Last updated on July 16th, 2022
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 Jessica Garza from San Antonio, Texas, who is an Airbnb host since 2017. Currently managing four listings in San Antonio doing both Rental Arbitrage and co-hosting, achieving 100% occupancy rate in the highest season.
This episode is sponsored by Airbtics, the only one analytics dashboard for short-term rental investors and 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!
Into The Airbnb S2 EP 1:
100% occupancy rate – Rental Arbitrage and Long Term Rentals in San Antonio, Texas
You can also listen to this Into The Airbnb Podcast Episode on Otter.
Delia:
Okay, so our first question for today is, why did you decide to get started on Airbnb?
Jessica Garza:
Um, so I got started back in 2017 and I was going through a rough patch with my health, I lost my job. And I cashed out my 401k to be able to get by while I was looking for another job. But my friend told me about her going on vacation and staying in an Airbnb and she was telling me about her experience. At that time, I didn’t know about Airbnb. So I asked her what is that and she explained it to me and told me, you know, how it goes, how the system works. So just out of curiosity, I downloaded the app, I checked it out for myself, I used it myself as well for like a weekend getaway, just to kind of experience what it really was. And I told to myself, like, I could do this for supplemental income, and to help me get by until I find another job. So that’s what I did, I actually started out just renting out my master bedroom in my personal home, so I did like a shared space. I learned a lot from that it was you know, getting to know, the ropes, getting to know what people like and don’t like. And, you know, I realised that renting out just the master was bringing in pretty good money, but also then I thought, well, if I could get my rent paid for the full month, that would be more beneficial to me. So I started renting it out on weekends, only Friday through Sunday and I would leave for the weekend. I was making enough to pay my rent, my utilities and I still got to live there, you know, Sunday through Friday morning, which was great for me because I also had two daughters that lived with me. So on the weekends, we would stay with my mom or my sister and to them it was fun. It was like we got to get away for the weekend and it did get me by, it got me by and then I enjoyed it. I started meeting a lot of new people and I became friends with some of the people that stayed at my place that relocated here in San Antonio. So I continue to do it from there.
Delia:
Wow, that’s a great and inspirational story! What did you learn from your experience of renting your own space?
Jessica Garza:
Mostly people’s scores and I guess I would say definitely, people’s expectations have changed now. When I first started the expectations weren’t very high I guess. I don’t know maybe the audience has changed, the Airbnb is so much bigger now. But with time I’ve learned how to not only set expectations but meet them and I really learned to put myself in people’s shoes because as a traveller myself, I started to learn like oh, you know, this would be nice to do or this is not so great to do and by experience you learn those things, not only from hosting, but also from travelling yourself.
Delia:
That’s right, that’s right. And how did you get your first listing? like the first whole listing you manage on your own.
Jessica Garza:
Um, it was through rental arbitrage and it was actually with my current home, the home that I started renting out my master bedroom in, I moved from just the master to the entire place only on the weekends. Once I saw how busy and profitable it was, I found myself another place to live and I just rented out the whole thing full time. From there, I just continued to accumulate properties and when COVID hit, I did close a few, I closed three, and I kept one. I thought I was gonna hit financial ruin, but in reality, I only had one month, which was the first month of the initial lockdown, where the place was empty and I came out of pocket. But after that, it got really busy again and it was from people relocating here. People that needed to quarantine, and they needed their own space away from their family that they lived with. It got busy real quick after that. So I started to just build up again, the properties that I had let go before.
Delia:
I understand, since you told me previously that you manage four listings, and some of them are Rental Arbitrage. Do you think in your area, San Antonio, is it easy to get lenders to agree to do rental arbitrage? Or do you have some kind of secret for that? How do you convince them?
Jessica Garza:
There’s a lot of pushback now, back in, when I started, there wasn’t so much pushback. But now, with Airbnb getting bigger and there’s just so much more competition in it as well, the city themselves have gotten a lot more stricter about where you can Airbnb. HOA’s sometimes don’t allow it, it definitely has gotten a lot more difficult the past two years to convince the landlord to let you do this. Then once you convince the landlord, you’re having to deal with the city or the HOA or the actual management property. So in reality, all you got to do is hope for the best, when you present the fact that, what the positives are and those positives are usually the fact that the property is constantly being maintained, is constantly being cleaned, is being supervised; rent is never late because I do usually show funds that I have savings, which I accumulated throughout the years to be able to show that we can financially back the lease. So some landlords feel like “oh, you know, all of these things are really good and I think I’d rather go with this than a traditional renter”. Then there’s other landlords that are just absolutely not, they won’t even hear of it and so for sure, it just depends on the landlord themselves.
Delia:
So let me ask you about the area you’re hosting in. You told me all your four listings are currently located in San Antonio, Texas, right?
Jessica Garza:
Yes.
Delia:
What is seasonality like in the area you’re hosting?
