← Real Estate Rookie
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- [00:00]
A
We all want to make money. And today we have another real estate related revenue opportunity for rookie investors that doesn't involve buying a property.
- [00:09]
B
Today we're bringing on the host of the Bigger Pockets, bigger stays YouTube channel to break down the lucrative world of Airbnb co hosting. Garrett Brown is going to walk us through his step by step blueprint of how you can start up a co hosting business and how to be successful.
- [00:29]
A
This is the Real Estate Rookie Podcast. I'm Ashley Care.
- [00:32]
B
And I'm Tony J. Robinson.
- [00:34]
A
Before we welcome Garrett, I wanted to share today's sponsor and one of the tools I use for my own real estate investing. They say real estate is passive income, but if you spent a Sunday night buried in spreadsheets, you know better. We hear it from investors all the time, spending hours every month sorting through receipts and bank transactions, trying to guess if you're making any money. And when tax season hits, it's like trying to solve a Rubik's Cube cube blindfolded. That's where Baselane comes in. Bigger Pockets official banking platform. It takes every rent payment and expense to the right property and a schedule E category as you bank. So you get tax ready financial reports in real time, not at the end of the year. You can instantly see how each unit is performing when you're making money and losing money and make changes while it still counts. Head over to baselane.com biggerpockets to start protecting your profits and and get a special $100 bonus when you sign up.
- [01:31]
B
Well, Garrett, welcome back to the Real Estate Rookie podcast. Man, thanks for jumping on and joining us today.
- [01:35]
C
I was happy to jump on and talk talk anything real estate related that we can talk about.
- [01:39]
B
Garrett, we're here today to talk about co hosting and I think before we get too deep into the weeds for all of our Rickies who may not be familiar with the phrase co hosting. Can you just define it for us? What does it mean to co host as an Airbnb?
- [01:53]
C
Sure. So Airbnb kind of popularized and coined the phrase co host, but it's essentially you're doing property management for a short term rental and you gotta be a little careful with the, with the term property management because reason Airbnb developed the co host term is because a lot of states have legalities around being a property manager. I'm doing air quotes here of how you can collect money and there may be a license involved, but Airbnb has kind of changed it to where you don't necessarily retain the money from an owner. You only get Your percentage cut that you get from the management side. So they've kind of circumvented some of these legalities and I'm sure a lawyer probably could explain those things better. But basically you're just helping out an owner with their property and most likely getting a percentage cut of the rental revenue that's coming in.
- [02:43]
B
And I think there's like a bit of a sliding scale here as well because, you know, I think when I think about a traditional long term property manager and Ash, you can check me if I'm wrong here. Most of them probably all do the same thing. You know, like they kind of full cycle everything from, you know, lease up to, you know, you know, tenant issues, turnover, whatever it may be. But in the short term rental space, there's some co hosts who only deal with like guest messaging and they're just in there to help you respond to guests and do all those other things. But everything else, your pricing, you know, the maintenance and consumables, like you've got to handle yourself. And then on the other end of that spectrum there's like the, the full service option where they do everything right. They're not only are they communicating with the guests, but they're taking those maintenance requests, they're going out and finding the vendors, they're doing everything, they're managing your pricing, they're keeping it stocked. So there's a, there's a bit of a spectrum there, Garrett. So for you, where within that spectrum, when you talk about co hosting, do you actually fall?
- [03:37]
C
I only do full service. It's from a, from a perspective of, I've seen people try just the, just messaging and some things like that and they'll do lower percentages. But what I see is that it doesn't really make a functional relationship between the owner and the co host. And so I personally only do full service management where we handle everything top to bottom for these owners. We also get paid a lot more on the percentage. You know, ours typically is 20 to 25% and we'll dive into the, you know, the full numbers of it and how we set it up. But usually the messaging or more hands off co hosting is probably between 5 to 15% tops. And those particularly didn't align well with the business model and my own real estate investing journey that I've kind of been on. So we do full service.
- [04:26]
A
Well, it has to be kind of hard to do your job if you're relying on the owner to do a certain part of it. And I'm not doing that. And I say that as an owner myself that I probably would have to be nagged to get stuff done so they can actually perform their job. But, but Garrett, I'm curious as to what came first, the chicken or the egg. Did you become a short term rental investor first, then a co host or did you start co hosting first?
- [04:52]
C
I, I was a short term rental investor first myself. I owned the units. I had three, I started off with three units back in 2019. I was managing them myself. I learned a lot. I kept, you know, and I ended up selling those units and getting into bigger, more profitable units once I learned some things, which I still was about three units that I was managing myself. I think that anybody that wants to get into this space is going to need to at least have some experience. You don't necessarily have to be a full fledged investor even though you know this is bigger pockets. And we always are talking, you know, and trying to educate that real estate investments are where the wealth is built and even on the short term rental side. But if I didn't own properties I would, I would have gone and worked under another co host or a property management company or vacation rental. Property management company is a better way to put it to just get some experience and learn the ins and outs. Because there's a lot of things you don't know and it's, it's also a lot harder to get co hosting clients if you have zero experience. Still possible, still a ton of people that do it. But I always recommend to at least get your feet wet in the game the best way you can to make sure it's even something you like and it will develop the skill set that is kind of needed. But I will caveat that saying that I know plenty of people that didn't have any experience were able to hustle and get their first client and they've grown to 30, 40 units and are very successful. So there's a little bit here and there that happens. But I would suggest you at least have some experience before you start going pitching co hosting. You know, primarily as my advice.
