All Forum Posts by: David Mathews

I'm afraid that most of the "You don't need to spend money on that crap" camp really just do not understand how the algorithms with these STR platforms work. They are not like Google. Google is a search entity that solely works for people. It aims to deliver relevant and useful data to a user when that user submits a search. Thus, websites that fulfill the wants of the user based on their hunt is ranked high, getting more traffic and conversation.

A platform like say... AirBnB is looking for more revenue for themselves so there are certain algorithms that cause your listing to rank towards the top. Not necessarily what's best for the searching guest or for you. the biz owner.  They are trying to ensure the guest finds something that'll give an experience that will keep them booking on future travel destinations. Here are just two factors that help move your listing to the top:

-Timely response to inquiries

Not only are quick responses good for guests, its an important Airbnb ranking factor. Make sure that you respond quickly to all guests messages, especially the initial inquiry/ booking message. Let your guests – and Airbnb – know that you’re an active host that responds in a timely manner. You should respond to every message within 24 hours, but realistically within 15 – 30 minutes. Yeah we're all hosts but we're people too. People who do not want to be glued to out device for our business. If you're at a family function or you're asleep or out on a fishing trip on the water or doing anything else that takes you away from your phone, these 3rd party options will allow you to have prepared messages to handle a multitude of inquiries or timed instructions to different steps in the renting process. All of that frees up your time tremendously all while letting the guest (and AirBnB) know that you received their message. It also satisfies the algorithm by instant response rates. There's no problem with actually saying in your response that "this is an automated response but I will get back to you as soon as I can about your inquiry". 

-5 Star Reviews

5 star reviews aren't just for potential guests to check out how you did previously. It might sound crazy but to AirBnB 5 stars is an A+.  4 stars is an F-! AirBnB makes money from your bookings. They make even more money when someone has a great experience with booking on their platform. If they had a great experience then they are more apt to use the platform again with future travels. If you get a bad review you could quite possibly cause the opposite. You could have cause a lifetime of lost revenue as that guest may never book on AirBnB again. So they rank listings accordingly in search results.  Communication is key to a smooth process that helps garner 5 stars. These 3rd party options can send communication for you every step of the way. Greetings upon booking. Driving instructions, Check in instructions, Check out instructions, and even that controversial "After check out message that mentions anything about a 5 star review."  Either way, if doing all of that manually via phone or computer you are no doubt copy and pasting and constantly customizing some of the messages that could easily be automated.  Talk about free up some time! I'm a dad of 7. I've been guilty of being glued to my screen trying to send last minute check in instructions as the guest is pulling up all while, "Daddy, Daddy, Daddy" is going on in the background. Ignoring what's really important is not what real estate investing is about.

Lastly,
As mentioned above AirBnB is a business and they are out to make money just like any other business. They obviously depend on your business that offers great hosts and accommodations but they aren't necessarily out to optimize your business. They're out to optimize theirs. So how do they do that?  By use of THEIR pricing tools. Sure it's easy to set in and forget it within their platform but you could be leaving THOUSAND$ on the table by allowing them to price your rental. Their goal is to put heads in beds. So many responses in this forum above have mentioned how 3 parties such as PriceLabs easily pay for themselves. Reason being is they are optimizing for you, not the platform you're listing on. They are also analyzing A LOT of data to arrive at their pricing. 

In conclusion if you just plan to nonchalantly rent out an STR here and there for a few extra bucks then you probably won't benefit from 3 party apps and such. However, if you plan to run your business as close to a passive method as possible or if you plan to continue to scale up and build something bigger than you 1st imagined as a host then it's definitely beneficial to research some of the different options to help take back some of your time and help put in place some real systems. All of that starts with 1 STR.

Quote from @Malkia Ra:

As I read this story, I can't help but think of how often bad tenants are "forgiven" as an incentive for them to willfully move from a property, only for them to apply for their next rental and get approved because there are no collections/judgements on their record warning future landlords of how horrible they are, and thus the cycle continues...

 I imagine after the eviction moratoriums were lifted this happened way more than we will ever know!

Quote from @Michael Baum:

@David Mathews, are you using VRBO as well? It is a short term rental, not an AirBNB. You should have it listed on VRBO to gather more guests.

