Shawn Moore was selling high-end resort properties back in 2008. He was making big money, living lavishly, and about to close on a new mansion in Newport Beach. When, out of nowhere, the owner of the resort they were selling for got indicted on securities charges. Feds came in and shut everything down overnight, including their paychecks.
In this episode, discover how Shawn came out of this huge loss and turned around to excell in a related sector. Shawn shares his strategies for growing and scaling a short-term vacation rental portfolio. Learn from Shawn's 20 years of ups and downs as an investor.
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Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.
Michael:
What's going on everyone? Welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum, and today I'm joined by Shawn Moore, who's the founder of VITC, a short term and vacation rental education program and he's gonna be talking to us today about what we need to be aware of as we get involved in the space as investors. So let's get into it.
Shawn Moore, what's going on, man, thanks so much for hanging out with me. I appreciate you.
Shawn:
Awesome, Michael. Thanks for having me, man. I really, really excited to chat with you.
Michael:
Now, likewise, likewise. So it's gonna be a lot of fun. We're gonna be talking all things short term vacation rental today. But I want to give our listeners a little bit of background into who you are, where you come from, and what is it you're doing real estate today?
Shawn:
Yeah, awesome. Well, first, thanks for thanks for having me and, yeah, we've been around the real estate game for a little while now. I've been a full time real estate investor for 22 years, if you can believe it. I feel like I've been around the block a time or two and really started my journey into real estate in the fix and flip game for a long time, I was just doing mostly fixing flip houses I wholesaled. One deal, it's what got me into the into the game back in 2000 and then realized I wanted to wanted to start doing the actual rehab on the properties and did that for a good bit of time and I remember going back in the day to a real estate investment club, local real estate investment club meeting, kind of sticking my chest out and acting like I was a big shot and telling everybody how awesome I was at I think I was about 23 at the time and felt like I'd had I had arrived, right and I remember this old guy named George, he came to me and put his arm around me and just said, Hey, Shawn, you I know you think you're pretty, pretty big deal around here. But you're really not a real estate investor, you need to quit referring to yourself as an investor, you have a job fixing up houses and at the time I really shot my ego, right? I was like, man, this this kind of sucks. I mean, he's like, if you can't be an investor, if you don't have any passive income and that was that was back in the you know, I was a couple of years into real estate in what I thought was investing, which a lot of people a lot of us have done fix and flips and but he was right, you know, really I was, I'd buy a house, I'd have to fix it up and I'd sell it and I have to keep doing over and over and over again and really that's what I had, I had a job of fixing up houses and selling.
So it opened my eyes back then that conversation to the idea of passive investments and passive income in real estate and, you know, there's lots of avenues, lots of lanes that you can run down in real estate and the natural lane that I ran down at that time was single family rentals, and just buying some single family properties over the over a couple year period. Back this was back in the early 2000s and if you could fog a mirror, you could get a mortgage and so we were able to get a lot of mortgages really quick. We got about 52 properties in a period of a couple of years. All single family homes, we had one four plex everything else was single family or duplexes. But I and so we started building that passive income up, it just wasn't exciting for me, it didn't. It was one of the biggest mistakes in 2005 we sold them all and I always tell people I at the time I acted like I was a genius because we sold them course right before the crash. But kind of the top of the market, they're close to the top of the market that it was, I mean, obviously, we were making like I think out of that entire portfolio, I was making about $3,000 a month in passive income. But on each of my flips, I was making you know, 30 to $50,000, depending on the flip that we had and I was like man, this I can make, you know, making a year's income with one flip is versus having this whole portfolio that I was managing myself and it's just kind of a pain, and really didn't figure the game out as far as how to how to actually make them passive and so we ended up selling them all. I had, you know, again, those probably the biggest mistake we ever made, because then we went back to not having any passive income, right, I had this portfolio that people were paying for. I was making money, not a lot of money, but I was making money every month and ended up having to get out of that game.
