Digital Social Hour - Why Vacation Rentals Beat Traditional Real Estate | Avery Carl DSH #1176

Episode Date: February 12, 2025

Discover why vacation rentals are outperforming traditional real estate investments in 2025! Real estate expert Avery Carl shares how she built a thriving portfolio of 250+ properties and reveals the secrets to succeeding in today's vacation rental market. 🏠 Learn how vacation rentals can generate the same income as a full-time job while you sleep, and why choosing the right market is crucial for long-term success. From beach towns to mountain getaways, Avery breaks down which locations offer the best returns and how to avoid common pitfalls that trip up new investors. Get insider knowledge on property management, guest screening, and building systems that scale. Find out why some cities are banning short-term rentals while others welcome them, and how to position yourself in markets with decades of proven tourism demand. Whether you're a seasoned investor or just starting out, this episode is packed with actionable strategies to build wealth through vacation rentals. Learn about creative financing options, tax advantages, and how to compete in today's evolving real estate landscape. Don't miss Avery's insights on market trends, investment strategies, and why vacation rentals could be your gateway to financial freedom. Plus, discover why traditional real estate might be holding you back from achieving your wealth-building goals. 🔑 CHAPTERS: 00:00 - Intro 00:26 - Airbnb Market Trends 04:10 - Bartending Experience Impact 05:00 - Specialized Recruiting Insights 05:47 - Is College Worth It? 08:57 - Short Term Rental Workload 09:49 - Scaling Real Estate Portfolio 11:47 - Real Estate Mentorship Experience 17:40 - Cities Banning Short Term Rentals 20:00 - Tenant Screening Process 22:30 - Bad Incidents in Rentals 24:05 - Book 2 Overview 24:25 - Capital Intensity in Real Estate 28:38 - Economic Predictions: Another 2008? 31:07 - The Short Term Show Overview 32:28 - The Short Term Shop Insights 33:27 - Outro APPLY TO BE ON THE PODCAST: https://www.digitalsocialhour.com/application BUSINESS INQUIRIES/SPONSORS: [e-mail] GUEST: Avery Carl https://www.instagram.com/theshorttermshop https://www.youtube.com/theshorttermshop https://theshorttermshop.com/ SPONSORS: Specialized Recruiting Group: https://www.srgpros.com/ LISTEN ON: Apple Podcasts: https://podcasts.apple.com/us/podcast/digital-social-hour/id1676846015 Spotify: https://open.spotify.com/show/5Jn7LXarRlI8Hc0GtTn759 Sean Kelly Instagram: https://www.instagram.com/seanmikekelly/ Digital Social Hour works with participants in sponsored media and stays compliant with Federal Communications Commission (FCC) regulations regarding sponsored media. #ad  #biggerpockets #mortgagerates #howtogetmorebookings #airbnbarbitrage #vacationrentals

BetMGM is an official sports betting partner of the National Hockey League and has your back all season long. From puck drop to the final shot, you're always taken care of with the sportsbook Born in Vegas. That's a feeling you can only get with BetMGM and no matter your team, your favorite skater or your style, there's something every NHL fan is going to love about BetMGM. Download the app today and discover why Bet MGM is your hockey home for the season. Raise your game to the next level this year with Bet MGM, a

sportsbook worth a celly, and an official sports betting partner of the National Hockey League. BetMGM.com for terms and conditions. Must be 19 years of age or older to wager, Ontario only. Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact Connects Ontario at 1-866-531-2600 to speak to an advisor free of charge. Bet MGM operates pursuant to an operating agreement with iGaming Ontario. Everything on my corporate dream job, I was making about $1,000 a month and then this house was making the same amount of money as me while I slept so my husband and I looked at each other and we're like we need more of these how do we do that and so only then did we start researching and listening to podcasts which back then there was only bigger pockets really and

learning about real estate Alright guys we got Avery here in Las Vegas. We're going to talk Airbnb today, right? Yeah, yeah, vacation rentals. I like to differentiate a little bit. Okay, yeah, there's a difference, right? I think so. Yeah, because a lot of people list their stuff on Airbnb,

but you specifically target vacation rentals. Yes, yes. So what we do is vacation rentals in true mature vacation markets. So beach markets, mountain markets, lake markets, things like that, not going into, you know, your grandmother's residential neighborhood and turning everything into party houses.

Yeah, more competitive there too, right? Yeah, yeah. Yeah, Airbnb I heard. Well, there's that whole bus thing, right? Yeah, yeah, there was the whole bus thing. Happy to jump in straight in on that if you want. Yeah, for people that don't know what that is, could you explain that?

