Latest / Short Term Rental Problems and Solutions / Poconos VRO STR Conference: Burnout, Boundaries, and Breakthrough
Transcript
- speaker-0: when they're at least 10 feet from a window or a door. Please and thank you. Having something like that in a little frame that matches the decor of the house in a mindful location, not everywhere, is a way to communicate these messages to your guests in a way that's not right there on their phone. The other thing, I really like the three-ring binders. Personally, I like my manuals to be in person. I think it's fantastic to have them digital too, but if you could print those out, I think it's better because which guest wants to be looking at their phone the entire time they're at your house? he'd still be invested in short-term rentals, he'd still be actually making money, and he'd have already actually built up some equity at this point but this ⁓ Real estate is there to serve your life. ⁓ are you familiar with the football term of a lateral lateral pass? when ⁓ somebody throws the ball backwards in the field a little bit, but they do it because they've got a bunch of blockers in front of them, and that person doesn't. A lateral move in real estate, yes, you might lose a little bit of ground. through commissions and closing costs. But if it gets you into a field position where you can actually make progress, it's a right move. I suggest that in real estate all the time, and I suggested it to that guy. But what he did was not a lateral move. He just quit altogether, which is what I'm trying to encourage you guys to stay away from. Yes, they can access it from anywhere. That's great. There's benefits of it. But I don't think that it's a replacement for the 3-wing binder. Anyway, just my opinion. Enable your guests to fix the small things. You know that little cabinet that nobody looks in right above the microwave? I like stocking that with certain things like batteries, light bulbs, ⁓ an extra TV remote. So there are some common causes of burnout. I'm gonna go over this quickly, but it's when you're not making enough money. Now, if we were all getting rich on this, it wouldn't be so much of a burnout. But when you're spending $3,600 a month on your mortgage, $500 on average for maintenance, and then you've got another $1,000 on your electricity bill, you're looking at every guest like, well, it's a privilege to stay in this house. You know how expensive it actually costs? And you're getting it for the whopping price of $900 for the weekend. In all of my investment properties, I like using Roku. You could use whatever you want to, but the reason I like using that is because I can have one replacement remote. And when the remote stops working for them, I can say, hey, there's batteries and an extra remote up above the microwave. And they go check it. If the light bulb goes dead in the chandelier, they can get up there and fix it if they want to. I've got a guest at a house checking out today, and I was troubleshooting the pilot light in the fireplace with them. They really want this fireplace to be working. And whatever we tried, not. speaker-1: it happened for me when I was at Texas Roadhouse. I'm not sure if anybody you have been there, but I was there on a date. was a Saturday night, very cold outside, ⁓ and I the message. ⁓ You know your phone buzzes on your leg and it's like I really want to ignore this, but ⁓ this is life now. ⁓ I ⁓ feeling like... ⁓ speaker-0: That's actually going through a lot of operators' heads as they're going through these things. Vendor reliability. How many times have I heard about people saying, my cleaner's not answering the phone. I'm worried something's wrong. They're just ghosting you because they're at a bar. And they're going to make up an excuse tomorrow when they want to get the job back. But this stuff happens. Vendor reliability, getting things repaired, the impact to your family. I was on a date. I didn't get home until after midnight that night, after refilling somebody's hot tub. didn't work. They also didn't want to walk outside and check that the tank level was up. ⁓ Now in my investment properties, I can see on the hellers.com, whatever it is, I can see what my gas level is, but in this situation, it's not my account. So I can't really check that. I could check with the homeowner. Anyway, the guest didn't want somebody to come out there and solve the problem. They wanted to be left alone. And so do yours. Generally speaking, they'd rather have the option to solve their own problem if they can. And if you just have a couple of things on site, you'll end up using them too. And it's not just the guests. speaker-1: this is supposed to be time that's for me. This is supposed to be time that's for my wife. We found somebody to watch the kids. This is kind of like not some night that I want to get ruined, but you know how your Saturday nights are when you're an STR manager or when you're managing your own short-term rental. And so we get into this mode of burnout because that text message said to me, hey, the guest tells us that there's no water left in the hot tub. speaker-0: On a Saturday, this stuff happens. So let's take another example, and I don't mean to be too much of a bummer, but let's just say that you're a