STRA Episode 3: The First (And Most Important) Step When Starting a New Short-Term Rental / Airbnb

The Short Term Rental Authority Podcast

The First (And Most Important) Step When Starting a New Short-Term Rental / Airbnb

[00:00:00]

Hey everybody. Welcome back to the podcast. We are John and Wendy Williams with the short-term rental authority, your trusted authority on all things short-term rental related to help make you the best operator ever. And on today's podcast, we are going to be going to be talking about.

The first thing that you should do when you are starting your short term rental business. Yeah. I wanna feel like we've talked about it a little bit. Little bit. Yeah. Cause it's that important? Yes. But today we kind of want to take a deep dive on how to choose your avatar, how to choose. Who it is that your hospitality business, not your real estate business, but who your hospitality business is actually going to have as a customer, who's coming to stay with you.

Right? So this is the first and the probably, I would say the most important step that you will ever take in your short term rental journey, because, and we're gonna get into this a little bit later because it's going to help you answer. all the other questions that you have right now, probably right.

Like where, where to put it, you know, is it a three bedroom or a studio, right, right. What put inside of it, you know? Right. Where, yeah. All of those things, it's gonna help you answer all of those things. So let's first talk about how do you go about finding which customer to choose, because there's a whole mess of.

That that you a whole mess of them. Oh God. Whole mess of them. Okay. Hey, at least I didn't say gaggle. That's true. that's geese. Oh yeah. That's right. and so you got a whole bunch to choose from, right? How do you even start? Like where do you even start? So [00:02:00] we may not even realize that, that there are so many.

Well, that's true. And we're gonna get into all the, all the ones that you may not have even thought about yet. We're gonna get into that today as well. But let's talk about first. How do you even pick somebody? Like you got all these things to choose from, but how do you pick? So the first thing that, that we tell people to do is to start.

Right. Yeah. So you want to, you want to be in your backyard as much as possible? Yes. Especially for your first several, especially. Yeah. For your first couple first one, for sure. Because you're you're you are going to be going to the unit a lot. until you have somebody to do that for you, but you probably.

Aren't going to have somebody do that for you at first, right? Yeah. And it's not only that, it's just, there's all these other moving parts that you don't realize until you're doing it. And it's, it's way easier. And in my opinion, smarter to start local to where you can actually go there, if you need to, for whatever reason, mm-hmm that you could put eyes on that property that you're not overly reliant on something like, oh, well, I guess I gotta hire a property manager.

because it's five hours away or it's across the country or, or whatever. Right. Right. And then you find out, well, all your revenue goes out the door to the property manager and even then you don't really have a sense of what's going on there. Right. So I think it's super important. Yeah. I would, I would recommend start in your backyard or as close as possible, as close as possible.

Right. Right. For that reason, because you are going to be going to the unit for whatever reason. And, you know, you, you don't know what you don't know right. At first, right? Yeah. And you need to build up some of [00:04:00] that experience. Yes. Cause remember you're, you know, one of our mentors, Jay Massey told us this, he said, you do your first deals for the experience.

And then you get the profit from your experience, right? Yeah. So if you, if you're doing those first deals and you're not in a place where it's actually local to you, or at least semi-local to you, then. You're not learning the things that you really should be learning, running that business. Mm-hmm and you know, you, you learn a lot about the market when you are operating short term rental business.

Yeah. So, and, and we're gonna be talking a little bit about this too, a little bit later on, but the we've been operating in, in Charlotte for quite some time now. And I did not realize that there were so many things going on in Charlotte. Well, that's true. Yeah. And then we moved to a, to a new market and we thought we knew that market well.

Right. but that, that is one of the things that people will do, they'll say, well, okay, I'll start local. I know my area. Yeah. Yeah. You think you do and you think you do. Yeah. And then you find out that, oh, I didn't know that was going on. Right. Cause people will come stay with you. and you didn't even realize that existed as a thing.

Right, right, right. Because it's not in your sphere of right. You know, awareness, cuz it's just not something that you do. Right. Right. For whatever reason. So, so that's, that's part of it, but that's like after you get started, right. Like you don't wanna start and then say, okay, who's coming there and then, oh no, that that's bad news.

