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[00:00:00] Sarah: Hello, listeners. Welcome back for another great episode. My name is Sarah Karakaian.
[00:00:03] Annette: I am Annette Grant. And together we’re–
[00:00:05] Both Annette & Sarah: Thanks for Visiting.
[00:00:06] Sarah: And this is the–
[00:00:07] Both Annette & Sarah: Hosting Hotline.
[00:00:08] Sarah: If you want to get your question answered here on the Hosting Hotline, all you have to do is head over to hostinghotline.com, record your question, and help thousands of hosts who tune in week after week with their hosting questions. This week we’ve got a question about co-hosting.
[00:00:24] Questions: Hi there. My name is Claire, and I have my own Airbnb, and I have started managing a number of other Airbnbs on the island that I live on. I made the mistake of having the listings under my Airbnb account. Realize that was not the way to go. So now doing it a little bit differently. I really need support on how to run this business from an admin/legal point of view, and what I need to get in place to do that so I can grow. If that’s something you can help me with, that would be fantastic. Thanks so much.
[00:01:08] Sarah: Claire, can we help you with co-hosting?
[00:01:11] Annette: Claire, do not delay.
[00:01:13] Sarah: Yes.
[00:01:13] Annette: You need to join our Hosting Business Mastery today, or actually yesterday. We have so many co-hosts in there crushing it. And let’s go through this question. This is a very loaded question because co-hosting has a lot of moving parts. You got multiple clients. You’re serving the guests. You’re serving the homeowner. You’re serving yourself.
[00:01:35] Sarah: Annette knows I’m very passionate about this topic because I have been co-hosting for years and years and years. Annette was co-hosting, and we’ve learned so much by making a ton of mistakes, making really great decisions, adopting past businesses practices into this business.
[00:01:53] And we have learned also from the hundreds and hundreds of other hosts who we’ve helped grow their co-hosting businesses, because I just said to Annette, before we hit record, answers are not a one-size-fits-all mostly because different marketplaces have different regulations and different needs.
[00:02:11] I don’t know if you, listeners, follow us on Instagram. We’re at @thanksforvisiting_. And recently we shared an old episode to our Instagram stories and our feed and it was about how to find a co-host. And one of the 11 tips we have in there is I say, make sure your co-host is licensed, and we got so many, dare I say, slightly annoyed and angry in DMs because they’re like, well, this is the reason why I co-host, so I don’t have to be licensed, and you don’t have to be licensed to co-host and on and on and on. And the reason I have that as a tip for anyone who wants to put their asset in the hands of someone else is I’m going to rock the boat a little bit.
[00:02:53] I don’t think there’s anything wrong with being a licensed real estate professional, especially when you are tasked with managing someone’s asset. Now, if you are doing just a few tasks for a homeowner, very specific tasks, that might be a different story. But in our marketplace– so Annette and I own a property together.
[00:03:16] Our short-term rental company manages the property. Annette’s buy-in was she put the down payment onto the property. But in our city, I can’t have Annette as a “co-host” on the listing because she hasn’t gone through our city’s regulatory process. And to do so, it would cost her money and it would cost her time. It just wasn’t worth it. So she’s not a host on her own property. So that means city to city, county to county.
[00:03:43] Annette: State to state.
[00:03:44] Sarah: State to state. Things are very nuanced and very different, so all you co-hosts out there, anyone who’s interested in it, I just encourage you to reach out to your local municipality, ask a real estate attorney who might help represent other “property managers” and “co-hosts” to make sure you really understand what you can and cannot do managing or co-hosting someone’s property.
[00:04:13] Annette: If you’re a host listening to this thinking it doesn’t apply, it absolutely does because it is just a matter of time until someone asks you to help with their property, which would be co-hosting. And if you’re good at what you do and, obviously, you’re going to be talking about a lot, people are going to be coming around and like, hey, can you help me with my property?
[00:04:32] The next thing I want to piggyback off what Sarah’s saying there is with the state to state, yes, it depends. But we want you to be really, really aware of 30-day plus days. And midterm rentals. We know that midterm rentals are all the buzz right now. And they are. I think that is where the industry– there are going to be a lot more guests wanting to stay 30 plus days, and maybe your state doesn’t require it for short-term stays, but once you cross over to those 30 day plus, that is where– you also want to let your legal professional, who you’re talking to in your city, you want to chat about that because then you become probably a property manager if it’s a 30-day plus stay.