Jessica Garza:
I would say the busiest is once the weather warms up and it’s usually around this time. It’s March through August. So March, like spring break, which we’re in right now is kind of what kicks it off for the year and we are consistently booked solid all the way through August until school starts. The slower months are after that, once kids go back to school and people are back to their normal routines, then that’s usually when I do see a little bit of a slowdown and that goes from August through February. But in all reality, it doesn’t slow down an awful lot is just not as busy. There’s not as many inquiries, but what I have noticed is, in my properties in particular, is during these times of the slow season is when I get the longer term guests. So like +30 days, I have a few properties that are close to the medical centre and so we do get a lot of contract workers for the hospitals, like nurses, doctors and stuff like that.
Delia:
Okay, so in these high season versus low season times, how is your average occupancy rate like?
Jessica Garza:
Like I said, even though it slows down a little bit, I really don’t have my properties vacant. Most of the time, they’re booked. So I would say in the highest season, for sure, it’s 100%. We might have like one or two days here and there in between. And sometimes we even book it like we block it, I mean, from it being booked, so that we can do a deep cleaning, if after a long-term stay 30 days and plus, I block a day or two after for cleaning, just because the turn around within four hours is not going to do it after someone’s been there for 30 days.
Delia:
And what about low seasons? How is your occupancy rate like in this time?
Jessica Garza:
The low season, like I said, we usually book it with long-term stays. So sometimes I’ll see like a week or a week and a half in between, I believe about a week and a half is the longest I’ve had any of the properties vacant and not booked in the low season.
Delia:
Woah. Okay, I understand. So, in general, like throughout the year, what will be your pricing strategy?
Jessica Garza:
Pricing strategy? Well, I know there’s a lot of programs out there that figure out pricing for you. I think there’s pricing dynamics, PriceLabs, I’ve heard of so many. But in reality, I like to just look at the competition and see what’s around me. See what they’re renting for, see if they’re booked and if they are and they’re getting something that is higher than what I’m getting, then I’ll match that price. If for any reason, it affects my bookings or, like, let’s say in the slow season, when I have that week and a half or two weeks, that’s empty, I will lower it during that time, but I manually lower prices when it gets close to time in my calendar, that’s not booked. I do not do instant pricing through Airbnb, just because I will see it go really high and then it goes really low and it’s not consistent and it kind of throws off my numbers as well because I do take into consideration overhead, which is, you know, we got to pay rent utilities, upkeep, replacing things that are damaged. Then on top of that, you still want a little bit of profit. And with San Antonio, growing as much as it has grown in the past two years, rents have gone up a lot. So that’s another thing that is making the rental arbitrage a little harder is the fact that it doesn’t leave as much margin for you to make profit. So you got to be real careful with the property that you accept to take on and see ahead of time. If the pricing checks out, you know.
Delia:
Yeah, I understand. So if this is not too personal, like watching your competition and how much do they make, do you think your pricing strategy has brought you a good amount of profit comparing to them?
Jessica Garza:
Um, I think so. I’ve never been in a negative, I have been able to build enough of a like a safety net as well. Like I said, I show proof of funds to the landlord as well, to show that I can financially backup an entire year lease. So, the reason I do that is probably because I’m used to doing that. I’m also a real estate agent, so when we price listings, when we price homes for sale, that’s what we do, we do a CMA, which is you’re evaluating the market at the time that you’re putting the house up for sale. So you’re looking within your neighbourhood homes around you what did they sell for and you compare it according to square footage. So I pretty much do the same thing with the rentals and I think when people are looking to book a place online, they’re doing the same thing. They’re looking to see probably what’s the cheapest for the nicest. So they’re looking for a nice place to stay. Definitely going to have some nice pictures to track them in. But also overall price what’s going to sell; price is what’s going to get you the bookings and if you’re more expensive than anything else on the app, you probably won’t get as many bookings.
Delia:
That’s right. That’s really good to know. And I’d like to know based on your experience running Airbnb, what has been, in the past years, your top challenges you have encountered while being a host?
Jessica Garza:
Challenges with guest as a host?
Delia:
With guests, while doing rental arbitrage, whatever you find the hardest to go through.
Jessica Garza:
Um, I actually find real estate a lot more difficult and stressful than Airbnb. So when I’m dealing with Airbnb problems, to me it’s like, it’s a big problem, but it’s no big deal. I would have to say it would be difficult guests, people that break the rules. Recently I had a person stay for three months and they removed all the smoke detectors in the apartment to be able to smoke inside. They didn’t bother putting them back on and also they damaged a few things in the property. They also opened up all the windows and left the AC running, like at a very low temperature. So the electricity bill was through the roof, like I had never paid such a high electricity bill for that specific property. So I would have to say it would be inconsiderate guests that, you know, it almost seems like on purpose they break all the rules because it’s clearly laid out in in the check in instructions, in the listing itself, I try and reiterate the information as many times as possible, so that later on, they say “I didn’t know”. That’s what I try and avoid, I want to make sure they have all the information upfront. For the most part, I’ve had really good guests. I’ve been lucky. But, you know, you get your troublesome guests every once in a while.
