[00:00:02] Speaker A: This is short term rental management, the show that is all about short term rental property management with your host, yours truly, Luke.
[00:00:13] Speaker B: Carl, welcome.
[00:00:17] Speaker A: Welcome to short term rental management. It is great to be here with you on this glorious, well, quite possibly two Tuesday morning. If that's when you tune in. We are here every Tuesday morning. My podcast appreciates a five star review, if you get a second, because after all, we are in the review business today.
Cash flow Carl going to talk about number of guests.
How many people should I sleep in my home?
And we will get deep into that after a word from this week's sponsor.
Sell with the short term shop.
Are you looking to sell your short term rental or even 1031 into a different property?
Our team of realtors will work hard to get you the most for your investment. We are experts in our field and would love to earn your business.
When it's time to sell, call the shop. The shorttermshop.com.
That's the shorttermshop.com brokered by exp cashflow Carl Long hair Luke, the multifamily madman.
The reverend of real estate, the man.
[00:01:37] Speaker B: With too many nicknames, dressed like a lumberjack.
[00:01:40] Speaker A: Today, life is good. Life is good. Happy to have you with me here. As we talk about number of people, how many guests should I allow in my home? Well, the correct answer is, there is no wrong answer.
This is one of those many things in management of landlording, short term landlording, where it's not as big a deal.
[00:02:03] Speaker B: As you think it is.
[00:02:05] Speaker A: When you first start, you're oh, my goodness, how many people should I allow in my house?
It's a huge deal and you're like freaking out about it.
[00:02:12] Speaker B: But the truth is, just pick something.
[00:02:15] Speaker A: And run with it.
[00:02:15] Speaker B: And if it's not working for you, change it later. Simple as that.
[00:02:21] Speaker A: No different than being pet friendly. People obsess over that quite a bit. No. Should I allow pets? Should I not allow pets? It's not that big a deal. Give it a try.
That's what I did my very first vacation house.
It's still to this day, the longest running Airbnb in the smoky mountains of east Tennessee.
[00:02:42] Speaker B: I was pet friendly, and I decided.
[00:02:45] Speaker A: After four or five, six months, even though we have many pets in my household, I did not want to deal with that anymore.
[00:02:55] Speaker B: So I drove myself nuts. And then I realized, wait a minute.
[00:03:00] Speaker A: I can just turn this button off and no longer allow pets in this house. Simple as that.
[00:03:06] Speaker B: So.
[00:03:09] Speaker A: We do obsess a bit, especially when we're new about how many people to allow. There's also. I do want to talk briefly about heads in beds. Right? We're talking about heads in beds here.
Now that term technically goes back old school when it was basically like, hey, man, figure out how many people you can sleep in this house. You'll make more money the more people you can shove in this house.
[00:03:31] Speaker C: Which is true.
[00:03:33] Speaker B: It is true.
[00:03:34] Speaker A: The more warm bodies you can stack in that home, the more you can charge per night because it's less per person.
And then that way maybe they can save having to buy two houses or a bigger house or a more expensive house, that kind of thing. So there are landlords out there that do that. That's their thing.
[00:03:52] Speaker B: Let me see how many people I can stack in this house.
That is not my deal.
[00:04:00] Speaker A: I find that that is too much.
[00:04:02] Speaker B: Work and you will get a lesser quality guest.
[00:04:06] Speaker A: The type of guest that is willing.
[00:04:08] Speaker B: To sleep in there with all those.
[00:04:11] Speaker A: Family members stacked on top of each.
[00:04:13] Speaker B: Other, not going to be that great of a guest.
[00:04:15] Speaker A: Let me throw this at you. The type of adult that's willing to.
[00:04:19] Speaker B: Sleep on a top twin bunk bed.
[00:04:24] Speaker A: Probably not the classiest guy on the planet.
So I decided long, long ago that I wanted to go a little bit lower on my number of people and I made that work for me. Yeah, might have left a little bit of money on the table, but it made my management, I felt it made the management side of things a little.
[00:04:43] Speaker B: Easier for me and my quality of guests goes up.
[00:04:47] Speaker A: Those two things are related.
[00:04:49] Speaker B: The higher quality guest, the less pain in the rear end management will be.
[00:04:56] Speaker C: Okay.
