In this episode, we're diving into the world of mid-term rentals with Shawn Costley, a seasoned expert from Huntsville Corporate Housing Solutions in Alabama. Shawn has mastered the art of rental arbitrage, securing six out of his seven mid-term rentals through this innovative strategy.
Join us as we explore three essential topics for every landlord and property manager:
5 main mid-term rental traveler types in Huntsville, AL
5 critical mistakes to avoid in the mid-term rental space
Best practices for successful rental arbitrage
Episode Highlights:
0:00 Intro- Welcome to The Landlord Diaries
0:40 What is arbitrage?
2:55 Shawn’s journey to MTR & corporate housing
4:00 ALE Solutions is a power user on Furnished Finder
4:30 Why Shawn chose arbitrage for his MTR strategy
6:45 Shawn’s 5 MTR traveler types in Huntsville, AL
7:45 Insurance displacement clients
12:00 Tech company clients such as Amazon & Samsung
14:35 Defense Industry clients
18:00 Fishing Tournament clients
21:25 Work crew clients
29:50 5 mistakes not to make in the mid-term rental space
29:55 When you stay in the property, you catch things you may not be aware of
35:25 Items frequently missing from a mid-term rental home
37:10 Don’t underestimate the power of marketing
41:40 Have reserves & be ready to pivot
44:10 Arbitrage best practices
Episode 103 Transcript
Welcome to The 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 proudly brought to you by Furnished Finder, the leader and largest online marketplace for midterm rentals.
Remember to like and subscribe. If you enjoy our content, it's your host team, Kelly Bailey and Katie Lyon of the Landlord Diaries podcast. We come to you every Monday with new great episodes from Furnished Finder hosts all around the nation. And today we get to have a special conversation with Shawn about his arbitrage properties.
But we didn't really explain arbitrage, so Katie. What is arbitrage for those listening? Yeah. Arbitrage is a really fancy word, isn't it? It sounds french, or it probably is French, I don't know, but it's so fancy. It's really not that fancy of a concept. Really what it means is that you're renting out a property that you don't own.
So you're either working with the property owner, you're working with the real estate group, you're working with an apartment complex, whatever it is. You've made this partnership with them to very transparently. You rent their property and then you furnish it. And then you use it as a midterm rental.
Some people do it, you can also do short term arbitrage but you're using it as something else. Okay. So you're essentially starting with like their base, which is the property, unfinished unfurnished property. You're adding some value and then you're using that as a different type of vehicle, like a midterm rental.
So it's a great way. To get into the space. If you aren't ready to commit to buying or maybe you don't have the capital to buy, there are some challenges as far as, you need to make sure you get the right partner and you're very transparent about everything. But we've got lots of resources and we've got lots of episodes on arbitrage if you're interested.
I'm sure we've got a playlist for that, so check it out. But let's see. We do what Shawn has. Stay about arbitrage because he is very good at what he does with it too. So enjoy.
Today we talk with an Alabama host, Shawn Costley of Huntsville Corporate Housing Solution. Shawn has obtained all seven of his midterm rentals through arbitrage except for one. Today we will talk about these three main topics, five midterm rental traveler types in Huntsville, Alabama. Five mistakes not to make in the midterm rental space and arbitrage best practices.
Ooh, that's a lot of great topics. Thanks for being with us today, Shawn. How are you? I'm doing great. Thanks for having me on. Looking forward to it. Yes, sir. Let's keep it simple to start off with, how did you get started in the midterm rental space? I think like a lot of people, we got started through Airbnb.
We had gone to a couple seminars in the area. I was a traditional standard landlord at first, doing your typical year long leases, monthly payments, that type of thing. And got a note from a friend that said, Hey, this might be something you'd be interested in. So we went the Airbnb route for quite some time.
And then coincidentally one of our guests happened to be an insurance adjuster. And so we asked about what she did and how she did it. And I just happened to ask where do your folks stay when they're, waiting on their homes to be repaired? She said, oh, places like yours.
And so that was an eye-opening moment for us, and we said how do we get involved? And the rest was history. She she happened to be a lady that worked at at a LE. And told us how to get into the game, and since then we've jumped right in feet first. Good couple things.
A LE Solutions is one of the lead leading providers for relocations and insurance housing. Great website to check out. We should also add Kelly, that E is a LE Solutions is one of Furnished Finder power users. They use the furnish under website. All the time to find the term rentals for their insurance placements.
Awesome. Yes. And we see a ton of housing requests come in for insurance clients. All right. So Shawn, why don't you start off by telling us about your portfolio and why arbitrage was your chosen method for midterm rentals. Sure. Our first unit was actually a house. We actually purchased one in Decatur, the next city over from where I am in Huntsville.