little burned out, you decide to go on a vacation, open up a new credit card, $12,000 to $15,000 to go to Aruba with the fam. Couple days for travel, six to stay there, that's $104 an hour. So what happens on Friday night? You know you have a guest arriving. This is supposed to be passive income, but the dread takes over. Why? Because burnout is just about that event. Your cleaner can take care of it. Your handyman can take care of it. And it's easier now because they've got the stuff here. They don't have to go to the store and buy a pack of six light bulbs. And then you can restock it on the next day. Most people keep all this stuff hide and away in the supply closet, but you don't really want to give your guests access to that, Moving on. Relationships prevent emergencies. Yes, be nice to your vendors. speaker-1: Now again, I told you, it's 10 degrees outside. There's no water left in the hot tub. How does this happen? And it's frustrating too, because this is the second time that happened. If this happened before, we couldn't figure out why it was losing all of its water. So what do I do? We settle our bill. The guest knows that there's going to be somebody there within the next 45 minutes. I have the tools in my car. I know what to do. We've done this before. But. speaker-0: If it was just that one thing, it would be easy. Not a big deal. But this is years of events, all kind of compiling. The guest checked in, you get a message, that little phone buzz, right? When it should be on airplane mode. ⁓ Your arcade game is not working. I know! I know the arcade game's not working. You're the fifth person to tell me that. I have it under warranty. They haven't come out to fix it yet. I'm so sorry. Here's a $75 credit. Treat your cleaner like royalty. Treat your handymen like they're your best friend. Use local vendors, not people who are traveling from out of town two, three hours. Build these relationships. If you're going to call in a favor, I hope you've done a favor for them in the past. Because favors promote favors. That's just the reality of it. A high leverage move is to let your vendors use the house. So you guys know I have a cleaning service. speaker-1: What happens and why this is so unsustainable is because we end up solving crisis after crisis after crisis. And when your time is valuable and you end up doing things that shouldn't take this skill level, we're in the hospitality industry. It's very easy to just kind of get burned or burned out by it. so that's honestly what we're talking about today. And it's gonna start off as a real bummer. I'm sorry about that, but I'll finish the story real quick. speaker-0: This is real life, this is burnout, this is reaching your last straw. And not only that, but at $104 an hour, you just ruined a whole day of your vacation because you're in this business. So is it any wonder that we get burned out? Is it any wonder that we start to just say, you know what, I'm done, I've had enough of this? So our cleaning service manager at one point was invited to use a house of one of our customers for her mother's birthday and they were there for three nights. Completely free. They just had to clean up after themselves. That's incredible. They were probably gonna be vacant those three nights anyway. And they built so much goodwill. The cleaning service manager would have bent over backwards for that customer because of that favor. Now you don't have to go that far, but hey, if you like baking, maybe make them some brownies. speaker-1: So there's this house, and this is an image from that night, by the way. This is the hot tub that was empty. There's a lot of ice on that wall. So what actually happened was that the guests put too many people in the hot tub, water flowed over the side. When they hopped back out, again, it's 10 degrees, they hopped back out, the water level was too low. One of those jets is exposed because the balance of the hot tub is a little bit off. It's not level. So one of those jets is pumping the water outside of the hot tub as fast as it possibly can. speaker-0: There are some solutions. So now the positive side, the positive side of things. I'm not going to tell you to get a VA, but it is an option. And you might say, well, a VA is going to cost me more money. I'm struggling to make $5,100 a month on my rental property. How am going to make more than that in order to cover the cost of a VA? Well, remember that a VA can do more than just communicate with your guests, which might only take you three or five hours a week. Some weeks, it takes you 20 hours to communicate with guests, because we all know that some of the times, Maybe drop them some cookies. Think of that personal touch that you do with your guests. Maintain the relationship with your vendors as well. It can create massive ⁓ Another ⁓ little tip I've got for ⁓ is ⁓ like, you can ⁓ just your an automated message just saying, hey. speaker-1: until it can't suck up any more water. Problem solved. I figured it out. Now I know. But when I got there, look, the hose is still connected to the hose bib. It's 10 degrees outside. Who knows what happened? It's frozen. Exactly. So I gotta get my heat gun. I gotta get this thing taken off. I gotta start getting the water flowing again. This