Guests: Amber Knight, Daniel Ramsey
Recorded: July 17, 2020

Excerpt

Raise your hand if you’ve ever felt stuck determining prices for your property rentals. An effective solution is to use information from the best in the vacation rental industry, Rented.com!

Today, we discuss optimal performance in revenue management for property managers with Amber Knight of Rented.com — a revenue strategy business that helps property managers and realtors earn more with less hassle.

Transcript

00:00:06:01 – 00:00:26:17
Daniel Ramsey
Hey, everybody. Daniel Ramsey here with my outlook now. Today is a great podcast because there’s kind of a new thing happening in the real estate world. It’s called Short Term Rentals, and we’ve been doing some content around this, but I’m excited to have Amber Knight here. She is the lead of basically partner success at Rent Incom. Amber, thanks for being here.

00:00:27:09 – 00:00:29:04
Amber Knight
Great to be here. Thank you so much. Daniel.

00:00:29:16 – 00:00:50:07
Daniel Ramsey
So we’ve got a good one. This conversation is such an interesting one for me as an investor, as a real estate broker. And, you know, I’m the founder of my out desk and we help real estate people, property management people find talent and leverage. But today’s conversation really is centered around revenue management systems. Amber, what the heck is that?

00:00:51:12 – 00:00:55:07
Amber Knight
Revenue management services systems are. Oh.

00:00:56:01 – 00:00:58:23
Daniel Ramsey
Yes, services. Not systems services. Yes.

00:00:59:16 – 00:01:31:07
Amber Knight
Right. So what we do is we help professional property managers make sure that their properties are priced and listed in a way that maximizes revenue for the home, for the managers. So we will go through and make sure every single night is priced at the optimum rates to achieve their strategic objectives, as well as making sure that that listing is in such a way that it’s attracting the guests that they want, essentially.

00:01:31:10 – 00:01:50:04
Amber Knight
So just to make sure is the property priced correctly and is it located at the right place to get booked at the right time for the right guests? And making sure all of those factors line up correctly is what rented does. And we use software and hands on management to accomplish that.

00:01:50:22 – 00:02:11:02
Daniel Ramsey
It’s such an interesting niche because, you know, I have a rental property in in Tahoe and I bought it because it’s close to my home and you know, it’s easy to rent because it’s next to a lake and it’s awesome. But what you do is you help investors and large property management really drive revenue and then select the right territories to be in.

00:02:11:02 – 00:02:14:00
Daniel Ramsey
Is that kind of a good synopsis of what you guys do?

00:02:14:11 – 00:02:28:22
Amber Knight
Yes. And that’s that’s another service that we do for professional investors and managers. Where do you go? What do you buy? What’s the right property and what’s the right place to buy that property to maximize your returns?

00:02:29:16 – 00:02:49:19
Daniel Ramsey
But how do you know? I mean, okay, so we’re today, if you’re listening, we’ve got a rented report and you guys put out a report on a national basis. Talk I mean, talk about how do you get your data? How do you know? Because I know Sacramento, I know Tahoe, but I do not know the middle of the country, let alone Florida.

00:02:49:19 – 00:02:54:09
Daniel Ramsey
And yet you guys are able to kind of cover the entire country, which is kind of an interesting thing.

00:02:55:15 – 00:03:20:10
Amber Knight
Right. And because the the short term vacation rental industry is so fragmented, the data, there’s a lot of data out there and a lot of it’s bad. So how do you sort through the data to make sure you’re looking at the right information and you have an accuracy level? So if you know that your data is only 20% as a 20% margin of error, you’re going to treat it differently than if it has a 40% margin of error.

00:03:20:22 – 00:03:47:07
Amber Knight
And what do you do and how do you move forward and how do you find local experts who can kind of triangulate who is the static? Right. And so we will go through and we’ll look at that and say, okay, how long has this property been listed? How many reviews does it have? How active is it? And then gathering that data either directly from the database, from the property managers, or scraping the data online to make that work.

00:03:47:07 – 00:04:10:21
Amber Knight
And it’s different for every market. So there’s a lot of markets on our rented report that are not necessarily they’re great markets, but there’s no data on them, so we can’t quantify it. So they’re not here. And those are some places that are emerging markets maybe that are more unknown. Yeah, the infrastructure is not there. They’re great places to invest, but we can’t just put it in a report.

00:04:10:21 – 00:04:29:11
Amber Knight
We’d have to go in and do a lot more work on it. So these are the top 100 places to is a starting point to buy, to look and to start to do that research. And then once you’re looking at this, you say, okay, I would like to buy a property on the Oregon coast. Well, it’s southern Oregon Coast Mill, Oregon coast.

00:04:29:11 – 00:04:49:11
Amber Knight
What kind of property is it? Okay, it’s it’s off the beach. Where do I spend my money? That at that point, you want to start to get either a local professional to help you out or rent? It has a range of research and we can go in and dig through and get you all of the data that you need to make the best decision and also to launch that vacation rental property.

00:04:49:17 – 00:05:06:05
Amber Knight
So you’re optimizing revenue properties like just what you buy and it’s not enough property managers. We’ve seen a 200% difference in properties for identical properties in their performance just based on how their revenue management is handled.

