Al Williamson, also known as the Leading Landlord, trains others on innovative ways landlords can create new income streams, reduce expenses, and grow their equity. Owning real estate is proven to be one of the best strategies for generating passive income, and Leading Landlord seeks to address the best practices for doing so. Al offers master classes, has a YouTube channel, has 23 listings on Furnished Finder, and has authored at least three books on this topic. You can connect with Al on his website, www.LandlordScientist.com (opens in new tab).
Al's portfolio is made up of some apartments he owns, some mixed-use commercial buildings, some properties he manages with partners, and some rental arbitrage. In the mid-1990s, a friend of his suggested that he and his wife buy a duplex and live in one of the units. This was the start of his journey into real estate. In the end, they bought a three-unit building and lived in the smallest one until his wife couldn't take it anymore. During that time, the value of the tri-plex quadrupled, so they were able to buy an apartment building next. From there, things started moving, and they kept adding properties.
Al looked at the numbers for all of their properties one day and realized that the time and money it took to maintain and clean all of them was the biggest drain on their cash flow and net income. Because of this, he became very interested in making their properties more efficient and finding new ways to make money from them.
In 2015, he had a few short-term rental properties, and a travel nurse booked one of them for a month. He was surprised by how much time and money he could save with a mid-term rental. His property didn't need to be cleaned and turned over as often during the month, and it was better taken care of with only one guest. He didn't have to spend much time managing the booking and cleaning schedule, and he rarely had to go to the property for maintenance requests. Because of this, it's not surprising that he turned many of his properties into mid-term rentals.
Al now uses virtual assistants (VAs) to handle much of the daily work in tenant communications, background checks, and lease creation because he has so many properties. A real estate investor friend of his who was already using them recommended him to use virtual assistants. They already had operating procedures in place, so he simply applied their procedures to his portfolio. The virtual assistants enabled Al to take on more of a business owner role and work on his business rather than in it.
Al advises other mid-term rental hosts to make their property and the time their guests will spend there as personal as possible. While mid-term tenants stay for at least 30 days, they still want to know where they should spend their free time. They don't just want to know what restaurants are nearby; they want to know what the best restaurants are for locals, where the best coffee is, what stores and local attractions are worth visiting, and so on.
Al emphasizes the significance of a direct booking strategy. He observes that, while using online travel agency platforms (OTAs) such as Airbnb and VRBO is convenient, it also incurs significant costs. What he particularly dislikes about OTAs is that by relying on them to fill your schedule, you are putting your business in the hands of someone else. That's why he values Furnished Finder so much; Furnished Finder generates leads for his properties, and his team can book them directly, saving money and ensuring the highest-quality tenant.
Direct Booking Strategy
Al discusses how the $2,000 figure is a kind of magical number in his book, " 6 Steps to $2,000 a Month of Passive Income Within 1 Year Using Real Estate (opens in new tab)." That $2,000 covers the mortgage for the vast majority of people. When that expense is no longer a concern for you, everything changes. You suddenly have enough money to make significant changes in your life, whether it's finding more investment properties, paying off credit cards, paying off car payments, or being able to afford some luxuries. You're able to put large sums of money towards productive, substantial purposes.
How to Know if Your Property is Right for Mid-Term Rentals
Examine the availability of extended-stay hotels in your area. If there are a number of these types of hotels in your area, you should be able to entice some of their customers to stay at your property. Red Roof Inn caters to the most cost-conscious business traveler, whereas Hyatt caters to the more affluent traveler. There are a number of other hotel chains that target different demographics, and knowing how many of these hotels are in your area and the travelers they're attempting to attract will give you an idea of how you might furnish your property; on the high end and charge higher rent, on the low end with no frills, or somewhere in between.
Determine if your Area has Suitable Rentals
Find out how much monthly rent extended-stay hotels charge. If you see apartments in the area that are renting for half the price of what the hotels are charging, you're probably in a good area. The rule of thumb for rental arbitrage properties (properties that you rent, furnish, and then sublease to traveling professionals) is to charge at least twice your rent. Sure, you'll have to pay for utilities, insurance, and furnishing the unit, but you'll be cash flow positive.
So approach the landlord of these apartments and ask if your company can rent out a unit or two, explaining that your tenants are traveling professionals, not tourists, and that your tenants, along with you as the property manager, will take better care of the property than any other long-term tenant would.
Al mentions that at this point in the process, you might hear "no" from property managers. He wants to be clear that being told no does not mean they are rejecting you as a person, but rather your offer. Inquire about their concerns and whether there are any changes to the offer that they might be satisfied with. You must also be prepared to say no. The landlord may respond with a new offer that is unworkable, in which case you must simply walk away.
Wisely Furnishing your Rental
Al has seen it all when it comes to furnishings, having stayed at a plethora of AirBnBs as a traveling engineer. While some hosts appear to spend the bare minimum to make their unit functional, others put in the extra effort to make their place truly inviting while clearly paying top dollar to do so. So, how can landlords achieve the same inviting appearance without spending a fortune? Working with an interior designer, according to Al and Katy Lyon, Furnished Finder's Marketing Director, is a great help and much less expensive than you might think.
As an example of the impact a designer can have, Al mentioned that he had a vacancy in one of his units for more than a month, which is unheard of for him. He contacted an interior designer, who examined his space, rearranged some furniture, recommended a new couch to buy, and suggested a few other small details to add some personality. Al's unit was booked again the next day after the updated photos were posted.
Market to Business Travelers on Extended Business Assignments
The goal of mid-term rental marketing is to keep your property rented as much as possible. As Al points out, every communication you have with your leads on Furnished Finder should include marketing and selling that lead on why your property is the one for them. He recommends determining their internal needs and emphasizing how your property and the surrounding area meet those needs. If they have a dog, for example, mention nearby walking trails or a dog park. If they have children, tell them about the playground, park, or other attraction that they will enjoy. Every point of contact is an opportunity to connect emotionally with that lead.
