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[00:00:00] Sarah: Hello. 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: Before we get into our question with Kendra, we do want to share with you, we’re in the heels of May.
[00:00:13] Annette: No. The heels or the edge?
[00:00:15] Sarah: Oh, so we are on the edge.
[00:00:17] Annette: Fingertips. I don’t know, actually, but the heels is at the end. We’re at the beginning.
[00:00:23] Sarah: Okay. May’s coming, and it’s going to be pricing month. Okay, everyone? We have partnered with PriceLabs. We’ve been using PriceLabs for well over five years in our own hosting business, and we have partnered them with the entire month of May. And we are going to conquer pricing. And this episode, this question from Kendra parlays perfectly into Money May.
[00:00:42] Annette: Moneymaking May.
[00:00:43] Sarah: Moneymaking May eve.
[00:00:45] Annette: Yes. There you go. Moneymaking May eve. Because listen, we want data over drama, facts over feelings. Know your numbers. Can I have any more alliteration in there?
[00:00:55] Sarah: You could, but I’m going to stop you. So in our show notes, there is a link to PriceLabs.
[00:01:02] Annette: Free trial.
[00:01:03] Sarah: Yes. Because we want you to dig in if you haven’t yet. Because Kendra, I don’t want to spoil Kendra’s question, but she has a question about something that she’s not yet experienced, and she’s like, well, I don’t have any data around it. We are here to empower you that you do have data. There is data that you can tap into it to help you make better pricing decisions, understand occupancy in a time period that you have not experienced yet.
[00:01:25] Annette: Market demand.
[00:01:26] Sarah: Market demand, booking window.
[00:01:28] Annette: Competition.
[00:01:29] Sarah: All of it. So if you haven’t checked out PriceLabs, please do. The pricing structure of PriceLabs if you decide to stay on after your free trial is one of the most affordable. And their market dashboard and all of their insights there are next level.
[00:01:44] Annette: Invaluable. So join us in May. Pay a lot of attention.
[00:01:49] Sarah: Yes, all of our content is going to be around Moneymaking May and your pricing, but today, Moneymaking eve, we’ve got Kendra’s question.
[00:01:57] Annette: Let’s get into it.
[00:01:57] Sarah: Today we have a question about midterm rentals.
[00:02:00] Questions: Hi, my name is Kendra. I wanted to say, first of all, thank you so much for all of your content. It is so incredibly helpful for someone like me that’s in this world for the first time. We purchased a property as my husband’s pipe dream in western Wisconsin on the trout streams. He grew up fishing, and we launched it on Airbnb and Vrbo in March.
[00:02:25] It’s called the Trim Be Cottage, and I think we’ve had pretty good success, pretty consistent bookings since that time, and good buzz around the area. And we had someone reach out asking to book it as a midterm rental from November through March, and I believe those would be our slower months anyway.
[00:02:47] But it’s hard to know because we haven’t had it on the market during that time for a whole year yet. And so we’re just trying to decide if it’s best for us to go what seems to be a safer midterm mark, midterm rental route, or if we’re going to lose ground in the STR market, on the algorithm, on Instagram, word of mouth, etc., if we do take this five-month stay. So would love to hear your thoughts on the pros and cons of taking this midterm rental versus keeping it on the STR market. Thank you so much.
[00:03:21] Sarah: Kendra, I love the pipe dream.
[00:03:24] Annette: And then trout. I’m here for it. Yeah, there’s a couple of words in there that I want to pull out, Sarah, is she used the word safer. Is this a safer option? Which I thought was interesting. I like listening to the words that everyone uses. But I’m just going to start with, you are using the word safer, however, you just launched a short-term rental.
[00:03:45] This happens in any business, understanding your why and why you got started, and just when guests start asking you for things, was that the reason that you got started, was to do a midterm rental? Kendra, I’m hoping you ran some numbers ahead of time.
[00:03:59] We’re going to dig into the numbers part, but I just want to let you know that the word safer, I don’t know that this is technically would be a safer bet. Data’s going to help us prove that. And what does safer actually mean to you? Because you still could potentially have guest issues.
[00:04:11] Sarah: Yes. And I have taken a head dive into midterm rentals, I would say, the past–
[00:04:16] Annette: You’ve done a cannonball.
[00:04:17] Sarah: I really did the past year, but the last six months, I’ve been a cannonball.
[00:04:20] Annette: A swan dive. I’m just joking, Sarah.
[00:04:22] Sarah: No, because, ask Annette. It’s really important to me that– okay, everyone’s starting to talk about how sexy midterm rentals are, and all of a sudden, you’re going to make 20k a month and all these amazing things are going to happen month after month. And now we’ve finally cracked the real estate cash flow issues.
[00:04:37] Annette: Code.
[00:04:38] Sarah: Right. And I’m here to tell you that it is a great way to leverage different seasons in your business for sure. But that the work it takes to go from midterm to short-term–
[00:04:50] Annette: Back to short-term.
[00:04:50] Sarah: Right. Is not easy. Running only midterm rentals is also not easy. When you have a midterm rental business, as a business owner, you have relationships with different companies, relocation companies. It’s not just loading up on Furnished Finder or picking the 30-plus days on an Airbnb. You can do that, but to have really great consistent success, like anything, surprise, spoiler alert, it takes work.
[00:05:17] So Kendra, the first thing I want to share with you is you can find out there is data around your area on if this is your slower season. So I would like you to get a subscription to PriceLabs. That’s one that we recommend, and know I can use. There are others, but you can join PriceLabs. It’s a monthly subscription.
