Make More Money with Less Hassle

Tony:
I think real estate starts and ends with Airbnb. Well, today’s guest is shaking that belief. He’s the CEO of Furnish finder, helping landlords tap into monthly rentals that outperform both short-term and long-term rentals. From booming relocation demand to under the radar opportunity and midterm renting. Jeff’s got the data and the vision. This is the Real Estate Rookie podcast. I’m Tony j Robinson, my usual cohost. Ashley Care is out being irresponsible on the beaches of Mexico with her kids and her family, but she brought in the next best cohost I could ask for, which is Garrett Brown from the BiggerPockets Bigger Stays team. Garrett, thanks so much for joining me today, brother.

Garrett:
Always a pleasure and big shoes to fill with Ashley Gone and I’m super happy to be here. But let’s welcome along our guest for today, Jeff Hurst. Thanks for joining us.

Jeff:
Thank you for having me. Very excited to join you guys and jealous of Ashley. Also, my wife and I had New Mexico this Saturday for our 20th anniversary.

Tony:
Oh, there you go, man. Well congratulations on 20 years. Yeah. Well Jeff, super excited to have you on with this man. So Jeff, you said in other interviews before that monthly is different than midterm. What’s behind that reframing and why does the search demand support that?

Jeff:
Yeah, so the insight here is we used Google Analytics to just look at how do people search the category, what are they talking about? And almost everything in business just follow the consumers, know your customers and what’s happening. And what we learned was that they’re typing into Google monthly furnace rentals or monthly rentals 50 times more often than there’s having in midterm rentals. I think most of the people typing in midterm rentals are people who are actually in the real estate industry and have grown up with the term, it’s kind of an inside baseball term around well, and so what’s the thing in the middle? It’s midterm, but if you’re a renter, you want a monthly rental, you’re actually more likely to search for monthly or sublet or short month to month terms like that. And so we’re trying to encourage people to use the language that the tenants and the renters actually want to use because that’s how the category is going to grow faster is to keep it in that every man speak.

Tony:
It’s so interesting because I feel like the same thing has kind of happened in the short-term rental stays as a consumer. People search Airbnb and maybe to a lesser extent they search VRBO or vacation rental, but very few people are searching the phrase, short-term rental in X, Y, Z city. They’re just going to go to Airbnb or whatever it may be. So it’s interesting that you’re seeing the same thing in the kind of midterm rental space. How are you seeing demand shift within the monthly rental search volume?

Jeff:
And then as backdrop, almost all of my careers, short-term rentals. And so I was the chief strategy officer at HomeAway when we sold to Expedia. I was then the president of VRBO for several years and then was the chief operating officer at Expedia Group. So for more than a decade I lived that short term life and kind of saw how that evolved and it was what got me excited about Finder. When I left Expedia, I didn’t think I’d end up back in travel. I couldn’t believe this platform existed because I’d been in short-term for a decade and never heard of it. And I got really excited about what’s changing in kind of like macroeconomic and with short-term rental that could fuel this rise. And there’s a handful of things that are really changing. So first of all, from the shortterm side, it’s regulatory. Almost every city has some sort of restriction on short-term rentals now, and almost no city has a restriction that’s 30 days or more.

Jeff:
And so there’s a little bit of a sweet spot that comes in when you start to sign a traditional monthly lease. The second thing that’s going on is inflation. And inflation has impacted pocketbooks, but it’s also impacted the ability to buy homes, mortgage rates. And so not only are more people renting, but also more people are choosing to stay in a rental for these kind of midterm stays because it’s cheaper than hotels and it’s cheaper than Airbnb because we don’t have any service fees. And then the third thing going on has been COVID, kind of reshuffled how people work and there is a lot more flexibility. There’s digital nomads that can travel and there’s a greater openness to being gone for two months in the summer and staying somewhere for two months, but also and working somewhere four days a week and then going home for the weekend. And it’s created this dynamic where we’re seeing a lot of growth outside of traveling nurses. This is what we became famous for, but into relocations, corporate academics and all these new use cases that people don’t associate us.

