The Personal Finance Podcast - How to Build Wealth With Airbnb Short Term Rentals with Lauren Keen Aumond

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Starting point is 00:01:05 is easy about how to invest in vacation rentals. What's up, everybody, and welcome to the personal finance podcast. I'm your host, Andrew, founder of MasterMoney.com. And today on the Personal Finance Podcast, we are going to be talking to Lauren from Adalting is easy. If you have any questions, hit me up on Instagram at MasterMoney. Co and follow us on Spotify, Apple Podcasts, or whatever podcast player you love listening to this podcast to. And if you want to have out the show, leave a five-star rating and review on Apple Podcasts or

Starting point is 00:01:59 Spotify. And don't forget to check us out on YouTube as well at Master Money on YouTube. Now, today we are going to be talking to Lauren about Airbnbs and buying short-term rental properties. And this is a topic that I've wanted to talk about for a long time on this podcast. and Lauren has been doing this for a few years now. And she's going to give us a ton of insights and she's got a ton of free tools and stuff for you guys to be able to download as well. But we're going to talk about how she finances these properties,

Starting point is 00:02:25 how she goes about finding these properties, how she manages these properties, and how she actually self-manages her portfolio as well. And we're going to talk about how Lauren is actually financially independent from buying these short-term rentals. So this is an incredible episode. I can't wait to share this with you guys. Without further ado, let's introduce Lauren.

Starting point is 00:02:44 to the Personal Finance Podcast. So today we have Lauren from the Adalting is Easy podcast. Lauren, welcome to the Personal Finance Podcast. Thanks for having me. Glad to be here. So we are so excited to have you because we've been wanting to talk about this topic for a very long time. And this is something that I really want to dive into because it's something I'm very interested in. So we're going to look at short-term rentals and buying Airbnb properties today. So you have a bunch of long-term rentals and you also have vacation rentals.

Starting point is 00:03:13 and you've started to kind of convert some of those long-term rentals into vacation rentals. Why did you decide to do that? So we started in short-term rentals sort of by accident. We were looking to house hack, which means buy a property where you can live in part of it and kind of rent other parts of it out. A very obvious example of this is buy a duplex, right? Live at one side rent the other. We ended up buying a commercial bed and breakfast with two ADUs, which are accessory dwelling units, in the back. And so we realized really quickly that the cash flow was much better with those. And we did that

Starting point is 00:03:51 because we bought in a tourist community. And we didn't have washers and dryers in these little things. And so we thought, well, if people come and stay for just a couple days, they don't need that. They won't care that it's small, but it's walkable to downtown and all of this. So we quickly realized that the cash flow was much better. So as we were expanding and buying other properties, we ended up going half and half with our other ones, half long term, half short term. I love that. So you started buying, I mean, you bought this first bed and breakfast and you realized the cash flow was much higher. So is that something where in the long run, you're thinking of converting most of your properties? Are you going to keep them all as how they are now? Are you going to go more

Starting point is 00:04:31 short term? Or are you going to go more long term in the long run, do you think? I think we will probably expand more into short term. A lot of the short term mental business the learning curve seems to happen for the most part up front. And then once you have your systems and processes in place kind of on the back end, then you just need the people in each area, right? And so, for example, we have that bed and breakfast that I told you about. We have a duplex that's half short term, half long term. So one short term, one long term.

Starting point is 00:05:03 So I already have a cleaner who knows the property. I already have a cleaner that knows how to go there. We already have handy people or whoever we need for this. there, right? So if I take that one side and I take it from long term to short term, no harm, no foul. So that's an example of how it could be really easy to make that switch. Absolutely. So you've got the systems in place up front for some of those rentals. You kind of got the learning curve taken care of there. So if someone's listening to this podcast and they want to get into vacation rentals, so this is something I've seen too where the cash flow is just much

Starting point is 00:05:33 higher on vacation rentals, specifically when you're in this market right now where it's tough to find good deals. If someone wanted to start getting a lot, you know, getting into vacation rentals, would you start looking in your local market or would you start to look maybe in some different areas that have higher capacities for vacation rentals? I would suggest looking in your local markets if you can. There's a lot of caveats to this, of course. One is, is there any draw? Is there any reason for people to stay there? Right. And there's different kinds of short-term rental markets. You could have like big cities where people travel. Maybe it's not just for vacation, right? But these big cities, tourism maybe isn't their primary.

Starting point is 00:06:10 draw. Maybe you live in a big city. That'd be a great place, right, if regulations allow it. Or there's regional tourist areas where you may need to drive versus fly. There's also national tourist areas, right? Like a Nashville where people fly in for these reasons, right? There are other areas, some rural areas. They still get travelers, but I suggest your local area, if possible. Maybe the cash flow won't be as good as like a Destin or a Nashville if you can figure out how to make that work legally and things like that. But it will make you learn the processes, the systems. You can see if you like it. Obviously, it's real estate. Short term rentals are real estate, but there's also hospitality involved. And you may find that you hate it. And I think you would rather have been

Starting point is 00:06:59 nearby the property the whole time. I would even suggest like a bedroom in your house. I think if you start that way, get comfortable with how Airbnb and the RBO work and the syncing of the calendars and the messaging and the coordinating cleaners, I would recommend all of that. And then if you're somewhat nearby, if there's an oh crap moment, you can be there to take care of it. So I would suggest just kind of dipping your toe in like we did, where it was in our backyard before you expand, if you can, if the numbers work. I would completely agree with that as well, especially if you want to have the possibility, if it's your first one and you're new to real estate investing and you want to have that exit strategy, I just think having it local. And if you need to sell that property,

Starting point is 00:07:35 it's much easier to sell it if it's local than it is if you're going long distance. So, So if someone wants to start looking for properties, where do you look for properties? Do you look on the MLS? Do you look off market? What is your favorite way to find these deals? We have found our deals on the MLS, but we have acted quickly with the exception of our first one. So that bed and breakfast that I mentioned, it was on the MLS, but it was on the income section of the MLS with no address. And I think a lot of people straight up just didn't see it.

