The Low-Cost Way to “Invest” in Real Estate in 2024 (Without Buying Rentals)

This story was originally published at BiggerPockets.com

A thriving real estate business without rental properties?! It might sound like an easy way to “invest,” but make no mistake—you’re going to need to sharpen your management, interior design, and problem-solving skills for it to work. Fortunately, today’s guest can bring you up to speed on this low-cost strategy!

Welcome back to the Real Estate Rookie podcast! In this episode, Veronica Garreton returns to the show to offer more nuggets of wisdom for new investors. In our most recent episode with Veronica, she shared how she pocketed $150,000 in profit from just ONE luxury rental property. But today, she is going to take a deep dive into the investing strategy that allows her to grow her real estate business without buying more properties—co-hosting!

Of course, co-hosting, like any other strategy, is susceptible to the occasional horror story. Tune in as Veronica shares how ONE troublesome guest caused $11,000 in rental damage and how her decisiveness helped her save the day. What is co-hosting and how does it differ from property management? Why are medium-term rentals taking over short-term rentals in certain markets? How do you prevent bad reviews on Airbnb? Stick around for all of the answers!

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Tony:
This is real estate rookie Show 391. So short-term rentals are not immune from the horror stories we hear about real estate investing, but solving at the speed of luxury may be the way to still get that five star review. Now, my name is Tony j Robinson, your host for today’s podcast and welcome to the Real Estate Rookie podcast where every week, three times a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. Now, we had Veronica Garton back on episode 384 where we discussed thinking luxury, right? She shared so many great tips that we literally ran out of time to get to this co-hosting horror story that she has. So I brought her back to share some information so you can really hear what happened and what are some of the lessons that she learned. Now, Veronica’s also been able to create her own real estate business without actually having to own more real estate, and we’ll find out more about what she’s doing there and where she sees the opportunities this year. So Veronica, welcome back to the Real Estate Rookie podcast.

Veronica:
Thank you, Tony. Happy to be back. I’m excited to share this with you. It’s quite the story.

Tony:
Yeah, you got some big shoes, Safi. Your first episode was pretty good. So we got to top this one now. We heard in last episode about your luxury property out in Joshua Tree, and again, that was episode 384 for anyone that wants to go back and listen and how you were able to really create this luxury short-term rental that was just absolutely crushing it in a very competitive market in Joshua Tree. But I hear you’ve also taken on some other ventures inside of the world of real estate investing. So what are those exactly?

Veronica:
Yeah, it’s a really interesting niche because Los Angeles is such an expensive market. During the pandemic, a lot of people refinanced and got those really incredible August 20, 22 0.9.

Tony:
I’m one of those, I refinanced my primary home I think in August, literally August of 2020. Yeah,

Veronica:
I mean everybody did. It was like a bonanza. And because of that, these people were basically in a great position as far as their interest rates, their equity. And what has happened is that time has gone on and people have felt like they don’t want to lose these properties, but their lives have moved in another direction. Their kids go to school in a different school district, they get a job somewhere else, but they don’t want to lose these properties that have these amazing interest rates. I started seeing this happening. I realized that there was an opportunity for co-hosting these high-end properties either for STR or MTR in Los Angeles, and kind of reached out to some people that I knew were in that position and said, Hey, I’ve got a great way for you to keep your property to keep building equity, but you can move on with your life and your mortgage will be paid for you, your property will be maintained. And a couple people really jumped at that and it kind of took off a little bit and it’s been pretty successful.

Tony:
So I definitely want to dig into the co-hosting side of things. We had Nicole Rutherford, I can’t remember her exact episode, but if you guys look for Nicole’s name, she also built a relatively short period of time, a co-hosting business as well. But Veronica, for folks who maybe aren’t familiar with the phrase co-hosting, what the heck does that even mean?

Veronica:
Yeah, so there is a difference between co-hosting and property management. Property management is actually full service, so the property manager is on the lease, whereas in co-hosting, especially in California, you are required to be a realtor if you want to be a property manager. So as a co-host, you are the owner’s representative, and that means that the lease is actually in their name. It’s not you who’s writing the lease, it’s their lease and you are helping them execute it and maintain the property. So that’s a pretty critical difference.

Tony:
But in a nutshell, you are providing services to the owner to help them facilitate the inflow and outflow of people who are staying at their property.

