Welcome back to another episode of Into The Airbnb, where we talk with Airbnb hosts about their short-term rental experience. Today's guest is Kim Fitzpatrick from Portland, Oregon, who manages five listings located in Portland, Destin, Florida, Blue Ridge, Georgia, in Sevierville, Tennessee. Today, Kim will share with us about her journey and experience as an Airbnb host and also about her experience doing remote hosting. This episode is sponsored by Airbtics, the only one analytics dashboard for short-term rental investors, managers, where you can find precise Airbnb data such as occupancy rate, revenue, average daily rate and so on. So, without further ado, let's get into it! Can you tell us how did you get started on Airbnb?
I got started on Airbnb as a house hacker, so I rented out space in my personal house while I lived there.
Good and how much time did you spend on that before you started with whole listings?
I probably did that for about a couple of months before I looked for a new rental property. I would say it was close to nine months before I purchased the next rental property which was in Portland, Oregon. It was a condo really near to where I lived. So yeah, I knew after a couple months of doing it as house hacking that I wanted to venture out into doing it bigger and better and outside of my residence.
Great. And how was your experience with house hacking? Is it a good way to start?
I've really loved starting that way because I feel like you get to know your guests, you actually meet them and you can talk to them and get more feedback than you may otherwise get. You get a feel for what they want, how they come and go and just sort of how they live in your space. And that's different when it's one person renting a room versus a whole family coming in and living as a family and going everywhere throughout the house. But it was good to talk to guests and some of them were more experienced on the platform than I was and so they would give me great feedback on how to improve or they would tell me I was doing a great job or what they liked, comparing mine to other states they've had. So it was really good information.
Good and how did you decided to get your own whole listing?
I was surprised by how much money I could actually make and how successful it was house hacking. I like baby steps my way into this. I rented a condo, no, I didn't rent, I purchased a condo in my neighbourhood, which I don't suggest doing, but that's how I did it because I was a single mom, my kids were young and I was working full time. So I felt like I was going to do the cleaning, which is a joke with a full time job and two kids, I did about two cleanings before I panicked and called a cleaner and I found a really great one. But I knew I just couldn't take on all of the work and I had to hire that out. So it was a good experience, good learning experience for me.
Great! You told me previously that you have more listings in different cities, how was the process? How did you get started acquiring more properties in other cities?
So after that condo and I really loved hosting and I loved making guests have a just a great experience and really setting up a place and being warm and inviting. I decided I really wanted to learn more and so I went to Google and YouTube and all the places you go when you want to learn something and I found a really great YouTube channel, which was founded by Richard Fertig, it's called STR University. I signed up and I went to his conference and I learned so much at the conference. I learned how you can invest in better ways with properties that make more money rather than just investing in your backyard, but to really find locations that are going to make more money with less work. I mean, I love to make a space beautiful and make somebody feel welcome and happy, but there is a business side of it as well, that is really important. So I learned a tonne through the conference that I went to and then I continued going to more conferences. But also the people that I started surrounding myself with because I would have a lot of naysayers in my social circle, people that didn't do it and they were afraid of it or they would say all the things that could go wrong. But when I started to expand my social circle to people that were in this business, running it like a business, I learned so much, I had a great support system. I had mentors and like-minded people and it really helped me to educate myself very quickly. So once I went to the conference, then I started looking all over the United States and that's when I got my next property in Sevierville, Tennessee, which is near Gatlinburg and Pigeon Forge and is a really great tourist market. Then from there, I acquired one in Destin, Florida, and Blue Ridge, Georgia. And now I'm putting a glamping trailer on my cabin property in Sevierville, Tennessee.
Well, that's a great story. I agree that looking for other people's experience is inspiring and you can also learn a lot about that.
Yeah, it really great to have people talk me through situations that they had been in before and things to look out for. It was nice to know that if something happened that felt unusual, I knew that I could reach out to other people and ask the questions and say: "Oh, my gosh, what do I do in this situation? Or Is this legit? Oh, is it okay?" I didn't understand. It made me a better host in such a short period of time having so many people around to guide me and teach.
Yeah, that's right. And how has been your experience with remote hosting so far?
You know, it's interesting. Remote hosting for me is actually, I want to say it's easier than the condo that was right around the corner from my house because the condo that was right around the corner, I would do a lot of the day to day work. If something happened, I would run over and I would check and I would do the cleaning and I would follow behind the cleaner and I would just fuss with things and judge things around and it took a tonne of my time. And when you have properties that are across the country, you know, you can't drive over there real quick and fix things, so you set it up properly at the beginning. Before you start you need to have all your systems in place and set up, so that when guests start to come everything is dialled in and is running smoothly. So for me, it's easier because I have to have more planning and vision ahead of time. But then everything runs according to plan, you don't put it off and you don't think "oh, I can just take care of that later", everything needs to be dealt with in the beginning. So it's a little bit chaotic and stressful in the beginning, just making sure you have everything ready, but after that it's much more efficient and easier then to grow on to the next and the next after.
