[00:00:02] This is Short Term Rental Management, the show that is all about short term rental property management with your host, yours truly, Luke Carl.
[00:00:18] There you go. Short term rental management. Luke Carl, happy to be here. I love you. It's vacation rentals at their finest. We're talking about single family overnight rentals here.
[00:00:28] Short Term rental Management. If you'd like to be a guest, please hit us up. Guest strmshow.com also some other housekeeping things. The Short Term Shop is hiring. We are getting ready to do some interviews very soon. So I don't know when you're listening to this podcast, but if it's near the release of the podcast, we would love to talk to you about a career in real estate. We have jobs available, mostly selling homes. If you're a real estate agent or want to become a real estate agent, well, you would already need to be a real estate agent. But if you're interested in possibly moving to the beach, moving to the mountains, moving to a very cool vacation destination and want to sell homes, get deeper into real estate, we would be happy to talk to you about that. We are currently hiring
[email protected] or theshortermshop.com careers. Also, want to mention Management Monday.
[00:01:25] If it's been a while, you need to come on back. Need to come on back. Changes every week. Management Monday is the first of its kind. It's a session where we teach the nuts and bolts about vacation rental management. I've been doing it for many years and you can get into that for free if you buy a house with the Short Term shop or you can join Short Term Shop plus, which is cheap at six times the price. That's sts plus dot com. So enough housekeeping for the day. I hope you're having a wonderful summer.
[00:02:01] Oh, where does the time go? It just flies, doesn't it? It's a little bit crazy how fast the time goes. Today we're going to talk about biggest mistakes in overnight vacation rentals, the mistakes that I see made on a regular basis and how to prevent them on today's program.
[00:02:24] All right, biggest mistakes I see in vacation rentals. Number one, patience.
[00:02:30] Patience is probably the biggest mistake that I see. Folks get so shot out of a can and they think it's going to be their new career. And next thing you know, they're just buying the first thing they can get their hands on and they rush the whole process and now they're getting it up and rented. And then a year goes by and they realize, wow, maybe I would have picked a better house and a different house and that kind of thing.
[00:02:53] So be patient.
[00:02:57] But it is a very fine line between patient and analysis paralysis. So it depends on the kind of person you are. Okay? If you're the kind of person that's suffering from analysis paralysis, patience is not your problem.
[00:03:13] We definitely see more so on the other side of the coin, the shot out of a cannon, if you will.
[00:03:19] You know, I. I would say actually more realistic. It's probably 50. 50. It's the shot out of a cannon. In the analysis paralysis is what I deal with on a, on a regular basis. And of course, there are tons of folks that don't do either one of those things, but they generally don't pass through me, right? So they, they just go about their business, they buy their beach house, they put it up for rent, and they take their family to their beach house, and it's just not really that big a deal.
[00:03:43] I don't really deal with those people. I deal with the analysis paralysis people, whatever that word is. And the shot out of a canon people, which I am a.
[00:03:53] I am 100. A shot out of a canon people. That's me.
[00:03:58] But when it comes to shopping, patience is a virtue.
[00:04:03] You are in no hurry. The hurry is to get the down payment. If you're shopping, that means you already have the down payment, so you're in no hurry. There will never be a shortage of deals.
[00:04:15] It will always be more difficult to get the money to buy the deals than it will be to find the deals. Okay, Let that sink in, because everybody, oh, I can't find a deal. I can't find a deal. I can't find a deal. I can't find a deal.
[00:04:30] People have been saying that since I started in this business years ago. I can't find a deal. I can't find it. Well, poor you, poor you. You came up with a hundred thousand dollars extra in your life to go find a vacation home, and you can't find one.
[00:04:44] You already did the hard part.
[00:04:47] Go slow. Pick the right one.
[00:04:50] Very fine line there. Because if you're analysis paralysis person, you'll probably just never get started. So you don't want that either. All right, so that's number one.
[00:05:02] Number one mistake. I see.
[00:05:04] Number two is communication.
[00:05:10] Not communicating with your guests enough and not communicating with your guests properly.
[00:05:18] I think that guests want to be talked to. It's better to send real messages. If you're to the point where you're so busy that you can't handle this, put it with a Property manager.
[00:05:29] It's no big deal.
[00:05:31] It's really not a big deal.
[00:05:32] Put it with a property manager. There's plenty, plenty of property managers out there. There's plenty of co hosts that are trying to become property managers or whatever.
[00:05:41] Okay? So communicate, be nice, kiss their ass, send messages. If here's, here's how you know if you're not doing it right, go back, go to your inbox right now and see how many of the last 30 messages they were the last one to respond.
[00:05:59] If the guest was the last person to respond in the message thread, you're doing it wrong.
[00:06:08] Okay? So respond, be nice, kiss their ass, do what you got to do. It's a big deal for these people to go on vacation.
[00:06:16] They deserve the personal attention.
[00:06:19] Number three, expectations. Setting expectations is huge. Of course we talk about this in Management Monday a lot. Feel free to revisit Management Monday with us anytime. If you are.
[00:06:30] If you have purchased a home with the short term shop.