Garrett:
Yeah, no, that’s great insight because I’m a real estate agent in Houston, Texas, and I have been for eight or nine years now, and just anecdotally in the past year to the shift from the amount of buyers out there has dramatically went down, but monthly rentals and some long-term rentals are prevalent, becoming more prevalent every day. People forget that there’s oil and gas workers that travel around and are looking for rentals in different areas, monthly rentals, so the opportunity has kind of exploded in a lot of areas. Where are you seeing the opportunity gap today for rookie investors in this space?

Jeff:
One thing I’d start with for rookie investors is I do encourage people to either stick with what you know or stick with what you’re passionate about. And so if you have friends or family who are in the construction industry, learn more about how they travel. If you have friends in the nursing industry learn about how they travel, if you’re like me and maybe kind of came up through more corporate understand who’s going to be staying in these units and then what you’re basically who you’re competing with. And I think that who you’re competing with is what’s often most misunderstood is that for the most part, midterm rentals are still often competing with an extended stay America or Embassy Suites and these hotels that might be charging 150, $200 a night, well, you play that out, you can charge 4,500 to $6,000 for a studio that’s way nicer than these.

Jeff:
And so you’re not competing on the same sorts of things, but really emphasize with what for my own portfolio, which is mainly short term, I know central Texas, Texas Triangle, got a lake house, got a ranch, got a beach house, and I knew who was traveling there and how to help build and design for it. And so I’d really start there. Houston’s a fascinating one because it kind of has everything because not only does it have oil, it’s got this huge medical center and people think about it for traveling doctors, traveling nurses, but the bigger use case I think is actually traveling to Houston for cancer treatment, traveling to Houston for this where you want to be comfortable and you need a monthly furnace rental. And there’s been a lot of inventory growth to help serve that need, which is more of a community service than a leisure STR for bachelor parties.

Tony:
Jeff, one follow-up on that is you just talk about supply increasing in Houston. On the short-term rental side, we saw massive, massive increases nationally in supply post COVID and 2122, I think the industry was able to absorb that supply growth, but you started to see cracks late 2022 definitely in 2023 where in most markets year over year revenue had come down. Are you seeing a similar saturation in the midterm rental monthly stay market as well where there’s this oversupply that’s starting to pull down revenues or do you feel that there’s still a lack of supply in this space specifically?

Jeff:
Yeah, I think it’s much earlier. There’s a lack of supply and part of the reason is there’s two things going on. So there’s the macroeconomic things I was talking about around there’s these shifts that are encouraging people to not only buy this as an asset class but live in these or travel to these. But the other thing that’s happening is when you think about the diversity of use cases between short term Airbnbs and what we do at Furnish Finder, Airbnb is really built around a core leisure use case. And so it’s close to restaurants, it’s close to downtown Rivers, beaches, lakes, mountains that rules out 90% of the population zones in the United States, like they’re really concentrated. And so getting oversupplied is really oversupplied more to neighborhood level. And then you think about where midterm rentals are, they’re by hospitals, they’re by universities, they’re by good elementary schools and they’re by commuter corridors. They’re really not where a lot of the Airbnbs are, and they do start to take up a different space. A challenge I’ve seen is that the Airbnb owner who bought it for a short term and wants to just make it a midterm, may not be in the right neighborhood and may not have the right outfit for what’s going to be successful. It’s often a like how do you go get this thing or supplement your short-term strategy with midterm? You can’t just swap ’em in and out because they’re different customer types.

Garrett:
How would somebody that is curious about figuring out if there’re going to be some demand in the area they’re in? Short-term rentals is, in my opinion, I only mainly do short-term rentals, so it’s a little easier me to analyze it. But if I was trying to figure out if there is demand in an area or if there’s even a chance to find some possible off-market deals in this particular market that I’m thinking of, how would somebody kind of evaluate that or what are your tips for a rookie that’s thinking about it?