00:05:06:18 – 00:05:16:07
Daniel Ramsey
Who would be an ideal client for you and then what would you do with them to kind of get them set up? And then what does it look like to actually have success with that client? Like walk us through the whole client journey.

00:05:16:17 – 00:05:42:14
Amber Knight
Absolutely. So we work with professional property managers for vacation rental property managers. We do also work with people who have a portfolio of more than ten short term rental properties. Okay. So we would work with them to understand what is your strategic objective for your properties? What are your owners want, what do you want to achieve? And some of them occupancy is the most important.

00:05:42:14 – 00:06:07:02
Amber Knight
They want as many people as many nights, the build as possible. And for other ones they want to make sure that the average daily rates for ADR is as high as possible. And so those and, you know, those are two extremes and there’s a middle in there that we try to find. And we try to find that for every individual home and choose the right software and the right data to make that happen.

00:06:07:06 – 00:06:37:24
Amber Knight
And then setting the rates, advising on the listings. So which online travel agencies, they’re OTAs. So that’s booking VRBO, Airbnb, which one of those should this property beyond and how often should it be beyond there? And what what should the rates look like? And in what should that what should the title look like? Look, right now, everybody’s gone through with COVID and they’ve changed their titles to say private insurance, private, private pool.

00:06:38:07 – 00:06:59:04
Amber Knight
Right. Right. The big thing now. So just going in and changing that right away makes a difference on which property gets listed first and the property that gets listed first for the right amount, they’re making more money versus somebody who just checks the rates once a month or sets them once a year and says the rate for this property’s $250 and that’s great.

00:06:59:04 – 00:07:25:23
Amber Knight
You’re going to get the 4th of July when you could have got, you know, gotten a $400 nice and you won’t get the, you know, Monday through Thursday any time of the year. So you lost out on tens of thousands of dollars because of that. So or just maybe you didn’t have good photo. So people don’t know that it’s a good property or deep enough reviews to know so that people know that other people have stayed there and like this property.

00:07:27:00 – 00:07:44:04
Amber Knight
So how do you find that balance and how do you make sure that you’re optimize in each individual segment, but also doing that while not spending all your time on it. So essentially you’re outsourcing your revenue management services and your pricing is to renting so that you can focus on what’s your best debt.

00:07:45:06 – 00:08:08:21
Daniel Ramsey
It’s interesting because as an investor, like a real estate investor guy, right, ICU as my national real estate broker almost with the data, how do you how do you guys pull that data and like how reliable is it? And would you, for instance, take a guy like me and say, hey, I’m going to spend $1,000,000 or 5 million or 10 million to buy this portfolio?

00:08:09:00 – 00:08:15:16
Daniel Ramsey
Where would I go and how do I know that what you’re the advice that you’re giving me is legitimate and I can rely on it.

00:08:17:09 – 00:08:41:15
Amber Knight
And there’s a huge difference between 1 million and 5,000,010 million and what you do there. Yeah. And so you want to if it’s if it’s $1,000,000, you want to find a local expert and we would match you with a local vacation rental management expert. This is a lot of great agents who are also property managers. So in 20 states it’s required you have to be a real estate agent in order to be a property manager or term.

00:08:43:01 – 00:09:16:04
Amber Knight
So we would match you up with somebody locally who is an expert. If you’re looking at spending five or 10 million or more than that which we’ve had, we would put together a customer report for you that says, here’s in there’s there’s broad overviews of like, which regions should you invest in? But if you know that you want to invest in the Gulf Coast of Florida, we would narrow that down to here’s all the markets and here’s the data in the markets and here’s what the professionals say in these markets and here’s what you can expect.

00:09:16:13 – 00:09:40:10
Amber Knight
So your ROI on investing in Panama City Beach versus 38 versus Destin versus Pensacola, they’re going to be different. And the properties that you want to buy in each one of these markets is going to be different. And then at the end of it, who manages that property? Because we went through all that work to find the right property and then the property underperforms because your nightly rates aren’t being managed properly.

00:09:41:00 – 00:09:57:15
Amber Knight
You’ve just lost out on a huge amount of money and look at the final stretch. So we match you with rented, we’ll manage those rates, but we also want an on the ground local manager to partner with to handle the guest interactions and handle the property and all of that.

00:09:58:09 – 00:10:12:22
Daniel Ramsey
In your report, are you taking into consideration like the purchase price and mortgage rates and like all of the kind of real estate related and maybe even price appreciation, like what the what what’s going to go up over time? And how do you do that with the data?

00:10:14:04 – 00:10:42:03
Amber Knight
Yes. For this year, this is a new thing for us. We partnered with Weiss Analytics, who they handle the index, real estate prices, and they forecast what the 12 month outlook looks like. And so we’ve partnered with them so that now we’re including not just ADR and occupancy and annual returns from the vacation rental side. We’re looking at what does it cost to buy a property in this market and how is it going to appreciate?

00:10:42:03 – 00:10:53:09
Amber Knight
And so what are your costs and what are you going to get annually versus what? What are you going to get from the property appreciating and where is the best value for you? And so it’s much more holistic than we’ve done in the past.