[00:04:57] Speaker A: So I decided I'm going to go.
[00:04:59] Speaker B: Number of bedrooms times two plus two.
[00:05:03] Speaker A: That's my formula. If you're just looking for kind of.
[00:05:06] Speaker B: A back of the Napkin, how many.
[00:05:08] Speaker A: People should I sleep in this house?
[00:05:10] Speaker B: Number of bedrooms times two plus two.
[00:05:13] Speaker A: Which means that a four bedroom house.
[00:05:15] Speaker B: Sleeps ten, a three bedroom house sleeps eight.
[00:05:24] Speaker C: Right.
[00:05:25] Speaker B: Now, major exceptions to that rule. Matter of fact, I have three four bedroom houses. I'm sleeping twelve in each of them. So I'm breaking my rule there.
Matter of fact, I have three four.
[00:05:43] Speaker A: Bedroom houses, all three of which are vastly different square footage.
[00:05:47] Speaker B: And I'm still sleeping twelve in all three of them.
[00:05:51] Speaker A: Let me take that back. Let me see.
[00:05:52] Speaker B: 1246.
[00:05:56] Speaker A: I'm sleeping ten in my smallest one. All right, so I sleep twelve in two of my four bedrooms and ten.
[00:06:03] Speaker B: In my little one. Now, the little one is pretty small.
It is, I don't know, top of my head, maybe 2000 sqft.
[00:06:11] Speaker A: I've got one that is 3000 sqft. I've got another one that is 3000 sqft. So a 3000 square foot four bedroom is going to sleep more than a.
[00:06:21] Speaker B: 2000 square foot four bedroom. Makes sense, right?
[00:06:28] Speaker C: Common sense.
[00:06:31] Speaker A: So I do apologize for contradicting myself.
[00:06:34] Speaker B: There a little bit with my square.
[00:06:37] Speaker A: Footage and my number of people, but.
[00:06:38] Speaker B: It'S difficult to remember all this stuff. You know, it really is.
[00:06:43] Speaker A: Sometimes you get a bigger portfolio and I'm blessed to have an amazing life that I'm living here and worked hard to get to where I am. And sometimes it's hard to remember that stuff. Okay.
[00:06:51] Speaker B: So cut me some slack now.
[00:06:54] Speaker A: Let's throw this at you. I've got a five bedroom that I only sleep ten people.
[00:06:58] Speaker B: So I have four.
[00:07:02] Speaker C: Three.
[00:07:02] Speaker A: I have three. Four bedrooms that I sleep twelve. I'm sorry. All right, back. I see I'm contradicting myself again. Two four bedrooms I sleep twelve. One four bedroom I sleep ten.
[00:07:12] Speaker B: And I have one five bedroom, I sleep ten.
[00:07:15] Speaker A: Why? Because it's a small five bedroom.
[00:07:18] Speaker B: It is.
[00:07:18] Speaker A: It's like, I don't know, 1900 sqft, which isn't tiny. The living area and the kitchen are small and the rest of the house.
[00:07:26] Speaker B: Is bedrooms, which is very common in vacation homes.
[00:07:30] Speaker A: That's another thing you got to understand, vacation. If it was built as a vacation home, it probably has a small living area, a small kitchen, no closets and.
[00:07:39] Speaker B: A lot of bedrooms.
[00:07:40] Speaker C: It's pretty common.
[00:07:42] Speaker B: They were built to sleep as many people as possible.
[00:07:47] Speaker A: So yes, I have a five bedroom, but it is small. In other words, if it was a.
[00:07:52] Speaker B: Regular old house that you were living.
[00:07:56] Speaker A: In and raising your kids at 1900 square foot, that'd probably be a three.
[00:07:59] Speaker B: Bedroom, maybe four, maybe it wouldn't be five. But since it was not built to.
[00:08:05] Speaker A: Live in, it was built to vacation in.
[00:08:07] Speaker B: There's no closets and there's no small little living area because most people on.
[00:08:12] Speaker A: Vacation aren't spending a ton of time in the house, depending on your market.
[00:08:17] Speaker B: If you're in pigeon Forge, which is where my five bedroom is, people are going out. They're going to eat out for the most part. They're going to the park, they're going.
[00:08:27] Speaker A: To the roller coasters, they're going to Dollywood, they're going to all these crazy amusements. They're not home much at all.
