Latest / Hospitable Hosts / Remodeling and Designing High-Performing Short-Term Rentals with STR Cribs
Transcript
- Miles - Hospitable: Thank you for listening to today's episode of the Hospital Hosts podcast and if you enjoyed today's episode please don't forget to like, share and subscribe on your favourite podcast platform and listen out to the next episode coming soon. Okay hello Mark, thank you so much for joining us today, how are doing? Hello and welcome to today's episode of the Hospitable Hosts podcast. Today I am joined by Mark Lumpkin. He is a short term rental design, renovation and performance expert with over a decade of hands-on experience in real estate investing and construction. He is also the sales director at STR Cribs. So if you enjoy today's episode, please don't forget to like, share and subscribe and let's get started interviewing Mark now. Mark Lumpkin: Yeah, hey man, thank you for having me on. I'm doing great. I'm excited to chop it up with you about short-term rentals. Miles - Hospitable: Nice, love it. Great. And so obviously, we're here to talk to you all about, you know, SDR cribs to a degree, right? So maybe you can give us a bit of a background in you and kind of your experience in short term rentals. Like, why are you here today? Why have we got you as a guest? Mark Lumpkin: Yeah, great, great question. So a little background on me. I've obviously, I've been an avid traveler for many, many years. About 10 years ago, me and my wife started to transition to traveling to short-term rentals. And as we had kids and we had animals that were traveling with us and things like that, it really kind of became our primary mode of traveling. And we really fell in love with basically Airbnb's. ⁓ I was in the construction industry and then somehow found my way into this niche. of short-term rental construction. then at STR Cribs, we're licensed general contractor. We do construction, we do design, we do amenities, which are really kind of the hot topic today that everyone's talking about. How do you amenities your property? How do you maximize your revenue? How do you stand out in a very competitive landscape? And so that's a little background on me, a little bit of what we do. And if anybody hadn't seen this, kind of got to see it to believe it. So you should definitely. check out some of our finished work because the houses speak for themselves. They're very fun, vibrant, exciting, and they drive a lot of revenue. Miles - Hospitable: So yeah, you're kind of focused on getting a house ready for being a short term rental essentially. So what are some of the golden rules that you follow around how quickly you're going to get a house, an empty house from being an empty house to being kind of guest ready? What's that process look like? What's that timeline kind of? Mark Lumpkin: Yeah, I mean, in real estate. every property is so different and so unique. It's no different with short-term rentals. And so we really take them on a case-by-case basis. There are some, you might have a new construction house that just needs furniture and decorations and to mount some TVs. And you can do something like that in a matter of a few weeks. There are other projects that require permitting and inspections and digging in pools and pouring concrete. Those types of projects tend to take in the months. So it really, really depends on what your project needs, what the house needs, what market you're in. might be able to pull a permit in the state of Texas in just a couple of days and the same permit in New York takes six weeks. And so it really, really depends on your geography and what you're doing with the property. Really kind of our golden rule is most projects take about two to three months to go from empty house to guest ready. And that really walks you through the whole process. You design the house, you renovate it, you furnish it, you take great photos, you clean it. You know, there's a lot that goes into getting a house guest ready for sure. So if you give yourself a good two to three months, that covers most projects. Miles - Hospitable: Nice, okay. And what about kind of any projects that maybe, you know, you'd be worried about taking on an owner or a property manager should maybe worry about taking on like, is there any red flags where you'd be like, Oh no, I really don't want to have to start pulling listings for X or whatever. Mark Lumpkin: Definitely, definitely. There's a lot of red flags. I'm such a big fan of trying to catch red flags early. Oftentimes it's in the acquisition phase, right? We deal, we work with a lot of people that are out buying a property in order to make it a short-term rental. They don't necessarily already own that property. And so I'm a big fan of doing professional inspections on everything. The property, the house, the foundation. Miles - Hospitable: Hmm. Mark Lumpkin: doing termite inspections, doing swimming pool inspections, that oftentimes will raise any red flags that you need to know about and prepare you for some potential costs that could be coming down the pipeline when you do own that property. So I'm a big fan of doing your due diligence first. I'm always happy to look at any inspection report. I offer this all the time to people, send me your inspection report. I'll tell you what the property looks like because, you know, do you have a pool that's got ⁓ drainage issues and it's probably got a crack in the liner and things like that. That might not be a big deal today, but