Part 2: Interview with a Thriving Nightly Rental Entrepreneur
Tyler Okeson has been actively leasing his 18 properties on platforms like Airbnb, VRBO, and other hospitality channels since 2017. Having navigated challenges and witnessed significant success, he's mastered the art of the trade, propelling him to the forefront of his local short-term rental market. I appreciate Tyler taking the time to sit down with me and share with all of us what we should think about and how we avoid the pitfalls that he has made so that we too can be successful investors in this real estate niche.
What is Your Hosting Goal?
Tyler: It depends on what you want out of it. Some do it for just a little bit of extra income, but it does come with a headache. To me it's not worth a little extra money as you will find yourself dedicating time and effort that you don't want to. If you want to start working towards passive income, then you will want multiple units. This will also benefit you when it comes to inventory and cleaners.
My Take: Determine your hosting objectives. Ask yourself if you doing this for supplemental income, as a full-time business, or for other reasons?
What Are the Legal Requirements?
Tyler: Every city and state is different. Even HOA's have regulations. Make sure you check with your local city and do your due diligence. Follow the rules and regulations so you can sleep easy at night.
My Take: Research and understand the local laws and regulations regarding short-term rentals in your area, including taxes, permits, and zoning.
What Is My Target Audience?
Tyler: This might not sound like it, but this is a loaded question. You will want to find out who you want to serve, and your answer can't be everyone. Because you will not be serving the solo business traveler in your 5-bedroom house that has bunk beds. You will benefit from some as if you have a 1-bedroom apartment that sleeps 4 because you have a sleeper sofa - you will get the business traveler as well as a small family coming for an event.
My Take: Identify your ideal guests. Are you targeting tourists, business travelers, families, or a specific niche?
How Should I Set My Pricing?
Tyler: You will need to figure out what your monthly goal is so that it can help you set perimeters of your daily rate. There are numerous programs out there that help with your pricing. These are huge as they notice big events that are coming up that you might not know of, and your price should be higher. This will always calculate occupancy, demand, events etc.
My Take: Research comparable listings in your area to set competitive pricing. Consider factors like location, amenities, and seasonal demand.
What Amenities Should I Offer?
Tyler: This does come down to who you want to serve again. But this is where it's going to separate you from other hospitality places. Having a fully stocked kitchen is more appealing than a free breakfast. Wi-fi is a big factor even if you don't offer TV's (yes, places do this).
My Take: Determine what amenities you can provide to make your listing more appealing, such as Wi-Fi, a fully equipped kitchen, or unique features.
How Should I Present My Listing?
Tyler: Professional photos can either make or break a place. Don't think your phone can do what you want it to. It's not worth it. You have 1 main photo and then about 3-5 more photos to catch someone's attention and they'll decide to move forward from there or not. These photos will want to be the main bedroom or living space. You will then want to include a kitchen, gathering place, and a bathroom photo next.
My Take: Take high-quality photos and write a compelling description of your property. Highlight its unique qualities and nearby attractions.
What House Rules Should I Establish?
Tyler: Although AirBnB and VRBO don't back you up too much on your house rules and fees for breaking those rules I will still have them in place. Don't be overwhelming with lots of them. I remember looking at booking a place (yes, I use AirBnB as I travel) and they had a rule that if we didn't take out the trash there would be a $100 fine. I think we only have a handful of rules such as no smoking on the property etc. The other rules are more of reminders like, quiet hours are from 10 PM to 7 AM.
My Take: Clearly define your house rules regarding smoking, pets, noise, and other important matters. Communicate these to guests.
How Will I Manage Check-In and Check-Out?
Tyler: There are systems that can manage the messages that go out for this process, so you don't have to sit there and do it every day all the time. I would also recommend something that you can change the keypad codes remotely. You don't want to have to meet them there to provide a key or have the same code for someone that had that code 3 months ago. You can also allow for an anytime check in and your listing will look more appealing.
My Take: Plan a convenient and straightforward check-in and check-out process. Consider keyless entry systems or a lockbox.
What Is My Communication Strategy?
Tyler: You will need to respond within 7 mins of your guest. Try to be within 1-3 mins as you are ranked on this, and your response time could hurt you. Remember this is a hospitality business as you respond and communicate with your guests.
My Take: Decide how and when you will communicate with guests. Promptly respond to inquiries and provide clear instructions.
How Will I Handle Guest Reviews?
Tyler: Always leave an honest review regardless of if you think you're going to get backlash. Your review is not going to be public until they leave their review or until after 14 days. Only state facts and leave emotions out of it.