Veronica:
Absolutely. I’m doing the vetting. I am doing the move-ins. I am meeting all of the people I’m helping with the rent collection, all the parts, anything that has to do with maintenance. So all of those things. And I think the critical thing to keep in mind here is that if you are already self-managing your own property, it is not that much work to manage five more properties because you’re already on call 24 hours a day for yourself, and nobody gets calls 24 hours a day. So it really doesn’t add up to that much more work.

Tony:
Now I definitely want to get into how you’re actually sourcing these leads in these different cities, but first you mentioned some phrases, Veronica, that I think are probably more so associated with long-term than they are with short-term. You mentioned leases, you mentioned move in and move outs. So I guess what is the average length of stay for folks that are staying at these properties? Are you getting a lot of shorter term that are two to three days or are you getting people staying for months at a time?

Veronica:
So I had one property initially where I started doing short-term rentals. So that was your typical Airbnb people staying for the weekend. It was relatively close to SoFi Stadium, so people are coming in for football weekends, and those were pretty quick turnarounds, but actually just in the last month, Los Angeles just passed a law that unincorporated areas have to go to 30 day stays. So all of that is going to be changing pretty quickly here. But it wasn’t an issue for me because I was also doing midterm rentals for these properties. So for some of them, we’re doing 3, 5, 6, 9 month stays. And for people that are, for example, changing jobs, they get a job at Raytheon and they need somewhere to stay while they figure out where they’re going to live in Los Angeles. And because there’s a housing shortage, people that are looking for a specific neighborhood or specific house type or a specific amount of square footage, they really need to wait until those properties come on the market. There isn’t a glut of properties, so they’re prepared to pay a premium to stay in a property that’s up to their standards until they find the house that they want.

Tony:
I got so many questions coming to mind here because a lot of little nuggets that you’re dropping in. So I think the first pieces, it’s important to make sure that if you are buying an Airbnb, or even if you’re just starting an Airbnb business, whether it’s through co-hosting, arbitrage, whatever it may be, you’ve got to be aware of the regulatory risk in that specific city. So you just mentioned in the LA city unincorporated areas or county, however you phrased it, that they’ve recently changed regulations so that those places now also have to go to 30 days plus. When you think about Los Angeles, it’s very similar to a New York City, right? New York City just recently banned short-term rentals, effectively say for a very small corner case of properties, but effectively banned all short-term rentals in that city. But you think about what is New York City major financial capital of the world, business headquarters, universities, Broadway, you got so much stuff going on in New York.
Los Angeles is very much the same way. You have so much economic activity happening in that market that they don’t really have a strong economic incentive to protect the little old short-term rental industry. And you see this happening. So what I always encourage people to do, and it sounds like you landed on this Veronica, was if you’re going to invest in a major metro, you’ve got to make sure from a short-term rental perspective, you’ve got to make sure that you have some kind of additional exit strategy. And for you, it seems like the midterm rentals was the logical next step for you on these properties.

Veronica:
Absolutely. You hit the nail on the head. I really look at all of the properties as could this work with multiple exit strategies? Because legislation is changing all the time. You really can’t just say, I’m going to do this one thing, and fingers crossed it’s going to work out great. That’s just not a solution. That’s not a business plan. I mean, you’re not really going into business if that’s your strategy is no strategy. I just really hope it’s going to work. So you always want to look at every property and say, would this work if I did midterm, would it work if I did short term? And the truth is that even within those strategies, there’s multiple strategies. So you could be in midterm rentals and you could do rent by the room, you could be in midterm rentals and you could do insurance claims. So there’s a lot of ways to look at each strategy and say, what am I looking for from this property and how can I maximize its value, not only from a dollars or cashflow standpoint, but also how many different strategies can I employ? Because it might be great for me to have short-term rentals, but if it only rents every weekend, I might be better off doing midterm rentals and have it rent for three months straight at 75% of the rate. But every single day,

Tony:
I love the concept of really digging down and niching down to understand like, Hey, what’s the best strategy? Now, the one caveat that I will add, Veronica, is I do think that being able to switch over to midterm or long-term is very much a market dependent option because for me, I invest in the Smoky Mountains, for example, and that is a true and true vacation market only. We’re not getting a lot of people who are coming to the Smokies looking for a five bedroom cabin right off the parkway that want to stay there for three months at a time. So in that market, we know that, hey, this property probably will not work as a long-term or midterm. However, the regulatory risk is so incredibly low in that market because the only thing driving that economy is people coming in seeing it short-term rentals like ours and then spending their money at the local shop. So I do think it is somewhat dependent on the market, but in a metro like LA and a metro like New York, you definitely want to be able to check that box.