Jeff:
Yeah, so the first tip is we do, we have a page we power called it’s furnish finder.com/stats and you can look up any city in the US and it’ll tell you the most recent, I think it’s the most recent 90 days of what’s happening. So it shows you how many searches have happened, how many times a page like a property page has been viewed, what the inventory makeup is, and there’s a few rules of thumb I kind of apply to it. If you go to any one of those cities, and this is a product experience we want to improve. So if you get there and are discouraged, no, it’s going to get better. But there are some rules of thumb, and the rule of thumb I’d start with is if you divide the total property views by the amount of inventory and you’re kind of like around 200, you’re in the ball game that’s average.

Jeff:
People are performing well. If you get to 300, it’s more like you’re a top performer and if you’re above 300, then you’re really onto something. And that’s a rule of thumb that I think you can apply. It’s easier to use in the more rural areas. And I actually think the strategy is better for suburban and rural. It works perfectly fine in urban, but the way we built that particular experience is kind of geography radius based. And so if you were looking at Houston, you just cover a whole lot of different use cases because the commute time is so different if you’re in dense Houston versus if you’re in Killeen, Texas or something like that. So that’s the first thing I do is go to the stats page and check it out. The second thing I do is pick whatever use case you’re solving for relocation, corporate or nurse and pretend to be them. And that really starts with go to Expedia and see what the long-term hotel market is. Is there an extended stay America nearby? Is there a garden suite nearby? Is there gone down the list? Then look at Airbnb and see if you see people who have long blocks of calendar or 30 day minimums.

Tony:
I love the point that you make about the limitations of short-term rental market selection and how it reduces the opportunity you have to select the right markets because you’re right, 90% of the United States probably doesn’t make sense for a true profitable short-term rental, but you’ve got a much larger geographic radius or options when you go the midterm rental route.

Jeff:
It’s not only larger, the inventory’s cheaper, it is a lot cheaper to buy something in Houston suburbs than it is in Rice Village. And so if you start looking at this as I can buy a duplex or quadplex for the same price as the short term rental, I was shopping at a leisure destination, it really changes the dynamics of the cash profile.

Tony:
And I think that’s maybe the challenge at times with the short-term rental industry is that you to go into markets that are mature enough to actually perform well where you have some level of confidence, but then typically in those markets because they are mature, because people know they perform well, you’ve now got this upward pressure on pricing and it’s like, well, it might perform well from a revenue perspective, but am I actually still profitable given the price I have to pay for that property? So you’re almost able to solve that issue with this midterm rental strategy because you can still get a strong revenue profile in relation to the purchase price that you’re paying. And I think that’s where the magic it seems to be.

Garrett:
I was going to say short-term rentals have such an amenities arms race right now too that you’re spending almost as much on the amenities as you are just to buy the property.

Jeff:
And there’s two other things that play a tricky dynamic with short terms. In particular what I’d call a lot of the higher under cash cow ones is you’re not only competing with people who are buying them as a rational economic investors, you’re competing with people who are just buying a second home and they may not actually care how much they spend for it. They’re treating it for a very different use case. And so I always called it the vanity premium. There’s a vanity premium when you’re shopping on 30 A in Florida or when you’re trying to buy a ski and ski out condo because you may be bidding against someone who doesn’t care if they make money. And if you go to another market where people are more rationally bidding and you’ve got a strategy that’s a superior strategy, there’s just a better chance you’re going to have a higher cash on cash return. I think MTRs pretty consistently would beat on a cash return profile and they might underperform on an appreciation profile, but then they also overperform on, they’re just less work. There’s three to four turns a year.

Tony:
Jeff, so much good information. I think we’re convincing a lot of people about the power of the midterm stay. And what I want to get into next is you talked to Garrett about the amenities arms race and how you spend so much money get into short-term rental ready. I want to talk about what it takes to get a midterm rental setup. So we’re going to cover that after a quick word from today’s show sponsors. Alright guys, we are back here with Jeff, CEO of Furnish Finder. So you just gave us the, I think one of the best arguments as to why if people should start considering midterm rentals or monthly rentals, but let’s talk about actually setting it up. So what are the practical steps that you’ve seen for outfitting a successful midterm rental?

