Mike Bayer

You're listening to the Vacation Rental Success Podcast, and we are proud to welcome back returning sponsor, OwnerRez. Providing a powerful and flexible system for managing vacation rental properties, OwnerRez provides booking and maintenance management, payment scheduling and collection, as well as insightful reporting. OwnerRez will provide you with a long-term booking foundation that is scalable for your vacation rental business while fully managing your channel listings, but still focusing on your brand, your website, and your way of doing things. If you sign up now using the promotional code VRF30, that's VRF 3, 0, you can get 30% off your first three months. Make sure you listen in to the mid-episode break where you'll hear some great testimonials about OwnerRez and more about this incredible company. For more information about OwnerRez, click in the link in the description of this episode on your smart device. Let's get started. Here's your host, Heather Bayer.

Heather Bayer

In today's episode, I'm talking to Avery Carl, a real estate investor who started with her first rental property at age 26 and now owns a portfolio of 24 properties. We're talking about everything to do with short-term rental real estate investment, all the stuff I wish I'd known when I started out investing two decades ago. Listen in, this is really good stuff.

Heather Bayer

This is the Vacation Rental Success Podcast, keeping you up-to-date with news, views, information, and resources on this rapidly changing short-term rental business. I'm your host, Heather Bayer, and with 25-years of experience in this industry, I'm making sure you know what's hot, what's not, what's new, and what will help make your business a success.

Heather Bayer

Well, hello and welcome to another episode of the Vacation Rental Success Podcast. This is your host, Heather Bayer. I'm super excited to be back with you once again. And in today's episode, we're talking about real estate investment. I started investing in real estate in the UK and then Canada in the late 1990s. And in fact, before that, I'd been investing in residential real estate in the UK. And then came out to Canada, found this wonderful market, which was short-term rentals that I really hadn't explored much, although it did exist in England for a long, long time before I got into it.

Heather Bayer

But once I got to Canada, I realized that there was so much here that....I don't like to use the word exploit.... but we could get into and make a real business out of it. But back in that time, the late 1990s, I had no help in figuring out what would work and what wouldn't in different markets. There wasn't the data that there is today to help an investor out in making those decisions. The shared knowledge and networking opportunities that we have now just weren't there back then. But these days, the channels are just filled with real estate gurus offering their services. Often, if you really look into them, they've got little experience other than a few minor successful investments. But the messaging that comes through in Facebook ads, and ads on other social media channels, have you thinking that they are making millions, and that's what you can do as well. Today, though, I'm talking to someone who owns a portfolio of 24 properties and is the CEO and founder of The Short Term Shop. Avery Carl has been there, done it. She has built a great business with her own real estate investment portfolio in short-term rentals.

Heather Bayer

And she now has a real estate team that helps investors acquire short-term rental properties in the most recession resistant markets. And she trains them on those methods that led her, as she says, led her out of the corporate rat race and into financial freedom. Well, sometimes I see these claims and I'm never sure what to believe, what not to believe. So I wanted to bring Avery on to help me out on this, to help me understand what today's short-term rental investment market is like, where to buy the right properties, how to analyze them, and a lot more. So let's go straight on over to my interview with Avery Carl.

Heather Bayer

So I'm super delighted to have with me today Avery Carl from The Short Term Shop, which I think is a lovely title, by the way. Hello, Avery.

Avery Carl

Hi, how are you?

Heather Bayer

I'm really good, thank you. Over the years, we've talked about real estate investing on the show. The show has been going since 2014. We've done 500 episodes now and probably only three or four on investing in real estate for the short-term rental business. And those few episodes have just topped  the charts in terms of downloads. So people find this super interesting. But there's so much out there to go on to, social media forums and Facebook groups, and there's so many people saying, I'm an expert in real estate and I can help you. And it's guru city, really. And when I came across you and I thought, Oh, no, this lady has a back story, a back story that isn't just last year. So I wanted to get you on and share your wisdom and knowledge on the short-term real estate investing market. So what's your back story, Avery? How did you get into the business investing in short-term rental real estate?

Avery Carl

Well, thank you so much for having me, first of all. I didn't make this term up, unfortunately, but I did see a term recently in an article where somebody called people who have just gotten started in the past year or two that are now charging everybody like 10 grand for a course. They call them 'Nurus'.

Heather Bayer

Oh, I love that.