Starting point is 00:08:05 I mean, the owner was 100% sure that she was going to be selling it. as a bed and breakfast, that somebody was going to buy it and run it exactly how she had been. She didn't want her guests to know that it was for sale. She didn't have it on the regular unless it wasn't on Zillow, like none of that. So we found it and we saw it. And we were like, hey, this would work for what we want to do. My husband and I both work from home. We both still have full-time jobs.

Starting point is 00:08:28 We wanted a spot where somebody could sleep like one of our guests, like, you know, not like a guest guest, but like my sister or his dad. And then two offices and, of course, the master. And so we saw that. And we knew we wanted to have rental capability and we saw the ADUs. So we found it. That one had sat on the MLS for about six months. This is mind boggling to people right now, right? But it was February 2020 when we started negotiating and it had sat since August,

Starting point is 00:08:53 you know, with some price reductions and things like that. So that one we acted kind of slowly, but I think we saw value and it needed a ton of work. It needed like $150,000 worth of work too. So we saw value, me specifically a little more than my husband, but we saw value where I think other people didn't. or they may not have even seen it. Our other two properties, the duplex, we did that renovation, we did a cash out refi, we bought a duplex on the water. We wanted some waterfront exposure.

Starting point is 00:09:20 So we had been kind of looking up and down the Tampa Bay Area, which is where we live, and found in Pascoe County, which is a little north, this community that had single families, a canal community. But the first canal was small multifamilies. So there was this big duplex. and it was listed for 395,000. So we're talking like 1,600,600 square foot units on the water, less than $200,000 each.

Starting point is 00:09:44 And I was like, we got to do it. I know it's kind of like this unheard of area. So we bought that, but we found that on the MLS. And again, it was somewhat local. It was about 20, 25 minutes north of that bed and breakfast where we're living. And we acted pretty quickly, like within a couple of days. We made an offer before we saw it. I have no problem doing that.

Starting point is 00:10:05 And then we went and saw it. They said if we liked it still that they would sign the offer. I think they countered. I think we offered 380. They counted at 385, something like that. So anyways, so that one was on the MLS, but we acted within a couple of days.

Starting point is 00:10:17 After we bought that one, we were still kind of looking at Zillow up and down the coast, but we were like expanding, right? Because like you said, it's harder and harder to find deals in the Tampa Bay Area is not a secret anymore. So we were looking up, still kind of looking along the coast. And we found this where I'm sitting right now,

Starting point is 00:10:34 a six-unit apartment building, about two and a half hours north of where we live, but it's in the same county as my uncle and my grandma. And my uncle is a handyman by trade. So that worked out really well. So, but that was on the MLS as well, but we found, again, we acted within the first week now. We were going to do that deal with my parents. We couldn't come to a numbers agreement with them. So it fell out of contract. But we ended up buying it six months later by doing a 1031 exchange of a different duplex that we owned than that waterfront that I mentioned. So we have in total 12 doors, if you count our camper, which is on Airbnb, with full water and sewer hookups in our driveway. And eight of them are now short-term rentals

Starting point is 00:11:16 because we do actually short-term rent our house and move when it's rented. So we have eight listings and then four long-term rentals right now and amongst the three properties and they've all been found on the MLS. That's incredible. And there's one thing I want people to note here that Lauren did. And it's when she bought the first property, these are like the best deals that are on the MLS is when you can find a property that has potential, but you have to find the potential that nobody else can see. Those are some of the best real estate deals out there that you can find. And what she did was she put value into that property. So she renovated the property for $150,000 and put value into that property and then refinance the property. So she used one set of capital

Starting point is 00:11:54 and was able to pull the cash back out, which did you utilize like the burr method essentially? Yeah, essentially. We didn't get everything back out. I mean, a total burr, home run would be we put 150 and we get 150 out or, you know, plus our down payment. We didn't. We did our down payment, which was like 60 grand, put 150 and got 100 cash back out. But that was enough to put 25% down on that waterfront duplex that I mentioned. And that's the incredible part about that strategy. So she was able to buy another property by forcing that appreciation into that first property. And then she was able to buy that second property. So that's a really cool strategy that you can utilize specifically with the financing. You utilize one set of capital.

Starting point is 00:12:31 And if you do it the right way, you're able to buy infinite number of properties if you can do it that way. So that is something that's really cool that I want you guys to kind of take note on that because it's a really great strategy. And one of my favorite strategies, especially if you're investing in real estate. Now, one big thing that I always talk about when we're talking about real estate in this podcast, Lauren, is that you make all of your money when you buy the property. So running the numbers correctly is one of the most important skills that you can have as a real estate investor. And we always tell people, once you get started in real estate investing, you've got to practice running the numbers, do two, three, four, four, properties a day to kind of get the hang of it and figure out how to run the numbers on those properties. So how do you run the numbers on these vacation rentals? Yeah, I get asked that question a lot.