Welcoming your Tenant and Repeating the Process
Making your tenant feel welcome is a process that takes time, not just a few kind words when they arrive at your property. According to Al, the smell of your property, as well as the staging and presentation of your property when they arrive, have a huge impact.
Landlords should use a single, simple fragrance throughout the rental unit to avoid distractions from multiple scents. It is important not to overdo it, as fragrances should blend into the background. A fresh, clean scent should be noticeable but not overpowering. When it comes to home fragrance products, there is a wide range available. However, for rental properties, it is recommended to stick with simple scents such as citrus for a fresh and clean aroma, vanilla, mint, or almond for comfy and relaxing aromas, and rosemary, thyme, and basil for welcoming and evocative aromas, especially in the kitchen. For the winter and holidays, pine and cedar provide a complex and woodsy aroma.
Reed diffusers or a plug-in scented device are recommended, as they're quick to set up and the safest.
Communication that is clear and concise is critical in making tenants feel welcome and at ease. As a landlord, you must maintain an open line of communication with your tenants from the start. Explain to them exactly what they can expect from you as their landlord, including your responsibilities for property maintenance, repairs, and any additional services you provide. It is also critical to communicate your expectations of them as tenants, such as adhering to lease terms, respecting the property, and reporting any issues or concerns as soon as possible.
Provide a comprehensive overview of the lease terms during the lease agreement discussion, including rent payment details, due dates, late fees, and procedures for lease renewal or termination. Take the time to answer any questions they may have and address any concerns they may have right away. This ensures that both parties are on the same page and helps to avoid misunderstandings or conflicts later on.
Throughout the tenancy, regular and effective communication should be maintained. Encourage your tenants to contact you (or your VAs) if they have any questions, concerns, or requests for maintenance. Respond to their inquiries and resolve any issues that may arise in a timely and responsive manner. This proactive approach to communication fosters a positive landlord-tenant relationship, builds trust, and provides your tenants with a comfortable living environment.
You and your tenants can establish mutual understanding, respect, and cooperation by prioritizing clear and concise communication, resulting in a harmonious renting experience for everyone involved.
How to use Furnished Finder Successfully
In his mastermind course, Al teaches students that Furnished Finder is a lead generation website, not a booking website like other OTAs. This means that you will receive leads from interested parties but will need to respond to their messages as soon as possible. Leads in the form of ‘matched’ or 'unmatched leads' will be sent to you. Unmatched leads are simply people who were looking for properties in your area but yours didn't quite meet their criteria, such as rent or number of bedrooms. Reaching out to these unmatched leads can still result in tenants because these travelers may have an unrealistic idea of what rent should be in your area or may have simply made an error. You can tell them how great your property is and connect with them on an emotional level by following up and talking with them.
Al points out that even if your property isn't a good fit for that person, you can still make money by referring them to other landlords you know and trust in exchange for a finder's fee (assuming they end up signing a lease with that landlord).
Episode 33 Transcript
Welcome to Landlord Diaries where we talk about midterm rentals and the opportunities behind them we'll share landlord stories talk about maximizing investment potential and discuss how to live the very best landlord life this podcast is probably brought to you by furnished finder the place for everything midterm rentals remember to like And subscribe if you enjoy our content hello everyone welcome back it's Kelly Bailey your host of the landlord Diaries we appreciate you being here if you like our episodes don't forget to subscribe like and comment hey everyone I'm Katie Lyon the co-host here and um first we just want to say thanks again for being here with us and second of all you guys are gonna have to forgive us this is one of those episodes where technology was not on our side we've got some glitches hang with us Al who we interview on this episode has so much great content he talks about Hospitality the value of upgrades and investing in your business and don't let our technology glitches get in the way we are far from perfect and neither nor Kelly or Kelly and I were well neither of us will take the um title of Technology queen or head of I.T so um there is a lot that goes into these episodes but what we really want you guys to get is the value of the content so for a while you might enjoy a freeze frame of Kelly's face and luckily she's beautiful and we can all enjoy that so please enjoy this episode and remember this episode and every episode is brought to you by Furnished Finder um The Online Marketplace for midterm rentals you can list your property for just 99 a year and that gets you unlimited leads unlimited tenant communication it gets you all sorts of resources it's like such a great value that most people don't believe us when you say that it's truly 99 a year so we would love your comments um your feedback and again thanks for listening enjoy [Music] today we have the man himself Al Williamson also known as the leading landlord Al trains others on innovative ways landlords can create new income streams reduce expenses and grow their Equity owning real estate is proven to be one of the best strategies for generating passive income and leading landlords seeks to address the best practices for doing so all all Al offers master classes a YouTube channel has 23 listings on Furnished Finder and has authored at least three books on this topic you can connect with Al on his website www.landlordscientist.com hi Al how are you today good so happy to be with you too thank you so much for taking time out of your busy day um we'll go ahead and jump into the first question uh which is uh why don't you start off telling us about your own personal portfolio all right well up my portfolio is all in Sacramento California and is a cluster of properties apartments that I own and mixed-use commercial building and Rental building rentals that I own as well as some uh some rental arbitrages and some management some so I'm management of other people's properties through Partnerships I'm pretty much in in the Partnerships that I have I'm responsible for the marketing part how did you kind of work your way up to so many properties well it started back in uh like 94 when I was at a church picnic I was just getting ready to get married actually 95 and a older gentleman pulled me aside he said hey you two should think about getting a duplex and living in one side of it because he had a number of duplexes in Sacramento and then I went to the library back then and just worked my way of checking out books and reading from one side to the other all about uh real estate creative financing no money down it was really popular in in 1996 so we ended up um I talked my wife into it we ended up buying a three Plex and living in the smallest apartment until she couldn't stand it anymore so we did that and that really got us off to a really good start um you know that property just happened to quadruple and value which is a big deal in California and yeah we parlayed that yeah we parlayed that into an apartment building and into our own personal residence and and just been going from there just making small small purchases and really um I love forced appreciation that's my jam um building that Equity up building that cash flow up and and not making a lot of moves but making