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[00:00:00] Sarah: Hello, listeners. Welcome back for another great episode. My name is Sarah Karakaian.
[00:00:08] Annette: I am Annette Grant. And together we’re–
[00:00:10] Both Annette & Sarah: Thanks for Visiting.
[00:00:11] Sarah: All right, let’s kick off this episode like we do each and every week, and that is sharing, showcasing– I couldn’t decide what I wanted to say there– one of you, our amazing listeners who’s using our hashtag.
[00:00:20] Annette: Sharecasing.
[00:00:22] Sarah: Sharecasing. If you use our hashtag #STRShareSunday on the gram, we will find you. We will share you. We’ll showcase you.
[00:00:29] Annette: We’ll sharecase you.
[00:00:32] Sarah: Annette, who are we sharing this week?
[00:00:33] Annette: This week we are sharecasing @thewanderstay. Again, it’s @thewanderstay, so W-A-N-D-E-R, like not all those who wander are lost. I love that bumper sticker. She can put that in there. A huge tip I want to give about this Instagram, one thing I loved about it, I’m like, oh, we haven’t talked about this yet, if you go to their highlights, they have a section, and it’s called Bloggers and shifted my mindset today to talk about influencers.
[00:01:07] Hopefully, a lot of you are having people, influencers, reach out that want to stay at your property, and I encourage you to make sure that it’s not just a story that’s posted, something that’s fleeting. What are they going to give you in exchange, if there’s compensation, if you’re going to give them the stay?
[00:01:29] We love that The Wander Stay is getting a blog post. So good for your SEO. Letting someone have that written format of what your home was like, I’m sure they’ll attach some photos too, but just want you to think about who’s coming to your home, and what can they offer. Is it just a quick story or a TikTok? Is there a way that the content can live on? And we love that blogs can live on, help you with your search engine optimization.
[00:02:01] If they are bloggers, they are working on their search engine optimization. So if you don’t know what SEO is, please research SEO. If you have a direct booking site, you’re going to want to be working on it. But I just wanted to say kudos to them for having these bloggers stay and hopefully getting that written content that’s going to help them in the future.
[00:02:20] And also, they have beautiful photos, and they’re just the cutest family too. I saw that they have their family picture there. I love when people include pictures of themselves so people get to know you a little bit. And we want to know your story. And this goes into today’s episode of why telling your story and your story matters always when it comes to your short-term rental.
[00:02:44] Sarah: Let’s say you just closed on a property. It’s your first one. You are so excited. You’ve done so much due diligence. You’ve got an amazing spreadsheet. You’ve a real estate agent. You have looked online to find out everything there is to know about short-term rentals in your area just to find out six months after you close that the area you thought you were in isn’t, and you’re actually not legally allowed to short-term rent your property out for the amount of days that you would need to make that investment worth it. That is exactly what happened to today’s guests, Callie and Bob.
[00:03:25] But I know probably all of you wouldn’t do what– they didn’t just sit there and take it. They decided to step up and do something about it. And like Annette says in the episode, if it’s not in your marketplace yet, if you haven’t had to challenge your community yet for your right to host responsibly, you will.
[00:03:47] That’s where Annette and I met, at a city council meeting. That is where a lot of hosts are having to at least sign a petition, show up, or like Callie and Bob, lead the charge. Callie goes over her–
[00:04:02] Annette: Step-by-step like process that crushed it that anybody can use for HOA, for city, for township. Honestly, she just gave life lessons on when you’re presented with a challenge and you’ve got to try to negotiate.
[00:04:18] Sarah: From the point of view of someone who has never done it before, which I think is even more valid. Because sometimes when people are experts at things, it’s like, okay, sure, but you’ve been doing this for years. Callie and Bob have never–
[00:04:29] Annette: Led an advocacy in a city before.
[00:04:32] Sarah: Correct. And so they just come at it with this simple but calculated point of view, and I can’t wait for you to find out what happens.
[00:04:43] Sarah: Bob and Callie, welcome to the show.
[00:04:45] Callie: Thank you so much for having us. We’re excited to be here.
[00:04:47] Bob: Yeah, it’s great to be here.
[00:04:49] Annette: Well, let’s dig in. Just to refresh for our listeners, Sarah and I met fighting for our right to short-term rent. That’s literally the first day that Sarah and I ever met years and years and years ago. Let’s learn about why you guys had to fight for your right, for your short-term rental. Take us back to your story and just hitting this roadblock pretty early in on your short-term rental journey.
[00:05:15] Callie: Yeah, so it might be hopeful to just give a little context to how we got to that first short-term rental. Bob and I started house hacking, and we actually still are house hacking our current residence in Minneapolis area. And post wedding, when we actually had some time on our hands, we were like, we want to get into the short-term rental space.
[00:05:36] Bob: Yeah.
[00:05:37] Annette: And house hacking, is it a duplex, or is it an ADU? How are you house hacking right now? Just for us–
[00:05:44] Callie: Yeah. Single-family home with a mother-in-law suite. So separate entrance, pretty separate from a laundry dryer, kitchen, all that situation.
[00:05:54] Annette: So that’s your first guest, is your long-term resident.
[00:05:58] Callie: Yes.
[00:05:58] Bob: Yeah.
[00:05:58] Annette: Okay, cool. All right, so that’s going along, and so you’re like, let’s get into shorter stays.
[00:06:04] Callie: Yeah. We’re both super passionate about the travel hospitality space and love traveling the world. And we’re like, we’re going to do this. We want to buy some property up in Northern Minnesota, start with a proof of concept, see if it works, and then see if we can expand and build out our portfolio in this space that we both care a lot about.