that could be one of those things where that pool could be totally destroyed in six months and you might be out tens of thousands of dollars. And so really flagging things early before you own the home as far as heavy expenses that are just around the corner that happens in physical real estate. And then my other red flag for people is oftentimes around safety issues. Just like, man, you know, we see all the time on the internet, the hot tub that falls through the deck and because the tech wasn't properly engineered to hold the weight of a hot tub or, know, a guest is suing another host. mean, that seems to be the headline all the time because they didn't have the right safety equipment or their handrails weren't the proper height. So make sure that the property is not going to cost you an arm and a leg in six months because something comes up. Miles - Hospitable: Yeah. Mark Lumpkin: and make sure that the property is safe for your guests. To me, those are the two most important things to look for. Miles - Hospitable: That makes a lot of sense. And then you talked about having a problem with a pool, obviously potential big cost down the line. What are some of the things you think about when you're designing a property to last as well? So you want to probably make it luxurious or at least very accommodating to a guest. We also need to think about guests don't necessarily treat a short-term rental like their own home. So how are you designing for that and building? Mark Lumpkin: Yeah, I mean, think there's two ways to, there's how you do the design, the furniture for that, and then also how do you do the construction for that? And so you want to look at things that are definitely more durable and are easy to clean. So if I've got a house with a lot of carpet, well, carpet's a nightmare in a lot of markets. If you're at a beach market or if you're in the mountains and people are trucking in mud and they're bringing their dogs and their kids. But if you could have like a luxury vinyl plank, like an LVP, that flooring is so much easier to maintain and to clean. And so doing things like that on the construction side, oftentimes make your life a whole lot easier down the line. I own my own short-term rental, I know exactly what that's like. mean, we were just talking about ripping up carpet in a brand new house we have because we built it two years ago and the carpet's already disgusting and it is what it is. So definitely things like that. From a furniture standpoint, I like to look at the quality of the item more so than the look and the feel of the item. The design and the aesthetic is very, very important, but the longevity of the item is to me trumps that. So a white couch might look beautiful and luxurious in your photos, but we all know that that big white sectional is gonna get nasty. It's gonna get stained. And six months down the line, you'll have upset guests because your photos look like one thing and when they get to the house, it looks like another thing. So I definitely think about it kind of in two different buckets, but it's the same type of concept. It's like, hey, you're opening a hotel. Do you think that this is a good idea to do, to put this item in this house? Is it going to last? Is it going to stand the test of time? Is it going to get ruined quickly and try to stick with stuff that's going to be there for you more than six months. Miles - Hospitable: Yeah, that makes sense. And then what about kind of ROI for kind of some of the projects you work on, like return on investment? You know, how much of a premium can, and I know this is going to be different for every property, but I guess how much of a premium can you put on a nightly rate once you've had a professional come in to kind of, you know, maybe renovate a property and make it a bit more short-term rental focused? Mark Lumpkin: Yeah, the premiums can be massive. We've got, we were just talking to someone who owns a property on a lake. We've done the property across the lake from her. She can see it from her backyard and she's generating about $65,000 a year in revenue on that property. She's owned it for four years. Our property across the lake from her did $235,000 last year in revenue. Same lake, same view, same bedroom, bathroom count. Miles - Hospitable: Hmm. Mm-hmm. Mark Lumpkin: two completely different setup homes and the revenue is drastic. So there's absolutely a premium. It oftentimes comes in two forms. One, it comes in head count, how many people you can sleep, a house with more bedrooms is always gonna, not always, but in general is going to generate more revenue than a house with less bedrooms. And then amenities. Miles - Hospitable: Yeah. Mark Lumpkin: If you've got a house with a hot tub in almost every market in the United States of America, that house will produce about $15,000 in additional revenue a year. You look at like Gatlinburg, Blue Ridge, Broken Bow. Those are some good examples of markets where a hot tub makes you about 15 to 20 grand a year in additional revenue. You look at pickleball courts. There are certain markets like the greater Tampa area or... like some of the major markets in Texas, San Antonio, Austin, places like that, a pickleball court on average generates about 25 to $30,000 a year in additional revenue. And so when you start amenity stacking and you go, right, I'm gonna make an extra 10 by having a hot tub, I'm gonna make an extra 20 by having a pickleball court, and you jam this thing with amenities, that's how you see those major discrepancies in revenue. One property doing 235 and one property doing. 