[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.
[00:00:16] Ladies and gentlemen, we have gathered here today to talk about rental real estate.
[00:00:22] Overnight rentals. What is an overnight rental? It's a single family home in a small town where a lot of people go on vacation.
[00:00:32] That's what it is to me, simple as that. It's also my birthday. Happy birthday to me. Nobody cares. I get that. But it is significant because I have turned 45, which means as far as I'm concerned, in the research that I have done, I am right now at my peak.
[00:00:54] I'm at my absolute peak. I have my health, although I've been a little bit under the weather and I have hit my stride as far as my career is concerned. I'm not talking about me personally, I'm talking about the average 35 year old.
[00:01:10] I'm just going to go with male because that's what I am. I would assume female. Same thing.
[00:01:16] Females are always created equal or greater in my world.
[00:01:23] And anyway, 40 to 50 is when you make your money.
[00:01:29] I really believe that's true. All right, let's break that down. I'm gonna get to the point. I do have a point. Today we're gonna talk about some rental stuff. Don't worry.
[00:01:36] Maybe we'll see how long I go on here. But I appreciate you either way.
[00:01:41] My research shows, based on many books that I have read and basically my opinion at this point, halfway through my 40th decade, fourth decade, you will make the bulk of your money between age 40 and age 50. As a matter of fact, the corporate world, and basically any world I suppose doesn't care about you anymore. As of by the time you're 50, it's too late. 50 is too late. Now we can have respect and experience. Those are absolutely invaluable as far as being a workhorse and putting the company on your shoulders and dragging it around.
[00:02:18] 40 to 50.
[00:02:22] And I don't know, I still got five years to go. So ask me this question when I'm 50 and then again at 55. But this is where I am right now. And I feel that this is true.
[00:02:31] And you know, I was a guy that spent way too much time in my 20s and my 30s, my 30s, my 20s carried over into my 30s, and now I'm finally getting to the point where I'm looking back on those days fondly. There was many years where I said, man, I wasted too much time in the bar, wasted too much time being a Dumbass.
[00:02:57] But of course, everything happens for a reason, right? And now that I'm in my upper 40s, as of today, I am looking back on it a little differently, where I'm grateful that I did waste all that time, because now, at still a very young age, I'm able to reflect and enjoy my life in a different capacity, a whole, whole different light.
[00:03:29] I waited to have kids. I didn't wait to have kids. It just didn't happen. And then eventually it happens. And then most of that has to do with a woman.
[00:03:37] Imagine that.
[00:03:40] You know, I, you know, I just, I came from a tiny little town. I actually went back and visited the house I grew up in recently, and it took me a long time to grow and mature.
[00:03:54] Wifey would tell you I still got a long way to go, and she's right.
[00:03:59] But my 20s, you know, here's my point. If you're in your 20s, have fun, have a ball. Those days, those, those years, they almost don't matter.
[00:04:09] You're learning about life and finding what, who you are and what life matters, what matters in life and things like that.
[00:04:19] You know, if I, if I were to have it to do over again, I would probably have encouraged myself to start a family a little earlier, you know, in my 30s. Early 30s would have been nice, but at the same time, I'm enjoying every second of it. I had my son when I was 40. He's five now.
[00:04:38] And I wouldn't trade it for. I wouldn't, I wouldn't change a thing. It's perfect. It's absolutely perfect. So, you know, life's a journey. I, I, All I can do is offer my stories based on my experiences. And I, I tell you one thing. I had big, giant Harry goats. I did, man. I, I moved away from a town of 1100 people in Nebraska, go Big Red to New York City when I was 21 years old.
[00:05:10] And looking back on that, I had some guts, man. I had some guts. That's. Takes. That takes gut now to do it is not guts, but to stay away. I've never gone back to live, you know, because it's easy to live in Omaha, Nebraska.
[00:05:31] It's just not for me.
[00:05:33] And it's a wonderful place, but it's brown and cold and boring.
[00:05:39] There's no professional sports. There's not a lot of things to do, but it's easy. Things are inexpensive. This cup of coffee was $2 cheaper in Omaha than it is where I live.
[00:05:52] But I got out and I stayed out, and that's actually a pretty Good indication that you're an entrepreneur. If you're looking to get out of the town you grew up in, you probably have different things on your agenda than your neighbor.
[00:06:09] And there's not a damn thing wrong with staying in your town and moving into the house next to your parents and making family number one. I think that that is absolutely wonderful, and I am very jealous of that.