Yeah, yeah, so between 2020 and 2022, with interest rates going down to 2%, a lot of people bought real estate of all kinds, primary homes, second homes, investment properties, and short-term rentals were one of them because people heard, oh, 2%, I want a beach house. I've always wanted a beach house. I can make that mortgage payment.

Let me just slap it on Airbnb when I'm not using it and make money. Well, turns out it is actually part hospitality business. So I kind of, I like to call vacation rentals kind of a gateway drug to both owning a business, like being an entrepreneur and also, you know, getting into investing in real estate. Yeah.

And so a lot of people did not treat it like the business that it was. And then there was, I call them FOMO buyers, a lot of FOMO buyers who really wanted to get in. But in every asset class, there were thousands of offers on every single property. So a lot of people bought kind of weird stuff. Like maybe they bought a little too far away

from the attraction so that when the COVID travel boom kind of the tide went out on that, they kind of got caught with their pants down because they're a little too far away from things and didn't really work. So a lot of people jumped in that didn't necessarily need to be there realized, oh, hey, this actually is a little bit of work or hey, I hate dealing with people because you do have to deal with people and then saying, okay, I think I'm going to sell this. This isn't really what I wanna do. But I actually read an article from AirDNA last week that a lot of the markets that they were talking about

that did see saturation, so that saw a huge supply come on in 2021 and 22, have kind of the tides gone out on that too, on that big supply. So like something like 20% came on in a market like Joshua Tree, California in 2022. So ton of supply. So like something like 20% came on in a market like Joshua Tree, California in 2022. So ton of supply. Now that's down to like 6% this past year. So you're losing a lot of that supply,

but there's still that steady tourism. So we focus on markets that have decades worth of tourism. So Smokey Mountains in Tennessee, I live in Destin, Florida. We've only got 10,000 people that live there, but 10 million people come visit a year. We very little hotel presence. They all stay in short-term rent there, but 10 million people come visit a year. Very little hotel presence. They all stay in short-term rentals, vacation rentals they used to be called.

So I kind of like to stick to that. And the local economy is very dependent on that. So you don't really have to worry about being regulated out. That's smart, choosing the cities really wisely. Yeah, we just booked our Sedona trip and we did an Airbnb. Yeah. I feel like that's another good city, right? Have you looked into Sedona?

Yeah, we have an agent in Northern Arizona who covers Scottsdale, Sedona, and that Flagstaff is getting pretty popular too. Oh yeah? Yeah, certain cities, it's almost better to be in an Airbnb than a hotel, honestly. Yeah, and I think that that's something that a lot of people don't realize

that there's a time and place for both things. They try to make it a big, like, we're going to, you're your hotel person or your Airbnb person in their adversarial, but they're really not. So for me, if I'm coming like here to Vegas for a conference or a podcast, I'm staying in a hotel. I'm staying in a nice hotel on the strip that's got room service and all the amenities.

I don't have my kids with me, I'm gonna relax. But if we're gonna go on a ski trip or a beach trip, we're booking a vacation rental. So it's a different time and place. Yeah. So before Airbnb, you were in a bartending, right? Yeah. So I graduated undergrad in 2009.

So no jobs for a soft communication major. Like myself. I was playing in bands, bartending to make ends meet during that. Once the job market swung back around, I went back, got my masters and got what I thought was my dream job doing marketing on the business side of music in Nashville and quickly learned that it wasn't

and kind of ended up in real estate investing, kind of looking for a way to have a little bit more flexibility. Right. And I know you've said on other shows that bartending did more for you than a college degree. Yeah. Especially being in the types of businesses that I'm in. So running the hospitality business of having short-term rentals. And we've got a lot of long-term rentals too. We've got 250 doors across the country. Hockey League and has your back all season long from puck drop to the final shot You're always taken care of with the sportsbook born in Vegas That's a feeling you can only get with bet MGM and no matter your team your favorite skater or your style

