, the arcade style, stand up video games, which I love. We're similar age, and so we kind of grew up to some degree in that era, so it's awesome. But now if my son, if we go on a trip, if we go to the beach or wherever, he's always bringing his PlayStation. It travels with us. It's like another member of the family, but even for the old guys that come in there and you see, like, the race car game or the old school Gallagher and I know now these days you can get the arcade looking game, but it's got, like, 20 or 30 different games in it you can play.

Mike Mills (Host) | 01:05:26 to 01:05:58

So was that something that you just liked and want to put in there? Did you find some of this said, hey, look, if you have stuff like this, maybe not necessarily that, but other things in the house for people to do other than come, sleep, leave, eat, whatever, just to have a few other amenities there? Yeah. So, man, amenities, that's a whole different topic, and I'll try to keep it. No, but starting in the Smokies, there are a lot of cabins out there, obviously, and so the bar, just the starting point and the Smokies.

Joel Verinder (Guest) | 01:05:58 to 01:06:12

And what you have in your place is kind of stupid. If you go to the Smokies and you don't have a hot tub, you're going to die. Yes. Some people will say, hey, mine's doing great. Well, they probably have something different.

Joel Verinder (Guest) | 01:06:12 to 01:06:22

They have an amazing view or something like that. Right. But you have to have a hot tub. Right. It's almost like a given you have some sort of arcade in the Smokies.

Mike Mills (Host) | 01:06:22 to 01:06:33

Okay. So pretty much any of those places will have an arcade, air hockey, pool table, some sort of game shots option, something. Yes. Right? Yes.

Joel Verinder (Guest) | 01:06:35 to 01:06:47

I definitely did. Not taking any credit for that. You saw what was there, and that's. What everybody else had, and you had to at least do that, right? Yeah.

Joel Verinder (Guest) | 01:06:47 to 01:07:05

So we took that, and when we went to other markets, like, we went to, you know, we realized. I call it, like, we wanted to Smokey fi. Like the Gulf Shores, right? Yeah. And so we wanted to take some of these amenities that traditionally Gulf shores doesn't have.

Joel Verinder (Guest) | 01:07:05 to 01:07:12

There's not a places over there that have arcade games because they have the. Beach, and they're there for the beach. Right. So you have an arcade game. It's like, wow, it has an arcade game.

Joel Verinder (Guest) | 01:07:12 to 01:07:21

Right. So it's things like that. We have one at a Mansfield house that you've seen that. It's like. You never know what's going to.

Mike Mills (Host) | 01:07:21 to 01:07:36

Well, you want to stick out in somebody's mind. Right? Because the idea, I think with anything, when you have a business, you have to get customers, right? You have to go out and find customers to bring in. But then the goal is, it's way less expensive to keep your customers than it is to go get new ones.

Mike Mills (Host) | 01:07:36 to 01:07:53

So if you have somebody come to your property and book your property, you want them to walk away going, man, that place was awesome. For whatever reasons that they have. They had the Jacuzzi and they had the games, and they had the fire pit and whatever. It was great. You want them to remember that, because then if they're going somewhere, ODs are.

Mike Mills (Host) | 01:07:53 to 01:08:11

It's easy to go back because you know what to expect, and you're taking a family trip. That's why people. The reason broken Bow has turned into what it is. It's not necessarily because broken Bow is awesome, per se. I mean, it is now, but it wasn't that way originally, but it was a place that you could live in Dallas, Fort Worth, or other areas, and you could go to.

Mike Mills (Host) | 01:08:11 to 01:08:37

And you were kind of out in the woods and whatever. But your expectation was always the same. Like, we're going to take this trip if I'm going to the beach. I don't usually, most people, I would think, don't go to a hundred different beaches. They find one place that's close, that's near where they are that they can pack up all their stuff and drive or quick flight or whatever and they go and they stay there and they like it and then they come home and then they got to go back there the next year because that's their family trip.

Mike Mills (Host) | 01:08:38 to 01:08:44

So how easy is it just to go? Well, we stayed at that place before. It was awesome. Let's go back there and you know what to expect. There's no surprises.