[00:06:25] Bob: Yeah, yeah. We had considered a motel first, then we decided maybe we start with a smaller short-term rental before we start with 14 units. So we started looking at smaller–
[00:06:40] Callie: We’re a tad bit ambitious, and it was a good thing that we ended up starting with a single-family cabin. So we bought that back in August of 2022, and then it took us about a month to get it up and running. Had it listed as of October. No big rehabs or anything crazy, just some little facelift items. And we got everything going. It was running great for a few months, and then come January, 2023, we got a letter in the mail saying, you guys are renting without a license.
[00:07:19] Bob: Yeah.
[00:07:19] Callie: And if you know anything about me and Bob, but really me, I’m very detail-oriented, very organized. Nothing typically surprises me. So this one threw us for a loop.
[00:07:33] Sarah: Let’s pause real quick and just share a little bit about the deal, if you can remember, although whenever anyone asks me this, I always ask my husband because he remembers the details and I never do. But how much was the log cabin and how much were you hoping was it going to cash flow immediately? Can you share us anything about the deal itself? And then, yeah, let’s get into the license.
[00:07:53] Callie: Yeah, purchased the property for 323. Had this big robust underwriting spreadsheet that we built or tried to build from scratch, and the goal was, basically, if it could be occupied 41% of the year, we would make a 10% cash on cash return. So that’s what we were aiming for. We’re like, hey, worst case scenario, we break even, or maybe even a little down, but we have a cabin that we can enjoy ourselves too.
[00:08:23] Bob: Yeah, it’s only two hours up north from comparables in the area, using AirDNA, Price Labs. Just looking at the occupancy rates in the area, we’re like, 41%, we’re safe. This will be great. And yeah, lo and behold.
[00:08:40] Annette: What was your occupancy rate before you got this delightful letter in the mail?
[00:08:45] Callie: It was hovering around 60%.
[00:08:47] Annette: Nice. So you guys are loving life. Was there not an email? Was there not a phone call? Because that one hurts when you go to the mailbox and get that.
[00:08:59] Callie: Yeah.
[00:08:59] Bob: Yeah.
[00:08:59] Annette: Take us behind the scenes of that. Were you guys together when you opened it with someone at work? Because this is like an, oh crap moment where you’re like, this just took a terrible, terrible turn. I just like to know what happens with the couple when they get that letter.
[00:09:19] Callie: Yeah, there were some tears involved. It was pretty devastating. I opened the letter. I was like, oh my gosh. What is this? This has to be wrong. And that wasn’t even the worst part. We’ll get into more details there, but yeah, I had a meltdown. I was pretty sad about it. And this one keeps me calm, so he’s like, you know what? We’re going to figure it out.
[00:09:42] Bob: Yeah, it was tough. That day, we actually were heading to a group dinner. I can’t remember if it was with your parents or family, and I actually had opened the letter before the dinner, and didn’t want to surprise her with that before the dinner. So just set it aside and was like, all right, we’re just going to pretend this doesn’t exist for the next three hours, and then we’ll deal with this later.
[00:10:08] Sarah: First of all, how sweet of you. Good call. So at least enjoy your last supper.
[00:10:13] Bob: It would’ve been a lot. Yeah, exactly. Exactly.
[00:10:16] Sarah: But I do have some questions that I wonder if others listening might be asking too. So you had this awesome spreadsheet that you built out from scratch, like an online calculator that’s already been done.
[00:10:26] Annette: Callie’s detail-oriented.
[00:10:27] Sarah: That wasn’t good enough for you. You wanted your own. I appreciate that. So did you buy it from someone who was selling it as an operating short-term rental? Did you look into licensing and didn’t find anything? Talk to us about that.
[00:10:39] Callie: Yeah, so in the listing description, it wasn’t rented previously. I think one of the mistakes we made was we worked with an agent who wasn’t super familiar with the market. Didn’t do our vetting on the agent. They weren’t familiar with regulations in the area, but definitely not all on the agent.
[00:11:03] There’s definitely a burden on us to do the research, which we thought we did. So on the listing description, it said we were in the city of Pillager, and even on our closing disclosure, city of Pillager.
[00:11:15] Bob: All our documents.
[00:11:16] Callie: All of our documents. And we’re actually just right outside the city of Pillager, the city limits, in the township, right on the outskirts. So we did all of our research. We read the ordinances front to back for the city of Pillager for the county, and there was nothing regarding short-term rentals.
[00:11:37] We missed it. We completely missed it. It wasn’t for a lack of effort and trying to do that due diligence upfront. But I think the combination of the lack of experience and exposure from the agent, at least in the local expertise in the local market, and then the just unfortunate ignorance around not realizing and taking the listing description at face value, and trying to do online research instead of just calling. We should have called the local government officials and had a conversation because that would’ve helped us out.
[00:12:15] Bob: Yeah, it would’ve shed light on our actual location. We did do a bunch of research. We looked at the county, the city of Pillager ordinances as well as state ordinances just to see where we actually fell in, and believed we were fully in the clear until we weren’t, but yeah.
[00:12:37] Annette: So the letter was from the township the home resides in.
[00:12:42] Callie: Yeah.
[00:12:42] Bob: Yeah.
[00:12:43] Annette: Did you not know about that technicality of the township until that letter arrived?
[00:12:48] Callie: Yeah. The one thing that made us question it was when we were setting up our garbage. And we called the city of Pillager, and they were like, yeah, you’re actually going to have to reach out to the township for that. And we’re like, oh, that’s interesting, but didn’t think twice about it. And then when we got this letter, it was from the planning commission as a part of that township. And it is actually a pretty funny story.