I see and what will be the steps you take to get a remote rental ready?
So the steps that I would suggest you take is you really really want to be educated. For me, it was great to start out with hands on experience through the house hacking and the condo nearby. It was a great education. It wasn't necessarily my best moneymakers, but the education was worth so much to me in the beginning because I didn't come from a hospitality background. I was a middle school PE teacher and basketball coach. So other than keeping kids moving and parents happy and communicating that way I didn't have a hospitality background. So educating yourself is really really valuable and surrounding yourself with mentors and a support system and reaching out and doing the work yourself. Nobody hands it to you, nobody's gonna feed it to you, so you have to be self-motivated and go find the answers. So I think that's really, really important. And then you're going in a need, once you start getting educated, you'll learn the tools, you'll learn how to get creative financing and you'll learn how to really get into the numbers of how the rentals make money. A lot of people will use AirDNA as their source for running the numbers on properties. AirDNA.com is a great source. Also, I have a friend named Kenny Bedwell, who is building a new one that is competing with AirDNA and it's called STR insights and it will break down properties even further than AirDNA does. So it's really accurate and it gives you a good prediction of the money that you're going to make. So you know how much money you should spend to continue to make money, so that you don't overspend. So yeah, you just find all those tools and you use the tools, you practice the tools and then you're ready. With help from guides anyone can do this truly.
Yeah, I agree. And what about the crew you need for your house? I mean, the cleaning crew, the handyman?
Yes. So if you decide on an area, let's say Sevierville, Tennessee was the first remote location that I got. So once I picked a property and I knew the numbers and I knew it was going to be a great investment. Then I start scouting for housekeepers and contractors and people like that. You'd reach out to your network, who has a property in Sevierville? Who has a property in Gatlinburg? Pigeon Forge? Does anybody know housekeepers? What do you think? Then you start asking questions and paying attention and then you have to interview them. I interview remotely and then I boil it down to two or three that I really like and I will meet them in person and walk them through the property. Once I get there to set it up and you get a feel for people. Then it's always good to have a backup, you want to have one main and one backup in case something happens. You always want to have that safety net, so that you're not left high and dry, if something were to come up.
Yeah, I understand completely. Let's talk about pricing right now. So you have different listings in really different locations. So how is your pricing strategy like with that?
Pricing, that's such a good topic, I'm glad you brought it up. Pricing is really important. I know when people get started, a lot of times they think they can predict the pricing by checking other properties in their area and then going off their gut feeling or if they know a big event is coming to town, they might know to increase their prices for that weekend. But the thing is, if you do it on your own, you spend a tonne of time manually pricing and changing prices or you're leaving a lot of money on the table. It's surprising to me how we think we know something and then we get into it we realise there's all these tools available to us and if we use them, we can make a lot more money with a lot less work. So I use pricing software. Personally right now, I'm using Beyond Pricing. They charge 1% of my booking fee. So if I made $1,000, they would take 10, very simple math there. But it's so worth it because they will price some days so high and I think what in the world there must be something going on that I don't know about and it gets booked and I'm shocked sometimes I see the prices and they also will drop the prices as well on lower occupancy times like Tuesdays in the offseason, so you can stay full, you can stay booked according to the percentage that you want to be booked at. But you're not missing bookings or you're not getting bookings that are too low. And you set your standards, you set your rates, what you want your average rate to be and what your minimum is so they won't go below the minimum. There's others too. I use Beyond Pricing, but there are PriceLabs and Wheelhouse. I don't know a lot about Wheelhouse, but PriceLabs charges $20 a listing I think and it might be less if you have multiple listings. So it's really really affordable and I would strongly suggest that everyone that has a listing, use a pricing software.
Good and do you use the pricing software option for all of your listings?
Yes, every single listing is connected to my pricing software because, even though I live in Portland, I don't know all of the things that bring people to the area. People will tell me they're coming in for all sorts of things that I had no idea. We have corporations that are housed near where my listing is, Intel and the Nike World Campus are here. And I don't know when they're having a big function and bringing people in from out of town, but the pricing software seems to pick up on those things. The same is true for Florida, Georgia and Tennessee. I can't keep track of everything every weekend and whatnot going on. So the pricing software does it all for me and I can just check on it here and there and adjust it as needed, but it does a really good job of automatically changing things for me.
Yeah, I agree. It's a really good thing technology, it'll help you a lot. What about the occupancy rate in your differently listings? How is it like in there in the high season versus the low season?
