The Mistakes with Short-Term Rentals Costing You $1000s

0:00Propel Fitness Water With Gatorade Electrolites, Zero Sugar, and Vitamins, Propel hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propel with Gatorade Electrolites. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsor Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a $75 sponsor job credit at nnd.com slash podcast. That's nd.com slash podcast, terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsor Jobs. Welcome to the Paul Morris podcast. I am super excited to share our episode today. Our guest is Jamie Lane. He is Senior Vice President and also Chief Economist for Air DNA. It is a data analytics company that analyzes

1:01all the data for short term rentals. In this episode, what we bring to you are the ways that you can determine whether a market is a great market or not a great market is now a good time to get into the short term rental business. And also, if you've decided you want to get in now, which is a good time, how do you go about doing that and getting the best possible purchase and rate of return? One of my favorite things that we talked about today, among many, many other things, are what are the five least expensive things that will drive your revenue through the roof? So, let's get right into it. I spent 10 years as an economist at CBRE tracking the US hotel industry. And part of that, I got deep into what was happening in short term rentals and really the growth that was happening on Airbnb. Had been a client of Air DNA for five years and then joined them as their VP of Research in 2020.

2:03And now I've been at Air DNA for six years. Chief Economist SVP of Analytics at the team oversee all of data science research at Air DNA and yeah, digging into this wild sector, the growth that it's had and how hosts are making more money, investing in different markets around the country and pricing their units better. So, yeah, lots of stuff going on at the company now. I love it. And most folks know what Air DNA is, but I also don't want to assume. So, give me a little, you know, a quick one on what Air DNA does. Yeah, so we're a global data analytics and intelligence platform for short term rentals. So, we track the performance of every single listing on Airbnb, Verbo, booking.com around the world. So, what is it earning on a given night?

3:04And what is it selling at? What are the occupancy levels? And so, the main way that people use Air DNA today is coming in, you can put in any address for a home around the world and it will tell you what it could earn as a short term rental, what would the monthly cash flow be, things like that, but you can also dig into market analytics. So, what are average occupancy levels, ADRs? How do they vary throughout the year? What are the seasonality? What are the booking lead times, things like that? And then also, we have a pricing tool called Adapt, which allows you to profitably price your unit on any given night into the future. And it integrates with Airbnb, Guesti, Host-A, the big PMSs. Again, just because we have such a broad audience, tell me what PMS is. Yeah, property management systems. Okay. So, those are the tools that a lot of professional hosts and property managers are using to manage their listings. So, whether it's guest communication, operations, pricing,

4:05we would be that pricing tool for those hosts that's gonna push updated prices every day to the channels, Airbnbverbobooking.com, that people are booking on your direct booking website. And so, that's gonna sort of match the demand in your market. And whether it's strong or weak, how is it pacing and then price your unit into that demand? Okay. And one of the sort of entry level questions would be, and I know you mentioned it, but if I have some money to invest, could I use your tool to find the sort of hottest market? Where is the, or, you know, where, hottest market, I hate to use that term, but maybe where is the white space? So, where would the demand outpace the supply and look at that sort of market analytics?

5:07Yeah. So, absolutely. So, we break up the country into 317 different markets. And then with the platform, we then allow you to start searching for different markets. Like, let's say you wanna invest in a beach market or a mountain market, or maybe you wanna go into an urban area, or just search in the state of Texas. And so, whatever your geographic limitations are, or focuses, we can allow you to sort of focus then on that. And then whether it's through sorting different markets or visually through a heat map, so see where our highest occupancy, or ADR levels, sort of comparing markets against each other. And then my favorite way to do it is actually by doing yield, because ultimately, and what you're looking for is how much is the property gonna earn? And then how much is it gonna cost me to buy that property? So, we license NLS data to then be able to run

6:07that calculation for every single home available for sale in the US. So then you can sort of focus on in on the markets that are generating high yields today, because I know the occupancy and revenue that we projected those homes would make. And then go one step further into the submarkets. So what submarkets appear to be generating outsized returns, and then down to the property level. So what is the estimated yield for each property that's available for sale? So let's say you start high level, see, okay, Colorado looks good. Then go one level deeper and like, all right, tell your ID looks really good. Now here are the 20 homes available, and tell your ID that might make a good investment. That analysis mirrors the advice that I give all the time, because people read headlines, and headlines are, I think it's important to know what's the interest rate, what's the interest rate outlook, what's the average home prices up to its highest point in history.

7:16And yet that average we know doesn't mean anything, because when I compare the best market to the worst market, since the peak of the market, Austin is down more than 20%, and Hartford Connecticut is up more than 20%. So the averages don't mean anything to us, and that's why the real data analytics taken down to the sub-market, city sub-market, all the way down to the property makes a big difference. Yeah, and that's where we do a report every year called Best Places to Invest, where we sort of highlight those markets with the strongest opportunity, and what I love is it's always different markets, right? And it's the combination of what's going on in terms of that market's change in home values. What's happening in that market in terms of revenue and what hosts are earning? And our top market this year, you know, being Abelian Texas,

8:17and you're like, I dig in like, what's causing Abelian Texas to be a hot market now? It's like, oh, they're building the, and star something, it's like a big data center that's driving all this construction demand, and all these people, and no one can find lodging in that market. So every single short-term rental is just like sold out solid. So yeah, there's so many local dynamics that end up making a big difference in terms of what earnings you can generate today, but then it's really important to understand like, okay, is this going to be a blip, or is this in long-term? So that's where I'm current underwriting is great, but then be able to see the long-term history of like, okay, what is average occupancy in this market over time? What is the average rates over time?

9:18In this winter, we just, I mean, we saw the worst winter in a decade in Park City and the Colorado Ski areas because there's just no snow. So like, if I'm underwriting a property today, like, I don't want the worst winter in a decade to dictate, I'm, what I'm investing in for a long-term investment. So the ability to dig into the underlying data, see the long-term trend of that market, and then sort of make a decision, okay, if data centers driving demand right now, and ultimately, at some point, the construction's going to be over, and that demand might go away, or hopefully, and the Rockies, like, the snow comes back, and this winter isn't a normal, the normal operating procedure for that market. Yeah, I was just thinking that because, you know, if I were looking at the data, and I saw Abling, Texas, I would go to, you know, hopefully you then go to the next layer down, like, what is driving this right now?