Yeah. Cause you. The, the whole idea is that you, you need to build this thing to attract the person that you want. That's the idea to serve, right? Yes. That's the, the niche there. Yeah. So, so with that being said, if you were going to be starting locally in, in your own backyard, that, you know, that kind of limits you geographically, that's true.

Right? So your, [00:06:00] your possible things that you could. are narrowed down by geography. Yeah, they are. But I will say that it's probably not as narrowed down as you think, even if you're in a, say a Myrtle beach, right. Say I wanted a short term rental in Myrtle beach. Would you immediately think vacation rental?

Yeah. And that's it? Yeah. Like you don't even think about anything else. Right. But in Myrtle beach, there are people that live there. That's true. Yeah. There are people that have say a fire in their house. Mm. and they need a temporary place to stay. And they've got, you know, mom, dad, three kids, a dog and a cat.

And that doesn't start sounding like a hotel room. Right. And it's gonna take six months to rebuild the house. Yeah. Right. That exists. Even in a vacation destination. That's true. There are people that are coming there for construction work. So say they're building something. A new theme park, a new whatever.

Mm-hmm , you know, they there's people that come from in, from out of town that are there for those purposes. Yeah. Right. There are hospitals in Myrtle beach, right. There are traveling nurses that travel to Myrtle beach for work. Let's, let's go through those. And this would be a good time to, to actually go through some of the possible customer avatars that you.

That you could possibly serve. And what we've done is we've put them into categories. There's about 65 that we came up with and we've put them into, to categories. So let's, let's do the categories. Yeah. And this isn't even an exhaustive list. No, but the idea is, Hey, get the juices flowing, just get the creation.

Start thinking about, okay, what, who can I serve? Right. Because that's part of what we keep saying. You need to. Who you want to serve. Right. And the biggest problem a lot of times is figuring out, well, who could I serve? Right. What are the possibilities? So here's some possibilities. Mm-hmm . So we've got the corporate traveler, the life events, traveler, the [00:08:00] entertainment traveler, the medical traveler, the military traveler mm-hmm the seasonal or tourist traveler, the academic traveler, the emergency travel.

And the voluntary relocation traveler. Right. And those are broad categories. Yes. So gimme some examples of got it. Some things in each that category. Okay. All right. So let's start with, start with the corporate traveler. And of course these are people like sales people who are, who work for a business mm-hmm and they are coming to the area to sell something.

Remember the solar people mm-hmm yeah, we've had several sales teams. Actually. There was the solar mm-hmm that came in and stayed at one of our houses. And then there was the the pest control. That's right. I forgot about the pest control. So if you, if you've ever lived in, in an area where there's door to door salesman and they come through and they're selling you these services, a lot of times, they're not from, they're not local.

They actually are sales teams that will go to an area and work that area for a period of time and they gotta stay somewhere and they stay with us in this case, at least a couple times we've had that happen that we know of. Yep. And then they'll go to another area and set up shop. Right. And they go all over the country.

So that's one of 'em sales teams training sessions, continuing education. Mm-hmm , that's interesting. There's a lot of people that come in for you know, like the corporate office is there. And they come from the satellite office, some other part of the country and they're coming in for some kind of training.

Yeah. It could be sales training. It could be you know, any kind of like it training. It could be anything like that. Yeah. Yeah. Yep. Contractors and construction crews. Mm-hmm , that's what I was talking about earlier. People coming to build something we've had that before to. Speakers and presenters for training or that's true.

That's true. So a lot of times that training isn't done by the company itself, it's done by an outside sales trainer, Uhhuh and guests they're coming too. Yep. Right? Yep. Nonprofits mm-hmm meetings with members of [00:10:00] branch offices. Yep. Team meetings. Mm-hmm merger, acquisition teams. Yes, they do that. Yep. So those are just some examples of the corporate traveler that you could serve.

The life event travelers are the people that we serve. It's one of them. Yeah. Yeah. One of them that we serve. So that's people coming for life events, such as weddings, funerals. Birth of a child or a grandchild adoption, even mm-hmm we had somebody come who was adopting a child. We also had someone coming who stayed with us who was getting inseminated.

Yeah. Did I say that right? You did. It's just shocking the say insemination , but I had no idea that there was an insemination clinic. Yeah around here. I didn't either. Yeah. Until she came and said, Hey, I'm, I'm doing this. This is what I'm doing. Graduations, family reunions, holiday gatherings. We get a lot of that.