Avery Carl

Yes.  So I guess I'll get on to my back story. So I've been doing this for the better part of a decade at this point. It's not as long as some people, but definitely did not get started during or after the pandemic. So I kind of backed into investing in real estate. I didn't say I want to be a real estate investor/I want to be a real estate agent when I grow up. I don't think anybody says that. And it kind of happened. My husband and I were moving from New York City to Nashville. We both worked in the music business. He was a Classic Rock DJ on Sirius [SiriusXM Radio]. I was going back to get my Masters to work in the business side of the music business. We had both been ex-touring musicians. We went to buy a house in Nashville because you could do that at the time. It was much cheaper than New York, not so much anymore. Our real estate agent was really trying to get us to buy in this really hip, fast-appreciating part of Nashville called East Nashville. We said, Wait a minute, we're moving from Brooklyn to Tennessee. We want to be out in the country, no neighbors.

Avery Carl

We've had two neighbors up and down stairs from us for the past however many years, both of them named Steve. They always had complaints. We had first floor Steve and second floor Steve, we called them. And, you know, it was always something, and so we're like, We're done with neighbors, we're moving out to the country. So we bought a house out in the country, but then we thought, man, we've got a little money left. What if we did buy one of those houses in East Nashville? Then when we get married and have kids later, then they're going to need to go to college at some point. Then if we just rent it out, so we're not having to pay the mortgage, then maybe by the time they need to go to college, it will have appreciated enough that we can just sell it and it will pay for their school without us having to come out of pocket. I was very like Dave Ramsey [American radio personality who offers financial advice] at the time, not anymore. And so we did buy one of those houses, which is really like.... let me back up and say, don't buy anything, ever, based on appreciation. Only we didn't know what we were doing.

Avery Carl

This was my first one. We got really lucky and we were renting it long-term, actually. So long-term rental. The mortgage on that was $650 a month and we were renting it out for $1500 a month. The cash flow on that was almost $1000 a month. Me, with my dream job in the music industry, was making $37,000 a year, which after the deduction on my paycheck came out to about $1,000. So we're like, we just doubled my income and I don't have to actually do anything. We had to get it set up and we had to save the money to buy it, but we're just sitting there the rest of the time, it's making money. So we said, well, let's buy some more of these. We can really do this. So then we actually started educating ourselves and listening to podcasts and reading books and learn how to analyze properties. And we only had one down payment left. And we said, well, what can we buy that's going to make us the most amount of money, the fastest, so we can buy more faster? And we had just been on vacation to the Smoky Mountains in Tennessee, which is about three hours east of Nashville.

Avery Carl

And we had stayed in a cabin. Everybody else that was there was staying in cabins. And so we said, oh, well, somebody owns these cabins. Why can't it be us? And this was well before - this was 2015 - I think Air DNA maybe sort of existed, but not really. We didn't have any of that data. There were no courses, there were no gurus, there were no YouTubers. There was really only the BiggerPockets Podcast and a couple of other real estate investing podcasts that we listened to. That was it. We just figured it out as we went. We were able to scale from 1 to 5 cabins in the Smokies over the course of  a couple of years. Since then, it's just been off to the races of scaling. Now we've got 8 vacation rentals and 242 long-term rental doors. So we've really gone all-in on the investing side of real estate, but we invested in the short-terms first because they turbocharge that cash flow to where you can go buy more properties faster.

Heather Bayer

Wow, that's quite the story. Congratulations on that. I talk about going back to the 1990s, the early 2000s, but still in 2015, there wasn't a great deal about. When this podcast started in 2014, there were just two podcasts. There was myself and there was Jasper Ribbers with Get Paid For Your Pad. That was it. And that was the start of Airbnb, and now look at it these days. But yeah, I empathize with you that, when you were doing that, there just wasn't the wealth of information. However, that brings with it, of course, its challenges because how do you sift through all that information to figure out, A). What's going to work for you? And secondly, [B).] What's relevant to you and what's going to make a difference to your business? So yeah, kudos to you for working through all that. And yeah, such a great story.

Heather Bayer

So in investment terms, things have changed in the past few years. Obviously, the pandemic is like this great blob in the middle of a quite nice trajectory that we were all experiencing. And certainly from my perspective as I was a short-term rental manager, the pandemic made a dent in the statistics, I guess, because it was unreal what happened during the pandemic in terms of occupancy and also people panicking to buy real estate.

Heather Bayer

And certainly in Ontario, it happened. It happened in so many places in the US as well. So just give us the bird's-eye view of what changes you've seen in the past few years, given the end of the pandemic. There's been increases in inflation, interest rates, and the general state of supply in the short-term rental market, which we are seeing is pretty high at the moment compared to demand. So what's your overall view of what you're seeing in terms of investment and short-term rentals?