10:19And if it's construction, you know, like, when the construction's done, that sounds like, you know, even though it's number one on AirDNA's list, that, you know, I would tend to, for myself, say, okay, well, you know, never mind. But if you had a long-term rental in that market, and you're like, no, I've got a tenant leaving, maybe I can convert this to a short-term rental and capture the demand while the demand's hot, and get a few years of outsized returns. Sure, sure, absolutely. Another thing that impacts, so you talked about, you know, obviously there's supply and demand, right? And then there's cost to the property. These are the fundamentals. One of the other things that I believe greatly impacts the short-term rental business is regulations. And so, you know, and I've got my own theory, you know,

11:19so I'll tell it to you, and you can, you know, that's why we have smart people on, like you on the podcast, is that just me talking to myself, because you, I invite you to call BS. You know, locally a market, for example, like Palm Springs, and I am winging it a bit, because I don't, I don't own a short-term rental in Palm Springs, it is nearby, but they suddenly got very, very restrictive on short-term rentals. In LA, again, not something I follow, but I am here, and I think there are parts of LA that just, you know, say no short-term rentals at all. So, if I bought based on short-term rental demand and revenue and cost, I did all that great data research, but then the regulations change. How can you, do you build that into your model at all, or just put like a caution flag? How does that work? Yeah.

12:20So, we do track regulations, and it's one of the things we put out in our rentalizer agent report, so someone runs it, the report, and then we go out and find all the regulations for that area and sort of bring it back in a way that's digestible and very specific around short-term rentals. And the thing about regulation is it's even in one city, it can be wildly different from one block to another. So, you think, I mean, there's city level regulation, there's county level regulation, there's zoning regulation, so if you are four versus are five versus commercial versus industrial, like there's gonna be different regulation relative to short-term rentals, and then it can be very HOA or neighborhood-specific too, where your HOA maybe allows it or doesn't allow it. So, it is the first check mark to sort of look at when you're sort of underwriting a property is a short-term rental even allowed in this area,

13:20because it can very quickly be like, all right. And let's stop, pencils down, because, and if it's restricted, you shouldn't even be underwriting it. Most markets though have moved to this permitting process, where short-term rentals are allowed, you just need to get a permit, you need to tell them where it's gonna be located and who to call if there's a problem, because most cities have realized that I'm a good mix of short-term rentals, long-term rentals, single-family homeowners, is what makes a vibrant city. You need somewhere to stay when someone's doing a renovation, you need someone to stay when they're coming to visit their kids when they're in college, then you need someone to stay and when, for construction workers that are doing, I'm a local project and are gonna be there for three months and I shouldn't have to stay in a hotel and for that amount of time. And as long as, and if there is a problem, that the local authorities know who to call to,

14:23make sure that it's fixed and taken to account and there's ordinances around trash and parking and the sort of standard issues that come up with short-term rentals, that a lot of cities have found that they'd rather regulate it in a sort of, a supportive way, and one that allows it to happen, but allows it to happen and with these sort of caveats and that they can also dictate the number of listings that are available, some cities have instituted caps where we're okay, and San Diego did that, where they said we were okay with 1% of our housing stock being allocated towards short-term rentals. They had a lottery for hosts to then get one of those permits and they held this lottery and there wasn't even, and everyone got a permit, because I knew it was much less than 1% of the homes that wanted to rent out as a short-term rental. So it ended up being a great way for the city to dictate what they want and then the host

15:23to sort of conform to that, and we're ultimately, I mean, everyone that wants to host is able to, but I'm in a way that I'm the local authorities sort of, I see a supportive of the city. So I have a theory, and if you agree with it, we can call it the Paul and Jamie, oh, we can call it the Jamie and Paul, if you want, rule of thumb, but let's see if you agree with it first. So you're gonna find some marketplaces that have no regulation at all, and to an outsider, I would think that would look pretty attractive. Hey, we can go in there, we can do what we wanna do, that sort of thing. But then if you build a short-term rental portfolio there, the thing that I would be worried about for a client or for myself would be, okay, now they're gonna come in and change the economics, they're gonna change the regulations, and suddenly I'm gonna have a property

16:25that I've gotta look at in a very different way, because, and I think it is a good sort of more 30,000-foot view thing to say that people are going to look at a short-term rent house that's available for short-term rental in a very different economic way. Generally, this is why people, like short-term rental, that's be clear in my humble opinion, is a much bigger hassle than having somebody rent for a year. So why does anybody wanna do that? And the answer is, because you're gonna get a lot more cash flow from it. So now we're moving from one year rental and we would underwrite that in a certain way, versus short-term rental, we underwrite it differently. Therefore, we're gonna have more revenue, we're gonna maybe be able to afford to pay more, still make more. Now the regulators come in and it can really mess our whole deal up. So with that huge preamble, here's my theory, and that theory is,

17:25I would recommend going somewhere where the regulators have already stepped in and set the regulations. For example, you gave a great example, and that is San Diego. So if I were looking at San Diego, and we looked at the RDNA and it makes sense, I do have a strong preference for buying near where you are so you can have some oversight and control, even if you hire a professional management company. So San Diego's close enough. We look at the, I want a short-term rental thing because I don't want to deal with LA cap rates, which are four and a half percent rate of return. I want a much better rate of return. I want to go short-term rental. We look around San Diego as the place. If I looked at San Diego prior to that regulation coming in, I'd be like, huh, I don't know what's going to happen.

18:26And anytime, what legislation looks like when they're making legislation is, there's going to be some council members that are like, we should have no short-term rental, that's be as restrictive as possible. And then there are other people that think, that's just let it go crazy. Eventually, they come to a ruling, and that ruling is what I've heard of before, not just in San Diego. I didn't know about that in San Diego, but I've heard it in other places. And that is, okay, we're going to allow 1% of the housing stock to be allocated. And then, similar to what you said, then they run this lottery at the 1%. But that's just due, that's due, like basic numbers. So you've got 1,000 homes, obviously, you're going to have way more than that. So 1% of 1,000 is we're going to do 10 short-term rentals, 10 short-term rentals permits, but we could go way bigger, but you get the idea. So we're going to allow 10,000 short-term rentals,

19:27and there's only 8,000 currently in play. So everyone that signs up for the lottery gets one. That's likely exactly what happened in San Diego. I would also argue that using that rule, that rule, which is to go where it's already regulated, gives you more certainty rather than less certainty, and that's important. And then also, in that example, let's just say that they were allowing 10,000 homes to be in the lottery. Everybody got one because there was only 8,000 homes in play. That's now leaving only 2,000 slots. So eventually, they're going to hit that cap with that market continues to grow. And then that creates that regulation then creates even more upside, because then you have one of the limited stock that's available. Yeah, so I'll break it out two ways.