[00:06:22] I was not able to do that. I had to give that up for this life that I was chosen to live, which is, you know, business owner.
[00:06:35] And could I have stayed home and been an entrepreneur? Absolutely.
[00:06:43] But it's not my style. I always wanted bigger, big, biggest, best. The best, the biggest everything.
[00:06:48] Let's go take over the world, man. And it's that attitude that got me to where I am today, wherever the hell that is. At my stride at 45.
[00:06:58] So I'm grateful to Nebraska, which I just got back from there, took my kids to the Iowa game, and Nebraska lost.
[00:07:06] And it snowed.
[00:07:09] It was wonderful.
[00:07:11] And the first game my parents ever took, actually, the only game my parents ever took me to as a child was Iowa, and Nebraska lost. So my kids now have that in common with me.
[00:07:23] First game, Nebraska. Our first game, Iowa loss. And then we had a Runza. It was wonderful.
[00:07:30] It was absolutely wonderful. But anyway, here I am at 45. I hit my stride. Let's go, baby. I'm at my peak, man. My peak. I got the next five years to crush it.
[00:07:44] And, you know, at that point, I think I want to continue to crush it, but I want to. I want to be able to not have to. That's the difference between. I'm hoping that's the, that's my goal for 45 to 50. The difference between those two periods of time in my life.
[00:07:59] Right now, I feel like I still have to crush it, which I don't, but I feel like I have to.
[00:08:08] And by the time I hit 50, I want to feel like I don't have to, but I still want to continue to crush it. Keep running marathons.
[00:08:17] Maybe not as often. I'm definitely cool with slowing down on the marathons once a year, once every other year.
[00:08:23] You know, it's hard. That is hard. But. Which I just did one of those three weeks ago, my 30th. Anyway, enough about me.
[00:08:32] I, I, I tell these stories because I, I, frankly, I wish I had somebody to tell me these stories when I was 25, 30, and when I hit, you know, 30, 35, and I was really starting to learn and gain some steam and quit drinking and all that nonsense.
[00:08:52] I didn't really have anybody ask questions and I went out and I tried to find these people. You know, they tell you go find your mentor and all this stuff. And it was difficult. Most people don't care.
[00:09:01] They don't want to help you. They don't care.
[00:09:04] They're busy, you know, and I, and to a certain extent, I don't blame them. You know, they get some hotshot kid that's shot out of a can and asking him a thousand questions. It's probably annoying.
[00:09:18] But I'm available if you're a hot shot that wants to ask me questions.
[email protected] I like it when people creep into my phone looking to buy a beach house for your family this summer.
[00:09:33] We can help.
[00:09:35] Theshortermshop.com we are a family owned business and we have the best team of real estate agents in the nation.
[00:09:45] We would love to earn your trust on your next beach or mountain vacation home. Purchase the shorttermshop.com with the short Term Shop. Not only do you get the best agents there are, but you get education and training to have success in the world of overnight rentals as well.
[00:10:05] Please join us at the Short Term Shop.
[00:10:11] So let's talk about rental real estate and vacation houses.
[00:10:15] Buddy of mine, Mr. Tim's a photographer in the smoke. He's a great dude.
[00:10:21] He's from Iowa of all places.
[00:10:25] Isn't that ironic?
[00:10:29] He just did a photo shoot at a rental property that had its own petting zoo.
[00:10:39] And I'm sitting here like, okay, first of all, I spend all my time telling people they don't need pickleball courts and now we've got petting zoos. We went straight from pickleball to petting zoos. Things are really being amplified here. We're going to 11.
[00:10:59] Escalating quickly.
[00:11:02] Now I should explain this is an HOA decided to put in this petting zoo and they had a few pigs and a couple of goats is what it looked like to me. And barn. And it was, you know, it was up at the front of the property of I don't know how many houses. And it was kind of a cute idea, but it did look to me like it was not going to be very long lived and at some point somebody's going to get sick of the, sick of it smelling bad and having to clean it up and all of that sort of thing, you know, because there's nobody living there.
[00:11:31] There's a barn, but there's not like a guest quarter. You Know, housekeeper quarters or something where somebody's keeping up with these animals at this place. You know, I didn't ask a lot of questions, to be honest with you. I should have asked more.
[00:11:45] But he did say it was stinky. That's gross.