Avery Carl

Whew!  How much time do you have? So to give a little background, so The Short Term Shop has real estate offices in 19 markets in the US. So we see a good cross section of what's going on everywhere. They are all vacation driven markets - not a lot of metro markets - that's what I've been dealing in. And what we've seen was a lot of people getting into the space and buying properties that weren't really looking at this as the business that it is. And they bought at a time where it was really easy to just buy a middle-of- the-road property and slap it up on the OTAs and make money. Now that things are normalizing, those are the people that are really panicking because they're like, Wait a minute, I have to do things? I have to pay attention to the management of my property? And then we saw a lot of people, too, that were just scrambling to get any property. We saw properties... pretty much everything that hit the market would get at least 10 offers. People were having to go well over asking, cash, waiving appraisal contingencies, things like that, just to be considered.

Avery Carl

We saw a lot of people buying things just to buy something, just because, Oh, well, I actually was able to get this offer accepted. Maybe it wasn't in a great location. Maybe it's not the style of property that really works well for that market, or maybe it's a little too far out, things like that. Now that things are normalizing, they're saying, Oh, maybe this was not an ideal property. So really, what's happened, a lot of people jumped in that maybe didn't need to be there, because they're not looking at it as a business. So supply has gone way, way up. And then a lot of people are not understanding that you really... this is a business. You do have to optimize your listing. You do have to make updates every few years. When I first started in the Smokies, you could totally buy a 'grandma cabin'. My top producer had blue laminate countertops and peel and stick wood-look linoleum for the first three years. And it did great. And then we've now updated it, because you just can't get by without anymore. But there was no reason to update it back then. But now that there's a lot more sophisticated operators in the space, you do have to make sure that your property is something that will stand out.

Heather Bayer

Yes. Did you see the Business Insider article this week?

Avery Carl

I did.

Heather Bayer

Which sort of pinpointed that the top end of the market is doing pretty well, and the bottom end of the market is doing pretty well. But it's that mass in the middle that is challenged at the minute. And yes, the photo that they included,  I'm sure it was a photo of one of the cottages that we took on in our property management company way back in 2001. And they're still out there. And I see them still out there. Independent owners are advertising these and thinking that this is still okay. I don't think there's many properties that are out there like that. So they were making a point, but I quite understood. So that's a state of the market right now. What about investors right now? Because I know in my market, what you've just been saying is absolutely accurate. I remember back in maybe it was end of November 2020, I went out to view a property with a new owner. He'd bought the property, he wanted to rent it it out, and I went out as a manager. It was the first time he had seen the property.

Heather Bayer

So he had bought the place for, I think, nearly $1.75 million, sight unseen. And as you said, no conditions. It was, just put in this offer. He put in, I don't know....  $150,000 over asking and got it. He made a wise one, because it's rented extremely well. It still rents extremely well, but I hope he doesn't try putting it back on the market right now. But we saw all these things up here. So if you're thinking about investing now, because interest rates are pretty high, I mean, tell me, what factors should people be considering now when they're selecting where to invest and whether to invest at all?

Avery Carl

So it's a really interesting time in the market right now. In terms of being a buyer, it's a really good time, because compared to two years ago where you had to go in $100,000 over asking with all this craziness, now a lot of the weaker investor hands have been shaken out of the market. So you have room to do things like negotiate, offer under asking, ask for seller concessions, ask for them to cover your closing costs, things like that. So in terms of being able to breathe and make good decisions and negotiate, it is a really good time. Now of course, elephant in the room, it's interest rates. So yes, interest rates are terrible right now. Well, I mean, I guess they've been worse, but not in my lifetime of being able to invest. But that does create an opportunity in terms of thinning the herd of buyers. And what we tell our buyers is, if we can find a property that presents an opportunity for you to add some value to it, maybe add a bedroom, do some updates, maybe it's really dated. But if there's a way for you to add some value so you can increase that equity but also increase that income that you're able to make, that's usually a good way to go.

Avery Carl

A lot of our investors now are focusing more on more affordable markets. So our blue chip markets, like the Emerald Coast of Florida and the Smoky Mountains in Tennessee, those are always going to be great places to invest. But because of that, they have higher purchase prices. But we have some other markets that I would call emerging markets that are not emerging in terms of tourism. They're just emerging in terms of sophisticated management being in that market. We talked about a little before, areas where a lot of the managers are very mom and pop, still managing the way you would have managed something in the 80s, early 90s. So these areas, typically because the income is typically a little bit lower, they're a little bit lower in terms of purchase prices. So areas like Shenandoah, Virginia, Western North Carolina mountains, which is just over the Tennessee state line from the Smoky Mountains in Tennessee, Myrtle Beach, all of these areas are lower purchase prices. So yes, while the interest rates are still higher, you're able to get in with less capital. Whereas last year, people were falling all over each other to buy two and three million dollar properties.

Avery Carl

Now you can find things for under that $500K mark. And of course, you want to make sure that your numbers work at the interest rate you're able to get now. But hopefully one of these days, interest rates will go down a little. You can refinance and find a little bit more cash flow. But a lot of those Nurus we were talking about have been using phrases like "Marry the house, date the rate." And I think that...