- [06:25]
A
At any point during your journey did you use a co host at all or have you always self managed?
- [06:30]
C
I have always self managed. I am and you know, anybody even watching this, like I, I always will preach to people to try self managing. Like I went to school for hotel management. I actually there's, there's a degree for that. People are always shocked. But there actually is a hospitality degree and I went to college for that. So I knew a lot of the ins and Outs. I've worked in hotels, so I came from the mindset that I never was going to need a co host. But anybody that is considering hiring one, if you're listening on that side, I would do your own self management for a couple months or whatever to give it a try. So that way you know exactly what a good co host is doing. I see too many people buy a property, they hire a property management company or a co host or whatever you want to call it, and then they're like, okay, cool, like we'll just run it. And they don't have any idea if they're even good. They don't know the ins and outs. They don't know how, you know how they're managing the guests. Is that the proper way to probably do it? So you learn a lot when you self manage, but I've seen a lot of people self manage, decide that they hate it and then that's when they hire a co host. And I think that is the best recipe for success to know that you're hiring somebody that's actually qualified and is going to make your life easier, which is what the point of a co host is.
- [07:37]
A
Tony, you only self manage your properties. You've never used a co host or a company, have you?
- [07:43]
B
Actually, the very, very first short term rental that we bought when we purchased it, the Actually, I think it was the second short term rental that we bought. The current owners had a property manager on it. No, actually was our first one too. I think it was maybe first or two anyway.
- [07:58]
A
Actually that one I went and stayed with you at.
- [08:00]
B
Yeah, I think that was one of.
- [08:01]
A
Them in Smoky Mountains, that one had to have the property manager for a little while too.
- [08:05]
B
Yeah, exactly. Yeah. So when you're buying from an existing owner that already has a property manager in place, a lot of times they'll say like, hey, we've got reservations that extend past, you know, your close of escrow. Is it okay if we continue to manage those reservations so we don't have to cancel? We'll still take our management fee and then we'll give you whatever is, you know, like the net profit. So we've actually done that a couple of times, but it was always like a very short time period, you know, 30ish days after closing for them to kind of wrap things up. And then we always took it over ourselves. So, Garrett, I'm curious man, like co hosting. I think the benefit is that aside, you know, if you compare it to buying real estate, you don't have to worry about a Down payment, you don't have to worry about, you know, paying to furnish or ad amenities. You don't have to worry about anything really financial.
- [08:52]
C
Right.
- [08:54]
B
But maybe it's not the right fit for everyone. So I guess what, what questions should someone ask themselves before they even think about jumping into the world of Airbnb co hosting?
- [09:03]
C
So I, I, I definitely think that it co hosting mixed with buying some of your own short term rental properties or properties in general is a true way to balance your own. You know, the, the issue of not having enough funds to get your next place but also getting the cash flow that you need in place. So if you're, you know, if you're cons, if you have never managed, and this is why I'm so adamant about at least maybe trying to work under a company to know if it's something you like. There is a. Short term rentals is nothing but real estate investing mixed with the hospitality business. And people always underestimate the hospitality business side. You know, I, I kind of think short term rentals are like a gateway drug to either going buy more real estate investing or go and buy your own business or something along those lines because it's kind of like a happy marriage, happy marriage of both. So if you've never done it and you don't have any hospitality experience, I would 100% try to work under someone and decide if this is for you. There's, there's so many softwares and automations now that it has become so much easier in the past few years to manage your properties and not be stuck texting guests all days, all day and doing things. But short term rentals are never going to be fully passive. If it is, then you have probably the best co host that's ever existed and you know, they probably need a raise because there's always gonna, even as an owner you're still gonna always have to step in and make some decisions and help the co host with some things. So I would just try your best to get experience either managing your own property, working under someone or you know, like if you have a family member that happens to have a lake house, like do some studying, go to The Bigger Stays YouTube channel, reach out to me. I, you know, I can help you through some things and, and try to give it a shot that way. And you know there's, there's tons of things we can talk about of like how to set up your systems but some of the time trial by fire is the best way to know if you're going to Learn it. But if you hate fixing things, hate, you know, having customer or guest interactions, and, you know, this may not be the business for you because there's still going to be a level of hospitality that you have to implement in your business.
- [11:07]
B
Gary, one of my biggest hesitations around jumping into co hosting personally is the idea that now as a co host, not only am I kind of focused on and beholden to guest satisfaction, but now on the other end of that spectrum, I also have this owner that I'm beholden to have to worry about them being satisfied. Is that a concern for you? How do you kind of navigate that, that balance of keeping your guests happy but also having to answer to an owner?