But at that time when we sold them. We started getting into the high end resort properties. We started really diving into resort properties and second homes and I'm talking like really high end private ski Golf Resort properties like in the 20 to $30 million range and so not what we do now, and it was this really exclusive resort but it introduced me to this new world of the hospitality world the second home world the resort type style properties vacation home properties, right and, and at that time I had bought a, we bought a cabin, my wife and I bought a cabin in 2006. And that was our first vacation rental that we ever bought. Well, in 2008, we started doing this in 2005 2006. Well, in 2008, late of 2008, the FBI came in and shut down this resort that we were selling properties for these really high end resorts, the owners got indicted on securities charges and so like we literally just overnight, computers are gone with the resort, we've gotten the word that we're involved in and selling properties that all of a sudden get shut down and we're like what is going on, right? We, we stopped our fix and flip business. I didn't have any passive investments at the time because I sold them all and I had this one property, this one vacation rental, I sat on my hands for about six months and threw myself a six month pity party and started to realize nobody was coming to save us. We didn't know what to do. This is in 2009 at this time, and the markets were tanking every day that the you know, the news is there's more foreclosures than there are you know, every single day, there's just worse and worse news. We're in the middle of the great recession and I started selling real estate I started I had a real estate license, I had never done that in my life. As far as actual an actual residential sales Asia, we started doing that I started working with investors to help them build portfolios of again, because I understood that I understood investors, I had been one but I didn't have any money to invest at this stage and really started getting back into selling real estate and kind of hustling to pay the bills and during this whole time, as I was throwing my six month pity party, we lost our house, I lost my vehicles we started, we literally lost everything because I sat there and blamed everybody and everything on my situation rather than doing something about it and I had this one asset, this one property that during this entire slide was it was producing and it was a vacation rental and at the time that was before they were really popular, right that was, you know, they weren't mainstream.
They were obviously Airbnb was around and VRBO was around, but they weren't as mainstream as they are right now and I started to, I started to at least those seeds were planted in my head that this might be a viable asset class to, to pay some bills, make some passive income, even during a pretty rough time of real estate, right, even during the that eight 9, 10 that slide that were in the middle of and so as I started to build back up and get back involved in investing and developing properties, again, I had a we ended up my wife and I ended up having some kids and we ended up having twins in 2011 and that kind of changes your perspective on everything, you instead of this really cocky freewheeling, like, you know, okay, I can just make money whenever I want and do whatever I want. I, my perspective on everything started to change, I started to ask different questions I wanted it to be you start to say, okay, what kind of an example can I be? What am I really building? What am I really doing things for? So you ask those different questions and as they started growing up, I started to say, you know, I love real estate. I remember walking on the beach with my son, and he was they were four, we were in Hawaii, we always go to Hawaii for their birthday and I was frustrated. I was working on a deal. We were doing development deals at the time and I was working on a deal and I got off and he could tell us frustrated and he's just a little kid and he's like, Dad, you should just do real estate in Hawaii, it's way fun.
Like, like Dallas, all my problems, right? Like we're hearing, why might Why don't you just sell real estate here and do stuff here because it's you won't be frustrated on your phone calls, right? That's the perspective of a four year old but what really got me thinking was, what do I love about real estate and one I loved investment properties. I loved the idea of building passive investments and passive income from real estate and I loved that resort style, that vacation style world that we were introduced to, even though it all came crashing down and I had this one property and I really started at that time, forming this idea of what we do now with odyssey of really taking vacation rentals as a vehicle to build financial independence and wealth and financial and lifestyle freedom and that's really when it started back in 2000. That was back in 2015 and then we fast forward to where we're at right now and we've got Odyssey is the number one vacation rental education company in the world now and it's just been a lot of fun and a wild ride. So Long's longer winded answer there for you, Michael. That's kind of what brought us to where we're at.
Michael:
I love it Shawn. Well, as you mentioned, it seems that vacation rentals are the new thing. Everyone's talking about them. You hear about them all the time. So curious without giving away the farm. What do people need to do? How do people knock it out of the park with vacation rentals and then conversely, I want to ask how do people really screw it up?
