Episode 037 - STRR - What is a STR and Why should You want to Have a Few?May 21, 2021
In this Best Of episode of the Short Term Rental Revenue Podcast, Michelle talks about what an STR (Short Term Rental) is and why it might make sense for you to start your own STR Business and have a few of your own inside your investment portfolio. Don't have a portfolio? This is a great place to start.
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Transcript of this Episode:
Hi, this is Michelle, the master of money mindset, and you are listening to BNB dash boss podcast.
And in today's podcast, it's Friday. So we're doing a best of the short-term rental revenue podcast. And in this episode, we are going to be going over what a short-term rental is, what is an STR and why you want to have a few of these under your belt and inside your portfolio. Stay tuned. Our show today is brought to you by audible.
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You'll love it. You'll love those courses and they're only there for a limited time. So do it. Also, don't forget our contest. We've got our contest running right now, and every week we're picking a winner. And everyone's names are going to be put into a drawing at the end for a final price of an Amazon Dodd with a little clock on it.
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I appreciate it. So please do take a picture of it. Send it over to me at Michelle at BNB dash boss. Let me know that you did, and we'll enter you in those drawings. We are going to talk a bout why we want to invest in short-term rentals, why we want short term rentals and what short-term rentals are. The meat and potatoes of the whole STR thing.
Okay. So STR stands for short term rentals. And what are short term rentals? Short term rentals are the mirror image of a long-term rental and what is a long-term rental. Okay. So if you don't own your house and you live somewhere, most likely you are renting that place or you're living with your mom and dad, and you shouldn't be listening to this episode until you pay them some money and get out on your own.
But if you're renting, you're paying somebody else for a long-term lease. Usually most people it's an average of a year. That's a long-term agreement. And what happens when people are renting your house as they go in there and they move all their stuff in and they live there and they wear and tear on your house.
Okay. So then when they move out, you get to fix it up, replace the carpet, paint the walls, and do it all over again. Find somebody else with good credit. Who's going to pay you on time and you put them back in there. And that's what a long-term renter is now short term renter. Is somebody who only rents out that property from you for a couple of days.
I mean, it could be one day, two, three, four. It could be a week, could be a month. The fact is these people are usually on vacation or a business trip. They're usually going someplace that they don't live. It could be like, say somebody who just wants to get away where they can write a book or something I've had that happen where they're staying in the same city, but they just want to be away from.
Home in a place where they can just concentrate. But basically most of the time, most of our rentals are short-term rentals got started in Orlando. And the reason why, because we've had STRs there for decades, because it's a great place to go. People code to universal studios and Walt Disney world. It's a huge, huge tourist destination.
It's a big, big Mecca for that. And a lot of times they're going with many generations of people or a lot of people, a lot of friends and family. Right. So. When you go to a hotel, you're stuck in a room, you've got a bed and you've got the bathroom in the shower and maybe you've got a little tiny baby fridge.
That's fine. And well, if you're going for a day, but if you want it stay for any length of time, most people are going to want some kind of place where they can make a meal or sit down and relax instead of laying on a bed. If they want to watch TV, they want a little bit of separation. So somebody else can take a nap while they're doing something else or.
Whatever it is, they just want a bigger space. And so we've had vacation rentals for a long time. They were a vacation rental by owners is BRBO was a huge site, is a huge site. Been around since way before Airbnb. Now we make up about 20. The United States makes up about 20% of Airbnb. But short-term rentals have been around for a long time there because people would just rent out houses.
You would have grandma and grandpa want to go mom and dad, and then all the kitties. Right. So you've got like three generations of people. So it was pretty smart to just rent a house. Get the entire house with three bedrooms. You put the kids in one bedroom, mom and dad get the other bedroom and grandma and grandpa get the other bedroom.
Everybody's got, you know, private bathrooms and you got a big kitchen and living room where everybody can join together. Sometimes you've got a pool in the backyard and it's a really great place. And honestly, instead of renting a whole bunch of hotel rooms, it saves you a little bit of money sometimes, and it's way more comfortable, way more convenient and a lot more fun.
Cause if there's rainy day, You decide you don't want to go to the parks or something. You're not stuck in a hotel room. It's actually a better option for most people. And a lot of people come in big groups, too. We have properties that have five and six bedrooms and we'll get tons of people in those. It might seem like it's an expensive place to stay, but when you split it up per couple, It's still less expensive than a hotel and way more fun because you know, our places have pool tables and foosball and pools and workout centers, all kinds of really fun things to do inside the house.