Joel Verinder (Guest) | 01:08:44 to 01:08:50

I totally get you. And that's the way my brain thinks it is so weird, though. Doesn't work that way.

Joel Verinder (Guest) | 01:08:52 to 01:09:13

I'll pride ourselves on trying to be great in customer service. I do a lot of things I think that are maybe a little bit different than a normal host. Like if you book with us, you'll probably get a personal video of me saying thank you so much for booking with us. That's awesome. And so we do these things and it's turned into great reviews.

Joel Verinder (Guest) | 01:09:14 to 01:09:24

I think our average around all platforms are like 4.96 or something for three years. But we've never had a repeat guest. Really? Isn't that weird? Not once?

Joel Verinder (Guest) | 01:09:24 to 01:09:30

Not once. And you can track it. Obviously not one person has come back. I don't want to say thousand. That's not right.

Joel Verinder (Guest) | 01:09:30 to 01:09:58

Probably 8000 stays. Do you think that has anything to do maybe with the market because it is the smokies and there are so many Airbnbs. When I think about it, we as a family vacation to the same market. We like to go skiing and so in February we're going to go to Copper Mountain and we've been there before and we had a great experience. But you're going somewhere different.

Joel Verinder (Guest) | 01:09:58 to 01:10:03

I want to stay the same place. I kind of want to check it out. Something different. Okay. I can see that too.

Joel Verinder (Guest) | 01:10:04 to 01:10:29

But we just wanted to just. There's other awesome places too, like a different building. So really, I guess the amenities could be looked as not necessarily that you're trying to get people back because you may or you may not, but that ultimately you're trying to get good reviews because that's what a new person coming in is going to look for. Don't get me wrong, I won't repeat people, of course we market to, but. You'Re just saying it doesn't really happen so far?

Joel Verinder (Guest) | 01:10:29 to 01:10:50

I had a lot of traction on it, but it's definitely something we're going after. The other piece of that in the smokies, the second home that we got in December 2020 had a kind of a starting of a theater room. I think I actually have that. You have a picture? I do, yeah.

Mike Mills (Host) | 01:10:50 to 01:11:00

Hang on. Let me put it up here. So here's your logo, by the way, for anybody wondering. The Red Glider getaways, where did Red Glider come fRom? We have a red glider at each one of our properties.

Joel Verinder (Guest) | 01:11:00 to 01:11:06

Okay. On a porch or a patio. Nice. Some of them are metal, some of them are poly. All right.

Mike Mills (Host) | 01:11:06 to 01:11:15

And then, so this was. There you go. Good one. That is a cabin that we bought. That actually is one we bought April of last year.

Joel Verinder (Guest) | 01:11:15 to 01:11:35

And they have this huge basement space down there that they just had some bunks in. This is just half of the basement. On the other side of the wall on the left, there's another big room. And so what we decided to do was turn this into a big theater. And so this is the same room.

Joel Verinder (Guest) | 01:11:35 to 01:11:52

And all we did is built a platform in the back, carpeted platform, bought some theater chairs, took all that junk out. And then what's, I guess, behind the photo or the camera in this one is just. I got that, too. Oh, wait a minute. Hold on.

Joel Verinder (Guest) | 01:11:52 to 01:12:03

That's the other side of the room. Yeah. It's just 120 inch screen with a projector. And this room. This is our cover picture of our listing.

Mike Mills (Host) | 01:12:03 to 01:12:16

Okay. And, oh, my gosh. The response on a theater room really is amazing. The thing is, when people go vacation, they want something different than what they don't have at home. Right.

Joel Verinder (Guest) | 01:12:16 to 01:12:28

And so to your point, I've had this discussion with some other owners, and we're like, hey, have you ever thought about putting Xboxes or PlayStations in your place? Right. That's way cheaper than an arcade. Right. And it's way more practical.

Joel Verinder (Guest) | 01:12:28 to 01:12:40

They can just bring their own games or something like that. And I'm not opposed to that, but. It'S just the same thing. But I think the big thing that people are attracted to is stuff they don't have at home. This is new.