Heather Bayer

You have to say that again.

Avery Carl

Oh, you haven't heard that one?

Heather Bayer

No.

Avery Carl

They say marry the house, date the rate, which I find can be a little irresponsible or encourage people to make irresponsible investments, because it doesn't mean go buy a property that doesn't make sense and just bank on refinancing at a lower rate later, and then it will make sense, because nobody knows what's going to happen. But if you can find something that cash flows a little bit now, that's great. And then you can possibly, probably, refinance later, but you shouldn't bank on that. You shouldn't buy a bad investment now planning on refinancing later. It at least needs to work a little bit now.

Heather Bayer

Yeah. Oh, interesting. What about analyzing a property itself, actually analyzing that property? How do you go about that to determine its potential ROI?

Avery Carl

That's always a really tough thing in short-term because it's always a range and different managers will be able to perform differently with different properties. There are a number of different data sources that you can use that are out there. There's Air DNA, there's Rabbu, there's Key Data. There's a few of those and those are all great, but data can't tell you necessarily why a property is performing the way that it is. It's not going to tell you, Well, this property's numbers are much higher because it's much more updated. This property is junky and that's why it's lower. It just tells you the numbers. In addition to whatever data you're looking at, we use what we at The Short Term Shop call 'the enemy method', which is basically going, whether you're on Vrbo or you're on Airbnb or whatever platform you're using, going and looking at your neighbors - or your enemies. It's really more fun to say 'enemy method' than 'neighbor method'. But you're looking at like, okay, you've looked at the data to figure out whereabouts what your range is. Then you're looking at your enemies to figure out what is closest to what you have, the property that you're buying, to figure out where you're going to fall on that data.

Avery Carl

The data by itself can be a little bit of a dangerous tool. For example, down here in the Emerald Coast, we had a client looking recently in a very middle- of-the-road neighborhood, the properties are about a million dollars. But what was happening was when he was looking at Air DNA, it was telling him that his property was going to make $350,000 a year, which it absolutely was not. But what was happening is, it's right next door to a really high-end community called Seaside, where all the houses are $5 million that were the same number of bedrooms as his. So it was pulling data from the closest properties, which makes sense, but they were in a wildly different category than what he was buying. Had he not used the enemy method to figure that out, Oh, wow, I'm not buying one of these, I'm probably not going to make what it's telling me so I could be in really bad shape.

Avery Carl

I always want to encourage people, when you're looking at data to also go look at your competition and see what they're doing to figure out where you might fall also.

Heather Bayer

And that's the legwork, isn't it? It's going through them one by one by one and figuring it out. And I've always advised people, look at the reviews, because the reviews will tell you what the guests are looking for, what their expectations are, are those expectations being met? So I've done that before, as you just trawl through every single review and print them off, highlight the areas where this property is doing really well, it's got really good occupancy. Hey, look, all they're doing is offering paid beach chairs. They are including the beach chairs and it's in the title. It says, Come to us and don't pay exorbitant prices for the beach chairs. Well, they're just including that price within their rate.  But it's been critical, I think, going through the reviews and evaluating them as well. But I love that. But yes, it's not just a matter of pulling in data and looking at numbers. It's actually looking at the qualitative data as well as the quantitative. I knew I was going to have to say that....I struggle.

Heather Bayer

Any other indicators or metrics that they should be using to analyze?

Avery Carl

Well, you want to try and look at properties that are going to be managed in the same way that you plan to manage them. So especially when you're looking at properties' rental history. So if you're not planning on using the same manager that's managing it now, the rental history really does not mean much because you're not really comparing apples to apples. So if you guys are planning to use a manager, I would contact that manager and have them take a look at everything that you're looking at and give you projections of what they think they can do with it. If you're looking at five different properties and you're looking at history from five different managers, that's just really not comparing apples to apples. If you're using a manager, you want to have that one baseline person looking at each property.

Heather Bayer

I know that you encourage buyers to consider doing it themselves as well, doing that rental management themselves. I guess if they're investing and they're buying several properties, then they actually become, ergo, their own manager.

Avery Carl

Yeah, they do. There's a time and a place for self-management or using a manager. I call it growth mode versus cruise mode. If you're in growth mode, like I was when I started, where I was going from zero to 250 doors. I didn't know we were going to go that many, but really trying to just buy as much stuff as possible and get as much cash flow to acquire as much as possible to get us set up. So if you're in growth mode, you may want to consider self-managing because you are trying to squeeze every last dollar out of that property. Now that we're almost a decade into it, I would say we're more in what I would call cruise mode, where, okay, we don't need it to squeeze every last dollar out anymore. We might be willing to go ahead and put this with a manager so we can take some of that headache off of our plate. So I think there's a time and a place for both. And it just depends on what your investment goals are, what your life goals are, and just what you want to take on personally.