Jeff:
Yeah, I mean the thing I’d start with is again, start with who do I think is going to be my tenant? A traveling nurse is a very different tenant than traveling corporate. One, you might have more emphasis on blackout shades and the other, you might have more emphasis on workspace. So start with who you’re designing for. Then remember that you’re not designing for a family’s most important four day long weekend or spring break. You’re designing for a place that needs to mainly do three things and needs to be able to sleep comfortably, work productively, cookies easily, and maybe there’s a little bit of downtime rest, but it’s not pickleball and it’s not a foosball table and it’s not all this stuff and the stuff you want to be sure you is, you don’t skip on towels, you don’t skimp on sheets and you don’t skimp on cookware in a short-term rental, you can kind of get away with some of that because they’re there for three nights.

Jeff:
This is 90 days on average. You care about the bed, you care about the bedding, you care about the towels, and you don’t want to travel with your own towels if you’re going on a 90 day trip. And so I think those are the most important things. You can do it a lot more cost effectively. Think like five to $7 a square foot, you can soup to nuts outfit a midterm rental than a short-term rental. And if you want to learn more about it, we recently did a webinar with menen that highlights tips and tricks for how to think about the space.

Garrett:
My head’s spinning now because it’s hearing five to $7 per square foot is like, like I spent on the low end is 25, but most likely 50 to a hundred just to get a short-term rental to be competing with everything out there.

Jeff:
And then you’ve got all the maintenance on all that stuff you had to buy. It’s probably $5 a year of maintenance.

Garrett:
I had three and four turnovers the whole year, and again, I am afterwards going to be adamantly searching for monthly rentals I can turn into in my area. That just sounds like an operations dream for me.

Tony:
I think we have 13 turns today in my portfolio, so I couldn’t imagine three or four for the whole year.

Garrett:
Oh yeah, I’m making sure in the backend my phone isn’t blowing up from a cleaner telling me right now, Hey, your sheets are ruined and this hot tub is ruined. And

Jeff:
The most frustrating thing is you get a phone call and it’s like you’re out of ping pong balls that ruined your trip.

Garrett:
Yeah, no, not long ago I had a guest get so upset with me because they didn’t understand how to start a fire with firewood outside in the fire pit. And I’m like, I can’t teach you everything. You could simply, that’s not my fault that you can’t put twigs together.

Jeff:
We more frequently hear from our landlords that the tenants left it better than they found it because they’re living there and they’re like, Hey, you didn’t have a dust buster and I bought one. I’m just going to leave it. I don’t need to take it with me or you didn’t have this and I bought it and left it for you. And it’s like that has never happened to me in any of my three short-term rentals where I showed, I was like, well, you guys left it better than you found it. Thank you.

Garrett:
So it sounds, this is obviously there’s a lot of operations that go into the short-term rental side and monthly rentals seem to be a little more easygoing and I’m loving that portion of it. What operation strategies work best for rookies that are looking to get into this and looking to scale it as a profitable real estate investing journey?

Jeff:
Yeah, for sure. I think on the midterm side, one thing I’d emphasize because you’re not chasing leisure destinations, look at how you can do this close to your home. Is there try to start, can you buy something where you can be the primary point of contact to get started? You can learn more about how this works. I mean it also puts you in that position I talked about earlier of start with what you know, who’s coming to your neighborhood, more about what type of industry is there. And so try and build something that your community or a suburb near you needs and really begin there. There’s not as developed of a software management community for midterms. You really, I mean four terms a year, you don’t really need software as much. Pricing is much simpler. You price by the month, not by the day you’re not repricing every six hours.

