Shampoo and Booze Episode 47: Renting Long Term vs Renting Short Term

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Mike and his wife, Brenda, have worked full time jobs for the past thirty years. They have also been building a small real estate empire in their hometown in Michigan as they've bought up duplexes, condos, and single family houses. These are all full-time rentals to long term residents. But recently they decided to buy a beach condo in Florida and try doing vacation rentals on Airbnb.
In our conversation Mike shares the differences between these two kind of rental strategies and, more importantly, goes deep into his numbers. We've thought about possible buying local houses to rent full time, so Mike gave us some good perspective. He tells us how much work each kind of rental takes which helps us decide which one works best for us.

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Check out Mike and Brenda's super cute condo on the beach:

16 comments:

  1. Great interview! It's great that he had a lot of different cards up his sleeve so that he could compare things fairly instead of speculating. Very cool!

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    1. Thank you for your comment. Yes we have done several variations of real estate investing. It's just something we really enjoy and very soon we will be able to reap the benefits.

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  2. Thanks for that interview guys, very informative and adds to my knowledge base that I'll hopefully start to use in the near future.
    As a former truck driver I have been to your beautiful tulip city of Holland many times Mike, what great place to have and Air B&B, on the good side of the state and the lake.

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    1. Yes the Tulip City is beautiful. We can't wait to transform our little duplex on the north side into an Airbnb. The new pedestrian bridge linking the north and south side should make it a great rental.

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  3. Does anyone have a recommendation on sheets? I'm going to need to get 10 sets for twin beds. I've already tried two different brands. One set was 400 thread count 100% cotton, but you could see through them they were so thin.

    Another set was polyester, but advertised as 100% cotton. The eBay seller is refunding my money on those. I had done a burn test and told them the fibers melted, so it certainly wasn't cotton.

    I'd like 100% cotton or a cotton/poly blend. In terms of thread count and price Ikea Gaspa sheets might work. I've spent way too much time looking at sheets over the last few days.

    The cleaning service I have been using for 4 years just dumped me two weeks before Christmas. Thankfully, I had already contracted with a new cleaning company to start January 7th, but it has left me in a bind for two checkouts. I will arrive to a dirty place on December 26th, the biggest changeover day of the year for ski resorts.

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    1. we have sheets and duvet covers from ikea. they look great and have been holding up really well.
      http://www.ikea.com/us/en/catalog/categories/departments/Textiles/10651/

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  4. I received this email with the subject line Unable to Accommodate several days after I had requested a December 26th clean.

    Greetings:

    This letter is to update you on some changes associated with our housekeeping services department.

    We’ve seen a large increase in demand for our services, mostly from homeowners looking to utilize online options to rent their home as a vacation rental unit. At the same time, and somewhat related, housing prices for long term rentals have increased, making life in paradise less affordable for the average worker.

    As a result, effective immediately, our housekeeping services are reserved only for homeowners with whom we have a rental agency relationship. As you can understand, these clients are our top priority.

    At the moment our vacation rental program is at capacity but we look forward to expanding that program in the future. However, if long-term rental management is of interest to you, please call us at xxx-xxx-xxxx so we can discuss your situation.

    Thank you,

    HOUSEKEEPING DEPARTMENT

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    1. I'm confused my their message. Are they just dropping owners who do vacation rentals without going through the area's renting agency? Is it a political situation where they're angry you're pushing rents higher for locals?

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    2. They are dropping homeowners who are not using their rental agency. It is a staffing problem. They haven't been able to maintain a person in charge of housekeeping and they don't have enough people to clean to meet the demand. The quality of service has significantly declined over the last 2 years once the former head of housekeeping left. I should have switched companies a year ago. It was very convenient for me, because they provided sheets, towels, paper products, soaps, shampoo and dish detergent.
      With my new service I have to have all my own linens and the company will supply the bathroom and kitchen supplies for a small fee.

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    3. it sucks that they dropped you so quickly leaving you in a learch. are you going out there just to clean the place? i'm thinking that you're spending xmas there? that's nice though.

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    4. No, I'm not going out to clean the place. It's our scheduled winter vacation from December 26-January 7th. I was in CO the first weekend in December to start purchasing towels, sheets, etc. and to interview cleaners. I thought I would have more time to set everything up.

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  5. On episode 289 of scavengerlife you purchased several oak door. I live in D.C. and I am wondering were you purchased the doors from?

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    1. We got the oak doors off of Craigslist. We've also gotten great material from the Restore (google it), though it's really hit or miss.

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  6. Thanks
    When is the next Shampoo and Booze podcast?

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    1. thanks for asking. the renovation has been taking up 7 days a week for us. but tomorrow starts our holidays and some time off, so we should be posting one soon!

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  7. Wonderful episode. Thanks so much for sharing. I like how diversified they are with both short-term and long-term real estate investments. It's making me wish that we hadn't sold our six unit apartment building about 16 years ago. We were young and stupid and didn't want the responsibility. it would've probably been paid off already and providing us a really nice passive income today.

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