all takes a while, but guess what time it was? It's already 10 o'clock at night. Quiet hours start at one hour, but at least I had some music to keep me company. Cause the people upstairs, and there's probably too many of them, speaker-0: they get chatty or they want to phone call you or whatever. But nevertheless, you can grow your team with something like a VA. And I just encouraged a friend of mine who uses these extensively to open up a service. It's airbnbvas.com, where they are trained specifically to help you with Airbnb. They'll be trained in things like marketing, they'll be trained in things like education and helping your guests and creating guidebooks and all kinds of stuff that, let's be honest, as hosts, we don't really get around to this stuff. It's not very standard in this industry, but if you feel like the cleaning job was quality enough that it deserves a tip, here's how to do it. Just leave some foldable money in the microwave. Our cleaners know that anything in the microwave is for them. And just let it go. Your guests might leave a tip, they might not leave a tip, you don't have to keep track of this. But your cleaners are likely to do a little bit better of a job because they know that your house is one there where they might get a tip. Like, it doesn't cost you anything. speaker-1: We're playing their music plenty loud. So I had that, I had my wife sitting in the car waiting for me, and this was a date night. And now we've got somebody watching the kids. We gotta let them know they're gonna be late. And it takes two hours to refill this thing. So fast forward to the end. Sitting in the car and messaging the host. Now this is not a property that I manage. I just get involved with all these different properties because I like to help people, right? But in this case, I'm actually her cleaner and I'm also her handyman. speaker-0: because our time is worth more than that and we don't really see the return on investment right away. But if you do hire somebody, they can take over some of the stuff and it can keep you in the game, even if it makes you little bit less profitable for little while. But they can do these marketing campaigns, they can bring people back, they can do all the same stuff that a property manager can do, but they don't take a percentage of the rent. AI messaging is a big one. I just came from the talk from Hospitable where they're talking about AI messaging and it's incredible how... And I think if you phrase it the right way, it's not gonna come across as tacky, it's not gonna guilt trip your guests into anything. it's an idea, I haven't actually done it myself because almost all my houses are cleaned by my own employees. But you get it, right? So there's certain things that you can do to think outside the box. And I try talking about this stuff all the time on my podcast. And this is not just a plug for the podcast, it's really just there to create an environment where hosts can feel supported. speaker-1: and I'm the one who solved this problem the last time. So where is the text message going? It's going to me. But the host is getting so burned out by this house. There's not much money coming in. There's not, it's not making money. It's actually costing money. The electric bill on this house last month was $1,000. The electric bill, just the electric bill. So we get into this situation sometimes where there's almost no margin. There's no. speaker-0: you can train AI to communicate with your guests, like 80 % of the messages can go back and forth. I just heard an example today where somebody's dryer wasn't working at two o'clock in the morning, and AI troubleshot it with them over the phone, like over the map. So something like that can help you take some of the load off. And that's the idea. It's not that one of these things is the ultimate solution. It's just that you should probably consider adding some of these solutions. Another one is partial management. Anybody heard of Evolve? can feel encouraged and with little tips like this, right? So another way to prevent burnout is to grow your team. We already talked about AIs. We already talked about VAs. Property management is not failure. It's not. Choosing a property manager, a lot of people say, I'm not going to use a property manager because they're going to take 20 % or they're going to take 25 % of my rent. I'm only making $5,100. We're barely breaking even. What am I going to make after they take 25 % of that? It's a legitimate concern. But a good property manager, and you can interview all of them. speaker-1: There's no value. Every guest thinks that they're overpaying and every time you get a reservation it feels like they're underpaying and you're just trying to keep your head above water. Well, there's some more context to understand. Why is it such a low cost reservation? It's because you can't charge Bugatti prices for a Ford Maverick. Like they're just not the same. You've got to improve your product before you can charge more for it. And when your ADR goes down because there's competition and the market keeps on getting flooded with premium listings, well, look at that kitchen. This is a reason why people are not booking it. This is actually the second kitchen. speaker-0: Evolve will take only 