65 grand because one is really designed at a premium, has all the great amenities, probably sleeps a couple more people. And the other one is just pretty averagely set up and doesn't have the amenities. Miles - Hospitable: see that makes sense. obviously, so amenities are going to help you get ⁓ higher occupancy and also obviously higher revenue per night. What about like some of the smaller things? So, and maybe it's more focused on kind of the review at the end of the stay, but kind of what are some of the smaller things that, know, when a guest arrives, they feel like, you know, they're home, right? They feel comfortable. What are some of the smaller things that we can be doing to kind of make that experience wow. So it kind of pushes them towards that five star review bearing in mind they've already booked. Mark Lumpkin: Yeah, there's a lot of things. ⁓ Hospitality is very much the people business and people want to feel good about who they're staying with. So you as a host, you as a property owner, your interaction with the guest, in my opinion, is one of the most important things, especially in the world of AI. think that Miles - Hospitable: see you at this point. Mark Lumpkin: We are maybe over-templatizing, over-processing this very, you know, one of the oldest industries in the world of people still want to, they still, they still want that hospitality touch. And so don't over AI, don't over software this, don't, you know, still make sure that you're a real person on the other end of the line. I think that's really, really important for your guests to have a great stay. Miles - Hospitable: Hmm. Mark Lumpkin: I know that probably wasn't the question you're asking me. was probably more around like what items you need in the house, but I can't focus enough on actually managing of the home and making sure that you're a real person, that you get them the information they need. You don't overload them. And there's a lot of nuance to that, but that's really to me, one of the most important things. The second piece to really specifically answer your question would be beds are... one of the most important things in your property, the mattress and the linens themselves. Host GPO put out this really great statistic where when they polled a bunch of guests, found that guests were spending about 60 % of their time in the property sleeping. And so if you think about like going on vacation, Miles - Hospitable: Hmm. Mark Lumpkin: You get to the property, you check in, you go out and do all the fun stuff. And then you come back and you eat and you unwind and you go to bed. But a vast majority of your time that you're in the home, you're sleeping. And so I can't express the importance of great bed and great linens as being one of the top things that you should invest in your property. And spending 10 or 20 % more over the cheapest possible option will yield you twice of a good of product. And so I would invest in little things like that. I would also invest in some of the creature comforts like ⁓ a coffee bar and like having tea and having just some of those nice extra amenities that people really appreciate when they go to like a five star hotel. If you can bring some of that to your property, those are very small little things that seem to go a long way with guests. ⁓ a couple of bottles of water in the fridge, right? Do you remember, you remember back in the day, we'd go rent an Airbnb and it was literally someone's house and they're like, they were gone for the weekend and you show up and you open the fridge and all their foods in the fridge, right? That's why we, that's how we used to book properties. Now we've gone to the polar opposite. You show up and it's a house that looks like a hotel. No one lives there. There's nothing there. And I think that we've maybe gone too far one way. Miles - Hospitable: Mm-hmm. Mark Lumpkin: And I would like to, think people are more successful when they provide a couple of the extra little creature comforts. A couple of bottles of water costs you nothing. It's nice when you've had to finish the day of traveling to have a cold bottle of water in the fridge. So you can have a few extra things in your home. And I think those will go a long way. Miles - Hospitable: Nice, I like that. ⁓ So obviously you've had a ton of clients and you've kind of helped overhaul a number of properties. I'm not sure if you've had a lot of clients that have kind of used you multiple times. And if so, I would love to understand, ⁓ do you see a lot of consistency between our listings? Do they tend to do things in a similar way across each listing or do they try to do something completely different in each one? Yeah, in your experience there. Mark Lumpkin: Yeah, yeah, yeah. We definitely, about half of our business comes from repeat referral clients. So we deal with a lot of the same people over and over again. ⁓ I would say that the foundation, like the meat and the potatoes of the meal is oftentimes the same, right? You figure out what works and you know you need a hot tub and you know you need to sleep this many people. That doesn't necessarily change very often. It's usually pretty consistent whether you've set up your first property or whether you're on your 10th. But what I do think is important is to just change the flavor of sauce, right? We still want great comfortable beds. We know we need king size