Jeff:
That part’s just simpler. The thing that is also different, there’s not as much management opportunity. Almost every major leisure destination has three to five vacation rental managers. This is more likely to be managed by a long-term manager and this can be hard to talk someone into it. They think like four turns a year, geez, I’m used to one. And so you have to talk them into that, but you’re going to make 50 to a hundred percent more monthly rent. You can talk ’em through that side and then they typically charge more like 10 to 15% fees across my three rentals. I think the management fee when you add everything up is a percent of what the guest paid. It’s more like 40%. And so there’s a big discount if you aren’t going to self-manage by being in the midterm because they just take less of the rate.

Tony:
Jeff, I know you said that the tech stack is still developing for the midterm rental space, but obviously Furnish Finder is one of the tools that midterm rental hosts are using. What are you seeing as the best practices to stand out on the furnish finder platform? Is there a golden ticket that you’ve seen that’s like, man, this works every time?

Jeff:
I think the people who know their target audience have an advantage. And so I’ll start with how do I compare it to short term? The biggest thing I’ve changed people’s frame of reference on is imagine you were competing on Airbnb in 2016 as opposed to 2025. And so what that means is one, there is less inventory so it’s easier to stand out. Photos probably matter even more. You can’t possibly be competitive on Airbnb without professional photos. You can be standout on Furnish Finder with great professional photos. And so it kind of changes the competitive positioning. And then something that more than anything is a communications. Remember that these function more like Zillow or apartments.com and Furnish Finder, we’re classified lead sites. And so the necessity of replying fast and communicating clearly raises the bar a lot because there’s not just an instant book. You’re not going to get an app notification, good news the weekend booked, you’re going to get an app notification from somebody who’s applied to stay at your house and one more. And if you wait a day, they’re probably going to pick the other one.

Garrett:
There’s a lot, my brain is still just like, I’m just so ready now to figure out where the next steps are in my investing journey because now I’m thinking like, okay, there’s all these things that I’ve learned in the short-term rental space that the mistakes I’ve made that I don’t want to make again. Are there mistakes that are common that you’re seeing other landlords make in the monthly rental space that I could learn from and other rookies hearing this right now to avoid going forward?

Jeff:
Yeah, I think there’s a, one thing I’d emphasize is the, going back to the knowing your customer, it’s like people overinvest because they assume they need to do something more than what the actual use case in their area needs, or they underinvest for the exact opposite reason. And so I’d say that primary research, and Garrett, you mentioned the $25 a square foot, if somebody’s done six shortterm and then jumps into midterm, it’s like, oh, I’ve got a playbook for this. Lemme go use my furnishing scheme. You’ve spent four times as much on outfitting the home as you needed to. And on the flip side, if somebody’s coming from long-term and they’re just like, well, they’re only, we just need to kind of bare bones and I’m going to do it all at ikea, you may not be competitive enough. And so I think that’s probably the first thing.

Jeff:
The second would be that assuming that a good short-term rental will be a great midterm rental, you cannot make that assumption. I think you can assume that a short-term rental that doesn’t perform well in a shoulder season or off season, you should take a crack at midterm rental because people don’t go to Michigan and winter for vacation. They still work in Michigan. There’s still universities in Michigan. There’s a chance to make money in that shoulder off season. And then the third mistake that I’d say people can get into is not appreciating that four turns a year still means the phone rings. It doesn’t ring nearly as often, but if you’re in Texas and you’ve got an HVAC issue or if you’ve got a plumbing issue, you do need to have a plan. And so getting ahead of it from a process standpoint still makes sense. It’s just that your process manual is more likely to be two or three pages instead of two or three dozen pages.

Tony:
Jeff, you bring up a good point around not every short-term rental will also work as a midterm rental. And I think that’s a very important distinction for especially rookie investors to understand because I know that there are folks out there who say, I’ll buy this property as a short-term rental and if it doesn’t work, I’ll just midterm rent it. And it sounds good in theory, but to your point, not every market supports midterm rentals in the same way. And I’ll give you guys a real example. We have one of our properties in Joshua Tree near the National Park, and there was just a long delay getting the permit for that property much longer than it ever been. They were super backed up and it was like a 90 day timeframe before they would even give us the first response of what it was going to be, right?