Yep. Especially around well, holidays births and home remodeling. So a lot of people are doing that too. We get. We got quite a bit of that Uhhuh as well. Somebody's remodeling a kitchen or something, Uhhuh and need a place for a couple of weeks or whatever. Yep. Happens all the time. Yep. And those people tend to be local.

That's right. Mm-hmm yeah. So a lot of people are, are you'll hear some people say, oh, don't serve locals. That they're they're bad news. And well, they're trying to prevent parties. Well, I understand. Right. I get it. There's but they haven't realized that there's a ton of locals that need those services.

For the, for this reason mm-hmm so we actually had somebody one of the neighbors, one of the neighbor's mom came to stay at one of our houses. Mm-hmm that's true. So that she could be right next to her daughter because I believe her daughter was. She's pregnant and she's, she's having me. So it was one of those birth of a child things.

Yep. Yep. Mm-hmm okay. Entertainment travelers. These are people coming to things like [00:12:00] concerts, football games, football games, basketball, basketball, sports, any kind of sporting events festivals we have. That's right. Yep. We have the Renaissance festival here. If you've never been to a Renaissance festival, you must go.

Yeah. And eat one of those big old Turkey legs. That's right. He always gets the big, giant Turkey leg. I love the Turkey legs. I like to take pictures of you with peoples legs. just, don't post 'em on social media. Yeah. Street fairs, art shows. Okay. And theater and the film industry is really big mm-hmm and we just had an actor stay with, with us and we didn't even, yeah.

We didn't even know they were filming a movie. They were, but, you know, we've had people that you know, they'll come in for like a Broadway type production. Yeah. Uhhuh , but there's people coming to the production to watch it, but there's also the people. Putting the production on that's true. They have to stay and they come early and stay, stay for a while.

Right. Cause they've set the set, the whole thing up and then do all the rehearsals and then they do the, the play or whatever, and then they have to break all that back down. And then, so they're usually here for a period of time. Yep. Mm-hmm yep. So that's, that's a one that you may not have thought of medical.

Of course, these are your, your traveling nurses. Mm-hmm . But what you may not have thought about is if you've got a hospital in your area, especially a a specific type of hospital. Yeah. Like here we have a children's pediatric cancer center Uhhuh, right? Mm-hmm a lot of times they will. Bring in a specialist doctor and that doctor will stay in residency for a number of months mm-hmm and that there, those people are gonna need a place to stay, right?

Yeah. So it's not just through traveling nurses. It's right. That, so traveling doctor. Yeah. It's one of those things where you kind of want to be specific, right? You what you don't, I'm just pointing this out about this. These categories is what I hear. A lot of people do is they're like, yeah, I have an avatar, but they name a category.

Right. Like medical professional, like medical [00:14:00] professionals. Well, that's great but is it traveling nurses or is it the traveling surgeon? Right, because those are two different people. They're and they're two different experiences. Yes, too. Yes. And we're gonna talk about that in just a second long term hospitalization.

Yep. So people coming to the hospital for procedures and things like that, and then people coming to visit them too. Mm-hmm a lot of times their family take care them. Yep. Mm-hmm yep. Long term recovery. So people have to be near the hospital. Especially people, we were, I was coaching a a student down in Florida and there was a plastic surgeon and she was serving people who were coming to get plastic surgery.

No, that was Fort worth, Texas. Oh, was it? Mm-hmm oh, okay. I thought it was Florida. Maybe it could have been Florida too, but the one I'm remembering was Texas was Florida, but, and, and apparently. they, people, people come from all over. Yeah. People have people who have plastic surgery have a long recovery time.

Yeah. And they can't fly and they can't fly. So they fly in. Yes. And they have the procedure done, but then they can't just get back on a plane. Right. Cuz they just had surgery. Right. And there, and there's also like complications could happen all this other kind of thing. Right. So they have to be near the hospital.

Mm-hmm just in case, right? Yep. So emergency elderly parent being relocated to assisted living mm-hmm oh, we had that during COVID. That was one of the people that. Actually stayed in our units during COVID. Yeah. It wasn't what we, what you just described, but yes, but it reminded me of it. It did.

