I am pumped to bring you this episode, where we will be talking about property management and short-term rentals.
People think projects fail at the end, but they fail at the beginning. A lack of proper planning and clear vision will most likely doom your project to failure. Joining us today is a highly experienced Winston Perry. He lays out a clear process of property management, from point A (sourcing properties) to Z (getting them listed). He shares what you need to do to get right from the beginning.
Winston is a military man, a co-founder of “YourspaceSTR” and boasts an impressive 15-year career in property management, he’s definitely someone you want to be listening to.
Bart: Folks welcome back to the accommodation show. I am joined today by Winston Perry. Welcome to the show Winston.
Winston: Hey Bart, how are you doing? Good to be here.
Bart: Doing very well. I’m pumped to have you on. We met on Clubhouse, an app which is going crazy at the moment. We had a bit of a chat. We started talking about tiny homes and RV’s and that sort of thing and we figured out we had a bit of a connection about hospitality. You told me that you’re a military man. I think you’re still serving, is that right?
Bart: You’ve been involved in property and in that sort of space since 2005, roughly around about 15, 16 years you’ve been in the space and you look at property as an investment, as a vehicle to drive wealth and build growth. Tell me a little bit about your story.
Winston: I started around that time frame on to a few different properties here and there, managed two but over the last three to four years started looking hard into the short-term rental space, partnered up with “YourSpace STR” and it’s been a race to the finish line since then, standing up multiple different short-term rentals, expanding across the shared economy space, making multi-purpose spaces, which are short-term rentals. Using them for events, using them for short term stay, long term stays, marketing multiple different venues, but we just like exploring within the shared economy space and making multi valued locations and offering different accommodations, unique accommodations in addition to RV shares and RV rentals and tours as well.
Bart: Just to put it in context for everybody out there. You guys are in the US. You guys are managing a bunch of properties. You’ve set up some properties for investors. Tell us a little bit about the different segments you guys cater to.
Winston: Our framework is a source build model cell. The source part is sourcing properties. We have unique ways of going out and finding different investors, flippers, real estate owners or just a regular owner who’s been having some rental inefficiencies with their space and we provide them an offer they can’t refuse, we enter into long-term agreements, we enter into different agreements with them, different contracts. That’s the source part. We build them out. We build these places out remotely. At times we’ve got places being built out in different cities at one time.
Bart: The first time you said build out to me, that term was a little bit foreign. What is it? What is he talking about building it out? Don’t you build it up? What does building it out actually mean?
Winston: Great question. We build out a space where, just think of you being where you are right now and doing some analysis, some space right online, taking a look at photos and getting a good feel of what that space can be used for, what unique offerings it can provide to that short term rental renter or just to provide event space for different usage. Do some analysis online, get my designer involved. We’ve got a great designer who is able to take a good look at spaces and figure out how to provide the right furnishings inside it. Whether it’s for events or just for rental accommodations. With that then we start building a team on site. We’ve got a process to build a team on site, using different different forms and going through interviews and contracting and then once the team is formed, it’s like putting that basketball team together and getting them on the court and then, they have at it with the next team. We build the teams out remotely, get a designer involved and we get the on-site vendors. Whether that’s the folks to assemble the property, to assemble the furnishings, we’ve got vendors that’ll do, landscaper and all the other required services on site with a different location, whether it needs it and then from there we roll into the management.
Bart: Just bear with me. Bear with me for one second. I just want to really make it crystal clear as to what building out is because I think people will really appreciate understanding that process. We go and we find a property. Then we’re analyzing it. We want to understand what it’s going to be used for and what the best use of the space will be. That’s why you’ve got the designer but also within that build-up process you’re also thinking about how to service a property. Who’s going to be looking after it, who’s going to check in guests, who’s going to do the gardening. I think there might be other bits that I’m missing. For you guys that build up process is actually, “how do we make this place work?” From two sides, one from an operational perspective but also from a guest perspective where, “hey how what product are we actually offering?” Is that what build out is?
Winston: Absolutely, you hit the nail on the head and the other important aspect to this because we try to frame it in a very concise period of time because there’s a lot of overlapping events. We’re analyzing the property, we want to make sure that the right offerings are there. We get our designer involved, a virtual state is involved too. The photos we have of the place at times we push them out to get those furnishings that our designer puts together rendered inside that empty space. What that does is that puts us ahead of the game, with regard to getting that listing out there and getting revenue against the listing in itself. Source the place, analyse it, get the designer involved, immediately get furnishings rendered and get it listed and that can happen in a few days period and then before we know it, things are ordered to being put on site, our vendor teams together and they build the place out and right when final photos are done at that last day, the idea is to have a renter coming in directly after the photo shoots done. That’s the best-case scenario. We’ve been pretty successful walking through that process. Just do the steps, but that’s it right there with the build.