Shawn:
Yeah, great question and really, there's really three phases that we focus on that I think are critical for people to get and it's the acquisition phase. So really understanding the underwriting, really understanding, there's a lot that goes into a good property and a good area, and really understanding and they're harder to underwrite, than what we're used to underwriting with a long term rental, like, you know, because you've got nightly rates that are fluctuating all the time, you've got occupancy that's fluctuating all the time, most of these areas are very seasonal and so you have to take in all of these factors that are moving targets, and figure out how to compile that data to actually run the numbers because you'll have really good properties and really bad properties in every area, even the best areas you're going to have not every property works even in the best areas and so there's a lot that goes into that first phase of acquisition and really underwriting and in I would say, in the beginning, that's where most people screw up. Most people think, hey, this is a great, this is a great market. It's a vacation real market that I like there's the you know, let's say Destin, Florida, everybody's down in Destin or Orlando, right, the kind of the home base for vacation rentals, that must be a good market, because everybody's down there, and I'm gonna go buy down there that doesn't, that's not how you underwrite these deals and so the very first part is, is really where people mess up is not understanding how to run the numbers and it's not rocket science, it's just much different than what people are used to and so that's the first phase that that you really want to focus on and dial in, you've got to be able to underwrite and find the best markets, and the best properties and it's not always about finding the top vacation rental market, some of the most, some of the like, the I call them backyard resort, communities that maybe are unknown, outside of a regional area can be some of the most productive, you know, markets to invest in, we've got one of our members who's a traveling nurse, and he builds a portfolio around major medical centers.
So there's all kinds of different markets that can work for short term rentals and it's not always these Class A resort towns that everybody thinks about. So really understanding how do you analyze a market? How do you analyze properties within that market and what works, and that's that very first stage of that acquisition, and then the next stage is the setup and management phase and where a lot of people dive into short term rentals, and they say, well, I'm gonna, I'm gonna manage this property my on my own and like, I can tell you like I have a portfolio, I don't manage any of my own properties, I know how to manage properties. But it can be a full time job to manage your own properties and unless you want a big side hustle, and you have the time for a side hustle, which a lot of investors that's not what they're looking for, right? We're looking for passive investments and so you really have to walk into it with your eyes wide open of what the management side looks like, and how do you build a management team so that it can become passive, and one, how much you're going to pay for it, because it's going to be your largest expense and so really diving into that second phase of that setup and management to really get the property set up correctly and then that third is the marketing and that the marketing side is how are you going to stand out in these crowded markets, right? A lot of these markets, like you talked about vacation rentals are kind of the thing. They're the they're kind of the trending vacate, or the trending real estate investment, if you will, for a lot of people, they because they think it's, you know, you know, the Wild West is, you know, you make way more money on short term rental versus a long term.
Well, that's not always the case, again, going back to the underwriting of it, but when you dive into these markets, how are you going to get your unfair share of business? How are you going to stand out because these markets are crowded? These markets are getting very, very saturated and I always tell people do. I really like saturated markets, because it shows there's huge demand, but you better know how to stand out in a crowd, right and so, and it's not always what people think and it's more how you set that property up. We always talk about delivering a unique experience, like right, a lot of people who are in real estate, because we're dealing with real estate, they'll have I always give an example of if you have a Zillow listing, and you have an Airbnb listing, they should look completely different and a lot of people a lot of times they look the same, they'll use the same photos like right, they're selling the architecture, and the property and the house on Airbnb, and that's not what you sell. You've got to sell the experience, you've got to sell what it's going to be like to use that property and so that's what we really dive into and that's one of the that's by far and away the biggest mistake once people own properties of what they're doing and what they're how they're how they go about this business is not understanding how to articulate what they have to offer outside of just pictures of a house. Does that make sense?
