The reasons why only some STR Operators & Airbnb Arbitragers succeed & others don't!

[Jake Mercer]

Here is a quick take on what I've noticed on what separates successful businesses or individuals in the short term rental space vs. those who fizzle out, end up closing up shop or end up getting results they're not happy with. Take it for what it is. Everyone's experience is different and some of these main seem like common sense, but they need to be said, again. It's more than just professional photography, cohesive and attractive design/decor and investing in amenities. Although, those things are SUPER important, there's more to it...

1.) WHY are you getting into short term rentals? Is it to make passive income? Make a lot of money fast and then buy a sweet car? Well..reality check. Your favorite gurus may make it seem that way but it is hardly that. Yes, it can be semi-passive income with the right systems, vendors, operations, potential virtual support, property management team, etc.. but ultimately, you are in control of the success of your property or portfolio and without knowledge, expertise or industry "know-how", then you will eventually lose because you are calling the shots. My advice, work with someone who knows what they're doing before making some potentially costly mistakes.

2.) Sooo, you want to be a real estate investor? You're an airbnb host so now you're in real estate! Wrong. You are in hospitality. Welcome to the wonderful wold of guest experience. Your job is to serve the customer first. Your business will rely on ratings and reviews, not the appreciation of your neighborhood or HELOC. That being said, you need to be a master of operations. Operations specific to short term rentals. Pricing systems and strategies (seasonality, orphan days, rule sets, etc..), Guest Communication, Negotiation Tactics/Agreements (Arbitrage or Management Services), Vendor management (minor maintenance and repairs from transient guests), Design/Decor expert (or outsource but you need to know what works!).

3.) Mo' money mo' problems. Mo' properties mo' problems. As you scale and grow your STR portfolio, whether it through acquisition, operations (co-host, property management) or through rental arbitrage..then everything compounds. When you scale to 5+ properties, issues and the cadence of messaging will increase 5x. The saying when it rains, it pours couldn't be more true for some of days running 17+ STR properties. That being said, you need to be equipped and prepared to bring on extra help or invest in the tools unless you wan to be working IN your business vs. ON your business. Be prepared to explore virtual assistant, PMS (Property Mgmt Software), direct bookings, project manager, guest experience manager, errand runner/handyman, etc... You need to learn the skill of delegation and become a true business owner as you scale.

I hope this helps give some insight to those wanting to get started in Short Term Rentals. I started 3 years ago in rental arbitrage and now to this day, still have those arbitrage properties, have started a management service and bought land and properties of our own this year. I'd recommend it to anyone and in fact, I help other get started but make sure you know what you're in for : )