- [11:34]
C
Yeah. And that is easily one of them. Like, even within my team, we kind of joke all day of like, you know, how much we love owning units because it's like we only deal with the guests. But when you co host, you are serving the guest and the owner. My biggest thing that I've learned, like, I've taken on when I first started co hosting, I probably said yes to way more than I needed to, like any property that was coming to me. You know, Airbnb has the co host network now where you can put, you know, put yourself on there to be a potential co host within, I think, 60 miles of your area that you're working in. And then, and I used to say yes to almost everybody that came along. And then I eventually realized that not every property is, is makes sense to have a co host. If they're making, if they're gonna make $30,000 in the year, it's probably not worth anybody's time for you to be the manager of it and dealing with what the money you're gonna make probably, you know, $2,000 that year unless you live right next door to it. Probably not the best move. So now we've gotten better with vetting owners to where we know the property is going to make a certain range. I, I personally now only take either really unique stays or places that are either lakefront or have some type of massive pool or something like some big draw feature that I know it's probably going to make a hundred thousand dollars in gross revenue that year. That's, that's my personal baseline. And I also have questions to ask the owner. Like I asked, you got to vet the owner out and make sure that it's going to be somebody you want to work with. Guests you can't do anything about. They're always going to be a wild card. But the owner is going to be a consistent. So we ask the owner, you know, like do, do you like would you be willing to you know, put a budget in to improve the property and like spend money on the things that need to be done. Like will they do a deep cleaning before you even take over the, like pay 500 for a deep cleaning. Like little things like that and, and, and you know, talk about your operations and if, if you're getting like signals from them that they're like oh, like that cost too much for the cleaning or, or, or, or, or even for one, one owner particular. Right. We charge 20% on the rental. We also have a tech fee each month and we also have a setup fee. This owner kept, kept messaging me, hey, can you do 17%? Hey could you do 18%? Could you do 16%? Like I think three different text messages that already is a massive red flag if they are trying to negotiate a 2 or 3% deal with you and y' all haven't even started, you know, like those type of red flags. If your gut's telling you like hey, this owner probably is a little difficult unless it's just a cash cow, multi million dollar place on the mountains or something, you have a great opportunity. You're probably going to regret taking that place after a while because the owner is just gonna, it's gonna, you know, we call them like golden handcuffs basically where you, you're stuck to the owner. They get to make all the rules but they're kind of making your life more difficult. You know, similar. I, I had another owner that was you know, arguing with the cleaning fee of like what we charge and what the cleaners have and it's like the fact that we haven't even started and you're, you're worried about what my team is charging that you have nothing to do with. Probably a bad sign. So there, there definitely is a little bit of, you know like just feeling out the owners and, and I can't recommend enough of getting some baseline questions and just being very candid with the owner and seeing what the react and.
- [14:47]
A
Trust me, your gut, that's great advice because I'm thinking of myself as an owner and you would not want to be my. So before we go to break, I have to hit you with some rapid fire questions because I want people to continue listening to this episode and I think these are three questions that everybody is already thinking. How much time a week are you spending co hosting?
- [15:08]
C
So I spend 10 to 15 hours. I have a, I have a big team. I built out though that is one thing that has the cool thing about co hosting is it's helped me scale my cash flow so much to match my owned investments that I now have the loose cash to hire a team. I have three full time assistants, an operation manager that's on salary, a full social media team, all kinds of things. But that came from come from co hosting and being having that cash flow to be able to put back into my business.
- [15:37]
A
How many properties are you co hosting for?
- [15:40]
C
I think it's 16 currently.
- [15:42]
A
And how much are you bringing in.
- [15:44]
C
A month co hosting alone? I'd say some of them have different variance rates and that's one thing that I've been able to like. I even have one co host client that I get 65% of the bookings. It's I can go into the details about it but we make probably, probably 50, $50,000 a month between the 16 rentals. I'd say a few, you know, a few caveats of like where that money goes and how the payouts go but we probably retain profit. I'd say $20,000 a month, maybe a little less, you know, between but, but though some of those come with a lot higher rental agreements that I was able to work out with certain tiny home builders that I partnered with.
- [16:25]
A
Well, we have to take a short break but I hope that really caught your attention if you're looking to make an extra 20k. And not to forget, Garrett works a full time job and has has his own rentals too. So we're going to take a short break but when we come back we're going to show you how to step by step implement your own co hosting business. We'll be right back.
- [16:43]
D
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- [17:57]
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- [18:42]
A
Okay, thank you for taking the time to check out our show sponsors. We are back with Garrett. So Garrett, can you walk us through a step by step business plan for getting co hosting off the ground? What are the tools, the resources we need? What are the first things we should be doing to actually start co hosting?