Michael:
Yeah, it makes total sense. And something that I always joke about, Shawn, I always say you got to you got to have a high Instagram ability factor and your short term rental listing.
Shawn:
Yeah and it's selling the experience right. It's not like it, we like Instagram because we can dive into people's worlds and we can see what they're doing and we have to have that same thing with the properties. It's not just having property photos, you better be able to, I should be able to look at your listing, and put myself in, in like, mentally put myself in that setting and say, This is what it's going to be like to stay in Michael's home because it's, you know, it's always in, I talked about delivering the fairytale having, you know, unique story, given that property, a soul, when you're really trying to articulate that to your prospective guests, that's looking online, where, and it's actually if you get that right, now, all of a sudden, you're playing in a category of one, and you're really standing out in a marketplace, because nobody takes the time to do that. Everybody just goes and hires professional real estate photographers to take pictures of their property, but they're not doing anything to articulate the experience.
Michael:
Right, right. So Shawn, question for you, for everyone listening out there that's raising their hand, it's like, that's not me, I don't have that vision, I don't have that creativity. What should they be doing or should they not even be playing in the short term rental space? Does that mean that it's not a good fit for him?
Shawn:
It's a great question now. One, you can definitely still play in the game. I think people think, because you can do a really good job of being it doesn't have to be this in your face, like creative theme that you're that you're putting together. But you do have to be able to put together an experience and so you may it may not be the right fit, right? If you're just like, I talk to investors all the time, that will say, hey, I just want to buy a short term rental because it has better returns. I don't care where it's at, I don't care what it's doing. I just want the returns and I always tell those investors, that's you're probably getting into the wrong game because that's not what short term rentals that's not how should you succeed with short term rentals. So there is an element there, Michael, where you do have to say, I do want to provide a really fun, unique experience for somebody, I really do want somebody to come experience this area, like I experienced it and I always tell people you should buy in areas or around properties that that will attract that you're attracted to you should be part of your target audience because if you're not, you're going to fall flat. When you're delivering that experience. When you're setting up an experience. I have a property that is a fly fishing property and it's up by Yellowstone National Park and we I said I love to fly fish and so it's very easy to for me to articulate what a great fly fishing experience is because I understand that group, right? It would be very difficult for me to put together a wellness yoga studio for somebody because I don't I don't, I'm not in that group, right. But we have some of our members that do these amazing wellness retreats, that are these I mean, these beautiful properties, and they have these yoga studios, and they do all this stuff, because but they know how to articulate to that group and so there is definitely an element to that and so if somebody says, you know, I'm not, I'm not that creative, I challenge people to say you probably are you want to set something up that you're attracted to and if you're absolutely not attracted to anything, and you're like I really don't care, then it's probably not the game you want to play because you're going to struggle when it comes to really maximizing the asset.
Michael:
Yeah, that makes a ton of sense. That makes a ton of sense and Shawn, you said something that I want to come back to and it was with regard to the underwriting kind of that first phase that you mentioned, in the long term rental world, we have the 1% rule. So if something rents for about 1% of the purchase price, it'll probably cash flow with a mortgage and we have the 50% rule, which says take roughly 50% of the income throughout the window, the operating expenses, what's leftover is to pay the mortgage in your cash flow. Do you have those similar types of rules, I'm gonna say in quotes to help people underwrite at a 30,000 foot level.
Shawn:
Yeah, and so the easiest. So I usually use the 10% rule of so you want to have about 10% of your acquisition price in gross annual income. So if you buy a $500,000 property, your breakeven amount for the end your annual breakeven amount, you need to generate about $50,000 in revenue. So it's and…
Michael:
Is that with debt that?
