STRA Episode 13: How to Get Started in Short-Term Rentals

The Short Term Rental Authority Podcast

STRA Episode 13: How to Get Started in Short-Term Rentals

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[00:00:05] Hey guys. Welcome back to the podcast. We are John and Wendy Williams with the Short-Term Rental Authority, Your authority on all things short-term rental related to help make you the best operator ever. At today's podcast, we are going to be talking about how to get started in short term rental.

[00:00:28] I think that's really great. That's a really good topic. It really is. So the, the short answer is go to our website. Sign up. No, I'm just kidding.

[00:00:38] I'm just kidding. Shameless plug. Right. So we were actually, we were actually rereading, or I'm rereading You're reading for the first time. I have never read it. Yeah. This is my first top. Yeah. So this is a book by. Michael Gerber, Michael Gerber, and the book is entitled The E Myth Revisited. So super good.

[00:00:55] If you're a business owner, especially a small business owner, I highly recommend this book. But Wendy and I have been, well, I'm rereading, she's reading, but I've spent a long time since I've read this book, so a lot of it feels new to me anyway but we're currently on chapter six, six of that book, and he was talking about Well, first of all, maybe we should explain what the book is about.

[00:01:15] So what is the The E Myth Revisited? So it's a, it, it talks about the why a lot of small businesses fail and what to do about it. Okay. So, but in this specific chapter though. The thing that struck me the most was the concept of starting a business, a as if it's complete, as if it's mature already. And I, I had never really thought about that before.

[00:01:58] I always thought that you [00:02:00] had to move through these. phases, I guess, if you will. Yeah. Cause he does talk about that. He talks about the infancy of a business and adolescent, and then adolescent. Mm-hmm. and then it has a maturity. Right, right, right. And, and then this last chapter he was talking about that you know, these companies that you've, we've all heard of that are wildly successful, like IBM and Disney, Apple and Disney and things like that.

[00:02:28] They actually started the business. as if they were mature. Right. So what does that mean then? So they, they had the, the owners of the business, the, the person who started the business had a clear vision of what they wanted the business to look like when it got done. Yeah. So they, they already had the foresight.

[00:02:57] Or it, the, the vision of, of, well, first of all, what, what they wanted the business to be. Okay. What they wanted to look like. How did it act? How does it act? And, and what does it do? Okay. So I thought that was really interesting. So, So how does that apply to, right. I, I was, I was thinking about that in, in this respect, and I feel like the way that it applies to this concept is if you are first getting started, and we kind of did this too.

[00:03:40] Mm-hmm. , we created a, a vision. For our business and, and, and what we, what we wanted the business to do for us personally, because we all go into business for a reason. What do you [00:04:00] hope that your business will do for you personally? And I think the answer to that is very personal. Yeah. And it's. Make as much money as possible.

[00:04:10] No. Like that's too vague. It's way too vague. You need a vision. Yes. You need to know how much money. Exactly. Yeah. Like where you're going. Right. So coming up with. exactly how much money you, you need to do whatever it is you wanna do, right? Because you gotta think about that first. What are you trying to do?

[00:04:33] What are you trying to accomplish? Maybe what you want your life to look like, for example. Mm-hmm. . And it's not all about the, He talks about how it's not all about. The revenue generated, either. It's not like, Okay, how much money do I wanna make? It's what's the culture of that business when you walk in the front door?

[00:04:54] Who are the people that are working there? You know, what's their disposition? Is it very formal? Is it very informal? Is it, you know, are people happy? Are people. Serious, or, and you gotta kind of think about that culture of your business too, right? Like what do you want it to look like and act like is kind of what you were saying in the beginning.

[00:05:17] And some of that is gonna drive your, how you present to the public. Mm-hmm. , you know, how, what, what. Are you actually building here? You know, when someone thinks of Queen City Suites, what? What hits their mind? You know, and you, and you know this, when you think. . Well, when I think of Apple, I immediately get a opinion of what that is, but it's because they took the time to think about what it was gonna be.

[00:05:45] Right. Right. And And that's how you get started. Sure. And I would, I would argue that's how you get started in any business. Yeah. Not just a short term rental business. Yeah. And one thing is to realize that, well, we've talked about this before too, but this is a business [00:06:00] that was really hard for me to.

[00:06:02] understand for a long time. One of my mentors Jordan Payne over at the Kingdom Real Estate, shout out to them. Even back when we were in the fix and flip business and when we were, you know, even when we were wholesaling and all, all these other things we've done, he kept saying to me, and, Well, not me, but every.

[00:06:21] That was, he was mentoring, Hey, this is a business. You have to treat it like a business. Right? But what does that mean? What does that mean? And I, and I always struggled with that because I didn't really have a blueprint or a formula or a example even of what of that business looked like was. Yeah.

