Welcome back to another episode of Into The Airbnb, where we chat with Airbnb hosts about their short-term rental experience. Our guest for today is Chad Hensel from RentLyne, a luxury vacation home management service based in Charlotte, South Carolina. Join us in this episode to hear about his journey and experience as both Airbnb host and property manager, how the market has changed these past years, insights on his current markets and how much can you do in suburban vs warterfront areas. This episode is sponsored by Airbtics, short-term rental analytics for high return investment, comprehensive data for insights, ideas and inspiration. Go to app.airbtics.com to find precise Airbnb data such as occupancy rate, revenue, average daily rate and so on. So, without further ado, let's get into it! So can you start by telling us how did you get started with short-term rentals or with Airbnb?
Sure, I came from a hospitality background. I was in restaurants for about 15 years and after that I got into real estate, it was an agent and a broker for roughly seven years. And when my time for that was coming to an end, I really kind of thought about those two careers that I had and try to figure out crossroads where those paths crossed. By chance I stumbled into a company here in Charlotte, that was doing short-term rentals and I thought it was a good overlap of the two things that I really enjoyed. So I reached out to them, they brought me on board, so that they could focus on their tech product, while I kind of built up their real estate portfolio and spun off to the races ever since.
That's great. And you told me you manage around 51 listings, is that including yours? I mean, the ones you own or you don't own any of your listings?
I do own seven of my own listings and it is included in that 51. The rest are managed for others.
Okay, and do you still work for that company you talked about before?
No, after I'd grown their portfolio from 26 properties up to about 72 by the time I left, it was just time for a new challenge kind of started over with a different company. And kind of taking them from 18 listings up to, I think we're about 42 right now, so we're still growing, we're being much more intentional about it. So the nice I could learn from the COVID times is that we can't just accept everything. We set out on a path that we all agreed on and are very intentional growth and we're very happy with it.
Okay, that's great. Can you tell me how does your work as a property manager and as an Airbnb host is together? Like, how is the experience doing both at the same time? I know, it's kind of related, like it's almost the same thing. But I will choose like to hear about your experience like in general doing both.
Sure. I mean, yeah, they're very similar, but there are some differences, you know, when it's your property and your listings, kind of take it a little bit more personally, when your guest writes in about something that's not quite up to their expectations. But yeah, we kind of wrap it up all into one package and keep it as consistent across the board as we can. We host all the properties on the same platform, for example, we have the same remote customer service team that works for both sides. So we really try to, like I said, to make it as simple across the board as we can. But yeah, you do take a little bit more personally on your own personal properties.
Yeah, that's right. I completely understand. And you told me you own about seven listings, right?
Yes.
So did you get started with short-term rentals already with the seven properties? Or did you start it with just one and started acquiring more?
Yeah, so when I first got into short-term rentals, I was working for prior company and during the course of growing their portfolio, I was looking at the properties that we already own. So we could purchase just as regular long-term investment properties. And so I can make so much more money doing it on the short-term market. So in between my private company, my present company, it took about a year off in between to really get my properties up to a level I was happy with and then kind of got back into the game of managing for others.
Managing process for your properties?
I've done a little bit of everything. The first one that we put up as a short-term rental had been our primary residents that we had just moved out and the property, we had it rented in a couple of months, so we kind of moved it into the short-term space. From there, we've done a couple of just regular investment property, mortgages. One of them was a failed flip that we turned into a short-term rental and that was with a hard money lender, we just got done closing with a company called Vizio and they have a short-term rental financing product available that's just starting to pop up. So we've kind of done a little bit of everything, a couple of them we bought for cash when they were foreclosure. So we've really done one or two, just about every financing you can imagine.
And out of your own financing experience, which one would you recommend? Which one was the easiest to do and the less expensive also?
Obviously, if it's a primary residence or your second home, those are much easier. And then as you get into the investment property, financing with your local banks, it's most similar, it's just much more stringent. You have to have the cash flow to back it up. Once you start getting into the more exotic programs, it takes much longer to get through underwriting and the rates are more expensive. So I was going to tell people to go with the traditional routes first. And then kind of once you've exhausted those and start looking for some of the newer products.
