Publisher's Synopsis
How you choose, design, and run operations for your short-term rental home will determine your net cash flow at the end of the day. There are thousands of practical steps and choices you must successfully execute in order to capture your ideal guest and earn consistent cash flow. This book covers how to earn great reviews and great results through:
- Managing cleaning for consistent results
- Routine maintenance for lower overhead
- Delivering 5 star customer service
- Choosing the right amenities, furnishings, household goods, and supplies
- Choosing the right Property Management Software
- Choosing the right websites to publish your listing on
- Creating a pricing and minimum stay strategy
- Marketing your property effectively through clear listing descriptions and quality photos
- Developing a cancellation policy and refund strategy
A young fisherman drags his net up onto his boat one last time, dumping his catch onto the floor of his little fishing rig. Exhausted, he grabs the oar and makes his way back to the dock, where he begins to sort his haul for the day. One bucket of keepers for the market, the rest of the junk going back into the sea. So much seaweed with today's haul, as well as some dead trash fish, is not even worth feeding that stray dog that has been occupying his doorstep. 90-pound haul, 82 pounds of which were trash. Eight pounds of fish for eight hours of work, and now to mend the nets.
For the next two hours, the young man mends his nets and prepares them for the next day. Feeling rough and down, he opts for the bar on the way home. Another fisherman at the bar gives him a nod as he settles down on the bar stool.
"How was your haul today? he asks the young fisherman.
"90-pound haul for the third straight day," the young man answers with a proud grin.
And so it goes with short-term rentals.
The stories are big, and the numbers are big. But if you are new to the game, are you having a hard time finding anyone's net numbers? If you are currently operating a short-term rental (STR), are you frustrated with the net outcome after all the work you put in?
Before we get too far, let's establish what matters. If you don't agree with me on what matters, then don't waste your time reading the rest of the book. The net profit is what matters at the end of the day. That's it. Short-term rentals are for throwing off free cash flow, and it takes a lot of work and industry-specific knowledge to get them to do that year in and year out. It's not worth owning short- term rentals for appreciation; if you want to buy real estate for appreciation, go buy raw land.
There is so much hype in this industry, and bloated numbers float around there. Six-figure incomes on midsize residential properties. Even if we find it believable, what does that number include, and what are they walking away with? Are they including cleaning fees in it? Local and State Taxes? If they are, that number is nowhere close to accurate. Also, who is being honest about how much time they are spending on their short-term rental? Is that even trackable, and how do you
account for that? How do you account for being on call 24 hours a day? Could you make that much money just working another part-time job?
Short-term rentals are more high-risk and high- reward than other asset classes within real estate, and without risk mitigation, your overhead is much more likely to eat you alive in a downturn than renting out apartments or single-family residences. You can create asymmetrical risk-return if you fish in the right spot, for the right fish, with the right net.
So, back to our illustration. Unless you want to be one of those fools in the bar who swallows it hook, line, and sinker when the young fisherman brags of the 90-pound haul, you will ignore anyone who boasts about 90k of gross revenue without disclosing net revenue.
