With Airbnb and VRBO hosts on the rise there is a growing demand for short term rental managers.
As an Airbnb superhost herself, Vee Le found opportunity in managing short term rentals for other investors.
Transcript:
Chris Bounds 00:02
All right Vee. I think you’re the first person we’ve had on that’s actually doing third party management for other investors in addition to your own. Kind of shared a little bit on how you got started with Airbnb. That very first experience and how that went and what were some of like the big learning moments.
Vee Le 00:23
I think like most people, we don’t really get in it. Which is kind of accidentally stump up on it. I think. One that I intentionally bought for short term rental was a property in Galveston. I went down and you know, looked at the home when I fell in love and I wanted to keep it. The second one was-
Chris Bounds 00:47
Normally a mistake. Like, you don’t want to do that as an Investor.
Vee Le 00:50
Well. Actually, that’s probably one of our best performance.
Chris Bounds 00:54
Yeah. This platform provides for that. Continue.
Vee Le 01:03
Anyhow, it’s the second one that this one was probably a shocker, a bigger shocker than anything that I’ve had and it made me realize how big of an opportunity that I’m missing out on is a property in the heights, I couldn’t sell it at what I wanted. Headed for rent, and I couldn’t rent it at what I wanted, either.
I said, Okay, let’s furnish it and let’s try this thing out. I kid you not, I couldn’t rent it at long term for $3,000 a month, but we were bringing in $3,500. We had people come and stay for 30 days, and maybe even 60 days, 90 days. We had just, group of people. That was an eye opener for me.
Chris Bounds 01:51
What do you think that house would have rented? Like, what’s the normal market rent for that house? Long term?
Vee Le 01:59
Long term, I could have rented out. This is three, four years ago. I probably could have rented it out, right away. $2,500. But I was on the higher side, I was at $3,000. You know, so $2,500.
Chris Bounds 02:20
On short term rental?
Vee Le 02:22
On short term, we will getting about $5,500 a month.
Chris Bounds 02:25
Yeah. Awesome. What are some of the biggest learning moments. I totally wish I knew that before turning this on the short term?
Vee Le 02:37
Well, I think that a lot of time. One of your guests mentioned earlier, like short term rentals existed way before Airbnb, right? We all hear this Airbnb thing, we think, okay, gotta be like a destinations. It’s got to be something fun. But there’s so many other reasons why people come and book, but stay.
For this home in particular, is near downtown, and it’s near the medical center. The biggest eye opener for me was, they could be anywhere.They don’t have to be in anything specific. It could be your normal neighborhood. Like we have one in spring right now that perform exceptionally well.
Chris Bounds 03:26
You don’t know, like spring is-it’s not known as a vacation area. It’s just it’s a community. It’s a community in the north side of Houston. That’s, I mean-the I don’t want insulted by saying there’s nothing special about it. But from a destination standpoint, like you don’t say,” Hey, I’m going to vacation in spring, Texas.”
Vee Le 03:43
Correct. This one is about 10-15 minutes from the airport. For people who don’t know, spring area, this is north of Houston. This one is Alpha Cypresswood. That neighborhood up there. It’s getting people book a week at a time. It does stay fairly book and this one probably would have gotten 1500 a month. On a long term, one year lease. Last month, I think we just send the owner, we made them 4300 I would say.
Chris Bounds 04:29
This is when you’re managing for another investor?
Vee Le 04:32
Correct. Okay. I was so fascinated by how well we were doing. I said let’s why not, you know, because it’s a lot of work. Whatever love you have for hospitality, it can go away pretty quickly too.
Chris Bounds 04:51
Which I always say like this is not a passive investment. Financial freedom, in the sense that you can make a lot of money and they can pull you away from something maybe you don’t enjoy doing. Like your daytime job.
In that sense, huge opportunity. It’s not passive though, because it is a lot of work. It seems like you went that extra step to, hey, if I’m going to build this out this whole management system, I might as well at least build it out to way the management side is profitable. I’ll just manage other people’s shoe. Is that right?
Vee Le 05:27
I started this with the intent of, I don’t want to be involved in the day to day stuff. And that’s not my strength, I don’t enjoy it, I want to be running a business. I start, I focus a lot of time in building this as a business, with a team and place to run the day to day operations.
And my strength is to build relationships with people like you, right to grow to help other investor who wants to maximize their earning on their second home. And that’s how it got started. I separate it as a management business. And I have my holding entity, obviously, to hold the rental. I mean, if I can, why not? Why not capture on both sides of it and help other people? You know, in my, my pursuit of my own desire?
Chris Bounds 06:20
Yeah, capitalism at its finest. Are you personally doing more of the traditional Biet route? And then then running your short term rentals? Or you doing the arbitrage? Or both? Maybe?
Vee Le 06:36
I don’t have any arbitrage right now. Because I just haven’t seen where the numbers make sense. You know, and I’d love to learn more from Moe earlier. But we mostly, we either own my company on the properties or we manage for other people. And so yes, I still do a ballpark of, you know, buying, and whatever I buy. First, I look at Okay, can it be a short term rental? And then if not, can it be a long term rental? If not, then let’s sell it.
Chris Bounds 07:13
Yeah, yeah. And that’s important too. If you’re getting to the short term rental game, and if that is the only exit strategy you have, at this point I mainly speaking of if you’re gonna buy it, because that’s where you get a lot of risk. If you buy it, buy this thing, if that’s your only exit strategy. It’s pretty risky.
When COVID happens, something else happens and you just can’t lease it anymore. But if you have multiple exit strategies, long term rental, or you could sell it and you’ve got to get equity spread, you’re pretty safe at that point. This seems like that. You’re not looking at it. This is the only strategy you’re looking at for a few different options just that way you could maneuver as needed. All right.
Vee Le 07:59
Well, I’m looking like you looking to build a lot of passive income, right? Thiss can be from I can run from anywhere because I love to travel. We want to have homes in other cities as well. Not just here in Houston or Galveston.
I have multiple exit strategy. But let me just say something on that. COVID real quick. When COVID first hit, we all thought Oh, crap, you know, this whole hospitality. The hotels are dead. We’re probably not going to get any booking, but next thing we know. April was bad. April 2020. was bad, but when may came-
Chris Bounds 08:41
flood way
Vee Le 08:43
Massive. It was like the best month ever in May. Right. Records.
Chris Bounds 08:49
Yeah, true. I was thinking more of government restrictions. Like if you were in Florida, I think they had some pretty heavy restrictions and other states, maybe even to the point where it was completely shut down. But yeah, if you could be operational, like that was a biggest stimulus you could ever get because people still wanted a vacation.
It’s just they didn’t want to get an airplane to do it so they could drive. And they did. They couldn’t get on a cruise, which meant lambaste was the only way which made Airbnb like the perfect option was, it was a it was pretty interesting. We experienced that too.