To be young and free and ski in Crested Butte, Colorado. It’s a dream come true for many before they settle down and find a real job in the real world. Today, Toby Mathis of Anderson Business Advisors talks to Heather Connor about how she lives and does what she loves by investing in and managing vacation/short-term rentals.
Highlights/Topics:
- Service Industry not Sustainable: Cost of living in a resort community is high, but paychecks are low
- Get a Real Job: Bartending to make ends meet, Heather secured a future by investing in vacation/short-term real estate and purchasing two rental units to manage
- Landlord-Tenant Law: What to be aware of and rules to follow
- Vacation Rental Market in Crested Butte: Affordable to luxury properties for all demographics and incomes
- Then and Now: Low-maintenance renters interested in hiking, biking, and skiing vs. high-maintenance renters more concerned about accommodations than activities
- Watchdog Property Management: Heather’s first “real” business involved steep learning curves and changes due to growing popularity of Crested Butte
- Vacation/Short-term Real Estate and Rental Management: Find experienced realtors with proper data to find properties that fit income, investment, and lifestyle goals
- Cash flow or appreciation? Current trend is up due to Vail’s purchase of Crested Butte Mountain Resort; condos have increased 40% in valuation
- Typical Length of Stay: 3 days to 3 months during summer, and 3–7 days in winter
- Maximize ROI: Stage property, use professional photographs, understand renters’ needs, keep current with local news, select property manager, and focus on lifestyle
Resources
Dan Sullivan (Strategic Coach)
Anderson Advisors Tax and Asset Protection Event
Full Episode Transcript
Toby: Hey guys, this is Toby Mathis with the Anderson Business Advisors Podcast. Today, we’re joined by Heather Connor and this will be really fun because not only is she involved in real estate, but she’s involved in a very specific type of real estate that not everybody understands, and that is the short term rental market and the vacation real estate market. Granted, she has a very diverse background in real estate, but this is fantastic to have somebody. Welcome, Heather.
Heather: Toby, thanks for having me.
Toby: Tell us a little bit about yourself, where you grew up, first off, and how you got into real estate.
Heather: I currently live in Crested Butte, Colorado, which is a phenomenal skiing place. I grew up in Washington State and my whole family grew up skiing in what’s called Snoqualmie Pass, It’s kind of four mountains in one and a huge ski bum family. My dad had a ski school there for 25 years, my brother was in ski racing, I was in ski racing, we both went into coaching. When I moved Crested Butte, I still love the skiing aspect, but at some point realize that I was going to have to have a real job here. Enter my background as far as management real estate.
Toby: Besides just regular real estate, you focus very specifically that you have a bunch of rental properties or something like that in Crested Butte? Could you tell us what you do?
Heather: When I first moved to Crested Butte, I started off in the service industry just like most folks here and that’s not really a sustainable type of job for living here in the future. Living in a resort community comes with some expenses. During that time frame, I was starting to invest in property. I just purchased my first two rental units, that was back in 2005 and also bartending.
I was bartending to live off of my paycheck, which are very low here in the Colorado area and then save my chips, and save up on downpayment. I purchased my two rentals and then I had to learn how to manage them. Landlord tenant law, it does not matter whether you’re new or seasoned, it still applies to you, and there’s a lot to be aware of to make sure that you’re following the rules. That is about the time frame that I thought, “Well, if I have to know all this anyway, I might as well maybe just pick up a few more properties to manage.”
Toby: Very cool. Do you manage those properties now?
Heather: We do. We have two businesses. We have Watchdog Property Management and it’s gone through a couple of phases as far as the services we offer, and we really zoned in on what our specialty area is. That’s been helped through my coach. I have coaching out in the LA area, Dan Sullivan Strategic Coach. I went in and like, “Gosh, we’re doing everything. It’s a little bit of a mess and I’m really tired all the time. We need to fix this.” So, through their program, we really zoned in on the areas where I could bring the most value to our clients in the part of the business that I loved.
For me, that’s vacation rentals. […] that aspect, we have been performing those services since 2005 with Watchdog, and there’s been a lot of changes in the industry since when we first started, […] not only in legislation, but also in the type of folks that actually utilize rentals now.