There's something every NHL fan is going to love about bet MGM Download the app today and discover why bet MGM is your hockey home for the season Raise your game to the next level this year with bet MGM, a sportsbook worth a celly, and an official sports betting partner of the National Hockey League. BetMGM.com for terms and conditions. Must be 19 years of age or older to wager, Ontario only. Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please

contact Connects Ontario at 1-866-531-2600 to speak to an advisor free of charge. but you're not sure how to find it. The good news is you don't have to go at it alone, you just need Specialized Recruiting Group. You can connect with them at srgpros.com. They're here to guide you and help you find a role that fits, all without costing a dime. They're offering a tailored approach to find your next role at srgpros.com and help you get on the right course. Your local Specialized Recruiting Group team knows which businesses are hiring and can offer you a path to contract and full-time roles. If you don't see the role you are looking for on their website, Specialized Recruiting Group also recruits for confidential roles, so give an office near you a call to learn

more. Take the next step in your career by starting at srgpros.com. But it's still all coming from a place of service. And then we've got the real estate brokerage, which obviously is a service business as well. So I did, I'm definitely a person that thinks college is worth it, but a lot of the soft skills I learned bartending,

dealing with different types of personalities, different moods at different times where people might be yelling at you, but they're not doing it personally, they're having a bad day, and just learning to kind of dissociate from that and just getting a job done. Yeah, I think the right college is worth it.

I got friends that went to super nice colleges, like Ivy Leagues and stuff, and their network is insane. So just from that aspect and the connections, I think it's worth it. But there's a lot that aren't. Yeah, yeah, and I think it just depends on what you want to do. I think there's worth it, but there's a lot that aren't. Yeah, yeah. And it's, I think it just depends on what you want to do. I think there's definitely something to be said for finishing a four year degree

because you've done a hard thing. You were consistent for four years and it shows that you're able to do hard things. You're able to be consistent, but it doesn't always translate over to skills that you're going to use in whatever career you end up. 100%, most of the time they major in something and they're not even doing that.

I wonder what percent that is. It's gotta be high. Yeah, I've got agents who work for me who are engineers. Yeah, you see that all the time though. I was going for marketing, which I felt like they were teaching outdated methods. They were. My MBA is in marketing and they were.

Yeah, because marketing's so ever-changing. Like that's not going to be in a textbook, what we're doing now, like with social media marketing. You know? Yeah, it's not. What were they teaching in your marketing class? So I got my MBA in 2014 through 2016. So not terribly, I guess it was like 10 years ago.

Jesus Christ. So not terribly long ago in terms of, there was social media and social media marketing was a thing, but they didn't, we didn't even touch that. It was, you know, how to position and it was more about advertising, but nothing about social media or building a personal brand or the value of that.

It was all just very textbook, old school marketing. Right, but at least you got a marketing job after. Yeah, for $37,000 a year. Damn, that's not much. No. That doesn't even cover rent. No, no. Yeah, and I mean, we can Damn, that's not much. No. That doesn't even cover rent. No, no. Yeah, and I mean, we can get into that a little bit.

I kind of started looking for, I thought that was my dream job. Like I've been a musician in the past, working on the business side, this is gonna be great. But it turns out there's so many people in Nashville and LA and New York, wherever the music business is, that will do the job for nothing because it's sexy. I personally don't love new country.

I love old country. I'm more of a rock and roller myself, but it just wasn't worth it to me to, and you, it's not just a nine to five, by the way, they expect you to be at the bars and the shows and everything until midnight. And for me, for 37,000 a year, just to say I was in a room with some country artists

who I can't stand anyway, it just didn't feel good. And so I kind of started looking around for a way that I could have some more flexibility for, and actually a place where the amount of work, the reward was commensurate with the amount of work I did, because I am a hard worker. So I'd get in there, finish all my work by like 11 AM. And then I'm just sitting there like, what can I do?

I feel that. I like your business model. Cause you put the work in upfront and maybe some on the backend, but not as much. It's a little passive. I know that word gets thrown around a lot, but once you get the property and you got a team in place, it's kind of.

Yeah. It's like an hour a week for one property. It's nothing. Yeah. Yeah. That's not an hour a week for one property. It's nothing. Yeah, that's not bad at all. Yeah, I don't want to, obviously don't want to say it's passive because you are dealing with people. You're going to have to answer questions here and there, but it's, you know, it beats it in a desk all day. Yeah, I don't think anything's ever 100% passive.

I agree with that. And I think there's a lot of people who've listened to a lot of real estate podcasts over the years who want that. Right, passive income. Yeah, and it's almost to the point where active income has kind of become a dirty word, real estate podcasts over the years who want that. Right, passive income. Passive income, yeah. And it's almost to the point where active income has kind of become a dirty word, but I love my active income.

I like feeling like I earned it, you know? Yeah, so I always want some active income, but these days as we get older, I feel like as passive as it can get is good too. Yeah, yeah, a little bit of everything. Yeah, so are you still stocking up on places or are you kind of just managing your current portfolio? So we are always buying something.