So the house is like a destination all by itself. So if there's somebody who's not really into the amusement park thing, a lot of times they just say, Hey, you know, you guys go ahead and I'm just going to stay here and read a book and do whatever I want to do or watch TV or whatever. And so big and small short-term rental places are really a cool place for people to go.
It's also great because. Let's say you're going, you're traveling for business or you're traveling to a place outside of your city. It's a great place to go, to get to know the community and the diversity and the culture of that place and that location. You're going to a couple places where I really love the culture that a couple of cities I love going down to Tucson.
Tucson is so different from Phoenix and it's only like a hundred mile difference. And it's like night and day when you go down there. But the culture in Tucson is so amazing and they have the best restaurants ever. They even have their own chain restaurants that they don't have up in Phoenix. Even that short distance you'll find EGS down in Tucson, but they don't have them up in Phoenix.
So there are places down in Tucson that you just can't get in Phoenix. And the restaurants are really, really amazing. Do you ever get a chance to go to Tucson, go just the restaurants alone. The city is different, but the houses in the neighborhoods, they just have a culture to them. San Antonio is that way.
When you go to San Antonio, I love the culture of this city in San Antonio and the restaurants. Again, I should wait like 400 pounds because. I love restaurants and I love eating out. So almost every time it was like, oh yeah, back to that restaurant in that city. If anybody mentions place, I just know places by the food.
Same with culture. Oh my gosh. New Orleans. Still amazing food and culture when you're walking around the city. So amazing. So if you're going to those places, those cities, and you're just staying in a hotel room, boring, I mean, you get the same bed and honestly, they're cookie cutter, which is great because.
You get the stability of knowing that you're staying in a chance. So let's say you're staying at the Hilton or Sheraton or whatever, a Marriott, right? You always know that you're getting a clean bed and your TV and your little fridge, your mini fridge and your nice clean bathroom. And that's great, but literally it could be anywhere you could pick it up and you could put it anywhere.
And it's the same thing. So when you go to these cities, it's so cool. To just stay in a nice short term rental someplace, somebody Airbnb, and really get a touch and a feel. And the flavor of that culture. I just wanted to touch on it real quick too, that my took my kids to Australia for an entire month.
And I'm telling you, when you visit a country for an entire month and you live like they do you shop at the places they shop. And you see the kind of things that they're buying you talk to the people, and you're not just living out of a suitcase in a hotel you're actually living there and it feels so different.
You feel like you're a part of the neighborhood. And the people are so amazing and so wonderful everywhere you go. Honestly, it doesn't really matter. I mean, people all want the same things. They just want to live and be happy. You know, they just want to make a living be happy and you start to realize that some things aren't as important as you think they are.
And when you live amongst the people, right. If you live amongst the people. If you live with them, you start to see that you go some places not everybody's on their cell phones. And you're like, wow, that's new, weird and different. The kids aren't texting each other and their heads aren't down while they walk through the streets or it's like, this is new and different.
You'll start to see like, the things that we think are important, the shoes and the purses and the lifestyle and the Starbucks on the corner. They're not everywhere else. You go and you start to see how other people live and you start to see that. It's good. I mean it's different, but it's awesome. It's amazing.
And you feel like a connection to the world that you never feel any other time, because when you're living out of a suitcase in a hotel, you are still separated from these people. You're just visiting, but when you stay in a place you're living there. And it's so cool. I think it's, it's amazing. I think that the lifestyle of the short-term rentals are amazing because you can stay for long lengths of time and really get into the cultures.
There's what a short short-term rental is. That's what it is. It's just staying in for shorter amounts of time. The reasons for short-term rentals. I'm going to give you now. Okay. So now if you are a property owner, This is for you now, if you're not just hold on, because someday you will be because ultimately that's going to be our goals for almost all of this and you'll get that in the later episodes.
Okay. But listen, let it kind of go in and out at your ear, but don't ignore it. Totally ready. Okay. So now those of you who have rental properties, why do you want to have a short-term rental as opposed to a long-term renter in your property? There are a couple of really good reasons. I mean, the fact that they pay on time every single month is reason number one, but you're not going to get the wear and tear on your properties that you get.