Starting point is 00:13:10 Mostly on Twitter, I'm kind of like the most active on Twitter. And because of getting asked this question so much, I actually created like a couple of guides, one for long-term rentals and one for short-term rentals. So anyways, maybe we'll put that in the show notes so that people can download those. And I use an Excel sheet. And the Excel sheet is, it goes along with the guides. So there's a PDF and an Excel sheet. And that Excel sheet is basically what I use. And the first thing I'm going to do when I'm analyzing a short-term rental, and this is a little controversial, I make sure it breaks even as a long-term rental first,

Starting point is 00:13:42 at least breaks even. And by break-even, I don't mean can pay the mortgage payments. I mean after you account for vacancy, expenses, cap-x, everything, you at least break even. And that's because maybe I'm going to have a lifestyle change. Maybe I'm going to like, I just started any job like a month ago. Maybe they're going to, like, promote me to VP of sales. I'm going to be killing it. And I'm not going to want to manage this stuff myself, but I also don't want to get a property manager. Maybe I want to switch all my short-term metals back to long-term reasons for some lifestyle reason. Or maybe regulations change. Here in Florida, in 2011, we kind of banned bans on short-term rent. So if there wasn't regulation in place already by 2011, you're technically not supposed to be able to put it in place now. But who knows. So I want to make sure that I can long-term rent and still at least. break-even. I check for revenue then. For short-term rental revenue, I'm going to check AirDNA and Price Labs. Price Labs is a pricing software where kind of like hotels have where high demand

Starting point is 00:14:43 weekends or weeks are going to be higher priced or weekends or higher price than weekdays. Price Labs is a pricing software, but they also have dashboards and analysis tools that you could purchase for relatively like $10 or something. And so I would use AirDNA and I would use Price labs, and that will tell you about what your revenue will be. And I would use both, and I would use numbers from Airbnb and VRBO and kind of pick some numbers somewhere in the middle when I'm assuming my revenue. And that revenue is going to include some vacancy, of course, right? Then you would have your operating expenses, and these are going to be much different than they are for long-term rentals, right? So something that I think maybe people don't know is when you're looking at revenue for

Starting point is 00:15:25 short-term rentals, you have cleaning to take out of it. That's included in your revenue, even though it's kind of a pass-through to your cleaner. You have cleaning. You have supplies. This is stuff that you don't have for long-term rentals, right? Linen's, right? Decorations. All of those kinds of things, toilet paper goes on and on, right? So you're going to have supplies that you're going to be replenishing. You would have property management as one of your expenses. I like to run the numbers as if I'm managing and as if I'm not. You have property taxes, insurance, That's another thing that's going to probably be a little higher. Repairs and maintenance, CAP-X.

Starting point is 00:16:00 I assume a little higher for those. I assume 7% of revenue for those for both repairs and maintenance and cap-ax. And for a long-term rental, I'd probably only assume 5%. Because you're going to do a little more to the short-term rentals. You also have utilities. That can be a pretty big killer. I would check with the prior owner or make some assumptions about your utilities are going to be. You also have lawn care.

Starting point is 00:16:22 And the lawn care might be more expensive as well. because you may have a nicer lawn or you may take better care of it because of the short-term rental vacation rental guests that you're going to have. It's also pest control and then licenses as well. I do go through the state of Florida to get licenses. It's not required to list on Airbnb or VRBO, but we went ahead and did that. So you have your revenue, then you have your expenses. And I'll stop there, Andrew, see if you have any questions before I talk a little bit more about numbers. One of my favorite things that you said there was you run it as a rental property because you always have to have that exit plan that if this doesn't work out or say there's a recession or

Starting point is 00:16:59 something happens and you don't have as many bookings that you did before, you can at least rent the property out, break even, and make sure you're still maintaining that property and you're staying in business. So I love that part of it. And we'll link up to all of Lawrence, her calculator and all that stuff down below and everything that she talked about there. But yes, I think some of this stuff that you don't think about is some of the supplies and some of these added things that are within an Airbnb. So what are some of the other additives that you can think of that may be in a vacation rental that are not in a long-term rental? Yeah, the primary thing is the supplies. And I think a lot of people don't think about the insurance as being more like our, we have, especially on the six unit here, we have loss of rent.

Starting point is 00:17:41 And we have that for like a year or something. That's like a thousand dollars a year to carry loss of rent. But if a hurricane comes through here, I need to be able to pay still my mortgage, right? So the utilities will go away in that scenario. So I have to pay for that. And there's things like that. And that's more because we have more rent, more revenue that we're taking in. So it's more.

Starting point is 00:18:01 There's also more liability, different liability, umbrella insurance, things like that. So the insurance is higher. The supplies, the licenses, like I said, I think I pretty much covered everything. The cleaning, of course, and the lawn care. Like if we are going to have long-term rentals, we're going to keep just a run-of-the-mill lawn. But at our vacation rentals, we've got like lush, tropical, beautiful plants and flowers and we water the heck out of everything. And so our utilities are high and our landscapers, we pay them a good amount of money.