20:28One, I totally agree. I think regulation is one of the best things that could happen to the industry, as long as it's sort of smart, non-decronian regulation, like we've seen in New York or LA, that essentially outlaw in all aspects. So, but giving you rules of road is and gives you confidence in investing. And I agree, I'd hate to go into a market, especially a city, and that has no regulation, because you know eventually you're going to get some, and that new regulation could be restrictive. With that, I'll say where I bought my most recent property, it's an unincorporated part of a county in rural Georgia, where I talked with my realtor who was the mayor of the town, and essentially put the likelihood of regulation and unincorporated part of the county was as close to zero as possible,

21:30given I'm property right issues in that area. So I think there's, in cities, absolutely, in other areas, like there can be, and you could get comfortable with no regulation, and that there's probably not going to be regulation in those areas. And you just sort of dropped some great information in there and it is what I would recommend to folks, and that is, you know, I would hire a realtor that has a lot of experience in the city. You just mentioned that you're in this, in this small rural town, the, that your realtor is also the mayor. So there's just, and he also had six short term rentals. So there you go. So that's like, sorry, I forgot that check mark, you know, that's, I was thinking one check mark, that's two check marks, that's, that's amazing. So, you know, not only a realtor that understands the market, but understands short term rentals in particular,

22:32may even own short term rentals, you know, that's going to be, that's going to be the person that I'm going to look for. So they really understand it deeply, and then also having some great market research. I have short term rentals in Joshua Tree. Joshua Tree was one of the places that just like fully exploded, total Wild West. And then, and, and I own some property in the next town over, which is, which is called Yucca. And I, you know, I was nervous about it because it's a much smaller town, so it's, it's incorporated. So they have a mayor and, and, and, and again, for clarity, these are terms like you and I understand and, and, and, and what happens is, like you said, there's layers of, there are layers of regulation. So there could be a statewide layer, there could be a county-wide layer, and then a city-wide layer. So, so, for example,

23:35Joshua Tree and Yucca are both in the same county. That county is San Bernardino County, and that county is so large that, you know, that if you go and you're like, oh, you know, Joshua Tree's a nightmare because of all of these short term rentals, you're talking to council people that sit over this massive, massive territory where Joshua Tree is the tiniest blip, you're not going, you know, do they have sway or not? Yucca is incorporated, meaning that it's an actual city. So then you, then the county, there is a county overlay, but then you go to the city, and the city can make it much more restrictive. So owning property in Yucca, now I know San Bernardino, like they're pretty liberal on it. Not, not that worried about it, but I'm like, hmm, what are they going to do in Yucca? Because they're, because, you know, the city councilman that I know owns a pizza shop in town. So these folks are, these folks are impacted.

24:36The city council people in San Bernardino are not anywhere near living in Joshua Tree. So, you know, having that local sense and knowing whether your property, which regulations will cover your property, whether it's incorporated or not incorporated, what that means is, do they have, do they have their own city or not? So, so Joshua Tree seems like a city, but it's not incorporated, which means that they're using the county fire and the county police and the city council of this giant county. And Yucca is incorporated, so they have their own mayor, they have their own council people, and they, by the way, install the 1% rule. And the number of permits that were currently out there were far under the 1% rule, but I think eventually that's going to, that's going to tap up. And I was glad to, I was glad that they regulated, because now I'm not afraid of what is to come.

25:39I feel like the 1% rule is really going to protect the locals from it being totally overrun like Joshua Tree is. So they're looking up the street, Joshua Tree is totally overrun, that's getting more restrictive, but now I know what the rules of the road are. So I'm not afraid to invest there. It definitely becomes a local, and city by city analysis of what is going to, and one, resonate with locals of, and is it a market? So Joshua Tree is a very tourism heavy market. You've got Gatlinburg, you've got, I'm Destin, Panama City, and you've got Lake Tahoe. These areas that were sort of built around vacation rentals, like vacation rentals were there before locals were. And now you have more and more people that want to live in these locations, and many of them do want to sort of, and pull up the bridge behind them of like, all right, I live here now.

26:41I don't think people should be able to sort of have second homes or run them out to people even though that's been the sort of ethos of those areas for, as long as people have been visiting them. And yeah, and you can get some restri-, and short terminals are very restrictive now in Lake Tahoe. And that can have detrimental effects to the local economy if all of a sudden, and it's, and high-mount wealth and individuals that just have their second homes there that they visit once or twice a year, versus, and if you've got, and tourists coming in and sort of visiting, and spending money in the local restaurants and shops. So, and there is a risk that regulation can really change destinations to the negative if things are sort of done that way. Yeah, and to be clear, we could spend,

27:41we could spend hours on debating, the politics of it, and I love the sort of get to the, so where are we gonna invest, how's that going? And by the way, I agree with everything you said. And what happens is Palm Springs, which has been a second home, haven forever, put in some very restrictive short-term rental regulations, because the people, the wealthy people that have a second home in Palm Springs don't want the party next door. So, you have to be able to hear a pin drop at 10 PM. So, you cannot have the, you can't, I mean, right, you can't Saturday night, you can't have a party that goes to 10.05 PM, or the city rushes in and it hits you with a big fine. So, we could definitely argue that, or argue the politics of that, but one of the things I wanna do is give great investment advice. And so, I do think, so we agree now,

28:42so it can be the Jamie and Fall rule of thumb, and that is that a place that's already regulated, of course, you can change the regulations, but when you go from zero regulation to now, it's regulated, especially when it's a reasonable one, like the 1% rule, if you can still, you're still under the 1%, you can still get into the market. Then I think number one, it's gonna give you some more certainty, not absolute certainty, but more certainty into the future, and then also it can create that extra layer of demand. And the last thing I'll say on regulation is once you're invested into the market, make sure that you're keeping an eye on what's happening at the local city council level or county level, because you better believe that the locals that want to ban it are gonna be the ones showing up, and city council also needs to hear from the investors and the property owners that I do want to

29:46be able to have that option. And if they only hear from one side, then it's clear where the regulation will go, so make sure your voice is heard if there are sort of hints of regulation coming or changes in regulation coming. And one thing that I noticed that's very expensive, that sometimes people don't catch right away is the cleaning fee can be very expensive, I'm like very expensive. Yeah, and that's one of the things to understand when investing in short terminals is if you are going into a more remote area, finding labor can get expensive. So what I do, there's a few different marketplaces when I use this turno, where you can find, it's a cleaning place marketplace, so you can find a few different bids for cleaning your place as a short terminal and get a sense of what that's gonna be.

30:48Because you think not only the time to maybe clean a four or five bedroom home, which is a lot, then it's also the time of someone getting out to your short terminal, I'm commuting to it, it might be half an hour and hour away from where they live. So yeah, understanding cleaning is a big piece of ongoing operations for your property. If I'm going to, like for me, I'm just not going, I'm too busy to, I'm interested in investing, I'm too busy to manage my own Airbnb, you know, just assume I'm going to pay 20 to 30% of gross income to a management company. Is there still a market where that makes sense and I can still get a great rate of return or does that price me out of the market by definition? It's gonna price you out of a lot of markets.