Tony:
So we’re sitting on this property for a while. We said, Hey, let’s try and midterm rent it, and we put it up everywhere to try and get people to book. Turns out no one is really coming to Joshua Tree and planning to stay for 90 days. There just wasn’t a lot of demand for that. So you’ve got to make sure that if you’re underwriting a property, especially if you’re underwriting in a true vacation destination, that it actually works in that model and don’t feel like you can just fall back to midterm or long-term renting it.

Jeff:
Yeah, my biggest advice here is underwrite it so that your backup plan is to turn it into a long-term unfurnished rental. And so maybe as a long-term unfurnished rental, you’ve got something that’s going to do whatever, 6% cash on cash or 4% cash on cash, but if it works as a midterm, it’s going to do 20 or 15. And then your backup plan is actually just like I’ve got to figure out what to do with some furniture or have a furnished year long lease product as opposed to I spent $25 a square foot for a short term and now it’s not working and it’s an oversold market. What do I do? It’s easier to solve from the other side.

Tony:
Jeff, I guess just one last question because I feel like a lot of Ricky’s are going to want to know the answer to this, but Air DNA in the short-term rental space, they put out their annual list of best places to invest and the internet, the short-term rental community always goes crazy when that list comes out. Do you guys have something similar for the midterm rental space? Like, Hey, here are kind of the 10 up and coming places that we’re seeing a lot of traction?

Jeff:
Yeah, we do. We actually published on our side, I think we did the five markets by small, medium, large, that have the most supply, and then those that have the biggest imbalance of demand to supply in a good way. And so a few trends jumped out. I think the biggest trend and something for people to really pay attention is just data centers. Where are you building data centers? I’ll tell you where you’re not building them. Seattle, Los Angeles, Chicago, Manhattan data centers need a lot of space. They need a lot of power. They need cheap land. And so an example, the fastest growing market we had in the US was Abilene, Texas. That’s where Oracle and OpenAI are building the biggest data center in the world. There is not enough housing in Abilene to house all the workers needed to build this thing for the next six years.

Jeff:
It does not exist. And so you’re seeing people turn in turn, create housing on the spot, think people are talking about, we’re going to build an RV park, we’re going to build container housing, we’re going to transition this multifamily here, we’re going to outfit this motel differently. And so data centers is a big one, and it’s great because if you know where they’re going to be one, they’re usually built by meta and Google and Microsoft, they’re willing to spend money to have their workers have a good experience and the time to value for them to get that done faster is massive. So if you can get there and be early, there’s a great opportunity around data centers. The second thing, and this is one that’s probably changed the most in my year and a half at Furnish Finder, is more and more families are trying before they buy, mortgages are high and inventory is expensive.

Jeff:
And so a lot of families are actually moving into neighborhoods on a three month rental or a six month rental that’s furnished, being sure they like the school, like the neighborhood while they shop for a home. And plenty of times they actually re-up, sometimes they don’t. What’s interesting about it is you’re not solving to give them the home, their lifetime home or their dream home. You’re solving to give them a comfortable place in the community they want to be in. So they might be shopping for a four bedroom home, but be willing to put their family a four in a two bedroom home for the next six months. And that opens up duplex strategies and townhome strategies and investing more of what, and just think about how many people do you know that have moved in and out of your neighborhood that have remodeled, that have had an insurance claim or they needed temporary housing. You can almost think of maybe filling these with friends and family network in some places. And that’s a very different dynamic and we’re seeing that open up more and more neighborhoods.

Tony:
One last question on that piece, Jeff, because that’s super interesting insight because the AI boom, I think everyone’s thinking about it from a technological standpoint, but you’re coming at it from a completely different angle, which I haven’t heard, didn’t even talk about before, which is so interesting. I guess one last question on just the demand and the kind of trends you’re seeing, what are your thoughts on room rentals in the midterm space? Is that also something that you’re seeing gaining traction or is it really just the whole place that folks are looking for?