Yeah. So they actually that's how my brain works. Yeah. Yeah. So I think this one was actually people that are moving somebody into an assisted living and they need a place to stay place to stay while they're doing that. You're right. Mm-hmm right. Cause they may be out of town or something. Yeah. But there is the one you were talking about where they were actually, and this, this has gotta be unique to COVID, but, but they were actually Mo they took.

loved ones out of the [00:16:00] nursing home. Right. And put them in one of our units with a caregiver, because well, that's where everybody was dying. Yeah. We're in the nursing home. Right. And they, they were trying to take them outta that environment. Yep. And yeah, that was interesting. Yeah. Yeah, it was, it was so, oh, this next one is one of my, one of my very favorites to serve and that's the military traveler and big props to all you and military out there.

We appreciate you and your service. To our country. It says some people who are coming for temporary duty assignments, mm-hmm looking for housing for upcoming move or reassignment mm-hmm visiting family members. And civilian training personnel right now. So this is a good example of one that is location, location specific.

Yeah. Right. So if you're, if you're within an hour of a military base, then you should really look into yeah. You should really look into it cause serving military customer because they take great care of your property. They're very respectful and they stay for a long time, but even then you gotta think, okay, is it enlisted or is it officers right?

Right. Two different people. That's right. Yep. And we'll talk about that in a second. The seasonal or tourist, of course, this, this is like your typical. This is the one everybody thinks of. Right. Right, right. So if you're in a beach area or a ski area historic towns outdoor nature interests mm-hmm like near national park, near national.

That was a big thing during COVID yeah, it was, it was like one of the few places you could actually go was outside. Right. Right. So if you were near a, a national park or something like that hunting or fishing mm-hmm and my favorite wineries or breweries wineries or breweries. Excellent. I'm a big fan. Academic traveler short term training schools, technical schools, beauty schools.

Or some mm-hmm trade schools, trade schools. Yeah. Are very good. Foreign students. Yes. Which was a big one during COVID you remember that? Yeah, it was because if you were [00:18:00] say a student from Italy, Italy you were screwed and the campus shut down. Well, you didn't really want to go back home either. Yeah, no, right.

Not so much. But you needed a place to stay. Yeah. So that was, that was part of it. But even, even then it's like, Okay. Well, a lot of times foreign students are coming in and they're not staying on campus. They need a place for a while, or at least to figure out where they're gonna stay before. you know, have a permanent place or whatever.

Right. And a lot of times temporary housing comes into that. Yep. Yep. Visiting professors and guest lecturers. Mm-hmm researchers using libraries or the archives. This is big in Washington, DC and summer school students. Yeah. I, I note Actually there's law libraries that people go to. Oh, like physical law libraries, cuz there's a lot of things that are only available in the library.

Oh, okay. Not online mm-hmm and so they, they will come to specific libraries just for that to do research or do some kind of, you know, whatever they're doing. Right. Cause they're like getting a PhD or mm-hmm or studying to be a lawyer or something. It could be. Interesting the emergency traveler, and this is one of our customer types house fire mm-hmm flood or natural disaster or plumbing, disaster mm-hmm natural disasters, such as wild fires, blizzards, hurricanes, hurricanes storm damage due to ho storm damage crime in home.

So a lot of times. People will get broken into and they're afraid of being at. Yeah. Yeah. That's something you probably never thought of. Never would've thought of that. Somebody that's been burglarized. Yep. Right. Burglarized. That's hard for me to say robbed robbery. There we go. So that's a that's. That was really interesting.

Mm-hmm and roof repairs. Mm. Or any kind of repairs, like remodeling, stuff like that. Mm-hmm voluntary relocation is the last one. So another big one for us. Yeah. Yeah. So this is people who are. Relocating to the area, like they sold their house somewhere and they're moving [00:20:00] to your area. They'll, they're building a new house.

We've got loads of that happening here. Mm-hmm it'd be interesting to see what happens with that. Right. And that relocation isn't always like from out of town, like sometimes it's mm-hmm, just like what you said. They sold a house. But they haven't found the new one yet. Right. Or it's being built or it's being built or whatever.

And they, well, we did that. Mm-hmm we sure did. When we built, we built our house. I wish we'd known about term rentals I know. Right. it would've been a lot more pleasant than staying with my mother. Yes, yes. Which is what we did. Yes, it would have. Yeah. And she was with two kids and 80 years old and liked it very hot inside.