Bart: That’s clear as day to me now. Alright, we’ve built it now, what’s next?
Winston: The next step is the management, so we call that “the manage phase” and there’s a couple different variables to the manage phase because it’s kind of happening, streamlined to the bill because as it’s building out, the listing is already out there. Immediately we’ve got to put the management team together. Who’s gonna check the guest’s messaging? Have we had that profit margin discussion with the investor, so we understand what profits we want to make on the place, so our pricing is right, so that analysis is done. That’s part of the management as well as ensuring that the place has, the end has the right check-in message quality control items in place. It has that long sustained management along with it. In addition to getting those listings built out and other platforms as well, that’ll be the other short-term rental platforms out there. We mark it on Facebook Marketplace and other venues as well. That package covers the managing phase.
Bart: By the way everyone, if anyone’s looking for a nugget, that was a nugget just there and I know that so few people know about this access to market, the Facebook Marketplace and I don’t want to give it all away to everyone but maybe we should because that’s what we’re here for, to provide value. Do you wanna talk about that now or should we come back to it later?
Winston: We could talk about now or come back to it. It’s a great venue to do some targeted marketing on your locations. Just some direct target marketing, whether you want to get that renter or that person looking for event space directly on Facebook Marketplace or if you want to pull them back into your platform, whether it’s a direct booking platform or direct them to your Airbnb listing. It’s tied into your standard management.
Bart: You’re not paying for an extended listing on Marketplace?
Winston: Your target marketing is fairly cheap depending on how you do it too.
Bart: That part is part of the management, that sort of go to market strategy?
Winston: The next step is, after the managers, the selfies we call that we just call it self, because a couple different things happen inside that phase. We package short term rental. We package turn key Investments. What is a turnkey investment? It’s a short-term rental that has an accommodation in the sharing economy and we package it for investors. It can be packaged as a business. It can be packaged for new short term rental investors that are looking at getting into the space. We make it available to them as a turnkey short term rental investment.
Again, there’s a couple different ways of how that’s contracted out. In its simplest terms, just think of you going to a lot and purchasing a vehicle, it’s just like that, in the contract, you have the vehicle. It’s already assembled, somebody assembled the vehicle and it’s turnkey. It’s right there for you. You can gain the profits that have come in on it right from there and at times we’ve got a good amount of historical data to show on someone to show what they’ve done.
Bart: You said source, build, manage and then the pricing and the right tools and that sort of thing. That is the next step or have we covered that?
Winston: You mentioned pricing. Yeah, I didn’t touch on that. The pricing is kind of like an art and science kind of pricing. The science is the actual numbers and numbers are the numbers. It’s going to cost you so much, to rent that, to have that space. The expenses are going to be a certain amount and then above that, you’re going to have those incidentals that occur with the space. That’s going to be the constant. The conversation we like to have up front with our investors is the profit margin discussion. We know that a lot of folks don’t often think about it so we want to kind of back them into a corner and ask them. “What’s your vision with this? Is this just passive income? Do you want to get actively involved and want to be part of this and understand the business?” Once we’re able to kind of box them in a corner and understand that profit margin discussion, it’s a beautiful thing because now you understand what the profits need to be, you understand the science of what your expenses need to be and then you add the space and as you put that all together now, you understand what your pricing needs to be in order to be at that profit margin. You divide that out, you’re able to come up with your daily operating expense for that particular location to break even and then once you understand that break even mark, how high do you go to get to that profit margin for that particular investor?
Then you can price yourself right.
Bart: Isn’t the goal to get maximum profits? Your pricing should be the maximum possible regardless. Setting a preconceived profit margin. Why would you do that when you’re like “I want I want as much as possible,” obviously you want more than break even and you can say well I’m happy with a 5% return on investment or per year. But then you know if it’s 50% return then that’s even better right? How does that affect your decision on pricing, when pricing should always be maximum.