00:10:54:00 – 00:11:20:16
Daniel Ramsey
Yeah. And what, what kind of returns if somebody comes in and says, look, I, I want to do 5 million and in real estate purchases with you and I already have a portfolio now what would somebody expect working with rented versus, you know, guesstimating or relying on like a local expert or, you know, like what do you expect the return on investment would be for working with rented?

00:11:20:16 – 00:11:45:24
Amber Knight
That’s that’s a big question because you’re looking at the short term. In the long term, I would say margins for if so in the investors are different than the making sure all managers when we look at a vacation rental manager just managing properties the margin them are 8 to 15% on their returns versus what what their what they’re spending in their time and everything else.

00:11:46:06 – 00:12:00:02
Daniel Ramsey
So let me break that let me break that down. So if you’re a professor or property manager right now and you focus on short term rentals, they come to you, you’re going to help them make 8 to 15% more revenue for their business.

00:12:00:02 – 00:12:22:07
Amber Knight
Well, their current margins should be right, about 18, 15%. And we say, okay, how do we increase the amount of revenue that you’re making your margins on? And so so that’s working with the real estate agents that are property managers. We will work with them to increase that size. So their what are their annual returns for a property investor?

00:12:22:16 – 00:12:44:16
Amber Knight
It it depends sporadically to put a number out there would be there’s just no way to do it because buying a place in Phenix versus buying place in Palm Springs versus Santa Barbara, it’s it’s really it’s radically different. And what we do is we we assess the risk and we say, what? What are you going to run into?

00:12:44:16 – 00:13:05:04
Amber Knight
What do you want to be aware of in going into this market? And what should you expect so that you can set up your key performance indicators and know going into, you know, especially with your the quality of the local managers makes a big difference. Yeah. So, you know, going Indianapolis surprisingly is a really hot market right in the Midwest.

00:13:05:08 – 00:13:26:23
Amber Knight
Great places to invest property with vacation rental management, but the infrastructure is not there. So if you don’t have a good manager and you’re not doing the management, you’re going to have a lot of work and you’re probably not going to perform very well on the Jersey Shore. South Jersey Shore, amazing potential there. But the managers are all on.

00:13:27:13 – 00:13:49:21
Amber Knight
They’re not there. They don’t handle the cleans. And so and everybody’s accustomed to Saturday to Saturday cleans. So you really can’t get full service property management in the South Jersey shore. But if you could and you could move from Saturday to Saturday rentals to three day rentals all over the place, you would make 300% over the market right now, but you have to handle the logistics.

00:13:50:08 – 00:14:10:15
Amber Knight
And so it’s it’s just such a new industry. It’s like the hotel industry in the forties, like the Wild West, and everything’s wide open, but you have to make sure that all the pieces slide in right at the same time. And you’re delivering a strong performance for the guests and you’re up and all that.

00:14:11:01 – 00:14:37:18
Daniel Ramsey
So that brings up a next question, which I, I love doing these interviews. What are all the considerations that a person should take when purchasing a property as a short term rental? What are the things that you’ve learned manage that, managing this national pool of not only data, but property managers and, you know, investors and like what are what are the buying criteria is for short term short term rental.

00:14:37:18 – 00:14:57:07
Amber Knight
The first one is regulatory, I would say, because like Miami right now, Miami has shut down all bars, restaurants and vacation rentals. But hotels are open. So you can go to a hotel and share a lobby with a bunch of people and share a pool with a bunch of people. But you can’t go rent. You’re on vacation myself.

00:14:57:18 – 00:15:18:11
Amber Knight
So there are some rules like that that are just ridiculous. Austin. Austin is an amazing place to have a vacation rental, but it has to be grandfathered in. So you have to have bought a vacation rental already and it has to be licensed and then it’s licensed. So buying a new house in Austin and renting it out as a vacation rental would be illegal.

00:15:19:01 – 00:15:27:12
Amber Knight
So you can’t do that. So you have to understand not just the current regulatory landscape, but the ongoing regulatory landscape.

00:15:27:22 – 00:15:38:03
Daniel Ramsey
Do you guys know if a jurisdiction’s about to try to, you know, make Airbnb illegal in a particular city? Like, how do you collect that data on a national basis?

00:15:39:07 – 00:16:00:21
Amber Knight
Being in it every day rented is we have a team of people who’ve been in this industry for so long and have are so involved in the communities and we’re talking to our local managers that we see what’s going on. And there’s local there’s teams of people that are working on this to just know what’s what’s going on.

00:16:00:21 – 00:16:23:00
Amber Knight
And some states like Arizona have passed these statewide regulations. Same can’t ban vacation rentals. You can text them which came in and that’s great. So then, you know, okay, the regulatory environment in Arizona is pretty good, right? But there’s a lot of people buying and selling houses in the Phenix metro area. I love Old Town Scottsdale. I love a lot of Scottsdale.

00:16:23:00 – 00:16:42:02
Amber Knight
But if you get a house in the suburbs, you know, you might get an extra taxi. You’re not going to get that much revenue from it. So you in a lot of this, the data doesn’t tell you all of this. The data gives you an indicator of the direction of something. And then we look at it. And because renting, that’s always that’s what we do is we.

