In this interview with Benjamin Etienne we talk about:
– the death of seasonal rental
– the 3 essential points to succeed in LCD
– tips for getting started
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Hello and welcome to this new video from the J'poster Complet channel. Today, we are talking about someone who left employment in 2019, who is now an investor, and who owns four short-term rental apartments, four apartments of excellence thanks to capital points which he will give us talk later. He has his next seminar on short-term rental which will take place at the beginning of March. He is an elite real estate agent. I am happy to welcome Benjamin Étienne with us today.
− Hello Benjamin.
− Hi Élise. Thank you very much for giving me the floor in this video. You still gave me a lot of compliments: elite hunter, excellent apartments. THANKS.
− Exactly. It's sincere. I would be delighted if you would tell us in more detail about your background, if you would tell us about all that, because I think it will be of great interest to people who follow the J'poster Complet channel.
− My name is Benjamin, you already know that. I am 33 years old. I left my job as an employee at the end of 2019, following investments in short-term rental that I made between 2018 and 2019, and therefore, in 2020, which allowed me to generate enough income to leave the world of wage employment. So as a result, I dedicated myself, in fact, over the year 2020, to creating online training, to organizing a seminar which will take place as you said on March 13, 2021. I am also a real estate agent and property hunter for investors who wish to invest in the Pays de la Loire region. So, we are already a team. It is a national network which was created in September 2020. We are already around fifteen hunters. I would say that the advantage we have compared to other networks is that all the property hunters for rental investments are themselves investors. So, we know what we're talking about. We have already done the operations on a personal basis. We have already done work, we have already managed tenants, whether bare, furnished, or short-term rentals. This is why we specialize in this type of hunting.
− Great! There's a question I really want to ask you. With this pandemic, we say it, we hear it a lot: “That’s it, LCD is dead. Everyone who does LCD absolutely must go long term. It's hell. » What do you think? Do you confirm? Is the LCD dead? LCD, for those who don't know, because it's true that we also have people from the I display Complete community who are real estate investors, we also have people who are at the head of a lodge or a guest house; so LCD is short-term rental, that is to say seasonal rental. So, what do you think?
− No. I think it's very, very far from being dead, because in fact, when we had the first confinement in March, we had a lot of cancellations for March, April, May. So, it was a bit complicated for those who didn't have the necessary cash. In fact, it was a bit complicated, I imagine, for them. However, we were also sure that things would resume. And when it resumed, it would really resume quite exponentially. I'm thinking about us this summer. Morbihan was the first tourist destination. We broke all the records. Whether we are restaurateurs or hoteliers, we still broke a lot of records this summer. It's a special year, more difficult than other years. The advantage that I find there - and this is an analysis that I did on my market - is that there are many people who have stopped LCD to switch to long periods of time, as a result, there is less competition. And from the moment we are in a mid-range, high-end positioning, and we differentiate ourselves from our competitors, we have a occupancy rate which is always suitable. We have profitability a little bit lower than 2019, but I think that we are... moreover, this type of business which will continue to evolve, because the hotel chains are unable to differentiate themselves, and we , by offering renovated and well-decorated apartments, I think that customers are increasingly appreciating this type of accommodation.
− Besides, a point which perfectly illustrates what you are saying is that Airbnb has gone public, and they are now worth much more than many hotel chains.
− Exactly.
− So, that shows that we have a future, and that that has great potential for the future.
− There are regulations in progress which will in any case slow down investments in certain cities. I'm thinking of the city of Nantes, for example, where they limit the number of properties per owner. But I think we're really at the very beginning. There are quite a few people on Facebook, on social networks who said that it was the end of LCD, that everything had to be sold, that everything was going to collapse. I think we have figures that are still very suitable for a year 2020 which is really special. In 2021, we will wait to see what happens, but I am an investor, and in this rental strategy, I do not want to spend it on the long term for different reasons. So, I think that when we do things well, we can still have a good occupancy rate, and a great profitability rate.
− We share the same points of view. What would be your three best tips to give in short-term rental for someone who is starting out, or someone who is still at the beginning, we are not going to say for someone experienced. What are your three best tips? Or maybe for someone experienced, I don't know.