[00:11:49] And he said the houses were all $2 million plus, which I don't understand. And I'm going to tie that into my subject today, and I'm going to go ahead and give you the subject today. The subject of today's podcast is that cheaper houses are easier to rent.
[00:12:05] So.
[00:12:06] But I do want to, I want to also mention here that these folks with these $2 million houses on this petting zoo property, they don't need the rental income.
[00:12:17] Matter of fact, I'm surprised they're even renting it. This place that he photographed is probably the only one in the neighborhood that's renting.
[00:12:23] What that really, right now, at this period of time in the economy, $2 million is kind of that line where you may consider, you got enough money, you don't need to rent the damn thing. You know what I mean?
[00:12:35] I think a lot of people in the grand scheme of real estate investing think small potatoes when it comes to money. And, and, and honestly, in the grand scheme of being wealthy, a lot of times these, you know us, we are, as real estate investors, we are kind of small potatoes. If you're buying single family homes and renting them out, you're small potatoes. I hate to tell you.
[00:12:54] And that's okay, I'm happy to be small potatoes.
[00:13:00] But that $2 million mark is kind of, you know, if you can afford the down payment and the mortgage or probably paying cash honestly at 2 million, you know, that's, that gets to the point where it's like, why am I, why am I putting a mortgage on this thing? That's stupid. If you've got that kind of money, usually this, you know, this is probably leaning towards a catch. Cash purchases in a lot of cases. In a lot of cases not.
[00:13:30] And of course, let's not forget the tax advantages. That is a very big thing. You're a high dollar doctor making 900 grand a year, and you need to tax situations and, you know, cost studies, et cetera, then buying one expensive piece of real estate is a great way to do that. And it's a lot easier to buy a $2 million single family home than it is $2 million apartment building.
[00:13:56] Then you put it with a manager, you can't use it, your family doesn't care about it.
[00:13:59] You know, vacation homes have A lot of perks.
[00:14:04] But just, I'm just giving you a little food for thought here. Once you get up to that $2 million plus range, $3 million plus range, you're probably wealthy enough that you don't need to rent the damn thing. All right?
[00:14:20] And I will say that the smaller houses, like I, you know, my, my subject for the day, are easier to rent. I'm more likely to get a two or three bedroom beach house rented in the wintertime than a five bedroom.
[00:14:34] Even for the same amount of money, for whatever reason, You know, I could price a five bedroom in the Smokies and a two bedroom in the Smokies the same amount of money the two bedroom's going to book first.
[00:14:47] Isn't that weird?
[00:14:50] Isn't that weird? There's some psychology or something going on there.
[00:14:55] I think it's because people that are traveling looking for a two bedroom, there's more of them and that's generally their price range. And maybe it's the search functions are not set up for that on the platforms. You know, there's a lot that. There's a lot to discover there and unpack. And I'm not going to talk about that today. I'm not here to get into a bunch of spreadsheet nonsense.
[00:15:23] But the smaller houses are easier, you know, especially in the down times to rent.
[00:15:30] So that's something to consider. Does that mean you should go out? I'm not, Am I trying to, am I trying to campaign for a small house right now? No, I'm not.
[00:15:36] Because the big houses are going to rent, you know, bigger money in the summertime. And a lot of times, you know, you'll end up working less with a bigger house than you will with a small house.
[00:15:52] Because the house sitting empty is not a lot of work.
[00:15:55] Just turn the heat down and wait until it gets booked.
[00:16:04] So this is, you know, this, this is a very, very much a case of you can take the boy out of the long term rentals, but you can't take the long term rentals out of the boy.
[00:16:17] To me, a long term rental is $150,000 house, depending on where it is, could be 100, could be 200.
[00:16:26] And it rents for the good old fashioned 1%. 100, $150,000 house needs a rent for $1500. Now there was a period of time there for six or seven, five, six years in Covid where that didn't make any sense at all. But we are slightly coming back around to that, which, by the way, I do still think the market has a long way to go.
[00:16:50] I think this is a great time to be looking for deals and I'm gonna get off on that tangent just a little bit. I am shopping right now actually. I'm shopping for a beach house.
[00:17:03] And there's some options, there's a few options. I might even make an offer maybe. You know, I'm a luck lucky. I'm at a point in my career where I don't have to go buy every single thing that crosses my plate. There was a period of time where I did do that.
[00:17:21] So long term rental, 150k, 1500 dollars a month.