00:16:42:06 – 00:16:42:22
Daniel Ramsey
At what you do.

00:16:43:05 – 00:17:08:01
Amber Knight
Our strategic plan, look at that and we say, oh, we need more information here. And we go talk to the local experts on the ground and get more data and more information until we’re comfortable with it. And that’s that’s kind of how we work through this is like market by market understanding. What does this look like? Because like, it that’s one of the reasons why we’re just focused on the United States, because this is around the world.

00:17:08:02 – 00:17:13:22
Amber Knight
We can we understand revenue management around the world, but we can’t do it to the level. But we can do it in the US. Right.

00:17:14:15 – 00:17:17:05
Daniel Ramsey
Okay. So regulatory is number one. What’s number two.

00:17:19:17 – 00:17:40:17
Amber Knight
Today? I would say how you get there. So a destination market is much more resilient or excuse me, drive to market is much more resilient than a fly to market. But the market will make more money when it’s up and down. So Hawaii, Hawaii is a no brainer 12 months out of the year except for right when it’s closed.

00:17:41:01 – 00:18:02:11
Amber Knight
So is there a good opportunity to get some deals on houses that are not making any revenue right now that will in 18 months? Yes. But if you know Hawaii goes up and down, it’s operates down. Where are your guests coming from? So how do you how do you how do your guests get to the property is probably the second the second factor.

00:18:02:20 – 00:18:08:11
Amber Knight
And then, you know, like, you know, I would say after that.

00:18:09:24 – 00:18:14:16
Daniel Ramsey
The infrastructure of the local manager or and the cleaning crews and the people.

00:18:15:07 – 00:18:40:06
Amber Knight
Right? Yeah. Where are you? Where are you going to stay? If if there’s not enough places to stay, not enough people are going. So there’s not enough demand. Like I’m a huge fan of diversification like you have. I think if you’ve got international and domestic guests coming to your market and they want to come ten months out of the year and your expand, you’re able to expand those shoulder seasons of spring and fall.

00:18:40:14 – 00:18:55:11
Amber Knight
That’s a really great market to be in because Michigan I love Michigan, but Michigan has a six week season, so you’ve got to find a housekeeper the same time everybody else wants to find a housekeeper and you’ve got to find a manager. And they’re just packed for six weeks and then.

00:18:55:21 – 00:19:00:10
Daniel Ramsey
Michigan’s only six weeks. They don’t rent their their cottages any other time.

00:19:00:21 – 00:19:21:07
Amber Knight
You can. But the managers are so used to a six week season that you have to find a manager who’s on board with how do we extend the shoulder seasons, how do we get an extra three weeks on both sides? Wow. And, you know, so you you have to figure that out and you have to find a manager that fits your your what you’re looking for.

00:19:21:10 – 00:19:36:12
Daniel Ramsey
So so supply and demand is really the next thing in the like how many people and where they’re coming from. That’s probably the next thing. What and then your local manager, any other kind of decisions or.

00:19:39:16 – 00:20:00:06
Amber Knight
I there’s there’s a like what what type of property do you need like you don’t want to buy a you don’t want to buy a beach house in the mountains. People with it go to a place. When you go to the cabins, you want to go, excuse me? When you go to the mountains, you want to stay in a cabin right on the beach.

00:20:00:06 – 00:20:15:16
Amber Knight
You want to stay in a beach house. You want it to be bright and airy and full of light. When you go to this, you want it to be super mod. You want, you know, you want those things. And so matching the property you’re getting to what the get the experience the guests are looking for and can you enhance that experience.

00:20:16:05 – 00:20:16:16
Daniel Ramsey
Got it.

00:20:17:04 – 00:20:42:02
Amber Knight
And then I mean, that includes like making sure the beds are soft and you’ve got good sheets and you know, you get in that hospitality thing, which is a whole different ballgame. And I strongly recommend nobody try to be an expert real estate agent and expert hospitality expert because are two different things. And so you want to make sure understand what you’re best at, what you like to do and do that and outsource the rest.

00:20:43:05 – 00:20:52:15
Daniel Ramsey
You’re like speaking my language. Okay, but what about I’m surprised purchase price, mortgage and appreciation isn’t in that mix somewhere.

00:20:53:11 – 00:21:20:04
Amber Knight
B So I’m looking at it from a vacation rental side and I would say they are in there, but there’s a handful of so when you’re looking at appreciation e like if you’re looking at keeping a vacation rental for years, you make sure, you know, are you getting those annual returns and are you like, those are the easiest things to maximize your price.

00:21:20:04 – 00:21:37:14
Amber Knight
It’s going to depend on. Like one of the things that we have in the rental report is the difference between the 50th and the 75th percentile. If it’s if there’s a high difference, it means you can buy a house, the 50 percentile for that zip code, fix it up and and sell it at the 75th percentile, or you can get a great deal.