That was our start. The arbitrages allowed us to move a little bit faster to scale Squa scale quickly, and the demand pretty much matched that for us. We were fortunately here in a position where almost 90%. Of the guests that we were getting were direct books direct bookings.
We I icing on the cake was Airbnb, but simply because of what was going on here with the growth, et cetera and the marketing that we were putting into place, we were able to meet with a lot of the apartments here in the area. There was a huge growth of units, so they were a little more relaxed.
Sometimes it's a little tough working with them. But in this case, because there was so many new places opening, they were looking for legitimate ways to fill their units. And unlike in a lot of places, they were very receptive to, to what we did and how we did it. So we would meet with them.
Explain who our customer market was very careful to avoid using OTAs in our discussions with us that we were doing online. Online travel agencies. Online travel agencies. Absolutely. Because sometimes if you come to the table saying Airbnb, right off the bat, they start shaking their head violently back and forth.
But when they understood what we did and how we did it, they saw the website, they saw some of the reviews and testimonials that we provided. They were very open to allowing us to to do or conduct our business there. We quickly begin, began to grow with demand and cooperation's been tremendous here in the area.
Alright, we are gonna circle back to talking more about arbitrage and some best practices there because it's such a hot topic and there's just so much potential that any landlord can utilize within arbitrage. But first, let's talk a little bit about the traveler types within furnished binder.
Furnished Finder started with traveling nurses and medical professionals, and that still is a good chunk of our travelers. But since, since the early. 20 14, 20 15, 20 16 the traveler types have expanded so much and you've got insurance housing, you've got corporate housing, you've got professional athletes, you have families, you have academics, you've got professors.
You have so many different options. So Shawn, I just wanna take a second and go into your main five traveler types because you have been wise enough to hone it into the five types. Of audiences that you serve with your property. So walk us through those groups. And Katie, I'm gonna jump in here because we're gonna talk about each of the five traveler types in detail that Shawn sees in the Huntsville, Alabama area.
'cause they're all very unique and just will be a great conversation. So let's jump into it. So Shawn, the first one is, insurance displacement is one of your largest groups. What can you tell us about that and how Furnished Finder is a part of that process as well? Sure. In fact displacement are probably my favorite group.
And for the sake of discussion, insurance displacement are those people who lose their homes to say a fire or a flood, and they reach out to their local insurance company for help. And the insurance companies will typically use an adjuster to help that family locate a residence to accommodate them during the actual repair time.
And so one of the things that we began to notice with Furnished Finder for us, was that a lot of our inquiries for displacement were coming from adjusters who have reached out to us through Furnished Finder, surprisingly here for Huntsville, more so than your travel nurse market. So we've been pleased to work with them.
I tend to find that insurance placements. Actually they are our highest paying customers. They're our highest paying guests for a myriad of reasons. Primarily because even at the price they pay to us as midterm providers, oftentimes it's a lot cheaper than the cost for them to house them in a hotel.
It's very difficult to house a family of five or six. You're looking at two or three apartments, you gotta house Fido and little wrecks and all the other little pooches and cats and all, and the cost can just be crazy per day. So a lot of times the prices that we quote to them are a lot less a lot less expensive.
But they also tend to be very loyal in terms of once they find a provider that they can trust. That they can work with, they're willing to work with them, and their timeframes of stay are also longer. Normally, for a flood, we find that it's averaging about a three month timeframe is usually on average.
And then for fires it's more like six to eight months. And then that, of course can adjust depending on the economic demand in your area. If there's a high demand for construction people to do this kind of work, and there's just not enough there. Those timeframes tend to stretch. So it's not uncommon for us to get extensions requested by those displacement as well.
Great market. We don't have to market hard to them. They typically find us, and then once we're on their list. They tend to keep coming back are insurance clients, location specialists, connecting with you through the tenant leads, direct messages. What percent of your bookings are coming from Furnished Finder for your different types?
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For Furnished Finder and Insurance. Probably our biggest market on Furnished Finder is insurance displacement. They, and by they, the actual adjusters are the ones that are posting, we've, we tend to see them more so than the actual customer themselves. Okay. We'll actually hear directly from, say, a United Properties or a a LE or CRS online or someone of that nature Will, will post on behalf.
We'll eventually talk to the customer, but normally it's not the actual customer themselves who's saying, Hey I need a place. It's normally the actual. Adjuster representative that's called, that's posting. All right. The second customer type is actually one that I'm seeing a lot in the Austin, Texas area as well, is different technology or company in that area.
So you have Amazon and Polaris. In Austin, we see Tesla requests through the tenant leads, meta, Amazon, Samsung, a bunch of different, tech or companies coming through. So tell us about that specific traveler type. Sure. I like them because they normally travel in packs of twos and threes. We have quite a few growing industries here in town.