[00:13:12] Bob: Yeah.
[00:13:13] Callie: It’s funny now. It was not funny at that moment. The township clerk, her sister stayed at her property and had a wonderful time. Was like, this is beautiful. It was amazing. And she told her sister, and that was the flag. Oh, they don’t have a license. We got to send them a letter. So it wasn’t for complaints or any of that. It was just like, yeah, we had a great time. Oh shoot, you’re not licensed.
[00:13:43] Bob: Yeah. Because there’s only two Airbnbs in the area. She was like, oh, which Airbnb was it? And when she found out, oh, it’s a new one, well–
[00:13:53] Sarah: Okay, so then you just go online, apply. You shut it down for a week or two, right? Is that how easy it was?
[00:13:59] Callie: Yeah, so that would’ve been great. Even going into this market, knowing that there wasn’t regulations, we were like, oh, we wish there was something because we’re all for balanced regulations, having some licensing criteria to make sure that hosts are renting responsibly. And they had all of that and a frequency limitation. So you could only rent 14 rental events in the entire year.
[00:14:29] Sarah: Ah.
[00:14:30] Callie: Yeah. And there’s a third, not only that. There was a seasonal requirement on top of that, so you could only rent eight times in the winter months and six times in the summer months. The kicker was they define a rental event– so 14 rental events– as anywhere from one to seven nights. So at the very least, it’s 14 nights in the entire year. And at the very most, what was it?
[00:14:55] Bob: It’s 96 or 98.
[00:14:56] Callie: 90 something.
[00:14:57] Bob: Yeah.
[00:14:57] Callie: Yeah.
[00:14:58] Sarah: Nothing helpful for you.
[00:14:59] Bob: No, no, no. Yeah, not 41%.
[00:15:03] Annette: Yeah, 41% got knocked down a bit. What was the action that the letter required of you? Was it, you need to get back to us, you need to show up in court? What was their call to action in that first letter?
[00:15:18] Callie: It was, you need to get licensed.
[00:15:20] Bob: Yeah. It was, you have to apply for a license, and then I think it was every event that you rent from here on out, it’s going to be a 500-dollar fine. I don’t know if it was an event or if it was nightly event, meaning every night that you’re renting it’s going to be a 500-dollar fine. But yeah, it was, you have to get licensed to continue to rent.
[00:15:42] Annette: Okay, so it wasn’t a complete, you’re done. It was, we need to get the license. When was your next reservation? How many did you have when you had this letter in hand? Because that’s probably the first freakout moment, is your guests that are coming soon.
[00:15:59] Callie: Yeah, so we got the letter in January. We had another weekend of bookings to wrap up January, and we didn’t actually have anything February on yet. So if there was a silver lining, there wasn’t much that we had to cancel looking forward. And we weren’t really sure what to do next.
[00:16:22] So the first thing we did was we called the planning commission leader, who was amazing actually. He was really great. He was empathetic. He said, all of the realtors in the area know this. The listing agent, at the very least, should have mentioned it. We were very transparent with our intentions.
[00:16:41] So he felt for us, and he said, hey, go ahead, get the license. And we’re like, hey, we shut down our books here. We’re going to get the license. We’ll do all of that ASAP. And he said, that sounds great. And then he said, and it’s been five years since this ordinance came out, so you could, if you wanted to, fight this. You could try to amend the ordinance. And we looked at each other and we’re like, all right, we’re going to figure it out. We’re going to try to amend the ordinance.
[00:17:14] Annette: Wow.
[00:17:15] Sarah: Were you both on board equally?
[00:17:17] Bob: Yeah.
[00:17:18] Annette: They wanted that 41%.
[00:17:21] Bob: Definitely. Yeah. We were definitely both on board equally. I think even though we didn’t pour a bunch of money into rehab, emotionally, we were invested in this property, being our first short-term rental for one. And then also the emotional impact it had on us just setting it up together, the late nights. Yeah.
[00:17:47] Callie: There’s a lot of love and blood, sweat, tears.
[00:17:49] Bob: Blood, sweat, and tears that went into it.
[00:17:51] Sarah: No, and you are such a great example of, I would say, most of the people who tune into the Thanks for Visiting podcast, are people who are hosting because, yes, they want a great real estate investment, but also they truly care about the hosting side of it. That part they’re passionate about. So just to sell it and get another asset in a place that has the regulations they need, I would say majority of our listeners would’ve done very similar to what you would have done or at least seriously considered it if time would’ve allowed. First of all, my question is, did you have experience before fighting–
[00:18:29] Annette: In advocacy.
[00:18:30] Sarah: In advocacy? Yeah. No. We’re shaking your heads no.
[00:18:34] Callie: I’m in consulting, so I have the background of gathering a lot of research, trying to understand the problem at hand, human-centered design, so storytelling, crafting a narrative. So I had some of that, but neither of us have got up against legislation before, let alone tried to change it.
[00:18:59] Bob: Yeah, yeah. I’m in software engineering, got a degree in computer science. I don’t like talking to people that much, so yeah.
[00:19:07] Callie: Yeah, I made him come on the podcast.
[00:19:09] Annette: No, we love it. So this boarding commission, he’s like, it’s five years. You guys can fight this. Obviously, you probably apply just for the current status of the 14 events. Give us the size of this town. Did he give you what the next steps were, or did he just plant that seed and you had to just do all the research yourself? And let our listeners know what were those steps. Did you guys start a spreadsheet? Help us help others.