Veronica:
Definitely that’s the case. And I think in areas that are primarily tourism driven, you do have that advantage in that they’ve always been that way. And so long before there was Airbnb or even VRBO people were already renting cabins in the Smoky Mountains. And the only thing I would say is that it’s not just LA and New York. There are much smaller cities that have great opportunities for midterm rentals. I mean, you look at somewhere like Cleveland, I mean they have incredible markets for MTRs because Cleveland Clinic is right there. There’s multiple hospitals. They have a huge amount of investment going in there. So there’s a lot of opportunity out there for midterm rental that people are beginning to tap into. But I actually think doing it really well, it’s still a little bit slow. And I think in this you have to look at the perspective of the need creates the organ.
What are people looking for? How can I fulfill that need? So you want to go in and say, okay, well if Intel is bringing 300,000 people here, somebody’s going to need a place to stay. Are they going to put them all up in the Hyatt? Like no, they’re going to have a dog, they’re going to have small children. They’re going to need this school district. So how can you tap into the needs of what that market is bringing? And that’s not just about major metropolitan areas where they have multiple universities and multiple revenue streams. It can happen in much smaller cities.

Tony:
Veronica, we’re just a few minutes into this conversation and you’re already delivering a tremendous amount of value. So I know you got more good stuff to share. So I do want to get into this bit of a horror story that happened at one of your properties, but we’ll get to that right after. A quick word from our show sponsor. Alright, we are back from that quick and we just heard Veronica break down the differences between co-hosting and property management. We talked a little bit about the regulatory risk that comes along with investing in short-term rentals, but I hear that you’ve got a bit of a story to share with us, and it’s not always rainbows and sunshine when you’re doing the whole short-term rental thing. And I would say we’ve hosted thousands of guests at our properties at this point, and the vast majority are amazing, beautiful human beings, and you have some that are just completely not that whatsoever. So I hear you got a little bit of a horror story, Veronica, so let’s break down what exactly happened and then I guess how you handled it.

Veronica:
Yeah, I would say I think people think that if you have more expensive or luxury properties, then you’re not going to have as many problems. And I would say while that may be true, the problems you have become enormous. So yes, I had a new property in Los Angeles. We had only hosted one guest and it was an MTR guest that stayed for six weeks. It was a professor that was doing a program at UCLA and we were so excited that we had listed it and the next day it had booked for six weeks. We were thrilled and once they left, we had another guest lined up perfectly vetted them, 21 5 star reviews, no red flags, but it was a new property. So we were still working out some of the kinks as far as how are we going to do things? What are some of our protocols?
I think once you start hosting guests, you start figuring out what you need to be doing or what’s not being done correctly, whether it’s cleaning or maintenance or the emails that you send out. What are the things that are coming up that are an issue? And at the very beginning, you’re still kind of working on those. As you start hosting people, they kind of start telling you where the holes are. Well, we had this new guest, they check in. I noticed that the Nest camera is pinging at the front door. So I look at it a few times and I figured people are staying there. So they go out to their car, I see them carrying a bag, I see them go out and grab a bag of groceries. So I say, oh, well these are people that are keeping a bunch of stuff in their car and they’re going back and forth, ignore it.
The next day, I’m actually attending the Real Estate Robinson’s conference in Newport Beach, and it was 30 minutes into the beginning of the conference and I get a call from my cleaner and my cleaner says, Hey, these people left. There’s a little bit of an issue. There’s a pillow on the roof. Some of the furniture’s been moved and the house is pretty dirty. And I’m like, well, some people get a little wild on vacation. No big deal. No problem. Thanks so much. Let’s make sure it’s nice and tidy. We’ll send the guests a note saying, Hey, we were able to get the pillow off the roof and no big deal.

Tony:
I just got to say that’s a new one for me. I’ve heard a lot of stories, but I haven’t heard of the pillows ending up on the roof. So that just shows where the story is headed. Okay, continue please.