Toby: Get into that. That’s more interesting. Who’s utilizing these rentals now? I always looked at it like, “Unless you knew somebody, I probably wouldn’t have ever done it.” Now, you have so many things online that you’re able to go in there and grab stuff from the Airbnbs to the VRBOs. What’s the sweet spot right now?
Heather: What’s been interesting is that back in the day in 2005, there were not very many people vacation renting at all. The town wasn’t really aware of it, there weren’t any rules or regulations around it, there weren’t licensing, and folks could just go on to sites and advertise. In fact, I just remembered that I think a lot of folks forget that the company, Airbnb is actually somewhat of a newer idea. It’s just caught on like wildfire. Those guys at San Francisco, I want to say, there are only about 11-ish years old, if that sounds crazy, considering how popular it is these days.
Back in the day, 2005, folks weren’t really that savvy in what it was. It was that adventurous type of personality that would say, “Yeah, I’d rather stay in a home and let’s just see what this is like,” and there weren’t any rhyme or reason. There wasn’t much as far as safety regulations, as far as the rental checklist. Back then, the clientele, when they booked, they almost always showed up. We never had cancellations, and two, the type of person that came to Crested Butte, they were very relaxed, is the giveaway to stay at.
They really didn’t care much about the accommodation itself. They just wanted it to have heat, windows if it was summer, have a bed technically, and they really just came here to go hiking, biking, skiing.
Toby: Give us the progression. I dealt with vacation rental and you really couldn’t drag me back into it, unless it was decided that was going to be my thing. How did it ended up being your thing? You had to zone-in on this thing, right?
Heather: I did. I zoned-in and at the time, I went through a lot of different phases, who I’m going to be when I grow up, and even today, I’m still moving though those phases of what’s next. Watchdog was a really big jumping point. It was my first real business. There were a lot of learning curves there and it went through a lot of metamorphosis. The vacation rental portion was really fun back then. People just would show up. They’re really easy going.
Toby: Is that different now? You said that like they were much more relaxed and they always showed up. I’m going to contrast that, I’m going to interpret it, but that means that under Airbnb sometimes they don’t show up, and sometimes they’re a little more high maintenance?
Heather: Yes. We’ve seen a lot of changes in our industry here. One is that the type of person that will rent through Airbnb is pretty mainstream now. So, the idea of renting a house or condo instead of a hotel, nobody really blinks an eye. Number one, as far as the type of person that will rent, it’s really opened up to include all demographics and all types of income styles. There’s luxury property versus affordable, and everything in between.
Another thing that’s happened is that, what folks are looking for is that little cutesy, the owner just left for the weekend, all their clothes are in the closet, and you can just crash there for $50 a night. Folks aren’t really looking for that here. Our type of clientele has really become a little bit more particular about the finishes.
What I mean by that is, Crested Butte has gained in popularity, and we were just purchased by Vail last year, so that also put up more on the radar because now we’re part of the Epic Pass. They were seeing more folks come here that didn’t visit Crested Butte traditionally prior. Their requirements for an accommodation are pretty top of the line, so they’re looking for absolutely something that is a private home, but it is managed professionally, and it’s handled professionally.
Toby: Wow. Let’s get into some interesting things then. What would bring most value to listeners is probably saying, “Hey, if I’m already in this space or if I’m thinking of going into this space, what should I be aware of? What are the do’s and don’ts?” We could start with, “Hey, I went on vacation somewhere, maybe I went skiing in Crested Butte. I got excited and I picked up a property.” I imagine that happens sometimes. Somebody says, “Boy, I just love it. I’m going to pick up a condo, I’m going to pick up a house, rented it for part of the year, and then I’ll come up there and I’ll use it a month over the year, and basically it’s paying for that.” What would you say to somebody who’s considering doing that?
Heather: That’s a great question. There’s two aspects of that. One is the real estate side and the second is the management portion. The actual carrying out of activities. The first part that I would say is make sure that when you identify the property, that you have the right data. You have someone that either has […] on the type of property you’re going to purchase. If that particular realtor doesn’t have a background in management and if they don’t have the correct numbers and accurate data, then make sure that they reach out and get it from somebody that […] realtors and you don’t have a background in management, don’t wing it, don’t guess, because this is an investment that your client’s trusting you with.
Toby: Hey Heather, I may have lost you. You say you’re talking a little bit about realtors and making sure you have the right data.