[00:19:37] Callie: Yeah. So he just planted the seed, not much more than that. So the very first thing we did was like you mentioned. We got the license. It’s the stereotypical septic compliance, fire inspection, site plan, evacuation maps on all of the bedroom doors.
[00:20:00] So all of the stuff that we had a lot of it already, it was just documenting it and sending it over and then showing up at the next planning commission meeting, which happens once a month. They have a planning commission meeting once a month and a board meeting once a month. So we gathered all of that information.
[00:20:20] We showed up at that first meeting, not only to get our license, but also to propose that we want to amend this thing. And that was a lot of crafting a narrative and deciding how the heck are we going to convince this group of people that this is a win-win scenario for everyone?
[00:20:41] Bob: Yeah.
[00:20:42] Annette: Is it a small town, like this boring–
[00:20:44] Bob: It’s a very small town.
[00:20:44] Annette: Okay. I’m just imagining, are you guys thinking about what you’re wearing, exactly what you’re going to say? A lot of times, commission and boards, they’ve been on for a long time, and they’re almost looking for someone to want to change things and them just flex their power, if you will.
[00:21:04] What was the boardroom like? What was the vibe in there? Was it you against the board, or were they very welcoming to you? How can our listeners anticipate what’s going to happen in these boarding commission rooms potentially? They’re smiling at each other like it was a vibe.
[00:21:23] Bob: Yeah. Some were very friendly. I’m trying to find the best way to put this. There were some who weren’t very happy with us being there, some who were very happy with us being there, some who were on our side, some who were very much not on our side, didn’t want anything to do with short-term rentals in there, in their backyard, saying stuff literally like, the summer days are golden days.
[00:21:48] I don’t want strangers in my backyard which is understandable, but at the same time, our properties are quite far apart up here in this lake area that we’re on. And also, they shouldn’t be in your backyard anyways, so that’d be a bigger problem.
[00:22:04] Callie: I think for the most part, though, we did get a lot of respect because we showed up really prepared. I don’t know if anyone showed up at the public inputs at the planning commission meeting with a PowerPoint presentation. I felt like Leslie Knope. I don’t know if you guys watch Parks and Rec, but I was at the mic. Bob was sitting behind me, and I was preaching.
[00:22:27] I was like, this is what we want, and we’re going to make this happen, and we’re going to advocate for the right of host rent responsibly in this area. There’s only two rentals. We can make this a good thing for the community.
[00:22:41] Bob: Yeah.
[00:22:42] Annette: I have a feeling our listeners are going to email in for your PowerPoint.
[00:22:46] Sarah: Actually, my next question was, Callie, is there any way you can give us a high-level view of what those slides were?
[00:22:53] Callie: Yes. We have notes. We’re ready.
[00:22:56] Sarah: Leslie, you’ve really come prepared. I am proud of you. Yes, please give us a synopsis of your– and how’d you come up with what to share? Did you go to any websites? What was your research?
[00:23:10] Callie: Yeah, so I think it started with just understanding the history of the ordinance and really getting a sense for what all went into this. They clearly put a lot of effort into crafting this the way that it is. Why are they saying 14 events? What were the biggest pain points in the community?
[00:23:30] And I think that goes back to just the work I do in my W-2 too. It’s like, what is the problem? And understanding the problem before you try to jump to solutioning. So I think we started there.
[00:23:42] Bob: We pretty much started with the problem, tried to figure out what would make both parties happy, parties being the actual commission board, planning committee, and then us.
[00:23:55] Annette: The licensing, I know he said its five years was up. Had it just started five years ago, or was it just the time–
[00:24:06] Callie: The ordinance went into effect in 2019.
[00:24:09] Annette: So it was very, very new. Okay, got you. So it wasn’t like it was just renewing every five years. This was the first time it was up for discussion again.
[00:24:18] Callie: Yeah.
[00:24:18] Annette: Okay.
[00:24:18] Callie: And I think it was because they were getting more interest from other hosts in the community that were thinking about it. And I think there was a realization too that maybe it is a little bit too strict in order to make this viable for hosts in our community. So that was a good thing.
[00:24:36] We had that on our side. I think through conversations, and research, and just asking the planning commission leader, the things that we learned were the reason why the ordinance came into effect, where there were a couple of problem properties. I think that’s most oftentimes the case. And noise was a really, really big thing.
[00:24:55] That was the biggest pain point for the community. Even our cabin is on a little cove that the noise just carries. So understanding that, understanding just data in the area around occupancy, so in the county surrounding, about 45 to 60% occupancy is pretty average. So going in knowing, okay, that’s where demand’s at.
[00:25:19] How can we craft a proposal that is grounded in the pain points of the community, is grounded in the data that is available to us? Back when this ordinance came to be, they did look at what other communities were doing, but there wasn’t quite as much data available to make an informed decision. They used what they could to make a decision five years ago.
[00:25:44] Annette: So Leslie, go through your bullet points here. Just give it to us. Give us those high-level bullet points that crushed it.
[00:25:50] Callie: Yeah, so we started with what we heard. So there was a section in the narrative about what we heard, a lot of what I just shared with you. The next was a little bit about our story, because as the host, you mentioned we’re really passionate about providing this stellar guest experience, and we wanted to make sure they knew about that.
[00:26:09] I think there’s other things that in searching for resources to try to help us in this process, we came across things like, yeah, it’s going to increase tax revenue, and it’s going to increase foot traffic to those local businesses, and all the key points. But some of those things lack the personal connection to why this is important to us.
[00:26:33] So what we had, our story, and then really setting the scene on what are challenges to set up the ask. So for us, we said, hey, going into this, we expected to rent for maybe 50 to 70%, and owner occupy the other 30% of the year. That’s not going to work with this current situation, so here’s a couple of options that we think make a lot of sense.