Winston: Great question because let’s just go back to March, end of March, what happened in March. Covid strikes and everything shuts down globally, everyone in the short term rental space is now shaken a bit because the place they had in New York City or the place they had on West Palm Beach, they don’t have the travelers from Europe or Australia coming in anymore. Now it’s a hard discussion of okay. “What do I do? Where does my pricing need to be? What is my break even point?” and it’s amazing because a lot of folks didn’t have that initial discussion coming in and understanding where their profit margin needs to be to keep the lights on inside the house or to keep their side hustle going, it’s good to have that conversation with yourself, or a conversation with the investor upfront because once they understand where that profit margin is, then when the when the next, pandemic strikes or when the next issue inside your major city strikes, you know where your break-even mark is and you know where you need to be at, you know exactly, you know when that place is marketed.
Bart: The pricing part is part of on a basic level just knowing your numbers. Understanding the numbers of what people need to pay to make profit on the other end and then you can keep squeezing as much margin as you can through partnerships, through improving the property, through better marketing or whatever it might be, right?
Winston: Absolutely and it’s basic sense to pay attention to the numbers, a lot of folks aren’t really into numbers. We’ve got a tool on the website that they can throw the numbers inside of and just take a good look at your expenses.
Bart: Now that you’ve thrown out the plug. What’s the website?
Winston: You can go to “YourSpace STR”. You can just Google “YourSpace STR” and you hop on there. You see a couple different tools. You see some of the coaching there. Coach Cav, my partner but you’ll find some documentation on there and a few other things.
Bart: Just to give us a bit of a breakdown as to how you guys do what you do. I love that you guys have kind of took this idea of short-term rental investment and broken it down into sort of, I can almost imagine Trello boards or a sauna boards, this step-by-step process of, “hey you got to get through this hurdle before you get to the next one,” and these particular parts you want to run as fast as you can like the build stage. I think one of my learnings there is, you are talking days, right and your understanding very well, that from when you saw us to when you get it listed.
The shorter the time you can do that in, the higher your profit margins going to be is absolutely crucial rather than sitting on something that’s burning money in your pocket, get it on, get your processes sorted before you get into everything and you’re going to be right. We had a bit of a chat before and you said that right now you are knee-deep into setting up a bunch of properties, but the one that caught my eye was you said there’s a group of ten of them that are together and they’re brand new to you guys and you guys have to do this particular process. I take it. I love you to walk you walk me through from the very beginning like the day in the life of Winston. What happens from there and what are you doing? And what’s it looking like? Now I understand the process a bit. Let’s talk turkey.
Winston: Cav, my partner gives me a call about a week and a half ago or so and he says, “okay, I think we’ve got potentially ten coming up in Louisville.” I said, “okay, all right,” you know what, you know, the next day says, okay, it’s you know, “it’s coming together.” You know, let’s we’re going to hop on a call. So we hop on the call with the owners and that’s in Louisville, Louisville, Kentucky in the states here.
Bart: What is that in relation to you? How far away is it?
Winston: 14 hours or so and yeah.
Bart: Remote right, like you don’t know too much about that place?
Winston: Yeah. I’ve been through the town, some years back. I’ve been through there but it’s a major city. It’s a major city for some context. We’ve got a derby every year. The Kentucky Derby, a popular horse race that happens in the United States. A lot of travelers travel globally to go to the Kentucky Derby. So this location is about ten minutes right from the Churchill Downs where they have the Kentucky Derby. Great location for an investment. That’s the source part, it just kind of happens, but to receive the call and get offered some space and then from there we went ahead and met with a few different investors. A couple of handful of them were new to the sharing economy and short-term rental space. What we did is essentially, brought them together in a call and offered them part of this, part of this deal, as an investor. Now you’re seeing the model converging a little bit, because we just immediately went from sourcing the place
to looking for investors and the cell part. That immediately happened, concurrently what’s going on is, I’m also talking to the designer and Davina and she’s immediately looking at the place in itself. We immediately got a photographer to get on-site, to get some good video and a couple staging photos of the place.
Bart: What are the places like? You say that there’s 10 of them. Are they identical, are they one bedders? Is it an apartment block?
Winston: They are apartments. There are ten different apartments. Two bedroom apartments. They’re all slightly different configurations. We didn’t know that up front. But after taking a look at some of the videos and photos directly after I realized they’re slightly different configurations, which is okay but makes it challenging a bit more for our designer because she’s very good at looking at different spaces and applying different furnishings, but it just provided another variable to that. The next step is just identifying what has to go inside that space.
Bart: Sorry. Did you say one bed or two beds or how big?