Heather: Absolutely. Part one is to make sure that you identify a property that works for your lifestyle goals that you’re looking for, if it’s going to be an actual vacation home and then a lot of folks actually combo a vacation home with an investment property up here. That’s a very common thing that we see. There’s going to be a couple of questions you’re going to have as far as is this the right company for me when I come out and I want to stay here, and then two, will it meet whatever my income or investment goals are with this property?
As you know, there’s two different ways. One could be how much income it brings in and also expenses, but the other could be also or a combination of that, and that’s how much does it appreciate […]. That’s really important that you have someone that has proper data.
Toby: How has Crested Butte done? Has it been going up nicely on the appreciation side, or is it really more of a cash flow thing?
Heather: Traditionally, Crested Butte has been up and down. We’re a resort community, and we always tend to follow suit any major cities—Denver’s our closest major city—and what that means is that because we’re a resort community, we tend to follow trends in late time, based on our closest city. However, then we also have our unique climate, our unique factors that affect us, so we’re like this little micro market. Then our micro market has micro markets beyond that. I mean, Crested Butte as a whole, then also has Mount Crested Butte, […] Crested Butte, and then we move into that rural areas, all the way down to Gunnison and they are all performing differently.
I would say that, for example, once Vail announced the purchase and actually purchased Crested Butte Mountain Resort, since 2018 to current day, 2019, condos up on the mountain have increased. They’ve been jumping up 20% and then 40% in valuation. It’s been pretty phenomenal. We have started to see that all across the board, values are increasing. That is pretty typical across the US right now. Some markets are a little bit more dramatic in their increase than others, but we definitely have micro areas that are increasing at a more rapid rate. Mount Crested Butte Condos is probably our biggest hotspot right now for its selling.
Toby: What should somebody expect as far as cash flow, if they’re getting a vacation property? Not just Crested Butte, but just as a rule of thumb, or if you don’t have one, if you just want to focus on Crested Butte that’s fine, too. I’m just curious as to what somebody should expect. They buy a $200,000 condo or something along those lines, what should they expect to get out of it?
Heather: What people could anticipate as far as cash flow, back when we first started versus now, it’s really different. Back in 2005, folks could cover their mortgage while vacation renting. You have to remember when your vacation renting, you’re taking on all the expenses, the day-to-day expenses, as well as capital improvements, just to start your little rental business.
For folks now, when you look at the potential capital improvements, as well as the day-to-day expenses that happen, your utilities […] if applicable, replacing furnishings, utilities, et cetera, I find that most folks do not cash flow regardless of how great of a realtor you have, but now, really what you’re looking at is to offset expenses.
I would say that you’re hitting right on target, that you could probably offset about half of your total expenses.
Toby: Oh wow. So, you’re going to have a little bit of negative there. Basically, “Hey, if you’re going to get a vacation rental, don’t expect to make it a big cash pile.” It’s because you really want to go there, and you’re going to use it, and you’re trying to offset some of your expenses?
Heather: Pretty close. There are some folks that are still able to […] that line. That takes a lot of effort and it takes somebody that probably is ready to take on some of the work themselves. We even […] that just closed on a house, purchased it for $800,000, putting about maybe $200,000 in improvements on the property. I would reckon that bill pulling, right around $100,000, and that’s prior to any of their utilities. They need to remember as well that management expenses, if you don’t live next to your rental, vacation rental managers are going to be anywhere from 15%–35% or 40%.
Toby: Wow 15%–30%. What’s the typical rent there, like period? Is it three days, four days, five days? What’s the typical period of time somebody’s going to be there?
Heather: It depends. In the summer, they could go anywhere from three days to renting a property for the entire summer, so 60–90 days. The folks that rent 30–60 days pay the premium rate, so they’ll pay the $20,000 each month to have the house for those time periods. In the winter, they tend to be shorter stays, and they tend to be more around 3–7 days.
Toby: Is it mostly the skiing crowd during the winter, and then you have the biking crowd during the summer, hiking, biking?
Heather: Exactly. This year, we’re seeing more of that Epic Pass folks coming and visiting. We’re also seeing a lot more front rangers, the folks from the Denver-Boulder area, and that’s when […] economy crashed. We start to see more local Coloradans coming to visit Crested Butte because they couldn’t afford to fly to their traditional vacation spots. The question is actually when we had folks coming and when the local Colorado community really started to visit Crested Butte.