00:21:37:20 – 00:22:09:10
Amber Knight
So your mortgage rates lower. So what’s the right property for that? And in I would say purchase price appreciation were so early on in collecting that data, we almost can’t speak to it from a vacation rental perspective. Like that’s why we’re partnering with Price Analytics to say what do they have and what does it look like? Because it just it varies a lot and it’s there’s not enough data on it to be able to say, okay, if you buy a house here, it will cash flow.

00:22:09:10 – 00:22:32:01
Amber Knight
It will cash flow for like for vacation rentals. It’s almost a niche where you can find a house that’s going to cash flow right away over time. And the appreciation is good. So like people in Summer County, Colorado, they buy vacation rentals because they want the annual appreciation there, not the the the amount of money they need from renting it out in a year is not worth it to them.

00:22:32:03 – 00:22:39:11
Amber Knight
It’s like pocket pocket money. They want it to make sure that their house is taken care of while they live in California or Texas or whatnot.

00:22:39:24 – 00:22:40:08
Daniel Ramsey
Right.

00:22:41:01 – 00:23:03:14
Amber Knight
So their priorities are different. They want that long term appreciation. If you look at somebody in on the South Carolina coast, they want occupancy to be super high and they’re very reliant on that, that the annual revenue and they’re not as concerned about the long term appreciation because they’ve they’re going to keep the property for a long time.

00:23:04:05 – 00:23:19:16
Daniel Ramsey
Got it. Well, it sounds like I mean, in my opinion, being a real estate broker, it sounds like what you’re saying is you need to partner with a local expert to determine appreciation and like what it what it feels like and looks like in terms of cost and value. Is that is that kind of what you would say?

00:23:20:04 – 00:23:41:01
Amber Knight
That is correct, because it’s it’s too it’s too complex to be able to say, here are this. You know, if you say here are the three most important things in buying a vacation rental, you know, do you love that market? You go there because you go to town. You love going there like you. You can’t quantify love. You can’t quantify appreciating a market.

00:23:41:11 – 00:24:03:21
Amber Knight
And people get so personally attached to their vacation rentals that, you know, trying and it’s it’s just too complex to be able to put into a number. But a local expert can say in this market, this is what we value. And the deep dove reports we can say in this market, here’s what to buy to get your best returns and we re that it’s just yeah.

00:24:04:17 – 00:24:26:04
Daniel Ramsey
So we we started this conversation out explaining the rented report, which is a national report which is actually going to get, you know, it’s it’s launched in the news. You’re giving it away. We’re going to have a link right below the video where you can click on register and grab a copy of that. Let’s talk through what the top five markets are were in July 2020.

00:24:26:04 – 00:24:44:16
Daniel Ramsey
So if you listen to this and 2021 or 2022, you need to get the updated version right, because this is an annual report that you guys put out. But let’s talk through how you got there with the report and then what the top five markets are and just entice people to want to kind of grab your report and and be involved with it.

00:24:45:14 – 00:25:07:05
Amber Knight
Absolutely. So for the rental report, we’ve been doing these for five years now. They’re very well regarded. This one was supposed to come out in March and we just kept getting questions over and over again about when’s the report coming out. So it’s like we would we will prioritize this and get it done. It is intended to be the first step into deciding where to buy vacation rental.

00:25:08:01 – 00:25:34:11
Amber Knight
And it’s it is intended to figure out, okay, do you go in the southeast or the southwest or what does that look like? And then find a local expert to dig in to find the right makeup of the property and how to manage it and all of that. So we went through and we looked at what are the markets that are established enough to have enough data that we could look at and enough reviews and active, active reports to understand what’s going on in this market.

00:25:34:11 – 00:25:55:20
Amber Knight
So we got the annual revenue and we looked at the rest park and rest par is revenue per available room. And basically it’s the occupancy rates times the average daily rates and it’s just kind of a general like baseline to say like for every night that’s available on this property, how much money should you expect to get for it?

00:25:56:10 – 00:26:19:24
Amber Knight
And so we kind of have assessed the reservoir on these properties, but we’ve partnered with Wise Analytics to understand how much does it cost to buy a property in this market and how much is it going to appreciate over the next 12 months? And combining those costs of running the property, plus the appreciation and the amount of revenue that you’ll make on vacation rentals in a given year.

00:26:20:07 – 00:26:43:14
Amber Knight
What are the best one of the best places to invest? Well, yeah. So it’s it took we could have spent six more months trying to to do the analysis on this. It’s super fun to get into and if you like spreadsheets that’s what we’ve got for one of these it’s been a while. But so the top places to the top area to buy vacation, rental is the Florida Panhandle.

00:26:44:01 – 00:27:04:07
Amber Knight
And what I would talk about specifically there is Santa Rosa Beach and tha that’s an area where big gorgeous vacation rentals and people love buying and selling them all day long. It’s like a hobby there. I love it. And so then the second place to buy vacation rentals is South Jersey Shore, which we talked about a little bit.

00:27:04:15 – 00:27:24:03
Amber Knight
Wonderful place to buy a vacation rental. If you buy a place there, if you can extend your season on the spring, in the fall, nobody else is doing that out there. And you’ll do have get amazing returns and higher returns I think than even what we’re able to document because of some of the limitations there on the management infrastructure.