really smart moves so so that's that's pretty much how it happened um I I right then when I was doing things and I was looking at my numbers I was realizing that I was getting the the monthly rents and and my budget was correct but the maintenance was wiping me out I was doing a lot of Maintenance myself and and some things I couldn't do but if you want to take care of your properties and not look like a slumlord look like you give a care about what you're doing um it costs and that was the big surprise and and and I've talked to other landlords about it for years and when they're in public they don't want to talk about it they want to talk about their number of doors and how many units they have and maybe they're um Revenue but but very few people want to talk about the actual net income before before taxes so that's why I started focusing on like somebody's needs to just stay here and do uh r d for landlords and find other income streams find Technologies to reduce expenses because we're most of us are fooling ourselves we're getting that yeah we're getting the equity growth it's great wealth Builder but when it comes to our cash flow as normal rental not so much a large patch raining especially that's heavily focused in midterm rentals tell us how you discovered this passion tell us how you kind of Came Upon This and and what you do exactly online um with that passion okay so I discovered it because in um well 2011 I happen to be in San Francisco and I had funding housing allowance by the National Park Service and long story short I ended up doing staying at different airbnbs a week at a time for six months so Airbnb was just taking off in 2011. and I had a nice housing budget and Airbnb was just taking off so I was loving it I love being a guest but I did not want to be a host because it was really bed and breakfasty back then sure so 2015 they came out with business travel ready saying that they would promote you to business Travelers if you didn't share the space that's perfect for a landlord so I started this experiment which was I set aside one of my apartments and um the first month I did three stays and I made like a thousand dollars more so it was great after that one unit and then I ran my numbers and that's like okay there's you know more expenses um so I brought my net down and then I got a one month stay um just so happened that was my God intervention my my burning bush in the wilderness request for one month and that's how it then I said man there's so much easier it doesn't put that strain on my family does it take up my time and then I ran the numbers it looked like I was getting about the same net income because I said you know if I have to go over I need to charge myself what a handyman would cost per hour that's my time as least worth that so when you when you add that on to these short stays and see your amount of time and you look at the amount of time and everything all your numbers uh it was about the same net income so I said I'm just going to do Extended Stays back in 2015. that's all I'm doing is um that and that's when I um I got more involved with travel Nurses Back Then so it's been a it's been a good really good ride and um it's great on my time it makes my numbers work it helps me address those maintenance issues that I was talking to you about earlier so I can have a really well maintained it's interesting that you discovered that you know [Music] the real estate world you know you can make really high numbers with Airbnb right and with short-term rentals but there's a lot of um time there's a lot of work there's a lot of sweat there's a lot of a lot of turnovers um I and you're right with so many expenses a lot of times it can pan out to be just about the same if you if you Market it correctly and you have the right type of property right I didn't have any competition no no one was managing their their calendars correctly so it's just me and um it didn't feel like a job you know this short stays felt like a really a second job that was just um really taxing and controlling me because I had to yeah had to be here uh there was just short timelines I didn't like that right I'm pretty spoiled now um I don't like to do anything on timelines besides meet with you too I like on my schedules at all I like is not speaking do you have a team do you have property managers do you have kind of your own in-house team tell us about that it's my own in-house team I wrote some software to for some um that I that I use for my my va's are in the Philippines and so I trained some other people as well and they use the same VA so we kind of um use my videos are kind of like fractional um cost so it's cheaper to share a share va's if we're all using the same standard operating procedures it's just cheaper to use the same va's to manage my portfolios and my my other students portfolios is you just can't beat it so what types of tasks are those va's doing for you they're writing leases calculating prorated rents they're responding on Furnished Finder and they're um that they not only offer like someone may be asking about this unit but it might not quite be available or a good fit for them so they'll recommend my other units that are available so they're count they're managing my calendar and also anyone else that I'm in the area that I happen to be affiliated with they'll offer theirs as well so um it's just a really smart way that software can't do those things and has a human touch to it so that's the key is is is is the um have someone taking a look at hey I don't want a big gap I allow four days of vacancy per month um wow so they can if they can keep uh make they can make decisions within and maintain that four four days Gap you know typically of course this is four to five months of this day and then if they can find someone within four days they don't need to ask for permission just go ahead and do it and um take them through the background check and put together the lease agreement and stock send it over to me for DocuSign I'm moving from CEO to business owner so Al you are a wealth of information uh you have such a talent in training others and so on our intro call I had asked you what do you want to make sure and discuss with other furnished rental hosts and you said two things I'm gonna start with the first one which is understanding The Traveler mindset so what do you got right so you know when they come in or when I come into different places because I fly in and I I um I talk about furnace rentals um I want to know if people want to know not what the restaurants that are nearby that don't really want to know that they want to know what you recommend that's the thing and they want to know where the locals go and how to have a unique experience so that they can for the time that they're there they connect so please um help help people find that while they're there so that's the mindset because because when you're there for a period of time you get lonely or or you want to yeah that makes sense so make it personal make it personal make it so that you know when I'm staying in on the suburbs of Denver I feel different than the suburbs of of Oakland you know I don't want to go to a Denny's restaurant um tell me where the locals go so that's my big plea as a as a former essential worker that's my big thing awesome and then the second thing was uh the value of direct bookings and understanding why someone may come to you directly for bookings you wanted to talk about that oh yes so you know Airbnb has been around for a while and they're a great organization and all the accolades but it's not new anymore you know it's it's it's eBay now you know there's other things there's other things now and people are kind of hip to the fact that there's a lot of expenses that are get tacked on so they they are Googling you I just want everyone to know Google is still gets 95 percent of the internet traffic still gets it so if if they can find you on Furnished Finder or they can find you on your direct website even your direct website with furniture is great so um uh keep those fees down for for you as far as can you know you're not so gamified