The market has changed. The real estate sales market has changed a lot in the past two years. There's not as much inventory coming on to buy, because people don't want to take a hit. Everybody's been in this big waiting for rates to come down. Yeah, so nobody is really selling and then people aren't really buying because of the rates. So we've slowed down

some, but we've always got, we're always buying multifamily in the Midwest. We're always buying single-family long-terms in the Southeast and we're always buying vacation rentals as they pop up. Typically we'll be in the Smoky Mountains or somewhere in the Panhandle of Florida, but it's just easier now to not branch out into new markets because we've already got our systems built. It's easier to just plug a property in there. So always looking, that's kind of our main investment, like family business,

and then running the short-term shop as well. Yeah, just looking for the right deals. You're patient, which is a good skill. There's a lot of people getting in real estate that want to just scale quick into multiple cities and then collapses once the interest rates go up. Yeah, yeah. And we saw some of that even with our clients in 2022,

people who, again, bought the, I got to build this huge portfolio really quickly and you could then. I mean, I did it. I'm one of those people, but people were taking like $500,000 HELOCs and not factoring that into the property they were buying. So they would take a $500,000 HELOC on their primary home, go buy a property, and then they'd come to us later and

say, hey I'm not making money. Can you look at my stuff? And it's like, well you have an entire other mortgage. $500,000 is no joke of a payment and you didn't factor that into what the expenses are gonna be on the property. So of course you're not making money. You've got this huge HELOC. So we did see people over leverage in that way. The majority of people didn't, but I think that, you know, you gotta be careful trying to go too fast.

Know your numbers, right? Right. Super important. No matter what level of business you're at. Yeah. Did you have a real estate mentor when you were starting out? No, so we started buying vacation rentals in 2015. So back then there weren't a thousand people

on Instagram doing it. There weren't courses, there wasn't even air DNA like the main data source of what the income will be on Airbnb properties started like the year after or the same year that we started. So we kind of came to it from a place of necessity. So we kind of got started investing in real estate because we'd just gotten married.

We'd saved up like $10,000 and having just gotten married and planning to have kids in the near future, I was super into personal finance. I was reading all the Dave Ramsey books because we don't know anything. You think, oh yeah, that's, you know, the Barnes and Noble guy, we'll read that. And we'd saved up like $10,000

and we didn't know what to do with it. We wanted to be smart with it. So we went to a financial planner that was in the same building as my corporate job. And she told us very politely that we did not have enough money for her to deal with. Yeah. So, and thank God she did,

or else all of our money would be sitting in an account and we wouldn't have been able to do what we'd done. But so she told us no, and we were like, well, there's gotta be something we can do with this. This can't be totally worthless. And when we moved a few years prior from New York City to Nashville, our real estate agent had been telling us

about East Nashville, which was really, really fast appreciating. And we were like, eh, I don't really care about that. We're moving from Brooklyn to Tennessee. We want to be out in the country. We are done with neighbors. And so we bought out in the country, but we thought back and said, well,

what if we bought one of those houses and we put a tenant in it and they pay the mortgage and the utilities are in their own name. And in the future, if it's appreciates really well, then we can just sell that house and pay for our kids' college. Right. Very stupid reason to invest.

We did no research, but we went and bought a house. Luckily, it was a really good deal and the mortgage on it was $647 a month and we were able to rent it for $15.50 a month. So really great for a long-term rental to make $900. Well, coincidentally, after all the deductions and everything on my corporate dream job, I was making about $1,000 a month.

And then this house was making the same amount of money as me while I slept. So my husband and I looked at each other and we were like, we need more of these. How do we do that? And so only then did we start researching and listening to podcasts, which back then there was only bigger pockets really

and learning about real estate investing. So we saved up a little bit of money again, and we said, what can we buy that's gonna make us the most amount of money, the fastest so we can buy more? And we landed on short-term rentals. We knew we didn't wanna do it in Nashville because Nashville is very anti-short-term rental

even back then. Oh, really? Yeah, the mayor of Nashville is very, he was just a city council member back then, but he's not down with it. Vegas is strict too, I heard. Yeah, yeah it is. So, but we'd just been on vacation in the Smoky Mountains,

which is about four hours east of Nashville. We stayed in a cabin, all of our friends stayed in cabins and we're like, oh, well, this is just what people do. We can own one of these. And so we looked into it, just bought one and we thought we'd have to put it with a property manager. Airbnb was just kind of becoming mainstream and the property managers wanted 40% of your gross.

Damn. Yes, they had a complete monopoly on, and vacation rentals have been around for decades and decades and there was no Airbnb. So they had a total monopoly on being able to make money on those types of properties. So we said, we can't do that. We need that money to go buy more properties.