Veronica:
And I mean, I had already been hosting for four years, so very few things kind of rattle me. So I thought, well, things happen. A kid was playing and you just try to think the best of people. So I’m sitting at the conference and about 30 minutes later, the new guests are checking in and it’s this little family from Boston. They’re arriving with their baby and my phone. I immediately get a message, then I get a phone call and I’m like, Hmm, this is strange. So I step out, I answer the phone and the guest tells me that they opened the shade on the front window. This is a mid-century house from 1952. All the glass in the house is original and the front window is 12 feet by nine feet of nont tempered glass. And they opened the shade that had been down and the glass was broken, the entire window was shattered.
So I’m like, okay, now it’s time for go mode. And all of our properties are luxury properties. So I always say, we need to solve this at the speed of luxury. I told the guest, Hey, I’m on my way. I will be there my ways ETA is one hour and 15 minutes. I jumped out of the conference, took off, started driving from Orange County to the middle of Los Angeles, arrived at the front door. I had a $300 Visa gift card in my hand and I said, Hey, this is not how we do business. Please take this gift card, take your baby and your family out. I’ve already called a 24 hour board up company. They’re going to be here in 10 minutes. We’re going to board this window up and I’m going to have the glass replaced in 48 hours. They grabbed their family, they went out, the boarding people came up, they cleaned up all the glass, they boarded up the window, the guests came back.
They couldn’t have been nicer to be fair. They really could have just said, cancel this whole thing. We don’t want to do this. And I said, okay, while they’re doing all of this and they’re boarding up the window, I start checking the nest footage. And basically what I was seeing was that this previous guest had brought in a never ending revolving door of OnlyFans models in various states of dress. So as that nest camera was pinging, I was seeing all kinds of not suitable for work content happening. And we don’t have any internal cameras, so I think I was spared the worst of it. But we do have one that faces the pool. We do have one that faces the yard. The people arriving at the front door were eye popping, and I’m the last one to tell someone how to make a dollar, but these are not people that I have encountered in my professional life.
So it was really, really scary and we immediately reached out to that guest and said, Hey, you broke this window. They denied it. And we said, well, there’s no question that you did. And it ended up actually being about $11,000 worth of damage that they did in 48 hours. The guest ended up being banned from Airbnb and it was covered by air cover. It was very painful, the process of air cover, but it was covered and we were able to get the glass in. And I think the critical thing here is that being that this was only our second guest, my relationship as a co-host was at risk. Then the relationship with the guest was at risk, and neither one of those relationships suffered at all. The guest ended up leaving a five star review and has stayed with us again since said, you handled that so well.
We know that we were being taken care of. You showed up in person, you were there every step of the way. We knew what was going to happen and when we felt safe, and the host said, oh yeah, you took care of it, great, thank you. Like if nothing had happened. So I think that that’s the critical part here is no matter how salacious the details, it’s really about stepping in and just saying, Hey, when things are not right, they’re not right. And my job is to work with you to take care of it. The guest is not against you. You are their ally in any problem solving and treating it that way, following the golden rule and saying, how would I want to be treated? Almost always garners really good results and things are going to go wrong. So it’s really not about making sure everything is perfect, it’s about stepping in when things are wrong and really problem solving.

Tony:
So many thinks apply out of that story. I definitely want to get into because here’s, I think the challenge for someone that’s doing any sort of co-hosting slash property management is that you are accountable to both parties. You are accountable to the guest to try and get a five star review and make sure they have a good experience. You are accountable to the owner to make sure that they feel happy. So a lot of times you’re juggling the desires of two disparate parties. But before I get into how you kind of navigate it with the owner, I just want to talk about the camera piece first because I think that is such an important thing for short-term rental hosts and co-hosts to have is security cameras on their properties. Now, Airbnb dig just come out, I think it was like yesterday, maybe the day before with an update to their camera policy to where you can’t have any internal security cameras before you could just in common areas like the living room and the kitchen, but no bedrooms or bathrooms or sleeping areas.
But now there’s no internal cameras whatsoever, but you were still allowed to have exterior security cameras as long as those locations are disclosed and they’re not pointing towards outdoor showers or saunas or things of that nature, we’ve definitely gotten saved by our exterior security cameras. We had a guest check in Veronica, and as soon as they checked in, maybe like 45 minutes later after they checked in, they said, Hey, we’re out of toilet paper, paper towels, and all the towels. This was 45 minutes into them checking in. And we were like, well, that’s weird. So we pull up the cameras and the first thing we see is these. It was a man and a woman. We had two security cameras, one in the front, one in the back, they got out of their car, grabbed a blanket, walked up to the front security camera, covered it with the blanket, walked around to the back security camera and then covered it with the blanket as well.
Anyway, it turns out it ends up being this person that we have to get physically removed from the property by calling the cops. But had we not had that camera footage, we wouldn’t have been able to have been tipped off that something funky was going on there. So kudos to you for having the cameras on the property and then leveraging that footage too. Obviously you weren’t able to prevent it from happening, but at least on the back end you had some evidence to point to you to say like, Hey, our house rules were very clearly violated by this guest.