that's why I love Furnished Finder they're not trying to gamify you into lowering your rates so that they can raise their fees and um it just puts it puts the your business on your own um uh real estate you want to build your business on your own real estate okay it's it's quite as you know try this out sounds you you don't want to um Sue Airbnb because they're not bringing you leads you know I have some I know some people like that so upset that they want to sue Airbnb because they're not keeping their rentals filled and I'm like that is a little bit of um addiction yeah yeah that's a little bit over Reliance on that so so that's my thing um just really set up for direct bookings Furnished Finder is definitely a part of that having a Google strategy making sure you can be found on Google somewhere some folks can be found on the 20th 30th page just can't find them at all so so I just want to um that that is my message please before you before you need it have a direct booking strategy love it all right now let's talk about the look that you wrote um for everyone listening you can find it on Amazon it is called six steps to two thousand dollars a month of passive income within one year using real estate so our why two thousand dollars I thought that was a really um very doable thing and my my people I coach are actually hitting that number I felt I could stand behind it and I got tons of testimonials behind it so I know it works and we just wanted to put together the small steps to get there Idol actually applies to something we'll talk about later which is your map strategy so 2000 is what you feel is the minimum acceptable profit you should be able to make within a year is that kind of what what you're saying that's correct that is so correct that's great and we'll get back to map later um so for the book um what you know tying it back to personal um 2000 is a goal and we might have some listen listeners that think wow how am I going to get there and other listeners that say well I want to be well above that so can you share from personal experience what your journey has been like to establish your monthly cash flow and your passive income well my first goal was to cover my my mortgage payment and two thousand dollars covers at a lot of people's mortgage payments and as soon as you get there which I think is a great goal it really changes the your attitude and changes uh how you feel at work and everything because you know you got that covered and and you freed up some money enter you're you're not going to be homeless or um if something something tragic happens you're going to be able to make it so I wanted to get people to that level of comfort that level of um economic freedom the relief that relief so when I got to there it was great and I kept going and and then my passive income was right there with my engineering income and then I became a I honestly became a bad employee I'll admit mine's making more than my boss and and this dress yeah on the engineering side and my my bills were covered I I I I didn't have the drive I did have the drive to do that I was worried about health care and all those things but um you know when I turned 50 I was like that's it it's either I'm gonna be waiting on a paycheck when I'm 65 or I'm gonna do what I know I was created to do which is to be an inventor that's that's my thing ever since I was at elementary school I wanted to be an adventure being a studying civil engineer was the engineering what's the closest thing I could find and I just had to do that for myself so um I just kept growing the furnished rentals and then um helping other people which brings actually the joy of helping other people find out what they are capable of and and what they're doing is is really where my focus is right now yeah it's hard to be finding something that you really enjoy doing for work like that's what we we were created for was to work with joy and so many people I feel like nowadays don't have that joy and are looking for it um so one thing that you said was one of your hold UPS was health insurance so for those that are considering leaving their W-2s and you know going full time into real estate investing what advice do you have on health care or anything else that might be holding them up you know I I don't have any really good advice besides it's going to be scary for a minute at least for me it was scary for a minute I knew I could figure I knew I could land on my feet but and I could chart it out and just talking to other people I simply added some rental I did a few rental arbitrages and covered that expense so when that's one reason I wrote the workbook is to get people to see that they're could use real estate I do recommend that you own some and but you you can use the real estate you don't have to own the real estate just like a stapler you use a stapler to accomplish a goal of the buying paper okay you can use real estate to create cash flow you don't have to own it so if there is a need um my daughter going to college or whatever you can just add on some Properties by there's a number of ways of controlling properties one one of course is owning a mortgage but you still don't own it if you have a mortgage right you can you can Master Lease it you can join Venture with their owner you can come in as a manager you can come in as a a caretaker and subject to options there's a number of ways of controlling properties that that you can use to provide a really nice housing for travelers essential workers like myself my former self and and we need it so that we can be embed it into the neighborhood and connect with the neighborhood and have a real life experience so so that's my whole that's my whole Manifesto right there I love it love it all right Al so one of the most common questions we get in the midterm rental space is how do I know my property is a good fit for midterm rentals um right we get that we get that question all the time and I think it's it's partially because this is not a new space but it's growing it's getting a lot of attention as the market shifts as interest rates are shifting it's not new but it's definitely kind of come come to the surface surface and is getting a lot of new eyes on it um right and everyone has has different answers but I want to touch on the six steps in your book that help answer this question um so Kelly and I will take times to kind of take turns going through here and asking you through but the first one you mentioned is telling the number and types of extended stay hotels so tell us about that and how you use that to help determine demand Okay so you know start it in the 70s with the resonance ends really started this whole thing out by um saying there's people who want a kitchenette in their hotel and it's been growing since then and they know how to do the research when they find a spot and there's several different brands of Hiltons and and Extended Stay America and many other you know 10 other brands and they're really good at locating and doing the research so if they are in your town you just look at that and humble enough to understand that they really really know what they're doing if they're locating and spending 12 to 22 million dollars to build something in your spot is because they're they're making a profit and they know they're going to make a profit and they know they're just a growing demand for it so to to Really to um to copy the a student that's what you want to do you want copy the a plus plus student all right so to you want to do an inventory of of what they concluded that's why as you look at the the number of extended stay hotels and then each brand is going after a particular type of person so you want to identify the different brands so that you can kind of understand the um the different avatars or the the different economic groups or and Lifestyles that they're going after for example Red Roof Inn goes after the lowest of a of a lowest uh people that the super economic budget okay and and the um Hyatt Place Hyatt homes they go after the top they typically a top elevated brand same with them uh it'd be Residence Inn and also um Home2 