[00:08:32] Speaker B: They're just coming back to sleep and gather.
Man, what an awesome day. Let's pour some moonshine and do this damn thing.
[00:08:42] Speaker A: Same thing on the beach. I got a big beach, I got a couple of big beach houses.
[00:08:45] Speaker B: One of them has a pool.
[00:08:48] Speaker A: People are gathering at that pool, man. They're coming in to watch a little bit of tv here and there, that kind of thing. But for the most part, if they're not at the beach or at a restaurant or at the amusement park or at the water park or whatever it.
[00:09:00] Speaker B: Is there at that pole, small kitchen.
[00:09:04] Speaker A: So keep all this stuff in mind.
The variable, again, the formula is number of bedrooms times two plus two. And then the variable is square footage.
[00:09:17] Speaker B: All right, we could probably come up with an exact formula, but I tried.
[00:09:22] Speaker A: That and it doesn't work. If you do 0.4% of 3000, that's twelve. Right?
[00:09:27] Speaker B: But if you do 0.4% of 2000, that's only eight.
[00:09:32] Speaker A: So it doesn't translate. So maybe something like number of square.
[00:09:36] Speaker B: Feet equals number of people.
[00:09:41] Speaker A: 3000 sqft equals twelve people. 2000 sqft equals ten people, 2500 sqft. That's where it gets weird. Are you really going to sleep eleven people? Because then you got like an odball bed somewhere or a twin bed in the corner somewhere.
So again, use your best judgment based on the prior formula. To me, that's the best way to go. Number of bedrooms times two plus two with the square footage being a variable.
[00:10:07] Speaker C: Right.
[00:10:10] Speaker A: This episode is brought to you by short term rental listing advice join this Facebook group and post your listing to get advice from other hosts, including myself, on how you can improve your listing or just post your property so you can show off.
Join
[email protected] that's strlistingadvice.com.
Let me give you some other examples. If I've got a one and a half, what I call a one and a half bedroom, again, back to the smokies. These are very common, a one bedroom cabin with a loft. So it's got like, let's say two king beds.
I'm generally going to sleep about five depending on square footage. That's where that odball. But maybe that's a pull out queen couch, a bed to sleep five.
I do find I start to get a little annoyed with six people in what I call a one and a half bedroom, which is a one bedroom with a loft, which you rent as a two bedroom, but legally you bought and sold as a one bedroom, right? So one and a half bedroom is what I call it.
I find that if I go to six on that thing, the type of people that are willing to cram six people in a one and a half.
[00:11:24] Speaker B: Bedroom cabin in east Tennessee with.
[00:11:28] Speaker A: Let'S say, 1200 sqft. They're going to be not my favorite.
[00:11:32] Speaker B: Guests, so five is kind of going.
[00:11:34] Speaker A: To be my limit on that. A zero bedroom cabin.
[00:11:36] Speaker B: I'm going to stick with two, with.
[00:11:38] Speaker A: The exception of maybe a child at.
[00:11:40] Speaker B: Maybe three humans total.
And again, where do I come up with these numbers?
[00:11:48] Speaker A: Historical data.
Historical data.
[00:11:53] Speaker B: Pick a number, run with it.
[00:11:55] Speaker A: That's the whole point of this call. That's the whole point of this podcast. Pick a number that you think is going to be okay. If it starts to be annoying or if you're over managing or you're dealing.
[00:12:05] Speaker B: With junkie guests, drop it down.
[00:12:08] Speaker A: If you feel like the guests are being totally cool and you could maybe spare a couple of square feet in the property.
[00:12:15] Speaker B: Bump it up. A person or two doesn't have to happen overnight.
[00:12:21] Speaker A: That's the theme of today's show.
[00:12:24] Speaker B: Pick something, run with it, change it.
[00:12:26] Speaker A: Later based on need and necessity.
Can I handle a little more management on this house in exchange for a couple more bucks? Yes. Okay.
[00:12:34] Speaker B: Bump it up.
[00:12:36] Speaker A: Am I over managing this house because.
[00:12:38] Speaker B: The guests are annoying me? Bump it down. Simple as that. Now, I mentioned the word humans.
That's where it gets a little weird.
[00:12:47] Speaker A: Because there is an Airbnb, a verbo loophole where they say that they basically think that infants don't count.