Toby: Let’s say that you’re interested in getting into vacation rentals. This is what you do for a living; you sit there and manage vacation properties. If somebody is walking in and it’s on the investment side, and they’re not going to manage their own property, but they could be buying a property anywhere that would be a vacation destination, what are the rules of thumb that you would tell them to make sure that they’re maximizing their return? Everything from, “Hey, make sure that your property looks halfway decent, so you’re not just taking pretty snapshots of the interior.” What are the rules of thumb that you would use that you would tell somebody, “Hey, this is what you need to do to do it right”?
Heather: There’s definitely a lot that’s in your own court as far as what you can do to maximize your success. I would say the top six things that I would recommend so you’re actually maximizing your potential income on your rental. One, take time to properly stage your property with your furnishings. I see folks that will purchase the place that came furnished. That furnishing may be updated and they’re like, “You know what? Just for the season, we’re just going to keep it.” They don’t realize how much that older furniture, that outdated furniture, or the poor layout of what’s currently in place, actually really affects their bottom line, even for that one season. Make sure that you take time to furnish, and that your property shows properly.
Then in combination of that, number two, is once you take that effort, then make sure you get professional photographs. They say that over 80% of folks are visual and your property is most likely going to booked online, purely from the photographs. Once you take the time to make it visually appealing, make sure that you hire a professional to make sure that it actually shows its best online, and captures the widest audience. With that being said as well, just a friendly reminder that the majority of folks that book these are females actually. They’re the ones that are online and you want to make this appealing. They look at it and they say, “This is what I […]”
Toby: How do you know that the majority are women? That is actually a really interesting fact if that’s the case.
Heather: I don’t have the data in front of me, but when you look at which gender shops the most, it’s the women. Who buys most men’s clothing? It’s usually the wife or the girlfriend that buys the clothing for the man.
For vacations, even though Crested Butte is, I would say, people or folks see it as a male-dominated type of ski resort because a lot of folks who come here is like a ski guy, like guy ski vacations, mountain men that come out here, even if that’s the case, a lot of the time their wives are still on there helping to book the property. They will first go off of places they feel look visually appealing.
Toby: I never even thought about that. That actually makes a lot of sense. Keep going, I’m sorry about that.
Heather: That actually just goes right into the next point is, think about what’s important your renters. In Crested Butte, we are a huge dog community, outdoor community, so folks that love to come out here and hike and ski, they want to be able to bring their pet. If your HOA allows it, or if your property allows it, and as long as you don’t have any allergies, if you can make it pet friendly, that’s going to be a huge bonus for you.
There’s little weird things, too. For example, for us, a king bed will make or break your rental. It’s the strangest thing. If there are two identical units and one has a king bed and one has a queen bed, the king bed will, at the end of the year, severely outperform the property with the queen bed.
Toby: Maybe it’s just making sure that you get a king bed in there. It is interesting. The little things make a huge difference. I learned that with ours and we have a couple of vacation rentals where you get them not because you’re planning on renting them out all the time but then you end up doing it and you realize that you better make sure you know how to do it right. And it is, it’s the littlest things make all the difference. It would be 20% or 30% difference in bookings.
Heather: Absolutely. When you look at 20% or 30%, that’s a lot of money. I would say the next thing to keep in mind, number four, is know your local laws and stay updated. They are constantly evolving, so know your local laws.
Toby: Is that what a property manager does? Is that what you should be expecting them to do or is that something you need to do?
Heather: I would say both. Ideally in a perfect world, you have vetted your property manager and they are professional. This is what they do for a living full-time, and they genuinely do stay on top of laws, and they stand on top of statistics of what’s […] and what’s not, what’s feedback they’ve been receiving. Now, that actually lends itself to a really interesting point because there are different types of property managers out there and they’re not all created equal.
You have folks that—I’m getting off topic here—I mentally categorize them in three different categories. One is that person that they work from home, they work off their cell phone, they got their vehicle, it’s just them, maybe them and their wife. They are who you get and they tend to be the most affordable. They have the lowest overhead. They may or may not be insured. And most likely, they are doing the day-to-day and running this as a home business, but they’re not actually going to seminars, staying educated, reading the laws at night, making sure that you’re protected. They’re just the neighbor friend that’s helping you out almost. I would say don’t depend on them to stay updated, they’re probably not going to.