Starting point is 00:18:33 So those are some of the things that are going to be much higher than they are. And that's also, if you're using property management, it's going to be higher as well. Property management for long-term rentals, like 10%. For short-term rentals, it's anywhere from like 20 to 30 percent I've even seen. I've seen that too. And it's just a massive cut of your profits when it comes. down to it. But it is a passive way to kind of manage those rentals if you wanted to do it that way. So you have your revenue and then you have your expenses. Is there anything else that you

Starting point is 00:18:58 factor in before you factor in that cash flow? So that gives us our NOI. Obviously, you're still going to want to calculate your cap rate. This is like what you're going to hear when you're analyzing a long-term rental and your cap rate is basically your NOI divided by your price. A normal cap rate in like Pinellas County, for example, where I live right now, is like maybe be 5%. I remember if you read one of the bigger pockets, Brandon Turner books, he said he looks for like 12 caps, right, from back in the day. For a short-term rental, they're going to be about, that cap rate's going to be about 15%. You can also take your net operating income again. That's your revenue minus those expenses that we talked about. Then you subtract your mortgage payments and that's how

Starting point is 00:19:38 you get your cash flow. Our goal is to overall from our portfolio have real estate pay or bills and then have our stocks for anything above and beyond that when we're in retirement, vacations, cars, things like that. With only these three properties in the mix that we have, we are able to pay all of our bills with about 25,000 more after that. We may upgrade our lifestyle. We may move out into our own single family home at some point. So technically, I think we're FI, but we're still working a little bit for lifestyle right now.

Starting point is 00:20:12 So rather than a cash flow goal per property, we've had one kind of for our portfolio. But we do have a cash on cash return goal per property. And that's going to be between 30 and 40% typically if you are managing yourself for a short-term rental. And for a long-term rental, you might get like 10, maybe 15. I love that. So the coolest thing about this, and this is the amazing thing about real estate investing,

Starting point is 00:20:36 guys, is that now Lauren is now financially independent with some excesses. She can make some lifestyle changes if she wants to. And in addition, she's investing in the market so that for the long term, she can make some additional lifestyle adjustments as she goes on. So that is the amazing power of investing in real estate and actually following this strategy. And that is so cool to hear because that's one of our favorite things to talk about this, Lauren, is financial independence. So that is one of the most amazing things about this. And I absolutely love that. So you can set a goal, put it into place, and figure out how many properties you need to actually get to that point so you can be financially

Starting point is 00:21:07 independent. And that is why this is so amazing. So one thing I always think about is, when it comes to turning something into a vacation rental, sometimes you can buy vacation rentals in areas where that's all there are is vacation rentals and they have furniture in the property. But where do you actually find furniture? And how big of a cost is that if you just buy a regular, say, for example, single family house or a duplex? Where do you find all the furniture for that?

Starting point is 00:21:29 And is that a major cost up front to you? It's a pretty major cost. I was talking to a friend of mine recently who has like a portfolio, like a big portfolio. I don't know if it's private equity or what it is. but they budget somewhere around 20% of purchase price. And they go high-end furniture, use a designer, things like that. That's not me.

Starting point is 00:21:49 We have gone with density with our properties. And because of that, we can actually be a little bit budget friendly, right? I've got, you know, it's a six unit. I have one roof. I have one mortgage payment, right? That's not the same as everybody else. The six-unit apartment building we paid $5.85 for. That's less than $100,000 a unit, right?

Starting point is 00:22:07 It's pretty incredible. So because of that, I like to kind of hit the budget people, make it a nice place. But I also didn't want to buy really nice stuff and have it get like scratched and banged up and things like that. So I said all that to say, we have gone with like Facebook marketplace and offer up and gotten a lot of like quality used furniture, you know, like from the condos and Clearwater Beach and stuff like that. And when we were setting up this six unit, again, three of them are long term and three are short term. So we're setting up three at once. we got a storage unit in holiday Florida near where I live. We got a storage unit.

Starting point is 00:22:42 And over the course of a couple months, every night went out and got some furniture and brought it to the storage unit. And then we scheduled movers for one day to move everything from that storage unit into these three apartments. And I had it all sketched out. I had all the measurements and I had written down what goes where. And I was like, I felt like the guys at the airport. I was like, you go here, you go there.

Starting point is 00:23:01 This couch goes there. This couch goes here. Right. And my mom helped a lot with that. I also bought a lot of, a lot of times people like redecorating. So I would just buy everything. Like I would buy like slave and have like a bunch of mermaid stuff. I'd just buy it all.

Starting point is 00:23:14 Or like, I don't know, you could see my anchor back here behind me. Somebody had a bunch of anchors and notical stuff. I just bought like lots of stuff from people. And I didn't use it at all. Some of it's like down in my shed right now. But it was really a really cost effective way to buy the furniture. So that's what we did for that. There's other things too.

Starting point is 00:23:31 Like we have smart locks on everything and those are Schlagg and code locks. those are $250 a piece. We put in smart thermostats, right? I don't know how much those are like 200 bucks or something like that. So it's like some things beyond furniture. Obviously, you've got to do everything in the kitchen and things like that. And I have a supply list too on my gum road as well. That one's free.