[00:27:03] And we gave them an option A and an option B. And option A was, please eliminate the rental event restriction, and let’s install some noise monitoring tech. Require all hosts install that. We came across in this process, Noise Aware, Minut, super incredible technologies that this small township had never heard about.
[00:27:24] So that was the first option. We knew they were never going to go for that, not for the noise monitoring. We knew they’d love that piece, but for eliminating the frequency restriction altogether. And then option B was, let’s start with a 220-night rule.
[00:27:40] So 60% of the year, it’s in line with where occupancy rates are at. And then let’s set a timeframe in which we can see how hosts are doing, and set some metrics to address in five years, say, how is it going? Do we need to change anything? So that was the initial proposal that we brought to the planning commission.
[00:28:06] Annette: So you gave them the solution. You were like, these are our two solutions that we’ve come up– love that. Oh, that’s great. That’s great. And you said our story. Were you by chance able to share the other two hosts that are currently hosting? Were you able to contact them and include their story or have them at the meeting at all?
[00:28:30] Callie: Originally, we thought this was going to be maybe in a couple of months process, and it ended up being seven plus months of going back and forth, and we’ll get into more of that. But the other hosts, we didn’t involve them at that first meeting, but we involved them as this process continued.
[00:28:47] Annette: All right. Because you thought maybe you could hit it out of the park first night and remedy this.
[00:28:52] Callie: Yeah.
[00:28:52] Annette: Oh wow. All right. Got it. Okay. So that was meeting number one. And where do they leave it that night. Thanks, we’ll take it back, or did they vote right there? What’s are next steps? Does it happen that night?
[00:29:05] Bob: Yeah, no, that was pretty much it. They said, thanks for bringing all this information. It looks great. And we’re going to go do our own research and find what the best change to the ordinance is going to be.
[00:29:19] Callie: Yeah. So that first meeting was with the planning commission. The real purpose of that first meeting was to approve our license. So we got the license approved, and then we seeded this proposal. Then we showed up at the board meeting the same month, so that was also in– we’re in February now. That was also in February, and we presented to the board that proposal, and they were like, oh, interesting. We’re going to hand it off to our planning commission to do additional research.
[00:29:51] Bob: Yeah. We’re going to give it back to the guys you just met with to–
[00:29:54] Callie: Yeah. So now we’re in March, and we show up at the next planning commission meeting expecting all this great research to be done, and nothing. It was on the agenda, and no one had done anything. And we’re sitting there. Other than getting the letter originally, that was probably one of the lowest points, because we’re like, you’ve got to be kidding me. We’re in March. No progress has been made.
[00:30:21] Annette: And you guys are driving two hours back and forth every time for these lovely meetings too, so got some windshield time to be thinking about what’s going to happen when you get there. So do you raise your hand and say, well, they just said no progress? That was the agenda? That was their comeback?
[00:30:40] Callie: Yeah, they’re like, we haven’t looked into this yet. We’re going to move it up to the next meeting, which is a month later. We’re shifting now to April. And at that moment we left. We were discouraged.
[00:30:57] Bob: Yeah, it was emotional. We were discouraged, but we left with, you know what, we got to roll up our sleeves mentality and now we have to do the work for them because it doesn’t seem like this is going to be a fast process. We let them take the ball with all this.
[00:31:16] Callie: So that next weekend we researched the eight most comparable lake communities. We pulled all the stats. We attached all of the ordinances. We provided a high-level summary of what our findings and takeaways were from it, and we sent it over to them via email, and we said, we’re doing this.
[00:31:37] We wanted to approach it in a way that didn’t seem like we were stepping on toes, but we said, hey, we’re doing this to maximize your time and help prepare you to make a recommendation because the planning commission had to make a recommendation to the board. So we’re like, we’re trying to help you make this recommendation.
[00:31:54] Here is all of the information. We can dig deeper. You let us know. It took us all weekend to grab all of that information and put it in a way, presented in a way that was helpful for them. So we did that, and then we said, okay. So come April, there better be a recommendation from all this research. And we almost played it back to them. We said, we’re expecting there to be a proposal ready to go for the board meeting at the end of April. And that’s where we left it in April.
[00:32:29] Bob: Yeah.
[00:32:30] Annette: Did you get a response from that email, though?
[00:32:33] Callie: We got a, thank you, we’ll pass it along.
[00:32:36] Bob: Yeah, that was very short.
[00:32:37] Callie: A lot of times I was communicating with the deputy clerk. Several times I would tease everybody on there and get a little bit of my hand slapped, but I was trying my best not to go around the process.
[00:32:49] Annette: Right. Okay. You show up in April, what happens?
[00:32:53] Callie: Yeah. So showed up in April. I will say after we got the license, we did open our calendar back up. So it was shut down for two months.
[00:33:02] Bob: We shut down, opened it back up after we got the license, and decided we’re going to get the ordinance changed. However much that is, we’ll find out.
[00:33:13] Callie: And at that point, we were renting legally.
[00:33:15] Bob: Right. We’re renting legally. Let’s just fully open it up. Hope we don’t hit over 96, 98 days, whatever it is, in the meantime, while we continue to rent.
[00:33:27] Annette: Did you have minimum stays, though? Were you making sure your guests, since you only had 14 events, like, hey, you have to stay for five or seven days? Were you making it a minimum night requirement that was pretty lengthy?