00:27:24:03 – 00:27:34:08
Amber Knight
There’s a lot of great managers out there, but we’re doing full service, which is managing the the listings and the bookings as well as the cleanings and the maintenance.

00:27:34:20 – 00:27:35:04
Daniel Ramsey
Right.

00:27:35:14 – 00:27:54:24
Amber Knight
So a third place, best place to buy a vacation rentals in the Poconos. It’s a great little spot. It’s kind of out of the way. What we’ve seen this year with COVID is that people are wanting to go to the mountains much more like they demand for vacation. Rentals in the mountains is higher than it was last year.

00:27:55:08 – 00:28:15:03
Amber Knight
It’s higher than what we expected it to be this year. So any place that’s up in the mountains is seeing a bump in revenue in 2020 and we’ll see a bump in revenue going forward. People just want to go and get away from everybody else and stay in their own private house and have room to spread out and work and do school and everything else, just not in their house.

00:28:15:17 – 00:28:38:04
Daniel Ramsey
Yeah. So you know what’s crazy? So and I don’t know if you can speak to this because I’m looking at the report right now and the Florida Panhandle has a score of 98.7 and Jersey and the Poconos, they’re 93. That’s a pretty big difference. You know, it’s like five points. And then the next one, Smoky Mountain Central Texas, they’re in the in the top seventies.

00:28:38:11 – 00:28:54:06
Daniel Ramsey
So can you articulate why such a big difference between Florida and Mike? Even my favorite, which is Tahoe is 50, is in the fifties. And the difference between 98 and 50, that’s huge. But I’m curious why the difference in the scores?

00:28:55:12 – 00:29:20:18
Amber Knight
Some of it is that these markets are it’s hard to call the Poconos an emerging market or even the south shore. But what we’re seeing is because this is based on the revenue data from last year of vacation rental revenue data, these markets are not optimizing their numbers. So the managers that are there are not making sure that their revenue management is as high as it can be.

00:29:21:02 – 00:29:37:24
Amber Knight
The Florida Panhandle has is a well-established market with huge demand. People always want to go there and they there sophistication in setting their rates and making sure that their listings are great. It’s just in a whole different level than what you’re seeing in all of these other markets.

00:29:38:05 – 00:29:43:24
Daniel Ramsey
Is there like a local manager that just dominates the area? And so it raised the competition for everybody.

00:29:44:10 – 00:30:06:10
Amber Knight
There’s 50 local managers that dominate the area and they’re all the best and they’re the best in the industry. They’re active. This is what they do. They’ve been doing it for 30 years and they they’re like, the internet is real and we’re going to optimize it, whereas the South Shore, which I love and I and I’m and I don’t mean anything, I love the people in Jersey like all of this.

00:30:06:10 – 00:30:24:09
Amber Knight
But I literally was talking to a manager there who’s like, We’ve been doing this since 1945 and it’s been working well. And I’m like, The Internet happened between out there. You’ve got a list of properties online. You’ve got to I don’t accept credit cards. You’ve got to you know, not everybody can check in on Saturday and check out on Saturday.

00:30:24:15 – 00:30:40:05
Amber Knight
So the number of guests that you have just keeps funneling down to smaller and smaller. And so there’s no competition. Whereas if you open up and you say, you know, I’m going to be out there and available as available as I can at the top of the rankings, you’ll make three times more than the house next to you.

00:30:40:22 – 00:30:53:13
Amber Knight
So the opportunity in the South Jersey shore is really, really high and not everybody knows it. The opportunity in the Florida panhandle is really high, but everybody knows it. And that’s the difference in these rankings.

00:30:54:00 – 00:31:08:02
Daniel Ramsey
You know, it’s weird. You know, it’s weird as I see Central Texas as the number five and that’ll make a lot of my friends happy who are Texans. But I can’t imagine going to Texas as, as a vacation rental. Like, I just I mean, you know, I don’t know.

00:31:08:12 – 00:31:37:00
Amber Knight
Yeah, well, you’re talking about like the Texas Hill country because this is the only thing we’re talking about destination or drive to markets. Got it. And so you know, and that’s what some of these things have in common. The Florida Panhandle, people drive. So you go to Panama City Beach, people drive to the South Jersey Shore. They don’t fly from California into the south Jersey shore, you know, Central Texas, New Braunfels and Fredericksburg, these are great little like it’s Texas Hill Country, Lake Travis.

00:31:37:00 – 00:31:51:19
Amber Knight
You know, these are great spots to go when you’ve been in Dallas or Houston or, you know, San Antonio all week. And you’re just like, I need to go somewhere for the weekend and get away this is where you got to drive you really. You can drive to Tahoe from Texas easily, right?

00:31:52:02 – 00:32:06:12
Daniel Ramsey
Right. And so so let’s talk about Tahoe because it’s my it’s my spot. And I’m since I’m interviewing you, I get to do that craziness. Right. Why is it so low there? Is it just because the pricing is high or what’s the.

00:32:06:12 – 00:32:07:19
Amber Knight
So, where are you in Tahoe.

00:32:09:07 – 00:32:11:21
Daniel Ramsey
Truckee area. Truckee, California. Yeah.