So we just figured out how to manage it remotely with just a cleaner and a handyman from Nashville. And scaled one to five over the course of about 18 months. And over the past 10 years, up to 250 doors, different asset classes, but just kept rolling every single dollar we made into the next property. That's incredible. So did you raise outside capital or all self-funded?

All self-funded. So back to active income. So I started the short-term shop, which is my real estate team underneath the XP. For people who don't know what a team is, it's kind of like a brokerage, but under another brokerage. I started having, I got my real estate license because my husband was embarrassing me in deals and I kept apologizing to agents like, oh, I'm sorry, he's being rude. He's not mean,

he's just a New Yorker. And so anyway, I was like, well, I can make a little money doing our deals. I can do it with a little more speed, not having to drag somebody around asking to show properties. So I got my license after our second or third. And over the next six months, friends started saying, oh, you're making how much on that cabin in the Smokies? Teach me how to do that, help me buy one. So it just, this business model just started

of helping people find one and teaching them how to run it. And then it became friends of friends. And then all of a sudden, I was the top producing agent in the Smokies. And then we had people come into us saying, hey, we bought with you in the Smokies, but now I want to buy one down in Destin, Florida or Panama City Beach.

Is there a you down there that you could send me to? And I was like, let me put one down there. And so we grew the brokerage to 20 markets. So 20 mature vacation markets. Like we're never going to open up in like a Nashville or in Austin. It's all vacation areas. And we've been the top producing sales team at EXP

in the world for the past three years. Holy crap, and EXP is huge. Yeah. Damn, well done. Thank you, thank you. Yeah, cause isn't EXP like the biggest? I think it is the biggest. It does have the most agents now.

Wow. And you're the top producing? I was the three of the last four years. That's insane. I was passed this year by a guy who bought somebody else's team. Well, I don't know if I count that cause he bought it, but well done, you know.

Thank you. And it's a male dominated space I'd assume too, right? Real estate agents in general are kind of female dominated, but once you get to the top, it's the top 10 at eXp are all men. Oh, wow. Well done. That's incredible. So do you see this still scaling to other markets, like the possibility of vacation

rentals, or do you think it's kind of saturated? It's a really good question. So I think that as metro markets, which a lot of short-term rental investors invest in metro type markets, that's not my business model, that makes me uncomfortable. But I think as places like Nashville and Austin, and I mean, Houston and Dallas

banned short-term rentals altogether. I think as big metro and suburban markets like that start to ban things and just tighten up regulations, I think it's just gonna further commodify true vacation rental properties and vacation markets as one of, it'll never be an across the board, you can only short-term rent in vacation markets, but I think they become more valuable

as other types of cities don't really want it there. Right, why are so many cities banning short-term rentals, you think? Oh, I totally get it. So a combination of things, hotel presence and primary homeowners. cities don't really want it there. Right. Why are so many cities banning short-term rentals, you think? Oh, I totally get it. So a combination of things, hotel presence and primary homeowners. So we'll take the place that I live, for example.

So Destin, again, 10,000 people live there, 10 million people come there. It's completely dependent on tourism. That is the only industry in Destin. So even if you don't own a short-term rental, you don't mind the tourists staying in the short-term rental across the street from you because we don't exist without them.

But if you get like in Nashville where there's tons of industry outside of that and people are coming in buying properties in what used to be like a quiet street where you're trying to raise your kids, I get that. Like I choose to live in a vacation market, but I still don't really want, you know, I'm raising small kids.

I don't really want people in and out next door that I don't know. So I get it. And I live in the short-term rent-a-li-est market you can live in. So in bigger cities like that, where it's not dependent on tourism, why would any person just trying to raise their kids

when their economy doesn't depend on it, their lifeblood doesn't depend on it? Why would they want that there? I get that. So that's why we stick to that. Got it, so the residents are complaining to the cities. Residents and then also hotels lobbying against it because they lose a little business to it.

Yeah, it's like the taxi lobbying against Uber when it first came out. Exactly. Yeah, that makes sense. Yeah, it makes sense though. Like if I had a family, I wouldn't want some guy throwing a party next door that doesn't live there.

Yeah, yeah, exactly. I had a family, I wouldn't want some guy throwing a party next door that doesn't live there. Yeah, yeah, exactly. I mean, it happened, Nashville's the bachelorette party capital of the world. And you're trying to raise your kids and there's like penis balloons next door. You gotta have conversations that you aren't ready to have yet. How are you screening tenants?