[00:05:16] So we really want to just have you dot your i’s cross your t’s, and take a look at that. The one thing also, Claire, we have to let you know is that we see so many co-hosts completely undercharging for their services, whether it be percentage-based, whether it not be charging for a setup, whether it not be– and you’re not charging and like being able to invoice for the setup, for the photos, for not just the percentage per month, but there are extra things that you’re doing on top of that, service calls to the home. So we see that as another huge pitfall, pothole.
[00:06:02] Sarah: Pothole.
[00:06:03] Annette: I like the pothole, but pitfall in this co-host, because again, some people say they’re property managers. Some people say co-hosts. There is just a huge gray area and percentage– but listen, seriously, if you’re not in our Hosting Business Mastery, and you are a co-host, I just have to implore you. You do need to join. There are hosts and co-hosts from all over the country, all over the world in there. And I’m telling you, our contracts are in there. Our invoicing is in there. There are so many lessons to learn just from other co-hosts, how they’re doing it. Claire, that’s where you need to be for sure.
[00:06:38] Sarah: I want to go back on a few things you said, Annette. First of all, the mid-stay rentals, here’s the thing. You can say, well, I’m just not going to offer mid-stay. But then are you really doing what’s right for your client if you are– depending on where you’re located, if you are a true vacation rental area where that’s just not something that a traveler would want, which I also question you there because with work from anywhere growing in popularity, vacation rentals, especially in your slow season, you might be able to find someone who wants to work in a beautiful remote location and call that home for a month or two.
[00:07:12] But if you’re not going to offer your client everything that could really maximize their rental, are you really the best fit for them, if that’s not something you’re willing to do?
[00:07:23] Annette: I want to talk about all the advantages, Sarah. You’re in the midst of it right now of being licensed. If someone wants to buy a short-term rental, you can help them buy it, then you can help them stage it, then you can manage it. You can help them sell it if you don’t want to be the one that buys it when they’re ready to sell. There are these other ancillary advantages that you can continue to create a lot of money, wealth from a client with helping manage their asset. So that’s something, I think, too– just being able to open yourself up to those opportunities is huge also.
[00:08:05] Sarah: And if you don’t want to help someone through the buying process or selling process, you can refer it and build a great relationship with an agent who would love that business, earn a referral fee, and be directly involved in that transaction. And just make yourself a more well-rounded co-host.
[00:08:20] But I do want to dig into Claire’s exact question. And Claire, first of all, I don’t know exactly what island you’re on. It sounds–
[00:08:28] Annette: Yeah. What’s up with that, Claire? You got to tell us the island so we can come visit.
[00:08:32] Sarah: And her accent is beautiful. I’m like, I want to go wherever you’re at. But Claire, in all seriousness, here’s the deal. For years and years and years, I actually made it a requirement to have the listings– oh, no, she said they were under her account.
[00:08:46] Annette: And now she’s going back. Yes.
[00:08:48] Sarah: So actually, Claire, let me share with you why that might not be a mistake on your part, because I, like you, made it a requirement– and I know you didn’t do this yet, but you’re thinking about it– that the owner keeps ownership of the listings, and listeners, I’ll share why that is appealing.
[00:09:05] But Claire, moving forward in my business, I’m actually going to have listings be under my account because I am slowly but surely making our business a more “classic” or proper property management company. This way I can really take care of my owners, but also do trust accounting. And this helps it so that all the money comes to me.
[00:09:33] Now, in some states, you don’t have to be licensed to do trust accounting, but in our state you do. And so depending on where you’re at, again, ask these questions. But it’s really nice when all the funds come to you and then you disperse those funds at the end of the month to your owners. And this helps for a few things.
[00:09:49] First of all, you don’t have to mess around with getting deposits from owners to make sure that you are not left high and dry with something you’ve already paid for, or you’re not chasing for your commission each month. And two, you can implement various fees that become a part of your management program that you don’t have to necessarily explain or disclose in detail to your owners.
[00:10:13] I’m not saying that you are being deceitful or secretive. But you have to remember, listeners, that as a, whatever you want to call it, a co-host or a property manager, that is your business. And you are learning ways to not only optimize that property’s success in terms of revenue, but also your business as a co-host.
[00:10:33] Annette, you were talking about this. Earning the money for all the different things you do from listing it to getting photos of it, to staging it, to making sure it is the right product for your marketplace, that takes knowhow and education. And you should absolutely collect funds for doing that work.