Oh, occupancy is so interesting, so I'm glad you brought that up. It's different in different cities. So Portland tends to be rainy and cold all winter, so we don't get a high occupancy here in the winter and we get a different kind of guest as well. So in the winter, I generally get lower occupancy, so I dropped my rates a little bit and that helps buffer that. But we will get families visiting family members here and people here meeting people they know or business travellers more in the winter. Then in the summer the occupancy is the highest, people are excited. Summer in Oregon is beautiful, it's not humid like the south, so that's our peak season. It's sunny, it's gorgeous. There's hiking, so people come here to visit, to see the greenery and the beauty. Then in the mountains of Tennessee, holidays are great, fall is beautiful because all of the foliage changes and it's absolutely gorgeous. There's a tonne to do in the summer there as well, so Summer and Fall are the high season in Tennessee and then it drops off after the holidays, so January February are pretty slow. That's okay because that's, when things are slow, that's when you do the maintenance, you do the deep cleans, you make upgrades and changes. And you use your property too, so that when nobody else is there, you get to go enjoy it. So you're making money in the high season, enjoying it in the offseason. In Georgia in the mountains, summer is great because again there's hiking and rafting and fun outdoor things to do. There's always holiday travel out there as well. But it slows down similar to Tennessee in that January February range. Then Destin is right on the water, it's in the beach, so it's the Panhandle. So it is cooler in the winter and everything has happened in the summer. So summer is high season there and that runs, I would say about Spring Break honestly to the late October is when it's high. Then after that the occupancy drops off sharply and a lot of people in those beach communities where the occupancy drastically falls in the winter will bring in a snowbird and the snowbird will stay there for a few months. So you kind of switch it over to a medium -term rental or some people call it a long short where it's still a short-term furnished rental, but it's a longer period of time. Then other people just allow the occupancy or allow the vacancy and use it personally. I know this winter I was there making improvements just recently, getting it ready for all the Spring Breakers. So yeah, it varies across the country in a different markets. My next rental, I would really love it to be a one that's hot in the winter, like a ski location because then my portfolio would be balanced across the year and I wouldn't have the dips in the winter financially that I have to kind of brace for a little bit and it would help balance everything out. So that's what I'm thinking of next.
Oh, so if you don't mind sharing, would you like to tell us about how much is your annual revenue?
I don't have my numbers in front of me right now, but my cash on cash return, I just looked it up, I did all the numbers for last year, a month ago or two. It appears that my cash on cash return is between 30 and 35% at each property, which to me are very, very great numbers. I think the stock market averages about 8% returns year over year. So 30 to 35, depending on the property is excellent. It's more difficult to find now, a lot of people have gotten into short-term rentals and as we know, the housing market and inflation have all skyrocketed, prices. Then even more recently, interest rates are climbing. So we have to work harder to find those kinds of deals, they're still out there, but we have to be more educated to be able to really dig in. Here's my tip, if people are talking about places like Blue Ridge, Georgia or the Smokies or these popular beach communities, and everybody's excited about them or they've had a lot of success there. My tip to you is that that market is probably done, you want to hit the wave early on and go to places that people aren't talking about. If they're already talking about them all over social media, then you're probably not going to get a high cash on cash return for your investment at that point. So you want to look at newer emerging markets. And that's where the STR insights and AirDNA can really help you know your numbers. So use your tools, it's really important in this day and age.
Yeah, I agree with that. Also that you mentioned your numbers, those are really good numbers. I agree.
Thank you. Yeah, I'm pretty proud I have to say
Yeah, you should be, those are great numbers! Which one of your listings is the one that brings you more revenue throughout the year?
The most revenue we get throughout the year has been the property in Destin. I will say that pretty much all of the revenue comes in the summer. So we need to be careful the way we handle that one in that the winter dries up and if the occupancy is very low. It has higher highs and lower lows. So I've noticed in mountain communities the roller coaster is a little less softer and in the beach communities, the roller coaster is sharper. So I caution people to manage their money really well and really be forward thinking with finances so that you don't think that the gravy train of summer is going to run 12 months out of the year. You really want to watch for that and be aware of that so that you don't overextend financially.
Yeah, I agree. And throughout all these years being an Airbnb host, what have been your top challenges?