Mike Mills (Host) | 01:12:40 to 01:13:01

This is like you're on vacation, you would do something different. I mean, there are people at theaters, but the very small percentage of the population have a 120 inch theater with stadium seating and surround sound in their house. Right. So you took the approach on this one because it had a bed, because when we were doing ours, we were like, well, how many beds can we fit? How many people can.

Mike Mills (Host) | 01:13:01 to 01:13:24

We fit, right? But you actually took a bedroom out to say, hey, look, I'm going to minimize the amount of people I can allow in here, but I'm going to add an extra amenity to it because I don't know. I would have no idea if I looked at our places because I don't manage it. If the average are four or five or ten, I don't know. We can sleep, I think, like 17 or 18 in the whole place.

Joel Verinder (Guest) | 01:13:24 to 01:13:41

Wow, really? Yeah. But we may only have six that show up on average. No, for this one, this basement is a mirror image on itself on the left and the right. Okay, so there's two sides, same size space on the other side of the wall.

Joel Verinder (Guest) | 01:13:41 to 01:13:54

The same exact space. And so all that we did was we moved the bunks from this side of the space to the other side. So you kept the bedding. We rearranged it and got it smarter. They had like a bar in there and we took it out.

Mike Mills (Host) | 01:13:54 to 01:14:03

Right. So we didn't get it away. No, I don't know if. Yeah, we have to leave it in there. It's still a sleep seven cabin.

Joel Verinder (Guest) | 01:14:04 to 01:14:16

I think it's a twin over queen. Got you bunk and then two kings in there. But, yeah. So this other slide you were showing there. So that cabin I just showed you did amazing.

Joel Verinder (Guest) | 01:14:16 to 01:14:30

The theater was super well received. Right? I didn't build it myself. I hired my local contractor. And so I found another cabin that has similar layout undervalued.

Joel Verinder (Guest) | 01:14:30 to 01:14:42

So they were using the same space. They just put some sofas there, like you see in a picture and a TV on a wall. Like just like a little 50 inch or something. Right? I'm like, what is that for?

Joel Verinder (Guest) | 01:14:42 to 01:14:50

They have another living room upstairs. Another 50 inch. Yeah, just a sitting space. This only sleeps like seven anyways. Right.

Joel Verinder (Guest) | 01:14:50 to 01:15:07

And so on that one, we did the same thing. You got the risers, you got theater chairs, carpeting. It's a little bit different flooring, but it's the same thing. Actually, my secret sauce. I'm actively in that neighborhood.

Joel Verinder (Guest) | 01:15:07 to 01:15:16

I hit refresh. Refresh. Show me another cabin. It has the same. Because it's actually interesting because in Tennessee, this is what they considered a basement.

Joel Verinder (Guest) | 01:15:17 to 01:15:28

But if you look out the windows, you can see the windows. Trees up there. Yeah, it's about that low. You're sort of a view, but it's because they're on a mountainside and it kind of slows down. So it's below grade.

Joel Verinder (Guest) | 01:15:28 to 01:15:52

And so it's a three level cabin. And so they actually don't count this area and the square footage of the home because it's below grade, like on your appraisal or whatever. Okay. Even though it's air conditioned, whatever reason, that's what they do. So when you have homes, I guess where I'm going, I'm trying to talk about value, trying to find homes maybe that others aren't looking at.

Mike Mills (Host) | 01:15:52 to 01:16:22

Right. And so I'm looking at a home that, hey, on paper it only shows it's 1700 sqft, but I know there's an extra 900 sqft down there in a basement that's not being counted for. Right. And so I also know that a cabin like that can have a $30,000 revenue difference just by converting. It sounds ridiculous to say that, but just taking, like, what we showed and putting a theater in, like that could be $30,000 a year difference in revenue.

Mike Mills (Host) | 01:16:22 to 01:16:27

Because you just get more bookings because it sets itself apart. Higher price. Right. You have more occupancy. Yeah.