- [19:00]
C
So the first big thing with co hosting is getting, you know, let's say you don't have any co hosting clients at all and let's say, let's just, let's just have the idea that you don't even have a short term rental even like we'll make this as simple as possible for people. There's two real ways that I have seen me and I know there's a lot of other options out there but there's two real, I want to say free but there's probably a little cost associated here, time cost for sure. First is you can go on, you can go on Airbnb and find properties that are, they look like they're struggling, they maybe have really bad photos, their ratings the reviews are really bad. Whatever sticks out to you, that is, that is not working on for their listing. I want you to. And this is Airbnb makes this a little tricky. I'm a realtor, so I have my realtor, my real real estate license. So I have a lot access to a lot of data on the back end in Texas of who owns a property and things like that. But if you don't have that access, you go on Airbnb and this is a little, this is fun to me because it's kind of like being a detective to figure out who the owner is and how to get in touch with them. Right. So you go on Airbnb, you start looking at the photos and Airbnb will show you a general location to where that property is. Right. So you already at least kind of know where it is. You can see some streets. Sometimes it may even show you the exact streets it's on. But you look at the photos, see if you see any street numbers on. Sometimes photographers will leave like, you know, like you'll see the house and they'll have 1, 2, 3, 6 on the, on the house. So that may be the street address. You also look at the aerial photos to see what houses are nearby. Kind of like the orientation, like is it facing a lake a certain way? Is it facing a street a certain way? And then I use my real estate license. Maybe you know a realtor in your area that can help you like pinpoint something. But there also is some cool softwares like propstream is a really good one. You can get into Propstream and start searching around that exact area and click a few listings and they'll pull up photos from like past MLS listings or you know, wherever the data they get from. And eventually you'll probably find that house in Propstream and they'll be able to show you the owner. You'll see, you'll see the house. Like that's the house. Like I, I can see it in the Airbnb photos. They'll give you the owner contact information. One of my favorite co hosting listings that I ever have, which is easily the, one of the most profitable ones I ever have. It was a, was a really unique stay. I've been trying to get in this, in, in touch with this guy for months. I knew exactly what the house looked at, but I couldn't pinpoint it down. I eventually got on. I used Propstream this time because I was doing some, I was, I was working within the software already and I was like, let me, let me try Some more things out on it. This was like a year ago when I first really got into co hosting. Really, really tough. I ended up finding the guy. I took his information. I can't remember if Prop Stream had his telephone number or not, but you also can go to, like, whitepages.com it's like $5 a month. You can type that address in. I got his text, I got his phone number, I got his email, all that. I just text the guy and I was like, hey, your property's basically, like, way nicer, way more, you know, complete. But, like, hey, I could tell your property's been struggling a little bit. We do co hosting in the area. Like, I know we can bring it to the top of the market. And instantly, like, the guy was super excited to finally hear from us. I'd send him some letters and I never heard back from him. And so I was like, let me get this guy's phone number. I text him. Started a great relationship. Easily one of my best. So you can go, like, the Airbnb investigative route, which is fun because you gotta, like, piece clues together and like, oh, this. This property looks at it like it's at, you know, this cross street. But the other really cool route that I've seen a ton of people very. Be very successful with is get into Facebook groups. Every single little city, like, even in my area, there's like, one that's, you know, the one of the counties is called Polk county county, and they have a massive Facebook group with like 80,000 people in it that is, you know, Polk county talk. There's people all the time popping up, like, hey, I, you know, does anybody know a cleaner for a vacation rental? Does anybody know a, you know, a photographer or a contractor? I'll send them a message and go, you know, hey, you know, I. I work in the area. Let me know if you need anything. Or there's like, there's also Airbnb, like, owners Facebook groups, and like, sometimes people will. You can join those. And you're, you know, in Texas, there's like an Airbnb Masterminds of Texas free Facebook group. You join it, host will all the time jump in and go, I'm not getting any bookings. Like, what should I do? I will either, you know, send. Either. I'll send them either a DM with like, five or six very simple. I'll go look at their listing and send them a. A DM with like, five or six simple things that I think will help their listing and show value. I don't ask for any money. I don't ask for anything. Like, don't tell them I even co host. I just provide value to them. And then. And then I, you know, it's up to them at that point to decide, like, okay, this guy actually knows a little bit. Like, maybe I should talk to him a little more, because he actually gave me some great insight and didn't even ask for, you know, any help. And 99% of the time, you. You go on their Facebook list or their Airbnb listing, and it's like, hey, you need better photos. Hey, you. You need to, you know, adjust your minimum stay. Hey, you need to be pet friendly. Like, it's kind of simple stuff, but to the owner, it's, like, revolutionary because they're not thinking about this.
- [24:08]
A
Like, even with the property literally describing our first call together that we did.
- [24:16]
C
I didn't want to throw you under the bus.
- [24:19]
A
Literally, the thing.
- [24:21]
C
No, except for the photos.
- [24:22]
A
I did use it professionally.
- [24:23]
C
You did have good photos, for sure.
- [24:24]
A
But you did have me rearrange them. That was for sure.
- [24:27]
C
Yeah, yeah. But you'll be shocked. People underestimate Facebook groups so much. It is. I cannot, I will always stand on this soapbox until, you know, years to come. Facebook groups are one of the most underutilized way to gain traction in any type of real estate investment or business that you're looking for. You just have to look in the right Facebook group and know how to provide value. That's what it all comes down to is providing value.
- [24:51]
B
Garrett, that was an amazing master class on sourcing potential clients, and I just want to add my own experience. So we at one point explored the idea of co hosting, and we actually put together, like, a pretty solid approach for sourcing clients. And it was similar to yours, but we actually used, and you can use either air DNA or you can use, like, a Price Labs market Dashboard. But like, for example, if you use Price Labs in their Market Dashboard tool, when you go into a certain market, Price Labs will give you all of the listings within that market. And then what we did was we sorted it in reverse order from lowest review score to highest review score. And then one of the columns that Price Labs and both ARDNA give you are the latitude and the longitude coordinates for that listing. So we would then take those lat and those long coordinates, plug them into Google Maps, do Street View, confirm that it was the right address. And sometimes it'd be spot on. Other times it'd be, like, right down the road, and you have to, like, you know, kind of Take the blue man or the yellow man, like walking down the road. But pretty quickly we could find the actual address. And then we would do what you did, where we take that address, put it in the propstream, get the owner's information. And our approach was creating postcards. But what we did with the postcard was we would actually take a picture of the front of their house and then we would put the negative reviews on the postcard. And a lot of the listings now that Airbnb added. So you guys know, like, Airbnb has like, you know, top 1%, you know, top 5%, but they also have a bottom 10% and it's right above the review. So if you're listing this in the bottom 10%, it'll literally say right above your reviews. This listing is in the bottom 10% of homes based on, you know, guest experience or whatever it may be. And we took a screenshot of that and we mailed those out to a bunch of owners. And that's how we, we kind of got like the phone ringing initially, very much like a sniper approach, but the, the response rate was actually pretty solid. We actually, it looks like one of the, one of the guys actually forwarded that letter to his property manager because we got like a lot of threatening calls from that PM after the fact. But it was a very, I think, effective strategy to try and source people.
