All Forum Posts by: Ryan Leake

Why Reviews Are Crucial for Your Airbnb Success

1. Build Trust with Guests: Positive reviews show potential guests that your property is reliable and welcoming, making it more likely they’ll choose your space over others.
2. Boost Visibility on Airbnb: Higher ratings mean your property is more likely to appear in search results, leading to more bookings and greater income potential.
3. Learn and Improve: Reviews often provide actionable feedback. A small tweak—like adding a cozier blanket or clearer check-in instructions—can elevate the guest experience.
4. Create a Sense of Community: Responding to reviews lets you connect with guests, showcase your dedication to hospitality, and set the tone for future visitors.

Tips to Boost Your 5-Star Ratings

1. Spotlight Your Space with Amazing Photos: Ensure your listing photos highlight your property’s standout features. Keep them updated to reflect seasonal decor or recent upgrades.
2. Offer High-Impact Amenities: Small touches like a coffee maker, fast WiFi, or a thoughtful welcome gift can transform a stay into a memorable experience.
3. Stay Communicative and Proactive: Prompt, friendly communication makes guests feel valued. A simple check-in during their stay shows you care without being intrusive.
4. Implement Self Check-In: Guests appreciate flexibility. A smart lock or lockbox can make their arrival seamless and stress-free.
5. Act on Feedback: Show guests you value their input by making improvements based on reviews. This not only enhances your property but also builds long-term loyalty.

Earning five-star reviews goes beyond having a nice property on paper—it’s about ensuring guests feel confident they made the right choice by staying with you. Keeping your listing updated, maintaining clear and friendly communication, valuing feedback, and adding thoughtful touches can significantly enhance their experience. Satisfied guests aren’t just likely to leave glowing reviews—they may also spread the word to friends or choose to rebook themselves, keeping your property consistently booked and increasing your revenue!

Here in Austin, October was a great month with plenty of excitement and high demand—but unfortunately, not all months bring that same level of energy. As we head into the winter months, it’s important to adapt and strategize to maintain steady bookings and revenue. While success during the off-peak months isn’t guaranteed, the ideas below can certainly help you make the most of the quieter season, no matter where your property is located.

Here’s Are Some Strategies To Maximize Your Low Season:

1. Do a Little Research Before Cutting Rates
Before we go slashing prices, we turn to tools like AirDNA to analyze local trends. If we see that bookings are mostly last-minute, we’ll hold steady on pricing instead of dropping it. That way, we capture guests who are willing to pay a premium even during off-peak months.

2. Target Longer Stays for Consistent Income

Consider offering discounts for extended stays to appeal to remote workers, traveling nurses, retirees, and long-term travelers. This approach ensures a stable income stream without reducing nightly rates, while attracting guests who seek longer stays. Plus, we’ll expand to other booking platforms like Furnished Finder, Zillow, and Facebook Marketplace to reach guests specifically seeking longer stays. We can also adjust your Airbnb/Vrbo listing to allow 30+ day bookings.

3. Expand Your Audience
Forget the typical vacationer! Austin’s low season is a great time to focus on business travelers, digital nomads, and folks relocating temporarily. With some tweaks to your listing—like highlighting your high-speed Wi-Fi and workspace—we can capture these groups.

4. Play Up Those Cozy Amenities
As the temperature drops, amenities like a hot tub, sauna, or fire pit become super appealing. Just like a pool is a summer draw, these cozy touches can bring in guests looking to warm up and relax. Let’s make the most of what your property has to offer this season.

5. Promote Local Events
Austin doesn’t slow down just because it’s cooler! From festivals to seasonal events, there’s always something happening. We can adjust pricing around these dates to attract attendees and make your property the go-to choice for event-goers.

Low season doesn’t have to mean low revenue. With a bit of planning, we’ll keep your place in demand no matter the season. Have questions? Want to brainstorm? Just reach out, I'm happy to chat!

As I run my STR mgmt business, I figured I'd simplify and share my company's comprehensive list of daily tasks that we believe deliver the best results:

1. Dynamic Pricing

• - Price Adjustments: We take a look at market demand, local events, and seasonal trends to adjust prices, ensuring our clients get the best rates.
• - Special Discounts: We offer last-minute deals and early booking discounts to fill any empty nights while maintaining profitability.
• - Using Pricing Tools: We check our pricing tool, PriceLabs, to set the best rates for the day.

2. Booking Management

• - Calendar Updates: We review booking calendars regularly to ensure everything is accurate and to avoid double bookings.
• Tracking Occupancy: We monitor occupancy rates and adjust prices or run promotions as needed to fill any gaps.