[00:33:36] Callie: Since we were still in the spring, most guests were just wanting to book weekends anyway, so we didn’t find– we were still in our first six months of hosting in general, so we didn’t have those loyal guests booking six months out yet ready to scoop up all the summer months. Again, that was a blessing and a curse at the same time. We were able to still just rent weekends, and we weren’t even getting requests for full weekly stays.
[00:34:06] Annette: And is it the honor system how you report back to the township?
[00:34:10] Bob: Yeah.
[00:34:11] Annette: Oh.
[00:34:11] Callie: It’s all self-reported.
[00:34:12] Bob: It is all self-reported, yeah.
[00:34:14] Annette: Oh. Self, how should I report this?
[00:34:17] Callie: Yeah. It’s all self-reported.
[00:34:19] Bob: Yeah.
[00:34:20] Annette: Interesting. That was my big question. I was like, hmm. Okay. All right, so the calendar’s back open? You guys are cruising back up two hours for April’s meeting.
[00:34:30] Callie: Yeah. So we’re at April’s meeting, and the board or the planning commission did do some research, some additional research, and there’s a couple that just were really hesitant to bumping it up to 220. So they agreed. They loved the noise monitoring tech. They were super excited about that.
[00:34:52] They felt good about changing it to a number of nights rule instead of a rental event rule. So that was really positive. They just couldn’t get on board for the 220, and they kept talking down, and at one point they were 180, and then 150, and then 120.
[00:35:13] Bob: At one point they were at 100.
[00:35:16] Callie: And as the meeting went on and we’re just losing steam, we probably talked for two hours.
[00:35:22] Bob: That was a long emotional meeting. A long emotional meeting.
[00:35:26] Callie: And it’s public input, so there’s a couple of other people there, but it’s really just us sitting there just having a candid conversation with the planning commission, and it almost ended like, we just agree to disagree, and their recommendation to the board was 120.
[00:35:41] Sarah: Okay.
[00:35:43] Annette: You got 30 extra days, right, from the original? Well, no, it was just events.
[00:35:48] Callie: It was events. So it was still better.
[00:35:49] Annette: It was an improvement.
[00:35:51] Bob: Still better. Yeah.
[00:35:52] Annette Okay. Help me with fractions. What percentage is 120 of 360? It’d be 30%, 20%?
[00:36:00] Callie: It was below what we needed it to be.
[00:36:01] Annette: Right.
[00:36:02] Sarah: It was not helpful in that. Okay. Spoiler alert.
[00:36:05] Callie: Yeah.
[00:36:05] Bob: Yeah.
[00:36:06] Sarah: Okay. So yeah, what was next? When was the turning point? When did you gain steam? When was there hope?
[00:36:11] Annette: When was there light at the end of this tunnel?
[00:36:13] Callie: Yeah, so they presented that to the board. The board didn’t discuss it. They just said, we’re going to bring it to a public hearing. So that’s the final step, is they bring that recommendation from the planning commission to a public hearing. They get input from everyone, and then a decision is made. That public hearing has to be scheduled 60 days out.
[00:36:38] That public hearing was July 20th. So we started this journey in January. July 20th, that public hearing was going to happen, and between April and July, we just worked our asses off to prepare what it– now we’re speaking to a different audience. How do we show up at that meeting? How do we build our team of allies to attend, to submit impact statements, everything we can to make sure that we show up well for that public hearing.
[00:37:12] Bob: Yeah. Reached out to the other renters in the area, wanted to see if wanted to hop on board, show up at the meeting.
[00:37:21] Annette: Let’s pause right there, though. That’s an important call you’re making. And I know hosts, that’s their biggest thing, is they want to rally their other fellow hosts, and it’s like, how did you get their information? And then how do you talk to them?
[00:37:32] Because that is the number one thing we get a lot of questions about. I need these other hosts to help me. Because they just want to reach out to them on the Airbnb app. How did you do that, and how did you craft your message to make sure they were on board?
[00:37:44] Callie: All of the above. We reached out to one of them via Airbnb. We acted like we were booking because there’s only two in our township, so it’s a little easier for us. But we did that. We also asked the deputy clerk for their contact information, and she was able to provide that as well.
[00:38:04] It just took a little while, but she was able to provide that contact information. We also asked her, can you provide meeting minutes from the last public hearing five years ago, and what conversations were had, and how many violations have there been since the ordinance was in place, how many permits have been revoked?
[00:38:26] And all of this really helped us build that case for the ordinance is doing the job that it needs to do, and there hasn’t been any permits revoked since that first ordinance was put into effect in 2019. So how can we use that data to help shift the narrative a little bit in that meeting with the community members and really lead with the noise monitoring technology and all of the advantages of that?
[00:38:57] Sarah: Was it your idea to get to rally people? Was it just the other two hosts, or did you grow your audience bigger than that? Was it other real estate investors who might want to come into the township and pour some money and some tourism into there? Any other ideas you had to help strengthen–
[00:39:12] Annette: Rally the troops behind you.
[00:39:13] Sarah: Your foundation?
[00:39:15] Callie: It was the other two hosts. It was the cleaning staff that we’d worked with if they couldn’t attend, we asked them to submit an impact statement. So they wrote up a one pager, and it was read at the public hearing. So that was great. So the cleaner, our landscaper, we reached out to the local coffee shop.
[00:39:36] We reached out to local real estate agents because they’re trying to sell these properties and attract investors or second homeowners as well that are interested in potentially renting out the space, at least for a portion of the year. That unlocked a whole other realm of data.
[00:39:58] One of the agents was working really in the weeds on advocacy efforts in a neighboring county. So he was able to provide police data and all of this information that we had at the ready. We didn’t necessarily bring up in our conversation because it wasn’t our township data, but it was available if we needed to reference it. And that was just a helpful conversation as well.