You mentioned two of them. Amazon, Polaris. We also have the Toyota manufacturing plant, and this is also a defense contractor hub area. So we get a lot of the Boeings and the. The Lockheed Martins of the world that are also coming through. They're very familiar apparently with with Furnished Finder.
We'll get them calling. I like them because normally you get to ask the magic question, Hey, is anybody else that's coming in town that also needs a place to stay? And normally the answer is yes. We just came across a new group that has come through Furnished Finder and nice little gym.
They're here for the nuclear power plant. About once or twice a year, nuclear plants have what's called an outage, and that's when the plant goes down and people come in to do all the necessary repairs and cleaning and all that. We found that by accident. But oftentimes they will schedule online when their outages are going to be for the year, and you can actually set start looking at furnish fine.
You start seeing them build up as it gets a little bit closer. But. They're a great system to have. A lot of times they're paid on stipend when they come through. So we just try to, we ask that question as well. Hey, you provide a housing allowance. And normally we try to meet that, but another great group to be able to reach out to oftentimes coming through Facebook, I'm sorry, not Facebook in Furnished Finder in groups of twos and threes.
We'll rent out sometimes by the room, or we'll just rent out the entire. A two or three bedroom unit, depending on what we have available. You're giving 'em a little preview 'cause we're gonna talk about the Furnished Finder Facebook group in a little bit. So that wa that was a happy accident right there.
Yeah. Nice. Ian slip, man. That was pretty good. Awesome. You combined one of them and we can lean into a little bit more. Sure. So that. Defense industry, it sounds like, is very similar to like the Amazon and the Polaris as far as the operations go, but you're seeing, I think, in the defense industry, a lot of star students coming in and there's a certain season that they come in, I think as well.
Yes, this is the season. The, we can normally tell when things are about to take a turn when the interns start calling. So every year right around the March timeframe you will see an onslaught. Graduate students from the various universities here. This is the big engineering town schools like Auburn and Alabama Roll Tide will come through and are looking for places to stay from the May through the August timeframe.
So it's like when you see the spring flowers come up. Normally, once those calls start coming, the end of the slow season is is coming and we're always excited to to have them come. They also tend to come in and packs of twos and threes. So it's again, not uncommon for us to have our three bedroom properties full of, interns that are coming in for the the season.
You gotta be careful with them a little bit just from the, from a cost standpoint and justify accordingly to match the, sometimes they have housing allowances, sometimes they don't. They're also the one time that, I will do third party bookings only because their mothers are calling.
And they're asking on behalf of their kids, oh, I want a safe place for them to stay. And mama loves them and be up swimming pool and, you gotta put on your dad hat and say, okay, look, we're gonna take good care of 'em. I promise you. I love that. And so we sent out a lot of pictures.
I tell them about my infamous wife tests that I use for all of our units. And people ask me what that is. I said, anytime we consider a unit for arbitrage, I always go at 11 o'clock at night. Drop my wife off in the parking lot and if she feels comfortable walking from the parking lot to the unit, we'll get the place.
If not, we will look elsewhere. So that's, they normally can identify, mom can identify right away with that. And so when we tell 'em that it passes the wife test where we're normally good to go. And I think interns are often a slept on tenant type, right? Like we don't think about interns as kinda the professional travelers that might have.
The budget for a furnished rental. But a lot of these are graduate students or they're in professional training programs. They're not always undergrads. And even when they do have slightly more strict budget, like you said, a lot of times they're gonna come in a group or they're gonna buddy up and they're gonna come together.
But they are looking for solid, secure housing. I know as a landlord I've seen more inquiries for internships and trainings and. Residencies and like contract workers for the summer than I've ever seen before. It's been a pretty cool thing. So I love that you have taken, that tenant type that, like you said, might have a smaller individual budget but have made it so it can still work.
And that's cool with midterm rentals. 'cause you can make it a room rental or a partial, whatever, however you wanna make it work. You can. All right, let's go to the next tenant type. And let's talk about, this is a new one, fishing tournament, guys. Am I, is that correct? Yeah. You've gotta, one of the things I think you have to do in this market is pay attention to the draws.
Here in, in your particular area Huntsville, there's water everywhere. You can't throw a rock somewhere and it not land in a mud puddle, a pond, a lake, or what have you. So they have huge bass fishing tournaments here, lot of water sports. They have the Paralympics here for example, every year.
So you just have to know when these things are coming in and then, do things like simply adjusting the title on your post. For that particular event, Hey, near, near the Paralympic stadium in May, or just in time for the bass fishing tournament in Decatur, Alabama, something that's gonna make your ad jump out. So if you're tied into the convention center events in your particular town, you can often take advantage of these what you wouldn't consider large. But these people need a place to stay, soccer tournaments. Main concerts that come in.