[00:12:55] Speaker B: So you have to keep that in mind.
[00:12:56] Speaker A: Are you going to abide by that or not? Because you can put it in your. This is what I do. I put it in my house rules.
[00:13:01] Speaker B: Humans, ten human maximum. Because what they can do, and this.
[00:13:08] Speaker A: Is totally within their rules on Airbnb.
[00:13:12] Speaker B: They can book ten people, and technically they could book six infants and get away with it.
[00:13:19] Speaker A: Now you got 16 people in this.
[00:13:20] Speaker B: House, but Airbnb doesn't count infants, which.
[00:13:23] Speaker A: I believe, don't quote me.
[00:13:24] Speaker B: I think it's anything under 18 months.
[00:13:28] Speaker A: So my house rules say ten humans regardless of age. And again, if it's in your house rules, Airbnb and Verbo will be on your side there.
[00:13:37] Speaker B: Booking.com hopper whatever platforms you're using.
[00:13:44] Speaker A: So I do see that quite often.
[00:13:46] Speaker B: Where they'll sneak or they really probably don't even know.
[00:13:50] Speaker A: I think sometimes they're sneaking, but I think most of the time they don't realize because Airbnb will let them put ten guests and three infants, and it.
[00:13:57] Speaker B: Still says ten guests, but you got.
[00:14:00] Speaker A: To kind of pay attention to that. Am I hyper focused on that and being the infant police? No, but if they start asking weird questions and then I'm like, wait a minute. What is this? Why do you have 13 people here? What's going on? I'm sorry. This house only allows ten. You're going to have to cancel. I'll give you a full refund. That's the key. If you're going to do it my way, you have to be cool with.
[00:14:18] Speaker B: Giving a full refund.
[00:14:20] Speaker A: And then Airbnb and verbobooking.com, they're going to take your side. If you're not going to give them a full refund, then it's like you're.
[00:14:27] Speaker C: And I get that.
[00:14:28] Speaker A: It's almost like you're trying to find some loophole to rip people off and nobody wants anything to do with that, and you shouldn't either. So in my case, the only downside to that is if it gets too close to reservation day and then I didn't catch it, and next thing you know, they're bringing 13 people, three infants and ten people to a ten person property. Well, too late. Shame on me for not catching that. And again, am I hyper focused on that?
[00:14:52] Speaker B: No.
[00:14:52] Speaker A: I'll be honest. The only time I ever notice that.
[00:14:54] Speaker B: Is when they're being annoying.
Okay, you're being super annoying.
[00:14:58] Speaker A: Let me see what else you're doing wrong. Oh, wait a minute. You're trying to sneak in three extra.
[00:15:02] Speaker B: Humans again, I use the word humans has to be in your house rules.
[00:15:10] Speaker A: This is not legal advice of any kind. You're going to need to call Airbnb and Verbo and booking.com and Hopper and Google vacation rentals. They're not going to care and confirm.
[00:15:20] Speaker B: All of this stuff. Okay, I am in no way offering.
[00:15:24] Speaker A: Any kind of legal advice. I've got three Harley Davidsons. I am not a lawyer. Not that I'm sure there's plenty of lawyers out there with three harleys, but.
[00:15:33] Speaker B: You get my point.
[00:15:35] Speaker C: All right?
[00:15:35] Speaker A: So be careful with that infant loophole.
Maybe you don't care. Maybe you agree. Maybe an infant doesn't count as a kid. I've got two kids.
[00:15:44] Speaker B: Let me tell you something. They count as a tornado.
[00:15:50] Speaker A: It's not even a human, it's a damn tornado.
And yeah, an infant doesn't do much of anything, but it does take up space and everybody. If there's an infant involved, the stress level is higher.
So again, I find it's my duty to make sure that the number of people are a little lower to keep that stress level lower, because people don't know any better. They're just trying to save a couple of bucks and it's your job as a landlord to say, no, sorry, I do not want the stress level that high in this house. It's going to lead to bad reviews. It's going to lead to your vacation not being as good as you want it to be. Quite frankly, what you're saying there is maybe you should save up a little bit more money and go rent a bigger house. You can't say that, obviously, that's not classy.
[00:16:33] Speaker B: That's not the southern way of doing things.