[00:10:52] And so when you also open up your doors, if there’s various fees that you are going to charge the guests, that’s not what this episode is about, so you have questions about those fees or opinions. We can talk about that in another episode. But it is your right to build a program out that is decided by you and what’s best for you and longevity of your company, is what I’m trying to say.
[00:11:14] And so having these listings under your account now, it can be an account that you open specifically for your business, and then the owners, they can be co-hosts on the listing. If your city allows it, they may have to jump through some extra hoops, but that is a way that I would say most professional property managers run their companies.
[00:11:35] Now, Claire, to answer your question, you can do it where the owners keep ownership of their listings and you are a co-host on it. Benefits to this, listeners, are you can sell that to an owner as a benefit. All those reviews that you earn for your owners, your owners own. So if ever the relationship doesn’t work out, you just remove yourself as a co-host, and that owner gets to keep that listing.
[00:12:00] But if you do it that way, you do want to trust accounting. You do have to have access to their Airbnb account or whatever their accounts. And that’s another thing too. We’re talking about Airbnb right now. If you go into other OTAs, it just gets really hairy. And there’s certain PMSs that will allow you to operate your co-hosting business in the way we’re talking about right now, so the listings being owned by the owner.
[00:12:24] Some PMSs won’t support that. It does have to be under your account. So also ask those questions, Claire. As you grow, you said from an admin standpoint, what advice do we have? A property management software that is right for you and your business is essential, but that is one benefit of having your owner own the listing.
[00:12:42] But you have to have access to their account, and there might be some hoops to the jump through to log in, and then sometimes your guests have to hear from– depending on what software you use, their owner name might pop up, or maybe it’s your name, maybe it’s when your co-hosts name.
[00:12:57] And sometimes the guests, I find, they like it when they have one person they’re talking to. And different property management software will help you to appear no matter who’s operating the conversation side of chatting with the guest, one person, one source of truth. So they feel really taken care of and not there’s a bunch of people they’re talking to.
[00:13:16] When the owner owns the listing, they see everything. So you want to charge a fee or handle a guest interaction a certain way? Your owner can see all that, and sometimes that’s not great.
[00:13:31] Annette: They have opinions.
[00:13:32] Sarah: They have opinions.
[00:13:33] Annette: They’ll have opinions, just so you know. They will have opinions.
[00:13:36] Sarah: Yes.
[00:13:36] Annette: Be ready for that. You do need to think about a property management software if you haven’t yet. Also, property care. Breezeway has been a game changer for managing multiple properties, but don’t get overwhelmed and add too many things all at once. You want to do it one at a time.
[00:13:57] But you are the co-hosting business, and when you just help anybody with their property, it grows really quickly. The revenue grows really quickly. You are a small business owner. You need to know your numbers. You need to be in there prepared that it will grow. You’re managing a lot of money, a lot of guests, and a lot of assets.
[00:14:18] Sarah: I’ll say this too, to anyone who listened to– first of all, I also want to welcome you guys to always DM us and share with us your opinions, even if they are different than what we are sharing. That is why Annette and I do what we do, and there are so many ways to look at a situation.
[00:14:32] So we have loved every DM we get, even if you’re coming at it with a different perspective. It is a really great conversation, and we are happy to have those. But I do want to push back a little bit on those who say, I’m a co-host and I only message guests, or I’m only doing X, Y, or Z.
[00:14:49] Because here’s what happens, and actually we’re having this conversation right now inside of our private Facebook group with our members, is these co-hosts, first of all, there’s two things that happen. The owner starts loving the service you provide, and they start asking you to do more.
[00:15:06] Annette: And more and more.
[00:15:08] Sarah: Or you are limited by what you offer to do because you are not “a property manager”. You have to engage with the owner to, I don’t know, get an electrician out there, or get an HVAC professional out there, or to pay for a certain thing that will make the guest stay so much better. It gets gray. So for me, after years and years and years of doing this, getting licensed was a no-brainer because I can have the best guest experience for these properties that I manage when I am able to take care of everything within reason.
[00:15:41] I’m not a contractor. I’m not a general contractor. There are times I need to get the owner involved, but right now we’re having conversation where this co-host in our group is like, I don’t want to do X, Y, Z because it’s technically not my job. But now the guest is being impacted because it’s “not my job”, and the owner is on vacation, or the owner isn’t responding fast enough. This is what you’re going to come up against. So I don’t see anything wrong just getting licensed. I don’t know.