When Miley Cyrus comes into town, Lord Jesus, every, everybody, you can rent a tent in your backyard, somebody will take it. But there's these events that come through that you need to you just can't post on furnish fire and just throw it up there. Those days are over.
You, you can't do that and get the kind of results you want. But if you can stay in tune, especially in the slower season. With what's coming into town, A simple title change will do wonders. And then, yeah it works. It really does. So yeah, fishing is a big one. I'm always asked will your driveway hold a boat?
That was one of the questions. So we actually had that, we actually added that photo to the list. And I do a little live link so you can, with all the measurements so that you can see that your boat can. Can fit up into the driveway. Yeah, that one's handy. So don't miss that if your driveway or your acreage is large enough, boats, RVs, storage, anything like that is good to highlight, especially since midterm guests are staying longer and may come with a lot of boxes, especially if it's a, someone that had to move out of their home for a remodel or a relocation or an insurance.
For sure. I love how you said that you have to be active on Furnished Finder, which is, I wish I could get like a tattoo across my forehead that said that because it's so true. You're not gonna sit back and just. All of a sudden have these bookings drop into your lap? I hear people who are saying they're not having success or they're not getting a leads.
I've actually discovered that a lot of travelers and tenants who are looking are gonna pick up the phone and call or text you. So your listing needs to look. Outstanding. Amazing. Be up to date. That calendar needs to be up to date and you need to feel really confident in it. And then you need to make sure that you're answering calls, you're answering texts, you're looking at the leads.
There's so many different ways to connect, but like you hit the nail on the head when it's like you can't just sit back and wait. You have got. Alright, last traveler type that you see a lot of in your properties that I wanna talk about is these work crews. So tell us a little bit about the work crews and how they are utilizing your properties.
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So yeah the construction teams is a, is another good source here. Huntsville is Alabama's fastest growing city. So these guys are everywhere. They're like ants coming out of an anthill. These, every road you're on, you look around, there's construction people. Apartments are getting built just about everywhere now as well.
And so these guys need a place to stay. And so what we've done in terms of just trying to stay proactive is we've actually are chasing them down. Some unfurnished fight. In fact, there was a guy on today. That was in the area looking for a space, a one bedroom space on, on Furnished Finder.
And again just, you gotta move fast on these. That's the other thing that I will say about Furnished Finder. As soon as you get that note that says, Hey, you've got a lead. You got to get to jumping. You can't sit back. You gotta reach out. So we're hitting them. We're trying to get 'em on the, on, on email, on the phone number, on, sending this stuff out because we wanna strike while they're thinking about making the decision.
Because, if you think you're the only one out there, that's a mistake. There, there are others, there are other folks out there that are also vying for their attention. But nevertheless, we've had two types of things with the construction teams. You have them come in and they'll literally say there's a group of us you also have had, or I've had on occasion the actual company ask, and then they actually rotate people through.
So they may rent something for the summer. For example, the construction company. Then what'll happen is the carpenters will come in for a couple weeks, do their phase, they leave, the electrical guys come in, they stay for a minute, do their thing, and then they're gone and the plumbers, and so they just, instead of constantly calling us all the time, they'll just say, Shawn, we'll rent it for the summer.
We'll let you know who's coming. So you know who's who in the zoo. But for the most part, they're just rotating people in. As needed. We will also at times go out and make site visits. As soon as we see one of those trailers go up we'll go out and reach out to them that way. As, as well.
Some of them, they still don't, they don't know Furnished Finder. They'll leave it to their guys to just find a spot. But anytime we can make it easier for them. And put a little postcard out on that notice board that always sits outside all the trailers with all the license information.
We'll smack a good idea. Little notice or something up on there. Idea and have them come through. But another great source. The only thing I will caveat. You need to, if you do offer that service, you need to get one of those boot cleaners that you can set outside your door. Ooh, that's a good idea.
'cause these guys will tear up some carpeting with okay. Good idea. Mud and construction boots. So put one of those out. That's a good, that's a good idea. Yeah. Set up, up for success, right? Yeah. Put a note out that says, Hey, remove your shoes before you come in. Or you will be doing some steam cleaning.
Afterwards, but other than that they're a great great tenant to have. That actually leans into a couple questions in regards to this one while we're on the cleanliness topic for work crews. Do you typically on all these different traveler types, have you found that you typically return their full deposits or is there a certain traveler type that maybe expect to replace the linens or things like that?