Joel Verinder (Guest) | 01:16:28 to 01:16:47

And that conversion itself, with theater equipment and everything, it's like a $20,000 project. Right. One year you pay for yourself. What other investment does that? Where did you find, just when you say it has a 30% increase, is this just stuff that you were researching and looking up or did you just kind of come to that?

Joel Verinder (Guest) | 01:16:47 to 01:16:57

No, it's because that's what we just discovered the first one. We just. Oh, once you did it, then you realized. Got you. And then we bought another cabin that repeated the process.

Mike Mills (Host) | 01:16:57 to 01:17:15

Yeah. And then another one of our cabins, we enclosed the space over a dining area. It was a big, lofty dining area, went like 40ft in the air, and we enclosed it up there and made it a theater room. And I think this year we've seen a 25% increase on that. Wow, really?

Mike Mills (Host) | 01:17:15 to 01:17:33

So you're the theater room master now? Because all these places that I'm going to, to have, actually add that to my list. We got the one in Whitney has a lot of space, a lot of room. It's pretty eye opening. I didn't think that the big amenity and the smokies is indoor pools.

Mike Mills (Host) | 01:17:33 to 01:17:51

Okay. So if you have an indoor pool, you were going to get booked first. You were going to get the highest rates. Right. We have two cabins with an indoor pool, but other, like the next in line, it's probably views, like someplace that has like ten mile views or you just see amazing views.

Joel Verinder (Guest) | 01:17:51 to 01:18:27

That's next, I'd say. And then, in my opinion, fire pits, like amazing fire pits and theaters are kind of like the next up, and you kind of have to just make do with what you got and figure out how do you rework your space or find deals that have value. Right? And so one of these cabins you just showed when we purchased it, I was looking out the top deck, and I'm like, man, if we just had some trees removed, you'd have a pretty amazing view. And so I was talking to the homeowner that we were buying it from, and I'm like, have you ever thought about cutting these trees down or why not?

Joel Verinder (Guest) | 01:18:27 to 01:18:34

And he's like, wow, it was going to cost like, two grand to cut trees down. In my brain, I'm like, two grand?

Joel Verinder (Guest) | 01:18:36 to 01:18:52

That would take nothing. I can get way more bookings off the two grand it's going to cost me to cut those trees down. We hired a guy right after we closed, and the way that these lots are, I mean, they're really slanted lots. He didn't have to take them out. He just laid them down.

Joel Verinder (Guest) | 01:18:57 to 01:19:25

Our number one amenity, people coming on, it's a theater, but the number two is like, man, it's got an amazing view. You can just sit in a hot tub and just look out over everything. See, like five, 6 miles. Do you think it's important from your own personal experience, if you were going to pick a place to buy a short term rental and start using it, would you recommend somebody, like, go there? If you're going to buy something in the smokies, well, then go stay in one at the smokies and get the experience, and that'll give you a better perspective on what you're looking for.

Joel Verinder (Guest) | 01:19:25 to 01:19:35

That's probably the smart thing to do. Yeah, I didn't do that. No. Well, hey, look, a lot of things are hindsight 2020. I'm a numbers guy.

Joel Verinder (Guest) | 01:19:35 to 01:19:46

I am probably way more faith in numbers than I probably should have. But I try to remove emotion and is it numbers? Does it make sense? Does the deal make sense? On paper, yes.

Joel Verinder (Guest) | 01:19:46 to 01:20:00

And I look at the properties before, obviously, before we purchase them. Sure. Yeah. But it's strictly numbers for me. In an example, I did find another floor plan.

Joel Verinder (Guest) | 01:20:00 to 01:20:12

It's on the market right now. That's the exact same as these other two. And with the way that the market is going and the rates and everything, it's been sitting out there. It's been on the market for six months. I'm like, oh, that's weird.

Joel Verinder (Guest) | 01:20:13 to 01:20:24

What's wrong with this place? Yeah, it's gotten neglected. Needs some maintenance, whatever. And I'm like, this is going to be great. I could probably offer them way under, maybe get them to pay some of my points or whatever, lower my interest rate.