31:49So if in a market you're looking, and some of the good ones you might be able to get a 20% or 30% gross margin, like if you then have to and pay that for your fee, that's essentially taking away your margin. So I'm a lot of investors are looking for tax benefit by investing in short terminals, you're still going to get that. A lot of investors are still looking at the appreciation component, they're still going to get that. So if you're looking forward to cash flow, I'm hiring a professional manager, I might sort of reduce that, but you're still going to get maybe some of the other benefits of investing in short terminals. And then there are markets where I margins are going to be higher, you still might be able to operate it. And we've seen that I'm hiring a professional manager can generate higher returns than managing yourself. You're going to have a full-time revenue manager. You're going to have someone that is generating direct bookings and not having to pay the fees to Airbnb and Verbo for those bookings.

32:50So a lot of times the right professional managers are going to actually earn you more revenue than you would have done by yourself. And they can still maybe get you a return. So it's definitely good to interview a few. We already in a highlight the best ones in every market that are potentially going to generate those outsides returns for you. So getting some bids from them, getting a sense of their fees, getting a sense of what they think you can earn, and addition to what we think you can earn is a good way to go down it. Yeah. It's, you know, this is not, and it is a product plug, and it's not intentional just because you're on the podcast. I couldn't imagine, you know, trying to figure out all of this stuff on my own, you know, where, especially, I could try to do it. I would try to do it. But if there's somebody here that's like,

33:51hey, we've done all the data analytics for you, we're going to hand it over to you. I, I, again, not, not intended to be a commercial, but I got to ask like, what is it, what is it cost for me to sign up for air DNA? And I'm sure you've got price tiers and you've got your, I, you had a cool name for something like a rentalizer or whatever it was. And I know I'm just thinking cool name means additional cost. I'm not saying it's not worth it. Yeah. You know, because how about this? I want to, I want to generate a great return. I, I love the idea of short term rentals. There are lots of other benefits to it. Like, for example, you mentioned the tax, the tax benefits, which I've done whole episodes on. And I think, you know, I'm not sure whether people snore through them or not. But there is, you know, there's something called tax segregation, where a lot of the amenities are, are, you can depreciate 100% of the amenities in year one.

34:51And if somebody's a large, or not even a large earner, but if they're, you know, if they're, if they're paying real income tax, it's a real reduction on your income, you know, right out of the gate. So there, there are, you know, go to your CPA, find out what that looks like. We won't give you that advice here. It's something to be aware of. And then also I like the idea of, hey, you know, I've got these places out in Joshua Tree. It's nearby. I like the vacation there. So, you know, I can hold a company retreat there. I can entertain friends. I can go out with family. It's a nice little park for sure. Yeah. And the rentalizer tool, we have a free version. I can go and put in any address and I'll give you sort of that top line estimate to then go deeper. Look at all the comms, look at all the monthly projections, get the regulation, all that. You do have to have a subscription. We have two options, monthly subscriptions, $125 a month or an annual subscription is $400

35:52for the year. And that gets you sort of full access to all the data you need to make a good investment. And then some part of that, some part of that subscription is also going to help me price the, the price the house. Is that, is that correct? How much am I going to charge for? Yeah, that's a separate tool called Erdogan Adapt, which is a revenue management software. And that gets charged per listing. So $20 a month per listing is going to update your prices every night and let you set your minimum stage, your gap night discounts, you're, and really set a revenue strategy for you. And then that's free to use for 30 days to get a sense of how it can increase your earnings and then you start paying after that. Yeah, I mean, obviously, you know, in your rural Atlanta, that $20 is going to be a higher percentage than, you know, than the short term rental and aspen for sure.

36:55However, again, not, not to pump you guys up because you're on the show. I mean, it's just like to pay $20 to have real analytics on how much I should charge per night, you know, gap nights, you know, which, which, you know, what are the, sorry, what am I charging tonight? What am I charging next week? What should I charge next month? You know, assuming that the data is very solid, I just can't imagine that it's not worth paying that. Yeah, and, and I've done a lot of research sort of on what it, how it impacts the average listing generates 20% more revenue when they're using dynamic pricing tools than when they're not. And it's mostly from higher occupancy. It's like most people over price the shoulder and off seasons and they under price holidays and events is really like you don't know how high you can push it and you don't know

37:57what's going to be that clearing price in the off season of like, all right, if you're homes, I mean, during the summer, it's $500. And then, okay, what do I need to lower it to to get someone to rent it either midweek or during the off season? And you can set your minimums. Yes, like, all right, I don't want to sell it below $100 and I. Propel Fitness Water with Gatorade Electrolites, Zero Sugar and Vitamins. Propel hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propel with Gatorade Electrolites. But a lot of times it's like, I feel like it should be 300. When in reality, you're going to get it rented out at $250 and by lowering it down and knowing what that price is, it's going to get you booked versus I'm having that property said empty. And a place that I've seen, you know, you see the algorithms work and you can be mad about it if you want. I don't get mad. I don't get mad about that many things and I got to tell you, you know, my daughter went

39:02to college in New York City. I would go basically to the same one or two, three hotels to stay when I visited her. And you know, they're using an algorithm because the same exact hotel room, you know, could go as low as, you know, $225 a night, which is pretty cheap for Upper West Side in New York. Same exact hotel room, you know, $1,000. I'm like, what? You know, and so I get aggravated, but they're clearly using, you know, some sort of sophisticated algorithm and those guys are doing it. I do think that as a general rule, I own one short term rental. I'm doing it hypothetically. You know, I'm like, oh, well, you know, some or months, it should be about this winter months. It should be about that. It's not going to get you the maximum detail that you could really get if you're getting really, truly night by night analysis. Yeah. I mean, essentially it puts those tools that the average hotel has into the hands of an

40:07individual host or property manager. And I'll say too, it's not just the rate. It's also the minimum stay, like I'm having longer minimum stays further out. I'm reducing those that you get closer in, making sure you sort of fill your calendar the right way. And it's really important. And then, yeah, it's, it's, yeah, it's a sort of science that's evolving quickly. And it's one that I'm most host should be doing to make sure they're maximizing revenue. We also hear from a lot of hosts that they don't want to maximize revenue, that they have other sort of priorities. And maybe it's that, and you've got a home and you want steady income. Like, you're like, I would much rather have low volatility than I'm waiting to last minute, hoping to get that guest booking. Or know what I've got a nice luxury home, like, right, I mean, I don't want to discount,

