Shampoo and Booze Episode 23: Springtime Airbnb Rentals Picking Up and Jay's Fresh Flowers

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Springtime is officially here. That means Jay gets to cut fresh flowers and put them on the table at the farmhouse. It looks nice and it's free! We talk about how we run our businesses like a Mom and Pop general store. All hands on deck, all of the time. We have a feeling that more urban rentals are becoming less like this. Though there are a lot of country rentals around here that are just as hands off, even by the management companies. We have successfully booked 4th of July weekend for a premium, so that feels great.

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15 comments:

  1. Is the farmhouse a two story or one story? If it is a one story, you might be able to access the tub drain from the basement and put in some new pipes for it. Also, drains used to be 1 1/2" pipe and now code requires two inch drains and pipes for the bathroom shower/tub. It might be a good idea to slowly replace the drains.

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    1. Sorry I commented before I heard you say about pipes in the walls and what not.

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    2. yeah it's on the second floor, not a bad idea to see if we can see the final drain in the basement though and see if it's galvanized down there.

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    3. Our plumber said we'd most likely just bypass the old pipes and leave them in the wall. The new pipes would run on the outside of the wall so would need to be boxed in. It's all doable, just takes time and money.

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  2. The flower branches are a nice touch! I love that and do that all the time. Waiting for ours to start blooming..not much is blooming here yet in Chicago..we're still getting flurries! We're traveling to Montreal in August and I'll be looking into Airbnb. If we do use them (it would be our first time), will definitely use your referral code. Thanks! :)

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  3. Follow up to my call about insurance. State Farm and American Family will not insure homes used for "short-term rentals for paying guests." The one friend I know of who does airbnb uses http://cbizspecialtyinsurance.com/vacation-rental/ I am curious about which insurance companies others use. I do have one agent in my town who uses a variety of insurance companies, so I will also talk to him. But he didn't know off-hand.

    Also, if i use CBIZ, has anyone had a claim and had a good experience?

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    1. We use Erie Insurance because it was recommended by our local agent and was the best price for the amount of coverage we wanted.

      I love just buying things through the internet, but it was important for us to get insurance through a local, trusted agent who would help if if we had a problem.

      We do live in small town so there is that level of personal attention that small businesses have.

      Be interested in the experience other people here have had.

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    2. Yeah, same as Beth I would also like to know anyone's experience with CBIZ. Another one I've read about is Peers (http://www.peers.org/product/homesharing-liability-insurance/). The problem with Peers and CBIZ is that you read about people who currently use them, but I can't find anyone who has filed a claim with them. So when the time comes, who knows whether they're worth it.

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    3. I agree that it'd be good to hear from someone who has had to file a claim with the insurance company you;re interested in.
      This is why I was suggesting going through a local agent who you trust. At least then if there's a problem, you have a real life person to deal with.

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  4. Good article in the NY Times http://www.nytimes.com/2014/12/06/your-money/airbnb-offers-homeowner-liability-coverage-but-hosts-still-have-risks.html?_r=0 (Jay, I am not getting links on these)

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    1. I see the link to the articel. It's not 'clickable" unless you add html, or use a link tool like this: http://www.rapidtables.com/web/tools/html-link-code.htm

      I guess its Blogger's way of cutting down on spam links.

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  5. I wanted to make a comment about the last episode as well as chime in regarding previously posted comments about insurance coverage.

    First, you guys mentioned going away for a month and having your friend take care of everything while you're away. I just wanted to share an app with you that I recently discovered. You basically tell the app how you want your place cleaned, how to set things up and even take pictures of how things should look. The person cleaning sees exactly how to do the different things and can even take a picture so that you know everything is done correctly.

    The app may be overkill for you buy it definitely offers peace of mind while away. It's setup beautifully and really streamlines the process of trying to convey how you want things done. The app is totally free too. It's called "Properly". More info on their website http://getproperly.com.


    Oddly enough, the name of the insurance company I use is called Proper Insurance. I've had a great experience with them and all they do I'd vacation rental insurance. It covers the property, contents and liability up to $2M. It even covers lost income in case of a claim making the property unrentable. More info at http://proper.insure

    One last thing I wanted to mention, in regards to leasing out a property to then sublet on Airbnb or other platforms. Where I am, in Nashville, the only residential options downtown are privately owned condos or apartments. 98% of condo HOAs flat out forbid rentals less than 30 days, some say six months and many minimums are set at a full year.

    That means leasing a place is the only option I'm the downtown core area. Short term rentals do great in the areas surrounding the core as well so we've definitely thought about buying property specifically to Airbnb. There are some challenges with this though. First, houses aren't as worry free as an apartment. As long as I keep my Airbnbs in Nashville, this isn't an issue but since we plan on growing to other cities, maintenance does become an issue. With an apartment, if there are any issues, a quick call to the apartment's maintenance team fixes the issue.

    The second problem is the fact that out fairly new short term rental laws place a restriction on the number of properties in a given area that can be used as a short term rental. Although completely arbitrary (and some might call unconstitutional), that number is 3%. Many areas in Nashville and surrounding areas are already at the threshold. Apartments aren't under the same restrictions.

    I heard you comment about people who are doing this so I just wanted to sort of give you the logic, at least as it is in my case.

    Thanks again for sharing your experience. I thoroughly enjoy the podcast and look forward to it every week.

    Steven Talbott
    http://stevenwtalbott.com

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    1. Thanks for the tips on those services. I know these kind of apps are popping up all the time in the Airbnb ecosystem.

      I really like your comment because it identifies the difference between how an Airbnb business affects a rural vs urban area.

      I know many cities including Nashville are struggling with how to deal with short-term rentals sucking up precious affordable housing. If regular people cant find housing, then communities are asking what happens to their vital centers that made their cities interesting in the first place. Tourists want to visit vibrant communities, but what happens when it's all just tourists? Debate around this is healthy.

      Also, cities are dealing with apartment buildings being turned into essentially "hotels" without having to provide the taxes and safety regulations that actual hotels provide. Lodging taxes help offset the wear and tear tourists have on a community's infrastructure. Or you have business owners running 50 short-term rentals throughout a city (which is basically a distributed hotel) without any standards to follow like a real hotel has.

      And finally, I really like hearing about your business model because it does highlight the differences we were discussing in the podcast. We're running a "mom & pop" business where we own and operate several rentals in our community, while building up real estate equity. We do most of the work and deal with our renters. People who rent out rooms in their homes fall in this category.

      Sounds like you're hoping to run a larger network of rentals over a large geographic area. You don't own the properties, but create a large cashflow as long as people are willing to pay you more than what you pay in rent. You sub-contract out all the work and manage things from afar.

      Be interesting to see how these models play out.

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  6. That is such a beautiful place Rayanne & Jay. What a great job you did. I don't know how you guys find the time. I barely have enough time for my Ebay business. Hopefully I'll pass through one day and spend a few days in your area. Would love to do some exploring up there.
    We have just recently listed our Panajachel Guatemala property on Air B&B and have had a huge interest. I had intended to open a Hostel there after I retired. But I am just not ready to settle in yet to something like that. I think the Air B&B will do nicely. Good luck and thanks for the great insight.

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    1. Thanks BigEd1. I think running a hostel would be a whole lot of work. You'd really have to love it. If you have someone trusted in Guatemala who can manage your property, Airbnb sounds like a good idea.

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