Jeff:
No, it is gaining traction. I’m a big fan of what the guys at Pat Split do. And so if people haven’t checked them out, certainly do we have 60,000 room rentals on our site. And so it’s a big number. We’re probably one of maybe next Airbnb. We’re the biggest room rental site out there. And what is interesting about it is we’re kind of like the self-serve version for that. And so you might have an A DU or just a room you’re trying to rent out in your house, and you can get started that way with a very traditional house hacking strategy and start to dip your toe in the water or potentially even create some cash flow to where you can then use that cashflow to fund a midterm rental acquisition or an arbitrage purchase. And that’s something we haven’t talked about is arbitrage is much more prevalent in the midterm space than it is in the short-term space.

Jeff:
And it’s because you’re much more likely to be able to get a landlord to give you a three-year master lease that lets you sub if you’re subbing it out 90 days at a time instead of three days at a time, it doesn’t have the same community nuisance type of concerns. And you can very often basically start a midterm business with one or two months down payment instead of 20% or 10% of a purchase price. And so those have changed the dynamic a lot. I am a big fan of the growth opportunity in rooms mainly because of the original macroeconomic point of I think affordability and housing crisis are here to stay and there’s going to be a large chunk of Americans that need to find a more affordable way to live.

Garrett:
Wow, that’s amazing to even just the sheer amount of different opportunities and creative ways that a rookie could get into this because it seems like there’s going to be less red tape all around with this type of strategy, and that’s discouraging for some rookies that are looking into the short-term rental space, but they want the cashflow that could come from something like this kind of model. So I can’t wait to hear further about how this has kind of changed the way your lifestyle and your perspective on these different types of investing models has happened. But we do need to take our last ad break before we do that, and we’ll be right back after this. So Jeff, I can’t wait to go into bigger deals after this and go to Abilene and start looking up some deals and see if there’s anything out there that could possibly work. But what shifts in your life have you seen come about this since you’ve been championing this type of model for everyone?

Jeff:
I think there’s kind of two questions there. What shifts have I seen in the industry and what shifts have I seen in my life? And so I’ll start with the life one and that it is very different than running a short-term rental platform as a president of vrbo and we were obsessed over trying to make these moments perfect for somebody’s highly leveraged spring break or for someone to be able to afford their dream vacation home or whatever it is. This is a much more, I’d say, connected to most of the world type of business and that we’re really much more solving for the bell curve of America and we’re solving for like can they afford a place to live? Can they afford a place to work? Can they afford a place to be when they’re disrupted and when they’re really in need of housing? And so whereas I used to spend a lot of time on a NIMBY movement like I’m not in my backyard, how do we prevent this?

Jeff:
What’s the regulatory environment now? It’s much more to me, of course you want one of these. Of course you want traveling professors or doctors in your neighborhood. Of course you want families to be moving in and thinking about how to buy. And so it’s changed my perspective on some of just how housing works in general and also how we got to the regulatory place we got to in short-term rentals. And I don’t think that’s around the corner for midterms. Personally for me, what’s been a lot different is I’m working at a much smaller company. We’re only in the us. It’s a much simpler type of approach and we’re very committed to keeping it simple and really keeping control with rookie real estate investors and real estate pros. I think that there’s probably been overreach on the short term side of how much control they’ve taken into the platforms from the end users. And our perspective is that we can build something that’s leaner and more affordable by putting more of that trusted and control back with the landlords and tenants to just figure it out yourselves. I don’t know, have a conversation, get on a FaceTime. You guys can do this. It doesn’t have to be disintermediated communication where you don’t talk to them until after the booking and you can never talk to ’em again once the booking closes. It doesn’t have to be that complex.

Tony:
Jeff, I love so much of what you said, and I think that the affordability piece is what really stood out to me because like you said, it feels like unless something dramatically shifts within the US housing industry, the affordability challenges are going to persist if not get worse. And I think the ability to give folks an option to maybe try and relieve some of that pressure in a way is an important thing, especially when you talk about the room mental side.