[00:06:43] Yeah. And, and a lot of it's stuff like that has nothing seemingly to do with. Short term rentals or, or anything, but it's something every business needs, like bookkeeping. It's like a big one. That's the one everybody skips, like how many people we coach and they've, they've got, you know, 4, 5, 6, 7 short term rentals.

[00:07:04] So they're well on their way and they don't even have a bookkeeper. Oh my goodness. I, that gives me heart palpatations. Just thinking about it. And, and now is that the, is that the vision for your business is, Oh, well we just don't do bookkeeping. or Wendy does bookkeeping? No, Wendy does not do bookkeeping because when Wendy does bookkeeping, it's twice a year

[00:07:25] Right. You know, you need the, you need bookkeeping. Like, yes, every business does, Right? But so many of us skip that part, or we're trying to do it on a spreadsheet or something. You know, you need. Oh, you need a bookkeeper and you know, QuickBooks or something, you know, some kind of counting software. Things like having a crm, customer relationship management system where you have a place to put customers and their emails and their phone numbers and things like that.

[00:07:55] Like these are core things in your business. Do you have [00:08:00] standard operating procedures? Yep. That's a big, huge. You know, are your pro, are all of the things that go on in your business, whether you're doing them or not, is that documented? Right. And he was talking about, and we were debating this. He was talking about how do you know, because it's one thing to have a vision, right?

[00:08:20] And to be building this thing and starting this thing, right? Cause we're really talking about how to get started. It's thinking through all of those pieces. But how do you know when you're done. . Right? And what does that mean? And what does that mean? What does that mean to be done? Because you, you're telling me, okay, I need a vision cuz to get started, I need a clear vision of what I'm doing.

[00:08:43] I need to realize now the pieces that need to be in place to make that happen. Right? Like some of them are more obvious like bookkeeping, but then there's some other things that aren't as obvious. Like, well what are all the SOPs I. . Well, those are gonna develop over time Sure. Based on things that happen in your business.

[00:09:02] But I guess the point is how do you know if you're, if you're trying to get a vision to where I'm trying to go, how do I know when I'm there? Well, I would say that the answer to that is why is that you have to ask yourself, why are you starting this business in the first. Okay. What are you hoping that this business will accomplish for you?

[00:09:22] Can you gimme an example? Yes. So one of the things that my vision is I would like to own a, Can I say it? Sure. A bud and breakfast. Okay. Can I say that? I guess. Okay. You just did. I mean, you can cut that out, right? ? Yeah. But then everybody's gonna wonder what it was you wanted. . Should I say a bud and breakfast?

[00:09:50] Or a bed breakfast? Yeah. But I'm gonna challenge you. I know where you're going, but I'm gonna challenge you. Okay. All right. So one of the things that, that I [00:10:00] personally want and is in my vision story is a bud and breakfast. Though one of the things that we cr that we created Queen City Suites to do for us is to help us purchase a bud and breakfast on the lake type property.

[00:10:22] So I know I need about 10 million to get this bud and breakfast up and running. Okay? And here's my challenge. That's another business that you're talking about. It is indeed. Right. So vision doesn't go beyond that. Like why are you starting that business then? What's the vision for that one? So for that one, I'd really just want to, to create a really cool space and experience for people to what end?

[00:10:56] Because it. , That's where I want to retire. . Okay, So you're building a retirement community? Yeah. , where people come stay at the Lake and hang out. Yes. And hang out. Yes. Interesting. Okay. Because you wanna stay there because I wanna stay there. Okay. Yes. Interesting. All, I mean, that's my ideal retirement space.

[00:11:20] Right? Okay. Right. That's where I, I want to live on the lake and I want to. have that experience every day, and I want other people to be able to enjoy it too. But I enjoy hosting people. I mean, you know this. Yeah. That's one of the reasons that we got into the short term rental space to begin with. Yeah.

[00:11:43] Was I really enjoy being the hostess. Yeah, I mean, I love to decorate and, and host parties and that's what makes me happy. Mm-hmm. , right? So why not combine those things [00:12:00] and make that a an experience that I get, not just I get to enjoy, but many, many, many other people get to enjoy as well. Yeah. And I remember when we had this discussion with.

[00:12:15] or meant toward Jay, He said, But Wendy, that's not what I meant when I asked you that question. He said, What do you, what do you really want? And then you said, Oh, well, I, what I really want is a Cadillac Escalade that costs $1,500 a month. Like we got down, it was like a hundred thousand dollars car or something.

[00:12:35] I do want that too. Right. So that was, that to me was more of a, a. An answer of what you're really wanting rather than this other thing. Cuz that's something you're gonna go do to make money. Like, that's not like, what are you gonna do with the money I'm going to? Right. You understand? I, I wanna purchase a a, a place on the lake.