Cause you probably got to process at this point, right? Yeah, yeah. So it just depends. So we have everything from studio properties all the way to big five bedroom properties. Typically the smaller ones you don't really worry about too much. The ones that are bigger, we have very strict limits

on how many people that can sleep. So we've got a 4,000 square foot, four bedroom. We could slam 20 people in there if we want to, but we don't, you're allowed to sleep 12. And we make it very clear, Hey, if you're caught sneaking extra people in, it's going to be X amount. We do have a ring doorbell camera or floodlight camera on the front. Nothing creepy, just, you know, right out front.

So you can see how many people are coming in and we just make it very clear in our house rules and then our, we have a rental agreement separate from Airbnb and VRBO that we have guests sign that say, okay, I'm signing this that says these are the rules. And if I break them, here's what I'm liable for. And really, if you just ask them questions, if they're coming to do something that you don't want them to do, they'll tell on themselves. Like we had a guy in the Smokies who was like,

hey, it's a one bedroom cabin. He's like, we've got four dually trucks. We're coming for the truck show and we can't fit them in the, can we fit them in the driveway? And we're like, why do you need, it's a one bedroom. How many people? And you know, then they tell themselves,

and you don't say, oh, I'm not gonna rent my place to you. You say, oh, I think you'll be more comfortable somewhere else. Your trucks probably aren't gonna fit. And you make it sound like they'll be more comfortable elsewhere and not, we don't want to rent to you. Makes sense. Yeah, so you just ask a few questions. probably aren't gonna fit and you make it sound like they'll be more comfortable elsewhere and not, we don't want to rent to you. Makes sense.

Yeah, so you just ask a few questions. Typically, if people realize you're the type to ask questions, they're not gonna book your place. Yeah, yeah, they don't want someone watching them, right? Right. Yeah. Or they don't want to get in trouble if they break stuff, if they're planning on throwing a party and you're like,

hey, just so you know, here's the thing that you have to sign that says you're not throwing a party. Right you're like, hey, just so you know, here's the thing that you have to sign that says you're not throwing a party. But are they pretty good with like refunding you if something breaks Airbnb and Virpo? I have never filed anything with them. I've never had anybody tear my properties up. Wow.

The one thing that's happened and it was an accident, like it's something I would have done cause I don't know how to do a charcoal grill either. They put a charcoal grill over some pine straw and some of the charcoal fell out, caught the pine straw on fire, caught my fence on fire, but it really wasn't a big deal. The guests didn't even know they did it.

They checked out and we got a call from the fire department and they said, hey, we're at your house. But you know, we just do the fence, no big deal. So I haven't had enough significant damage ever to have to go through that. Well done. I think that's a testament to your management abilities, honestly, because a lot of owners report some incident.

Yeah. Especially at your level. Yeah. I don't want to say that it's typically the owner's fault if you book something like that, but it's never, there's ways to kind of screen it. And it's just by asking questions. It doesn't really matter how they answer the questions,

but if you ask, then they're going to be like, oh, you know what, we're trying to throw a party. Let's go find somebody who's not asking questions. Yeah. Do you have pets allowed at your properties? I don't. And you know, I really wanted to be at first because I'm a big rescue dog head.

I would come home every day with a new rescue dog if my husband would not leave me. Same, same for sure. And so we started with that first, but then what I realized is not everybody, it takes as good of care of their animals as we do. And also all it takes is one big white German shepherd for your cleaner to hate you,

because they have to like unweave the hair out of every single thing. And what I have noticed because I do travel with our chihuahua is that sometimes when I book pet friendly properties for us, when you go in, it smells like somebody else's dogs. So for us, it just wasn't worth jeopardizing the other bookings for that.

I'm totally pro doing that if you can make it work. For us, we kind of just got upstream of the problem by just not allowing them. It makes sense though, cause you got to pay more for cleaning too probably. Yeah, yeah. And like I said, you don't want your, your cleaner is the last person in the world

you want mad at you. Right, cause they got to clean all your properties. Yes, you want your cleaner happy. Yeah, if that makes sense. I know you already have a book and you're dropping a new one soon, right? Yes, yes. So first one called short-term rental, long-term wealth

came out on bigger pockets in 2021, I believe. That one's more of a primer on how to choose a market, how to choose a property and some like light managing. This one is called Smarter Short-Term Rentals and it's more about the systems and processes to put in place to out-host your competition. Yeah, is this capital intensive for people? Not as much as you would think.

So there's a few things about short-term rentals that are cool that you can't do with other asset classes. So one of them is tax related, one of them is down payment related. And I'm telling you that's your, remind me to talk about the tax one. Okay. Down payment.