41:10like keep my rate high. I'm willing to give up some occupancy to maintain the rate. And so that's where we have like different strategies that you can sort of, that you can implement. And it's going to sort of give, take what you've said is your main priority and then work that into your pricing strategy, which I think resonates with a lot of people because especially with short terminals, it's not always a revenue maximization strategy. There's other things that it should be taking to account when pricing your home. Right. I mean, that's exactly what I would want. I would want sort of the perfect data and then from the perfect data, you know, make my own choices. So just like you said, you know, the house that I had in Palm Springs, I was like, I'm going to rent it out. I never did. You know, the houses in Joshua Tree, the idea, you know, I bought them to rent out. But you know, if I were going to rent out the Palm Springs house, it would have been

42:10that sort of thing. Like, hey, you know, if I get some additional revenue, that would be great. I'm going to set my price high. It's a cool house. If I'm not getting that price, I don't want it, you know, I don't want it. I don't want it occupied. So I have, you know, this is amazing stuff and I could just sort of keep riffing, but I've got some, I do have some, some, some specific questions for you. Your, your air DNA 2026 report for 2020 26 says that it's the best year to invest in short-term rentals since 2021. So help me convince us, skeptic. Yeah. So, I know a few things, that was written at the beginning of the year and a few things went into that and a few things have changed. So how we think about investment and investability, it's sort of like affordability in terms

43:13of investing in homes. Like there's what revenues, hosts are earning. There's what home values are and there's what the interest rates are that you can get to serve it on, on debt. So the thesis going into the year is that home values were, I'm going to be flat or I'm maybe growing a little bit, but that I'm, or even in some of the, I'm sort of hot, vacational markets we've actually seen prices been coming down. So that's going to, I'm all else held weak, if prices are flat or I'm coming down that that's a good thing for investment. Short-term rental revenues have been going up and we've seen that extensively this year. I'm so far this year, overall revenues are up about 5%. And then the expectation going into the years was that I'm, interest rates were going to be coming down. I'm with the war in Iran and what's happened in inflation and gas prices.

44:16But I'm, prediction has not come out to be true. I mean, interest rates have gone back up and we were, I think, pre-war just about 6% on terms of 30 year fix rate and now it's, I'm sort of ticked back up. But in terms of, I'm sort of absent debt and it has, I'm revenues have gone the way we expected and home values have generally gone that way too. So, and it's been a tough investment environment since 2021. So, and we all saw what happened with inflation and what needed to happen in terms of interest rates to sort of tant that bet down. That has hurt, investibility. We've seen what's happened in home values and over the last five years they've gone up and extensively and they really went up high and a lot of the best vacational markets where, and people wanted to live post-COVID. They weren't just second home markets. They were primary home markets now that people were able to live and work remote.

45:20And we have seen some of that turn and some of that turn has opened up some of these markets to new investment again. Okay. And so, basically, just a quick recap on that is, you know, beginning of the year, statement hey, 2020, 26 is the best time ever to do short-term rentals. That's tamped down a bit just because interest rates have continued to climb. Price, home prices have remained stable. So therefore, you know, the cost to get in is going to increase a bit. But if you're going from the best year ever, tamping that down still a good time to invest as a general matter. However, the question that I get for the podcast, absolutely the most, the question I get, you know, at the coffee shop or wherever among my own friends, you know, is now a good time to invest. And I always tell them that it's, you know, forget, fine, understand the national market.

46:28Then you've got to really go from there to a regional city and then even down to the neighborhood to the point where I use this example over and over again. My house, you know, down the road, my house is still in a market that turns over pretty quickly and two miles down the road, it's one of the slowest markets in LA. So, you know, you really have to do it, do have a local analysis. The other thing is, is that people make bad buys when it's the best market and people also make great buys when it's the worst market. So it really is dependent on the particular property. So if you say to me, hey, look, we didn't anticipate interest rates went up. So housing prices really stayed kind of firm. So that lowers our expectation of cost and therefore revenue as a percentage of cost.

47:32I would say to you that if you work hard at it on the buy side, you're going to find that the sales have slowed a lot and that you will, you know, go look at listings that are more than 60 days old and call those, call those realtors or have a realtor that represents you that's going to do that work, that's the real work, that's what they should be doing. And you know, call the listings that go over 60 days and even though the headline price is X, they might be just getting ready to lower the price, you get in ahead of that, you can make an offer where the numbers make just as much sense as they did consistent with your prediction at the beginning of the year. Yeah. And what you said is all true and sort of predicated in that is we are seeing all time low levels of new investment in short term rentals today. So we had reached an all time low in 2025 and the thesis was was that that was going to

48:41be the bottom and that we were going to go up from there in terms of new investment activity. It's been relatively flat in terms of like last year's 3% growth now we're seeing about 2.5% growth. It's been pretty stable this summer. So yeah, it's definitely one of those markets where it does take more time to find good investments. They do exist. It does and the property I bought had sit on the market, sit on the market for a year. They renovated the basement, which ended up being a game room. And they cut the price by $150,000 and all of a sudden something that wouldn't have made sense a year earlier, all of a sudden did. And it was because in the economics of the deal changed dramatically, especially for that property. So, and how many people in that area were actually looking to invest in a short term rental? Who knows, but it definitely made sense for that investment activity.

49:47And so, there is a thank you for using that very specific example because there is a massive lesson in that, you know, like we talk about percentages and whatever and like what's the what is it's really my job to like get somebody smart like you and you know, wrangle the stuff that like somebody can listen to the podcast and run out and do something. And the what you've just said is we are talking about a particular property. And this is what I think really people need to hear. Like is now a good time to buy? So let's go look at Jamie's property when it first got listed. And the answer is no, it's not a good time to buy. Let's just look at that one property is the whole market, you know, it is a microcosm of the market. There's no, it's not a good time to buy. It doesn't pencil out, it doesn't work. You know, that same property sits on the market. The owner says, geez, we want to make it more, we really want to sell, we want to make

50:49it more attractive. Maybe our realtor told us, hey, if we fix up the basement, then you know, we'll get more buyers. So then they spend money, they fix up the basement. That initially doesn't do everything they needed to do. And then the price comes down $100,000. I don't know what your actual sales price was. But that's likely a high percentage of the total acquisition cost. You mind telling me what was the pro? Yeah, it was $7.25, then it ended up acquiring it at, with the buyer's credit of $20K to fix the AC unit and some other things needed. So yeah, it, and then what really changed the narrative for that property was then the money I reinvested into it. Like where short term rentals are going today is it's less about the interior and more about the exterior as people are generally going there to, and as a destination, especially a five bedroom home like I invested in.