Winston: There are two bedrooms, two bedroom apartments with slightly different configurations, but our technique is to try to maximize that head to bed space ratio inside the space but at the same time, make it extremely functional too. Page is really good at that. Making it really functional and being able to maximize the head to bed space ratio inside it. Right now as we speak, we’re at the phase of understanding the space. We understand the space. The listings are about 99% right now. I think as we speak probably a few listings are already out. Although furnishings are not adequately in the spaces just yet. Over the next couple days, we’ll finalize the furnishing breakdown and get that into the spaces. We’ve already got four different vendors on the ground that have already taken a look at the space and already tied into some contracts already with them to conduct the first deep cleaning that needs to be done and then also walk through inspections with the building owner to make sure all the maintenance items are checked out. But right now we are on a schedule. Once that first booking comes in, we are on a schedule. We anticipate having all the places furnished out and ready to go probably around the next two weeks. If everything goes right with the flow of materials and furnishings coming in that we’re getting through wholesalers.
Bart: When do you decide to pull the trigger to list the property in that process? Because you said some of them you have listed, some of them you haven’t, when do you feel like another level of confidence to say? “Hey, yeah, let’s do it,” because I measure you still got a buffer that if it goes wrong you’ll just say, “sorry it didn’t work out,” but what’s the threshold?
Winston: Great question. As soon as we signed into that agreement with the owner or the owner was already an investor. We immediately turned to get in that place listed in under a specific timeline to get that place launched.
Bart: If you don’t have furniture in there, how do you do the pictures?
Winston: Yeah, we got lucky here with this one. One of the units was probably about 80%, 90% furnished already, so it’s just some small adjustments that had to be done to get some adequate photos. Then we did not have to do too many modifications, but at times we sent those photos down to get small things rendered. When I say rendered, I just mean if there is like, let’s say laundry on the floor or something, they erase it out with some photoshopping skills, but we’ve got a good photography team. They’re on the ground and we also got, I call him my broker. Tim could find photographers anywhere on earth and he’s got a huge network and knows exactly what we need from a photography standpoint. He puts the order out and gets that done, gets the rods back and he’s able to do special editing for us.
Bart: Is this a photographer that you fly around the country to do the photos?
Winston: No, Tim is special. He is a great photographer. He’s out of Hawaii, been running around the states since Covid, but he’s got a unique eye for photos and real estate and spaces in itself, the different angles and the different colors, photography speaks with lighting. He’s got a strong network of photographers and he’s able to reach out and find different photographers and interview them and understand, let them know exactly what we need because short-term rental photography as you know, you do it with different accommodations, It’s different than just finding a real estate photographer.
Bart: We stop doing this episode and start a whole new one about that?
Winston: Yeah, we could do a whole new episode on that. It’s an interesting conversation when you talk to a photographer that’s never shot short term rental space and has just done, you know, Jerome and real estate, Tim is really good at that. He’s able to have a good conversation with them and convey exactly what we need with regard to the space. And what’s required for him to do is special editing in the background.
Bart: Funnily enough, I reckon that. This is my hunch that real estate photography will actually change to align more closely to what we’re doing. Be it in a hotel or the STR space to actually try to shoot the experience a bit better, because right now it’s just functional right like this wall, that wall, four walls and you’ve done the photography, but I think they are having a bit of a missed opportunity of placing the people in the space in terms of real estate. I think they could do a lot better and sell a lot more property if they could really sell that dream, especially with those margins.
Winston: Where was I? We are in the midst of it right now as we speak, I just had a call earlier with the designer and she is working the deals with a few of the wholesalers, we anticipate, getting that locked in the next few days to get some shipments coming in and our vendors on the ground be ready to grab that and get things laid in. Let me touch on the team real quick is that … I get pretty fascinated with the teams. One of the things I like doing is bringing those teams together on site and it’s because you are dealing with different businesses, different characters, different parts and pieces to pull it together, but essentially we always have a slight lead whether that’s somebody we send out there [inaudible 00:28:16] We just need a slightly 90% of the time we designate a slight lead out there and that could be an existing co-host that’s in the area that we were able to leverage which is a fascinating thing, because they know what right looks like from being just a super host. It’s very easy to find a lot of people don’t realize that they can find a person that thinks and knows, knows the feel, just like them by just reaching out to a few co-hosts and having a good conversation with them. Or housekeeper, a good housekeeper that’s been inside the space already and has operated inside of that space.
I mentioned the designer enough. You need a maintenance or assembly team to make sure the furnishings get there.
Bart: I’ve got to break these down because this one is going to be my thing. I’m going to go into quickfire as well. If anyone that’s watching or listening just expects it because I want to be mindful of your times, but also I want to give a maximum value. With the co-host in terms of commercial arrangement is a kind of retainer? Is it per hour? Or is it a commission? Or all of the above? Is there a quick answer to that.