Shawn:
Yes, that's with debt and with management and so that that gives you that'll give you about your breakeven amount. Expenses are going to vary based because you got one big variable expense and management and your management's can vary anywhere from roughly about 20 to 35% and so that's a big, that's a big of your gross revenue, right? So that's a big, that's going to be your largest expense by far and so usually your expenses to cover debt service and management is going to be somewhere around. It's usually around that 65 ish 60 - 65%. So it's a little bit higher than like what you would find on long term rental, but your breakeven mark is easier to get It's an easier number to come up with because if you've got, because usually what the way we underwrite these, Michael is we're looking for annual gross revenue, because your 1% rule is on a monthly basis on long term rentals, right? The 1% rule, our monthly, our monthly income is inconsistent on these properties. So we have to look at an annual basis, a lot of these areas, you'll make 70 or 80% of your gross revenue in a three month span, right. So you're going to make it during the peak summer season, for example, in some areas and so that 1% rule, you might be negative cashflow for six months out of the year, but you can be really profitable at the end of the year, because your peak season made up made way more up for like than what you had to on those months that you were losing. So the one is close to the 1% rule, that 10% rule is close to the 1% rule, but you have to annualize it, because your the way that we run the numbers is going to be on an annual basis because your monthly numbers are going to be fluctuating so much.
Michael:
Makes total sense and then you said about 65% on the expense ratio side of things.
Shawn:
Yeah, yeah. Yeah and so and the biggest, the biggest jump in that is your management because your your fixed expenses are going to be very similar to long term rental, right? You got your your principal interest, taxes, insurance, you're gonna have higher utilities, typically, because you're paying the utilities on the short term rental side. So you're, you're gonna pay, you're gonna pay more of your utilities, and you're going to have a higher management costs than what you would on the long term rental, everything else is going to be pretty consistent as far as the other. So that's why it's a little bit higher.
Michael:
Okay, that makes total sense and should you be factoring in this? Is your personal opinion, for cleaning fees? Is that part of your gross revenue or is that same dollar insane dollar out? So we're not even gonna count it?
Shawn:
Yeah, it's a say it's $1. In dollar out, it's a pass through expense. So we don't even count it. Now you can, there are people that will run the numbers, they count it, and then they count. So they'll count it as revenue, but then they have it as an expense, we just we just cancel it out because it's passed through, we don't make money on cleaning. Some people do and so if it's a revenue generator for you could add it in that way. So that it's, you know, you know, $1 in or $2 in and dollar 50 out, right, so you've got a little bit of a buffer there. I just, it's anything that's a pastor expense, we don't we just don't factor it in.
Michael:
Okay and that makes sense. Shawn, I'm seeing I'm curious to get your thoughts if you're seeing the same thing. But these vacation rentals and short term rentals as they're being sold and marketed. They're being marketed like a business and they're saying, hey, based on the NOI performance, this is the value of the property but as you and I know, to go get a single family rental, or a single family mortgage, it's gonna be based on the appraised value. So how are folks squaring those two things?
Shawn:
Yeah, it's a great question and I think that I think it's going to be a little while before people, I think that you've got a lot of sellers that are trying to value properties based on performance and base like a business, but you're not able to get lending that way, right. They're still from a for all intensive purposes, most of the lenders out there, you're still buying and getting residential, regular mortgages, second home, vacation, home investment, property mortgages, it's going to be based on the property appraisal. Now, we're sellers have been getting away with it a little bit, because it's so competitive, and most things are selling over appraisal. So people are paying an appraisal gap, right? We're seeing that even outside of the vacation rental space, right? People are paying over and paying that appraisal gap. So sellers on vacation rentals, that's how they're starting, or they had been pricing properties and that's we're still we've been used to multiple offers, we've been used to cover an appraisal gaps. As things start to soften a little bit, I think that sellers are going to struggle to continue to price properties that way. I think that you there's a definitely a good argument. But you still have to get the right buyer that's willing to still cover that gap and say, yeah, I'm willing to buy it based on performance, because you're still not going to get lending based on performance. It's not it's going to be few and far between as far as lenders, even our DSCR lenders, even the asset based type lenders that are tackling more commercial type loans, they're still there. They're looking at revenue that the property is generating, but they're looking at they're still looking at average, they're not looking at individual property revenue. For example, if I have a really high performing property, they're not going to give lends you more money on my property, they're going to look at the market average and so it's still difficult, I think, to prop to price properties that way and we're where we see people trying to price it is it is about that 10% rule. It seems like okay, if a property's generating $100,000 or say, okay, we're going to, we're going to sell this for a million, it still has to be dang close to the property value though. At the end of the day it comes down to the what the property is valued at and what it appraises for. Ultimately, it's got to be somewhere close to that or we just don't we seem fallen flat if people are stretching too much.