Suites not home two Suites but hometown um Homewood excuse me they're going after the the higher end and there's many in between economic Brands and comfort Brands although so you really want to know what's there and what you know is there especially if there's a lot of them there then you know you can easily compete against at that level you can easily take a few cards from their parking lot and it's very safe to do so I love that it's such a way of looking looking until uh because we get that question all the time of you know how do I know that my property is a good fit or I'm thinking of getting into it you know how do I know this area is a good fit for midterm rentals and it's such a refreshing approach that you take that we haven't heard yet and uh I think it's really inspiring so if y'all want to know more about this uh his YouTube Channel's YouTube channel is really good and it has pictures and graphs and flow charts so definitely if this is intriguing you go to his YouTube channel and listen to all of his stuff and while while uh while Katie and I like to be a little lengthy because there's so much great stuff from each of you that we don't want to cut off the details Al happens to keep him pretty short because they're like four minutes ten minutes yeah um so let's move on well you know before we move on to the second one do you want to say anything about the Mrs number as part of uh step one um your minimum rental score so I like that you asked that question because you're kind of wonky about this just like me is that the number of brands is important because that's if there's a variety of brands that means that's how intense your Market is okay if there's just one brand just say this is just Extended Stay America that means they're just looking for people who come in with the general service Administration uh reimbursement number you know whatever the government will will reimburse for that area that's what that's what that says if it's just this day America but if you see um another brand that's coming in like Home2 Suites which could be a little bit higher and that's going after the the Young Folks like you Kelly they're going after the the Gen Y folks uh you're saying like wow there's two populations here now in my town that's what you can tell so when you're doing your survey you got to take that into consideration that not only is my not only do I have four hotels but there's two Brands there you know and that should that that's even better for you because you can go after two Targets now they've done the homework for you so paying attention to uh each Hotel would have what at least 200 rooms in it right so so you should count them up and say please yeah count them up and say okay that's you know all these people think that they can keep these things at least 80 filled and and they put this type here because they know people 25 days and longer are going to go after it that's what kind of their standard and then you're saying well I want the people who are going to be there longer than 25 days and then I want to know are they coming in high end are they coming in younger people who want go hiking and spin biking or they come in a Red Roof Inn Lower end that can can't afford all those things or just trying to um tip housing type of thing in transition and you can tailor your Furnishings you can tailor any extra amenities you can tailor your pricing all towards that this really reminds me of um I remember in college we did a business study about why there's always fast food chains right next to each other right you would think that oh there's already a McDonald's why would Burger King put one right there it's like well because they already did all the research they already figured out the traffic counts they already figured out you know where the daytime population is so now Burger King's only problem is being better than McDonald's right so it's it's that's a very um you know insightful spin that you have put on it because yeah it's it's they they've taken the time to study and make sure that the demand is there because their risk is High um so now all you have to do is is be better and get to know your audience more thoroughly and offer something that's a little bit more unique so I think that's great it's even a little bit better than what you're saying because Burger King if there's a McDonald's They can measure the traffic count in McDonald's parking lot mm-hmm they can they can actually count it up so so it's not even a guess anymore it's it's like hey we just need to set up on the other side of the street and and we can have some of this action we can see that the cars are backing up in the drive-through all the way through and blocking traffic on the other side yep so so it's even a lower risk decision go ahead I need to look at your furnished rentals and know that you've already done your research on where the right spots are and then we can all Buy in your area this doesn't work in Sacramento California I was saying doesn't work and doesn't apply to Sacramento no it's totally different that's the one exception yeah one exception yeah yeah totally an exception so I don't know maybe we've already combined number two here but number two was determine if your area has suitable rentals have we already talked about that I think I feel like we have no no we haven't talked about that so that's if if you're if you're a landlord and you know what you charge for your place say you have a one bedroom okay um and and if you're wondering if if you're if your rent is about 50 of what an extended stay hotel is charging per month then it's really easy to understand yes I'm gonna I'm gonna be able to go in and do this okay if you don't own rentals if you don't own rentals you're only measuring the profit between the market rent and the extended stay hotel rent rates okay monthly rates so for what I always say it doesn't make sense for a landlord to go do midterm rentals if they make the same amount of money as as a traditional landlord it doesn't make any sense to do that you you only care about the traditional landlord monthly profit has got to be the Baseline okay so if you're going to do more you gotta get paid more so you're measuring between what the monthly rental rate is for a traditional landlord and what an extended stay hotel charges per month and you're measuring the difference between those two and if that looks good to you um you go for it I call it the waterfall if there's a if there's a big drop and and you can put a turbine there to collect energy then do it if there's a small drop you know a little rapid it's not going to give you much energy so that's why that's why the the target um rent is you're looking for about 50 percent and if you're there then just move forward stop thinking about it move forward yeah so you have your engineering mindset and your coaching style so tied into this um what would you recommend for those that don't know how to figure out what the current market rate for rent is go to um Facebook Marketplace and see what what owners are charging for rent you can do that you can check Zillow Craigslist wherever you if it's a real rate not a scam you can you can just see what's going on in that area that's one way coming from the bottom up the other way is to what I recommend is to calculate what an extended stay hotel is charging especially if there's a number of them that say there's a number of um uh um I'm thinking of a brand um staywood or something like that that's an extended stay you find out what their monthly rate is so you divide it by two so you're gonna find that's the 50 or that's your target monthly rental rate and then you go and you see if you can find a rental for that amount or less and if you can then you then you move forward you you get off you get out of your seat and you move forward and go start making some money all right tell us next up on your list I have find and rent tell me what that means yes that is if you if you once you find that Target monthly rental rate that you know will work and if you can find things in your area for that price then then you go and you you approach