12%, they'll do photos that are professional photos, and they'll communicate with your guests about as much as a new VA would. So they take off some of that communication responsibility, but all the problems still come back to you, so you know. Relief beats perfection. Now you might be like some people I know where if it's gonna be done right, it's gonna be done by me. I just have to jump into this situation and solve the problem. They're all willing to spend time talking to you about your property and your needs. You can talk to a good one. They should make a sustainable strategy. It's not failure to hire a property manager, but a good property manager will actually raise your ADR because they have technology, they have revenue management, they have a whole bunch of things that you just might not feel like you have the time for, and economies of scale. So I know of a property manager. Actually, it's Wanderhome. Our host today is with Wanderhome. speaker-1: Poor layout, wasted space, it's a raised ranch, it's not a chalet, it's not an A-frame. like somebody bought this, ⁓ host bought this during that like COVID gold run and ⁓ it's not doing as well as it used to, values have down for it, the ADR has gone down, it's not intentionally designed as a short-term rental, so there's things they could be doing in order to get prosperity up, but they probably should have converted to a long-term rental a while ago. But they're not. speaker-0: But you grow a team, you've got to go of perfection. And if it's got to perfect, and if it's got to be every single time, you're going to get burned out. they were able to raise the income from a professionally managed property in Arrowhead from $60,000 a year to $120,000 a year. That is incredible. So if you are considering hiring a property manager and you're making 60 and they make you 120, you're netting way more with the property manager even though you're giving away a portion. So there's solutions like this that you should be exploring if you're facing any kind of burnout. Build a real house manual. It surprises me sometimes, the rentals that I've stayed in, where the host has not invested enough time to give the necessary skills and knowledge to the guests to solve their own problems. I think most guests do want to solve their own problems. So I have a whole bunch of information in my own personal investment properties where I go through what the heating system is, how the thermostat works, the name of the thermostat in case they want to Google speaker-1: They're sticking with it. If we fast forward another six months, you know, with the fine, with guests like this, with the repeat issues, with the maintenance expenses, you know, exceeding $500 a month, just in repairs, ⁓ you can understand why she decided to just put it up for sale. And putting it up for sale is the right move in some situations. It's not always the right situation. And what what hurts me, yes, I'm a real estate agent. I could be selling it and getting a commission. speaker-0: instructions on how to use it. The lock box, I've got a backup lock box that the guests can use if they can't figure out how to do a Schlagg lock. It's one of the most customer friendly locks, But if they can't figure it out, I've got that backup code in case I'm not able to message them back five seconds later and unlock it through Wi-Fi. I still do all these things. These are things that you can do about your property in order to make it a little bit less stressful. Real estate like a roller coaster. There's ups and downs, but you're gonna get hurt if you jump off at the wrong time. ⁓ Remember we talked about lateral moves. There's also ways improve your property. There's times when you should be selling, ⁓ when you're not getting a good enough return on your equity, ⁓ like gentleman I spoke about earlier with the Lakeview house. speaker-1: That's not what I'm interested in though. I want to see people win. I want to see them win enough that they say, I want a second house, I want a third house, I want to grow with you, I want to grow this area, because that's, I've lived here since 2008. The Poconos is an area and a marketplace that I care about and I want to see it succeed. So I don't like seeing people get burned out. I don't like seeing the cycle of sales over and over again. So I try to support them. speaker-0: Sustainability compounds. ⁓ I can tell you, I am so passionate about real estate because my grandmother was a farmer all of her life, never had any extra money. My parents grew up very, very frugal. And my grandmother's entire retirement was her rental properties. She just had six apartments in Danville, Pennsylvania, and they were her entire retirement. And she lived okay. and in order to reduce that interaction between the guests when they've got an issue. Fewer calls means less stress. And your guests prefer to solve their own problems. ⁓ Another thing to consider doing is you may have bought the house and said, I'm going to rent it for a year and then I'm going to buy the hot tub. Well, what happens when there's not a lot of margin is you feel like maybe I just shouldn't buy the hot tub. But buying that hot tub or getting in that sauna or redesigning the decor, speaker-1: You remember 2022, right? Remember