51:52So we added a pickleball court, we added a hot tub, we had it playground for kids and where we, given it was in a more rural area, like it's 20 minutes or grocery store, it's 20 minutes or 15 minutes to a restaurant, people are going there as the destination. And if you make the home attractive of, oh, I could see my spouse self spending a day at this home, I don't need to go out and do other things. And they're just imagining, oh, we're going to do this with the kids, we're going to do that. And it's really, that's what it's become. I mean, so many of the reviews are like, I never left the property. And we had such a fun time entertaining, like the kids never left the pickleball court the entire time. Like, that's what you want to, I mean, have a guess or an envision when they're booking your property. Mm-hmm. Again, you've hit great stuff. Is there anything in your product that's going to show me? So I use a professional management company. They are the largest in Joshua Tree.

52:54So therefore, they have a lot of first party data, meaning they have data. They have collected in addition to using Air DNA. And they're telling me, hey, put a pickleball court in. Hey, do this. And I'm like, I would never think, the cost of a pickleball court, maybe a cost more here than it does there, but it's still relatively inexpensive. Are they really going to play pickleball? It kind of doesn't matter because it makes that listing pop. A salarium is another thing that out in Joshua Tree because people are stargazing. The salarium is inexpensive. Let's throw a salarium on there on the property. It costs six grand. It's going to make it pop. It's going to make it stand out. Other nuances, for example, are that I'm used to, I mean, I understand a home renovation. But it is sort of also the Instagram ability of a home is going to make a difference.

53:57So that I drive by in Joshua Tree, thankfully not my property. I look at this place. It's like a total dump. And they've got this beautiful mural painted out by the pool. And I see a bunch of people taking Instagram shots of themselves in front of the mural of the house that's a dump. I'm not suggesting you do that, but having an awareness of what works, what doesn't work. Yeah. So it's actually my favorite section within ARDNA is top listings. So you go into any market and you can filter to three, four bedrooms, whatever it is or go down to the neighborhood. And you can see what are the listings out there that are generating the highest revenues. And then you can see the amenities, you can see the photos of those properties. I get a sense of, okay, what is driving bookings in that market? And so you can do that for the market you're investing in and that can get you a sense of, okay, if I did these things to my property, like what it could earn.

55:02And then what I like to do too is go to the more competitive markets. So like I'm in North Georgia. It's not super competitive. You then go up to Gatlinburg, which is one of the most competitive markets in the country or Joshua Tree or Palm Springs, like super competitive markets. And then see what they're doing, what the top earners are. And then you're going to see all these crazy ideas and what people are able to earn. You might not be able to earn that same amount in your market. But you might be seeing where the trends are going of what people are wanting to book and what they're willing to pay more for. So you might be the first one in Yucca to put a salarium and be able to get that increased value because you're seeing what the hyper competitive Joshua Tree Desert market is doing. So that's one of the things I really like to do is look at sort of similar type markets and what are the top listings doing in those markets? Is that going to give you crazy ideas what you can do for your property? Yeah. And that's why I think getting a professional advisor is going to save you a lot of money.

56:10For example, you're only going to have a marginal cost, which is basically what are you going to get for that additional dollar you're going to spend? Where are you going to put that additional dollar? One of, I should be a real estate expert and one of the first houses that I did in Joshua Tree, we had a great carpenter and we were able to put in custom cabinetry that probably would have cost $80,000. If anywhere else we had our own team do it, they bring in at $35,000. Total waste of money because no one, it's different if you're going to live there. I want the custom cabinetry in my house, but no one is going to complain about how about this? I'll put it to you another way and this is like, I'll put it to you the harsh way. The harsh way is invest more in the areas that are likely to create the Instagram ability

57:18moment and spend less to a point just so long as the customer is not going to complain. I'll give you a concrete example. Bathroom number three, I'm not going to, when I redo bathroom number three, I'm not going to do it. I'm not going to put garbage in there. I'm going to make, actually make sure that the stuff is going to be high enough quality. It's not going to break. It's got great durability, but I'm not putting, there's no marble. I'm not putting anything fancy because no one is going to say, wow, I love the place. It was amazing. Bathroom number three, I got to tell you, generic. You're not going to see that. However, if we're doing three bathrooms, I would really cut down the price spent on bathroom two and bathroom three, put that extra dough into tricking out bathroom, the bathroom in the main bedroom, because that's where people are going to take the photo.

58:20That's where they're going to be like, oh, wow, this is great. They're putting kids in guess somewhere else. I'll say, I give you five high return things. Yes. I totally, the lowest return, renovating your kitchen, renovating your bathrooms, those are not going to return for a short-term rental. Highest return thing, string lights in the backyard. That's going to pay multiple time overs. Number two, board games. People want to play games when they're at a vacation rental, if they see fun games, if they're going to play, those are going to cost you $30 a piece. Another one, fire pit. You might spend $1,000 on a fire pit and some plastic atom-rendeck chairs. That's going to pay multiple times over. Instead of renovating your kitchen and investing some sharp knives, and so many people are actually cooking at a vacation rental. They don't necessarily care about the granite countertops or the nice cabinetry, but having some nice sharp knives for them to use and call that out in your listing description,

59:24you have no idea. I had so many people call out and reviews. It was so nice to have a nice set of knives when I was staying here and to be able to go cut it tomato and not have it fall apart. These are like, this is genius, not just for the absolute specifics, which I love, but just to change your lens on it, because I would, if Jamie, you and I were going to renovate a house and either keep it for a long-term rental or we're going to renovate a house because we're going to flip it, I'm going to say, hey, let's make sure we spend the money renovating the kitchen. Just to make sure we're not going to blow the bank on the bathrooms, but I want those bathrooms to look great. Having the more generic kitchen, of course I would suggest because it's a little higher

1:00:25volume, spend a few dollars more and get the garbage disposal with the extra amperage or whatever, so that you've got a little heavy duty kind of thing in terms of that. But string lights, board games, one of the other things, I just did, I picked my daughter up from graduating from college in New York and we drove cross country. We did 80% of our stays in Airbnb's, 20% in hotels. By far we enjoyed the short-term rentals more. One of the things that I really appreciated was when they had a decent coffee maker loaded up with go mid-level coffee maker, automatic and go high-level coffee and make sure there's

1:01:28like, can you imagine, put real cream in the refrigerator? I'm just so pumped about that, I can't tell you. I never even noticed, is there a granite top in any place that I have no idea, I can't remember, but I will tell you I remember specifically the ones. We're on a long-term drive, so one of them had the high capacity washer dryer with the soap suds there and everything. I'm like, this is so good. It was these little amenities. Like you say, board game, sharp knives, fire pit, Adirondack chairs, Adirondack chairs look cool, they're going to cost a bit more. They're going to look great in the photos, people are going to appreciate them. So totally, totally get that. Yeah, no, it's a common question I get from my property. It's like, what's your coffee maker? So I've got the photos, point them to the photos, and we have three different ways to make