beds. We know we need full length mirrors. We know this house needs a hot tub. That doesn't change. But the bedding, the color of the bedding, the throw pillows, the headboard, the design aesthetic, I think should change from property to property. So you want to really have those key elements in every home. but you want your design, your flair, your look and feel to be different and original on every single home. Miles - Hospitable: I see how that makes a lot of sense. Cool, okay. We talked a bit about like hot tubs, swimming pools, some big ticket items. If we're on a bit of a budget and we're just trying to bring maybe a bit more life into the property, what are some of the things that we could be doing? I'm sure we'd all love to kind of come to you and invest a decent amount money, but if we want to just kind of do that a little bit of uplift as kind of a short-term project, what are some of the things you'd recommend doing? Mark Lumpkin: Yeah, I think it depends on the property itself. It really depends on what market you're in and what you have to work with on the property. I would look at your guest avatar and I would try to do things that are going to make them comfortable. It's oftentimes much easier for people if you are the guest avatar. So I think about like one of our properties and we have little kids. And so I think what would we like? Well, it'd be great to have a pack and play. Okay. Pack and play is not that expensive. I can provide a pack and play. It'd be great to have kids, you know, rubber silicone dishes so that I don't have to worry about my three-year-old throwing a plate across the table when she doesn't want eat the food we made her and it's shattering. Like, so there's a lot of little things that would make us feel comfortable. And so we've set that property up like that. And we see a lot of families come and really have great stays. And so to me, that's, that's what it comes down to. If you're on a budget, really identify who's the guest avatar. who's coming to the property and then figure out some small things that would make them really, really comfortable and would in a small way increase their experience. Is this a couple's cabin in North Georgia and you're gonna get a lot of just weekend stays for husband and wife? Okay, cool, can we do some premium towels? Can we do some robes? Can we do a great coffee bar? Can we do, you know. something that would, that person would really appreciate. And there's definitely not a blanket statement for that. So people have really got to think through this and think about, all right, what would my guests like? The cool thing is most of the people listening to this are in hospitality and you're in hospitality for a reason, because you know how to give people great experiences and great stays. So just double down on that and then add some things to the property that they would enjoy and then photograph those things, add them to your listing. and add them to your description. can't stress how important that is. You wanna make sure that you're letting people know about the great things in your property, not just doing it, not telling anyone. Miles - Hospitable: You're definitely going to advertise that hard work that you've put in. Awesome. I think maybe just one more question and maybe carpets is one of them, but is there like anything that you'd advise not to do? That's kind of, it's just kind of a waste of money, you know, throwing money down the drain. Mark Lumpkin: Definitely. Yeah, yeah, mean, there's, I can ramble on about this forever, but there is certainly a law of diminishing return where you can overbuild a property or you can provide, you can do so many things that are not gonna be appreciated by your guests and are just gonna cost you money. And I have started to see that a little bit in this kind of amenities arms race that we're in, where I'm seeing people doing like, very high end heated flooring. And I'm seeing people do luxury countertops and crazy, beautiful $20,000 showers and outdoor lighting so that this house looks crazy cool at night. There's really no data behind that stuff and it doesn't necessarily drive revenue. And so I would stay away from that. I would try not to overbuild your house. Miles - Hospitable: Mm-hmm. Mark Lumpkin: because the difference between the number one property in the market and the next five is marginal at best. But the difference between the top 20 and the next 50 is pretty large. And so you don't have to go absolutely bananas and be the craziest property in your market to be a top performer. ⁓ So that would be my advice for that. Don't overbuild your house. ⁓ Try your best to stay within reason. Provide some great value. but you don't have to go absolutely nuts. And oftentimes it's actually counterintuitive. Miles - Hospitable: That makes sense. Cool. And final, final question for you, Mark. If anyone wants to go learn a bit more about STR cribs, where do they go? Mark Lumpkin: yeah, do you just go to our website, strcribs.com? I'm pretty active on social media, whether it's Facebook or LinkedIn, you can find me there. can shoot me a DM. I'm happy, Miles, if you want to share, share any of my links and people can reach out to me directly. And yeah, thanks for having me on. It's super fun. I always love talking about short-term rentals and the industry is changing rapidly. So. Miles - Hospitable: Awesome, thank you very much for joining us, Mark. A pleasure. Mark Lumpkin: Thanks for having me on, Miles.