My Take: Encourage guests to leave reviews and respond to them, both positive and negative, professionally.
What Cleaning and Maintenance Plan Do I Have?
Tyler: DO NOT do your own cleaning. You will burn yourself out so fast. Pay for a licensed and insured cleaner and only charge the guest what your cleaners are charging you. Have the place cleaned after each stay, and a deep cleaning once a month. When they're doing the deep cleaning have them check for loose items, beds, tables etc. and have them tighten them up. You will want to also schedule quarterly items such as, change batteries, air filters etc.
My Take: Establish a regular cleaning schedule and perform maintenance checks to keep your property in top condition.
What Is My Cancellation Policy?
Tyler: This is a toss-up. This also depends on your type of place. A vacation rental should have either a no cancelation policy or 30-day notice in time to hopefully get it rebooked. For other places you can do a moderate and allow them to cancel 5 days prior to check in. Do what you feel comfortable with and adjust it according to how your bookings are going.
My Take: Set a cancellation policy that aligns with your hosting goals.
How Will I Handle Security?
Tyler: We use an exterior doorbell camera. DO NOT ever have one inside, not even in a community area. Make sure you have all the different detectors inside the place. Handling the loss of a home is easier than handling the loss of a life.
My Take: Ensure the safety and security of your guests with appropriate measures such as smoke detectors, fire extinguishers, and secure locks.
What Emergency Procedures Are in Place?
Tyler: Provide your guest with the closest medical facility. Travelers are coming to the area and don't know where to go in case of an emergency. Have flashlights on hand or close by so that a team member can drop them off. There are uncontrollable things that you still need to do your best that you can. Even if it is just showing you make an effort.
My Take: Have a plan for handling emergencies such as power outages, plumbing issues, or medical incidents.
How Will I Handle Guest Feedback and Complaints?
Tyler: Take all feedback into consideration. You won't be perfect for anyone. You could have the most expensive nicest bed and still have complaints. But acknowledge their complaints and look into them if they are serious. You're not going to switch out a bed mattress for each guest. The faster the better and let them know they've been heard.
My Take: Be receptive to guest feedback and address any issues promptly and professionally.
What Will I Do to Stand Out?
Tyler: Your title has a big part of this. Let's say you're in Cedar City, Utah. You could put Hike Zion and Bryce in the same weekend. Or if it's during their Shakespeare time put Shakespeare and step free home. No who you are serving and adjust your titles to them. Change your title quarterly as well as this helps with the algorithm.
My Take: Consider what makes your listing unique. Could you offer local recommendations, personalized touches, or special promotions?
How Will I Manage Finances and Taxes?
Tyler: Definitely get a bookkeeper to help see what places are doing great and what places are not. For the other purposes of taxes and what type of company you should be, definitely consult with a tax professional.
My Take: Keep accurate records of your income and expenses for tax purposes. Consult a tax professional for guidance. Should this be an individual LLC for every property?
What Is My Plan for Scaling and Growing?
Tyler: It sounds weird but the more the better. This can help in numerous ways such as, a bad month for one unit can be covered by a different unit. Your chance of getting a cleaner is more enticing as you have multiple locations. It also helps to have storage in one place close by (not in the unit because you don't want to have to walk in to unlock a door to grab more TP).
My Take: If you plan to expand your hosting business, think about how you will scale and manage multiple listings.
What Support and Resources Do I Need?
Tyler: Join some Facebook groups or mastermind groups. Sure, they've probably heard the question 100 times but it's your first time asking, and you will find some people that respect that and will help you with it.
My Take: Seek out Airbnb host communities, forums, and resources to learn from experienced hosts and stay updated on best practices.
How Will I Stay Informed About Industry Trends?
Tyler: This is something that I should probably look into more, but you are unique to your own guest. Just because a swimming pool or hot tub works for a 7-bedroom house doesn't mean you will need one for your studio apartment.
How Should I Gauge a Good Occupancy Rate?
Tyler: Figure out what you want to make monthly and adjust to that. Just because you're 100% occupied it doesn't mean you're making money. Someone that is only 50% occupied could be making more because of what their rates are.
My Final Take: Hire a Realtor!
Look for a well-versed realtor that might specialize in this industry. Not only for locations but different systems they use but always do your due diligence to make sure you're protected.
If you're interested in delving into the intricacies of investing in nightly rentals or wish to connect with Tyler Okeson or me, feel free to contact me at 801-885-2558 or brandonrwood19@gmail.com.