Heather Bayer

Certainly over the years of being a property manager, I spoke to hundreds and hundreds of owners about this very thing. And some, when in discussing it with them, I would say, I think you'd be better doing this yourself. Try it out yourself, see how it works. Others, I would say, try us out as a manager for a year, see how that works. And then learn the basics through using a manager. Basically, there's options out there and no one way is ever right for everybody. So just good to touch on that.

Heather Bayer

We're going to take a short break just now to hear about our sponsor, OwnerRez, directly from one of their clients. We'll be back to our interview in just a few moments.

Suzee Sanderlin

Hi, I'm Suzee. We've owned short-term rentals since 2017 and currently own three properties, all managed using OwnerRez. I became a big fan of the company, because of the robust abilities of the software. I've been able to configure OwnerRez to work with all of our business processes. For example, we spent a lot of time thinking through the guest experience, and I created email templates to automate as much of that experience as possible without it feeling automated to a guest. I love being able to schedule emails to guests at the perfect time without actually having to spend the time sending them. I set up everything one time and OwnerRez has taken it from there.

Suzee Sanderlin

When possible, we like communicating on the listing platform, so there's a comprehensive record of messages. Recently, for Vrbo, integrated messaging was introduced. We are happy we can now communicate from OwnerRez to our Vrbo guests without having to open another app. This has simplified our processes even more. OwnerRez has so many possible customizations, allowing us to tailor the system to meet our business needs.

Suzee Sanderlin

It wouldn't have been possible for me to set up my account without their very comprehensive documentation library designed for all types of learners.  I learn visually and they have videos for every step of the setup process. My initial feelings of - I can't do this - were replaced with me feeling very accomplished with the help of their support resources. Their set-up checklist is really meant for someone like me who wants to do it myself without having a lot of technical knowledge. I found out I really can do this. I love the flexibility the OwnerRez system has provided to run our business. For us, it's been the ultimate 'you do you' system. If you're looking for a channel manager, you should definitely consider OwnerRez.

Heather Bayer

Well, that was a great testimonial. Now back to our interview.

Heather Bayer

Local regulations, zoning laws, these are super important I'm sure you would agree. I do know of people who have bought properties and then found out to their cost afterwards that the regulations are in place that did not permit rentals. This is huge.

Avery Carl

Yeah. Number one thing, before you guys even start looking around on Zillow in a market. Don't take some person on Facebook's word for it, call the local municipality. So that would be the city, if you're inside city limits, or if you're looking at a big, unincorporated area like the Smoky Mountains for example, it would be the county. Just ask them, say, Hey, I'm looking at buying a property in this neighborhood or just anywhere. What are the regulations? Because they'll tell you what they are. They'll also tell you what's coming up. Nashville, for example, we used to have an office in Nashville. We shut it down for this exact reason, because they would constantly change the rules. People would buy something that's legal to short-term rent, and then the rules change two years later, and then they're up the creek. That's the most important thing. The number one thing, the first thing you want to look at when you think, MMmm, I think I like this market, is call and get that information directly from the city or county. Don't go on a Facebook group. Don't try to skirt the rules. Just follow the rules because if they want, they will find you.  So make sure you're following the rules.

Heather Bayer

I'll just add to that, it's not always what's in place now, it's projecting to the future. What's out there that might be being considered by councils and municipalities in the future. And we certainly learned this to our cost in Ontario. That's every little municipality. And there's 300, 400 municipalities in Ontario, and everyone is approaching it in a different way. So taking on what one municipality... In fact, if you're looking at several properties across different municipalities, the rules are going to be different in every single one. So really important to look and find out if they are looking at regulations in the future, and if so, are they modeling it on another municipality? Because that's what we found. Some municipalities have gone for total bans, and then you'd speak to another who didn't have any regulations and ask them, and they'd say, Oh, well, we've seen this one, Wasaga Beach, where there is a complete ban. We're looking at that one at the moment. So just taking it that one step further and look to the future as well.

Avery Carl

Absolutely.

Heather Bayer

So, property types. Wherever I go, I'm looking at property constantly. I'm a serial entrepreneur.  I love investing. I haven't done it for the last five or six years. Since five years ago, I sold my last one. And I know I'm getting the bug back again. And I'm not going to go into Canadians buying in the US, because that's a whole other topic. But if I were to be looking, what's this best property to be looking at now? Is it a condo? Is it a townhouse? Is it a family home? Is it an apartment? Let's look at where you are in Destin. If I was looking at Destin, what would you suggest I'd be looking at? And what are the pros and cons of all these different types of accommodation?