[00:40:24] Bob: Yeah. It would’ve been great if he showed up to the hearing with us, but he had, yeah, some conflicts that he wasn’t sure–
[00:40:34] Sarah: That’s good for listeners to know too. You might ask people for help, and they might submit helpful documentation, but that doesn’t mean that’ll mean more bodies in the room for you. But obviously, you didn’t lose hope or steam, so how’d it go?
[00:40:48] Callie: It went really well. We prepared for battle. We ready to take on hundreds of community members because that’s how they teed up to us. They were five years ago, this was a hot topic, and there was all these different niches of the community that were really unhappy. And so we were ready to take on any argument. We had an explanation for everything. The attendance was really low actually. We were very surprised. It had to have been less than 20 people.
[00:41:25] Bob: Yeah. It was about eight people. We expected an angry mob with torches and pitchforks, and that wasn’t at all the case. There was only one or two individuals who actually had slight grievances being noise, and that was it.
[00:41:44] Annette: And you had a solution. You had a fix for that. How long did the discussion go on that night?
[00:41:53] Callie: Probably an hour. It was relatively quick.
[00:41:56] Bob: I think the longest part of that discussion was still trying to land on the appropriate number of nights.
[00:42:02] Callie: And it was less of a debate. It was more they gave space for every community member to come up and share their perspective. So several of our neighbors came up and spoke. One of them was in a very interesting predicament. He’s right next door to us, and he had shared, I don’t have a problem with Bob and Cal. They’re doing a great job. They’re staying on top of it.
[00:42:28] There’s one larger property in the same area as us that houses more people, and because of that, the noise carries, and it’s just hard to avoid that. So he was really happy to hear, hey, if you require all hosts to install this noise monitoring tech, that would solve my problems. All of the community members that showed up were just really happy that that was being considered.
[00:42:58] Bob: Yeah.
[00:42:59] Sarah: As we wrap up the episode, share with us what ended up happening and how it’s been going since then.
[00:43:07] Callie: So we didn’t get our 220, but we did get 180.
[00:43:12] Annette: That’s 50%. I know that one.
[00:43:13] Callie: Yes.
[00:43:14] Annette: Got it.
[00:43:14] Callie: Yes. We got 180.
[00:43:18] Annette: Her mom and dad are proud. That college education is really coming through. That’s awesome.
[00:43:25] Callie: We were happy. It wasn’t 100% what we were looking for, but it’s enough for us to keep learning from this cabin, keep enjoying it ourselves when we’re not renting it out. And maybe at some point we’ll sell, but we feel like we’ve built now just trust and reputation in the community. We were able to change the law. It feels big.
[00:43:48] Bob: Yeah.
[00:43:49] Sarah: It is big.
[00:43:49] Annette: Did you do it that night? Did they tell you that night, though? Were you able to, oh, you couldn’t leave? Oh, damn. I just wanted you guys to be able to bust open the doors and like, we won. That didn’t happen. Okay.
[00:44:01] Bob: No. Yeah, no, didn’t happen that night. But no, I think I consider it a massive win just from the fact that we went into it, I went into it expecting us barely to be able to change the law at all, change the ordinance, and create a massive impact, allowed others to come in there and be able to rent now, besides the fact, yeah, we are getting more than the percentage that we had initially assumed for 10%, cash in cash return of 41% occupancy.
[00:44:35] Sarah: Are you maxing out your occupancy to your greatest potential, do you think?
[00:44:40] Callie: We were booked out all summer. It was wild. It was our first summer, so we didn’t know what to expect. I would say, end of June through September, it was pretty booked. So we were very happy with the numbers.
[00:44:57] Annette: Wait, this actually might end up working even better for you because you could maximize your busy season. Actually relax, take time. It’s required time off, and now you’re like, no, we’re only open these 180 days.
[00:45:12] Sarah: This is a very Annette response right now, everyone.
[00:45:14] Annette: No, seriously, think about this. You guys know that 180 days you have to play in, and it’s like, let’s get maximum revenue during those 180 days. You have these dates that you’re definitely– even though your calendar isn’t open, open, you’re still taking requests, but, hey, we can have two months, three months off where we can go enjoy. We’re not doing turnovers, anything like that. Give your team a break.
[00:45:37] I think it’s boundaries and guardrails that you can maximize even though it’s maybe not the full answer that you wanted, but it gives you that guardrail now to just crush it during that busy season.
[00:45:50] Sarah: How important has the noise monitoring been over the past year? Is it working? Is it impactful? Share with us, other than your experience, is the community talking about it? How do your guests feel about it?
[00:46:03] Bob: I enjoy the tech a lot. It’s been working very well. We’ve only had actually one guest that we’ve been alerted to essentially being too loud. Immediately, it sent them a notification, us notification. Was fantastic. They reached out immediately to us after they got alerted, and we’re like, hey, just so you know, we’re not actually being that loud. We’re just playing some board games. Don’t know what’s going on.
[00:46:37] Callie: And we’re like, oh, it is getting a little loud. It’s over the threshold. So we were able to communicate and resolve that really quickly, and they still gave us a five-star review. They said, hey, we understand that this exists. We appreciated the quick communication and efficient communication.
[00:46:54] So it really was a positive response there. We had one guest that had booked and canceled the reservation because it was listed there. And I think if anything like, it’s amazing. It’s being proactive, and you don’t want those guests anyway.
[00:47:11] Annette: No, absolutely. Love that. And listen, might be board games, but Sarah’s probably the most competitive person I know. She would get rowdy during a board game if she was losing, and maybe if she was winning.