Polite, as my lovely wife has taught me.
[00:16:41] Speaker A: She's, of course, from the very deep south.
[00:16:44] Speaker C: Right.
[00:16:44] Speaker B: So you're going to have to come.
[00:16:47] Speaker A: Up with an SOP, a standard operating procedure based on whether you're going to be, quite frankly, my way of doing it, the human thing, it is more work that way. Like, I got to call and explain to the person at Airbnb, hey, they told me they're going to have 13 people.
My house is ten person maximum, and.
[00:17:05] Speaker B: In my house rules, it says ten.
[00:17:08] Speaker A: Humans, regardless of age. That's how you get through that infant loophole. But Airbnb is not really going to like that. They're not going to understand it.
[00:17:18] Speaker B: So you got to decide if it's worth it.
[00:17:21] Speaker A: Is that juice worth the squeeze? For me, it is. I don't want that many people stacked in my houses again, making the stress level go higher and everybody has less of an awesome time.
[00:17:33] Speaker B: I come from the party world, right?
[00:17:35] Speaker A: I was in the party business for, like, 15 years. I owned a nightclub in New York City a little, well, nightclub, it's a 600 square foot dump, is what it.
[00:17:44] Speaker B: Was long time ago.
[00:17:47] Speaker A: And so I learned. And even before that, I was partying. I was in the party, the rock and roll party business.
[00:17:54] Speaker B: That's what I did, man.
[00:17:55] Speaker A: We had a good time all the time.
[00:17:59] Speaker B: I take what I learned from that.
[00:18:01] Speaker A: Business, which is all hospitality.
[00:18:03] Speaker B: Make no mistake.
[00:18:04] Speaker A: Nightclubs, restaurants, bars, it's all hospitality. If you have experience as a waitress or a waiter or a bartender, you're going to do very well as a.
[00:18:15] Speaker B: Short term rental landlord.
All right? So I take what I learned from.
[00:18:22] Speaker A: That side of the business, from the hospitality business, and I translate it over here, which is, again, it's hospitality.
[00:18:28] Speaker B: It's all it is. It's the exact same thing. And what I do is.
[00:18:35] Speaker A: It used to be, back in the day, I'd see a guy wander in my bar, and he'd sit down at the bar and he'd be one of these, like, come to the bar early and complain about my problems kind of guys. And I'm like, listen, there's 100 bars out there.
[00:18:47] Speaker C: That.
[00:18:47] Speaker A: That's exactly what they do. You go in those bars and you complain about your problems.
[00:18:51] Speaker B: That's not what we do at my bar.
We come to my bar to create memories and have a good time.
[00:18:58] Speaker C: All right?
[00:18:59] Speaker A: So if you're not coming in here to have a good time, you are.
[00:19:01] Speaker B: In the wrong bar.
So a lot of that has to do with, what's the vibe you're trying to create in your property?
[00:19:10] Speaker A: What type of a manager are you? There's plenty of people that are listening to this saying, this guy doesn't know what the hell he's talking about. I'd sleep 16 people in that four bedroom.
[00:19:21] Speaker B: So it's all about what environment you.
[00:19:25] Speaker A: Want to create for your guests.
You don't need to sit there and have a game plan. You don't need a freaking flowchart about.
[00:19:34] Speaker B: Your environment and your property.
[00:19:38] Speaker A: It will change and evolve over time.
[00:19:40] Speaker B: Based on your experiences.
[00:19:43] Speaker A: Okay, so again, to reiterate, the most important thing to learn here is that there is no wrong answer.
[00:19:50] Speaker B: There's no wrong answer. Pick what you think is best over time, the procedure and the policy will change and evolve based on needs.
Number of bedrooms times two plus two, with a whole lot of exceptions.
[00:20:12] Speaker A: Heads and beds with the reverend of real estate.
[00:20:15] Speaker C: Luke.
[00:20:15] Speaker A: Carl, I appreciate you. Please give me a five star review. And of course, check out the shorttermshop.com. We'd love to sell you your next vacation house. We're the best in a biz, baby.
[00:20:25] Speaker C: It.
[00:20:25] Speaker A: Let me teach you how to be a good landlord.
[00:20:27] Speaker B: Come on, let's do it.
[00:20:29] Speaker A: Don't overthink. It's.