And then also. Are any of your operations different with these traveler types? Since you're saying some of them are the travelers themselves booking, while others are the company's booking. So do your operations change at all with that? So those two questions? Yeah, a little bit. Actually in my experience, I've had more difficulties with tourists versus work folks.
I think work people. Tie their stay to their job, so they're not going to, for lack of a better word, Jack your place up. I've found as often because there's always that concern that you're gonna pick up the phone and say, Hey, Mr. Supervisor Mr. Jones is cutting up and tearing a place up.
Do something about it. So we've never had problems or challenges. Now we've had requests, for example with construction teams. Sometimes they don't mind bunking up. So they'll, they may say, do you have some twin bids that you can substitute out for Queens? 'cause we're gonna put two guys to a room or three guys to a room.
Also construction guys tend to wanna pay every week. Which can be a little bit of a pain in the butt, but hey, money's money. Yep. I'm normally open the door as long as it's not 20 guys asking me, but normally they like to pay week to week. And same with like your Polaris and your, these guys get paid every week.
And they're used to setting up their budgets that way. So we've had to adjust a little bit with those kinds of practices in terms of, extra cleanliness. Things of that nature. Normally we, it's about the same across the board. Okay, good. They're, yeah, they're they're the some groups they like to instruction construction teams.
They may want a little bit more on the cookware side. For some reason, they like to cook at home. So when their day is over, they don't wanna go anywhere else but to the place and relax. So they'll ask for extra pots, pans, nice. That kind of thing. But no major shifts. We've had to do other than probably pay collection, the collection of the rent.
That's the biggest one. Yeah. On the deposits, what, let's quickly, let's touch on this quickly. What do you see is that you like to ask for a one bedroom versus a three bedroom? What do you ask for your deposits and have you found that you're typically giving the full deposits back? Oh, yes.
I have yet to not give a full deposit back. We've been doing this year. This is what, going into the fourth year, we've never had a situation where we've had to do a full deposit. The things that, that break down. Especially for your midterm long term stays, you're gonna change sheets, you're gonna change time.
Not to sound sexist guys, boy, they, there's a saying set of sheets the whole time they're there, sorry men. But that seems, in our case, that seems to be, you. You can stand a towel up. They've used it so much. But there's just an expectation that those kinds of things are going to get used.
But we've never had to replace, beds or, somebody breaks a glass or two. I don't get too spun up over those types of things. But in terms of, major furnishings, that type, we've been fortunate, we try to screen very intensely. Our guests when they come through. And again, because we're dealing with work people, for the most part, job related stays we just tend to find it's a little bit more.
Of a focus on maintaining a good proper place and them exercising good care while they're there. Shawn, this has been such a great conversation on the five traveler types that you see frequently in the Huntsville, Alabama area. Feel free to jump in on YouTube in the comments if you wanna share some more traveler types or tips about traveler types.
So onto our second topic, five mistakes not to make in the midterm rental space. And one of them is close to my heart which is. To live at the property if you have the opportunity for a weekend or when Dave and I got started, we'd actually lived there for a week or two when we first got started.
Now, that's not always the case, and when you build your systems, you don't need to do that. But it is a fun one if you've never done it, to try out one time and see what does this property actually. Feel like and operate like to our guests. And one of mine was shower heads. When you actually get into these homes and you take a shower where your guests are gonna be showering and you realize, wow the flow is actually not very great.
I need to switch this shower head out or. It needs to be descaled because there's a lot of hard water buildup in it or like ways to operate it that you're not familiar with. Shawn, you had some really good tips for why you live in the property and things you found out through doing that. Oh, yeah.
And what I would say it's also a good way to get at least your first review, invite a friend for their birthday or anniversary or what have you. Hey, if stay at my place, absolutely no charge. All you have to do is just tell me. What you liked and didn't like about it and write a review.
And they look forward to that. In fact, we got a couple mooching type friends every time we open up a place, they just can't wait to, Hey, you need somebody to stay in one for you. But there's the small things that you'll notice. We are a wine and pizza as a welcome gift type folks.
And I remember the first time we did it. Everything was perfect. Laid out very nicely, left a wine of pizza and forgot the corkscrew. Just never crossed my mind. Uhhuh and I get this call at midnight saying, Mr. Costley, there's no corkscrew in the entire place. So it's the small things, like you said, the showers.
That's a uhhuh, that's a big one. Water pressure is a concern that comes up quite a. With folks. So just staying there to see those things firsthand. I think even things like plungers and your, how you put your gift baskets together. Let's touch on some of those too. Yes.