When you have a long-term renter in there. Your short-term rentals are completely different. So I'm going to get, tell you a story and believe me. I know that if you have rental properties, you've probably lived this over and over and over again, because it's a living nightmare that all of us rental property owners have had.
You take a property and you buy it and you clean it and you paint it with love and he fixed it up. And it's adorable adorbs, right? You walk in, you're like all so happy. You're like, oh my gosh, look at these cute little blinds and see how this paint is. And look, I painted the, you know, the trim is all white and it just pups and boom, it's beautiful.
Bathrooms are clean, put a nice new sink in. Maybe you resurface the tub and now they've got the elongated toilets. And so you don't have the little round ones where you feel fat when you sit on them and like, everything looks great and you rent it out. Get this great renter. And of course they pay on time every month because it's our dreams and learn never late.
Cause again, it's our dream. Okay. So now all this has happened and then they move out it's a year or two later or whatever, and they move out. You walk in that property and holy crab cakes. What the heck happened to this property? The property is just like somebody just. Took a grenade, pulled the pin with her teeth, threw it in there, shut the door and walked the F away.
Right. I mean, that's what it feels like. Cause you walk in there and you're like, holy heck what happened? And here's what happened. They live there. That's what happens. So now you got to replace the carpet and the flooring and the paint and oh my gosh, what did they do to the blinds? The blinds? I mean, what did the cat get stuck in there?
I mean, it's just all. Crappy and torn apart. And the place just looks like, you know what? And I mean, Dustin cheeseballs, right? It looks terrible. It's beyond repair appeals. Like, so you go in there and you spend thousands of dollars fixing it up again because you know what? This scenario just keeps playing out the same old way.
You fix it up, you put somebody in there, they move out, you got to fix it up again. And then they're in there for a while and then they move out and they walk out and you walk in and you got to fix it up again. And it just feels like it's going that same way. And here's the deal on most rental properties.
You're only making so much money. Anyway. It almost feels as if. Everything you made for that year or two or whatever they've been in that property that you're just handing back to your maintenance guy is to fix it all up again, or you're spending it to fix it all up again yourself. And it just feels like this revolving door where there's a big wooden foot sticking out of the door that kicks you in the butt after it runs around every year or so when the guy goes out, because that's what it feels like, appeals.
Like crap. And that is why you want to do short term rentals because they don't use your property like a long-term renter does. They're only in there for a little while. And most of the time they don't even use all the appliances. You don't have to replace the carpet like you used to, or the flooring, like you used to, these people are up doing stuff they're out and running around and they're not using every inch of the place.
They're not at a lot of times they might be there for a week or two and they might not even use the kitchen once. That's it. And you've constantly got your cleaning crew. Who is your bestest friend in the whole wide world? And your cleaning crews going in there and they're keeping an eye on the place and you're nipping all the stuff in the bud that would ever get out of control.
Anyway, they find the leaks before the leaks get really bad and. They make sure that the filters are getting changed on the AC so that you're not getting the repairs that you would need. I don't care what anybody says. Even when you hand people, the filters, every month, they don't replace them. The majority of time, the people who are coming in for a short term rentals, they're taking care of your place.
In a very different way. Now. I know it seems like that would be the opposite, right? Cause we think of the rental cars, we think, oh, a rental car when I get a rental car. Oh my gosh, I got this story. We had a friend who one time their car got totaled. They hit, they got this rental car and it was a four wheel drive Jeep.
And we all lived out by the desert. Oh my gosh. We had so much fun taking that Jeep for wheeling out so much fun. But we drive rental cars crazy so that we wouldn't drive our cars. So we assume that that's how short-term renters are. No, they're not. They're there for fun, man. They're just gonna unpack and go do fun stuff.
They're not there to tear your property up unless they're a bunch of college kids and you're going to avoid that, like the plague. Okay. We set in rules and I'll tell you all about them as we go farther down the line. But. You're not going to rent out to those kinds of people who are having big old parties in your place and your properties are well-maintained, they're cleaned all the time.
You've got money coming in constantly, and it's good money. Like it's really good money. It's even better money than when you have a long-term renter. There's a lot of reasons why you as a landlord, want to rent to us. So now back to you guys, come back in, Hey, everybody back in the room, pay attention again.
All of those who don't have rentals. Okay. Now here's something really cool. Guess what you can do if you don't have any rentals, rental properties of your own, and you want a short-term rental BNB business. You can do that. So you can find a landlord, you know, find a nice property and walk in there and pick out the property and go through your list.