Starting point is 00:23:52 Totally just download that and look. And it tells you how many mats to have, how many mirrors to have, right? Don't forget to have a broom and a dustpan and a vacuum and, you know, all of this stuff. But we did the math recently, the six unit, which we set up. these three in like February and March of this year. From the time the long-term tenants left to the time we got these three units set up was two weeks for two of them and three weeks for the third because we were so organized and so ready to go because of our checklists and because of that storage unit. That included getting everything painted and things like that. We actually brought our handyman

Starting point is 00:24:28 up from two and a half hours to come do everything here. And our camera guy, right? We also have surveillance. So we brought our surveillance guy up here from back in Pinellas County as well. He drove the two and a half hours to install all of our surveillance. That's another thing. This is just a side note. If you have one property, one surveillance system, which is cool too. But I think it was about $7,500 a unit. So that would be like, I guess that would be like 22,500. So maybe it was $25,000 to set up these three units, including the hardware, you know, the like the locks and the surveillance and the nest thermostats as well as all the furniture everything for the kitchen also linens like if you're starting if you're doing especially like we did three two bedroom units at once

Starting point is 00:25:12 there's a lot of linens like you've got to have multiple you know so many like mattress protectors quilts pillow so many pillows it was like multiple thousands of dollars and just linens and again i have a supply list if you're feeling overwhelmed as i'm talking about it but yeah so that's about what it costs for these. The other ones, I can't like remember off the top of my head and I wasn't documenting as well, but that's kind of a round estimate for you. We'll definitely link the supply list down below as well because I think that is one thing where people probably logistically just don't think about this as they get started in it, but there's a ton of extra things that you want to make sure that you have that you have to have in order to operate the property properly. So that is

Starting point is 00:25:52 one of the biggest things as well. So one big thing is making sure that your property is booked and you want to make sure that your revenue is coming in. So what are some things that. that as you start to get into the property, what are some things that you can add to the property to increase bookings? Yeah. So we have a very small unit. It's like a she shed. And we remodeled it and we put, this is kind of silly, but when we did the shower, we put those like stones. I don't know have you seen it where like the bottom of it's like people love that. People love that thing. You know, it's just like instead of tile, they lay the little stones there. People love that. I also had my cousin come. It's called Acorn Cottage. My

Starting point is 00:26:29 cousin came and painted a tree on the wall, right? So like there's a lot of people that do murals and things like that. I just couldn't find a good picture of a tree. So I had my cousin come paint me one, right? So there's murals and stuff. We've gone really hard with our yards, our landscaping at the bed and breakfast, including the fence and demo. The whole backyard was concrete. It's terrible. All of that was like $35,000, but you feel like you're at Bush Gardens. It is lush and gorgeous, right? So people walk in and the first thing that they see is this beautiful Florida backyard. And a lot of people aren't from Florida. And they want palm trees and they want shells, right?

Starting point is 00:27:08 And they want somewhere to sit. And they want an umbrella to sit under it, you know, and have their drink or whatever. So we went pretty hard on the landscaping for that property and the duplex that's on the water. Same reason, right? You're sitting on the water. You want to have really nice pretty plants around you. Something else you can do. Fire pits.

Starting point is 00:27:24 People love fire pits. People like grills. We don't have grills right now. because I haven't figured out how to keep them the right amount of clean. So a lot of people, if they're driving, they bring a little grill or some people have bought them and left them there. So I actually have quite a few grills now. But I don't want somebody to think they're going to get a grill and then not get one, right?

Starting point is 00:27:46 Your reviews are the biggest thing, obviously. You need to have great reviews. The place needs to be clean, clean, clean, clean. That's the number one thing. And it needs to be clean, like how it looks, but also how it smells. So if I'm thinking about my property, the first couple, people are walking up, they're going to notice, they're going to notice the landscaping. They're going to notice how pretty it is. They're going to notice how nicely painted the property is.

Starting point is 00:28:05 Then they're going to walk in the unit. They're going to notice how clean it is and they're going to notice the smell. They're also going to notice the decor. And the decor to me should be kind of minimal, right? And I've also done that thing where we have named what we've named the units. So Palm Cottage, lots of palms. Acorn Cottage has the tree. I am sitting in white heron nest right now.

Starting point is 00:28:28 So we've got herons everywhere. So I have kind of gone off of that like little schick, I guess, or whatever. So they're going to notice that. You don't want to have clutter. That's something that people don't like. A lot of people also like the very kind of like mid-century moderns really in right now. I haven't gone that route again. I've just gone with like really strong pieces of furniture that are used.

Starting point is 00:28:51 Maybe they've got a couple dings, but they're going to have a couple dings after the first guest stays, especially if they have kids or pets or whatever. So let's see. We also have the one that is waterfront, right? So that's something that's not every property is waterfront. So if somebody has a boat, they basically, there's only a couple of places. So that's, you know, stuff that we've done, have good reviews, have the landscaping. We have the little mural, make sure they're nicely painted on the outside. We keep clutter away. We make sure everything's clean. We do have fire pits. And then we have the one waterfront one. I love that. Those are some great things to add on. And I think it depends on where you are in your climate and all that stuff to kind of make it feel like you're on vacation.

Starting point is 00:29:28 So that's some of the keys that you were doing to give that Florida living vibe as well. And then like, for example, if you're in a colder climate, you can add hot tubs and things like that. There's just little things that you can do to really increase bookings and get better ratings as well. Yeah, we have one hot tub and it's not worth it. So, but it's in our primary. It's in our primary. So we use it.

Starting point is 00:29:45 We got it for us. But like every time somebody stays there, they break it. It's kind of crazy. I don't know. It hasn't been worth of us. But like, if I'm going skiing, if I'm going to the mountains, I'm requiring. a hot tub for me to stay there, right? So, excellent point on the hot tubs. Exactly. So I remember when I needed to hire someone fast, but finding the right person quickly felt

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Starting point is 00:32:44 and I want to give back to the community. Ooh, then it's the vacation of a lifetime. I wonder if my head of office has a forever setting. An IG Private Wealth Advisor creates the clarity you need with plans that harmonize your business, your family, and your dreams. Get financial advice that puts you at the center. Find your advisor at IGPrivatewealth.com. I want to shift gears to management here because I know management is a huge part of this, and it's one of the biggest things, because if you have people coming in and out either weekly or every couple of days, then you want to make sure that you're managing a property. So you self-manage is from what I understand.