Toby: I would agree 100%. That’s like having your uncle Ned do it. You’re giving Uncle Ned a little bit of money. You’re getting a discount, but it’s your uncle Ned.
Heather: Right. On the complete opposite end of the spectrum you have the larger companies. For us, that’s like the resort. there’s a couple other companies where they went out the majority of an entire complex and those are the ones where you’ll see that there is a photo of one property that is meant to represent multiple, and they’ll just rent the property that is available. It may or may not look the same, but it’s similar as an example of this. Those companies tend to stay really on top of legislation laws, they have individuals that are working in each specific area of their expertise, and they can be great. Sometimes for some folks, they feel like they can get lost and feel a little anonymous.
Toby: You’re in a pool in that one right? There’s 20 properties and how do you make sure yours is the one that gets picked? I already know what they’re doing. They’re going to say the one that makes them the most money with the least amount of aggravation. If for whatever reason your unit has a problem, dishwasher or whatever, they’re going to quit renting yours just because they don’t want to deal with the problem of the dishwasher.
Heather: That’s a good point and it might take them a week or two to fix that simple thing. What’s great about the larger companies is that they’re going to have most likely more ad spend dollars for advertising. They’re probably going to get more traffic to their website, their office, they’re going to have more potential to rent your property. The problem is that, pretend that you went out of your way, Toby, and you and your wife just really make your place beautiful. The neighboring unit is just pretty standard and all over…
Toby: You’re not getting the benefit of that.
Heather: You’re not seeing that increase in the value that you put in your property.
Toby: We see this in Vegas. MGM has its properties, people that buy down there. The best thing is to be hands-off. It’s not your unit anymore. That’s not the one you should be staying at.
Heather: On top of it, if you read your management contract with a lot of those companies, you’ll see that there is a disclosure in there that says that they will do their best to equally divide rentals between all units. For those of us that really like to excel in whatever field we’re in, it’s like how I felt about pulling tips when I was bartending. I think that whoever really provides the best service and the best product, you should be rewarded for that. You won’t see that.
Toby: Okay. Then there’s a middle ground I take it?
Heather: There’s the middle ground and that is really buried inside the companies and services they offer and it’s really buried in the percentage that they take. You will see anywhere from probably I’d say 20%–35% is the range there. […] brought 35% for our properties and that’s because we chose to have a system that is very systematic, streamlined, and we’re only taking on certain properties. In fact, we actually just recently did a big clearing. Anything that was not the right property and not the right owner, then that’s no longer a part of our inventory.
Toby: Move the bricks. They may be better off to be in the big pool.
Heather: Yeah. We would be considered in that middle ground because that middle ground can be so buried as far as the number of properties, how they handle things, some offer linen, some don’t. Some will pay for advertising and some don’t. Some charge you for toilet paper and you see that on your statement every day, some don’t. That is really across the board. That would be really important for you to have a clear conversation about what they do or do not offer and how they work with you.
Toby: Yeah, that makes sense. I could see it. If you’re in the middle ground, it’s like this. In my field, I’m an attorney by trade. If you’re going to take on cases and you’re getting paid a contingency, you want a case you can actually collect on. In real estate, I imagine that you want to be rewarded for bringing people into great units. If somebody wanted to spend very little on their unit, be bare bones, maybe dump it into a pool. If you really take care of your property and it’s nice accommodations and you want to be rewarded for that, maybe you need to be in the middle ground. Would that be a fair assessment?
Heather: Yeah. You actually bring a point because you say, “I’m an attorney by trade.” What’s funny is that I feel like when I mentioned the right property that really is easy for folks to understand, they’re like, “Okay, you want a property that they take time to furnish it, they keep it nice and updated, they make the improvements you ask for, it’s in the right location, it’s easy to rent.” It’s middle ground to rent it because you’re like, “That’s a great location, that’s a great property.” What I think is really interesting is that as far as the right owner, what I’ve noticed that has worked for us is working with, I never worked with you, but I believe somebody like you.