3. Guest Communication

• - Quick Responses: We aim to reply to guest inquiries within 24 hours, often much faster, to increase bookings.
• - Pre-Arrival Messages: We send personalized messages to guests with important information for a smooth check-in.
• - Responding to Reviews: We take the time to reply to guest reviews, addressing any concerns and thanking them for positive feedback.

4. Listing Optimization

• - Updating Photos and Descriptions: We refresh listing photos and descriptions based on guest feedback and any changes to the property.
• - Checking Amenities: We ensure that all amenities are accurately listed and updated regularly.
• - Testing Titles: We try out different listing titles to see which ones attract more clicks.

5. Market Research

• - Reviewing Competitors: We look at nearby listings to ensure our prices and offerings are competitive.
• - Keeping Up with Trends: We check local market trends to take advantage of busy times.

6. Property Standards

• - Cleaning Coordination: We work closely with our cleaning teams to ensure properties are spotless and ready for guests.
• - Maintenance Coordination: We coordinate maintenance tasks promptly to keep properties in great shape.
• - Stocking Essentials: We make sure that all necessary items, like toiletries and linens, are available for guests.

7. Guest Experience

• - Improving Based on Feedback: We make ongoing changes based on what guests tell us to improve their experience.
• - Easy Check-In: We set up smart locks and clear instructions to make check-in as simple as possible.

8. Performance Tracking

• - Monitoring Metrics: We keep an eye on key performance indicators to find areas for improvement and make adjustments.
• - Managing Cancellations: We review cancellation patterns to minimize future issues.

While managing short-term rentals may seem simple to some, it can be a lot of work behind the scenes to ensure every detail is optimized. I like to think our company goes the extra mile to maximize bookings and revenue for our clients. This approach allows our clients to enjoy consistent bookings, great reviews, and higher returns on their properties than a average or mom and pop operator. 

If you know of anyone looking for a hand in Central Texas (Austin or Hill Country), feel free to shoot me a DM here! I know our company will be able to help in one way or another!

@Alon A. Hey Alon, I run an STR management company here in Austin and I'd be happy to answer any questions you have about the market!

This week's post goes out to the data-driven folk...

First, let's talk about two key metrics: Average Daily Rate (ADR) and Occupancy Rate (%).

Understanding ADR: Maximizing Rental Income

The Average Daily Rate (ADR) is a key metric in the short-term rental (STR) industry. It reflects the average rental income per booked night, including nightly rates and additional fees like cleaning charges, pet fees, etc. Several factors impact ADR, including location, seasonality, supply and demand, property type and size, and local events. You can boost your ADR by optimizing listing details, adjusting pricing based on market data, improving property appeal, and leveraging positive reviews. All things which we'll continue to discuss.

Optimizing Occupancy: Filling Your Calendar

Occupancy Rate, another critical metric, paints a vivid picture of your property's performance. The occupancy rate, a vital metric for Airbnb success, is calculated by dividing the number of booked nights by the available nights. The occupancy rate reflects how often your property is rented out compared to its availability. Understanding and monitoring your occupancy rate is key to maximizing earnings, as it indicates property performance and influences pricing and marketing strategies. Strategies to improve your occupancy rate include optimizing your pricing, targeting the right guest demographics, upgrading amenities based on market demand, gathering positive reviews, etc.

The Data

So for our analysis, we've peeked into the data here in Austin, TX using a leading short-term rental (STR) data and analytics provider called AirDNA. We broke it down based on a crucial aspect of short-term rental success: the number of guests able to stay in a particular property per booking, which the industry cool-kids refer to as "heads in beds." Essentially, we extracted the ADR and occupancy rates to see the variations between potential revenue based on how many guests are able to stay at the properties.

The goal is to shed some light on the different levels of demand depending on the # of guests allowed as well as to see which months attract the highest demand (hint: it's March, April & October). The other clear takeaway is - by increasing the amount of guests that you're able to accommodate in your Airbnb, you're likely to increase the amount you can charge on a nightly basis. Our team is always looking for ways to accommodate more guests while maintaining a comfortable guest experience.

More guests doesn't necessarily mean higher occupancy, however, which is why it's so important to look at each property's potential individually.

Stay tuned for more data and actionable insights to fuel your success in the Austin short-term rental market!

Your local host,

Ryan Leake

@Rodrigo Barreiro Pujol

Just stabilized my first house hack in Austin and it's going great. I'm renting by the room and it's covering 95% of my expenses. Best way to get started in real estate investing IMO.

Find yourself a great agent and they'll get you in the right deal. I teamed up with @Ryan Kelly and his team was super helpful. Plan to get my second one in the books this year.

"Does it mean this strategy is best if you are in close proximity and take on more tasks yourself?" From my understanding, absolutely yes. It's unlikely you are able to meet most of the tests like “100 hours and more than anyone else” if your cleaning team or handyman are doing most of the work. It's much easier to rack up  material hours if you are nearby and able to take on some of the timely hands-on work yourself.