Delia:
That’s good. Good to hear your experience because, you know, many future Airbnb hosts are very discouraged to get started on Airbnb because of these stories of nightmare guests. They think that’s going to happen to them on a regular basis or that is going to ruin their business. So it’ll be great if you can give us some tips. You can share with us some tips for other Airbnb hosts or future Airbnb hosts who’d like to get started.
Jessica Garza:
Yeah, I can understand that. My biggest fear has always been and still is squatters. I have not have a squatter situation, but yeah, it’s very possible and to me that my biggest fear. But definitely, I think the biggest tip is that you learn from every guest, that you change things and improve as you go. So like with the guests that I just told you about, after that I decided to put in a electricity cap on any stay over 30 days. I give them an amount that if their electricity usage goes over that amount, they’re responsible for the difference. So that’s probably the best advice I could give to anyone is that you’re constantly learning from your own experiences and so you’re constantly having to adjust your business. I would also say, do not get overly involved emotionally. It’s a business and it should be treated as a business. I’ve seen a lot of talk on social media groups, where people treat the properties I guess, like their own personal home and for your own personal home, it might be different. If you’re doing room share, that’s very different because you, your personal self is there, you’re sharing space with someone you don’t know. But if you’re not sharing the space, it’s a business and you really have to separate yourself from that and just treat it as a business and not get overly involved with every move that guest is making. I like to give guests their privacy and their space. If they’re breaking roles, then I just charge them accordingly and that’s that.
Delia:
Those are great tips. So last thing I would like to ask you for is, we talked previously about rental arbitrage and some tips about it. Now I would like you to give us some tips regarding longer stays. For some hosts, it might be easier for them to do longer stays for a variety of reasons and maybe they’re scared of it or maybe they think it’s not going to work in their place. But in case they get it going, are there some tips you’d like to share for them?
Jessica Garza:
Yeah, actually, longer stays are my favourite. Yeah, so longer stays are my favourite. There’s just the less turn around, the less cleaning. I have heard of hosts that offer cleaning, while there’s people within a long-term stay. It seems like they do it mostly to be able to check on the property, which sounds like a good idea. But like I said, I like to give people their privacy. So I will offer them the option to have someone go in within two weeks to clean. But if they don’t take me up on it, I don’t push it. So like I said, with long-term stays are special rules, I got the electricity cap in place now. Also, I’ll have them sign a short-term lease for anything over 20 days, I take the deposit from them as well because I have had people leave and refuse to pay damages or the electricity cap. I’ve actually had Airbnb declinate as well. So it’s easier to just keep it from a deposit and show proof of why you kept it and move on. I would say that most people looking for long-term stay place, they want a place that’s fully furnished with everything they’re going to need, especially in the kitchen, cooking. A lot of people that are staying there for a long time, that’s not just vacation, they need to live in it, I mean, they’re going to cook, so you need to have everything that they’re going to need for that. Also, dressers in the bedrooms. I’ve noticed a lot of Airbnb don’t have dressers and for like a weekend getaway or something like that, that works. But when you have a long-term stay, they need a place to put other clothes and have a routine in place.
Delia:
That’s right.
Jessica Garza:
I think that’s all I would say about that is, you know, making sure that you have separate rules for the long-term stays because a lot of that won’t apply to people that are just there for the weekend or three days. But definitely because there’s less turnaround and there’s less, usually, there’s less traffic in and out of your property. With the long-term stays, it’s usually working professionals, so you don’t have an entire family coming in and out of your place a lot. So that’s probably like another pro for a long-term stay.
Delia:
Right, those are really good tips. Actually, there’s one more little question I would like to make. I’ve seen many hosts struggle with, when they have troubles with guests, for example, they don’t know if it’s easier to solve it with the guest or also call Airbnb, tell Airbnb about their problem in case it is something really serious. Would you say is easier to deal with the guests? Or is better to involve Airbnb?
Jessica Garza:
It depends on the guest. Some guests, they seem like sensible understanding people and so you can message them directly. I would definitely keep all messaging on through the app because they’ll try and text you and make you promises and tell you “oh, yes, I’m willing to pay this fee or that fee” and then when you try and charge them through the resolution centre, they just don’t pay and then there’s no record of them promising to pay when it comes to you involving Airbnb and their resolution centre representatives. So definitely, I would say depends on the guests, most of the time, I reach out to the guests first and I see if they’re reasonable, if they’re even going to respond. Some of them won’t even respond to you. But if they seem reasonable and they respond and it’s on the app with the messaging so that if you need to involve Airbnb, it’s all there, then I keep it at just that. But if we’re not getting anywhere on the agreement of what the issues are or that they’re gonna pay the fee, then I involve Airbnb right away for sure. I use Airbnb’s customer service a lot.
Delia:
Okay, that’s great advice. So that’d be for today. Thank you for sharing your story with us!
Jessica Garza:
Oh, you’re welcome!
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