- [27:03]
C
Yeah, no, I love that. I actually didn't even know that you could get the latitude and longitude of. From price labs or Air DNA. So now I'm like, my brain's exploding even more there because, like, oh, I can't wait to really dive in there. But yeah, no, that, that is, that is a great approach. We had a little success with postcards. We did, didn't do something like that. But I, I do love that idea. I'm sure there were some property managers very upset, but you, you should be, you should be performing better if, if we have to point this out. Like, I mean, come on.
- [27:30]
B
Yeah. Imagine paying someone in your listings the bottom 10%. It's crazy. So, Garrett, going back to like the 30,000 foot view, the step by step. So it sounds like step number one is to identify potential clients and then reach out to them, I guess. So, like, let's say that someone picks up the phone or they, you know, they call you back from a postcard. What does that initial conversation look like to get them from, hey, I'm potentially interested. To them actually signing on as a client?
- [27:54]
C
You, you have to figure out their pain point. That's Always any, you know, even in my, all my realtor days and everything. It's, it's kind of, I don't want to call it a sales call because in the end we're like, we're providing value in a service based thing. But most of the time the reason the owner ended up calling you because they realized there's an issue and you are probably the solution for it. So you know, when I take the, I call it the Lighthouse is the one that I referred to a few times where I text the guy, got his number. You know, a few years ago. I just, when we had our first initial call, my first question, just right off the bat, you know, like, how's it going for you? Oh, we haven't, we've had one booking all year. I'm like, and I was like, like what's the issue? Like what have you seen be the biggest pain point? And he's like, oh well, you know, we have to have a three day minimum because you know, we, I'm worried that we're not making enough money and I'm always worried I can't drive up there and like they just start rattling off things. You just need to be a good listener and figure out what their biggest issue is that they have and solve that immediately for them. Like with it when, you know, when his, his and this is why you need to be prepared too. Like you can't just send out all this stuff and you don't know anything about co hosting or like running a good short term rental because you're going to get questions and you're going to, you know, you're not gonna be able to answer. You're like, oh well dang, that sucks. Like, you know, good luck. But he presented like, hey, I, I have to do three day minimum because our cleaning fee is so expensive. And he started rattling off things and I took each one. I, I, I reiterated the problems. I'm like, okay, so you're, you're having an issue with getting things fixed. You're worried that you're going to be on vacation with your family and something's going to break. And then I address those problems of how we solve those. And I, I have a team in place. I, you know, like, I don't live far from the area. You know, sometimes that's even like just not, you don't want to put yourself out there as like being the, the, the runner of sorts. But if you're just starting and you don't have a team, like you are the team, you're you're the coach, owner, player and mascot. So you got to wear all the different hats there. So figure out how you can solve that problem for the host. And there's always common issues. Like, like I said, the most common by far is I can't deal with it when I'm not there. We're struggling. Like we have, like, we have to block off dates because, you know, I just took over another one not long ago. She was like, we've only been able to run it a couple months, a year because we're, we live in Mexico 10 months of the year. And I was like, well, that is a super simple solution because like my whole team's in place. I live near the area. We have systems and structure. We have a cleaning team that handles everything. You know, we have 24 hour coverage to like, you know, assistance and all that. Like between AI and just having a couple of virtual assistants, you can achieve all that. You just have to make sure you, you understand what you're, what you're, you know, I don't want to say selling to the host, but make sure you understand what you're providing to the host. But easiest way to get, to get more clients, figure out their pain point and solve it for them that it's always, you never, you always be shocked at like what the small issue is that allows them to like decide that you're the right one for the, for the property. It's never like 20 different issues. It's usually like one or two big things that you can easily come up with a solution and they're more than willing to at least probably give you a chance.
- [31:03]
B
Okay, let's talk. Right? I mean, because after you do all of this active listening and you're, you know, understanding what their pain points are and then you present your co hosting as a solution, what are maybe the biggest objections you typically hear and how do you overcome those?
