[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 Karl.
[00:00:17] All right, it's officially Tuesday and I love you. If you can leave the podcast a five star review, be much appreciated. I know this is a very small niche podcast and we can use your help in the form of a five star. So please hit me and good vibes will come your way from your next guest.
[00:00:40] You'll get a five star too.
[00:00:42] And that is what we are talking about today. That's exactly what we're talking about today. We're talking about guests and reviews and five star service on short term rental management with Luke from the Cash Cave.
[00:00:59] So today I want to talk about finding the war. Yes.
[00:01:04] And this kind of derives from the early Covid days when everybody was moving and shaking, nobody was getting on airplanes and nobody had to go to work. So what did they do? They booked Airbnbs.
[00:01:18] Quote, end quote, airbnbs. They booked them and they left the house and they would work from them if they needed to.
[00:01:26] And it was a wonderful, weird time where we were all scared to death. I had my first child right before this Covid thing hit. And it was scary.
[00:01:36] It was kind of crazy really.
[00:01:41] And all of a sudden we got a little cocky. Folks got a little cocky in that early covet era. And what I mean by that is, you know, 2021, 2020 21, 2020, 2021, 2022. It was really about a two year period, two and a half years maybe.
[00:02:01] And we got a little bit like our, our, our stinky stuff don't stink.
[00:02:10] People were booking, people were booking early, people were booking far in advance. People were paying whatever they had to pay. They didn't even care. They had extra money. The government was printing money, we had free money.
[00:02:23] They couldn't go to work, couldn't get on an airplane, and they were getting into their car and they were going, and they were going to houses.
[00:02:29] I mean, there was a period, remember their period, where people didn't even want to go to hotels because they were worried about the people in the room next to them. Yeah, that was a thing.
[00:02:42] And we look back on it now and it's a little crazy.
[00:02:46] And thank God that it went away, you know, And I hate to talk about the COVID time so much around here, but it's, it's just, it is, it's a reality we're living in. I also need to mention to you that we are moving into 2026.
[00:02:59] My Christmas tree is going up in, like, five weeks, we're here. I'm an early Christmas tree guy, and I don't want to hear it from you, not early Christmas tree people, because you're doing it wrong.
[00:03:15] Nothing to do with short terms, but this is everything to do with Christmas. If you're doing the after Thanksgiving Christmas tree thing, you're wasting your time. It's a complete waste of your time. You're gonna waste. You're gonna take all that time and energy to put this tree up for four weeks. And I don't like the after Christmas thing either.
[00:03:35] I'm way on a tangent here, but I don't like this. Let's leave our tree up for the first two weeks of January. Me, me, me. No, get rid of it. First two weeks of January, we need to be starting to think about the beach.
[00:03:47] Summer, spring, it's coming.
[00:03:51] Get ahead of it. Fashion forward all the time.
[00:03:55] It's like pricing a property.
[00:04:00] My point is, is we are slowly starting to slide into 20, 26 here. And Covid's long gone, dead and buried. People are broke now. Nobody's got that free money, and it's a different time. And I think that that is our biggest problem, is perception.
[00:04:18] But my actual point is, is that in early Covid times, it was like our. Our stinky didn't stink, man. And we could do whatever we wanted, and prices were high, and it was booking, booking, booking, and everybody wanted to get in on the action. Everybody wanted a vacation home. Everybody wanted a boat, a Rolex, a firearm, and an RV and a second home.
[00:04:44] We talk about it often.
[00:04:47] It's the. The big four boat, Rolex, rv, second home. Sorry, five firearms, the big five. The big Covid five. Everybody had extra dough, and they were buying them, baby.
[00:04:57] Couldn't tell people no. Hundred thousand dollars over asking price. Sure, why not?
[00:05:05] It was. It was nuts.
[00:05:11] But those days are gone. We're sliding into 26. The economy's not what it was.
[00:05:17] I mean, I'm not saying the economy was better then. I'm not saying that at all.
[00:05:21] But there was free money floating around.
[00:05:24] I mean, hell, you didn't even have to pay your mortgage for a couple years if you didn't want to.
[00:05:28] Remember the forbearance, remember that.
[00:05:32] Nobody talks about that anymore.