[00:06:33] But if you don't know what that is, no problem. You need to set expectations.
[00:06:39] I preach about it often.
[00:06:42] I feel like I beat this one to death, but maybe you're hearing it for the first time. So I'm going to preach it again. Communicate. Set expectations through communication. Okay, so these two kind of tie in together. But if your guests are getting upset and leaving bad reviews, it's because they were expecting something different than what they got.
[00:07:07] All right, wear my donut hole hat today, which I don't. I don't know. Something about having a food on my hat I don't like. But this is not. It's a 30 a hat is what it is. So if you know what 30A is, then you'll get it. If you're from the south, you'll get it.
[00:07:22] I live on 30A and I go to a donut hole with my children often and I have scrambled eggs, thank you very much. I do not have the donut.
[00:07:32] Anyway, for those of you that are listening, you have no idea what I'm talking about and bless you. I prefer to listen myself every Tuesday morning.
[00:07:42] This program is brought to you by Smarter Short Term Rentals, the Facebook group.
[00:07:50] This group has nearly 75,000 members and has all of the information you can imagine to get you started in the right direction. In the world of vacation and short term rentals, that's Smarter Short Term Rentals, the Facebook group.
[00:08:09] Search for it on Facebook. That's Smarter Short Term Rentals. Setting expectations is huge. If you're getting bad reviews, it's because you're not setting expectations. You need to try harder.
[00:08:22] That can be done with automated messages, though.
[00:08:26] You, anything that you're saying repeatedly can be automated.
[00:08:30] It's those personal touches on rule number two, communication.
[00:08:35] Those need to be not automated and personal for the most part.
[00:08:40] Okay, set expectations. They need to know exactly what they're getting before they get there. And if anything, set the expectations slightly low.
[00:08:49] Under promise, over deliver is always a good idea in almost every single aspect of life. I can't even think of anything in life that it'd be better to over promise and under deliver that just generally doesn't go well. I've always, ever since I heard that term for the first time 20 years ago, I've always tried to over promise, under promise, over deliver, always.
[00:09:10] There's nothing worse than the guy that says, oh, yeah, I'll be there on Tuesday, and then you don't hear from him for three weeks.
[00:09:19] That's not somebody who's crushing it.
[00:09:24] And then being unorganized, rule number four here, biggest mistakes, biggest mistake number four that I see is being unorganized, having no clue what day of the week you're going to do. Pricing, having done. Haven't done pricing in, in two months. Put everything on a calendar, on a schedule and do it right. This is just life in general. This is the way I run things anyway. You know, now I know other people can function. People can function without a calendar.
[00:09:51] I cannot. I like to have a calendar. I like to have. I like to work on my calendar. It's timec consuming, it's pain in the rear end, but it's good for me, so I do it.
[00:10:02] Be organized. Put your pricing sessions on your calendar or just do them with your morning coffee. You should be excited to do pricing. I've been doing this longer than anybody and I am still excited to do pricing. If you're not excited to do pricing, then you are probably not making any money and your calendar looks like crap. Okay? So get organized. Get the pricing on the schedule.
[00:10:32] And that can be. Actually, I'm going to throw that one in there again. That's going to be rule number five. This wasn't on my list, so I'm throwing. I'm doing an audible here. Spend more time on your pricing. Spend more time on your pricing, but not too much. I actually met with somebody the other day. She said she was spending 45 minutes a day on pricing and her calendar looked horrible.
[00:10:48] Oh, and she only had one house, so we don't need to be spending 45 minutes a day on one house here, folks. That's going back to getting organized. Get organized.
[00:10:59] So rule number four, get organized. Number five, spend more time on pricing. Number six, not understanding your finances.
[00:11:07] That's a big mistake. I see in rental real estate all types of rental real estate. Again, I have apartments, etc. Love my apartments, even though I hate them.
[00:11:16] And if you have apartments or you've done any syndications, you'll know exactly what I mean by I love my apartments, but I hate them.
[00:11:24] Oh, man, are they a pain.
[00:11:28] Anyway, if you don't have a bank account situation, you know, ready, rocking at a cat, a separate capex, a bank account, and all that kind of stuff, then you need to get on that.
[00:11:39] That all comes from Mike McAllowitz, profit first. It's been mentioned a million times. You will read that book and find your own interpretation of what he's talking about.
[00:11:50] The way I do things is not the way you're going to do things. Is not the way she's going to do things is not the way he's going to do things. But read Mike McCallowitz, profit first.
[00:11:59] That's where you'll get the goods for understanding your finances.
[00:12:05] How did you not know that you were paying for stuff at Target for your personal life, out of your bank account, from your properties?
[00:12:15] That's not good.
[00:12:17] You got to understand your finances, where things are going. You need to understand that a CPA is not a bookkeeper, okay?
[00:12:30] Your CPA is not a bookkeeper. And asking him to keep your books to, to not have good, good books is a huge problem. And asking your CPA to do the books for you is a problem because that's not their job and they're not good at it, and they're going to charge you a fortune, and it's just not going to be as good as if an actual bookkeeper. Do you need a bookkeeper? Not if you can't afford one.
