Here’s the summary of this episode!

Listing	https://www.airbnb.co.uk/rooms/30376303 4 Bedrooms 2.5 Bathrooms Charlotte, North Carolina.
Vacation Rental Career (1:44)	Ran 7 long-term rental properties in Chicago. First Airbnb property: 2018 Fall Second Airbnb property: 2019  Third Airbnb property: On hold
Coronavirus handling (3:28)	https://www.furnishedfinder.com/ Posting on Facebook groups  Finds from neighbours who needs a house
Occupancy Rate (5:01, 7:42)	50% during low season 80% during high season (Summer)
Price (6:21)	Around $270 on average  Currently lowered 10-20% due to coronavirus situation Rates are 10-20% higher during high season
Long-term rent (7:42)	$2,000-2,500/month
Market Research when buying a new house (12:29)	Work with a realtor who uses AirDNA to estimate vacation rental income

Today’s guest is Teri. She runs two listings near Charlotte in North Carolina. Her revenue from a four-bedroom house is around $4,000 to $5,000 per month (plus cleaning fees) depending on the season. Similar properties around the area are rented out at $2,000-$2.500 per month. Teri has 52 reviews average at 4.98 for this listing. 

Jae Seok An  0:40  

What do you do outside of running this Airbnb?

Teri  0:43  

Ah, well, I am recently retired from a profession in cardiac surgery. I worked in an operating room for 22 years. And I’ve always, not always for the last 15 years or so, I had seven rental properties. I managed on the side as traditional rentals. So I had tenants who would live there for a year or two years and then move out. And then I get a new tenant. I did that and I did that in Chicago. And after relocating to Charlotte, North Carolina a couple of years ago, I learned about Airbnb property management from my neighbour who is also in real estate and real estate development. And I was interested in getting another rental property so I decided to try Airbnb. And it’s been great up until recently.

Vacation rental career

Jae Seok An  1:44  

When did you start your first one? And when did you get your second one?

Teri  1:55  

Okay, so I purchased my first property in the fall of 2018. And it is a single-family home. And we had to do a little bit of renovation to it just to kind of update it. And I listed it and had it up and running on Airbnb in December of 2018. So I received my very first reservation on the first day I listed the property. So I hosted my first guest in like the third week of December and it’s been rented. Just about every weekend. Since we had such success with it in early 2019, I decided to purchase another single-family home, which is only about five minutes from my current property and had that place up and running. within three weeks. However, the property suffered a fire, which destroyed the interior of the home. Oh, and it’s been under renovation since May of last year. And I am still about three weeks away from getting that property up and running.

Coronavirus handling

Jae Seok An  3:28  

what’s your strategy to deal with this coronavirus situation? 

Teri  3:44  

Yeah, so right now

I am trying to think outside the box. So, I have listed the property on furnishedfinder.com, which also works with travelling nurses. And I have also tried to put my listing on different Facebook groups just to let people in the area know that if they have family who may still need to come into town they would have a safe place to stay while they’re here. I’m lucky that I did have a family who needed a temporary place to stay because their house is being renovated,  locally, so she has been staying with me for two weeks now while her roof is being replaced. But after that, I’m just hoping that the restrictions on all the states and all the travel will be lifted within the next 30 to 60 days so that we can start accepting bookings again.

Occupancy rate

Jae Seok An  5:01  

What was your occupancy rate like in the last two months before this coronavirus thing hit,

Teri  5:09  

so my occupancy rate in January, February, was over 50%. My weekend bookings were 100% booked Friday, Saturday night. I had a few that were staying throughout the week and I’m very into great customer service. So I respond to requests within an hour and I make sure to welcome my guests when they arrive and I send them a welcome message. And I leave things in the home for them that just kind of make it special, so that they feel like they’re getting a little bit more for their money. And I always want to make sure that they’re happy before they leave. So I check in on them and ask them that I strive for a five-star review at the end of their stay. So if there’s anything that I can do to make sure that happens, they can always reach out to me right.

Price

Jae Seok An  6:21  

When I checked your listing, the price was around 280 to 310. Is it right estimation, or did you lower it recently?

Teri  6:31  

So recently, I have lowered it a little bit 10 to 20%. But on average, yes. I was getting on Around $270 on average, per night, it is a four-bedroom home. So eight to ten people can sleep in the house. Right. And at $300 a night that’s still a very reasonable rate. 