Starting point is 00:33:20 So why did you choose to self-manage instead of hiring a manager and then give us some tips on self-managing as well? Yeah, well, when we started, like I said, we bought the bed and breakfast. We had the two accessory dwelling units and we had the camper. We replaced a mobile home with a camper. And so we launched kind of right away in January 2021 with three units. But they were in our backyard. That was the main reason I was going to manage it myself. I was like, I'm going to handle it myself.

Starting point is 00:33:45 But I'm also going to learn this in and out. But I'm going to be able to see cleaners, talk to cleaners. I'm going to be able to look at what our supplies are. We have a supply closet everywhere, right? Every owner has their owner's closet. And so I knew that I could keep track of the linens and the shampoos and the coffee and all of those types of things. So I just started managing it by myself with those three. And I was managing natively in VRBO and Airbnb with no ability for direct bookings.

Starting point is 00:34:12 And those two platforms do sync calendars with each other. I think some people join Airbnb and they're afraid that they're going to have to to manually manage a calendar, and that's not true. You can manage natively in those. But if I had a price change over here, I had to do it over here. If I had a picture change of BRBO, I had to do it in Airbnb. But if you have one, two, or three listings, I think that's fine. When we bought the duplex on the water and we listed our primary residence, so we decided when our primary residence booked, we would go stay on the water for however long. So we added two more listings. When we went to five listings is when we decided to get a little more professional about it. And we implemented

Starting point is 00:34:52 owner res, owner reservations, owner res. And that is your single point of truth. So all my pictures are there. All my descriptions are there. Also, this is so amazing. It sends automated emails to. And also it integrates with something called remote lock, which integrates with my schleg and code locks. So when somebody books, I know, so great. So when somebody books, they get an immediate email from me through a relay if it's Airbnb, right? So it looks like it comes from Airbnb. They go in, they put in their name, email address, phone number, regular address. They put in a security deposit to me and they sign a renter's agreement. Once they've done that, all of that happens without me doing anything. Three days before check-in, they get at 9 a.m., they get an

Starting point is 00:35:38 email and it has the driving directions, the house manual, where's the garbage can, what's the Wi-Fi information, all of that stuff. And then, you know, they're accessing. code about a day before they arrive. Owner Res sends the code to the locks, but it does not activate until a half an hour before check-in, and it deactivates a half an hour after check-in. And the cleaners have their own codes. We have our own codes. And so there's so much automation that has occurred that it has helped so much. Now, I still am answering little kind of one-off questions here and there. But if I get a question two or three times, I tweak the listing or I tweak the communications. If people are like, hey, how far away is it from the airport? But doop,

Starting point is 00:36:20 my listing, 55 minutes from the Tampa airport, right? That's what's going in there next. So I use owner res and I use remote lock. We also use price labs like I mentioned for pricing, which you can integrate directly. I know with Airbnb, probably VRBO. I don't think you would need owner res to do that. But we do have price labs integrate with owner res. It's like $15 a month per listing. You're going to get that 100%. There's no reason to not have price labs, even if you have have one listing. We also have quick books and then we have hired a bookkeeper as well. We hired a bookkeeper when we got to five listings and that was before we bought the six unit. So I'll pause and take a breath there. That is very cool. So technology is really just helping you out a lot

Starting point is 00:37:02 self-manage and it's probably saving you a ton of time as well. So with price labs, is that one that will kind of adjust the price depending on demand? Is that how that works? Yeah, demand amenities, reviews, all of those things. It takes everything into account. So like on, owner res and I'm sure it reads just your listings on Airbnb but there's all these places you know is it free parking is it free Wi-Fi do you have smoke detectors you know does it have stairs does it have you know any of the other types of fire pits grills is it a separate place by itself you've nothing shared what is shared you know are there water views all of those types of things so it takes all of those into account and weekly so this is something I have to do manually

Starting point is 00:37:44 Monday mornings, I log in, and I do what's called a channel bridge. So I pull in the bookings, right? Because the bookings sink, but I pull in kind of the financial information, and I pull in the reviews into owner res, and then that stuff then sinks with price labs. That's how price labs knows what your reviews are. I also pay my cleaners on Monday mornings and things like that. So Monday's kind of like my cleanup day for stuff.

Starting point is 00:38:12 That's amazing. So it's saving you a ton of time of just little tiny things that we all hate doing with sending out a bunch of emails and a bunch of different things for the little things like the lock codes and stuff like that. And then Price Labs obviously helps you make more money and you're going to make your money back just by being able to do that with those price adjustments as well. So since yourself managing, how much time does this take you with all this additional technology that's helping you out? 20 minutes a day, ish. I mean, that said, yeah, I know. People don't believe me. but, you know, we're here because there was some maintenance stuff that needed to be done.

Starting point is 00:38:47 And we could have hired my uncle who lives in this county to come here and do it. But we decided to come stay and just sort of check on things. So, you know, my husband does a lot. He's very handy. He's an engineer. Super handy dude. So we put new pads on the bottom of the chairs because they like came off. We don't want to damage the floors.