− Already, the first advice I give is in relation to the location. It is often said that in real estate investment, the three rules are location, location, and location. I think this is even more true in short-term rentals, where most of my clients, in any case, are looking for the very center. When you are in the very center, there is everything nearby: restaurants, shops, etc. In any case, it is one of the first criteria for customers. So, location, for me, is a first rule. The second rule is decoration. Everyone does the same thing. I talk about it in my training, but everyone does the same thing. We have the impression, from one city to another, of going to an Ikea or Conforama apartment. I have nothing against these stores, but I think that there are a lot of people who have launched into LCD with budgets perhaps a little tighter on the decoration part, and for me, it becomes a little impersonal. There are ways to have beautiful furniture without spending a fortune. And I think that this is also one of the ways that will clearly differentiate us from other competitors, because there is still a significant offer on Airbnb. Less on booking, but more on Airbnb. And I think the decorating part is a good point, a good piece of advice that I give. And the third point is to have, in fact, software called a channel manager, which will allow you to synchronize calendars, and therefore availability and prices. Why have a channel manager? This really allows us to automate a lot of time-consuming tasks, including double reservations. In the event of a double booking, what happens on the platforms? You will see that it quickly consumes energy. So, the channel manager, for me, is something essential, and which does not cost much compared to the usefulness we have on a daily basis.
− Why did I already laugh a little when you talked about channel manager? This is because we talked about it just before, and we said to ourselves that it was really part of the standards for us to start with, and that today, we are still surprised to see that certain people claim precisely this absence of a channel manager, even though it seems to be essential to doing things correctly, if only to save time. That's why I laughed a little. It's a laugh of support for what you were saying. Great. It's super interesting. If you had to start from scratch, what would you do with short-term rental? Because now, you have experience, you have heritage, you have knowledge. If you had to start from scratch, would you do exactly the same, or would you do some things differently?
− On the decoration and channel manager part, at least in the two pieces of advice that I have just given, I would do exactly the same thing, because each apartment that I buy and that I decorate are in my image. In fact, that means that I tell myself that when I get into it, there always has to be a bit of a “wow” effect. Sometimes, I spend a little more than the planned budget, but in the decoration and channel management part, I would do exactly the same thing. I would say that for the location part, now that I have studied the market quite a bit on the LCD part, and I studied, in fact, the towns around my home in Brittany which were working well; Vannes is a city that functions very well, the real estate assets have evolved in a somewhat exponential way, because there has been almost a 15% increase in real estate every year for the past two or three years. So that's quite a good thing, but I think that in terms of profitability, I should have invested in cities with a cheaper price per square meter, but with profitability as strong as Vannes. So, I did a study; not thorough enough, but it still took me a few days to get it to lather. So, I did a study on Brittany where there are two or three towns which are doing, let's say rather well, with a price per square meter which is practically half as expensive as Vannes. And I think I would have gained a little more from that. But no regrets. The apartments that I bought in Vannes are very beautiful, they work very well, but I think that perhaps I would have studied the LCD market a little better, and perhaps to have a more strategic city, which affects both professionals and tourists.
− I see what you're thinking, we also talked about it just before. What are the two or three keys for you to say to yourself: “I have studied a city well. » Are there any little tips you should know?
− There is one thing to know. I bought in Vannes because I was born there, and I'm really from the area. The first thing when you buy is the price per square meter. It is necessary to be 10, 15% below the price per square meter compared to the Vannes market average, among others; do not underestimate the work. If there is renovation or refreshment work, you really shouldn't hesitate to put in the resources, because when you do LCD, you have a clientele that is still relatively demanding; therefore surround yourself with construction experts. And I have a tip which is important in relation to the location: it is to get closer to the tourist office, and to look, in fact, at the occupancy rate of the hotels which are in the city in which you want to invest. And that's great value, because if from one year to another, you always have a 60% hotel occupancy rate while there is increasingly strong competition via Airbnb, and which does not count, in fact, in these calculations, it means that there is quite enormous potential. If your occupancy rate is below 60%, I wouldn't advise against going there, but you should still go a little cautiously. You should know that a hotel is profitable from 40%; If I'm not mistaken, Élise, you are an expert on this.