Quote from @Michael Baum:
STRs, not AirBNBs. :)

Yes sir that is twice you have pointed that out. I'm really not sure why though as my original post directly mentioned STR and nothing about AirBnB. HOWEVER, as mentioned in a subsequent post, I have only listed on the AirBnB platform for now because it has been consistently booked from the time of going live over the summer all the way through December. With the exception of a day here and there for cleaning. I originally planned to use both platforms, AirBnB and VRBO, depending on how vacancy was looking. So far so good. I haven't needed to and really I was just testing the waters with the online platforms simply because I already had the 4plex set up close to what was needed for short term rentals. I have been renting directly to traveling nurses, traveling airplane mechanics, traveling construction workers for the past 3 years. We were under contract with a Lake House/Camp on Big Lake just south of Lake Charles and I wanted proof of concept before fully pulling the trigger.  The reason I chose AirBnB platform (and correct me if I'm wrong) was because after reading up on the two STR sites, the local and state tax portion is more integrated into the AirBnB platform than the VRBO which requires a bit more recordkeeping.

Quote from @Leslie Anne Morris:

If you buy a place that is already a STR you may be able to snag their cleaner. Just check the reviews first

Good point but I’m actually considering converting a furnished 4plex that we own over to the Airbnb platform. I’ve successfully rented it for the past 3 years to traveling professionals under a lease. We’ve had a couple tenants stay up to 2 years. When the main apartment came available over the summer I dipped my toes in the Airbnb waters and it took off. Problem is my wife and I do not want to be cleaners! I’d rather stick to the investing side.LOL We have teens that the cleaning gig has & could be an excellent opportunity for them. It could even grow into their own business but between school, sports, and everything else it just hasn’t been consistent for them to be reliable. So guess who got stuck cleaning last minute more than I’d like! 

Fast forward to now, coincidentally we have 3 of our traveling long term tenants leaving this month. Perfect time to place the whole complex onto Airbnb and increase cash flow but I’d certainly want a decent, reliable cleaner in place 1st. 

Quote from @Monica Mejia:

Hi David! So I use the platform, TurnoverBNB, to find cleaners in my area. All cleaners on this app are specifically for Airbnb's so they should have a great idea of what your needs are right away. You still want to make sure you vet these cleaners and have them do a test trial before you officially bring them on. I found a cleaner that would be a great fit and then had her do a trial clean before I launched to make sure it was executed well. You can also use this trial to give them any feedback so they can be well prepared for an actual guest clean. 

TurnoverBNB also has a feature that allows your booking calendar to integrate with your cleaner so they know exactly when a clean will be needed. This will save lot's of time on your end!!! 

I've tried to build a great relationship with my cleaner which has been helpful because she now helps me with restocking and a few other 'property manager' duties. I would 100% recommend doing the same with your cleaner if you don't plan on having a property manager right away.  

 Thank you! I just sent out a quote request through the site.

So how did you find and settle on your cleaner? Do they offer any services directly associated with STR's?

Quote from @Nate Sanow:

I don’t go by the “gospel” of Dave Ramsey anymore, but, he has some good nuggets here and there to take away…one of which was recently on a rant of his he called the media people who produce “fear porn.”  I love that phase, fear porn, it is so freaking true.  The media loves to sell us on fear, and then turn around and sell us on their cure for it…

What I am getting at.  They are doing that with the fear of a crash.  Yes, I share your sentiment.  Rentals in so many ways are more in demand than before.  So many landlords the last few years sold their rentals once vacant to cash out at what they thought was top of the market, or, at least a good time to liquidate.  So many renters are locked into long term leases and are definitely not looking to move or buy.  Thus, there is a very real and specific housing shortage but not of ones for sale, of ones for rent.  I always see multiple applications within days of going live.  It makes me very empathetic to those searching for quality places to rent…and as much as I love my market I am not so naive to think we are the hottest market in the US, what I mean by that is I would suspect this is even worse in hotter markets than mine.  

Oh and yeah many of this is in reference to days ago not 2021 or 2020…so despite the rates and the centralized banking attempts at market dictations, we the people still continue to create the actual market….for now.  

 Everything you just said is exactly how I feel. I suppose I didn't convey that very well in my original post by the looks of the replies. "Don't over react." "Don't you dare sell." "This isn't the stock market."