Yeah, she did. It was very warm. Yes. Mm-hmm visiting the area to look for potential areas to buy in mm-hmm and change of job. so we actually have this available for download. If you want to contact us, you can find us online. I'm sure the short-term rental authority. So those are some of the categories and, and the idea was just to.

Just to get the creative juices flowing, right. Just to put it out there of some, some things that you could, some possible people that you could serve and, and you could probably think of a lot more people. Yeah. There's many more there's many more so, but the idea is to really niche that down into. You know, 2, 3, 4, 5 max, no more than five, no more than five because you know, the, the, and there needs to be some overlap there too.

Mm-hmm because there's such a thing as the level of service that you are providing for guests too. And you hit on this earlier. You know, you could be tra you could be serving a, a medical professional, but the medical professional, it [00:22:00] could be a nurse mm-hmm , but it could also be a surgeon as well. Right, right.

Mm-hmm and their expectations yes. Are gonna be totally different. Yep. Right. So now we're talking about which level of service. So, not only do you wanna pick an avatar, put three to three to five, but you also need to choose a level of service mm-hmm and we liken this to Walmart target or Nordstrom type level of service mm-hmm right.

So the Walmart type experience is very budget conscious. They're, they're really kind of shopping on price here. Yeah. And all three of those stores sell something similar. Yes. Yes. They do. Like you can buy a shirt at all, three of them. Yeah. That's true. But your expectation of quality at one is different than at the other.

Yes. It's all about the expectation and what your customer experience, or maybe, you know, even how easy is it to return something might be. You know, a different experience at diff those different places. Right? So that's, that's definitely something to consider mm-hmm so, and so that's something to, to consider as well.

And, and those different levels also have different things that they value. That's true. Right? So the, some people may value the location. So location's gonna be really important to some people, whereas it not so much to other people, convenience and convenience to certain things like. The well, some people may be, are they driving and they need parking available.

Yeah. Parking's gonna be more. Or is it like mass transits, way more important? Mm-hmm and I need to be able to walk to the grocery store. Right. Like, right. So those, those are two different people expecting two different [00:24:00] things, but that answers the question of, if I know who I'm serving now I know where to go put that thing.

Right. Right. Where do I want to locate? unit. Well, you've now you've gone into the next thing that we were gonna talk about is answering this question of, of who is your customer is going to help you answer pretty much every other question that you could possibly have. That's true. And, and I was really talking more about the overlap.

Oh, because you said, Hey, there should be. And really there should be overlap in, in the customer types that you pick, like an example would be overlap, which is why I was mentioning location and things like that is if I wanna serve travel nurses and families with children, those things aren't very compatible.

Yeah. They're not. Cause the traveling nurse starts sounding like, okay, something near the hospital. That's maybe a studio apartment because they're budget conscious and they're traveling alone versus family with children. probably values. Well, quiet privacy and privacy, right? In a larger space. Yeah. Like they probably want a two, three bedroom, right.

With maybe a yard cuz they've got a dog. Right, right. So you, when you choose these avatars, you want to choose three to five, but you want three to five that are compatible right. In all those things, location type of property, all those kind of things. So maybe travel nurses goes really well with traveling business person.

Who's also alone and values being uptown where the hospital is. Right. Right. And, and family event travelers goes real well with military travelers too. Right. Cause they, they can tend to be the same type of people. Yep. So you gotta to be thinking about like, what age are they even? Yeah. Yeah, for sure.

Because are they the age that they're going to have young children traveling with them? Mm-hmm what's their income levels, what you were alluding to as [00:26:00] far. level of service, you know, are they expecting Egyptian cotton sheets, right? Or do they not value that because they'd rather have a lower nightly price.

Right. And so those, those are things to consider when you're, when you're developing these avatars, make sure that you pick some that are compatible, I guess is the way to say it. Right. So what, what we've done is we've chosen. We've chosen somebody like us. yeah. The easiest thing to do is pick yourself, pick it.

Right. And that's what we did because, well, for one thing, you already know this person because you are this person mm-hmm and you can anticipate almost their, every need. Yeah. Cuz that's what you're trying to do. Yes. That's what creates a really great guest experience. It does. Yeah. Is, is they walk in and say.