I imagine that others have tried to do this while OOS investing but I couldn't speak to their success (or lack thereof)

 Absolutely - that's a great point! Seems like you're well versed in this subject Kelly. Curious to hear the system you'd recommend for tracking material participation?   

Alright guys and gals - this one is juicy (and a bit lengthy), so buckle up,

Today, we're diving into the world of short-term rental tax strategy, exploring both the opportunities for success and the pitfalls to avoid. Let's jump right in.

The Power of Short-Term Rental Tax Strategy:

Short-term rentals offer a unique opportunity to offset your W2 income with real estate losses, thanks to an increasingly popular STR tax loophole.

It works like this:

(1) Save up enough money for a down payment

(2) Buy a single family home that you will Airbnb/VRBO

(3) Ensure the “average period of customer use” is <=7 days

(4) Materially participate

(5) Cost segregate the property, resulting in large depreciation deductions

(6) Use the losses from step 5 to offset your W2 income

What makes this possible is that operating an STR is considered "non-passive." Non-passive losses can offset non-passive income (like your W2). Passive losses can only offset passive income or gain on sale from a passive activity. Real estate, by default, is passive and the primary way to avoid the passive loss rules is to qualify as a real estate professional.

Full-time employees and non-real estate business owners cannot qualify as a real estate professional (aka REPS status) because one of the tests is to spend more time in real estate than anything else (and it’s unlikely that you can convince the IRS or Tax Court that you spent more time in RE than your day job). So they invest in real estate and watch all of the great tax losses get suspended and carried forward.

The short-term rental loophole avoids this issue. Thanks to step 3 and 4 above, the short-term rental will be considered “non-passive” and losses can be used to offset your W2 income.

The problem?

Those people overlooking what it means to “materially participate”

Here’s the Material Participation Criteria:

• Spend more than 500 hours on the short-term rental business
• Do substantially everything for the STR business
• Spend more than 100 hours on the activity and no one other individual spends more time than you do
• Significant participation activity for more than 100 hours, and your combined activity in all significant participation activities exceeds 500 hours
• Participating in the business for five of the 10 previous taxable years
• Personal service activity (non income-producing) for three of the previous taxable years
• Regular, continuous, provable participation in the business for more than 100 hours

A Cautionary Tale: The Story of Jackson

Let's take a moment to learn from the mistakes of others. Meet Jackson, a real estate investor who thought he had it all figured out. He jumped on the short-term rental bandwagon, hired a property management company to handle the day-to-day, and hoped to write off a hefty sum against his W2 income.

However, his journey took a turn for the worse when he got audited by the IRS. Jackson held that he did meet the material participation standard by meeting the “100 hours and more than anyone else” test.

Jackson logged time spent on things like paying bills, coordinating with the property manager, and preparing tax returns. Unfortunately, these are considered “investor hours” and will not count unless Jackson was involved in the day-to-day management.

The Tax Court also threw out Jackson’s driving time between his home and the STRs. Additionally, Jackson inflated hours spent on activities, for example, spending 2 hours shopping for Nespresso pods.

Despite his best efforts to prove material participation, Jackson fell short, ultimately losing his case in tax court. His $43,220 loss was reversed, leaving them with back taxes, penalties, and interest.

Lessons Learned:

Jackson’s story serves as a cautionary tale for aspiring real estate investors. While the allure of short-term rental tax savings is undeniable, success hinges on attention to detail. Material participation isn't just a box to check; it requires active involvement in the day-to-day management of your properties and meticulous time logs of not only the investor’s time but also other parties (like the PM company) activity.

Navigating Short-Term Rental Tax Strategy:

So, how can you avoid the same fate as Jackson? It starts with understanding the material participation criteria and diligently tracking your time and activities. I believe that self-managing your property and maintaining detailed records is the only true way to demonstrate your material participation and safeguard your tax savings. And I'm saying that as an STR manager who wants your business. But I'd rather see you get massive tax savings and then work with you down the line.

We’re Here to Help

If you're still feeling ready to go after short-term rental tax strategy and significantly reduce taxes from your W2 income, don't hesitate to reach out. Whether connecting you with an STR-specific CPA or guiding you through the process of trying to self-manage an Airbnb/VRBO, Host Del Casa is here to help you achieve your goals and navigate the road ahead. Contact info below if you'd like to connect!

Here's to your success,

@Dakota Mivshek if they're not living in the unit themselves or on the parcel then you'll want to apply for a Type 2 permit! Attached the application below:

Type 2 Residential STR Application

Let me know if I can help in any other way!