[00:47:24] Sarah: We’re talking about standing on tables.
[00:47:26] Annette: Getting that. For someone that’s in this right now, what’s a mindset tip? Because I feel like every host at some point in time is going to go through a challenge like this. What can you offer our listeners before we go of just something that really kept you focused in the zone from both of you, if you don’t mind?
[00:47:45] Bob: From my side, I believe there’s never just an end to a situation. There’s millions of ways out of it, as well as millions of solutions to the problem. That being going into changing this ordinance, we didn’t think anything about the noise monitoring being a solution or really the reason that the actual community had a problem with the rentals.
[00:48:19] And so finding out, oh, well, maybe there’s a way we can keep our rental property and other rental properties from causing noise problems and then finding a solution to that was pretty incredible. But yeah, basically, there’s always a way out. You’re going to find a solution in some way.
[00:48:40] Annette: Love it. Callie, how about you?
[00:48:42] Callie: I think my answer would be different if it was someone thinking about buying a property or someone that is in the situation where it’s like, oh shoot, we bought a property and this is happening. I think if it’s prior to purchase, it’s just, when in doubt, create transparent, open dialogue with your community officials.
[00:49:03] It’s scary sometimes because you’re like, oh, this is a great market, but it’s going to come back to bite you if you don’t understand. And people say that all the time, but give them a call. Don’t just try to interpret the ordinance yourself. Give them a call and have a conversation about it, and you’ll pick up really quickly if their community is in support of short-term rentals or not.
[00:49:25] And you really don’t want to be in a place that they don’t want you there. So that’s the first thing as a proactive step. And then I think if you’re in it, similar to Bob, I feel like, for the most part, have a glass half full type outlook on life. But this one was really hard.
[00:49:45] And I think just for those that are going through it, there was moments through it that we were like, we’re alone. There’s no one in the local market that’s dealing with this. There’s no one we can talk to to help us through this. And I think just to tell people, like, there’s a lot of people that are going through it.
[00:50:03] We hope that this podcast does a little bit to just help people realize that there is hope and it’s going to take time, and patience, and persistence, but you will get through it. And if that means at the end of it selling it and moving on to the next great thing, that’s okay. But that there’s also hope. And there’s a way to work through some of those tough moments, and it’s okay to have some tears along the way.
[00:50:27] Sarah: Have you guys heard of Rent Responsibly at this point now?
[00:50:31] Callie: We have, and I reached out to them, talked to a woman that actually I think was based in Minnesota. There just wasn’t a big following. They had some resources that we could leverage, but there just wasn’t a big community in Minnesota, or at least yet in Minnesota.
[00:50:51] Sarah: I also love that you came to a solution. This is a problem for me. My initial thing, which you hear this, but it’s I would’ve initially suggested attacks because I’m thinking, oh, townships love money. Everyone loves money. Have a piece of my pie. You know what I mean? Have some money. But you didn’t even have to give up those goods, like the technology in a small subscription to Minut or Noise Aware, and you came to this lovely result.
[00:51:19] Actually, I used to work at a hotel and food and beverage, and my GM who is my mentor was always like you, what is the solution that you can offer that doesn’t necessarily cost money off the rip? And there are solutions out there to either calm a guest down or offer some sort of way to make their stay extra special that doesn’t cost us money.
[00:51:43] And I have to remember that. And I love that you guys didn’t even bring that up, this whole conversation of having any sort of excise or lodging tax. So that’s also a win too. Because even though your occupancy might be lower, you’re not giving a piece of it back to the–
[00:51:57] Annette: That fast.
[00:51:58] Sarah: Yeah. Back to your community. So that’s very cool too. All right. Are you buying another short-term rental anytime soon?
[00:52:03] Callie: On our horizon right now, we’re going back to the idea of a boutique hotel motel.
[00:52:09] Sarah: Good for you.
[00:52:11] Callie: Really want to apply our operating model to that, everything we’ve learned over the last year and a half, and potentially in a Midwest lake market or national park market. We’re still working through what that looks like, but we’re excited about scaling a little quicker.
[00:52:30] Bob: Yeah.
[00:52:30] Annette: So good. Well, you guys have been such an inspiration to Sarah and I, but hopefully so many of our listeners out there are just ready to take on the townships, take on the board. And this is even for an HOA. I think those bullet points that you gave were really going to help a ton of people in their endeavors. Where can people reach out to you? Or if they win their battle and they just want to say thanks to you, how can they reach out to you?
[00:53:01] Bob: Yeah, they can reach out to us at Bigwater– I think it’s @bigwater_cove on Instagram, or bigwatercove.com. They can book with us.
[00:53:13] Annette: Oh yeah. Book with them. Yeah.
[00:53:15] Bob: Yeah.
[00:53:16] Annette: Yeah, we’ll link to all of that for sure. But thanks so much for– and I believe you two reached out to us, right? And I want to encourage listeners, Callie and Bob, we already know they’re go-getters, but they actually reached out to us, gave us very similar bullet points of why they should be on the show, why their story is important, and that’s why they’re on here today. So if you have a story that needs to be shared with more of our listeners, please just reach out to us. And we’re always taking applications for people to be on the show, share their story.
[00:53:47] Sarah: But Callie and Bob, thank you so much. We will share all of your contact information in our show notes. With that, I am Sarah Karakaian.
[00:53:54] Annette: I am Annette Grant. And together we’re–
[00:53:55] Both Annette & Sarah: Thanks for Visiting.
[00:53:56] Sarah: Talk to you next time.