- [31:18]
C
You know, biggest is always like, oh, it costs too much. You know, I mean like, or like why am I going to give you 20%? That's usually the first one. Like we even mentioned earlier, like some people would be like, well what about 17%? And it's, you got to stick to your numbers. But then you also tell them you how I, how I kind of frame it is like even with the person that had one booking all year, we presented it as like, hey, we can do this, this tweak. We can make you pet friendly, we can, you know, our cleaning team will be enhanced and then that price becomes, and we'll also work on, you know, we have dynamic pricing so you're not even going to see that 20% from your bottom line because we're going to increase your revenue so much that like if you're making $20,000 this year and if you can bring us on and pay us 20% and we can still make you $40,000 that year and you work less, which one sounds better? You got to just kind of talk to them in plain numbers and tell them how the reason that, you know, the 20% or whatever rate you want to charge isn't going to be a big deal because you're going to increase their revenue with the tactics that you have. So also I get very tactile as far as like helping them understand of like, you know, like why Pet Friendly is so big. Because it's the number one search filter on Airbnb. We talk about how high level our cleaning team is and then the other, you know, and then we also talk about like how we're going to adjust their calendar to make it book better. And it's good when you have case studies and experience because I can, I can very easily rattle off numbers that we do in the area and you know, have an idea of what they're going to make. But like some real simple solutions is no, like a lot of owners don't know what Air DNA is or Price Labs or something like have, have like go on Air DNA or Price Labs and get the revenue that is expected. It's not always guaranteed. You know, it's, it's, it's a, it's a suggestion more than anything. But take that number to the, the host. And then also I bring some competitors in their area and say, hey, this place that is two streets down from you is making double what you're making. Air DNA says you should be making 50k and you're making 25k. Like our company can take you to that next level. The other thing too is like you need to stand out because there's a lot of people and two really cool ways that we've stood out recently is we are Breeze. There's a company called Breezeway. They're, they're say they have a safe, a short term rental safety inspection certificate. A lot of words there but it was like three or four hundred dollars and we, and there's a great guy, Justin Ford, he's amazing. We, you know, took the course. It saved us thousands of dollars on our insurance bill with proper insurance too which is, you know, my owned units. But as a co host now we go and tell tell owners like hey, we're short term rental safety certified. We, we know what to look for to make sure guests are safe. We walk them through all the liability things which is something that owners care a lot about and they don't think about. If we talk about how they need to get specific short term rental insurance from proper or steadily or something like that. And then the other really big thing is we tell because they always worried about parties and damage. We tell them like hey, as a part of our co hosting fee we can supply between 1500 depends on how big the property is and how much it costs. Between 1500 dollars and $10,000 of guest damage insurance that we will cover in our percentage. We use a company called Safely. It's like five to seven dollars per night that we pay it out of our thing. But that peace of mind for owners is we've sold so many owners when we tell them those two things that we're short term rental safety certified and we also can provide our own damage protection that they don't even have to worry about. And it came in handy a week ago a guest at one of my co host properties broke the door jam. They said if the door just fell off which is hilarious because we all know that didn't happen broke it. I didn't even, I, you know, I take security deposits but I didn't even go to the guest. I put it into Safely. It was like 600. I sent an invoice, my handyman fixed it. They paid it out within two or three days. Guests never guess, never got charged. Owner never. They knew because I wanted to show them how good the insurance is. But I didn't even have to tell the owner like we could have just handled it and kept it moving. So there's those are two really cool benefits that I've that I've been able to bring on a lot of owners recently by just showing that I'm a little different and that I, I really you know, care about the owners and their, you know, their property and their place and their revenue.
- [35:40]
A
So for that software is that fee it's paid, the owners are paying that directly or is that part of your fee structure that you have set where some of these different things that maybe you know, a normal co host wouldn't know to get like the safely insurance coverage or whatever. But how does your fee structure work and what are some of the things that you include or don't include?
- [36:04]
C
So we, we include that in our fee structure. We, we kind of consider that like not a Cost of doing business. But more like I said it's an upsell that of like why we are a full service premium concierge. You know, co Host we charge 20 for the nightly rental rate of almost every property. We like I mentioned, I do have some where I get 65% which we can talk about but completely different structure. That's more of like a partnership between me and the tiny home builders. But most of them we do 20 nightly rental rate. We collect the full cleaning fee which most of them are pretty even with what the cleaners charge me. But there's a couple where I still make like maybe 20 or 30 bucks off the cleaning because of logistics and other things too. And we're how we're able to price it.
- [36:45]
B
Gary, let me, let me just ask you really quickly, right so on the cleaning fee are, are you just sourcing the cleaning out to third party cleaners or does your property management company actually have like cleaners on your team that are doing the turns?
- [36:58]
C
So and I'm in two markets where we, we have you know, multiple units. In each one market I actually have hourly cleaners that work for my property management company. The second market we do a subcontractor. She's been with me for three or four years. We kicked the tire on bringing her on hourly and did many couple different reasons. It wasn't going to work for either side fully. So we pay her per project and she has a full team out there that she kind of takes. I, I kind of consider her in house but she's still a W or she's still a 1099 subcontractor. So we outsource it. But she has, you know, she started with one property with me and she's grown to five or six people that work under her. And so I, you know, I trust her. She knows how I operate. And so we always turn the cleanings over to, to the team that we have in place there. And there's a lot again Facebook groups. I found all of my cleaners through Facebook groups. People think I'm crazy, but every single cleaner I work with and that is on our team came through a local Facebook group through a little trial and error. And so we do that. We take the full cleaning fee. Most of the time we don't make money on it. Sometimes we make a little bit. We also charge and this is something recently I've implemented. We charge a thousand dollar property setup fee for each time we bring on a property and that is to get new pictures. That is to there's so many things that I learned that like, oh, you would expect owners to do. And then like you get to the property and you're like, there's 10, there's 10Amazon boxes here and you didn't unload any of them. Like now you're expecting me to do it like, which is fine. I, I, but that's when I started implementing the setup fee so I can bring myself or my helper to go out there and get the pictures and the videography. And then we also now have implemented a hundred dollar a month tech fee. We used to not do this, but honestly the softwares are what run a lot of these properties and you know, a couple properties, there'd be some months where they weren't as profitable as we want and we were almost barely breaking even on them. And it was a lot of it because of extra software that we paid, you know, between Lodge of is my property management software. We have Price Labs, we have host Buddy Turno, my business line of phoneware. We do, you know, like our just having our website hosted that we have to have another property on there, things like that. So that's why we started doing a hundred dollar a month tech fee, which, you know, I just implemented that. So I know some people that do that, but, and some people that don't. But I think going forward it's, it's kind of something that people should go ahead and start charging to the owner. But when you're just starting off, like one of my friends, Allison Craft, who I think she even was on the Rookie podcast, maybe at some point, I can't remember, but she's a rock star. She's got like 20 or 30 units. And her first unit she was like, I took like 8% on the CO hosting, I didn't know. Or like 10 something wild. But she still made like 2 or $3,000 a month. So there's ability out there to have some flexibility. And when you're first starting, like you probably can't get to what we did, where you can do 20%, $1,000 setup fee, $100 tech fee. Like we can do that because we've built the reputation and have the numbers that back us. But sometimes when you start off, you might have to take a little lower or not be able to do that and just get the trial by fire going. So that way you can learn all these things as you grow the business side.