Starting point is 00:39:04 Cleaning the globes of the lights if the cleaners have been missing it. The dryer, the heating element was half bad. So he fixed that. So it's like 20 minutes a day in terms of like the communications and kind of the back of house stuff. We still have chosen to check on our properties ourselves and do a little bit of maintenance here and there. So on average, I don't know if you were to take his time.

Starting point is 00:39:24 It would be more kind of spread out. But for me it's about 20, really truly about 20 minutes a day. But right? Sometimes people like I'll be on like a call for work like this and I'll get like a text and it's like, you know, but it's normally super quick. It's like 30 seconds. It's like what's the code? you have an email that's with the subject line welcome information that was sent to such and such at 9 a.m. on this day,

Starting point is 00:39:44 let me know if you can't find it, right? Boom, done. Like, so that's one minute of my 20 minutes a day, if that, you know, so it's, it really, the systems were huge. I think you could easily spend 30 minutes a day on one without them. That's incredible. So I think that, you know, that is absolutely worth it to self-manage instead of paying somebody 30% of your revenue or whatever it is, 30% of rent to have to manage that. If you could just spend, you know, 15, 20 minutes a day. And if you have one property, I'm sure it's even much less. You have multiple properties that you're managing at the same time. So in terms of finding the people, the handyman, the cleaners, that type of stuff, how did you find your crew there? And then in addition, if you were starting over again, if you were starting to say in a new city or something,

Starting point is 00:40:26 and you didn't know anybody, how would you go about doing that? So I posted initially on the community Facebook group for where my where the bed and breakfast is and said, hey, who's doing short term rentals? And a lady DM to me and it was like, hey, come on over this Wednesday night and I'll show you our place and I'll walk you through everything, numbers, all that. And that was like amazing. And so she talked us through stuff, gave us some tips, things like that. And she recommended a cleaner to us as well.

Starting point is 00:40:58 So we started with that cleaner. That cleaner ended up getting a lot of like construction jobs. And so we did recently have to switch away from her. But again, I went to the same community group and asked. And then I found a cleaner that way. She's been fantastic. That's another thing that owner res is good for is my cleaners have access to the calendar, but not guest information.

Starting point is 00:41:18 And they also get automated emails when a booking happens, cancels, or changes. So I literally don't even schedule cleaners. Like they just go and do it. And they're supposed to text me. when they're done. And that's like, yeah, that's it. But I can check. You know what? I can check. If they don't text me, I can pull it up and be like, all right, when does the lock code use? Boom. It's been done, right? Because they were there. And I can check cameras and stuff too.

Starting point is 00:41:38 So same thing with Handyman, right? Like the same thing. On the Facebook groups, I found Handyman that way. Obviously, my husband does a lot of it. And my uncle, if he's around, but the face, literally the Facebook groups are asking other owners who they use is how I found people. And it hasn't been hard. We are in really kind of touristy communities. especially where I'm at right now. I'm on like an island and it's tourism and clamming is like all they have. And so short-term rentals are kind of ingrained in the economy here. So it's not a weird idea to be looking for cleaners or same with where our bed and breakfast is. Obviously, tourist area. We bought a bed and breakfast, right? So there's people within this economy and they're

Starting point is 00:42:19 very quick to offer advice, offer people. I got a plumber out the other day. Our water heater went bad. And he was, and somebody was like, this is the best guy. And 10 people recommended him. And he was out there and had my water heater replaced by the end of the day. You know, so that's primarily how I've done it. Ask other owners and ask Facebook. And that's been the best way I found him to is asking other people who are investing in real estate. Because with all my long term rentals, that's what I would do is ask, you know, who are the best people that you've used before. And I would find some people that I've been, you know, using forever doing it that way. So I think that's the best way as well, just kind of asking around with your neighbors and your friends and stuff just to figure out who's the best and who they've actually used. So one thing that a lot of people ask about when it comes to Airbnb's and doing vacation rentals is do you ever have any noise complaints from neighbors or any issues with neighbors on the property? Well, in a lot of cases, the neighbors are my tenants. So they're actually kind of my eyes and ears a little bit, which has been kind of interesting. I worried about that a little bit with the bed and breakfast, but it was already a bed and breakfast when we bought it. And also, we increased our property value by hundreds of thousands of dollars. So the people around are pretty happy with us, frankly, right?

Starting point is 00:43:29 And then our other properties are multifamilies. And so there's not a single family home like right next door to us to like cause complaints. Also, we have licenses and everything's totally legal. So we haven't had that issue. Another way that we combat that is we've chosen. We've made a conscious choice to have smaller units, right? We have the camper. But then we also have studios or when we rent our house out, we only rent the bottom floor,

Starting point is 00:43:54 which is one bedroom, the waterfront duplex is two bedroom, and each of these three are two bedrooms. And that is going to cut down on parties. Now, sometimes people, they beat the system and they rent these two at the same time and make it a four bedroom, which is fine. But my tenants are here to keep an eye on things, you know, and I know that they're going to call me if anything gets out of hand because they're going to be annoyed probably. But also, they're keeping an eye on things. With our duplex, with the waterfront duplex, we have on one party. It was there, and it was in March. And of course, we were skiing.