Jae Seok An    

When I had a look at Zillow, it seems like a similar property in the Burlington area, which is well known for the wealthy neighbourhood was rented out at around three to $4,000 per month.

Do you agree with that price?

Yes, yes, I do. Right. And you mentioned that you’re getting around $300 per night. And if you get a 50% occupancy rate that’s around $4,000 per month in revenue. Yes. Right. Okay, then that isn’t too much higher than renting out long term, long term. Right, cuz that’s around three to 4000.

Long-term rent

Teri  7:42  

Well, so I think it’s your, your assessment of those rates depend on neighborhoods. So the neighborhood I’m in those homes would probably rent out additionally for 2000 to 2500 a month. All right? Yes. And even, even if I were able to get 3000 a month, yep, I would much rather still have my home be a short term rental. Because I find that long term tenants tend to not take care of the property as well as a short term tenant does. And so there is less wear and tear on your property with a short term tenant because it’s for one They are only there for a few nights. And for the nights that your property is not rented, it’s staying clean. It’s, it’s being maintained by you, you have plenty of opportunities to go in there and fix something when it’s broken. Yep. And so, I think even if I were making the same amount, or even a little bit less, I would, I would still feel like I was doing better with a short term rental than the long term.

Jae Seok An    

Right, understood most till you’re making a lot higher than renting out in the long term, which is between $2,000 – $2,500.

Teri  9:22  

So yes, yes, this has proven to be better than a long term rental, especially during the really big travel seasons, which is the summertime, right, summertime rates were much higher. I was I had more of an 80% occupancy rate in the summer.  

Jae Seok An

So you were putting it at a higher price how much higher than let’s say January or February about 

Teri

About 10? To 15%? 

Jae Seok An

Right? How do you do the cleaning? Do you hire a cleaner or do to yourself? 

Teri

I do both actually. So on days, when I have the time myself, I will go do it myself. But if I happen to be travelling or if I’m busy during checkout, then I do have a crew that comes to help me.

Jae Seok An   

What software do you use to run your Airbnb?

Teri  10:20  

So I list on airbnb.com and on vrbo.com. I have tried beyond pricing calm to see if their algorithm would help with doing smart pricing on-demand pricing. Yeah, I use them. I use them for a little bit. And I think it all just depends on your market. I felt like I could keep up with my pricing just as well as they can. So yep. I’m still kind of playing around with that.

Jae Seok An    

Earlier during this interview, you mentioned you had seven properties in Chicago. Yes. Are you still running them as the long term rentals?

Teri  11:19  

No, I’m not. I decided to sell all of those properties when I moved because I didn’t want to be maintaining them long-distance,

Jae Seok An    

right. And do you plan to expand your Airbnb operations in your area? into the future.

Teri  11:41  

Yes, I actually do have a contract on another single-family home, which I am supposed to purchase at the end of next month. And right now, I haven’t made any decisions, but I’m a little bit concerned with the real estate market in Charlotte, because of the coronavirus. And so I’m not 100% sure if I’ll be moving forward with that at this time, but I haven’t made any decision yet.

Jae Seok An    

I see. That’s interesting that you were thinking of buying a property just to run as an Airbnb rental. Is that correct?

Teri   

Yes.

Market research when buying a new house

Jae Seok An   

Can you describe how you did your market research to decide that property is yours like to run Airbnb?

Teri  12:29  

So as I mentioned earlier, by a neighbour who is has been in the real estate market in Charlotte for over 20 years, he helps me do A lot of the research and he uses AirDNA.

Jae Seok An   

Right? So I guess from there, you were able to estimate how much you could make by running this?

Teri  12:53  

yes. So we would look for properties that were for sale that were undervalued where we could purchase them at a really good price. And ones that buy with the AirDNA data, told us or predicted a nightly rate that we could get for that property. And so based on those numbers, we would decide which property we try to purchase specifically just to run as an Airbnb.

Jae Seok An    

And yeah, that was it about the interview. Thank you so much for sharing and taking your time on it.

Teri  13:38  

Yeah, thank you very much. You’re very welcome.

 

Also, check out Umar’s story and Alexander’s story.