[00:05:37] Annette: Worth every penny, especially when there’s a decision like this. Facts over feelings, data over drama.
[00:05:42] Sarah: 100%. And you can pinpoint your area of the market and see what revenue, ADR, and occupancy was like in 2023 for the past year, beginning of 2024, if you’re going into March. That data is out there for you. Then, if you still decide like, oh, okay, I don’t know that we can pay our bills at that rate or with those occupancies, and there must be some sort of need for midterm rental because this person’s reached out to you, then find out what the market is for a furnished midterm rental, and there you can find more data.
[00:06:14] You can make the stay 30-plus days and find out what that data looks like. You can also go on to Zillow. We’re just getting out of March now and see what the furnished rentals in your area were priced at. And then you can make that decision. And I also want to tell you, Kendra, that ramping up and defining a midterm rental tenant, you should start sooner than you think.
[00:06:35] Annette: And I love like, you do have a lead, Kendra. Let’s not squander this lead. This is exactly like November to March, I think, booking. Let’s get all the information as possible from this potential guest. Why are they coming? What is their budget? I would have a way to reach back out to them, because this is gold. And I would just let them know, hey, we just got started. I need to do some research ahead of time. I wouldn’t give them a hard no.
[00:06:59] I would dig in because maybe whatever this particular person, why they’re coming to town, there might be others like them. You’re like, is this a one-off, or is this something that every year you really could get into the swing of things? Do they come back every year? So I really would ask those questions there.
[00:07:13] The other thing, we took little notes ahead of time, is really knowing yourself too, Kendra. It sounded November to March, maybe this is around the holiday season. I don’t know what your personal life looks like during that time, and maybe, again, not to say that the guest is not going to have any outreach or anything like that, but does this work better with your life having a midterm rental?
[00:07:33] But I think really knowing those numbers, like Sarah said, also your why of getting started. And yes, there might be a slower season, absolutely. But if you know what your busier season is and you understand those numbers, it’s okay.
[00:07:46] Also, I think a shoulder season has been villainized in the short-term rental world because of COVID. People were seeing incredible highs every month of the year. And so now that it’s balanced back out and normalized, these shoulder seasons are getting completely villainized, but it’s just a normal balancing of what the demand is in your area.
[00:08:07] I offer that to you too, Kendra, of understanding what the seasonality is and can those higher months help offset those lower months? But like Sarah said, getting back into the algorithm, getting those guests back booking for the spring and summer might be more of a challenge if you are occupied for five months.
[00:08:24] Sarah: I would start your marketing efforts to get back into the short-term rental on your Instagram and your emails. I know you’re just getting started too, but whatever audience you have, stay consistent when your midterm renter is in there. And make sure guests know when you are “opening up” your calendar back up for your short-term rental stays.
[00:08:43] I don’t know what your booking window is. You can find out on PriceLabs, but when it comes to April and your calendar opening back up, okay, maybe your booking window is 30 days, maybe it’s 60 days. I know from more of those vacation rental destination locations, they are longer.
[00:08:57] So that means that you can start ramping up your calendar and booking out, and be aggressive because since your calendar has been blocked for so long, it is going to be a little bit of a tougher climb.
[00:09:07] My last thing I want to share with you too, Kendra, is if you do pivot to a midterm for those months, and if this becomes a part of your booking cadence every year dial in those expectations for the midterm renter. Are you going to be replenishing the consumables for them every time they run out, or do you get them started and that’s it? How about your utilities?
[00:09:26] Annette: Yeah, utility. We have seen a lot of hosts. This was me years and years ago. I accidentally got burned on just a one month stay, but utility expectations, having someone in there 24/7 is very different than a lot of different personalities and guests. And then also Kendra, I don’t know if you’ve even had that property during the winter months and when it might be colder. And we know that those can get completely out of control, so that utility expectation is huge.
[00:09:52] Sarah: And last but not least, if they’re a tenant in your state, making sure that you verify income, employment, background check, and make sure you have your non-negotiables when it comes to credit score and your rent to income ratio.
[00:10:11] And state all that upfront. Figure those out. Decide on them, post them. Have that be your gospel, and stick to it, and make sure that you are going to become a landlord during those months. This is all great stuff. We’ve been doing it, Kendra, here in Columbus. I put my toe in the water last winter, and this past winter, I went all in, and it was a great learning experience.
[00:10:34] It’s a lot of work, and you have to figure out what your systems are getting into the midterm rental season and then getting out of it again. Possible, doable, but all those things that we just shared with you, write them down, figure them out, and get a plan together.
[00:10:46] Annette: And Kendra, you’re a wonderful candidate for our Hosting Business Mastermind, so make sure to meet us inside there. We’d love to see you in there, but great question. We are excited for you. We are excited for this pipe dream, for all of the trout fishermen to share. No, seriously, we love that.
[00:11:01] We love you partnering with your partner on this dream, and we’re excited for what’s to come. So keep us in the loop of what you decide, but definitely, get all the information from that potential person that is already reaching out because you already have a little bit of demand, which is great.
[00:11:13] Sarah: With that, I’m Sarah Karakaian.
[00:11:14] Annette: I am Annette Grant. And together we are–
[00:11:16] Both Annette & Sarah: Thanks for Visiting.
[00:11:17] Sarah: Talk to you next time.