00:32:12:03 – 00:32:38:15
Amber Knight
North Shore one is that I would say the Bay Area has pushed up prices quite a bit. Yep, yep. There’s some regulatory uncertainty. South Lake Tahoe is like banning vacation rentals. I actually think the Nevada side of of Tahoe is a really great opportunity. But again, the infrastructure, there’s there’s managers that have been there that have more than 100 units that are like we’ve been doing the same thing since the nineties.

00:32:38:21 – 00:33:00:00
Amber Knight
And when the Internet happened, Airbnb happened. You’ve got to get on board with this review of rooms and they’re like, Well, you know what? Think the same people keep coming to us and we think there’s a lot more people who live in the Bay Area and they like to book at 2 a.m. and not talk to anybody, you know, like so you’ve got this balance of and that’s where the property values come into play.

00:33:00:12 – 00:33:27:00
Amber Knight
And it’s just like, how much does it cost to buy this property? And what are like when Tahoe is up, has a bad ski season like and there’s just not enough snow. You’ve got a lot of variability in how much money that property is going to make. And you know, whereas like the Nevada side of things, 75% of their rentals come in the summertime and there’s there’s also a huge push for for long term stays in the wintertime in Tahoe.

00:33:27:10 – 00:33:40:06
Amber Knight
So if I would speak to it, there’s a lot of things and some of it’s just like, you know, we talk about the Florida Panhandle, all the managers are on board with how do we be innovative and get as many bookings as we can. Tahoe Tahoe’s a little bit more resistant to some of that.

00:33:40:16 – 00:33:43:23
Daniel Ramsey
Yeah, tahoe’s hard to even get contractors property managers.

00:33:44:09 – 00:33:56:20
Amber Knight
With top tier revenue management would kill it. They’re like, if you had it tucked in, there are some talk to your managers there, but when you get that, when you have one of those, they’re going to do twice what everybody else is going to do, if not three times.

00:33:57:14 – 00:34:11:17
Daniel Ramsey
It sounds like sounds like you guys are really geared to help optimize property managers and large investors. Like that’s your ideal sweet spot to really, you know, keep that. Those are the people who would be clients for you.

00:34:12:07 – 00:34:13:11
Amber Knight
Yes.

00:34:13:11 – 00:34:13:19
Daniel Ramsey
Okay.

00:34:13:20 – 00:34:39:18
Amber Knight
We’re very good at making more money out of existing assets. That’s what we love to do and talk about. And that’s that’s all day long. That’s what we do. So it it can get very boring. Like we also have the ultimate guide to revenue management on our website. It is like a page book and if you’re a person who likes to talk to other people versus dig into data, it’s exhausting because it’s so much.

00:34:40:08 – 00:34:55:09
Amber Knight
But if you like that and you want to know like, how do we break this down? That’s that’s one of the things that we do is we break it down, like, here’s what your strategy can look like to achieve your objectives. And here’s here. Here are the different tools in the toolbox. Which ones would you like to use?

00:34:55:15 – 00:35:13:13
Amber Knight
This is what we recommend. And so and again, it’s not like this is not one size fits all for everybody because it’s too much, because people want different things. And so we have to say, what are your objectives? Here are the tools. Let’s pick the five that work and let’s revise and iterate.

00:35:14:05 – 00:35:32:08
Daniel Ramsey
And circle what I mean are you. So if you were like, let’s just assume you won the lotto tomorrow and you had $10 million to invest in short term rentals and Amber, you were going to do it. Go tell me the strategy and where would you go and what would you do?

00:35:33:01 – 00:35:54:06
Amber Knight
I’m going to say I would probably say South Jersey, like if I look at this list, like eight may and that area, get some vacation rentals, manage them in a way that nobody else is managing them in the market. And there’s some regulatory things with like real estate agents get a great deals on like like it’s very favorable for real estate agents there.

00:35:54:12 – 00:36:16:12
Amber Knight
So it’s harder. You have to go in. You have to be a broker. You have to do all of these. There’s a lot of hoops to jump through, but opportunity for innovation in South Jersey, in the South Jersey shore is huge and nobody’s paying attention to it. And I think like if you look at Cape May in even, you know, I was there in December one time and it was beautiful and it was like it’s just it’s right there.

00:36:16:12 – 00:36:38:04
Amber Knight
It’s a 2 hours from New York City. And there’s so there’s this huge population of people and they don’t go and they don’t go because the properties are hard to find and they’re listed for the same people that have been going there for three generations. So evading that, bringing more demand for that, doing what’s going on in the Florida Panhandle in in the South Jersey shore, I think is a huge opportunity for innovation.

00:36:39:21 – 00:37:06:11
Amber Knight
I think you have Fredericksburg, Texas, New Braunfels are really great places. And, you know, I love that. I also love Sonoma. Like if you want to talk about California and then North Florida, if I was in California, like you’re in Sacramento like that Fort Bragg area and right up in there and like no on the north California coast, north of San Francisco, amazing opportunities there.