− Maybe, yes. I think it depends a lot on the number of stars, too, because economical hotels are profitable much faster than luxury hotels, which require super high occupancy. But the average must be that.
− Yes. So, getting closer to the tourist office to see the share of tourist and professional customers is rather a good thing. If you have a lot of professional clients, you can also form partnerships with local businesses, especially if you have a channel manager. These are things that you cannot do if you do not have a channel manager, hence the importance of having one. So, that’s it for the advice part. Afterwards, we could talk for an hour, an hour and a half about all the solutions that I tried, which also made me lose several thousand euros, because in my opinion, we also have to test, it You also have to know how to lose, especially when it comes to pricing. There are times, in fact, when we think we are selling well, but in fact, we don't sell at all, it's not at all consistent with the market, we should have better sold up to 30 or 40 % more expensive than what we charged. There are quite a few solutions, but I would say that the first thing, for me, is that when you invest, and I did it in a city where I had to buy an investment property last December, it is in Camaret-sur-Mer. So, I approached the tourist office, they gave me all the statistics on the occupancy rates of nearby hotels, and that allowed me to see, in fact, if the investment could be profitable or not. And in fact, it turns out that in Camaret-sur-Mer, there are quite a few people between April and September, and after that it's dead. Basically, your investment is made over four to five months of the year. So, it's a little bit complicated. While in Vannes, we have a seasonality from March to November, but we still have a professional clientele, we still have a small industrial area around Vannes which allowed me to reassure myself about my investment, by telling myself that in any case, excluding tourists, November, December, January, February, I still have professionals on the move. And via partnerships that I made in 2020, it allowed me to sell during this low season.
− Top. I'm thinking of something that goes along the lines of what you're saying: don't hesitate, too, to look at Airdna. It also allows us to have an idea of the rental demand in the city. It can complement, correct, or go in the same direction as the stats you give, and it's always interesting to look at that.
− Airdna, for those who don't know, it's a platform that takes statistics from Airbnb and Abritel, and which will integrate booking statistics in the first half of 2021, confirmed two weeks ago by the country manager from Airdna France. So, I think it will become an essential tool for seasonal rental companies, in any case, for those who want to invest in it, because it really shows you the rental demand in the city. It's an insignificant investment, in some cities we're talking about 20 or 30 euros. I think for Nantes, it's 40 euros. 40 euros to have complete statistics on the city in which you wish to invest is nothing at all. Plus, it's a monthly subscription. You can use it for just one month, and cancel the subscription without obligation. And then, they push the statistics a little further for concierge services: there are demos, with slightly more complete Excel files. This is a solution that exists on the market. It is criticized because people use the free version. But the paid version is just crazy. It is so complete that even I, in fact, am using it, whereas before, I used the free version, telling myself that there is still not much data, but I tested the paid version, and in Nantes, in any case, it reassured me about the investment I made.
− Moreover, I would like to take this opportunity to say that the criticism that people often make about Airdna is that it is written in English, that these indicators are a little barbaric. We did a little training which allows you to know precisely how we use Airdna, and how to understand it so that it is no longer barbaric at all. I'll put the link right below in the info bar so you can watch. I think it's a training that is quick to assimilate, and which will really allow you to get the essence of Airdna. As Benjamin says, it's a few dollars for a really big future gain, because without this information, we make bad decisions, and we miss out on money. There are many people who have your background, Benjamin, and who ultimately say to themselves at a given moment: “Hey, I would like to become a seasonal rental concierge to exploit all this skill, and all this knowledge that I have accumulated for me and for my clients to provide seasonal rental concierge services. » Is this a wish for you?