[00:13:02] Yeah. What are you gonna do with the money that thing makes? Well, even if I'm assuming you're just not, even if it didn't make money, I want to buy a house on the lake. I want to live on the lake. Right, But you're serving other people. You're building another business, are you not? Yes. Okay, so what are you gonna do with that money?

[00:13:18] That's why I keep asking. I'm going to buy cash flowing assets to create generational wealth for myself and my family. Okay. That's what, And I'm gonna live on the lake and buy a boat and some kayaks, and I'm gonna travel. . I think that's getting closer to the actual vision. Okay. Personally. Right. Well, that's an interesting thing to do is to actually think about what you want, like what do you want your life to look like?

[00:13:51] Yeah. And to have these kind of conversations. Yeah. Where you kind of have. , think about it a little bit and dream a little bit. Yeah. [00:14:00] Because a lot of people don't even allow themselves to dream. Right. And we, we've learned that playing the the cash flow 1 0 1 game. Yep. , If you haven't played casual 1 0 1, you should, That's fine.

[00:14:10] We'll probably do an episode on it if we haven't already. It's fine. But the, one of the first things you do in that game, and the idea behind that game, if you don't know, it's, it was created by Robert Kiyosaki, the same guy that did Rich Dad, Poor Dad. And, and it's meant to be a tool of learning. So, you know, you were a school teacher and in education, you know, this, that the, the more things you can incorporate.

[00:14:34] Seeing it, speaking it, doing it, doing it. Mm-hmm. doing it, you learn a lot more than you do just hearing it. Sure. For example, or just reading about it. And so that was the whole point of the game is like, do it right. Which is probably why I remember it. But one of the first things you do in that game is you choose a dream and they're not stuff like, Hey, I want to own.

[00:14:55] A skyscraper that makes money. Like that's not what your dreams are in that game. Your dreams are run for mayor or build a school for kids that wanna be entrepreneurs. That's the one I like to pick. Oh, I like that. Be a jet setter. That's the one. Yeah. I travel around the world. Mine is go see all the seven Wonders of the world.

[00:15:14] Yeah, that's one of them that's on there. Yeah. That'ss one I always pick and I, there's one now that I like that's golf around the world. Oh Lord. So I can pick that one right. and then they have price tags associated with them. Right. So the, the idea of the game is you try to eventually land on that spot and have the money to purchase it.

[00:15:32] So now you've purchased your dream. Right? Right. And one of the lessons in that game actually is cuz you also have a profession. So you can be anything from a janitor to airplane pilot, airline pilot, medical doctor, everything in between. Right. . And when you look, even when you're an airline pilot, right?

[00:15:50] When you look down at what your salary is and then look and see what your dream costs, it's almost like you can't even see how you're gonna get there. Right. Well, you know, I [00:16:00] knew, I knew going into it that I needed $10 million to purchase my but and breakfast. Right. But that almost sounds fantastical, doesn't it?

[00:16:10] It did. It used to. Okay. Yeah. But now you see the path there. Yes. Yeah. Mm-hmm. . And that's, that's what the, a lot of the vision is about, is figuring, figuring out that path, right? Mm-hmm. . Right? Right. But you don't have to, you don't have to necessarily know the path right now, I think when you're first getting started.

[00:16:32] even allowing yourself to dream about that life that you would like to have. That's how you get started. Mm-hmm. , what, what do you want your life to look like? You're, if, if, if money were no object and you could do anything you wanted to today with anybody you wanted to do, do it with, what would you be? . Mm.

[00:16:58] That's that. And thinking about that perfect day, I know what my perfect day looks like already. Yeah. And, and letting that be something that's achievable. Yeah. Right. And then you go to work on, Okay, let's get this thing started. And then how, and, and I don't know if we ever answered the question of how do you know when you've gotten there?

[00:17:19] Right? So what, how do you know when, when is your business done? And I would answer that and say, it's done when I can. . Oh, that's interesting. Yeah. It's done when it's, it no longer requires you, me. Mm-hmm. meaning there, yes, I'm the CEO of the company, but there's a salary associated with that. And you need to figure out what is the salary of this company or the salary of the CEO of this company.

[00:17:47] What does that mean? And once you get to the, get to the point where, okay, you can actually pay yourself. and everybody else that's involved has a salary that is commensurate with the position. [00:18:00] Now you can actually remove yourself and hire somebody. Yep. Right. And the business is still profitable. That's what I would say.

[00:18:06] That's what I would say. That's when you're done. Yep. Or that's when it's fully baked. May not be done right. You can still grow. Sure. Right. All companies grow, but at that point it. Its own autonomous entity that kind of grows on its own with the people inside of it, but it doesn't require the founders anymore.