Okay, thank you for your advice on financing them! And can you tell me all of your selling listings are currently located in the same market?
All the ones that I own are in the Greenville market. And we do some of the listings for others down there. But the majority of our properties are in Charlotte. Neither of those markets has a terribly large seasonal adjustment, that there aren't any gigantic weather changes. You know, it's not like South Florida where it's warm in the winter and so we don't get that. It's pretty steady all year round.
Okay, great. So both of them are all year round markets, you don't see a big revenue difference in any of them?
Well, the area that we've chosen to grow either results out of Charlotte, there are a couple of very large freshwater lakes and so that's where, as a company we've chosen to really put our efforts in. Those do have a bit of seasonality. But the more urban properties and the suburban properties, those ones hold steady.
That's great! And can you tell me how much monthly revenue or annual revenue can someone estimate in those markets?
Sure, for kind of a more urban and suburban properties, you know, a three bedroom, two bathroom, can range anywhere between $35,000 a year and $55,000 a year, depending on the exact location. Then when you get out into the lakefront properties, that number jumps up pretty significantly to anywhere between 80,000 and 200,000.
Wow, that's a lot of difference between the lakefront and the suburban. I've heard about the benefits of doing lakefront or like going out, you know, the revenue is way higher. But is there any particular challenge that comes to rent a property that is lakefront?
Sure, I mean, there are some regular logistical things like making sure that you have all of the rent water toys available, the floaties and all that kind of stuff and that they're cleaned and always, you know, refresh. Yeah, we've worked with a local boat rental company, that we were not handling the boats ourselves. And so we're kind of looking at the whole several different things. Yeah, there are some strange things that pop up being like houses that you won't get with a normal house in the suburbs.
So can you tell us if there is any seasonal change, how much would you say is the occupancy rate in those kind of big seasons if there's any?
Sure. We use kind of some pricing and marketing strategies, we always target between 65% and 75% occupancy. That's kind of where we found to be our sweet spot. Here in Charlotte, the fall tends to be kind of be our higher season, especially now that the concert venues are reopened, the football stadium is opened. We do have more frequent large events in the fall. But even then the difference on our occupancy is only 5% to 10%. It's not a wild difference, we're not getting, you know, 30-40% differences.
That's still a good number of occupancy for all year round. So can you tell us a little bit about how much would be the revenue difference in Greenville and in Charlotte? I thought I heard some numbers before, but I'm not 100% sure.
Yeah, the difference between the two markets, you know, a fairly normal house are very minimal. Both markets do a real, very good job of having year round events in the tourism industry that's kind of outweighing the rest of the economy. So yeah, they're very comparable.
Okay, that's great to hear. And how about how do you manage pricing? Both for your personal listings and also for the listings you manage?
Sure, we use dynamic pricing tool to refer to the club PriceLabs, in the past, we used Wheelhouse, Beyond to talk to the folks that were rented for their version of the art. We use those to create a nice basis and to set up some programming. But then for our lake houses, it's much more manual. We look at those individually about every week or two to make sure that we're hitting our occupancy targets and earnings targets for those properties.
And can you tell us, how much would be the price difference between a lakefront and suburban?
Oh, yeah. That, do you mean on a daily rate or for the earnings potential?
Yes, daily rate.
Right now we're coming into our summer season, so this is kind of primetime for the lakes. In the rates here can go anywhere between $700 a night and up to $1,300 a night. When you're getting near like July 4th, Memorial Day, Labor Day. Versus there are properties that are in the more central markets. We're looking at around a generally $150 to $200 a night. So it's a pretty big difference.
I understand the price difference. But in the specific events, like you said, Fourth of July, Memorial Day, how much do you raise the price for both of them?
It tends to be somewhere around 30% for our market. Occasionally we do get kind of more unique events or one time events, like this year, as a good example, we have the Presidents Cup, which is a very large golf event. And we have several lake houses where that event is being held. So even though that one is in late September, we're able to basically get our privacy's and rates for that even though it's out of season.
