Transforming Properties into Profitable Ventures
Learn about Michael’s journey and the tactics that help him transform vacation rental properties into profitable ventures.
In this episode of the Hospitable Hosts podcast, we are thrilled to welcome Michael Anderson, a licensed mortgage loan officer and co-founder of Breezy Beach Stays. Michael manages 50+ short-term rental properties in Jersey Shore and uses Hospitable to streamline operations (he is our Mogul plan customer).
Chatting with Miles, Michael shares how he got started in the short-term rental industry, how he merges real estate finance with property management, and how he uses technology to automate operations as he grows his property portfolio. He also shares his secrets for maintaining high occupancy rates in the shoulder and low seasons, as well as the amenities that impact guest reviews and booking rates.
Press Play now to learn about the strategies that helped Michael successfully scale to managing 50+ properties.
Do you prefer to read the highlights? We’ve got a summary of the key takeaways below.
Combining Real Estate Finance with Property Management
Michael and his partner own a short-term rental company called Breezy Beach Stays. They're located in Seaside Heights, New Jersey, in the Jersey Shore area. “It fits my passion for real estate, operations, and customer service, combined with something I know and enjoy doing,” Michael says.
Michael got into general real estate investing about five years ago and took a liking to the lending side, the mechanics of leveraging other people's money. He notes that his understanding of how to structure a loan so you can benefit with minimal out-of-pocket costs helped him a lot. He used that strategy to successfully scale his portfolio to 50+ properties. “So it was more about having an understanding and then wanting to become a licensed real estate professional on the lending side to help other people achieve goals and advise them,” Michael says.
Bottlenecks to Growing Property Portfolio
Michael emphasizes that those looking to buy their first vacation rental property should understand that “in this business, you're more in the hospitality business than you are in the real estate.” It’s important to realize that how much your STR property can make really depends on the host.
“I had known from the beginning that I needed to build a scalable product, even from having my very first rental. I dipped my toes in the business by buying a short-term rental for myself. My partner bought a short-term rental for himself. And we said, “This is something that we could do at scale.” So I think the bottlenecks are just getting out of the do-it-yourself.”
Michael points out that the do-it-yourself approach to managing STR properties may only work when you have one or two properties, but it doesn’t work at scale. So it’s essential to start thinking about how you’ll manage your growing portfolio very early on.
Using Technology to Automate Operations
Michael emphasizes that automation is vital when you’re just starting and when you’re scaling your property count. He also shares he’s a huge Hospitable fan.
“How you manage one property is how you manage a hundred properties. So I knew that it was important to have that core PMS software, and it just happened to be Hospitable. You know, I had heard good things about it. It was the best-priced, which made it the easiest to get started on. And it was also scalable. So I really liked that.”
Michael thinks it’s crucial to build your tech stack as your business is growing, “once you hit that 10-property mark.” He shares that his tech stack now includes Turno, ClickUp, Zapier, and Quo.
Keeping Occupancy in Low Season
Michael manages STR properties in the coastal market, which is seasonal. “Anyone can make money with a house one to four blocks from the beach in the summer. But it’s the off-season when you have to work for it. That's when you're going to make your money.”
Michael says one of his secrets to maintaining occupancy is adjusting the pricing strategy for the low season. “Last year we had a house that rented as high as $1,700 for a single night in the summer on July 3rd to $200 a night in the winter. So that’s some extreme variance, but that allows us on an annual basis to make the home very profitable.”
They also use a mid-term strategy. “I consider mid-term two to four weeks,” Michael explains. “You can use a lot of pricing tricks with a certain price if they book for the weekend, but it's another price if they book for two weeks, and that two-week price is much more attractive on a per-night basis. And you're still going to net way more because you weren't going to book Monday, Tuesday, Wednesday, Thursday, anyway.”
Michael points out that people who book off-season are usually traveling for work or to see the family. “They're usually pretty low-maintenance guests. A lot of times, they're repeat guests. They will come back every year.”
Impact Factors on Reviews and Booking Rate
“We have about 1200 reviews on Airbnb with a 4.98 rating, which I think is pretty good. So, the top two things that people comment on are the cleanliness and the communication,” Michael says.
He also thinks it’s essential to provide the right amenities to ensure a perfect guest experience and comfort. Michael emphasizes that when designing vacation rental houses, you should always be thinking about how your guests will feel there and providing everything they need for a good night’s sleep. “When we bring on new clients, we try to instill this mindset into them because we need that to be successful. So we need our clients’ support there,” he says.
Another important thing is the check-in experience for your guests. ”The door lock needs to work. They need to get in smoothly. There needs to be a lit entryway. The air conditioning needs to be on, Michael explains.
Michael shares that they have smart locks to ensure a smooth self-check-in process. “We use Hospitable smart locks, and I started using that from the beginning,” he says. “I love how we can change the code for each guest automatically. It's super quick.”
Listen to the full episode of the Hospitable Hosts podcast to learn about Michael’s journey and the tactics that help him transform vacation rental properties into profitable ventures.
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Table of contents
Combining Real Estate Finance with Property Management
Bottlenecks to Growing Property Portfolio
Using Technology to Automate Operations
Keeping Occupancy in Low Season
Impact Factors on Reviews and Booking Rate