[00:05:36] But now we're living in an age where we've got to find the word yes. I think when you're talking to your guest, if your gut instinct is to say no, you're making a mistake.
[00:05:49] If no is the answer, it has to happen before the guest Books or just directly after they book and give them a chance to get a 100% full refund. Just let's forget about this and move on.
[00:06:06] If they're signed, sealed, delivered, booked, and coming to your house, it is too late to tell them no.
[00:06:15] If they are in your house and they say, hey, where's the extra paper towels? And your gut instinct is to say, sorry, we only provide a start, which is the old school way of doing it and the COVID way of doing it. We only provide a start.
[00:06:26] You know, you might be doing yourself a disservice there in 2026.
[00:06:31] I think we are probably living in the age where it's better to go ahead and instacart them the damn paper towels than it is to say no.
[00:06:39] And I know it gets cuts into our bottom line. It doesn't look good on a spreadsheet to be sending them instacart and paper towels. But guess what? I disagree. If you do that, your reviews will go up, your guests will be happier, and happy Guest equals more money.
[00:06:55] You have to find these little nuggets of happy with the guests, and the little nugget of happy with guest A, who's in there right now will translate the guests B, C, D, E, F, G, X, Y, Z that are coming later on down the line.
[00:07:11] And XYZ are going to spend a little more money because ABC were happy.
[00:07:17] Those vibes are in the universe. The property's going to know that the folks were happy. The. The Internet's going to know because of the reviews. And XYZ will be happy to spend a little bit more money because ABC had a good experience.
[00:07:31] Feel like that's a mic drop right there, man. Find a way to say yes if you are, you know, one of these hosts.
[00:07:42] And it's very common, and a lot of times these folks don't realize that they're doing it.
[00:07:47] So if you're listening to this saying, oh, I don't do that, you might be wrong. You might be doing it.
[00:07:54] But if your instinct is, you know, my house is. Is. Is better than that. My house is cooler than that. Oh, you know, we don't act like that at my house. There's a standard here, like, if you're trying to run the country club of houses or some sort of like the Four Seasons.
[00:08:13] First of all, the Four Seasons became the Four Seasons because they never say no.
[00:08:20] When's the last time you stayed at a Four Seasons?
[00:08:24] I've only stayed one time ever, and I was shocked.
[00:08:30] I'd like to do it again. It's extremely expensive. I think the one I stayed at was fourteen hundred dollars a night Disney.
[00:08:38] We were actually on our way there and we, we went a day early in our, our Disney reservation, which obviously is also extremely expensive, hadn't started yet. So Avery, my lovely wife, booked it with. She had some sort of point system or something, I don't know, travel points or whatever.
[00:08:53] So we stayed at the Four Seasons and. Whoa.
[00:08:55] My goodness, my.
[00:08:58] My small town, broke family.
[00:09:02] God bless you, mom and dad, but we didn't have any money.
[00:09:06] That blew my mind. The Four Seasons. And it's because they're doing. They're going above and beyond now. Of course they can afford to do that, you know, so they're, they're. I'll give you, I'll give you that. Let's play devil's advocate on that one.
[00:09:19] It's a lot easier for me to never say no if my price per night is a little higher.
[00:09:24] You know, when you're spending fourteen hundred dollars to spend to stay at the one night at the Four Seasons that damn sure better not be saying no.
[00:09:35] So there's that, you know, but it's a fine line. What are you going to do? Put in your headlines and your descriptions that we never say no? So you should spend more money to stay in this house than the other house that looks exactly like my house.
[00:09:50] That's not the economy we're living in.
[00:09:55] People are looking for a deal. A deal, A deal, a deal. So, and I get it, it's kind of hard to give them such a smoking deal when you're saying yes all the time and you're instacarting stuff.
[00:10:05] But CO is over and it's time to give them what they want.
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[email protected] if you're listening to this for the first time, getting into vacation rental, overnight rental for the first time, it's a dangerous topic because I don't want you to think, oh my God, the guest says that the toilet's not flushing right. I have to say yes and get somebody over there to fix the toilet. I'm not saying that that's a little much for me. Get the damn plunger out and plunger it and let's move on. This house does not have a front desk and a maintenance department. It's a house.