Joel Verinder (Guest) | 01:20:24 to 01:20:34

Let's do it. So we were up there over Christmas and of course, what do you do on your vacation? You look at homes. That's what I do. Anyway, so it looked at it, but the roads going up to this thing were awful.

Mike Mills (Host) | 01:20:34 to 01:20:40

Yeah. So getting there was a huge pain in the ass. I didn't want to do it. Yeah. For that reason.

Mike Mills (Host) | 01:20:40 to 01:20:54

But you were going to do that. You were going to see that because you were going to go there to buy it anyway. So you were going to experience that property. But I'm just saying that that's just one part of the equation is understanding how people are going to access your vacationer is going to access it. Is it easy?

Joel Verinder (Guest) | 01:20:54 to 01:21:10

How's the parking? What are the numbers that, did you build out a spreadsheet for yourself to say, okay, well, this is what my mortgage is going to be. Here's what I expect the occupancy to be. Here's what the average nightly stays are up here. Okay.

Mike Mills (Host) | 01:21:10 to 01:21:13

Yeah. Does this work? Does it not? Did you build something out like that? Yeah.

Joel Verinder (Guest) | 01:21:15 to 01:21:34

If you're looking to get into short term rentals, I would say even before you even have your dollars and cents saved up, just start analyzing deals. So we have kind of a deal analyzer, spreadsheet. Happy to share it with anyBody. Put it in the comments or something. Give me your info and I'll send it.

Joel Verinder (Guest) | 01:21:34 to 01:21:46

But it basically just breaks down. How much do you think you can make? What's your mortgage? It's in electricity and water and Internet. All this good stuff.

Joel Verinder (Guest) | 01:21:46 to 01:21:56

Hoa. Gives you, what's your cash on cash return? Like how much cash you need to put into the deal? How much do you net every year going forward? How long does it take to get your money back?

Joel Verinder (Guest) | 01:21:56 to 01:22:15

These types of things. And so, yeah, I think I got the basis of the spreadsheet from somebody and I kind of morphed it into my own. Yeah. Give you your own pieces to everyone. It's go through deals because usually not this market, but you need to be able to act right whenever you see something.

Mike Mills (Host) | 01:22:15 to 01:22:29

Right. And so if you're confident in your numbers and you're going through deals and you're analyzing it when you're ready to go, if you've been doing this and you'll run the numbers, you'll be like, yes, that one's for me. Right? It hits my boxes. You know what you're looking for?

Joel Verinder (Guest) | 01:22:29 to 01:22:49

Your realtor will like you a lot more. You have to go see 20 different spots. And that's another thing, right. When you go look at these short term rentals, it's not like your traditional, unless you go like in January, February where maybe it's off season, you can't get in a house. Oh, yeah, there's guests in there.

Joel Verinder (Guest) | 01:22:50 to 01:23:00

Right. And so if you're like, hey, we got to go house hunting, you can't show it. Yeah, you can drive and look at the outside. I'm like, oh, that's great, but I can't go in. No, because there's somebody there.

Joel Verinder (Guest) | 01:23:00 to 01:23:11

Unless you got lucky and you just. Hit it on the right time. Yeah. So it's different. It requires a different level of just being ready and being prepped.

Mike Mills (Host) | 01:23:11 to 01:23:35

Well, I think that there's an opportunity and I know that, I don't know what all has happened, but I know that there's some laws that are changing and different cities do different things. What they'll allow for different short term rentals and how many in the, and it's market by market. So it always changes. You hear stuff, especially in Dallas all the time around the stadium where they don't want to have people doing that kind of stuff there. And you see that.

Mike Mills (Host) | 01:23:35 to 01:24:09

But I do think even with all that, with interest rates being higher and probably going to stay here for a little bit and the housing market slowing down, it creates opportunity. It creates a lot of opportunity for investors to come in and if it's in the right area to set up these type of short term rentals or long term rentals. And so you'll see, and this is what we tell a lot of our buyers these days. Like, look, right now, if you're willing to buy, because there's not a lot of people willing and able to buy, you're going to get a pretty good deal. And it's not always the price.

