4,000+ Bookings Later: Short-Term Rental Insights from Luke Carl
Learn about Luke’s STR journey and the strategies that help him achieve success in the short-term rental business.
In this episode of the Hospitable Hosts podcast, we welcome Luke Carl, Educator and Co-Founder of The Short Term Shop, a specialized real estate brokerage that helps STR investors buy, set up, and self-manage vacation rentals in top vacation markets. Luke is a seasoned real estate professional who owns hundreds of units with no partners, including multifamily, single-family, long-term, and short-term rentals.
During the episode, Luke shares his real estate journey and gives some valuable insights and tips for finding success in short-term rental investing. Luke emphasizes the importance of hard work and the need to put in the effort to see the results.
Press play now to learn about Luke’s STR journey and the strategies that help him achieve success in the short-term rental business.
If you prefer to read the highlights, we’ve got a summary of the key takeaways below.
Luke’s Journey into Real Estate
Luke says he’s been a full-time real estate investor for most of his adult life, and he has been doing vacation rentals since the early days of Airbnb. Luke owns and operates two of the longest-running Airbnb cabins in the Smoky Mountains.
They have the brokerage, which is his wife’s business, The Short Term Shop, where he teaches clients how to become better managers. Luke has a podcast for mastering remote STR management called The Short Term Rental Management. “I also own other asset types—I have apartments and plenty of long-term rental, single-family, duplexes, and others,” Luke points out.
Luke shares that he started his career in real estate with long-term rental properties, which he self-managed in the early days. “We first got into the vacation rentals because they were in our backyard in the Smokies, and this new Airbnb thing was coming around, and I thought, we could do this,” Luke reveals. “So we took the cash flow from all of the properties (and still do) and reinvested it. Never have we spent one single penny that was made on our own personal lives.”
The State of the STR Market
Luke says he’s extremely grateful for everything real estate has done for him, especially for giving him the opportunity to work very hard. Still, he admits that the last two years were not the best time for acquiring new properties, “which actually coincided with not the greatest market.”
Luke explains that high interest rates and increasing home prices have made it tougher to invest in short-term rental properties. He thinks this year the vacation rental market is recovering, though slowly. “It is definitely looking better. I have purchased two overnight rental beach homes right here in my backyard, which I wasn't planning to do, but I found deals. And I do think the market is in a lot of ways looking pretty spectacular, pretty horrible in a lot of ways as well.”
Choosing the Markets to Invest In
Luke’s strategy focuses on places where people don’t really live but where they typically go on vacation. He recommends considering places where you and your family would like to go, and that’s how his wife and he did it. Targeting small towns with high vacation demand but low permanent-resident rates enables Luke to maximize his returns in these areas.
Luke highlights the importance of being familiar with the area where you are going to buy a STR property. He shares that they decided to buy a cabin in the Smoky Mountains and put it on Airbnb and Vrbo because they were going there a lot themselves. He also attributes his success with short-term rentals to being early adopters of this business model and thinks they got lucky in that regard as well. “I'll be honest with you, a lot of luck, a lot of being in the right place at the right time.”
Standing Out from the Competition
Luke notes that competing with other short-term rentals in your area listed on OTAs is challenging and stressful for new hosts. “It can be stressful, but for me, the way I do it is I don't go crazy, and I just make sure my homes are very nice, and I compete with price per night. Not only price per night, because I also have longevity, which again is luck and a luxury that new people don't have—a ton of reviews.”
Luke emphasizes that he doesn’t “go crazy with amenities. He makes sure his STR properties are nice, so they all have bathrooms and kitchens with coffee machines. “I make sure to paint the stairwells a couple of times per season to ensure the paint is in decent order. Very nice tile selections, and I try to bulletproof my showers, make them very user-friendly and things like that.” But Luke is not enthusiastic about fire pits, and his properties are only equipped with electric fireplaces.
“I keep it very simple. Keep it clean. And that affords me to be able to wiggle more on my price per night if I need to,” Luke points out.
Managing Properties across Different States
Luke shares his approach to efficiently managing different types of properties across various markets. He says he has anywhere from 2 to 300 long-term rental units at any given time, about half of which are apartments and the other half are single-family and duplex units. So he hires from three to four third-party property management companies at any given time.
Luke also owns a property management company for his short-term rentals, which employs four full-time employees and uses software tools to automate various aspects of STR management. He says he has been using Hospitable for more than 4 years, and he is a huge fan because it really makes his life easier.
Despite his rentals being in different states, Luke often visits the properties in person to check how everything works. Luke says he tries to schedule inspections at all his units at least once a year.
Listen to the full episode of the Hospitable Hosts podcast to uncover Luke’s path to building wealth through short-term rental investing.