[00:17:29] That's just kind of a bread and butter situation for some folks to have a good job and raise their family in there and, and let it rip.
[00:17:44] And I, I don't like the, I don't agree with this mentality that people that are renting are only renting because they can't afford to buy. I totally disagree with that. There's a, that's kind of a thing that runs around in the long term rental world. Some, a lot of property managers think like that. Well, they're renting because they don't have any money. That's not true.
[00:18:04] Maybe they don't want to just be tied down, you know, I mean I, I was, I didn't want to be tied down when I was younger and that was 20, you know, I'm 45. So things have changed a lot. People certainly don't want to be tied down as much today, you know, and so maybe they just want to live in that house for a year or two.
[00:18:24] Anyway. I am of the philosophy that there are really good people out there that rent, go find them, put them in the house and forget about it for 10 years and then they're going to move out and it's going to be trashed and you got to spend 8 grand, 10 grand fixing it up and then another 8 grand for an H vac and you're saying, man, this house is expensive, why did I buy it?
[00:18:50] And time goes on and time goes on and time goes on.
[00:18:54] So it's that mentality. This carries over for me into short term rental and it's something that I talk about all the time where people in short term rental do not for whatever reason like long term rental and very rarely own a long term rental and don't know how it works and don't care about it. But in my brain they're both the same freaking thing. They're the same thing. It's a house. First of all it's a single family home. It's not some giant commercial building with 200 doors, units or whatever, office space.
[00:19:23] It's just a house.
[00:19:26] She changed the name of this podcast. It's just a house.
[00:19:38] And sometimes they live in it and sometimes they go on vacation in it.
[00:19:43] Simple as that.
[00:19:45] That's another thing again, a lot of tangents today. I know, I know, I know. That's what happens when I don't have a guest.
[00:19:51] But I get sick and tired of these folks that get into short term rental because they think that it's some new fangled thing that's like walking on the moon.
[00:20:07] That Airbnb. I got an Airbnb. It's a freaking house is all it is. It's a house.
[00:20:16] You didn't invent anything. I hate to tell you, I don't know where this comes from.
[00:20:24] Vrbo's been around for 30 years.
[00:20:30] And I think the sooner you can get out of that nonsense mentality, the better off you are. It's a house. You rent it out. Is it in a vacation town that doesn't have any hotels or is it in a good school district with 32 brick ranch and it's $150, 100, 1500 dollars a month.
[00:20:56] I know, I know. There's tons and tons and tons of exceptions out there.
[00:21:03] And you can rent a house in Cleveland overnight. Again, you're on vacation when you're doing that, or you're traveling, you're working, you're staying for a short period of time and you want a washer and dryer. We just did that in Omaha. We rented a, an Airbnb.
[00:21:17] It was a loft, like a condo kind of a deal. And it was a two bed, two bath and it had a washer and dryer. And it was glorious because we just got back from Disney World and all of our stuff was nasty and we had to switch from shorts to parkas and that's why I got sick, you know, so anyway, so food for thought, it's a little easier in a lot of cases to rent a smaller house than it is a bigger house. And so with these pet, these, these, these amenities and these petting zoos, etc, it's something to consider, but they both have their ups and downs. You know, obviously if you're going for the tax advantage, the bigger it is, the easier it is, you know, so. But just keep in mind that the little ones, they just kind of chug along. They chug along.
[00:22:10] You can take the boy out of the long term rental. So we talked about a lot today and we, I have no idea what we, what we talked about. So good times. I love you.
[00:22:19] Happy holidays to you. I don't know when this, this podcast is coming out. Could very, very well be in January, but please leave me a five star. I know this is so niche down and nobody cares about it. You know, it's the, this is a very niched situation we're looking at here. But I do feel like I provide some pretty good content and if you're listening, watching on YouTube, give it a like and if you're on a podcast, please hit me with a five star. Love to have, love to have that five star baby. And Luke at the ShortTermshop.com
[email protected] currently reading a book. I'll throw that at you. Just started a new book. Hold on. What is it? It's a Ryan Holiday that came out last year.
[00:23:04] I kind of, I started skipping his books a little bit because it seemed like he was putting out too many of them. I hate to say that because he's awesome.
[00:23:15] Yes, wisdom takes work. Brian Holiday came out last year. Good book. I'm enjoying it. I'm enjoying it. I'm about halfway through already, so I love you. Don't overthink it.