And we'll, we're going to go over that in future episodes, but you're going to go through your list of what you're looking for, and then you rent out the property. Again, you've got those win-win wins scenarios. The triple win, the, you know, boom, boom, boom, like a firework going off. It's like everybody wins.
The landlord wins because he's getting the rent he wanted. Plus he's getting a tenant. Who's going to take Superbowl care of his property. Then in the middle there, you're going to have these short-term renters who are coming in for vacations or for business or whatever reason they come in. They're going to stay in your properties.
And they're going to have a great time, a rock in time in your property because you rock as an STR business owner. Right? And then you've got you on the other side of that, where you're making sure that the, both of those people have the time of their lives. They're getting exactly what they want and boom, for providing that service, you are getting money put into your pocket every month, more money than you would have made when you were just a landlord yourself and better money because your properties are being taken care of.
So we're going to teach you how to do all that. We're going to teach you how to do that with no properties of your own. We're going to teach you how to do that with very little money down. Now, obviously this is not a no money down situation. You're going to need money. You might have to put money on a credit card, or you might not have to borrow money from mom and dad and uncle, grandma, and grandpa, or even a business loan.
It's not that much money. Really it's not because pretty much anybody could do this. I'm excited. I don't know. I'm hoping you're feeling the energy of the excitement because this is what it is. So keep listening, subscribe now. Give us a review. If you like this so far, if you didn't keep holding up, like keep holding none, wait until episode three, because we obviously, we want good reviews and remember too, I hope I've said this before.
There's more than enough for everyone out there. And that is so true. I cannot even stress that fact enough. There are millionaires being created in the United States every single day. Thousands and thousands of them every month. I'm not even kidding. Tens of thousands. You can look it up. It's amazing.
There is so much money out there to be had. Do not listen to the lies that tell you that you have to take from someone else to create your own. That is so untrue. Creating value is what it's all about. All these businesses that you see have been created. In the past few decades and that money has come from nowhere.
They were things that didn't even exist before money that didn't even exist. There's more money being put into circulation every single day. There are more opportunities every single day. And you have the opportunity. To take a piece of that pie and own it. And then you can be a blessing to other people because that is what it's all about.
It is about empowering yourself and then empowering others, right? I mean, that's what it's all about. Listen to our podcast, share it with other people, both because there's more than enough. And if you've got a friend out there that you want to do business with, or you guys have been throwing ideas and opportunities back and forth each other, get them listening to this podcast, get them on here.
Say, Hey, I just want you to just listen to this for a few minutes and then tell me what you think, because that's when you have the most fun is when you do businesses with your friends. I've had the opportunity to do so many wonderful things with my friends and I go and I travel all the time with my friends.
We just got done doing Hawaii. And we did California. I'm trying to think of the macula. It was a really cool wine city down between San Diego and LA I'm totally blanking on the name, but we did a wine tour down there. I wasn't drunk the whole time people. It was an awesome tour doing these things with your friends, going places and traveling with your friends is what it's all about.
Just being together with people that you love. And people that you care for and doing things for other, when you have money, you can do things for others. You can help people when they're sick, you can help people when they're, well, you can help people have a better life in your own, empowering them. Don't loan them money.
You have to go to our website and look up why I don't lend money to people. Otherwise being able to help people. That's a different thing of my mom. When she got cancer, there were pills that she had to take. There were $600 a pill. Yeah, God bless the USA, right. And our pharmaceutical companies, but $600 a pill.
I am just so blessed to say that I could do things for her when she was alive, that I wouldn't have been able to do if it wasn't for real estate and the investing and the chances that I took, I am not saying I won all the time. I, there are times I lost a lot of money, but there were more times that I won and that's again, why I am here, where I am today.
Because I took those chances and because I persisted and I hope you do too. I hope you sign up and come back because we're ready to rock and roll. Hey, thanks for listening to our best of remember on Monday, we're going to be dropping a brand new episode. So make sure you drop in for that. Mondays are brand new episodes.
Fridays are best OFS. If there is anything you need from us, please send me an email request to [email protected] and I will get on it as fast as I possibly can. We want to answer all your questions and get you everything you need. If you have questions, comments, you so much for listening. Have a great weekend.
God bless you. Go and Grow.
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