[00:12:52] If you can't afford a bookkeeper, look at Stessa.
[00:12:56] All right?
[00:13:00] Understand your finances. How do you get to know your finances? How do you understand your finances? Spend time on them.
[00:13:06] It's like Snoop Dog says, got your mind on your money and your money on your mind. If you're not watching your money, somebody will take it.
[00:13:21] The number seven thing that I see, biggest mistake. This was not supposed to be a top seven mistake. Blah, blah, blah, blah, blah. It just turned into that. I. I didn't do that on purpose. Nobody said, luke, you need a top seven mistake podcast. Blah, blah, blah, be a good influencer.
[00:13:38] It just kind of turned into that. And I really only had six. And then I threw in that other one.
[00:13:43] Pricing. Pricing is the one I threw in. All right. The last one I have for you is real estate is expensive.
[00:13:55] I see too many people that are. Again, you've heard me say it before. Trying to hit the slot machine, trying to buy one house, trying to quit their job. They think that one house is going to set them free and then they're going to go live this life where they don't have to go to work anymore. Bull crap.
[00:14:12] Hard work is always the answer.
[00:14:16] And real estate is expensive. I can't tell you, man. Every now, every now and then I see some folks that are like, well, I can't afford a. I just bought a house and I can't afford a new. Whatever, a hot tub. I can't afford a new kitchen sink. Can't afford a new refrigerator. I was trying to.
[00:14:35] Trying to wait until I could afford a refrigerator. You just spent $700,000 on a house and you can't afford a refrigerator. That's a problem.
[00:14:43] That's a major problem. And I do not like hearing that. And I hear it more often than I, than I care to hear it.
[00:14:51] If you can't afford real estate, don't buy real estate. It's expensive.
[00:14:54] That goes back to rule number one, which was quiz time.
[00:14:59] Patience. Be patient.
[00:15:04] Real estate is expensive. If you can't afford it, slow down. Take your time. The down payment is what?
[00:15:15] The hardest part.
[00:15:18] I've been saying it for years. The down payment is the hardest part. All right, let's recap.
[00:15:22] Number one, slow down. Be patient. No. Or part two. If you're. Shout out. If you're Analysis paralysis. Speed it up.
[00:15:32] Number two, communication. Go through your inbox. If you have messages that aren't being responded to, shame on you.
[00:15:41] Set expectations.
[00:15:46] Set expectations. Set. They need to know exactly what they purchased or a slightly less version of what they purchased under promise over deliver.
[00:16:00] Being unorganized is not good.
[00:16:03] Having tasks on the calendar is good.
[00:16:06] Number four.
[00:16:08] Number five is pricing. Spend more time on your pricing. Not spending enough time on your pricing. Not learning how to do pricing properly is a huge mistake. You need some revenue management training. You do. I'd be happy to give it to you. This is not a sales pitch, but we do do that. We offer that in house. Sts+.com.
[00:16:27] Number six, not understanding your finances.
[00:16:33] Get your bank account sorted.
[00:16:36] If you don't pay attention to those bank accounts and sort the profits out, they will dwindle. You will end up with nothing.
[00:16:44] You will end up having a month where the mortgage doesn't have enough money. You don't have enough money in there to pay the mortgage and that is your fault.
[00:16:53] Shame on you.
[00:16:55] Pay attention.
[00:16:56] Understand your finances. And number seven, real estate is freaking expensive, dude. There ain't no way around that. There ain't no way around that. If you think your wife likes handbags and that's costing you a lot of money, forget about it. When you get into this real estate thing, you're going to find out what expensive is real quick. You think boats are expensive?
[00:17:15] Ain't nothing, dude. Go buy some real estate if you think boats are expensive. You need to get in. You need to level up. Let's level it up.
[00:17:23] And that's okay. It's okay. Real estate's expensive. Let's go, let's go. Let's level up. Bring it in. Let's go. Let's do this. Go bigger. Stop thinking so small. Maybe that's number eight. That's biggest mistake. Number eight.
[00:17:37] Stop thinking so damn small.
[00:17:40] Why are you thinking so small? Oh, man, this refrigerator. I can't afford this refrigerator.
[00:17:46] I just bought a six hundred thousand dollar house and I can't afford a refrigerator. What are you doing?
[00:17:51] What are you thinking? Stop thinking so small. Let's go. Level it up.
[00:17:57] Level it up, baby.
[00:17:59] Gonna leave you with a quote.
[00:18:04] You make mistakes. Mistakes don't make you by Maxwell Maltz. I don't know who that is, but it's a pretty good quote. I have another one for you, actually. We learn from our failures, not from success.
[00:18:19] All right? So making mistakes is a good thing.
[00:18:23] If anything, take what I've taught you on this show today and just have a laugh about it because you're going to have to go through these damn things anyway. You know, if you're brand new and you're like, oh man, how do I avoid? How do I avoid all these things happening? You don't.
[00:18:42] You just shoot and then you aim and you hope you hit the target.
[00:18:47] That's all there is to it, man. So get out there and go make some damn mistakes.
[00:18:54] And as usual, cash flow Carl saying, don't overthink it.