You wanna get. Hey, don't call me at midnight plunger. That's the big monster plunger. You don't want the cute one that you normally see in the corner somewhere, that you wonder, you need the big monster one that you get, not the one that looks like it's never been used, huh. So so we, we affectionately call it, don't call Me At 2:00 AM Plunger. That's the one you need the big one. Nice. So that, that is a, an absolute mandatory one, and then we we actually set out a, as I mentioned a little bit earlier, we have a wine and pizza as our welcome. What we found in our particular guests and study, we use the SL lock so we can actually tell when people are coming into the units.
And what we found was that the majority of our guests get there at night and they're from outta state. So we would leave a note that says, Hey, welcome to the unit. Thank you for allowing us to host you. Please feel free to enjoy the wine. The coffee and oh, by the way, we left your pizza in the fridge, in the freezer, and actually on the table.
That's genius. Yep. On the table we have a pizza tray, the wine glasses and the bottle of wine. And a handwritten note that says all this. And then call me if you have any issues. And we get more calls and more notes because folks, when they get there, one, you don't wanna leave. Once you get there, it's at night.
Two, you don't know where the nearest McDonald's is. Three. You either have hungry kids or you're hungry yourself. So being able to throw that pizza look, they might leave the wine, they eat the pizza. They eat the pizza every time. But it's the one thing that we constantly get compliments on because it saves the day for them and the kids to be able to throw that pizza in the oven.
We put the tray out there so my oven doesn't get too messed up and serve the pizzas and the wines. It's just been something that's been part of our brand. That we've used and it's been very successful and often talked about. That's huge though, just serving them with hospitality. I think also a couple other things, I can set you up for success.
We leave like a small toolkit in all of our units, like with a hammer, a couple screwdrivers. 'cause what we have found is if something if a cabinet handle gets a little bit loose, they'll take care of it. And it's a non-issue. A plunger, basic cleaning supplies. I don't expect the tenants to clean, but sometimes people liked, they like to be able to wipe up or clean the mirrors or whatnot.
A vacuum, a Swiffer. I've had a lot of tenants ask me, is there a vacuum? If not, I'll bring my own. And I'm like, you do not need to bring your own vacuum. We, and it's not like a $500 Dyson. It's a basic vacuum. Oh yeah. It makes a difference. A pack of batteries we always have. Yep. And like starter, like laundry detergent and toilet paper.
We're not gonna provide your paper products for the whole time you're there, but we will surely get you started. But a lot of those things you're right, it's just allowing people to be self-sufficient, which lets them feel at home. Oh yeah. We leave a lot of what you just talked about.
Exactly. Trash bags as well. And, the the laundry stuff makes a diff, we leave two or three pods for them to, like I said, we're not feeding the neighborhood, but we'll leave enough for them to comfortably settle in and do what they need to do without having to run to the Walmart to.
Yeah. Yeah. So a couple things just to wrap up this first, one of the value of living in the property is, one thing that the Furnished Finder does is we have house rules in the edit listing process that kind of prompts you to think through some of these things. You may not always. Think about such as, making sure to give them the wifi code, what day is trash on and recycling, things like that.
How to operate your appliances. And so fun fact, we've got our Furnished Finder Facebook group, which is called Furnished Finder Midterm Rentals for Travel Nurses, corporate travelers, and more. It has over a hundred. 40,000 members. So if you ever have a question you wanna ask, you're gonna get all sorts of responses, but it's hundreds of responses.
A lot of times that can point you in the right direction, or you can do a topic search on things such as cancellations, and then you'll see conversations that have already happened over and over again on that topic. So the one thing I wanna add about this specific question is recently I posted a question in the group that said, Hey.
Travelers, what items are frequently missing from your midterm rental home? And the engagement was amazing Working Can Burner was 98 likes a box fan hangers full length mirror, and Tupperware had 75 likes and hangers. Scissors and knives that actually cut our 66 likes. So one thing that I started doing, which I haven't had anyone request it, but just putting like a knife sharpener in the home or in your flip kit so that you can check 'em on those flip days.
So that was a fun conversation. Let's go ahead and move on to number two of things, not to mistakes not to make in the midterm rental space. And you said Shawn. Not doing any marketing. What would you like to add there? Oh yeah. This is paramount. When Airbnb and all these OTAs first began you could just throw something up and just let it go, and people were renting.
Now those days are gone. And in order to di differentiate yourself or differentiate between a hobbyist and someone who's doing this as part of a livelihood. Is you've got to reach out and do your marketing. And a lot of all of our efforts really focus, and you could spend days talking about this, but our marketing centers around really five Ps and it's been like that since the beginning.
It's people place, product, price, and promotion. Those are the five Ps that are that, that you gotta master. When it comes to this stuff. So whether it's through changing your titles in Furnished Finder to match the seasons, if it's football season, if it's, winter time and you got ski opportunities in addition to being near the hospital, if you've got a major event going on in town, the big ones, that just happened in your particular city, you've gotta be able to, to market.