- [40:04]
B
Garrett, we've learned so much already and I appreciate you sharing all this with us. We're going to take a quick break, but when we come back, I want to go over how do you set yourself apart from other co hosts and really what kind of boost your income as a co host in the space as well. So we'll be right back after work from today's show.
- [40:20]
D
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- [42:22]
C
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- [42:46]
A
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C
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- [42:51]
B
Rated PG 13 so we're back here with Garrett and Garrett, I want to understand you talked a little bit before the break about you know, liability and you know, the, the track record that you have. But as more folks come into the space of Airbnb co hosting, what are some of the things that they should focus on and that you focus on to try and separate yourself from the other co hosting options that exist out there.
- [43:13]
C
So I touched on a couple earlier when I talked about the liability side and understanding that to educate owners on the guest damage side, the, the insurance they need and also like how you're going to set them up for success on, on, you know, the safety of their property. I personally think my hot take going into 2026, I don't think there's much of a hot take because my, my, my numbers and my bookings will tell you this. We do like 90 direct bookings now is, is pricing is going to matter a lot less in 2026 and marketing is really what is going to move the needle for short term rentals everywhere. You know, there's so many options now, so many things and if you're just trying to do like oh, we have the best, everybody has dynamic pricing. I can't remember, I think I was talking to Sean Rocky Jeets like a week ago and we were Talking about how 70% of listings now use some form of dynamic pricing. So it's not a, it's not like a, it's not an add on bonus anymore. It's kind of a necessity. But if you can somehow, which this is kind of one of my, my strengths I feel like is the marketing side. But if you can learn some, some small things about marketing, whether it's how to, you know, how to, how to really build your search engine optimization for your website, how to even run, you know, some simple TikToks and IG reels or, or hire somebody to help you with it and you know, even like paid ads like we have, we Even, even in my company now we have a full time paid ads person that we are able to show this to owners say hey, we have a person that works full time on the ads. We have our own marketing spin that we spend each month. But would you want to contribute your own like personal marketing spend that only goes to your property to increase your visibility and you know, increase the bookings and your revenue and all that. We break it down in a business sense. So if you're a co host like it, there's no, no more negotiables on. You got to know pricing. You have to have top notch service, top notch automations and, and like guest concierge to it. But that extra bit that I guarantee you is going to not only make more revenue for you but also close more deals is that, that you can speak a little bit of the marketing language that is going to be needed going into 2026 with some of these properties even. And I, and I say all that too. One, on my, on my main website we have all of our properties, right. But each, each week we will go in and write a blog for, for one of the particular like houses or, or like not each. Once of every few months each property gets its own blog. Basically that is search engine optimization driven. So like we have a property, the Lighthouse again it's on Lake Livingston. We will do a blog that says the best vacation rental near Lake Livingston or near Houston or whatever the, the keywords we want to use is. Now that blog will live on Google and there's a good chance of somebody typing in, especially the higher your site gets ranked and you do some things. If somebody typing in best vacation rental near Lake Livingston, there's a good chance that blog is going to pop up and you're serving, you know, you're serving the owner with more additional outside marketing that really is free. Like you can create a blog in 15, 20 minutes now. So I, I, you know, I give that as an example but I just want to incentivize people to learn the marketing side a little bit or turn it over to somebody that does know it because that going into 2026, everybody has professional pictures, everybody has dynamic pricing, everybody's listed on multiple platforms. Like that's not a way to stand out anymore. Now it's about getting your property in front of eyeballs that were not on Airbnb and all the OTAs already and you need to capture them before they get there. Instagram is, is the new ota if you want to be honest. So that's where everybody's searching TikTok and Instagram. That should be where a lot of your focus is going into, into 2026.
- [46:59]
A
Gary, you've mentioned a bunch of times that you've built a team to really help you run this business. But what about for a rookie investor just getting started? Do they need to hire a team right away? And who would be your first hire?