[00:10:58] And for my guests out there, who we love, and you're the whole reason that we're doing this and you're always our first in our hearts. You need to understand that if you're renting a house that doesn't have a front desk and a maintenance department, that you might need to learn how to use a plunger or don't clog the damn toilet.
[00:11:17] You know, it's a fine line and it's a weird vibe and mostly because of the way it works. Right. And I'm going to get off into a tangent here. In the, in the vacation rental world, if you got somebody coming over there to fix something, you have to get written permission. It gets a little weird. You got somebody coming into the home and everybody's all about privacy, privacy.
[00:11:37] So you want this thing to be like a hotel where I'm sending maintenance over there to fix the toilet, but you don't want to let us in. And it's getting weird and I have to contact the platform and this and that and it's a pain in the ass.
[00:11:50] I do think that we are slowly, and I'll do another podcast on this because it's a great subject. I do think we are slowly moving into the world where we may just give the vendor the phone number of the guest and let the vendor contact the guest in these vacation towns. That's how it works in a long term rental, by the way, if you don't have any long terms, if something needs to happen with the plumbing, you give the plumber the tenant's phone number, name and phone number. The plumber usually calls the tenant, coordinates the schedule when you can get over there, and then they usually handle it.
[00:12:25] Now also you have to be careful with that because if you don't have scale, that comes with scale.
[00:12:30] If you're dealing with a plumber that's never heard of you for before, that's not really going to work. But if you have 50 units in that town and you have a plumber that you use often and they know your style and they know your management and they know you, that works. So that's what comes with scale. That's when real estate gets easier, is when you have a lot of units, gets harder. Obviously you're dealing with more personalities and fires and maintenance issues. But getting the things fixed in some capacity is a little easier.
[00:13:01] You get a great H Vac guy, which they're hard to find. But again, if you got 50 units, it's a little easier to find because you're keeping these guys pretty busy at that point. 100 units, you have your office or somebody in your office Shoot a text over the H Vac guy.
[00:13:16] Or maybe you have third party property management and they know who you like to use or whatever. And then the, the H Vac guy calls the tenant and sets up a time to get over there and they fix it and you don't deal with it. Then the H Vac guy just sends you a bill and he likes you and he knows you, so he gives you a good price.
[00:13:33] Economy's a scale.
[00:13:36] So if you're sitting here thinking to yourself, man, all I ever do is have problems with H Vac guys and plumbers, it's because you're too small. I hate to tell you, you got to grow and scale to, to get, to get over that stuff. That's when that part of real estate gets easier with scale.
[00:13:54] But it's not easy to do and it's probably not going to happen in vacation town anyway. It's not for this podcast really, because you're not, you're not.
[00:14:01] It's not likely that you're going to end up with 50 vacation houses in the same vacation town.
[00:14:09] You know, if you're new and you're trying to quit your job, you probably have some crazy goal like that. But let's do some math. Let's say average purchase price of, I don't know, 500 grand, which is actually pretty slow, pretty low for most vacation towns. And we're doing 20 down on these things. That's 100 grand a pop times 50, that's $5 million cash.
[00:14:33] Plus the. You got to have the firepower, you know, you gotta have the leverage.
[00:14:39] So 5 million times 1.8, that's 9 million dollar purchase price, 10 million, whatever the hell the math is on that, that's gonna bug me. I'm gonna do the math. Hold on, simple math. $25 million worth of real estate. You're gonna need to have the leverage to get that going. 20% of 25 is 5. Right? So if you don't have $5 million in cash laying around and the firepower to get $25 million worth of loans, or our purchase price for $20 million worth of loans.
[00:15:19] Economies of scale are difficult in the vacation town. That's again, this. We're way off in the weeds here. But that's not where vacation rentals shine. That's not where vacation they shine. And the fact that you're getting a pretty high dollar asset, you got tax advantages out the wing Wang.
[00:15:35] That's a tech. That's a technical term, by the way. I got that directly from my CPA Wing Wang.
[00:15:42] You got the cost segregation. You got the bonus depreciation, which is back up to a hundred. Rejoice.
[00:15:51] And you got low interest rates because it's a house instead of a commercial property.