1:02:31coffee at our house. We've got a French press, we've got a nice drip machine, we've got a cure egg if they want a quick cup and then a nice grinder and give them some beans to grind them. It's a great, not only gift of like, oh, they got me some great local beans, but then the grinder to then make an excellent set of coffee that cost you, what, 15 bucks and they're having an excellent first morning value. Yeah, totally, totally amazing. What, you know, another thing that on one hand I felt aggravated on the other hand, I felt delighted was, you know, sometimes they'll give you a book with a house, which is, which is, I would put that at good, not great. But, you know, just the thing, like, here's how you get the Wi-Fi. Here's, you know, here's our restaurant recommendations. Here's, you know, some real thoughtfulness as opposed to, you know, reading the book

1:03:31is better than no book. But, you know, when people laid out like, hey, here's our favorite restaurants, you are, you're this many miles to the grocery store if you need to go. Here are the hours, can you imagine? Like just that little extra care making so much difference. The thing now that we do in that, and people should be doing is the electronic guidebook. And so you click on the link, you see the map of, where's the nearest, are, where the recommended restaurants, where's the grocery store? Like, so you can see everything around. And what are the, I invest hikes nearby, and all that sort of thing. And then, I mean, where everything is outlined, like, how to use the hot tub. And we have a video, how to use the hot tub, how to use the washer dryer. Like, what are the most common things that people are going to have a tough time doing? And yes, right out the instructions, but a 30 second video on, like, how to take the cover off the hot tub, could save so much aggregation for, for a potential guest.

1:04:34So taking that time, I mean, it took a few days to create the guide in a way that, I mean, it's going to be really useful, but now, I guess, and again, they love having, I mean, that level of detail when they, I mean, both get, before they get there. So they can plan out the restaurants, and they don't need to wait to get your book in hand of, like, all right, this night we're going to this restaurant. Other night, we're going there, we can go ahead and make the reservations. And, and getting that beforehand is, is, and people want to plan in advance. Obviously, if I get direct bookings, I'm going to make more than if I use Airbnb or Verbo. Is there a magic number? Because the other thing is, you know, Airbnb is sensitive to that, to the point where, I'm just guessing, like, you know, they have an algorithm. And if I run everything through Airbnb, you know, maybe I'll be higher on their algorithm. If I take half of the listings off and put it in my pocket, where, is there a balance

1:05:40there? Can you tell me, educate me about that? Because I have an idea, but I don't know. Yeah. And the general rule of thumb is, you don't want to be too dependent on any one channel. So I don't want, I'm more than 60% of my revenue coming through any one spot, because then I'm, I'm dependent on them, right? If I get a bad review and Airbnb, just, leave list me, like that's, I'm putting all my revenue, I'm up, I'm at risk. So whether it's, I'm distributing through Verbo, booking.com, creating your own direct booking website and driving, I'm repeating bookings through that. And those are all great ways to diversify your revenue mix and across channels. And so, and my property, it's still about 50% of revenue that comes through Airbnb. And, but it's, and 40% that's coming through Verbo and 10% that's direct. And I'd love, I'd love it being, I'm 25, 25, 25 in terms of distribution.

1:06:47Because then I also let you to push rate higher. And if you're getting more eyeballs through multiple channels, and that's ultimately going to allow you to charge more for any given night. Yeah, so I, my suggestion is diversification. And if you're a destination that people come back over and over and over again too. So let's say you're in Palm Springs and you get, I guess, driving from LA over and over again. I have a direct booking site. Make sure they know where they can book the next time they come. And then that's going to save you, I'm 15% of, I'm what Airbnb charges you and fees. If you're a destination that, let's say you're an urban area and like no one's coming back and over and over and over again, it might not make sense to have a direct booking site because you're going to have a hard time. I'm getting people there. That's where it might make sense to be on booking.com because they're the platform of choice for Europeans. And if you're in, I'm Boston or in LA and you have a lot of international travelers coming

1:07:49in, that's where they're going to be looking to book and you want to show up there. Or if you're a family unit and families go to booking.com or to Verbo, more often than not. So being on that platform, so yeah, diversification is in the best way there. Mm-hmm. Got it. Do you think it hurts your, does it hurt you on the algorithm if, if, or do you know, does it hurt you on the algorithm if I take, if I'm able to, so you sort of said, you know, a third or third and a third would be ideal for you because you'd be picking up a third of the revenue without paying, without paying the fee for it. But then you'd have diversification between still Verbo and Airbnb. Is it going to hurt you, let's say I get it to 60, 2020, is that going to hurt me on the Airbnb algorithm? So what's going to hurt you on the algorithm is lack of availability.

1:08:51So if just all your nights are booked through other channels, like, yeah, that's going to hurt you. But I'm, but you're booked. So, and, and then the other thing that's going to hurt you is if you don't have a lot of reviews. So if you're getting going and, and you don't, and my suggestion is, is you, you do lower your prices at the beginning, you get, I mean, five, 10 reviews on Airbnb, Verbo, that's going, and with the algorithm, if you're getting booked, you're getting reviews, they're positive reviews, you're going to keep staying up at the top of the algorithm and that's going to have a snowball effect for your property. If you don't have any trust built on that platform, that's going to be hard for you to show up top on that platform. So that's where maybe it makes sense. And if you don't have any reviews on Verbo, that you make some investment in that platform, okay, I'm going to lower my rate a bit on Verbo.

1:09:52I'm going to try to drive bookings. I'm going to try to get volume on that platform. And then once I've got, I'm at five to 10 reviews, then I can start pushing my rates again, and it won't hurt me as much. So it does take, I'm focusing on each platform, on building your review history, to get going, and then making sure that you have availability across platforms, because some people, they'll only make certain times available on Airbnb, they'll only make maybe, all right, I want to drive direct booking, so I'm only going to make the next three months available on Airbnb, and everything outside of that are going to block off. That is going to hurt you on algorithm. So making sure your calendar is available further out. Yes, if you want to, I would say over index towards making available, but maybe if you do want to restrict some, put it at a higher price, because then the algorithm won't treat

1:10:53you as bad that way. Do you have any hints on, on how do I, how do I make sure I get more reviews? What's the best way to ask for them? How do I make sure I get five star reviews? What do I do if somebody's holding me hostage on the one star review? Yeah, you, you, my suggestion is over communicate. If you think you're communicating too much with the guests, you're probably not communicating enough. So sending messages after they check in, sending messages, and before they check in, and after they book, saying how great it is that they booked, here's the guidebook, so you can help plan your stay a few week before, remind them of the guidebook, remind them of check and instructions, all those things. And after they check in, make sure, and ask if they have any questions about the house, and during their stay, everything going okay, and after they check out, was everything good. And then if it is good, I mean, if you, and you're going to have a sense of how the