We work really well with folks that are professionals and are experts in their own trade. What we find out is they’re busy, they know where they add value, and that is where they have excellent and unique ability in that skill, and they’re not looking to get in your way. They say, “I chose you for a reason. I’m going to hand this over to you. I just want you to tell me what you need from me and from there, you’re my expert.” It’s the folks that cross that lane and they try to jump back and forth, that really actually ends up hurting them in that.
Toby: I’m a value person. I always tell people, “You could be focused on the money that you’re spending or the value that they’re bringing.” If you say a higher percentage, that’s going to turn off people that are focused on the money instead of the value. I’d rather pay somebody 35% of a much higher number than 20% to something that’s not performing. They’ll be so focused in, “This is what I pay,” well it’s like you should actually look and say, “What percentage of your revenue total and what is that revenue target?” if I’m bringing in zero and I’m paying 10% because I got a bare bones manager for it somehow, I still have zero, it doesn’t really matter.
They’re not doing anything for you. They’re not getting any revenue. I’d rather pay 50% to somebody who’s keeping my unit top dollar paid out. That percentage isn’t the issue, it’s the, “What’s the revenue?” the bottom line revenue number. You have a couple more that we want to go through on your six things. I think you’ve gone through four. Let’s jump on the fifth.
Heather: Absolutely. That the fifth one is really simple, just be quick to respond. We live in an on-demand society. Folks do not like to be kept waiting and if you wait too long, they found somebody else that already accepted their reservation. Again, if you have a property manager, then not a big deal. You have somebody to take care of that for you.
Toby: Is the property manager able to agree or do they ever have to get approval from the tenants? Do you deal with any of that nonsense?
Heather: Do you mean approval from the owners?
Toby: Yeah.
Heather: Yes. That’s where we talked about who’s the ideal client. The ideal client is the professional that hands it over and says, “I am giving you the freedom.” The person that says, “I want to have authorization over every decision,” which we’ve had in the past and we do not have them anymore, those are the folks that actually miss out on bookings because by the time that you ask them their permission and then get back to the person, they’ve already moved on.
Toby: I want to know if I’m booking something that I have it. I don’t want to be, “Hey, I hope I can get it. Please let me know,” I just want to be able to say, “Here’s the dates, can I have this unit?” “Great, let’s go.”
Heather: Right.
Toby: I couldn’t imagine waiting two or three days to hear back from somebody. Even a few hours is annoying.
Heather: It is. See? You just said a few hours, and that is the society we live in. We want to do something, we want what we want, and we want to move on.
Toby: I was looking at a checklist, “This is where we’re going to go, this is the unit. Great. Check.”
Heather: I love that you bring that up because I think that a lot of owners that really have that tight hold on some of those decisions, don’t realize how much they’re hurting their bottom line.
Number six, I would say is that in general, when you just look at your rental holistically, think about the lifestyle. For us, we’re in Crested Butte and folks that come here come from Texas, they come from Austin, Oklahoma. They come here in the summer because it’s really hot than where they are. When they come here, they’re having a little escape from their life and they want to be a part of our community. They want to be part of the mountains. They want to ride their […] around. They want to get away from what’s happening back home and they want to be part of our lifestyle. When you put your vacation around together, think about what they want, and that’s how you attract them.
Toby: That’s perfect and that actually makes sense. Now I want to go to Crested Butte.
Heather: I want you to come to Crested Butte.
Toby: How does somebody find out more about what you do and Crested Butte? If they want to go up to the mountains a little bit, we can get into a few things. How far out of Denver? Are you closest to Denver?
Heather: We are. We have a couple of airports depending on your choices. The closest airport is Gunnison, 30 minutes away. If you have a private plane, you have to buy land to actually fly into, but we do have a private airport here in Buckhorn Ranch. The most commonly used airport is […] and that’s around 4–4½ hour driving to Crested Butte.
Toby: Wow. Flying to Gunnison is what you’re saying.
Heather: Yes. Fly into Gunnison.
Toby: Awesome. How do they find out more about you?
Heather: If you’re looking to find out more about vacation rentals here, you can visit our website which is watchdogcb.com that’s for Crested Butte. For real estate and how to purchase a vacation rental property here in Crested Butte that is heatherconnor.com.