Michael:
Okay and that makes total sense. Shawn, you brought up an interesting point that I want to come back to and that's around revenue projections. I think most owners, short term rental owners will tell you that the last two years have been banner years for them and so how do we square what has been with what will be kind of given today's market?
Shawn:
Yeah, great question. So one of the things that, that I think that the reason it's been banner years is because occupancies have been so high, right, we've had that we've had two years of basically never ending summer, right, we have we have seasonality has gone out the tube, it's been, it's been really high occupancy across the board. So we've been talking about I talked about this, you know, all even the very beginning of this year is kind of our projections is we're going to see occupancy, in short term rentals, come back down to the normal seasonal type levels, when we underwrite our deals. I never underwrite based on that, that top percentage of occupancy, like there are people that will say you should, you know, you can get 80 90% occupancy and short term rentals, we don't do that. I don't believe that that's a long term. I mean, short term rentals are short term for a reason, your occupancy is going to be somewhere 70 to 80%, in some of the best markets, where we've seen the last couple of years, some of those best markets are 80- 90% occupancy, that's not sustainable. In the short term real game, if you have a short term rental, and you've been tried to have 90% occupancy for an entire year, it's really, really difficult because you have these odd days that are there in between days anyways, that throw that occupancy, it's, it's just hard to do, right and so you have to say, okay, look back.
So when we underwrite we underwrite back to 2019 18, 17 levels with our occupancy, we look at that occupancy in those years, when we're doing our underwriting. So that helps us bring that overall revenue down a bit now that the flip side of that is, revenue numbers have been consistently going up, they didn't revenue didn't spike average nightly rates didn't spike like occupancy did. So the overall gross revenues had this huge spike in these banner years, but it was it was driven by occupancy. Now rates are a different story rates have been consistently going up. But they didn't have these big spikes they've been in where you will find in short term rentals, which is interesting is there's a gap in the market, you've got, you've got the you know, the bottom of the market, you got the middle of the market, you've got the top of the market and so when we underwrite these deals, we're very conservative on our occupancy and then we want to look at the range, we want to look and say, okay, given this given occupancy on this area that we're underwriting, I want to look at the bottom of the market, as far as average nightly rates, I want to look at the middle of the market for you know, three bedroom homes and the average hourly rates here and then I want to look at the top of the market, that will give me a revenue range that we're looking at, then what we want to do is say, okay, based on this property, I'm looking at where do I think it's going to fit in this market.
If I'm in a beach market, and I'm not on the beach, I'm probably not going to get that top revenue range, because most of those top revenue properties are on the beach, for example. So I have to take these, I have to start to now take make this logical analysis on this range of revenue. But you want to wait the way that I know, the original question is how do we how do we say, okay, the last two years have been an anomaly. It's an anomaly based on the occupancy for sure and then you've got to start to look at those nightly rates, and then take a more conservative approach back in 17, 18, 19, as far as occupancy, and that's how we underwrite the deals now, because we just don't think that occupancy is going to continue now, what we saw was, we saw another spike in occupancy this summer, again, really high, where we started to see kind of normal occupancy come in the spring, and then we just saw that a big spike again, this year, but I just don't think it's going to last and so we take a very conservative approach as far as occupancy goes.
Michael:
Okay and that makes total sense and, Shawn, my last question for you is with regard to expenses. You mentioned in the kind of the long term space, your PITI your property management fee, we could throw in there and then in the short term realm, we've got your cleaning expenses and the utilities. What else should people be expecting to have on their line item for expenses for the short term rental?