- [47:13]
C
So if, if you work full time like me and you have a busy life and you know there's, you're gonna at least need boots on the ground and the first hire always is going to be your boots on the ground team. Like, you have to have a rock. You don't need like the virtual assistants and, and all that, like operations manager, all the stuff that I have now. But when you first do it, you have to have a rock star cleaner, a backup cleaner as well. Like you're gonna have to have one. It's. People always like shy away from that. But there's going to be a time where your main cleaner can't make it. And then you need a rock star handy person. And you need to know this, all the subcontractors in the area, that alone is going to save you. So, and pay your, your cleaners and handy people well because they're going to go above and beyond for you. That way you don't have to always drive out to the property and handle all these things that you really shouldn't as you're building a business. But if you, if you get that set up and you start to, you know, you're a little overwhelmed, I'll give you the easy, I don't want to say the easy route. I'll give you. Like, the more the route I would do going forward is using something like Host Buddy, AI or any kind of these AI tools that are out there. There's one called Conduit. There's. I even got an email today of a new one called like Hosto or something like that. But some of these AI tools are better hosts than like even me. Like they'll answer questions overnight, they'll reply in two to three minutes. Like I even sometimes like a guest will send me something and I have to copy it, put it into like Chat GPT and go make, make this nicer because I'm, or make my response nice because I'm, I have too much emotion in this and then I'll send it back. But Host Buddy and you know, all the other ones out there, they, they take the emotion out of it and they're a host on 24, 7 for you. And it's like $10 per property. It's going to be very, you know, integral into getting back your time. When you have one or two properties, you'll still have to have a human touch to it, so you'll have to monitor it and do a few things there. But if you start growing after that, it would be easily getting a really, really good virtual assistant that can handle a lot of these very mundane tasks and things as you grow. But for your first couple properties, I don't think you really need a team if you get an amazing cleaner and an amazing handy person there because they're going, you can handle most of the other thing and automate a lot of it for the messaging and all that kind of side. But boots on the ground, there's no AI for that unfortunately yet. Maybe, maybe coming, I don't know.
- [49:31]
A
And Garrett, you really helped me open my eyes to a lot of this. Like I started using Hospitable and just when I used to have somebody co host for me, they would message me and say I'm going to be on a flight, I won't have wi fi. Can you just watch the messages for me? So like I just thought that was like a standard thing. Now that I have Hospitable and it literally responds to pretty much every message for me. I'm like on the airplane, like oh, three messages taken care of. I didn't have to do anything. Here it is. So that was a big eye opening thing to me too because usually I'm very skeptical of AI, but I have never ever seen AI this good because you do the chatbots on website when you ask for help and it's just awful. This is so good and I have to agree, like way better than I ever could. Like they have the little improve button and I'll just like hit that. It will make it so much nice if I even have to respond to the person.
- [50:27]
C
And, and most of the time they never even realize they're talking to AI. It is like it is, does so well. And like some of these tools, Hospitable has a great AI engine. Like they most of the time think they are talking to you and that's all we, that's all we want.
- [50:41]
A
Everyone thinks Ashley is so nice.
- [50:43]
C
Yeah, I love it.
- [50:46]
B
As we wrap things up here, I think just what is your long term vision for co hosting? Like do you want to build this into, you know, the, the next vacasa or evolve where you've got, you know like thousands of units or you know, Tens of thousands of units. What's your goal? How big do you want to scale this thing?
- [51:04]
C
So I definitely do not want to get to that level for a million different reasons we won't talk about on this podcast. But my, the cool thing about and what I want to leave people with this and you know, even into 2026, I, I'm really like geeking out basically over like commercial real estate. Like, I mean I know Tony, you've already like both y' all have probably been involved some projects. But the really cool thing about co hosting is that you can get, say you get, you know, I have 20 con or I think I have 16 now, but we're growing a lot more. If I get 50 contracts, you know, in a couple years you can sell those contracts as a business to somebody that is looking to either buy your business or a private equity firm or whatever. And a lot of people like so say see a 50 contracts and you know you're making 20 and you know they're, they're estimated to make you know, let's say $50,000. So 50 times 10, that's the $500,000. Somewhere around, I'm sure my math maybe is a little off. You could sell those, that business with those contracts to somebody for like between a 1 or 3x multiple depending on your teams and your operation and all this. And you could sell that and exit out at a million dollars, possibly evaluation and maybe even, you know, there's, there's so many exit routes when you have a business because you could sell it as a business or I can just keep it in internal as long as I want and let it because now that I have this co, this team and all this, it makes my units that I own more profitable because I'm, I've had the economies of scale where I'm spreading out the marketing, I'm spreading out the, the cost of my VAs, I'm spreading out the cost of my, my, my helpers and things. So the really cool thing about it is you can sell it as a business or it can make your own real estate investments even more profitable going forward as you figure out what your exit plan is. My exit is I, I probably want to sell the co hosting business in about five years and hopefully exit out and the great fashion that I just outlined so well.
- [52:56]
A
Garrett, thank you so much for joining us today. Can you let everyone know where they can reach out to you and find out more information?
- [53:02]
C
Yep, of course. I Bigger Stays YouTube channel is the bigger pocket. Short term rental YouTube channel we also have our Bigger Stays newsletter that goes out each week and on Instagram. I am Garrett Brown. Re always happy to chat and talk anything Airbnb or real estate investing in the world for you.
- [53:19]
A
Thank you so much for joining us. We always appreciate you coming onto the show. Thank you. I'm Ashley, he's Tony, and we'll see you guys next time.
- [53:26]
B
Hey, rookies. If you're watching this, we want you to apply to be a guest on the Real Estate Rookie Podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie Podcast. Now look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener.
- [53:45]
A
As a rookie investor. Especially if you just got your first deal. It is all fresh in your minds and you are the best person to tell your story. Give your experience on how you got it done to help someone else get their first deal.
- [53:57]
B
So head over to biggerpockets.com guest if you want to be a part of our show again. That's biggerpockets.com guest and we'd love to have you on.