Avery Carl

It really just depends. So in Destin, we have both condos and single families. And if you're looking for anything, three bedrooms or under, it's probably going to be a condo here. Anything four bedrooms and up, typically our single families around here start at four bedrooms. I think with any market, it's just making sure that you buy the type of property that the tourists come to stay in. So here in Destin, beach houses, walkable to the beach, or condos on the beach. And your price range or size of property that you want to deal with will determine whether you end up condo or single family. In this market, I love condos because you don't really have to worry about them changing the rules on you. A lot of people are like, Oh, no, not a condo, because they're worried that the condo association will make it to where you can't have short-term rentals. Here, Panama City Beach, Myrtle Beach South Carolina, a lot of these areas like this, the entire reason these condo buildings exist is to house short-term rentals. You don't really have to worry about that as much. If you go to one of our mountain markets that we work in, you typically want to buy a cabin.

Avery Carl

Condos don't work in some of them, but they do work in other ones. That's really where having a local real estate agent who understands investing in these comes in handy. But you don't want to come into one of these markets like Destin, for example, and buy a 90s brick ranchhouse, because that's not what the tourists come here to stay in. They want to stay in a bright color or white is the new beach house color now. Bright color, white beach house, close enough to the beach. They don't want to stay in a 50s ranch house where they have to drive 20 minutes to get to the beach. So you have to know your potential guest in order to buy the right property.

Heather Bayer

That's a great point. Knowing your avatar, your target guest, where are they coming from? Where's the inbound traveler coming from? Where do they get this information on inbound tourism?

Avery Carl

So, number of places. The old Google machine is always helpful, but any Board of Tourism or Chamber of Commerce in any area will have, and especially in vacation markets, will have this, because their bread and butter is tourism. If you're buying in a metro market, they're going to have that stuff. But if they've got a big convention center, that convention center will have data on the demographics of people coming in because they're also trying to attract big conventions to come. Or if there's a big theme park, a lot of times, like Disney for example, they'll say X amount of people visit Disney World a year and it will give you an idea of the tourism coming in. But typically there's a Board of Tourism or Chamber of Commerce that will have that information for you.

Heather Bayer

Yes. The DMO, Destination Marketing Organization, some areas have these, and some of them I know down in Florida, some of the DMOs have some amazing statistics on inbound tourism. How many come by air and how many come by car and how far do they drive. And this stuff is all super useful.

Heather Bayer

You talked about buying a property and making sure it's in an area that people want to travel to. What about the amenities and the features that they typically look for, the guest looks for in a short-term rental? Are there some common elements, so that if you're looking for a property that you go for those common elements? I mention this because I know in my market here in Ontario, it's all waterfront. Every property, if you're buying a property, if you don't buy it with private waterfront, then you're going to struggle. So what other key amenities would you look for in general? I mean, our market is specific because we've got 250,000 lakes, so there's a lot of waterfront property. So what would you suggest to look for?

Avery Carl

So typically, across all our markets, whether beach or mountain view, is always a good thing to have, whether it's a mountain view or view of the Gulf of Mexico or the Atlantic Ocean. Views are important in some of our markets, like the mountain markets. Hot tubs are very important. Pools are always attractive across any market. Private pool, if you can get it, especially at the beach, because a lot of people... I'm in this phase of my life right now where I've got a two year old and a four year old, and I would like to still be out in the sun, but they've got to take naps, so I can put them in the house, they can take their nap, and I'm right there. Whereas if it's a community pool, you can't really do that. So if you can get a private pool, really great to have. A lot of our mountain markets, indoor pools are the new thing. Again, 'enemy method' to look at what's important in your market. I have a mixed use building here. This is my office down here, but upstairs is a condo that is a vacation rental.

Avery Carl

We've got all the beach chairs and the beach wagons like you mentioned, and we put that in the description, like our headline, Hey, we've got all this stuff for you so you don't have to worry about paying an arm and a leg for the beach chair service. Definitely enemy methoding to figure out which properties have those amenities that you need to have.

Heather Bayer

I'm glad you mentioned those beach wagons, because I do a course on niche marketing. Niche marketing doesn't mean you have to spend a huge amount of money making a property entirely accessible for severely disabled people. You could just have that niche where it's for families and you provide that wagon and you take that. Then it's just so simple. It's $100 to buy a wagon, but that could set you so much apart from the competition. I love that.

Heather Bayer

I have people in our network who have bought beach wheelchairs. So these are the wheelchairs, they're expensive, but they really set them apart from the competition in that accessible market. So they've got the accessible property, so people can come in and use the bathroom, but they want to go to the beach. So including the beach wheelchair has been hugely helpful for them. These are just some smaller ideas that can make such a difference. And I like the idea, views. These are the things that you can't change. It's when you're buying it, you've got a view, you've got a waterfront, you've got a fenced-in yard, maybe for being pet-friendly. I'm just thinking of some other amenities or features.