Your your ad or your post to that you've gotta follow up with your previous guests. A lot of times we're one and done, we just keep hoping for the next person you forgot about Jimmy, who was there last year as an intern, Hey, is Jimmy coming back this year?
Does he have some friends that are coming back this year? So you've gotta reach out, whether it's, email, constant contact, MailChimp. Web pages, those types of things you've gotta get out there. While I greatly enjoy Furnished Finder and that for what it does and what you're capable of doing, putting yourself on as a Google business page in your respective area.
That was when our direct bookings blew up. Because there's a sense of legitimacy when you do certain types of marketing. When you have a webpage, it differentiates. When you have a legitimate email address and you're not, like one guy his name was Bigfoot 7 0 7 at Gmail, nobody's gonna look at that and and consider it, you know that you're serious.
So small marketing steps like that. But if you start to look at just brainstorming off of people, who is your avatar? Place, where are you and what's happening in your area? Price, how are you doing competitively? With your product, what, define a two bedroom. If it's gonna be corporate, what is it gonna have?
If it's gonna be tourist, what's it gonna have? Promotion, what works best in your area? Are they email folks? Are they flyer people? Are they direct visits? Are they, showing up at a site, supervisor's trailer on a construction site in place? You've gotta get out. You've gotta market.
You have to, or you're gonna, you gonna market or die. That's pretty much. The adage that we've taken. Yeah. Does our marketing director have anything to add to the marketing conversation? I just think it's important to remember that, like you said, even with your email addresses everything that you do that interacts, interacts with someone else is marketing down from your email address to how you email to.
Your messaging to things people more traditionally view as marketing. It's all marketing, right? Marketing to me is just the messaging and how we're communicating and sending those messages. So little steps are great, right? And you don't have, if you have one property, you might not need a website.
Use Furnished Finder listing as your website, but make it really good, right? Yeah. Don't take, don't skimp over those little things. And if you need, like you said, like a more professional email address, Gmail's free guys. You can make a professional email and have it on Gmail still, just don't make a big foot.
Steps, these small steps can go a really long way. And I just think it's important not to overlook them. Alright, so I'm looking at your, the next two mistakes we don't wanna make, and I'm thinking we can combine them because one of them is not keeping enough funds for a reserve or slow season, and then also being slow to pivot when you need to.
So Shawn, I'd love to have you elaborate on those quickly and just hear. Your thoughts behind them? Sure. Just about everywhere that you have a unit available has what we call a slow season. Sometimes it's more apparent than others. It may be up north if you're in a ski area, there's a season for skiing.
And then there's a dry season where you might get some hiking people up there. You might get, some retreat type folks that just wanna, no one else is gonna be up there, so they want solitude. But for the most part, you're gonna have slow seasons. One you need to recognize when that is. Now on a side note.
If you're in the insurance displacement market, there is no slow season because nobody picks a season to get into an accident or anything of that nature. So that's a big plus. But it's also random, right? Yeah, exactly. Exactly. If you, it's not always constant, right? If you can lock it in and there's nothing, there's no bigger blessing.
Then for somebody's pipes to break in October and then you've got 'em for the next six months. Not to be funny, but at least during the slow season you've got an insurance displacement in your unit. But you need to recognize when that is. Typically here, it's from, you get a little bump up in December around the Christmas holiday, and then it's pretty quiet from there until around March.
And so you've gotta, in your planning, realize you're still gonna write checks for rent. In January and February, and if you've got seven, 10 units averaging just, let's just say $1,500 a pop, that's a lot of money to be dashing out if you didn't plan for those seven months of famine versus seven months of feast or whatever that you had.
So you've gotta to balance that out and know that in your planning that, yeah, it might be profitable in June, but that money's gotta carry you through until the next season. You reminded me. My dad's one of the only ones along with the roofers and the automotives. My dad does, has done windshield replacement.
He owns his own company for 30 to 40 years now, and he loves it When hail comes. Because he's constantly steadi. He's booked for a month or three months out. So I hear you there. I think this last the fifth part, we can actually tie into arbitrage best practices as well, our final segment because exit strategy, you guys are both in arbitrage for the most part.
And have these contracts in place with your complexes or owners rather than the, properties that you know, are gonna be underwater at the end. So what does the ex exit strategy look like If for some reason, you need to part ways with an arbitrage partner or pivot a little bit.
I know for me we've have just made our decisions at the true end of lease turnovers. So if we sign it for a year and it ends in June normally that's when we'll choose to renew. The difficulty that comes with that and why it's sometimes better to get units in the off season is June is in the military season.
Here you come again at the end of June, wondering if you should renew another year. But it's right there in the middle of the most exciting part of the season for us as opposed to January. However, I have found in the business that we do that surprisingly apartments are very understanding.