Ah, challenges, I would say my biggest fearful time was when I purchased the cabin in Tennessee, my first remote cabin. It had been rented for about a month as is before I could get out there and really make it into something special and amazing because of my work schedule. I got out there and COVID hit and as a teacher thought I had a two week spring break and then we were going to go back to school as usual and COVID would pass. I had spent all this money and effort fixing up the cabin making it really great. That was right at the beginning of COVID and the bookings dropped off completely and it was vacant for the first three weeks after I list it and I totally panicked. It was my first remote location and I thought "what have I done? Did changes I make ruin it? Was it working before, it was great?. That wasn't the case. It was really COVID, I didn't understand that was going to be such a substantial life changing event. So that was stressful for me. And I would say looking back, there have been moments where maybe there was an issue with a guest that I was very worried about in the moment, but looking back it doesn't seem like that big of a deal anymore. Maybe there was some damage and I was really disappointed that they would treat my house so indifferently or with just a lack of care. But ultimately, it's been really, really great and there hasn't been too much struggles that we can't work through and come up with solutions for. So overall wonderful, great guests. But there's always that one or two that just make things stressful or there might be an issue, I had a water heater go out last summer in Destin. That was coupled with a guest that was not super flexible or understanding, so it just created a really difficult week. But it was one week in my whole life, at one property, and we're through it now we have a great water heater and we refunded the guest. They'll probably never come back, but you know, we did the best we could. So ultimately, it wasn't as big of a deal as it felt like in the moment.
Yeah, it must have been scary go through the COVID breakout like the first one ever, so just a scary experience. Will you like sharing some experience you have with trouble guests? So other people, other Airbnb hosts can see that it can be something they can pass through, that is not the end of the world because many got really discourage after one. They really think is going to end their business forever. So would you mind sharing some with us?
Yes, I'm happy too, that's a great topic. I do sense that somehow, new listings seem to attract difficult guests and I'm not sure why that is. But maybe it's a SEO, maybe it's chance, maybe it's just my experience. But I've helped a lot of people get started and the nervousness of a new host mixed with a new listing and maybe they don't know all of the ins and outs just yet or the rhythm of it. Then a difficult guest comes in, maybe it's the lower price that people tend to start out with in their new listing, but they'll get a difficult guests that might leave everything really dirty or sloppy or they might stay in sheets or something gets broken. But a lot of times, it becomes so emotional because we put our heart and our soul into these properties. We put all this love and care into furnishing them and thinking about what guests would want and appreciate and when it feels like it's being abused, it feels like a personal attack, even though it's not, it feels that way and it's so hard to remove our feelings from the situation and just manage the facts. So I would say, when you are starting out, it is so important to have somebody that you know and trust that will be level headed that will hold your hand virtually or whatever through the process. A lot of times, I will help people get started and set up their listing, so they know what they're clicking on what it means and what they're choosing. Then I will co-host for them for a few bookings, so I can see the interactions and I can be in the background like "yeah, that's cool. That's legit, you should try this, say this, I would word the answer to their question this way" and it's just really nice to sometimes have a voice of reason in the background when things don't feel like they're going well. I've been there I've been stressed. Then at the end, you think "oh my gosh, they're not talking to me, why aren't they talking to me what's going on?" and then you find they're just quiet. There's quiet people, they enjoyed their stay and they left and everything was clean and you can breathe a sigh of relief or you know, sometimes things get broken or damaged and that's a cost of doing business. It's frustrating, but it's part of the whole process and we get better with time too. We get better at vetting guests, we get better at attracting our tribe and repelling the people that we don't necessarily want to be hosting. So yeah, it's good to have somebody out there holding your hand through it though.
Yeah, those are great words. Are there any tips that you would like to share for other Airbnb hosts? And also if you'd like to talk about your website, you can also do it.
Um, yeah, I think I would just love if somebody would reach out to me and ask me any questions you have. I answer tonnes of questions all the time. I'm happy to get on the phone with people or chat via Facebook or Messenger or however it works best for you to answer questions and give you as much information as I can because I really believe there's room for all of us to be successful at this, but it does take a tribe of people around you. I do have a website, it's called strsource.com and that stands for short-term rental source.com, where I'm working with another woman, friend of mine, who's also a business owner. She owns a cleaning company in several locations in several states and she is phenomenal at this as well. So at our website, strsource.com, you have access to the owner of a cleaning company, as well as the owner of local and remote short-term rentals, you can also find us on The Short Term Rental Source at Facebook. Then our email is shorttermrentalsource@gmail.com. So we have coaching and consulting and we are setting up our courses and there's just a tonne of information that we're loading onto our website and our Facebook group right now. So we'd love to get you started and right now we just have a waiting list for coaching and consulting. So if you want to jump on it when we have openings, we would love to help new owners become like really great short-term rental hosts. So now we'd love to guide you through the process.
That's great. Thank you for sharing that with us. So that would be it for today. Thank you for your time. Thank you for all your tips and for sharing your experience!
Thank you too. I am so glad that you asked me to come on. It's been great talking with you about all this stuff. This is what I love, all day every day.
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 have 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.