1:11:56stay is going, if things are good, ask for that review. If things aren't good, ask what you can do to make their stay better next time of what you could do for the next, and to improve the home for the next guests. A lot of times, they'll get the cathodic nature of complaining out to you through that text message, and then not do it through the review. So yeah, in the first year, I asked every guest, hey, I just launched this property, is there anything I can do to make it better? I'd love any feedback you have. I guess had great feedback, and a lot of it was negative. And that one time, did they include that negative feedback in the review, which was exactly what you want. And it is such, such great advice. I'm so glad I asked the question, because it also makes perfect sense, which is now, now,

1:12:57okay, so I go into, again, I have a lot of recent experience with Airbnb stays, because I just got off the, you know, 21 day road trip. And, you know, and some of them, like I went there, and the place was nice, and the coffee was good, and they never said, hey, welcome, and they never said, how was your stay? And, you know, I didn't leave a bad review, for sure, it was a great stay. I didn't leave a good review. I just didn't get around to it. On the other hand, you know, there's also the kind of a joke that I have, you know, a live in LA, a quality restaurant, and there's a thing. Yama va resort and casino, and San Manuel is bringing the biggest laughs to the stage. Break taboos with Alih Wong on August 28th and 29th. Enjoy Ralph Barbosis, Dry Humor on September 18th and 19th. Don't miss Nikki Glacier's unapologetic comedy November 19th. Tickets on sale now at Yama va theater dot com. Only at Yama va resort and casino, celebrating its 40th anniversary.

1:13:57You in must be 21 to enter. Labor Day's savings are happening now at the Home Depot with select appliances starting at $399, plus save up to an extra $1,000 and get free delivery on appliance purchases of $998 or more. Get a whirlpool laundry tower featuring industry first UV clean technology designed to reduce bacteria in the wash without fading fabrics. Plus, with great prices at the Home Depot, you can save on select appliances designed to make laundry day easier. Shop Labor Day's savings at the Home Depot today. Offered by the August 27th through September 16th, we'll only see store online for details. You can call it primacy and recency and primacy and recency is primacy is your first impression, right? You know, recency is maybe I have it backwards. I don't know, but one is your first impression, one is your last impression. And so somehow the servers in LA have figured that out. So they'll be like, hey, welcome to the restaurant. We're so glad to have you here. Have a seat.

1:14:58What can I get you? And then they ignore you the entire stay. And you're like, oh, I'm going to murder these people. And then right as they serve deserve like, hey, it was so great to have you here. And I'm like, oh, yeah, I forgive them now. So that first touch, super important, first touch, super important, second, the last touch, super important, checking in in the middle, you know, would be great also. And then the other thing that you mentioned too is just the catharsis of, you know, the places that I stayed at and that you say, I'm thinking of one right now. It was great. Never heard from the owner at all. It felt like staying at, you know, a Marriott. And so therefore, I didn't see the owner as a human being, you know, sorry to say I know Marriott has great, you know, shareholders were all human. I don't have any great bias against huge, huge companies. However, if I'm staying at Jamie's Airbnb, if I'm saying it's sort of Jamie's short term

1:15:58rental, he's like, hey, welcome, you know, did you get the guidebook? And I'm going to say no because I forgot to check. He's like, all right, well, let me send you the link again. If there's anything I can do and then I'm not going to look at the link, but it's so nice that he did that and then I'm going to do my own thing and I'm going to use the washer and dryer because that was great. I'm going to drink the coffee. That was great. How's your stay going? It's great. You know, thank you very much for staying. Did you enjoy it? How could I make it better? Now if I was mad about something, I let that out. Great advice, you know, such good advice. And it's a great way to mitigate bad reviews and then also just people want to be heard. And if they're not heard, you know, they're done. What do you think is the biggest mistake that people make when they approach a short-term rental? Yeah. And typically it's an investing in a market that they've just gone to growing up. They want to own a home there and they just buy it, assuming it's going to make money and then it doesn't. And then they think that investing in short-term rentals is just a bad idea.

1:17:04So I do the research. I'm not just investing where you want to go on vacation, but investing what's also going to cash flow if you want it to make money. You have your own Airbnb and you have your own short-term rental. And you know, I assume making good money on it, but it's also taking some time because you're managing it. What's the perfect number of short-term rentals for you? Are you planning on getting another one? It's like one year max. Do you want to get five? What's your plan? I have one now. I've won to buy one this year. It's not going to happen this year. It'll happen next year. I didn't get through my list that my wife made me of things I needed to do to our own house before I was allowed to buy our second one. But I'm going to get through that list and be able to buy it next year. And I'd like to have four or five. I manage two for a family. We've got two homes up in Maine that are owned by a trust that we share.

1:18:06And so I manage those. And my parents have four, so I help them as well. So I love it. Hospitality is my blood. And for me, one hour a week dealing with cleaners and responding to guests, I know it's not that much work. I sort of fit it into my day-to-day and generally enjoy getting to interactive guests, getting their feedback. And I don't really see it as a chore. Last question I'll ask you. And it's a question for me. And that is my strategy because I knew that I was not going to manage it myself. I knew that the cost of professional management was going to eat up most of my profit. And I'm using professional management. My strategy was to buy five at a time. I was like, I'm either going to buy zero or I'm going to buy enough because eventually

1:19:06I'll be able to make a choice to hire somebody local who can run it for me. Do you think that's a good strategy? I guess it depends on market. It depends on sort of an efficiency around building a team. If you have a great team and they're able to cover all your properties, cleaners, handyman, all that, it can make a lot of sense. Where it can run into trouble is regulation. If you are highly concentrated in a single market and then regulation changes, that's a big risk. So maybe being in an area, I'm multiple different cities in a concentrated area can make sense for a lot of people. But it goes back to regulation and the risk of regulation can definitely sort of and or should be taken to account when building a portfolio. Jamie, thank you so much. It's been phenomenal. I think this is a masterclass in short-term rentals.

1:20:11I'm a huge fan of your product. I could not imagine you're doing this at such large scale that there's no way. That, for example, your kind of more expensive product, which is the, you know, what's going to figure out how much I should charge every night is $20 a month. There's no way that I could get the data. And your own data suggests that I'm going to get 20% more income by using that one tool. If I get 10% more income using that one tool, it's paid for itself so many times. So a huge fan. Thank you so much for your time. I really appreciate it.