a landlord or if you own it yourself you just go do it but it sometimes you own rentals that work but you don't want to kick out your tenant to go do this so that's the hardest part for a landlord who's used to owning everything and who has a lot of equity and is Cash strapped which most landlords are cash strapped and they're waiting for their tent to move out and they feel they can't do anything is to move their feet and go talk to another landlord open their mouths and ask if they can rent their place for their corporate housing for their midterminal business that serves Travelers Not tourists explain all the benefits of the great people that come and stay and what a blessing they are to the community and um and how much easier that landlord's life is going to be with a essentially a manager paying them to manage their property you know a skilled property manager like YouTube or skilled at Property Management paying someone else to manage their property that's that's an outstanding offer if you frame it that way and and so that's that's the next step is you you go and do that you face the rejection of someone saying No I say that's the price you pay hearing the word no is the price you pay for Financial Freedom you got to be able to hear that and move forward adjust your offer because they say no to your offer that took me that took me years to here's here I'm saving you guys years of a therapy right here if someone says no to you they're saying no to your offer they're not saying no to you as a person of worth okay just fix your offer Spruce it up make the adjustments figure out where the weak spots are figure out how are you going to Shore that up and and go ask somebody else that's that is exactly it you don't say uh no because I have a slightly crooked nose they rejected me you know you don't say no because I'm African-American they rejected me you know right you just you say this my offer is my offer my offer it's my offer let me fix my offer and then that is that is the choke point for many people it was it's a subconscious thing which is which is why I spend a lot of time coaching on this topic because I feel we have to you guys are really touch the point here it wasn't me getting on it it's like my favorite topic you know with uh learn some things right because it's real estate and real estate investing and even property ownership is something where you're gonna hear no a lot you're also gonna have to say no a lot right to yourself as well of okay right like and you have to be able to be comfortable hearing that message and knowing that it is not a brick wall you've hit it's you're one step closer to your next yes um and I approached this I my default mindset is not the one that I like to live in right I have to force myself to have that positive mindset every day so it's you know I'm the type of person and I know I'm not alone here in the world where if I hear a no very instinctively I tend to get shut down and kind of in my own head but it's like wait wait wait no that just means like I'm going out one step closer to wherever the yes is going to come from right and it also makes you like I mentioned more comfortable with telling yourself no as in like you know this tenant type isn't for me this property isn't for me this property manager might not be for me whatever it is it's I don't know how you can Succeed in Business whether you have a lot of doors like Al has or whether you have one rental unit or room or whatever if you're not ever comfortable with saying no um so I think I think yeah that is that is a really important topic that is uncomfortable for a lot of people to live within but has like it's mandatory right it's it's a single choke point is the one point of failure that that keeps people from doing what they're meant to do in life yeah and having and having having abundance is that it's that one thing yeah correct me if I'm wrong but find and rent applies really to three three Styles either you're buying your property and renting it you're arbitraging your property and renting it or you're managing your property for someone and renting it are those really the three options or your joint venturing or your character caregiving or or your um or some other type of form of buying like at least like um subject to but but what you're saying is correct or there's just a there's just a lot of varieties of controlling your property what the what the monthly expenses that's what it is what the monthly expenses because that's the cash flows the difference between your income minus expenses so whatever your expense stack is has to be below the target monthly rental rate okay love it so we'll move on to number four uh if that sounds good Katie did you want to add something yep nope go ahead please do I was just going to move on to wisely Furnishing your rental so tell us your thoughts on this um and how it can tie into market demand this is where this where people really get upset with me is because so I travel I travel quite a bit I've been traveling quite a bit as first as a a resident engineer and then now as more of a a speaker author and I stay at different airbnbs since 2014 I've been just painting on my own pocket and I would and then I coach people so I like to do a walk through or create a video for my YouTube channel so I try to stay at unique places and and I try to talk to the owner have a conversation with them and they have no idea what their numbers are as far as how much it costs them to set up or and and there they made decisions um knowing their monthly profitability is and how much that they cut paid to put in there it's going to take them about two years two and a half years to pay back their startup costs they have no clue if they know they usually just buy things because they like things and which is great if you're if you're if there's a room in your house that you're doing and you're just doing this doing a furnace rental to reduce your your monthly expenses that's outstanding that's just to reduce your overhead that's one set of decisions if that place is going to be also a guest room and you're going to personally use it then yeah do what you want to do but if you're a business owner you look at how long is it going to take me to break even how long is it gonna take me and then but if you don't know that gave you that's what this book is for is to give you some some guidelines onto um how much you should spend if you want to break even in 10 months then you look at your monthly profitability times 10 and that's your budget you have to stick in stick to it okay like like Kate was saying you gotta stick to that what tangible advice do you have for those that want to do what you're saying to stay organized from the very beginning so that they can wisely furnish their their rental well thank you for that question because because I get to toot my own horn a little bit here is uh I came up with a I came up with a formula so I looked at um what from what my students and myself and people I talked to felt was a month was a minimum profit that they wanted so if you have a four bid two bath house you want a you know a certain amount of profit more you want more profit than someone with a studio okay so I kind of plotted those out those different points out and then I found a a slope or something to correlate that between whatever your housing type is if you have a two-bit one bath and that rents for two thousand dollars you can multiply that your monthly rent let's say the monthly rent as a traditional landlord is two thousand dollars okay or that's what's been charged or that's how much you pay or that's how much you want your tenants to pay you multiply that by 0.38 which is my famous Williamson constant 0.38 times the monthly red and that's going to give you uh the your mem your minimum expected profit for that month okay so you can so if that's got that number needs to be more than five hundred dollars um but that's your memo profit so you can take that minimum profit now and multiply by the number of months that you before you want to break even they say it's eight months a year or whatever and now you got a A