Mike Mills (Host) | 01:24:09 to 01:24:51

Like you said, sometimes the seller is going to pay all your closing costs. They're going to help you buy points to get your rate down, to make it more manageable, to get your mortgage in a place where you can get a better return on your cash. So it's something that if you have the means to be able to do it, which that's a whole other thing. But if you do, then there are opportunities and there are deals to be had right now. Whereas if we get, say, twelve months down the road and rates get back into the fours or even low fives or whatever, and you have people hopping back on the train of purchasing homes will those deals dry up and now, yeah, your rates lower, but now you're having to pay 2030 or 30 $40,000 over list price in order to get the house, which is what we were going through 24 months ago.

Mike Mills (Host) | 01:24:51 to 01:25:22

So I do think that right now there are opportunities to find good deals out there and I think that if you look for them and you, like you said, get your numbers together and know what you want and know why you're buying these properties, I think there are things to be found and had. So we're coming up on an hour and a half. So we've been going for a while. It goes by fast. But is there anything else before we roll out that you want to leave us with or anything that we didn't touch on?

Joel Verinder (Guest) | 01:25:22 to 01:25:53

Yeah, I guess if you guys are interested in short term rentals, I'm always happy to talk to people, give some advice to some degree. Anyways, you can find us@redglidergetaways.com I've got some phone number email on there. We'll put that in the comments and the different posts. Happy to, happy to talk a bit. I am an Airbnb ambassador, so if you are new, do you have a.

Mike Mills (Host) | 01:25:53 to 01:25:54

Shirt or a bad.

Joel Verinder (Guest) | 01:25:56 to 01:26:24

If you are looking to do your first short term rental, I do have a link that I can send you that'll give you a little bit of a discount as you do your first listing, that type of thing. And it'll allow me to do the ambassador and Airbnb. There is a kick in it for me. Airbnb Reimburse me a little bit for helping you type of thing, but it's free to you. Just a free, uh.

Joel Verinder (Guest) | 01:26:24 to 01:26:43

We're super happy to be here, man. I'm glad that I can help you out for all the pick and roll advice early on. For Addison, letting her play, I'm really more. All these trophies that we want, Lady Wildcat today is paying it back. That was a long time ago.

Mike Mills (Host) | 01:26:43 to 01:27:03

But those girls, I loved that stuff. I mean, it was definitely something I really, really enjoyed doing. And I'm sure my red faced yelling from the sidelines is always entertaining to watch as well. You know, it's funny, on my phone you were texting me earlier today and it came up as Coach Mike. Coach Mike.

Mike Mills (Host) | 01:27:04 to 01:27:22

I got a lot of those. I got a lot of those. Well, I appreciate you, man, coming in and hanging out with me for a little know. Like I said, this was a bit of a personal one too, because I've got two of them trying to figure out how to manage these the best way I can and looking for ways to kind of maximize our revenue. So I've definitely learned some stuff myself.

Mike Mills (Host) | 01:27:22 to 01:27:50

We'll put all your contact information for your red glider getaways in there so everybody can take a look at that. And then once you get your podcast up and rolling and start publishing episodes, I'll share those out for you, too, because I watched the first two you guys did, and you had a lot of great information, stuff that I learned, which is, again, driver for me to bring you on here, because I was like, man, I need to talk to them. I need to ask this. They're pretty raw. Yeah, well, hey, look, this is all stuff that we're all learning.

Mike Mills (Host) | 01:27:51 to 01:28:12

We all learn how to do different things, but I think as you do it more, you'll get better at it. And I think it's already great. So I don't think you have a lot of room to prove. But I do appreciate you coming. You know, once I get my next round of questions put together, after I dive a little deeper on these properties, I'm sure I'll have you back and we'll go through it again so you can be my short term rental Yoda.

Mike Mills (Host) | 01:28:13 to 01:28:19

That's the goal at least. All right, brother. Well, I appreciate your time, and we'll see everybody later. Take care.