And how can you pull on the strategy to price those event dates? Do you already open the calendar for, I don't know, maybe four months before and start already raising the prices? How do you do if, for example, it's already one or two weeks before the event and there are some dates left? How do you manage that?
Sure, in PriceLabs we use their far out pricing. So you can set up kind of a rolling pricing category. So we open up our calendar actually a year out in advance and we tend to charge higher prices, you know, for the folks that want to kind of book early, you know, lock in their time. And then as the event draws closer, kind of our normal pricing kicks in. And then once we're within, I think it's about 10 days, that's when we start offering small but incremental discounts to make sure that we're hitting our occupancy numbers. And then also, within PriceLabs, we have a set up so that once we get a certain occupancy number, our prices go back to their floor, we get rid of any discounts,
And how much would be the discount you offer when you get closer to those dates?
I believe we have ramped up, kind of starting around 5% and goes up to 15% over the course of several days.
Those are good rates. And do you only offer a discount when it gets closer to, you know, a date, you know, it should be good? Or are there any particular other events or occasions where you also offer discounts?
We tend to be a little bit more stingy on the discount side, we try to get a price right on the front end. So we're not happen to try to manage as many discounts as the date gets closer.
Yeah, I understand completely. So now that we talked about pricing completely, can you please tell me a little bit of the challenges that you have encountered? Both as an Airbnb host of your own properties and of the properties you manage for other owners?
Sure, it's very similar in the challenges that we've faced. Finding a strong cleaning team, I think it's everyone's problem here in the industry, we all have difficulty, especially once you get into more than three or four units, you really need that outside help. Gonna really from there, it's maintaining the consistency and the quality. We saw when COVID happened, my personal property kind of took a little bit of a hit, so I had to hit pause on some of the ongoing maintenance. So some of that got deferred a little bit. And then kind of once we started getting through that we took a, you know, a real hard honest look at everything that's going on. So okay, we may have pulled back a little bit too far here and there. It's now time to get caught up. I don't think that's too unusual for everyone.
Yeah, that's right. And is there any particular challenge you face as a property manager, especially when it comes to the people you manage for?
The number of units that we have and the number of teammates we have on our staff, making sure to set time aside to communicate with our clients, everything that's going on, what's gonna happen in their properties, and what we're doing proactively to increase their revenue and to take better care of their properties. That's been a challenge, just because there's only so many hours in the day. So with the properties is easy to tend to forget that step of having a great time to just communicate with the clients and keeping them fully informed.
Yes, I fully understand them. And can your clients get involved in many aspects of the management, if they want to?
No, we try to be as turnkey of a service as possible. Most of our clients have other jobs or other careers they're working in, so they don't have to be as involved. Very occasionally we will have situations arise where you will need their input or their advice on how they would like a specific situation handled. But outside of that, we try to keep it as simple as possible.
Okay, that's great. I've heard about that before. But if someone wants to get involved in, you know, some aspects they don't usually do, they are allowed to, right?
Yeah, we on a case by case basis, I mean, at the end of the day, the properties that we're managing, we're not the owners. We're not gonna be telling someone who owns a million dollar lake house that no, you can't come out and take a look at something well, I guess is there. That's kind of the one that we run into every now and then. But yes, we try to just keep as much distance as possible. We give them all of the reviews on a nice printout, we let them see the messaging, like we're very transparent and open with everything. But we really try to keep the distance, just as the communications everything, we want this to be a business for our clients and not just kind of them renting out, you know, the extra house for a little bit extra money. We want them to really know that, yes, this is a business asset. You're hiring managers to handle everything, you know, let us do the work. And you know, as those rare occasions pop up, then we'll get them involved.
I understand. And it seems like your communication with the client is very good, so you keep a lot of clients, right?
Yeah, so far, we've been looking at a knock on wood there. In the two and a half years of in this current company, we haven't lost a client, and we're going to keep pushing on that.
That's great. So you've been in the property management industry or doing inging short-term rentals also during the COVID period, you know, the COVID outbreak on 2020?
Oh, yeah. I was there for that.
Okay. So can you talk a little bit about that? How was the market back then? How did it you impact? And how it is for you right now? How did you came out of that?