Furnishing budget now you have a budget that you know you got to furnish everything in which is a big deal because now now you could take that to an investor and say hey fund this for me create you can create an investment now so that's the magic of it that we have permission for for us that one question leads to another what is the Williamson constant why 0.38 y.3 is completely empirical the units are all jumbled up you can't it's just an empirical number that that fits the data is is basically a slope that fits the data and it's been peer reviewed and um I figured I was waiting for someone to figure this out and I figured it's just me I I have the I have the the the community that can um peer review it for me and and I've been doing it for a long time so I said it's me I need to come up with a constant so that's what I did I'm gonna add I'm gonna I wanna add on to what you said there Al because Kelly knows this um we are Furnishing our second property within about 30 days right now should be furnished by the end of the week and they're both out of state for us so I want to just pass on a couple of tips that I think tie in really well with what you're suggesting and I also want to know if you've used any of these things also um the first thing we've done is we've created spreadsheets to track every single little thing um and the hope is that you know those are kind of a one-time pain point where if we create it once the next time we don't have to create the spreadsheet we can use it but then your expenses are accurate right so if I buy a starter pack of toilet paper for four dollars it's got to be accounted for so that the numbers are right when we're thinking about profitability the second big thing that we have done is we've actually worked with a designer and that sounds very bougie and and I know it does but it's actually I think saved us a ton a ton of money um the projects were both very simple for her we didn't even meet with her in person she texted us links to all this stuff it goes magically together and it's all stuff from very affordable sources but they're products that she has used before so she can say this couch might be inexpensive but it's really well made I know that because I've seen it and I've used it in homes um I mean I would say we paid for her five times over by the amount of savings that you know she offered us with her um expertise and it I mean it the weight lifted from my shoulders um was enormous so I'm curious if you've ever used you know any designers or you know if you've come up with any systems for that as well because it you know it's it can get really overwhelming even for a small property that's such a good question well you can give a designer a budget yeah my my budget was as minimal as possible thank you they don't want that they want you to give them a number so that they could be you talked about being resourceful well um having a a budget you can give it to the designer and they can they can work with it so that's one another reason why the Williamson constant and coming up with the minimum acceptable profit is needed that then also share a point about using a designer oh chase this place I'm in right now my first runner right now I had a feng shui expert come through and we could have never have picked it but we didn't know about rolling cards and uh what what was needed where so that was that was he was worth his weight um because this is not I have a lot of angles in this in this space and then just recently had a unit that um wouldn't rent I had a and I told this inside my own Facebook group like that I pride myself on on no vacancies but I hit a patch here in December of 2022 where I've had my longest vacancy in my entire career of a little bit over a month and we're just freaking if I if I have a vacancy this is how I feel if I have a vacancy then my whole team has failed and I've failed in this is it because we had 30 more days to find somebody so it's a complete failure that's how I feel about my vacancy having a month of it you can see I'm melting down so I had a designer come in and she moved things around and we got a new sofa and she she instead of uh just added some touches she just went through our closets to see what we had and threw that on I could have never have gotten there our place booked up the next day or two days later wow so absolutely I mean absolutely absolutely it's you measure with your potential loss of days of vacancy and and designers can save you those those days of vacancies they pay for themselves just in doing that so that's how I feel about it I'm very big proponent I'm good at creative things and physical and rotating objects and structures you know someone else has a superpower their genius zone is designed just just like you would go and leverage money you go and leverage people's superpowers and their genius zones you know I come to UK for photography that's your that would not only are you good at it but that brings you Joy too right right yeah so use people's different genius zones to make your business so that that adds more abundance to your life is that is one of those decisions you you uh you start me on another passion topic about making decisions that and choosing abundance you have to make those choices and definitely using a designer in your midterm rental business or your extended stay rental business absolutely is the right decision love it yeah um so we've got two more questions or steps from the book that we want to discuss so we've covered the first four onto the last two of the steps to um feeling confident in your two thousand dollars per month in real estate within a year um and step five is Market to business Travelers on extended work assignments Al what what does this chapter mean this is really big this is like this is a whole episode you got to bring me back and and bring send me great and into the green room and everything again because this is real marketing is it because we got to keep our units filled and uh we got a Market online offline and with social media and um you know furnished finder says um it's uh this is just a small commission monthly not commission as a monthly fee so it kind of falls into the online um leg of the stool if you think of a three-legged stool and then there's this whole world of offline and when you're on offline and you're meeting people there you want to send them to your personal website dude you don't want to send them to your Airbnb we don't buy anything on Amazon without reviews if someone has zero reviews we just don't buy their thing if someone has one review then we might buy it so that's social proof is really really important and when you're doing social proof again you send people to your own website you can't even you can't operate unless you have your own website your own real estate that's what I'm saying that makes a whole lot of sense and we we get a lot of feedback uh from our users of you know that furnished finder is not a booking site it's a lead generation site and so you can take all those leads that come in uh for you personally or through the tenant leads on furnished partner and work them into your um that marketing to your specific uh website just like you're saying so that's that's a great point to add that absolutely uh we of course want we of course want them to come to Furnished Finder but that's what we want to help you guys as well let me drill down on the Furnished Finder part because that's now that's one leg of the stool the Furnished Finder that's that's why it's just bringing out this breaking out the three legs but um people are people aren't always used to you responding on furnished Finder this because there's so I think we're getting better because the Market's tightening but um people want to hear not a automated response they want us to feel your personality come through as you're talking as you're talking to people on your furniture you're selling them you're predicting what they want okay so it's really a textual or textual messaging selling at the same time so be a be a present and aware that um if they if you hear they have a dog talk about that how far you are