These people have really thought about my needs and, and, and what I'm really going to need when I stay here. Right. And the needs of different people are different things, largely dependent on why they're coming. Yeah. How long they're staying. Like if you're, if you're serving people that are staying a long period of time versus just a weekend.

Well now indoor washer and dryer start sounding like something you actually have to have. Or a dishwasher, for example, mm-hmm, where, you know, if you're staying for the weekend, are you really doing laundry? Probably not. Probably not. Right. Right. So it's like, who do you want to attract? And you need to really niche down into who that avatar is.

Mm-hmm so, you know, kind of going through this list of, Hey, here's the different people. Great. But I always say, yep. Start with something that's closest to what you are. Cuz like you said, you understand that. And then the other thing I would say. Start with somebody you would actually enjoy serving.

That's what I really like. I think that's part of it too. Mm-hmm right, because I, I [00:28:00] think one of the mistakes, you, you, it's actually a mistake. People. What people really want to do when they come to us is, is they wanna say, who can I make the most money with? Right. mm-hmm right. And then you start with that a lot.

You start looking at the market and saying, oh, it looks like three bedrooms do a lot better than two bedrooms. Mm-hmm and you're looking at it that way. And while that may be true on paper it's, it's not always something that you would even enjoy serving. Right? You might not even enjoy having four bedroom houses, cuz it's constantly.

You're worried about people having parties there. Cause it sleeps 10. Right? Right. That's just stressful where I, you know, maybe I'd feel better serving business travelers because well, there's smaller spaces that don't tend to attract people that want to party. And I understand that customer type better.

And I like they're here for a professional reason rather than just vacation. Right. So I, I think a big part of it is who do you, who are you comfortable serving? Mm-hmm and then. do I know that customer very well. Yeah. That's, that's a big part of it. Mm-hmm right. Is, is being able to anticipate their needs and you know, that customer so well.

That they don't even have to hardly ask you any questions. Right. Mm-hmm because you've thought of just about everything and it goes back to your marketing too. Like that's why you attracted them in the first place. Yeah. Yeah. Right, right. So, so the, so knowing who, who your customer is. Is not only gonna help you answer, you know, what type of property am I, am I gonna get, am I gonna get a, a studio?

Am I gonna get a four bedroom house? But it's going to, it's going to help you choose the location, right? Because now that you know why someone's coming well, you're [00:30:00] going to want to be around that general area. I mean, if. If you are serving the, the military, for example, you need to be around a military base.

Right? Right. So it's, it's it's going to answer what to put inside your unit. Even, you know, some people may not even value a desk or, or a pack and play, or those kid things, cuz you're not serving children. Right, right. Mm-hmm maybe the traveling nurses really value blackout curtains yeah. And not being on a busy street and not being on a bed.

That's a good one. A lot of them are working nights and sleep. They work nights and sleep during the day mm-hmm right. Yep. Mm-hmm the, the property type, the feature photo and where to market. Yeah. I was talking about that. So like, what do you say in your title? Yeah. Like what do you say in your listing, in your description?

What's your first five pictures. Well, all of those are centered around who am I trying to attract? Yep. Right. Cause I we've always, I'll just little nugget here for you, but in your title, your title should have features in it. You know, the worst title you can have is cozy place to stay one bedroom. Right.

And cozy two bedroom. Cause what does that really mean? Right, right. I'd rather see. At least in your, in your title, it should be something that speaks to the avatar that you've chosen. So for example, if I'm doing a business traveler, for example, I'm going to in my title, say something like high speed, wifi dedicated workspace printer included, right close to such and such area.

Yeah. Like two miles to convention center. Right, right. But if I wanted to serve the, because in uptown Charlotte, you could serve either. If I wanted to serve people that were coming from sporting events, I might say two miles to Panther stadium where the Panthers play football. Yeah. Right. Mm-hmm and, and, but those are actually the same location.

Mm-hmm , it's just, what am I choosing to point out it's close to. Right. Right. For [00:32:00] example, Mm-hmm . So we hope that you have found loads of value in this episode and stay tuned for the next exciting episode and be sure to like, and follow us. And so you get notified of the next exciting episode that's coming out.

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