− Yes. I have already created a concierge service with my father-in-law. On the other hand, we were hit by the pandemic, because all our customers panicked. I had 80% of clients who panicked, who stopped doing LCD, and who switched to long-term. I think there is a real demand in the market. It’s very French, the concierge service. In France, this is something that works well. Be careful, when you set up a concierge service, and you collect rent from owners, you must have what we call the sesame, the management card, because you are considered a real estate agency. So that's the first warning I could give, since there are quite a few people who do it without knowing it. You may be rejected by competitors, by real estate agencies who do not support concierge services, among others. I think that with all the tools we have as investors, we can duplicate, in fact; these methods, by being a concierge service, by using a channel manager, by automating the management of emails, by studying the pricing of the goods that we are going to manage. So, it’s something that works more and more. I am in the process of switching to professional subletting. In fact, I am going to sublet the property from the owners, and I am going to resell, in fact, on the Airbnb and booking platforms. Be careful, it's the same. It is a method which is very regulated. You don't have to do anything. I invite you, if you can, to contact a lawyer on this matter. I received a 25-page report on subletting that I read this weekend, and there are quite a few things to know. You don't have to do anything. I would say that the advantage, when you sublet for the owner, is that you don't have the same rules, the same standards as in housing, and you have a fixed rent. So, it's a real advantage for the owner. Whereas the owner, when he goes through a concierge service, there is no guarantee of rent, it is based on supply and demand, and there is no commitment either. That is to say, when you are a sublet, the owner can stop the lease. This is what we call a derogatory commercial lease. It can be stopped, in fact, with three months' notice. So, there are quite a few advantages for the professional sublet, and for the owner. So, it’s something that’s being done more and more. Be careful, if you have a lot of apartments to manage as a professional sublet, because suddenly, I have the impression that there are a lot of people who get into this business, and at a At any given moment, I think it will be regulated just as short-term rentals have been regulated in cities with more than two hundred thousand inhabitants and in certain cities with more than 50,000 inhabitants. So, also be careful with this method, because you are also committing to paying the rent to the landlord, and if you have ten rents to pay every month, that can sting. I would say that the advantage of the concierge service is that there is no guarantee of rent for the owner, and there is no guarantee also for the concierge service. So if the market collapses, well the market collapses, and then you are not financially committed.
− It’s true. You are right to point this out, because during this pandemic period, concierge services have resisted the crisis more than subletting.
− Yes. I know quite a few sub-lessors who stopped the leases to switch back to the management of apartments through concierge services, because suddenly there were too many financial commitments, and we have five or six apartments at 500 or 600 euros per month, well there are still 3,600 euros to pay to the owners, while we get 500 or 1,000 euros. So, be careful with this rental strategy. We hope not to be in a pandemic every year either. I think we are working towards it. In any case, it's a method that works, because short-term rental works, so subletting is something that works, and is very profitable. But it also commits you financially to the owner.
− Great. Thank you very much, Benjamin. Tell me, where can we find you? If we want to see what you do, if we want to write to you, ask you for advice, subscribe to your services, where can we go? What can we do?
− I can be reached for the moment on social networks, since the website is in progress. So, I'm on LinkedIn. I didn't say my last name. My name is Benjamin Étienne. On LinkedIn, you will find me under the name Benjamin Étienne, expert in profitable real estate. I don't think there are many Benjamin Étienne people who have that name. On Facebook, Benjamin Étienne, always. On Instagram, Benjamin Étienne real estate consultant, the name of the company. I communicate quite a bit on this, given that I am organizing the first real estate seminar specializing in short-term rental in Vannes on March 13, 2021. So, if you would like to know more, you can contact me by private message. I will of course send you the page where we explain a little how this day will be organized. We have seven speakers, for the moment. I am awaiting the response of an eighth speaker.
− Who works diligently to be able to be present.
– So, there you go. For now, you can find me on social networks. I don't have a website at the moment. It will arrive within a few weeks.
− Okay. Great. Thank you very much, Benjamin, for sharing all his keys with us.
− Thank you, Élise.
− Thank you for all these ideas that you were able to give to people who have not yet started LCD, or even those who are already starting.
What I suggest to you is that if you are hesitant about determining your prices, because we are on the J'poster Complet channel, and we help you determine your sales prices, don't hesitate to download the free bonus, which is just below, in the description, which will help you no longer make mistakes when determining your prices. You will be able to join our private seasonal rental price and turnover maximization group, and you will receive it automatically when you register. I'll see you soon for the next video.
− Thank you again, Benjamin, for your presence with us in this video.
− Thank you, Élise.