from the dog park if you hear if you hear they have kids to talk about something that they may enjoy doing and that's how you that's how you uh are talking to people's internal needs so that's what I want to get to when you respond to your furniture try to talk to people's internal issue and then you can close the deal quicker but it's absolutely um essential Furnished Finder it really is an essential for this space and and but but just being on there is not enough you gotta be active understand that if you've got to be selling as you're communicating yep and I I don't know if y'all have noticed but I've sure noticed Al has been practicing what he's saying during this whole episode he's tied back in things that Katie is interested in things that I'm interested in so I I follow you out and it does make it very personal and that's such great advice for our for our audience yeah absolutely all right Al the last one we have here for you welcoming your client and repeating the process tell us all about this so we're trying to get to two thousand dollars um a month so you may have to add several midterm rentals onto your system but uh there definitely needs to be a welcome um there's a there's a number of things that go on to that that when you come into a new place uh I think other people talk about but it's got to be the smell the staging and and everything needs to be in order so that needs to be pay attention and also the collecting the financing because um Airbnb does it for you but if otherwise you really need to have a process of not giving access codes until you got your funds so there's a there's a whole bunch to welcome your guests so that um is done professionally but then the process can be repeated again um since we can we're using real estate to create this two thousand dollars where we own it or not um you may have to repeat the process to add on another unit I I do want to address that it's not how many units you have it's definitely the the profitability of each unit so if you if you get two units and you can squeeze out a thousand dollars profit per month then you're then you're there then you made that two thousand dollars a month um so so so I really want to stress it's really important to focus on making each unit profitable not only getting it keeping it filled for sure and reducing vacancies is reducing expenses but also looking at other ways that you can reduce expenses too like maybe sharing Wi-Fi signals and and other things to reduce your monthly expenses so so that's it um repeat get to that two thousand dollars definitely within a year absolutely within a year and it's not about how many you have it's about how much cash flow that you can that you have available to to make your life better okay so don't just keep adding on to add on because I need a big portfolio just get your two thousand dollars enjoy it cover cover your rent enjoy your family and and then add on from there that's my big thing I feel like you hit a really good point there that we haven't talked about on the show uh which is the collecting the payment step and you know different people do it different way some people use keycheck um uh which is offered you know furnished Finder business side uh and set up the automated payments that way um others use direct booking so there's a lot of different options but the the part that you stated that I think is important for us to talk about that we have it on the show is when to do those things when to collect the money and when to give um the access codes because honestly there's distrust on both sides you know on on the Travel side and on the landlord side so it's like you have to work together well to make sure that everyone feels comfortable and safe with the transaction so um like Dave and I we in the lease we go ahead and put in the least one we're signing with our our Travelers after we've already done the background check um then we you know we communicate all the steps along the way and we let them know hey we just you know we ask for the deposit within three days of signing the lease and then we'll go ahead and take the property off the market um and and then we continue that with um and whenever you're ready to pay the first month's rent you have up until the move-in day but um if you'd like to to pay it early then we'll go ahead and send over the welcome you know the the house rules from Furnished Finder and the access codes um as soon as you paid the first month rent so how do you do it Al and what do you recommend uh for your training Style so we have some specials on Healthcare professionals who are rarely on guard they've been scammed or they heard about scams or something like that so when I'm dealing with them that's their internal need is to to not be scammed not be taken advantage of not because there's there's already hurt right there so in those cases after they paid their security deposit we'll let them take a look around I'll give them access after they looked around then I'm expecting payment so that's how I that's how I deal with with those types of folks um again my my goal is it it's the place it's going to look like they what they've seen anywhere and um if they have our travel nurse on assignment and I see they're we always ask for a copy of their assignment letter is usually didactic but that's how we pre we always get an assignment letter from say a travel nurse if they want to scratch out some things that's fine but as soon as I get that I say the pre-approved so get them stop shopping and then if they're concerned about being scammed I say after you after you've looked in you look around um pay us then so we usually get a venmo oftentimes we do uh we take just about everything but demo at that time otherwise normally we we get payment before we allow if it's someone who's um we have people relocating and the different traveling classes that we have I'll make them pay up front before before they walk into the place so so all these things just kind of like you can't have automation you can't have a bot just spitting out information because you'll it'll mess you up so we we kind of go even though I guess if I was doing short shorts I would need more of that but since we're doing Extended Stays it allows us to customize things more and um we don't have that much turnover at the same time anyway so so that's how that's how I approach it I love it okay so um Al I want to wrap up with one uh important question which is how do you educate others on uh using Furnished Finder most successfully so usually when I'm talking also in my my coaching and training program you know we walk them through for nurse Finder and um I think the used Furnished Finder successfully is to the notifications get real-time notifications if you can so that you're responding to those and if people aren't good fit for you or especially if they don't get for you they might be good fit for someone else in your account that an associate as well so we do that way as well so not only so first finder definitely is a legion of course and if you you can also make money off of it you can pay your furniture fees by just referring people to other people's units as well I want to leave that as a big tip hey well this has been such a refreshing outlook on midterm rentals uh so just a reminder uh if you really enjoyed Al's style of teaching then you want to hear more from Al remind them how they can connect with you please Al you can get into my my whole world by going to landlordscientist.com again you can get a copy of my a PDF of my book 40 ways to increase the net income of your rental properties also and an audio series on the top 10 ways to reduce your expenses so all that at landlordscientist.com foreign you being here today uh I've enjoyed it and I'm gonna have to re-listen to there's so many of our episodes I need to re-listen to multiple times to really you know hone in and change some of the ways I'm doing things so thank you so much for being here absolutely all right well have a good day everyone and if you have any questions for Al please uh go ahead and and go to the YouTube episode and uh ask away [Music] thank you