Starting point is 00:44:23 So we were in Colorado. We were not 25 minutes away like we would normally be. But this kid goes over to our neighbors and is like, here's my number in case things get loud. And my tenant's like, Lauren, this guy's about to throw a party. And so we got on the phone with Airbnb and the safety team really quickly after that. And they were removed, reservation canceled, money kept, security deposit kept by like 11 p.m. Because the main reason, they were starting to have a party. could see there's cameras they're passing blunts around like come on guys right and you know so that's

Starting point is 00:44:58 not allowed but also this it was just a bunch of kids i don't know who booked it and the person who's information i had was maybe this kid's mom or something and i don't know if the mom booked it or if he took her account and did it but you're not allowed to do that you're not allowed to book through other people so that was an example of my tenant basically helping me out and my tenant as the neighbor so i think the size has kept that down. And then also the neighbors and tenants all that makes complete sense. I think a lot of people just worry about it like in residential areas. But that's amazing that you have your tenants right there to kind of help you be your eyes and ears. That's a really, really great thing to have as well. Before we jump into some of the questions that we talk about

Starting point is 00:45:37 with all of our guests, what is the next step for you? Are you going to buy any more? Or are you looking to buy some additional now that you're financially independent? Are you just going to increase that so you can increase your lifestyle? Or what is your next step in terms of buying and acquiring more rentals. Our next step, we are going to take a HELOC out on our primary, the bed and breakfast, just to have, just in case we see any deals. For the most part, from the short-term mental perspective, we are going to optimize our existing properties a little bit and try to get more revenue out of those.

Starting point is 00:46:08 So when we bought the bed and breakfast, there was furniture already there. And I know I just went and talked about all these furniture is great, but it's a little to use, you know what I mean? So we're going to redecorate the two cottages where we started. We kind of used what we had and we've been going. We're going to redecorate those. We are also going to put in split systems instead of wall units. So that's something that we're going to do.

Starting point is 00:46:29 And then we're going to raise the, we'll think we'll get a higher average daily rate because of that. So we're going to optimize that a little bit. We may as long-term tenants leave here, the six unit flip those to short term. Our long-term tenants, as much as I love them, they've told me about the party and kept that from happening. They are about $1,000 under market rent because the former landlord signed a three-year lease. So they have one more year on their lease. So we will get more money out of that property. We probably will do another long-term situation over there. And so we'll get more money just from that. So we're going to focus for the next few months at least, especially if

Starting point is 00:47:08 there's a recession coming or if we're in one, I'm not sure. We're going to be optimizing our current properties and basically like you said we're FI so our goal is to hit our brokerage account really hard and also build up some cash as well so we're just a little more indestructible in a year from now and to come season which starts in January. Awesome. That'll be so cool to see what you guys do next and I think that's amazing. It's so cool that you guys are financially independent just by doing this and then you're adding some additional things as well so you can increase your lifestyle as you want. So that is one of the coolest parts about this. So let's shift into some of the questions that we everybody typically. So what are some of your favorite books that you've read on business or

Starting point is 00:47:49 real estate or personal finance? What are some of your favorite books that you've read recently? My favorite books I've read recently are by this, not that, by Financial Sam Dogen. And why does the stock market go up by Brian Ferroldi? And these are their friends of mine. They're in the personal finance space, of course. And they came on my podcast recently. And so they sent me their book. And I loved them both. They were both. really good. I've actually assigned, why does the stock market go up to my sister, who's 19, to read this summer. So those are my two favorites so far. And Financial Samurai's episode is up, and Brian's will be up soon on my podcast feed. Awesome. We had Brian on here as well. Brian is amazing.

Starting point is 00:48:33 And I want to get Sam on as well. I need to get with Sam. That's a book that's on my list. And Brian's book is fantastic. I've read that. But Sam's I haven't read yet. So I got to definitely check that one out. That's amazing. So this is my favorite question to ask everybody. And the answers are always different. So it's very interesting. But what does wealth mean to you? Wealth is freedom, right? Wealth is me quitting my job pretty soon to self-manage these rental properties and focus on

Starting point is 00:49:00 adulting is easy. When I started Adulting as easy, it was a blog and I added the podcast. And now my Twitter has grown kind of a lot and people are asking me to coach them and things like that. So adulting is easy, which starts. and really truly, of course, it'll always be my passion, but it's now kind of become its own business. So I sort of have three jobs. And so to me, wealth is going down to just two jobs and the ones where I work for myself. I love that answer. You get to pursue your passions and be able to

Starting point is 00:49:31 kind of do the businesses that you want. You're financially independent, but you don't want to stop working because you're going to be helping other people and doing that kind of stuff as well. So that's, that's amazing. So where can people find more about you and adulting is easy? And we'll link up everything down below that we talked about today. Yep. So as I said, I'm most active on Twitter. I'm at Adulting is Easy. My podcast is called Adulting is Easy.

Starting point is 00:49:53 It is on Apple, Spotify, pretty much anywhere you listen. I also now have the podcast on YouTube. I'm on Instagram at Adulting Is Easy Real. I have like very few followers because I just started that. My website is realadultingis easy.com and my gumroad is adultingis easy.com. Most of my resources are free. I have FAQs. I have the supply list. I have a landscaping checklist. Tons of things are free there. I have two guides that are for sale right now, analyzing short-term rentals and keys to short-term rental success. And you guys can get 50% off with code Andrew as well.

Starting point is 00:50:33 That's perfect. Well, thank you so much for offering that. We'll link all of that up down in the show notes so you guys can check that out. Lauren, thank you so much for coming on. This was incredibly valuable. Thank you so much for having me, Andrew. Frozen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Play Ojo. The online casino with all the latest slot and live casino games.

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The Personal Finance Podcast - How to Build Wealth With Airbnb Short Term Rentals with Lauren Keen Aumond

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