Sure, at the time, that was actually when I was still in the process of onboarding my personal properties into short-term rentals. And we went from, you know, having a, at the time a very kind of slick team and set up. When the first time initial panic came through, I had two cleaners that were on my team, they both left, like with no notice, you know, they really did panic. And obviously, with Airbnb, essentially allowing everyone to just cancel their reservations. You know, there was a lot of uncertainty. So we really cut back on everything that wasn't a mandatory spend. Essentially, anything that wasn't the mortgage payments or utilities kind of got put on hold for a little while. And so we just kind of stayed with it. We thought that things were going to eventually return to normal or normal ish, that if we could just outwait everything that we'd be fine. And then, by the time we may started rolling around, you know, we're two months into lockdown. So everything else so we saw a pretty much an explosion of people that were tired of being, you know, within their own four walls or being separated from family and so people started traveling again. At the same time, we had this kind of trickle that didn't turn into a rush of travelers. A lot of our competition dropped out because they did not have the reserves to last 2,3,4 or 5 months with no income. And so just like we thought would happen, kind of washed out. The folks that didn't have the staying power and the folks that were able to last through actually reap depth and reap the benefits for basically the last two years. So that's kind of where we were and all that mix, we were able to make it.
That's great. It's great that you were able to make it! And how long did it take for the market start picking up again with your personal experience?
It took our markets, probably about four or five months, for the urban markets to start recovering this weird juxtapositions of here for the lake properties, they recovered almost immediately. You know, a lot of folks were looking around saying, "hey, if we're gonna be stuck in a house and we have to quarantine somewhere, let's go ahead and get the whole family together. Let's go rent a giant lake house for, you know, two, three weeks, you know, we'll spend the money, it's fine. Now's the time to do it". So the property is here on the lake, they just didn't really slow down, they actually got much busier than we had expected. So it was kind of a two tier recovery here locally.
Yeah, that's very particular and never heard about something like that. That makes a lot of sense. So can you tell me a little bit about the revenue difference during the pandemic when it started picking up and how it is like by now?
Yeah, during the pandemic, obviously, it was a much lower. I'd say, we probably saw about a 40% decrease for the first six months and then started steadily creeping up and creeping up and creeping up. And I'd say, probably by the middle of 2021, we were fully recovered. And then in the second half of 2021, and the first half year of 2022, we're actually outperforming everywhere pre COVID. So for our end, we're going gangbusters.
Also, you can still relate to your rates or to your pre COVID rates, would you say that is like your top performing numbers pre COVID and right now?
Oh, yeah, we're doing much better now than we were pre COVID.
Okay, yeah, that's great to hear. So lastly, are there any tips that you would like to give for other Airbnb hosts, people who might would like to also hire a property management company?
For anyone who's interested in hosting, think very long and hard about all the details that can go into everything and start to exist and put those in place before you hire anyone or before you even really get too far down the road. There's a lot of detail, especially as you start managing multiple units because at that point, you're essentially running a decentralized hotel. And if you think about everything that has to go on there, you're doing all of that same work and activity just in multiple places. So it actually gets much more complex. For any property manager who's thinking of bringing on a property management company, I would say you've to talk to several of them. And you really get a feel for how they operate as to talk to some of their existing clients for references. And you know, at the end of the day, go with the one that's going to give you the best feeling, the most comfort and give you the most information as to how your property is actually performing. You will see that right now the industry hasn't quite coalesced around specific standards of information to be given over us aside from the basically top line sales numbers and your bottom line revenue. But there's a whole wealth of information out there other than just those key figures.
That's right. Thank you a lot for your tips! And if you'd like to promote your company you can do it now.
Sure. My name is Chad Hensel, I'm with RentLyne. We also operate the lake line brand here in Charlotte, and the upstate co-host brands in Greenville, South Carolina.
Thank you a lot for your time and for your tips and all of your information. These have been really helpful and interesting to hear about!
Alright, thank you so much for your time Delia. It was wonderful speaking with you!
Thanks for listening to Into The Airbnb. We're looking for hosts and other people in the short-term rental industry to interview. If you had what we need and would like to share your experience in this podcast, please send us an email. All the info is at the end of the description.