[00:16:14] Annette: But if they don’t want to and it’s not required in their area, you absolutely don’t have to. We want to make sure that you know your regulations of your area and just be prepared that if they want to sell the house, you’re going to have to get that lead somewhere, or if someone wants to buy one, you’re not going to be able to help them, and long-term and midterm rentals.
[00:16:37] Sarah: I got permission from this host to tell you guys his story. But one of my friends here in Columbus, who is a co-host, she didn’t know– now, she doesn’t have to be a licensed real estate professional to do what she’s doing in our area.
[00:16:47] She’s doing less than 30-day stays. She’s doing certain things. Her contract is outlined. She’s doing all the right things. The thing that she didn’t do that was right, and this is where I was DMing people back about “being a licensed co-host”, is– I’m not just talking about getting a real estate license, but this host didn’t know that the city required her to understand when the property was no longer licensed with the city as an operating short-term rental, so the license was expired. The owner wasn’t responding to the city’s request to get it renewed, but because her photo and her information was on their Airbnb account–
[00:17:24] Annette: Attached to the account.
[00:17:26] Sarah: She had to do eight hours of community service if she didn’t want to have something on her permanent record. For co-hosting, you guys–
[00:17:33] Annette: Because she was coming up as unlicensed.
[00:17:36] Sarah: That is correct. So I’m not just talking about real estate license. I am talking about a license– as a co-host, if you’re listing right now and you are interested in hiring a co-host, you want to make sure this person you’re hiring is– I am very good friends with the woman who works in our licensing department because that is my job, to know everything that is going on in that office, to make sure that I can keep my owners up to date and myself and our own properties. Passionate about this.
[00:18:05] Annette: Last thing, we had a long conversation about this yesterday, Sarah. We also want to make sure you have the correct insurance for your co-hosting business and that the owner that you are co-hosting for has the proper insurance. This is huge. This is something where your head will start spinning of like, oh my gosh, who’s insured where?
[00:18:34] And hopefully nothing happens to anybody, but these are big things that if something happens on the property, you are the co-host. You need to understand what type of insurance the owner has and then the insurance that you need also. So that’s also, Claire, something that we want to bring up, is make sure that the way that you’re running your business is properly insured.
[00:18:58] Sarah: To wrap this up, Claire, and to answer your question, I know we got in a little bit of a saw box.
[00:19:02] Annette: And if you’re listening to this episode, you should do a drinking game because we say Claire 45 times.
[00:19:06] Sarah: I like her name. Claire. I can’t do accents. Claire. She says it so good. Okay. But to answer Claire’s question about the admin side, Claire, if you’re going to start hosting for other people and anyone out there who doesn’t want to host for others, but you are getting more than one property, even when you have one property, depending on how many turnovers you’re doing and other administrative tasks, the tech that I believe I cannot live without, dynamic pricing, property management software, property care, which to me, the only option out there is Breezeway. I’ll stand on that.
[00:19:44] And then QuickBooks. So bookkeeping for your business, Claire, not necessarily for your owners. Depending on how you handle the owner’s money, you’re going to have to take copious notes when it comes to purchases you make on their behalf and just keeping all that money straight, whether you buy it first and then invoice them, or you’re doing trust accounting. It doesn’t really matter.
[00:20:07] So making sure you either have a bookkeeper that really understands short-term rentals, and co-hosting, and property management, and then of course the software to support that is also going to be something administratively that you’re going to need to have.
[00:20:17] Annette: We see that all the time, and I do that. I’m who somebody gets really excited about a relationship. I start putting stuff on my credit card, and then I’m like, oh, we’ll figure it out later. But then you need to invoice for it, just slow down to speed up on all of the numbers, all of the invoicing, who pays for what.
[00:20:36] Sarah: As a reminder, if you want to get your question answered here on the hotline, which we love these questions because this is how we know these episodes are going to really get you excited as a listener because you’ve asked them, go to hostingholine.com, ask your question. If you have this question, hundreds, if not thousands of other people also have the question.
[00:20:56] So don’t hesitate if it’s about hosting, or running a business, or anything about real estate, short-term rentals, midterm rentals in general. Annette and I do it all in that regard. And if we don’t have the answer, we will tap into our network of experts, and we’ve been known to have them record their feedback. So hostinghotline.com. With that, I am Sarah Karakaian.
[00:21:18] Annette: I am Annette Grant. And together we are–
[00:21:19] Both Annette & Sarah: Thank for Visiting.
[00:21:20] Sarah: Talk to you next time.
