All Forum Posts by: Ethan Cooke

@Joe Linares - Evolve Vacation Rentals charges a 10% fee for marketing, booking and customer communications. They are known as one of the better STR rental management companies. They offer additional services including cleaning, re-stocking, etc. Good luck!

@Jordan Hanks - Great question. I always learn from the folks who have already responded—they are pros! I manage 13 furnished rentals in the San Francisco area. I have 2 full sets of sheets and double-towels for each unit. My cleaner starts to launder the used linens as soon as she arrives at each unit and often leaves a load of laundry drying in the dryer when she leaves. I like

@John Underwood‘s solution of using high-capacity machines to expedite laundry time. If that’s not an option, then extra linens is the way to go. As @Julie McCoy and @Paul Sandhu said, you can always pay your cleaner to do laundry off-site.

@Bob Mueller Jr. - 30+ day rentals can be profitable in the right market. I run a 30+ day furnished rental business in San Francisco and just south of SF, and have 90%+ occupancy year-round. 

The core criteria to consider for your area include:

- number of well paying jobs in the area

- number of people moving to the area to take those well paying jobs (short-term assignments and indefinite)

- number of employers who move workers into the area to fill those jobs 

- frequency of 30+ day vacationers 

If the above economic criteria look good, then there are a few basic criteria for the unit itself:

- easy parking

- decent neighborhood

- kitchen or kitchenette

- low price per bedroom compared to an extended stay hotel 

Good luck!

@Eric P. - I rent mostly houses since most apartments are managed by property managers. Apartments can also be really good since there’s less maintenance and the landlords own several units. I rented an apartment from a building owner a few months ago and now he is offering me his vacant apartments whenever they come up for rent.  So if you can find the right apartment landlord, That can also be a good strategy.

Sounds good @Michael Greenberg. If you're not too busy with family stuff, let's grab coffee!

Best,

Ethan

@Eric P. - I have not had any landlords requesting unusual rent increases after I improve their properties. It’s a win-win partnership. We have very good relationships and they love the arrangement: free maintenance, early rent payment and no tenant complaints to them. I am very transparent with them and I like to give them a cut of the action: if the unit makes good money during year 1, I tell them that and offer them a 5-10% rent increase (fairly standard for the Bay Area). It’s a small price to pay to maintain a great relationship and keep a great unit. If the unit doesn’t make much, I tell them that and let them know that I can’t justify paying higher rent but I am happy to stay if they keep the rent flat. I have renewed these leases also. So far I have renewed all 4 leases that have come up for renewal—at very reasonable rates.

@Michael Greenberg - I manage the properties myself. I appreciate your advice on setting up more automation and assistance. I am a bit of a control freak, and I actually enjoy most aspects of managing the business. But I’m reaching a tipping point where I’m willing to give up the joys of balancing my books and unclogging broken toilets!   ; )

@Sean Wilt - 40% sounds high to me for just about any market, although you might get 20-30% on true short-term rentals. I think the key to commanding high rates is maintaining much higher occupancy than the owner could achieve themself using the known platforms like AirBnB and VRBO/Homeaway. 

Check out what Evolve Vacation Rentals offers. They are growing rapidly and expanding into new markets. They charge 10% for the first 2 bullets on your list, and they offer additional services at additional cost. Some platforms in some areas (e.g. AirBnB in several major cities) pay the taxes already. 

I manage 12+ furnished rentals in the San Francisco area, and I also have a couple of "full service co-hosting" arrangements with homeowners. In one case, I do most of your listed VR services for a homeowner plus the initial 3-week set-up of the unit (design; procurement of furniture, kitchenwares, linens, etc.; photography, etc.). I am charging 20% gross revenues for year 1 only (largely as compensation for the set-up). In year 2 I plan to charge about 12%. To be fair, the big difference from what you are proposing is that this unit is mostly 30+ day rentals which require less work.

Good luck with your business! 

@Eric P. - Good questions. Nowadays I get below-market-rent listings from the landlords that I am already working with. But previously I used craigslist. If you live in a metropolitan area with a lot of rental units, it's fairly easy to find these places. You need to be willing to scan listings daily, then contact and meet the landlord as soon as you see one. But there are plenty of them out there. 

I tell landlords I am doing "furnished corporate rentals" for a month or more. If they ask where I get my tenants, I tell them "AirBnB, referrals and sometimes Zillow or Trulia". Those are my marketing platforms. Most landlords are fine with AirBnB as a marketing channel when I explain that I market to business travelers who will be staying for 30+ days.

The property improvements I make are cosmetic: interior paint, new light fixtures, new cabinet hardware, new combination door locks, adding nice towel racks, fixing broken closets, shelving if necessary, etc. I have spent up to about $3K on labor and materials to improve a 2-unit place (single family home with in-law). But it was a great investment: the poor condition of the property was one of the reasons my rent was so cheap, and I made back the $3K in profit in the first 2 months.  Just like buying real estate, these cosmetic "value-add" rental properties are the best because they show poorly and most people don't want to rent them from the landlord or put in the effort to fix them up.

I hope that's helpful.

@Jacob Fafard - I get referrals every month for new arbitrage rentals from the landlords I work with. Before I had a network of landlord-partners, I used Craigslist to find properties. I look for a few basic things which I have found make a unit profitable:

- good neighborhood 

- Close to large employers with well-paying jobs

- easy parking

- below-market rent

- low cost per bedroom

- flexible landlord who will allow 2 people per bedroom plus 1-2 more and will allow small pets (ideally).

Places that meet these criteria generally cash flow very well.

Regarding arrangements with landlords, they love it and bring me their vacant units. When I first speak to them, I tell them:

- I’d like to use their place for furnished corporate rentals of 30+ days

- I will furnish it beautifully and maintain it immaculately  since that’s what corporate tenants expect. 

- the tenants are responsible professionals

- I will be 100% responsible for all the lease terms

- I will handle all property repairs that take less than $200 and 2 hours of my time

It’s free property management for the landlords. They don’t care how much money I am making since we both get what we want: they get to enjoy a completely passive, hassle-free investment and I get to make money by fixing up their place, furnishing it nicely and managing an ongoing stream of traveling tenants.