Veronica:
Actually it is the cameras that saved us. So we had a camera on the garage that faced the driveway and it happened to show those glass panel windows in the shot. And because of that, I had to watch an unbelievable amount of hours of security footage of people shooting OnlyFans content. But that camera did catch a person leaning back in an EAMS chair like those loungers leaning back like this, and the back of the door hits the glass and you see the glass crack and then in the most damning of steps, you see a person come and grab the shade and pull it all the way down. So there was no question that this is what had happened. But again, I think people think exterior cameras, well that means I can’t know what’s happening. And agreed not every house has giant glass windows, but it doesn’t mean that you can’t have a sense of what’s going on inside. If you think of that scene in home alone where he has the fake Christmas party with all the dummies, you can see a lot just by having access to the exterior of your property. And that’s not about violating people’s privacy. In fact, I was so aware of people’s privacy that I didn’t check the camera as much as I should have, but I think that when things happen, it’s worthwhile to have a really good timeline that is independently verifiable of how things happen.

Tony:
I want to touch on how you actually communicated with the owner during this entire process, but one last thought on the cameras before we move on to that. I know I have some folks that I know in this space who a lot of my arbitrage friends who have a lot of smaller units, but they actually have a VA who specifically only hired to review their camera footage. So they’re literally just sitting there all day and their only job is to look for house rules violations. I want to get into how you communicated with the owner, what that conversation looked like, but first we’re going to take a quick break to hear a word from our show sponsors and we’ll be right back. Alright, so we are back with Veronica. We just heard the horror story of an $11,000 window being shattered. I got two other questions to follow up on in this story, Veronica before we keep moving. First is what is your communication with the owner look like during this process? I do think for a lot of people that maybe think about getting into co-hosting, part of the challenge is like, well, I don’t know if I want to be responsible to someone else’s property. So from the moment you got the call saying like, Hey, the window shattered, what kind of dialogue was that like between you and the owner?

Veronica:
Yeah, so I think a lot of people’s first impetus is I need to tell the owner right away. And my theory is that’s not why you were hired. Your job is not to make your problem their problem, it’s your problem. So what I did was I waited until I got to the property, I understood the scope of the problem and I had already stepped in with the first steps of a solution. Part of that is that in my co-hosting contract, I say that I have the authority, they agree and sign that I have the authority in an emergency to make decisions and notify them as needed. And I think that that’s critically important in an emergency. This is not, Hey, can I buy a new toaster? This is someone shattered the front window and we have people staying here. And so I waited until I was at the property, I had the photographs, they were coming to board it up and I said, Hey, we have a situation.
The previous guests broke the front window. I’m reviewing the footage now they’re on their way to board up the glass and I have new glass is going to be here within 48 hours. I’m documenting the whole process and we’ve started an air cover request. I don’t need anything from you right now. I’m just making you aware of the situation. The guest is okay, I gave them this gift card and we’re going to have it all solved within 48 hours. That’s the job they pay me for. Everybody has great customer service. When nothing goes wrong, it’s who you are and how you step in when there’s a problem. That’s the actual customer service.

Tony:
And you mentioned Aircover a few times, Veronica, what is that for? Folks maybe aren’t familiar with that because I do think maybe a bit of hesitation from new investors who are thinking about investing in Airbnbs is the exact horror story that you just painted out as like someone comes in causing immense amount of damage to your property, then you’re stuck footing the bill. So what is air cover and how did it aid you in this process?