[00:18:28] Yeah, Right. And I would say that's actually the end point. And then working back from there, you say, Okay, well what's the first thing I need to do? And one of the first things you need to do, , well figure out what kind of business this is, what customers are you serving, and then that we've talked about that before.

[00:18:47] That kind of leads you down the path of, okay, where and what type of property? And then how are we gonna serve all these people? What's the operations behind that? You know, what are the pieces that need to be in place to make it all work without me being involved? Even though I'm involved in the beginning, I'm really just filling a job that.

[00:19:08] The company can't quite afford to. Right. Somebody is eventually gonna get, be put in that position. Yeah. Cuz this, again, this is a business, this isn't right. Passive real estate investing. Right. Right. You know, this is an operations business, right. That is a hospitality business that serves a client base and it knows who it is, it knows who it serves.

[00:19:30] It's very specific about that. And it knows what the hierarchy, what the people are, what all the positions are. It. Standard operating procedures. It has processes, it has bookkeeping, it has attorneys, it has CPAs, it has, you know, all those ancillary things that you need in a functioning business. Like what would you expect an Apple to have?

[00:19:54] What you'd have to expect. I have all that Sure. Right. Training, like when you bring on a new person, like [00:20:00] is there a training program? Mm-hmm. , Right? So there's a lot to build. , but knowing that that's what you're doing, that's, that will bring you back to, Okay, how do I get started? And I think one of the best ways to get started actually, and now I'm gonna start plugging myself, but the, because this is what we did.

[00:20:15] Go get a mentor. Yeah, go get a mentor. Why re why reinvent the wheel? Yes. That that will, That's because it's going to put you so much further ahead. That's what I was about to say. . I mean, it's not a shortcut per se, cuz you still have the work to do. No, it's not the, not an easy button, but it does keep you from doing things that aren't important and focuses on the things that are, because it's easier to see the end goal for someone who's well closer to the end goal.

[00:20:48] Right. Right. Than just getting started. And yeah, you can go to YouTube University and you can, you can do all that stuff too. I mean, this is on YouTube. It's the information out there. The problem is everybody has different perspectives and you hear one thing over here and you start doing that, and then somebody over here says, No, don't do that.

[00:21:06] Do this. And it's because they have two different game plans. They have two different ways of getting there. So if you can get on one track with one person, and at least duplicate what they've done. . Now you're at a point where, okay, now I can go experiment and do my own thing. Mm-hmm. , right? But you, you kind of want a process.

[00:21:24] You want a blueprint to follow. You want a plan. And that's what we've put together to help people at least get started, get to a pretty good sable company to the place where then they can start making those decisions about, okay, how, where, where am I trying to go? Because everybody's vision's different.

[00:21:46] Right? Everybody's trying to get to a slightly different place. Yeah. But that's the first step, like to to, to wrap it up, is it would, I would say that the, how do you get started [00:22:00] is figure out where you want to go. . Yeah. Have a complete vision. Have a complete vision of what you want your business to look like.

[00:22:07] What is a, what does your mature business look like, and what does your life look like with that mature business? That's exactly what I was gonna say next. Right. What does, What is your. personal, everyday life look like, and how does your business fit in there? How do you fit in with that business there? I mean, you may not fit in at all, right?

[00:22:31] You may just have a meeting with your COO once a week or once a month, and or you may sell it, or you may sell it, but you gotta have something that's sellable, right? Mm-hmm. , right? A house that's been on Airbnb isn't sellable. It's sellable as a house. , but where's the business that I'm buying? Right, Right, right.

[00:22:53] So you, you want to create the operations, the business. You want to have it autonomous, you want it fully baked at some point so that hey, you don't even have to have those meetings with your CEO because you don't own it anymore. Yep. Right. And you actually had something to sell. Right. Perhaps, Or you could franchise.

[00:23:10] You could. Yeah. That's what hotels do. Yep. But that's a whole other podcast. I know. , That's interesting. , that's a whole other podcast. There's so many things that could, could be done. I know, I know. It's so exciting to think about. I know. But you know, I, I like to I like to think bigger than myself, Right.

[00:23:27] Because I eventually want to franchise my butt and breakfast. Okay. I think it will be really cool to. To own a whole bunch of, but and breakfasts all over the bud, but, And breakfasts, bread and breakfasts I guess. I don't know. I don't know how you say that, plural. I don't know either. , I'll just worry. B tie bread, br, but, and br tie, but, Okay.

[00:23:51] Well, we hope that you found some value in this podcast about. how to get [00:24:00] started in a short-term rental business, I guess, is really kind of for any business at all really. Yeah. So, but we hope you found some value. If you did, click that like and subscribe button, and we will see you next time. Onto the next.

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