Heather Bayer

Hot tubs, of course, that's something you can put in afterwards. If I was looking for a property, I'm currently exploring Costa Rica for property and I want a swimming pool. I'm looking at real estate listings at the moment and got to have a swimming pool because that's what will attract guests. If you've got to get out and drive to a beach... And I loved what you said about your two and your four year old, because if you're attracting families, I hadn't thought about that. You think, Oh, I've got this beach property near a beach, but what are you going to do with children of that age? If that's your avatar, if that's your target guest, then you've really got to think about those other amenities and maybe a pool that allows mom to sit by the pool with a baby alarm while the kids are asleep inside.

Avery Carl

Yeah. Well, and you mentioned pet-friendly, too. So we travel with our little Chihuahua everywhere, and we just went on a month-long motorhome trip or camper trip, but where we stayed in short-term rentals. And if you're going to do that, just going all-in on the pet-friendly thing is really helpful. So you mentioned the fenced-in yard. We stayed in a place that was so cute and they made such a huge deal about being pet-friendly and like, We're going to give your dog some treats and they have some stuff to give them. But when we got there, we were like, this is really not pet-friendly. It was a really old building. It was really loud. Our room was right by the front door. So anytime anybody was walking in from the bar in the middle of the night, our dog thought somebody was coming in. So I'm trying to keep her quiet, trying to keep everybody asleep. So really going all in on the pet-friendly thing without being like, Oh, yeah, we're pet-friendly; here's a dog treat. Really, really makes a difference for those pet travelers with pets.

Heather Bayer

Yeah, that's a good point. Being pet-friendly or being family-friendly, it's not a matter of just paying lip service to it or being accessible. Just having a ramp to your door doesn't make it an accessible property. There's so many other factors, so it really is worthwhile considering, before you head down that macro-niche pathway, consider how it's going to come across to your target market. So some great points there. So in addition to location and property analysis, what other factors do you advise investors to consider?

Avery Carl

I would really consider hard the type of market you're investing in. So I stick only to regional, drivable vacation markets. I typically stay out of big metro areas like a Nashville or a Dallas because these are the types of areas where there's A). A lot of primary homeowners and B). A lot of hotel presence that is losing market share to short-term rentals currently. Those are the two main things that contribute to anti-short-term rental regulation, is primary homeowners and hotels. I try to focus on regional drivable markets that don't have a lot of hotels and that are dependent on tourism.

Avery Carl

If here in Destin all of a sudden short-term rentals weren't allowed, there's only 10,000 people that live here in Destin. There would not be enough permanent residents to fill all of the short-term rental houses here. It's really unlikely that the local government is ever going to regulate anything out. They'll add some rules here and there, but they're not going to say no more short-term rentals, because then the entire tourism industry is dead. Even the primary homeowners who live here, their businesses, which are typically restaurants, fishing charters, things like that. If we don't have people coming here staying in the short-term rentals, those businesses will collapse too. I like the areas that are more dependent on tourism, because they will typically, not all the time - there are definite examples like Breckenridge, Colorado, but typically will be more friendly towards short-term rentals in the long-term.

Heather Bayer

What do you think about the Sedona market? Because I've seen that Sedona market flip-flop over the years. I was looking at properties in Sedona way back in 2012, I think. And at that time, it was all very open. And then they clamped down and went to 30-day rentals. Then Arizona... there was a statewide statute, wasn't there, that they couldn't limit short-term rentals. And I'm not sure, but I think it might have flip-flopped back again. So Sedona is a tourist market, yet there's a lot of residential areas within the boundaries of Sedona itself.

Avery Carl

Yeah, that's a weird one, because Arizona, as a state, is very short-term rental friendly. But then Sedona as a municipality, a lot of people aren't super-psyched about having short-term rentals there. So you have to take the temperature of anywhere that you plan to buy, even if it's a vacation destination. For example, I know I live in a vacation destination. There's one or two rentals in my neighborhood, but I still don't want one right next door to me necessarily, not because anybody is particularly going to be loud, but I've got little kids. I don't know who's coming in and out. I get it. So if I, someone who makes my living off of short-term rentals, I don't want one next to me, then think about the people who have no association with it at all. So you really do just have to take the temperature of the area when you're buying there, because there are a few places like that, like Sedona, Breckenridge, a few more of the Colorado ski towns are like that. So you really have to do your due diligence there.