So I'm here for the long haul. I bought right with all of my homes with the exception of one which still currently cash flows but flood insurance eats a lot of that income up. With all my other rentals I should be able to drop rents WELL below market value and still cash flow. Fingers crossed that it doesn't ever come to that but if need be I can.  The main point is that all of the signs point to a stronger rental market across the entire country.  I'm just a little surprised to see a dip like I've seen lately.  Not only in my market but I've read others experiencing it as well.  Yes, one could say seasonal.  I do hate to try to fill a vacancy any time after September through the beginning of the year.  However, I have listed decent properties at decent prices even in July and noticed less inquiries.  Plus over the past 7 years I've had absolutely zero vacancy rating. Qualified applicants would already have their deposit to hold in before the previous tenants had their moving trucks loaded.

I think it's all a temporary dip in rental demand and I feel that the stage is set for a strong rental market for years to come.

Quote from @Eliott Elias:

As a buy and hold it shouldn't impact your current portfolio. Stick it out and don't you dare sell now! Rental demand is through the roof 

No sir! That would be my absolute last option. We are still acquiring. Right now working on a STR right on the lake. Hopefully it will be ready to rent in a month or so. All of my properties were bought right so if I ever end up needing to reduce rent substantially then they should still rent and cash flow.

Quote from @Anthony McEvoy:

Hello @David Mathews:

shouldn't the current political/economical environment be a recipe for more demand for rentals?  It depends on the rental and the location.  If you have a high end rental in an area that is not that high end, then you may not see an uptick in that demand.  Historically, when a market softens and people are more forced to rent, then they typically rent down to a lessor house from what they would buy.  Also, the location is important and the happens in the community where the tenants are drawn from.  If the area just saw a decrease in job opportunities because a company just left, then demand for rentals may decrease.

Also, what do you mean by "experiencing less traction with listings"?

Thank you for the replay. Yes, I should have been a bit more clear on a few things but #1 was speaking "in general" and #2 I was trying to spare members with too much fluff to read in my post.LOL  

So... I am in Lake Charles, LA on the Gulf coast and our economy is driven by petro/chem industry and a couple casinos. We hardly noticed a blip when 2008-2009 hit. The drilling moratorium during the Obama administration did a lot of damage to surrounding Gulf coast areas who are dependent on offshore drilling but nothing noticeable to the Lake Charles area. When Covid hit every REI I know was able to continue clicking right along thankful that our area wasn't seeing the nightmares we were reading about with the eviction moratorium. I say all of that to say that it seems that our area is fairly resilient.

I invest in C class first time homebuyer type of neighborhoods. I usually list fairly competitive to the fellow landlords in the same areas. Certainly don't want to be labeled one of those "greedy landlords."(sarcsam) For the past 7 years when listing a vacancy it would almost be overwhelming to keep up with the inquiries. If I would list on FB Marketplace during the evening time I would wake up the next morning to at least 30 to 50 inquiries. I've had a few vacancies over the past 2 to 3 months and I've noticed the number of inquiries have drastically reduced. Plus, within those inquiries the number of qualified applicants has seriously fallen off. 

I am seeing similar stories all over the country on BiggerPockets Facebook page.  I am not to a point of alarm yet but a bit puzzled as to how or why a market shift in real estate buying power would effect rental demand when I expected the complete opposite effect. My theory that I posted on BP FB page was that most of my clientele seem to be Millennials and GenZ.  Sure it's not politically correct to group people with a generalization but I never claimed to be politically correct so here goes...  I noticed that for the most part that age group has no problem making lateral moves. I see it constantly. Instead of selling their vehicle I'll see them list it for trade. Same goes for material items like ATV's, jetskis, boats, etc...  Well in my experience as a landlord I've seen it with their moves in residences. They'll move simply because their lease is up.  Funny thing is they end up moving to similar priced units, in similar neighborhoods, that are similar in age and layout.  So with that said, I have made the assumption that the noticed lack of traction with my last few listings may have something to do with people hanging onto their money due to uncertainty.  They simply aren't willing to pay the move in cost of arbitrarily switching places while everyday costs like gas, food, etc are all up.  Just a theory.

Ok it's all the buzz that we may be looking at a market correction. Some say crash. Some say downturn. Some say recession. 

As a buy and hold investor with mostly single family with a few small multifamily, no matter what term you call it, shouldn't the current political/economical environment be a recipe for more demand for rentals? My take is that as the interest rates climb and the real estate market cools due to lack of buying power wouldn't that create more tenants who are in limbo waiting to buy a home?  So why am I reading about and personally experiencing less traction with listings than say.... 6 months ago for the same type of listing?