Winston: Not really a quick answer. It just kind of depends. It really does, a lot of times there will just be a flat rate depending on the job that they do on site. We’ve got some generic language, you know that we put together for our standard jobs.They’re tracking everything on the ground. They are the quarterback on the ground.
Bart: They’re involved in the setup stage, in the build stage but they’re not involved post that project but if they’re a housekeeper, they still may be involved later on but then you just pay them upfront for the first bit and say, “hey you’ll be the housekeeper. I’m going to give you x amount extra on top of to do X, Y, Z.”
Winston: A key thing Bart, the key nugget is when dealing with vendors you want to keep them in their comfort area, you’ll have the small business owners that think they can do everything, provided they know exactly what needs to be done. It sounds and seems all simple but we try to keep them in their comfort area. In those interviews we’re real specific about short term rental, about technology, because we have various checklist on to-do lists and stuff that they have to report back on, how to how to use some of the technology inside of spaces, keeping them in their comfort area, whether that’s strictly cleaning whether that’s strictly designing, taking photography, just putting stuff together. That’s all you’re gonna do is put stuff together and put it against the wall. That’s all you’ll do, but the site-lead is a unique pressing because they understand what right looks like from what the products look like in the very end, when you prioritise and the paint on the canvas, what the artwork looks like at the end. They know exactly what it’s supposed to be.
Bart: You got site-lead, we’ve talked photographer. We’ve talked, designer, housekeeper, tech person or somebody looking after the property on a long-term basis. How does that look?
Winson: A lot of times, we always have a primary alternate housekeeping team that gets online. We’ll have that primary up front that will be the primary housekeeper, they handle the day-to-day and post, so they have the technology to channel managers, they got full visibility, they’re tight, they’re connected with our with our virtual assistants to do any coordination for anything that needs to occur thereafter, and then we have an alternate who’s tied in as well. The team is the team, it is a full team. The primary knows the alternate, the ultimate knows the primary there. There is no competition there. There’s clear guidance with regard to what each one’s role is, you know, because life happens and that alternate may have to come in and understand the space exactly like the primary did, that’s part of the process as well.
Bart: Is there anything else that we missed out in terms of team?
Winston: That’s about it. Some of our places we’ve got a couple other teammates whether that’s a landscaper, whether it’s a you know, pool service guy or gal, if there’s any special services that are required inside the space. When we go into events, we’ve got a property that we’ve got an event coordinator. When there are events going at the particular space, they can take can assistant in coordination so we can offer that service directly to the renters, if they happen to mention that they’re having a bachelorette party or if they happen to mention that they’re having, a graduation party or network event for their business, we can casually jump in and offer if they need additional services from an event planner, so they’ll be tied in with our team as well.
Bart: Mr. Winston. I could imagine that we could talk for probably another few hours. We actually the first time we spoke. I think it was meant to be a 20-minute call ended up being over an hour and a bit just just chatting and chatting and you’ve got so much knowledge about all this which is which is fascinating and I think the great thing is, you know about all the intricacies. The other thing that I can tell about you, is I think the reason why you’re successful is your temperament. You’re pretty easygoing, which is I think really important when you’re dealing with so many wheels to a cog, is the right expression. Tell us what we can do for you as a community and how we can reach out to you.
Winston: You can find me and my partner on “YourSpace STR”. You can find me directly at www.key@yourspacestr. That’s my email, you can find me there directly. You can look at it under Airbnb and Sharing economy live, right on right on Facebook. You’ll see us there as well, as far as what the community can do for us, we’re always looking for insights. We’re always looking for building a network, we’re always looking for folks that are looking for unique spaces and looking forward to Turn Key Investments and also looking to invest early on in the short term rental space. We are happy to bring them on, part of the team and show them what that looks like and also, we could expand and grow with them, always looking for that.
Bart: You guys aren’t regional region-specific. So if someone contacts you from Australia, it’s all good, the same thing if someone contacts you from the UK, which is where a part of our audience is as well or anywhere in the world. You’re happy to talk because you either need Investments or you might want places in different locations and different opportunities to work on. Thank you so much. We will speak again in the future. I am sure I’ll see you around. Thanks for sharing all that beautiful knowledge. That’s years and years and hundreds of thousands of dollars worth of investment that you guys have got for free from Winston. So thank you my friend. That’s very kind of you.
Winston: Bart, it’s an absolute pleasure. Thanks, a great discussion.
Bart: Cool. Have a good rest of the day, bye.
Winston: You too, take care.