this meme? It's a, since it's a podcast, there's some people who need to be explained to what they're actually seeing. I know you can see, but this is a snowbank with a hole in it. It's one of those little kid igloos It says, just listed on Airbnb, $195 per night. No low balls. I know what I have. Remember back in the time when you could have any house listed? It could be your shed and you'd still make like a lot of money. Like those days have gone. speaker-0: These are all things that would cause you to have a higher ADR. Having a higher ADR is going to cause you to have better quality guests. it's like you got to spend money to make money, but if you don't do it, if you just put it off, you're going to feel like this is the way the guests are going to be from this point forward. You can actually control the quality of your guests, not just by screening, but by actually improving the property and making it worth more. Fewer issues, fewer surprises. And respect follows investment. ⁓ For a farmer who had never paid into a 401k, never had social security to really rely on, that is huge. And I would like to see other people succeed that way. And when she passed away last year, that was her inheritance. Her seven kids, know farmers, they have a lot of kids, her seven kids were able to split the value of those rental properties. She generated generational wealth with that. speaker-1: and everybody seems to be upping their game. And it just contributes to lower rates and price-focused guests. the unrenovated listings they really do different ⁓ At the first STR conference two years down at Camelback, ⁓ I met a host and he showed his listing and I it wasn't doing well. And so I encouraged him, hey, you know you bought this in 2017, you've got ⁓ roughly $120,000 in equity. You could sell property and you could one like these other three that I sold that year. speaker-0: And we're not talking about long-term rentals today, we're talking about short-term rentals, but real estate as a strategy has always been good. Even if it doesn't go up in value, it still doesn't deflate like the dollar does. And any fluctuations where it goes up and down, in my experience, have always just been level with the value, and the dollar has gone down in value. So I see it as a very good sustainable strategy. But the goal is longevity. It's last. Outlasts the competition. At the first conference that I did talk at, which is this one a couple years ago, I talked about the broken window theory, which is essentially if you saw stains all over this carpet, if it was dirty and stuff like that, you would have this unconscious feeling that you could disrespect it as well. So if the bottle cap fell off of your cup and it fell on the floor, you wouldn't notice because there's other stuff down there too. You just would get this impression that this place is not really taken care of, so why should I take care of it? That's actually a psychological rule in human nature, it's true. speaker-1: And you could actually cash flow from day one. Like you could get good furniture, good decor, good everything. And he said, no. And I quote it, my kids would never forgive me if I sold the house. Well, you probably know how this ends. That emotional attachment to this wrong property, the property wasn't making ends meet. It wasn't covering its invoices. It wasn't covering its anything. It did not do well. And he ultimately decided just to sell it. He gave up. speaker-0: provide a better service, provide better value than your competition. Final takeaways. ⁓ Breakthroughs require structure. Sometimes you have to invest time and energy into your rental in order for it to cause less problems for you so that your guests are better prepared to solve their problems so that you don't get those messages like I did about the hot tub being empty. You know what she could have done? That host could have had clear rules about the hot tub. If you get out and the water's below the jets, you have to refill it. So if you actually take care of your home really stinking well, your guests are gonna take care of it as well. So that little knob on the dresser that's loose, tighten it or take it off or get a new dresser. Do something about it. Don't just leave it be because that sends an unconscious message to them that it's okay and this is the standard of quality and that they're gonna be okay doing the same thing. I get disgusted sometimes. Walking into a house and seeing speaker-1: and made this emotional decision to just get rid of it. said, Jeremiah, sell it for me. And I did. I sold it, but it didn't feel good. I know it's my job. And I wanted him to get the best deal he could. But at the same time, I felt like that was such a failure, because he could have taken that equity and transferred it into another property and actually done well and still be in the market. speaker-0: Do not leave the hose connected to the hose bib when it's below freezing outside. You have to refill it. You have to put the lid back on. How about that as a rule? Any of these things would have caused that problem to not happen that night. If they had put the lid back on, if they had refilled it, if they had not had the hose on the hose bib, all of those things would have solved the problem. But