There's something called a vacation home loan or a second home loan where, you know, most properties you have to put 20% down. This type of loan, you only have to put down 10%. So there's some stipulations to that. So definitely ask your loan officer, but you have to stay there for 14 days out of the year yourself because it's your vacation home.

You're getting a vacation home loan. But when you're not using it, you're a hundred percent allowed to run it out on Airbnb and Verbo. You're not allowed to put it with a professional property manager because then it wouldn't be your vacation home. You're not allowed to put it with a professional property manager because then it wouldn't be your vacation home. You wouldn't have control of it,

but pretty, I would say a lot of people use that type. If you are somebody who maybe has a good size down payment, but you don't show a lot of income, maybe you don't have a W-2, maybe you're 1099, maybe you're a professional real estate investor and you don't show income because that's why we invest in real estate. There's something called a DSCR loan, works very similar to a commercial loan,

but it's a portfolio product and they approve you for the loan based on what the property should be able to make rather than what you make and what you show on paper. The vacation home loan is conventional so you are limited by what your debt to income ratio is. And then the last cool thing about short-term rentals that you can't do with anything else is you can offset if you're a high W-2 earner. So like Q3 and Q4 every year, we get a ton

of high income clients who wanna employ the strategy. It's called a short-term rental loophole. And typically you can only do what's called a cost segregation analysis, which guys, by the way, I'm not a CPA, obviously, so talk to your CPA about this is not tax advice. But what a cost segregation analysis does is it allows you to take accelerated depreciation on the property, which basically means that instead of extending that out to taking it annually for, I think it's 39 and a half years or something, you can scoot all that depreciation to the front.

So what that means basically is a 20-ish percent tax deduction. So if you bought a $1 million property, you can, if you meet a few requirements, deduct like 200,000. That was when we were at 100% bonus depreciation. The Biden administration was kind of sunsetting that. So we're at 60% this year,

but it did go back through the house and the Senate last year. And I would expect it to go back to 100% this year. Nice. So we'll see. I hope so. Yeah. Cause that applied to cars too, right? That I don't know.

Cause I know I bought my G wagon last year or two years ago and it was 80%. Oh yeah, it might be. And then I think it dropped to 60, like you're saying. Yeah, 60-ish. Last year. Yeah, so hopefully it will go back through the house and send it again this year and we'll get it back.

But the cool thing about it is to be able to get that, usually outside of short-term rentals, you have to have what's called real estate professional status, which means you have to be able to prove to the IRS that you spend more hours working in your real estate business than anything else. Well, if you're a doctor, you can't get that. So what the short-term rental loophole does

is you don't have to have real estate professional status to do this strategy. You just have to meet a few requirements, which there's three of them. I'm not gonna go into detail on each of them, ask your CPA, but the basic premise of it is you have to spend more hours working on it just than anyone else who's involved with it. So more than your cleaner, more than your handyman,

and you have to self-manage it. So typically what a lot of high-income earners will do, they'll wait till the end of the year because setup is the most intensive part of a short-term rental. So they'll very easily have more hours than anybody else and they'll self-manage it for a year or so. And if they don't like it,

they'll put it with a property manager, but it works just like, you know, a regular cost seg on an apartment building or whatever, but you're able to do it without getting that real estate professional status. Yeah, this seems like a good way to, for high net worth people to kind of park some money, get some tax benefits and some income

Yes, absolutely and we get a wave of them the end of the year every year. I bet yeah Do you do you worry about something like oh wait happening again ever to real estate? Oh, it's a great question So we actually are in a very oh eight like situation in the real estate sales market but the difference is The prices didn't go down. So fewer homes were sold in both 2023 and 2024 than the last 65 years. So worse, the real estate market was worse last year

than in 2008, but the difference is everybody expected a price crash, but that just didn't happen. I kept hearing that every single day on YouTube or Twitter, like, yeah, prices are gonna tank and it never happened. No, no. I personally, cause I was buying a house, I waited two years because I thought it would crash

a little bit and it never crashed. So I just bought anyways and it still hasn't crashed. Yeah, I don't, I'm not an economist, but I don't see it crashing, especially as rates tick down. There's only gonna be more buyers jumping in. So if you wanna buy something, whether it's a short-term rental, a primary home, whatever,

now's a really great time to buy because nobody's buying, you'll be able to get a better deal because you don't have any competition. I just bought a place in New Orleans, I got almost a 20% discount. Because I had been on the market for a long time. There's nothing wrong with it, the pictures weren't great, which by the way, that's one of my favorite ways

to get deals, is bad pictures. Cause a lot of times if you go look at something, it looks so much better. Now sometimes it doesn't, but a lot of agents are lazy. They're outdated photos. Or they just do it with their phone and it doesn't look good.