Heather Bayer

Yeah. So this really brings me on to my last question, is about finding someone to help you. So if you're considering investing, and I know that many people want to go and do it themselves and will do all their own leg work and collect all their own data. But what about finding a real estate agent who is able to help you with that investment in short-term rental? Because not all realtors are the same. If you're dealing in family markets, in family residential markets, then perhaps that person doesn't know about this short-term rental market. How important is it to find a realtor that understands short-term rentals?

Avery Carl

It is very important. And for those of you who also listen to more real estate investing geared podcasts, a lot of them will say, Give your business to the agent who answers the phone first, which I think is really terrible advice, because the only thing that an agent who answers the phone first is, is the person who happened to be holding their phone and didn't have anything else going on at the time that you call. It does not necessarily mean that they're an expert in that. An example that I like to use is back when we had an office in Nashville, had a guy call me up, never met him before. He said, Hey, I heard you're the person to talk to about short-term rentals. I found this house. It's $900,000. And this was in 2018/19. So that was back when $900,000 was really expensive. And he said, It's going to be awesome. It's going to make the best short-term rental. Let's make an offer on it now. So I looked at it and I was like, Man, you're not allowed to short-term rent in this neighborhood. Now, if he called somebody who had no idea and just an agent who normally does primary homes, he could have made an offer on that and closed on it before he realized that he couldn't use it.

Avery Carl

There's a lot of data out there. There's a lot of other investors, but you really do have to have a local expert, because there are properties that will look great on the surface, but that agent knows.... there is a street in the Smokies, that if you buy on that street when the winds blowing the wrong way, you're going to be able to smell the dump and it's completely overwhelming. Without having somebody local who knows these things, you can fall into those holes. It's really important to have somebody who not only is local, but who really understands and works often and specializes in short-term rentals.

Heather Bayer

Okay, that's great. Finally, Avery, tell me a little bit more about The Short Term Shop. What your company does and how it helps would-be investors?

Avery Carl

Yes. Thank you for asking. The Short Term Shop is the US's largest short-term rental specific real estate team. We're like a brokerage, but we're underneath another brokerage, so we call it a team here. But we have short-term rental specific agents in 19 of the top short-term rental markets in the US. All of our agents only take short-term rental clients. We don't take primary homes, we don't take long-term rental investors. We only help short-term rentals. We've got a whole back end training program where we teach you everything you need to know about managing the property yourself, if that's the way you want to go. Or we have vetted property managers that we know, like, and trust in each market to refer people to as well. We try to make it a one-stop-shop where we help you find the right property, help you find the right market, then find the right property, and then figure out what your management style is and what's going to work best for you so that you can be most successful.

Heather Bayer

That sounds really comprehensive. I'll make sure that there is a link to The Short Term Shop on the show notes. Avery, it's been an absolute pleasure talking with you. I've learned a lot. You're firing up my enthusiasm, again, to go invest. And I know my husband does the editing of these podcasts and I can hear his sigh from now. Here she goes again.

Avery Carl

She's going to go buy some more houses.

Heather Bayer

Yes, you never know. Thank you so much for joining me.

Avery Carl

Well, thank you so much for having me.

Heather Bayer

Well, thank you very much, Avery Carl, for joining me. I learned a lot from that. It's really inspired me to start thinking about investing again, maybe in the US market somewhere. I'm thinking Costa Rica. I know that my husband edits this, and I can hear his sighs from here as he hears this. He's going to be going, Oh, here she goes again. But we would not be in Canada right now. 20 years we've been here, just about 20 years ago this week. And we would not be here if I hadn't started investing in Canadian property back in the 1990s. And by the time we moved out, I think we had five properties. So I was able to move out here and start the business. Property was the stepping stone. And I've always loved being a property investor and selecting the right places and making some good money out of them. So I just think it's a really great investment. So, Phil, while you're editing this, we'll probably have a conversation afterwards.

Heather Bayer

Okay. I hope you enjoyed listening to this, listening to Avery. Do take a look at The Short Term Shop. If you are out there thinking about investing, then for sure, take a look at Avery's site and beware of the Nurus.  I love that. I really love that expression, the Nurus. I'm going to be using that. I've stolen it now.

Heather Bayer

Okay, I will leave you for now. Look forward to being with you again next week and I hope you go on and have a really great day.

Mike Bayer

This episode was brought to you by the Kind Returning Sponsorship of OwnerRez. Don't forget, if you sign up, use the promotional code VRF30, that's VRF 3,0, to get 30% off your first three months of usage of OwnerRez, which is an internationally recognized leader in vacation rental software. You can click the link in the description of this episode in your smart device or head over to vacationrentalformula.com/OwnerRez to find out more.

Heather Bayer

It's been a pleasure as ever being with you. If there's anything you'd like to comment on, then join the conversation on the show notes for the episode at vacationrentalformula.com. We'd love to hear from you and I look forward to being with you again next week.

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