Veronica:
Yeah, I think that the nightmare guest is the clogged toilet of long-term rentals. It’s like, well, what will you do if there is a horrible guest? So air cover is the insurance that Airbnb provides when you rent on their, and everybody, I think it was in the New York Times, the story about this guy in the hills in Hollywood who had this guest stay and then they ended up staying for like three years. Well, they went off platform. That’s why that happened and that’s why you want to stay on platform because you do have that backup and support. I will say that five years ago I also had another nightmare guest and air cover was lightning speed. They were incredible. They solved my problem and I got paid within two weeks. In this case, it actually took about four months, but it all did get taken care of and every single dime was paid back and I believe it is still about a million dollars in coverage. So it’s a pretty significant buffer and I think it’s not worth doing about things like a couple towels or a stain sheet or a broken vase. That’s the cost of doing business. But when you really have damage to the property, something substantial, my experience is that if you document it, they do back you up.

Tony:
Last question on the Aircover piece. You said it took four months. So did the owner front that cost or did you as the co-host front that cost for them?

Veronica:
So we pulled it out of the maintenance budget. So we had money that we set aside and even though we had only had one previous guest because they had stayed for six weeks, we did have a cushion there. We had to pull from all places. And it wasn’t ideal because it was only our second guest, but in general that was the way that we had to deal with it. And it was just an unfortunate series of events, but Airbnb told us all along, you are supported, we are going to take care of you. And they

Tony:
Did. What are some of maybe the biggest lessons you learned going through that experience, Veronica, that you can share with our guests other than opening up all the shades,

Veronica:
Have your cleaners open all the blinds and all the shades in between guests? That was definitely the first thing that came out of it. The second thing was really maintaining the relationships is about that speed of luxury. I happened to be that this rental, which is not the case with all of them, was within driving distance. For me, it was not convenient for me. I was at a conference that I wanted to attend, but when people, something goes wrong, you have to take care of people. You have to show up and say, we’re going to do this right? Whether that’s your property manager or that’s your local agent or it’s your cleaning person, having someone show up and say, we are here to solve the problem. You don’t need to look at this anymore, we’re going to take care of it for you. I think that was a really big thing.
And the other thing that I think is a really good tip for taking a property live right before the last guest, the last person before you have guests is find your ideal avatar. So the people that you would like to stay with you, is it travel nurses? Is it families? Is it professionals? Is it digital nomads who find someone that lives that lifestyle that matches up with who you want to host as many people as your property can hold? So if you can hold five, five people and give them a clipboard with numbers 1, 2, 3, 4, 5, all the way down and nothing else, do not give them the house book and just tell them, write down everything, open every drawer, use every appliance and write down everything. And then you can cross-reference that against your house book and make sure that you’re actually meeting the needs of your guests because maybe you have a pack and play but you don’t have a crib cover.
So they have this pack and play that’s got this plastic sheet. Well, it’s not a big deal to have a crib cover. It costs you like a dollar 50, but if you have it there and they need it, they just solved their problem in advance. And you wouldn’t think of that if you don’t have a new baby, oh, I’m going to need a crib cover. So they’re going to come up with all these little details that maybe you are missing because you are not your ideal guest. You’ve thought of everything you can think of, but that doesn’t, travel nurse might say, oh man, the shades are not really blackout shades and I worked the night shift. Well, it takes nothing to change those curtains, but that might be the difference between a three star and a five star review. And when you’re getting started, those reviews make all the difference. You want to absolutely be able to meet your client where they’re at, and you want to have the best possible house book that you can. So by not giving them a lot of parameters and you just say, write everything down, people love to be given open-ended critical options. They’re saying, be tough on me. They’re like, okay, I’m going to be tough on you. And that really helps you. Long-term, I’m still using the tips that I received from my very first guest to keep my property to be the very best that it can be.

Tony:
Love that insight. And what we do before we take a listing live is we have a Prego live inspection checklist and we have one of our property inspectors go through and they’re just literally testing every single outlet. They’re checking the burners, they’re making sure the ice maker works, they’re running the dishwasher for cycle, they’re opening and closing all the windows to make sure they work. And this is something we built over time based on some of that feedback that we got when a guest first checked into the property and we’re like, man, I guess we didn’t check to see if that top right burner was actually working. When you walk through that process, you’re able to identify those things. Veronica, how many properties are you currently co-hosting and are they all luxury?

Veronica:
I am co-hosting five, about to be six, and then I also host my own property and two of them are luxury, and then the rest are high-end, but smaller units. So one is a pretty lovely but just a one bedroom loft. And then the other ones are maybe the equivalent of high-end hotel rooms, but they’re in incredible locations. They’re about a block from the sand, so they still price out and act like luxury, but they don’t qualify as luxury properties.