Jeff:
And I really think it is not like it’s a bandaid. If more people would invest in quadplexes and duplexes to solve affordable housing, then you would have more affordable housing. And if more people were furnishing it, and furniture is not a, it’s one of the worst return on investment things you can ever do as an individual furnishing your home. It’s like buying a car as soon as it’s in your house, you’re selling it for less than you paid for it yesterday. And so more and more people are also thinking about, well, I’m just going to rent the furniture through a furnish finder. And then if you start to do the math on, okay, I’ve got a $2,000 a month apartment that I’m going to come out for, but I’ve got to go spend three or four months rent to furnish it, why not basically just rent the furniture along the way and save all that money And that money might also be enough for you to go buy a midterm rental and start to create cashflow instead of buying furniture for yourself. And so that’s the other hidden dynamic is when people ask me about the strategy, I often describe it as the strategy is how fast can you pay furniture back? And we usually think the payback period on furniture’s like six months, maybe a little more. And after that, you’re just making an extra 50% ish every month on paid back furniture. You’ve actually turned it into a cash flowing asset instead of a couch that needs to be reupholstered.

Tony:
So for all the rookies that are listening that are maybe somewhat convinced, Jeff, by the wonderful information you’ve shared so far, what is your challenge to those folks who are sitting on the sidelines thinking about getting into the monthly rentals, but they haven’t yet pulled the trigger?

Jeff:
Yeah, my biggest challenge to you is to be creative about how little capital it could take to get into this. If you’re going to rent out a room in your house, perfect. You rather have a midterm tenant than short-term tenants coming in and out. That seems reasonable. And so you can start there and then start to look at what does it cost to buy something that’s an efficiency studio near my house? It is going to be a lot cheaper than a short-term rental is going to be in a leisure destination. And so how can I basically look into that? And then one of the things that I’m also encouraging people to think about is there’s a big aging demographic issue or issue opportunity in the United States. When you see things that are estate home sales that you’re like, oh my God, I can’t imagine renovating that and fixing it up.

Jeff:
There may be an opportunity to make it a midterm rental that doesn’t have to have the same high design, the same feature, the same functionality, and get into a spot where you’re just trying it. And for anyone who’s already got a rental for $179, you can put it on Furnish Finder and find out if you’re running so close to the wire that you don’t have $179 in your rental business, you should not be in the rental business. You don’t have a big enough support fund. And these are the types of things where you need to be able to take risk and just try it.

Garrett:
Jeff, that’s some amazing advice. You pretty much laid out the blueprint for all the rookies listening and myself included, to not just make this something that they’ve thought about or they hear about online and YouTube, and that’s kind of getting buzzy and trendy now, but I think you’ve really laid it out for everyone to take some actionable steps going forward. If people wanted to reach out to you and ask a few questions or disconnect going forward, where’s the best place for them to find you?

Jeff:
Yeah, so we have a real humans on a sales and customer support team, hundreds of ’em that if you come to the site and reach out to us, they’ll answer questions. I’m also frequently accessible on LinkedIn. If people want to reach out to me and connect, I’m happy to meet prospective customers and think about how we can help people. And then definitely check out our Landlord Diary podcast where two of our resident landlords talk through midterm rental experience. I think we’re 150 episodes in and a million views. And so there’s a lot of great content there for very specific topics like room rentals and arbitrage and how to think about target audiences.

Tony:
Well, Jeff, thank you so much for coming on. I can tell that you’ve got extensive knowledge, not just about midterm rentals, but the travel industry in general, and I appreciate you sharing that with us. Garrett, thank you for jumping in for Ashley while she’s off frolicking on the beaches in Mexico. And to all of our listeners, thank you for hanging out with us today. This has been the Real Estate Rookie podcast. I’m Tony, he’s Garrett, and we’ll see you guys next time. I.