Toby: Very cool. I will post this up on our website as well. I really appreciate you spending time with us. When I first talked to you I was like, wow, you’re really into the vacation rental stuff and you seemed to be very zeroed in on it. You made it very simple and easy to understand. That would be something that a lot of people should hear just because there’s a lot of folks that get out there, they hear about Airbnb, VRBO, how great it is, and they’re on vacation somewhere so they buy something. They’re looking and they have no idea what they’re getting into. This is not your traditional rent it and forget it type of thing. This is a full-time job for somebody to really manage these things.
I can speak from experience because I’ve had vacation rentals. My partner and I, Clint, he was dealing with all the little maintenance stuff and he kept saying, “This is just annoying. If I have to deal with another person who has a remote control and it’s the remote for the fan and they’re trying to turn on the TV with it,” he goes, “I’m going to go crazy,” so I was like, “Which is why you use a manager for it.”
Heather: That’s so funny and you start labeling everything. You’re like, “This is the door.”
Toby: “This is how you turn on the dishwasher. You ever used a dishwasher? Yeah you have.” […] We do it all the time. We have a couple of condos here and there, and some of them we just let our friends […]. Still, you’re always dealing with that little stuff and you always have to ask yourself, is it worth it? Do you really want to spend time dealing with everything from a house cleaner, making sure that it’s clean. You’re not there. Let’s put a camera and maybe that would freak people out. You have to have somebody that you know that if you say, “Hey, it needs to be cleaned on this date,” that it’s actually clean on this date.
We’ve done it remotely. It is a mess sometimes where you’re just like, I don’t have eyeballs there. It really does make a huge difference and then it’s your unit. A lot of your people, do they actually come and spend time in their own units?
Heather: They do. A good majority of folks this is their vacation home. Actually, we have a lot of folks that, if it weren’t for the fact that they could rent the property when they weren’t there, a lot of them wouldn’t be able to afford a vacation home. This is a good way for folks to have an investment in a location that they love to visit and they can actually afford to have it in that area. Whereas in years past, maybe it would have taken them another 10–20 years to be able to actually afford all these payments.
Toby: That is perfect. I’ve seen that work with boats and yachts. I never thought in a million years that somebody could do that stuff, but they do, and I’m always shocked at it. Then I realize, it’s way more important that you don’t destroy your unit by bringing in the wrong people. That’s where it really comes in, like you said, that you want a certain type of manager or a certain type of owner, and you probably are just as selective on tenants, too. I don’t want to have somebody that’s going to go in there and trash my place because it’s my place. This is where I actually spend my time, and it’s my belongings, it’s my furniture. Yes, other people are using it, but it’s a lot different than if it’s a rental where you’re never going to go there.
Heather: Right. That brings up a good point. We won’t have time to jump into this today, but if you want, I can send you a link to a video that just talks about a couple of ways for you to protect your investment, to protect yourself.
Toby: Absolutely. We’re all about protecting. There’s different insurance for it. You’re preaching to the choir when you start talking that realm, and we would love that link. We can always share it with people that are listening to this.
Heather: Absolutely, and folks like you guys, what you share with and educate everybody on as far as asset protection really falls in line with one of our mainline items as far as protecting yourself either to a corporation, anonymity, or both, which is what you guys speak to all day long. I can’t say enough how much most folks get that stuff until it’s too late. They just get excited and they take cute throw pillows, and they are really into it, and they forget that there’s a very real legal side here where there’s a lot of potential liability, and it’s important that they speak to somebody like you guys to make sure that they are protected on that backside.
Toby: I appreciate it. That’s what we do. Thank you for coming in and talking about what you do. I think that will be of great value for someone who’s thinking about vacation rentals. Actually, really digest and think about what Heather was talking about because it makes such a huge difference. It is a different animal than your typical investment property. It could be a great thing if you’re walking in with realistic expectations or it could be a really horrific thing if you’re caught unaware. It’s like buying a boat. […] buy it and sell it.
If you’re using it, fantastic. This thing is really great if you’re treating it as your unit. If you’re doing rentals, it’s a little bit of a different animal. Just know that they’re very different animals. Heather, I just want to say thank you very much for joining us. I loved hearing from your fan club there, too. I love the pets and the rescue dogs which is telling us something about you there. That’s awesome. You get a big check on that one and I really appreciate you joining us.
Heather: All right. Thanks, Toby, good to see you.
Toby: All right.