Tony:
How did you find your first client? Because obviously you have your property in Josh Street, which did incredibly well. I’m sure that served as a good resume, but when you said, okay, I want to do this co-hosting thing and I want our rookies to understand how can they maybe branch out into this field if they want to. So how did you source that very first client?

Veronica:
So actually speaking of finding your avatar and having them stay with you, my avatar family that I asked to come and stay at Rock Bound the very first time and do this clipboard for me loved it. And they actually were the ones that ended up reaching out to me a couple of years later and saying, Hey, we’re going to end up moving. We built a new house, but we don’t want to lose our house. Could you make it an Airbnb? And that’s actually how that first one got started. And then from there, it’s been a little bit of word of mouth, but my most recent client I actually got from Facebook. I’m in a Mothers of Los Angeles, which you can imagine the chaos of that. I’m in a mothers of Los Angeles Facebook group and someone posted, Hey, we’re going to be out of town for multiple months.
Is there a service where somebody just kind of takes care of your house and makes sure it doesn’t get broken into and that you don’t have a flood or anything like that? And so I just posted, Hey, not exactly that, but this is what I do because I could see that they were in Manhattan Beach, which is a very, it’s like one of the richest zip codes in the United States. I said, but this is what I do. I do luxury midterm rentals. And you can see these are some of the properties I work with. And I actually had three different people reach out to me via that and say, I’m really interested in this. And then of those three, one of them is going to become the sixth property coming up. You just never know where they’re going to come from.

Tony:
But I’ve heard that Facebook group strategy is from so many different people that I know that do co-hosting, and it’s just a really consistent way to get business. Man, so much, so much, so much good information here, Veronica, and I feel like I’m always learning a lot when we have these conversations. We talked a little bit about your tips for taking the listing live with that checklist as you give people, do you have any other tips for, Hey, before we launch, what are some other maybe either big or minor things that someone should focus on before they actually welcome in that first guest?

Veronica:
One thing that I would say it, and this is a little bit me-centric, is I studied architecture. That’s my background. So I’m always really focused on design, and I think that it’s very easy to get caught up in trends. Everybody wants a tropical wallpaper or everybody wants that certain chair or things like that. But the truth is you actually want to be ahead of trends. So I don’t really look at what other Airbnbs are looking at in my area, what I try to look at is taste makers. So I’m not looking at what is going on right now, I’m looking at what’s coming. So if you watch, and this is a weird one, but if you watch all of the fashion shows for New York Fashion Week or for Paris Fashion Week, those are all the colors that are coming. I mean, I could have told you the Pantone color of the year, the last four years by watching the spring 2024 runway walks.
So it’s not really about looking at what’s going on with wallpaper or what’s going on with accent walls or what’s going on with bedding. It’s about looking at what are the colors, what are the shapes? Are people liking bigger and puffier things? Are they liking shiny things? Are they liking more golds or more silvers? And just getting a feel for what’s coming down the line. Because if you look at the mustard yellow couch or chair, that’s in everybody’s house now. If you go back two years, you’ll see it on every runway. So keeping an eye on what taste makers are looking at what editors of magazines are looking at, and that’ll help you stay ahead of what’s coming in design as opposed to doing what’s right now, which you’re the new kid to the game. The people that did that successfully are six months, 12 months, 18 months ahead of you, and you’re just copying what they’re doing, but you’re already behind.
And where that is really bad for you is it means you are going to have to remodel and update to not look dated relatively quickly. So I would say you want to forecast style before it hits the mainstream. And the longer that design language is relevant, the less you’re going to have to invest long-term to stay current. Another good one is keep the big things neutral. You do not want a banana yellow couch, okay, no matter how good it looks in the room. So keep the big things neutral and take the accents to be the touchstones to current style. So you could paint a fancy mural or have a trendy color, but pretty soon it’s going to be visual cringe. I mean, think like millennial pink. There’s going to come a moment where it just sort of jumps the shark and you’re like, oh, that again.
So you don’t ever want to be in that position. How could you have integrated millennial pink at that time without doing that? You could have gotten a beautiful vase, you could have had a throw pillow, could have had a chunky blanket, and you sprinkle that color into your space that pops in pictures that speaks of the moment, but that you can swap out easily without changing the major price tag items that are in your house. And that way when trends change, you can easily adapt without bringing in significant cost. One of my favorites is bookends. You put them on the shelf, you get a geo, that little rainbow made out of ceramic whatever is going on in the trend of the moment. And those are easy to swap out. They’re portable. A cleaner could move it for you. And if they get moved around the house, it still makes sense. So that’s an easy one where you can bring in whatever the trend of the moment is without really putting a big financial burden on adopting that trend.