[00:15:58] That's where this stuff shines. You want to do 50 houses in the same town? 50 units in the same town. Go buy an apartment building.
[00:16:04] Go buy a bunch of little duplexes or whatever.
[00:16:09] Whole different thing anyway. We're weighing the weeds. I don't even know what the hell we're talking about anymore. But figure out a way to say yes.
[00:16:21] Oh yeah, we were talking about giving your plumber the guest's phone number. That's very dangerous when you're little because I know I'm all over the place, I'm bringing it back around.
[00:16:32] When you give the plumber the guest phone number and you don't really know the plumber, I mean, you don't. All sorts of things can go wrong. Like they're. They don't do it right. They don't talk to the guest right. They show up at the wrong time, this, that and the other. But if you know the plumber and you use them often, you can do that. It's nice.
[00:16:51] So if you're brand new, don't just be going and giving an H vac guy your guest's phone number.
[00:16:57] You got to get written permission from, you know, on the platform to enter the home. You can't just walk into a home while it's rented. Even on a long term rental, you can't do that. You got to give them notice, let them know you're coming.
[00:17:09] And so that was my point, is that, you know, I'm not saying that we need to run over there and fix everything all the time. When I say don't tell them no, I still think for the most part little stuff can wait. Until when? You know, Monday when they check out or Tuesday or whatever.
[00:17:27] But if it's something that you can provide and it's inexpensive, again back. I'm spending half an hour talking about this paper towel example. But it's, it's perfect example. If they sell, where's the paper towels? Where's this soap?
[00:17:39] I did this the other week. I got a newer property not too far from my house. It's right down the street from my house. And the guests said, we can't find any detergent. And normally we would say that's because you used it all up. We only provide a couple of pods in most cases. That's just how you do it. That's how all my neighbors do it.
[00:17:56] But they don't know what the neighbors do and they don't care. They know that they're out of freaking soap. That's all they know.
[00:18:03] So what did I do? I took it as a great opportunity to take my kids to Ace Hardware and get them some popcorn and picked up a couple of little things of detergent. So we went over there and dropped the detergent at the front door, and it was wonderful. And if you don't take your kids, I'm telling you that you haven't lived. If you don't take your kids to Ace Hardware to get them the popcorn, they got these little mini carts at the Ace Hardware. Little tiny little kid. I mean, two, maybe not two, but a kid that is only like six months into walking can push this little card around, you know, maybe like a three and a half year old, something like that. And it's just the best. They love it. They love it. My son goes around just dumping stuff in the cart and of course, you know, we gotta empty it back out again on the way up. Back up. Because I'm like, I don't need it. I don't need this. I don't need these seashells or whatever, you know.
[00:18:53] So, yeah, I. They. They sell seashells at the beach. Ace Hardware. I. It's whatever. It's the funniest thing I could come up with at the moment. But my son's dumping stuff in his cart and then we go, you know, he knows exactly where that popcorn is, and he loves it. Loves it, you know, and he loves helping me with stuff and screwdrivers and hammers and it's just the greatest thing ever. So I'm always looking for any excuse I can get to go to the old Ace Hardware and. Worked out great. Guest was happy and we moved on. So we're living in an age where it's best not to tell them, though. That's the moral of the story. Give them what they want. Make them happy. The economy's not great. They're probably a little pressed to go on this fish vacation. And your future guests will. It'll rub off on them and they will appreciate it and they will be happier as well.
[00:19:44] There's a book on the subject, which I don't. I can't prove that I've actually read this book. I don't. It's not in my library, but I feel like I have read it. It's called Getting to Yes by Dennis something or other. Dennis B.
[00:19:59] No, that's the narrator, Roger Fisher.
[00:20:04] Getting to yes. It's got a lot of reviews of bestseller, international bestseller. I think I've read it. So, anyway, long story short, I can't officially recommend this book because I can't prove that I've read it. I think I have, but it's not in my library.
[00:20:22] The title definitely rings a bell. I'll throw it out there. Read it.
[00:20:27] Getting to yes. Maybe I'll check it out. I'm ready to move on to a new book.
[00:20:31] But anyway, Bob's your uncle.
[00:20:34] Don't overthink it. See you next Tuesday.