Shawn:
Yeah, so you're so you're, again, your fixed expenses are really pretty similar, right? Yeah. PITI, you've got the on your fixed expenses, what's going to be different than a long term rental or other types of properties are going to be your utility costs, right? You're going to be paying internet cable, you know, your electrical all that stuff is going to be that's going to be as part of your fixed expenses. So that's going to jump your expenses. As up, the variable expenses are what a lot of people miss calculate and variable expenses when you start to add in your and these are, these are based on the number of stays and they're going to be based on the gross revenue, your management company is going to take a percentage of your gross revenue, your booking your booking sites like Airbnb VRBO, they're going to take a percentage of your gross revenue, right. So when you get a booking, they're going to take a percentage of that those, those fees are what's going to eat into your overall profits and so a lot of times be like, Well, man, I'm making three or four times what I would make on a long term rental and a short term rental doing this nightly. But by the time you add in, you know, 30%, and management fees, all those different things start to add up. Now, you're not making three or four times the profit typically. So the biggest expense that people mess up is the management and I always tell people, there's, there's a couple of approaches you can take with management, even if you self-manage, and you put your properties on Airbnb VRBO, you're going to still run an average of about eight to 15% of basically a management fee, that's going to go to those booking sites, where you're booking your property, if there's a hybrid approach, where there's companies like evolve, and some of those companies that will do a 10%. But they're going to be 10% plus that eight or 10%, right from the booking fee. So you're going to be a total of about 20% and management, if you have that hybrid approach where you do some of it, they do some of it. If you go the full service route, which I suggest most people take that route and that's what it's going to be different than what most of the other coaches out there are ever going to tell you to do because it because it doesn't look good on the front end on the numbers, right?
It is but I just believe most people are not set up to manage short term rentals at a high level, you're better off getting a full service management committee to help you and that's going to cost you 30 to 35% of your gross revenue. That's a huge line item, right? That's a huge expense and so you have to make sure one that you get the right fit, because they're going to be your largest expense, you want to make sure they're doing a good job and I always tell people good management company is worth their weight in gold, a bad one is really a nightmare. So you want to make sure that you've got the right fit there. But it's a that's a big a big expense that a lot of people don't think about and I have on every one of my properties, I use full service management on every one of my properties for a reason, right? It because it's what makes these properties allow us to be passive investments and I want something that is a passive investment. I'm not looking I'm not looking for another job to manage these properties and so those are the biggest ones, the management and then your fixture your utility costs that you normally wouldn't have to pay for.
Michael:
Okay, that's great. That's great. Shawn, this has been a ton of fun, man, I want to be very respectful of your time. If people want to learn more about you, or more about VODYSSEY where's the best way? How can I reach out?
Shawn:
Yeah, awesome. I appreciate that, Michael, so they can just go to https://vodyssey.com/ . It's VODYSSEY, you can go check out our stuff. I've got a book there. It's called: What the hell is lifestyle acids number one bestseller on Amazon. So you can go check that out talks about our whole process, taking you through that acquisition phase, that setup and management phase and ultimately the marketing phase and then you know, you we've got a ton of I've got our podcasts on there. We've got a YouTube channel, we've got tons of free stuff that people can dive into if you just go to https://vodyssey.com/ and learn a little bit more about us and our view of the vacation rental world and then yeah, that's a great place to start right there.
Michael:
Right on. Well, Shawn, thank you again for coming on and sharing some wisdom with our listeners really appreciate it and I'm sure we'll chat soon.
Shawn:
Awesome. Thanks for having me, Michael.
Michael:
Okay, everyone, that was our show a big thank you to Shawn for coming on super eye opening, really informative to learn about the vacation rental space from his perspective. As always, if you enjoyed the episode, please feel free to leave us a rating or review wherever it is get your podcasts and we look forward to seeing you on the next one. Happy investing…
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