it's because none of those rules were posted, none of those rules were discussed with the guests, that they felt like they could do this. bottle caps next to the hot tub or cigarette butts all over the deck. And it's just that, like, the cleaners are cleaning the inside of the house. They don't often think to clean the outside of the house. Or you open up the grill and it's disgusting inside. And it's because it was disgusting before the last guest used it and they felt like they could leave it the same way. I opened up a grill one time at a house that had already been cleaned and there was an orange inside. Why is there an orange and why is it still juicy? It's a grill. And with it being 10 degrees outside, they didn't want to walk over and pick up the lid. Which, by the way, wasn't on a hot tub lift. Which I think is such common sense. I was able to get a hot tub lift for a hot tub that was like 50 bucks. I installed it, it solves a lot of problems. And the guests don't leave it on the ground anyway. Back to the point. Build something that you don't feel like you need to escape from. And remember your motivation. You got into this business for a reason. It's like they hid it in there. I couldn't figure it out. Moving on. ⁓ Backup entry access. So you can send out your automated message, hey, the code is 1234. And if it doesn't work for you, there's a lock box to your left of the door. The code for that is also 1234. There's a key inside in case you can't get through the lock, or in case the battery dies. Just sending that kind of a message. The guest looks at the code, sees 1234, says OK, and they get in most of the time. It might have been so that you have a place to go with your family to spend that quality time. Don't give up on that. Or maybe your family's not coming here anymore for that quality time, but you've probably got some sort of equity that you can use somewhere else. The other thing that you've got is a lot of lessons that you've learned over the last year of hosting. But about three times a month, I get a call from a guest saying, hey, I can't get into the house. I don't want them to not be able to get into the house. And guests can check in any time they feel like it. They can leave and they can come back, you know? And I might not be available. Now, if you've got AI messaging, they're going to resend the message. But this is oftentimes something that can be avoided just with some forethought, just with some preparation, you know? Designed for failure in use. So let's talk. What kind of questions, conversation starters, what can we talk about now? I forgot, I think about one minute left. I've seen some vacation rentals with so many signs plastered over the walls. The rules, no smoking and no dogs and it's just tacky, it looks bad, but I kind of get it, right? They're seeing a lot of guests that are breaking the rules. So how do we get the guests the message without coming across as not being hospitable, for lack of a better term. You can use discrete design matched instructions. speaker-1: Yes. ⁓ speaker-0: Thank speaker-1: Above is a good they... ⁓ speaker-0: For goodness sakes, we have AI today. You can ask AI, hey, how do I make these house rules sound friendly? So that instead of it saying, you know, ⁓ no smoking, it could just say, hey, in an effort to make everybody feel welcome, we ask that all of our smoker guests actually just smoke out. speaker-1: out for lodging out here. speaker-0: Yeah, my complaint with Evolve, and I used to be the agent that they were referring all of their business to, my complaint with Evolve is that you're still managing the property yourself. Every time there's actually an issue, you've got to deal with it. I had a property that was listed with Evolve and it said, it's only one mile from Arrowhead Lake, but Arrowhead Lake is behind a gate. Our guests couldn't get in and they wanted a credit because of it and Evolve wouldn't take accountability for it. So like there's definitely downsides to having your property manager all the way over Colorado. There's definitely downsides to having your property manager in Florida where there are a plane ride away from solving problems here. And if you are trusting a property manager to manage your place, your baby, ⁓ I think you should be interviewing the actual people who are going to be interacting with your property. And your property manager in Florida is not. They might have an operations manager here, you should be meeting them, in my opinion. You shouldn't be just trusting the one who's like down in Destin, you know, revenue management for your house. They don't know anything about it when you interview a property manager. I've got a whole bunch of tips. Just listen to the episode that's dropping in two weeks. ⁓ That one has ⁓ rant on it about property managers. ⁓ Anyway, ⁓ yeah, with Evolve, yeah, it's issue. But the good news is ⁓ if stop using Evolve, you can host it with hospitable and you're 12%. You can use the same revenue management tools with Price Labs. here. You can get their card. ⁓ Well, not all of the same, but you get the idea. And we also heard about revenue management earlier. That was just $2.50 per month. ⁓ So that's ⁓ another thing to look into. you very much. ⁓ I'm to be here.