Tony:
I’ve never heard of millennial pink, so I just had to Google that to see what exactly that was. So there you go. I learned something new right now. But

Veronica:
Did you recognize it

Tony:
Though? I did. I did. I feel like I’ve definitely seen it in lot of different, especially the more kind of funky short-term rental designs. So Veronica, you’ve dropped a lot of knowledge on this call, and I will say, I think you’ve maybe even surpassed our last episode with the knowledge bonds we dropped here. But I think that the last question I have for you is just when you look at 2024, what are you seeing as the opportunities for someone that’s just getting started today?

Veronica:
I think that as far as my market like Los Angeles, because we do have these new rules coming down that short-term rentals are going to need to go to midterm rental, I think a lot of people are either going to drop out of short-term rental or they’re going to be looking at people that can facilitate midterm rental. So people that are able to furnish a property, people that are able to vet guests, people that are able to liaison with insurance companies, all of those are going to be roles that need to be filled. So I think for Los Angeles specifically, I think that’s probably the next opportunity. I think what I’m looking out outside of Los Angeles, I am working with a partner in St. Louis to develop a little bit higher end midterm rentals for travel nurses. And this is like the tried and true midterm rental customer avatar.
But during the pandemic, I hosted a raffle at Rock Bound and we said, send us any person that is a first responder frontline worker, and we’re going to raffle off a stay. And so we did that and we had thousands of people reach out and we didn’t take anybody’s email, they didn’t go in a database, we didn’t do anything. This was like a pandemic, just do good for others type feeling thing. And what I learned from that experience was that taking care of the people that take care of us should be what it is. It should be what our goal is. And I think that these nurses, especially travel nurses, they really take on the hard cases. And if that’s the person who’s taking care of my child or my grandmother or me, I really want them to go home and feel great when they wake up in the morning.
So I think the idea of taking care of them. So I have a bunch of ideas about elevating that experience, not necessarily the price tag, but really thinking about what is it that these travel nurses actually need to be supported in the job that they do. It’s not just a bed and a pillow. They’re not staying for a day or a week. They really need a space where when they get home, all their needs are being met. And how can I do that better than anybody else who’s doing it? So I’m working with a partner in St. Louis to work on developing that.

Tony:
Veronica, I love this conversation because I can tell that you just truly have the passion for hosting and everything that it means to be a good Airbnb host. And I think as an industry, we’d probably be better off if there were more folks who adopted that mindset. So really enjoyed our conversation today. You broke down the differences of midterm versus short term co-hosting versus property management, how you’ve been able to solve issues quickly within your business. The design tips and strategies are always great coming from you, and just a ton of nuance that I think is going to help every single person who’s listening to this episode as they look to build their own short-term rental business. So Veronica, thank you so much for coming on the podcast today. It’s

Veronica:
My absolute pleasure. I have so enjoyed doing this, and I hope that somebody out there can take away something really useful from what I’d shared. And if anyone has questions, feel free to reach out to me. I love touching base with people and hearing what they’re encountering.

Tony:
Well, Veronica, again, thank you so much Ricks. That is a wrap for today. If you guys are still here, please do leave an honest rating and review on whatever podcast platform you’re listening to. If you’re on YouTube, make sure to hit the subscribe and follow button, turn on those notifications, I should say, that way you never miss an episode. And check the show notes of today’s episode as well. As you can see Veronica’s contact info, my contact info, and just all the good stuff we shared in this episode. That’s it for today, guys, and we’ll see you in the next episode.

Watch the Episode Here

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In This Episode We Cover:

  • How Veronica grows her real estate business without buying more properties
  • The co-hosting strategy and how it differs from property management
  • How to earn five-star Airbnb reviews by working at the “speed of luxury”
  • Why investors are moving from short-term rentals to medium-term rentals
  • Why you NEED an exit strategy when investing in a major metro market
  • The “emergency” clause you MUST include in your co-hosting agreements
  • How to furnish your short-term rental (tips from a professional interior designer!)
  • And So Much More!

Links from the Show

Connect with Veronica:

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected].

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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