When it comes to dealing with corporate providers, good. They do this all the time. So yeah you incur whatever penalties you incur for having to break the lease early. But if you're giving them notice and the I've had them welcome us back, the next go around when those things have, you've been a great client.
No issues, no drama. They just look at it as a part of of business. So we, again, we we do spend a lot of time. Looking at other places 'cause we're looking for the best prices. And we've had situations even where leasing companies have lowered prices for us to keep us as guests. Where I've been able to say, Hey listen, we'd love to stay, but the place down the street is offering a special, now everybody's doing specials, they're offering is special.
Can you at least beat the difference in price? And oftentimes they, they will for the sake of keeping us, and it saves me from moving down the street and paying money to move two blocks with the U-Haul. We'll go ahead and stay if they bring the price down a hundred dollars or $200 to make us more competitive.
So it's a little bit different than if you're a single person just trying to rent a, an apartment. They understand how the process works, so we've not had any issues. Katie, how about you? What's your exit strategy for arbitrage? Arbitrage is great for us because it lets us continue to build our portfolio without having to have the means for another down payment or us really being ready to purchase the next one.
We are still purchasing, but at a slower rate than our portfolio is growing, thanks to the arbitrage, right? But what I really like is every year when my lease comes up for renewal, I get to sit here and say, Hey, how'd that go? How'd my numbers turn out? Did I like that? If yes. Great. I'll renew again, sign on the dotted line.
And sometimes I get to negotiate the price if it didn't go as well. I'm like no harm, no foul, right? I don't have to sell a property, I don't have to. All I have to do is move the stuff and kind of say goodbye. So I really enjoy that part of arbitrage. But I think for us it's the long term or the exit strategy is.
It's working really well and we really enjoy it. I think a key part is finding that good partner, which we could do 10 episodes on. But I think it's just more arbitrage allows you to think less in terms of 10 year time periods and more in one to two year timeframes. And it gives you that ability to pivot quickly if you need to.
Which I really like Shawn. Any advice on how to find those arbitrage partners? Yes, I I have gone on to a couple of different methods. I normally I will reach out through apartments.com and literally just reach out with a prefab message to the leasing officers telling them what we're doing.
And the responses are normally pretty good. Like I said, right now the demand is pretty high. There are certain builders who are actually looking. Now for OTAs, a, an interesting nugget is Greystar, who's a major builder now is actually looking at doing some Airbnb type collaboration with providers, which is interesting.
I'm still researching it and trying to get some details, but I've seen a few articles in that regard. So you want a group that's going to be friendly, that's going to allow you to do. The things that you need to do as a provider, you wanna be able to get that digital access. You don't wanna be chasing lock boxes all over the place, those types of small things, are cameras really an option or not.
So if you have your initial questions up front that you can ask about, can you get in that first month for free and do your setup and all. So there's some basic kind of interview ish type questions that we will. We'll ask to, to facilitate our decisions to to join or not join.
But no, it just come for be honest, don't sneak in and then try to Airbnb or try to VRBO it out. Good point. That type of thing. You will get caught. More and more builders are looking trust me, they are out there. I've had colleagues try to sneak in and do some things and next thing they're getting put out because somebody from the company.
Is on Airbnb posing as a as a as a guest. Yeah just be honest with what you're doing. Shawn, I think we could talk about arbitrage all day long, but we are out of time. So what we are gonna do is I'm gonna point you guys to the fact that on YouTube, on our Landlord Diaries YouTube channel, go to the tab that says playlists, and we have an existing playlist about arbitrage conversations.
About corporate housing conversations or any other specific conversations in the midterm rental space, you wanna dive deeper into. And that's a nice thing about all of our episodes is they don't have to be watched in order. And honestly guys, they've been pretty timeless so far. So I don't think even if you went back and listened to our most.
Popular and when, which was like one of our first three. You'd still get great value from that today, so keep that in mind. And Shawn, we really appreciate you being here. If anyone would like to connect with you how would you like them to do sure. They can reach us at info at huntsville corporate housing solutions.com (opens in new tab).
It's long. Or you can go to our website as well and reach out to us. There, just dial the number. It rings surgically. My phone is attached to my hip, so you'll more than likely get me if you call. But feel free. I love collaborating with other folks that are out here in this space.
I've been a big believer of collaboration over competition. So I'd be more than glad to help provide some advice and insight. No problem at all. I'm sure people are gonna be reaching out to you. A great conversation. If you're loving our show. Don't forget to subscribe, share this episode with a friend.
Leave us a five star review on Apple Podcast or Spotify and we hope to see you guys next Monday. Have a great week everyone. Bye.