00:37:06:18 – 00:37:26:22
Amber Knight
The properties are kind of expensive, but they do really well and they do really well year round. Like for whatever reason, people from Dallas love going, Yeah, I know, it’s a way. I guess there was some company in Dallas that used to fly their their team up there every year. And so now it’s like this historical thing. If people do what it says, a lot of Californians and a bunch of people from Texas.

00:37:27:11 – 00:37:49:05
Amber Knight
So yeah, I would say like, you know, you’re kind of you’re jumping around and like, like, what can you do? But yet houses in the Florida panhandle are always a great, really solid investment. Even demand does not go down in hurricane. They be like, these are the shocking things like hurricanes happen. Demand does not go down. Like what does that?

00:37:49:05 – 00:37:54:13
Amber Knight
People just want to go. They’ve been going for so long. It’s huge. You know, you.

00:37:54:13 – 00:38:15:04
Daniel Ramsey
Actually brought up another question that I had and it’s so interesting picking your brain. And if you’re listening right now, this is like this is my dream job, right? Interviewing an expert about real estate and a different way of looking. This is like ideal. But you brought up a good point, like Fort Bragg. How do you know the demand of a particular area and where people are coming from?

00:38:15:10 – 00:38:39:21
Daniel Ramsey
Because if if, if, like, for instance, I know Fort Bragg, my wife has played soccer tournaments there. It’s a great place, beautiful beaches, beautiful towns, little quaint place. But I would never know that I should advertise in Dallas and Texas to get occupancy in Fort Bragg. So how do you guys help somebody understand where where the demand comes from location wise?

00:38:41:04 – 00:39:15:16
Amber Knight
90% of it, honestly, is understanding, like evaluating our own data. So if you’ve been running a management company for more than 18 months, yep, your own data is the most valuable piece. So how do you interpret that data in a way to define what you should be doing, what you should be going? So that’s one of the first things we do, is we partner with a company called Key Data Dashboards and they upload all your data and they evaluate it and they put it into nice, beautiful visual spreadsheet so that you can figure out what that looks like.

00:39:16:03 – 00:39:26:22
Daniel Ramsey
And the but Amber, I’ve been running I’ve been running my property management by my gut and seat of my pants. How do you how do you extract that out of it?

00:39:27:00 – 00:39:43:00
Amber Knight
So we would there’s four or five companies you can buy data from. We’d buy that data. We would talk to a local expert on and then you can look and you could just see. And also SEO is the other piece of if you do an assessment, you can figure out where to location.

00:39:43:11 – 00:39:53:07
Daniel Ramsey
Yeah, yeah. Okay, great. Amber, we’re giving away the rental report. If you’re listening. We’ve got Amber here. Partner. Success is your the director of partner success, right?

00:39:53:14 – 00:40:24:17
Amber Knight
The VP of Business Consulting Services. So I moved over from the first time we talked to running essentially helping businesses and helping managers grow and make more money. And that’s what I do. And usually it’s finding the right, right people to outsource specific things to, you know, on that quadrant of things you’re good at and things you like to do, the things you’re good at and you like to do and offloading the things you don’t like to do, you’re not good at first.

00:40:24:17 – 00:40:44:22
Amber Knight
And then the things you don’t like to do that you are the things that you aren’t good at for like, what is it on the quadrant? Things you don’t like to do and you’re not good at outsource those things don’t like to do and you are good at it. You kind of want to keep those first and then the things that you, you know, that you like to do that you’re not good at, you want to outsource those too.

00:40:45:03 – 00:40:57:24
Amber Knight
And so then you’re just focus on the things that you like to do that you’re good at, and then figuring out who’s the best people to either learn from or to hand off for everything else. And that’s a lot of what I talk about all day long.

00:40:58:14 – 00:41:18:01
Daniel Ramsey
That’s that’s exactly our value proposition. Do what you love, outsource the rest. Focus on your core business. Amber, this has been amazing. I really appreciate you. If you’re listening right now, you can click below to get the actual rented report and we’ll update that every year as you guys build them. How would somebody get a hold of you?

00:41:18:08 – 00:41:36:22
Daniel Ramsey
We’ve talked about rented but we’ve never said rented ecom, which is your website. But how would if if I’m a property manager, if I’m an investor or if I’m a broker that owns, you know, a property management division, how would we find out, you know, about your company and take the next steps of discovering whether there’s a win win here that we can create?

00:41:38:07 – 00:41:46:05
Amber Knight
Yeah, you can email sales team and rent a dot com or you can reach out to me at Amber at rent dot com and we can go through and make things happen.

00:41:46:20 – 00:41:54:14
Daniel Ramsey
I love it. All right, Amber, thank you so much for joining us today. This has been fun. And I’m I actually learned a lot, which is which is really great.

00:41:55:01 – 00:41:58:21
Amber Knight
Glad to hear it. Yeah. Let me know that when you want to buy a vacation rental and we’ll talk about it.

00:41:59:04 – 00:42:20:13
Daniel Ramsey
There you go. All right. Amber night from rented dot com. Again, thank you so much for joining. If you’re listening right now, you’re listening to the music desk podcast scale to show we love having you. We love helping businesses grow, save time, money and scale. My name is Daniel Ramsey, the CEO and founder. And thank you so much for listening.