And so by there not being a lot of competition, things sitting on the market for longer sellers can get, not always some of them don't come down here to reality with the rest of us, but they on the market for longer. Sellers can get, not always, some of them don't come down here to reality with the rest of us, but they can get fatigued and they're like, fine, just take it. I'll just take the lower price. So it's a great time to get a deal.

And I also feel like a lot of people are going to leave Cali and move to other states, especially after the fires. So the market might pick up from that too, right? Yeah, yeah. I think so. And especially in a lot of our markets are in no income tax States. So Tennessee, Florida, Yeah, yeah. I think so. And especially in a lot of our markets are in no income tax States. So Tennessee, Florida, Texas,

which California obviously has a lot of. Yeah, they love those. They love Vegas too. Yeah. You know, man, I don't know if you know the neighborhoods here, but like Summerlin has like no inventory right now. I believe that.

Like literally none. Like it's super hard to find anything. I don't know what it's like by you, but that's what I'm seeing. Yeah. So ours, our market is different because it is a lot of second homes. So things sit on the market a little bit longer

because you don't have a lot of need to buyers. So people aren't really buying a lot of houses to live in. So ours is a little weird. We have stuff sitting on the market for a long time. Oh God, that makes sense. You also got a top two on our podcast, right? Yes, it's called the short term show and it's on as you expect, short term rental investing.

Do you have guests on or just you? Yeah, I have guests. Most of the time I have guests every now and then. If there's like a big piece of news to report, then I'll do it without a guest, but we have guests. That's cool. Yeah, there's some good real estate shows. I used to watch Ramsey a lot, but now I, I don't know,

the debt-free stuff, I want to get your opinion on that. I think that I was a big Dave Ramsey fan when I first started paying attention to finances. And I think that his advice is good for people who are never going to move beyond, I just don't want to have debt. I just want to live my life and work my job, and that's it. But I think for people who want to be entrepreneurs,

that it's not good advice. People who really want growth, I think that the all debt is bad debt is bad advice. I feel that. Yeah, I think to a certain level, it's like kind of detrimental advice. Like if you want to make tens of millions, that's going to be hard to do it without debt.

Yeah, 100%. Like I haven't seen that in anyone. No, me either. And you would grow so slow. Like if I had to pay cash for every single house or apartment building that I own. It would take you 20 years to make your money back. You had to put down a hundred percent on everything.

Yeah, it just wouldn't make sense in any capacity. Absolutely. And it's not you that's paying the debt down. It's your tenants or your guests. Absolutely. Anything else you want to close off with here? Do you have a course or anything? Oh yeah, good call.

Yeah, so the way the short-term shop works is we have offices in 20 markets. If you wanna spend 250,000, go affordable. We've got markets for that. If you wanna spend 25 million right out of the gate, we've never had anybody do that, nor do I recommend it, but we've got a market for that too. So we try to have a diverse range of markets

for our clients. We've got beach markets, mountain markets. And if you buy with a short-term shop agent, we will teach you how to manage it for free. But in the past year or two, we've ran into a lot of people who are buying, want us to help them, but they're buying properties and markets. We don't service like California. So we did recently start a course called STS plus that's a mentorship.

So it's a little more extensive than what we, what we do in our management Monday for our real estate clients. So we try to keep it super affordable. So if you wanna do ours and somebody else's, you don't have to choose. You can do everybody. So it's called STS Plus, like short-term shop plus, and you can find it at stsplus.com.

Cool, we'll link it below. We'll link your podcasts, your books, and everything else. Thanks for coming on. Yeah, thanks so much for having me. Absolutely, guys. Check out our links. See you next time Bet MGM is an official sports betting partner of the National Hockey League and has your back all season long from puck drop to the final Shot you're always taken care of with a sportsbook born in Vegas

That's a feeling you can only get with Bet MGM and no matter your team, your favorite skater or your style, there's something every NHL fan is going to love about Bet MGM. Download the app today and discover why Bet MGM is your hockey home for the season. Raise your game to the next level this year with Bet MGM, a sportsbook worth a celly and an official sports betting partner of the National Hockey League. BetMGM.com for terms and conditions. Must be 19 years of age or older to wager, Ontario only. Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact CONNECT ONTARIO at 1-866-531-2600 to speak to an advisor free of charge.

BetMGM operates pursuant to an operating agreement with iGaming Ontario.