Seasonal rental companies: questions to ask yourself before getting started #sansfiltre – EP 1
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Hello, and welcome to the J'poster Complet channel, the channel which helps seasonal rental companies, professional sub-renters, and seasonal rental concierge services to increase their turnover.
Today, we are doing a somewhat special format. I have a very special guest next to me, who will help me do an interview format where we will have an informal exchange to ask all the questions we ask ourselves when we start vacation rentals. You will see, there is no tongue in cheek, we will really ask ourselves all the questions, even the thorniest ones. So, I'm going to introduce her: Claire, who is my sister, and who, therefore, started vacation rentals. I thought it was very interesting to be able to make this video together.
I know — and I trust you on this — you can even ask the toughest questions that we don't dare ask. We will provide an answer to all of this to help you if you are in the same situation as my sister currently.
– What I suggest to you, to start, is that you tell us a little about your journey in seasonal rental: where are you at, and how did you make this decision?
– Listen, I’m not at all in that basic universe. I don't work in this profession and it's not part of my daily life. I decided to do this project to have additional income. So here, with my partner, we have the idea of buying a property and then renting it out. We are at the very beginning of the process. So here, we are looking for people who will support us during these procedures, because due to lack of knowledge, we do not want to start alone. And thanks to you, we have several people who will accompany us: a property hunter, there, we also work with an accountant. So there you have it, a lot of steps, and of course, throughout these steps, I had a lot of questions. And this is the opportunity to talk about them a little, all of them.
A quick digression, before starting the video, my sister said to me: “Can I ask you this one too?” “Ah yes, everything. Come on, let's go, we say everything, we talk everything, we reveal everything, there's no problem. » So we're going to ask them all. It's great, we really help you at the stage where you're going to get started, you're gathering all the information to be able to get started, and you're going to get started.
– So, what are your questions?
– My first question: I admit, we have already talked, I didn't really believe that we could make money like that with inaction. It seemed too good to be true. We talked about it a little together, you told me about short-term rentals. And in fact, for us, it’s something we’re stuck on. We say to ourselves: “It’s still super risky! » That is to say, with a long-term rental, with a tenant who will still stay for a minimum of several weeks... in the short term, if there is no one there in the evening, is Is it really that reasonable?
– It’s true that it’s a worry that is extremely legitimate, because we have the impression of saying to ourselves: “I have no security.” As you said just now, that is to say really: “I could have no one, in fact.” And above all, there is this worry of saying: “In fact, every day, you have to find someone.” So, if you have this concern, if you are also asking yourself the question, there is already a first thing that can reassure you: it is to go to a site called AIRDNA. This is a site that will help you, in fact, see seasonal rental trends and statistics in the city you are targeting. This will allow you to see, over the last three years, what the usual trends are. You will be able to see when there are people there and when there are not. And if you offer, in fact, a quality service, if you commit, in your project, to having someone who will do the cleaning carefully, a pretty decoration, a product which, really, holds up, it will not There is no reason why you should not have the trends that are observed in your city, or even among the best trends, in fact, in the city. And then, there is another point which is interesting: it is that when you make your investment, we have also talked about this a lot, it is that it must be an investment which is already profitable over time. the long term. That is to say, you should only invest in apartments, projects or investment properties. If you choose directly to invest in an investment property, it should be profitable in the long term so that ultimately, the short term is just a cherry on the cake, and in the end, very quickly, this break-even point arrives, even if you don't particularly have a 100% occupancy rate right away. Because it is true that at the beginning there may be a start-up time, the ad is brand new. At the beginning, we try to be at a slightly more attractive price, precisely to capture good ratings, and so that people start to come, even though at the beginning we don't have any ratings. So those are two keys that are really important on this subject.
– Exactly, let me say so, in relation to what you said at the end. At the beginning, you have to make prices a little attractive, and today, that's the fear we have. We say to ourselves: "We are going to make a purchase, all the same, of substantial value, which, moreover, with work to improve visibility and profitability. » At the beginning, we will have to repay these loans, and it is not said that the short-term rental rents cover it, by the way. You see, this is a point that worries us a lot.
– Yes, I understand. But there is also one point that can help in this context, which is to be able to postpone, in fact, the repayment of the loan. At the beginning, you are not obliged... you can negotiate with the bank to have a deferral of repayment of monthly payments, especially if there is work. So that’s a good argument for being able to postpone a little. And sometimes, we can even postpone more than the duration of the work. It allows you to have this security, to create cash flow at the start, and to have this serenity upstream. But you'll see that when we start, even if at the beginning, it reassures us to say to ourselves: "I won't be able to repay the monthly payments straight away. I wouldn't have to repay all the monthly payments. » But in fact, when you start vacation rentals, if you haven't made a mistake about the investment, from the start, it actually works. We are also not in a situation where we have worrying amounts. If we do things well, once again, if we have made a good choice of apartments, if we have carefully studied the AIRDNA in particular to ensure that there is the potential, if we have made a nice decoration, if we also have a logic of revenue management, this is also a vector of performance. At launch, there is no reason to have a gap of six months, it doesn't exist.
- All right.
- Impossible.
– And afterwards, we were talking about just that. In any case, we will be able to cover our costs. Afterwards, short-term rental is a real job. It takes a lot of time, it requires a lot of daily management. So here, we plan to continue with the concierge service, and what's more, we won't necessarily be able to manage it ourselves. I'm going to be completely honest: when I typed "concierge" on the internet, the percentage of concierge services is very high. By the way, already, it seemed completely astonishing to me to be able to earn money, that is to say that the income is higher than the real estate loans, the various taxes and others, to that, we must add 20- 25% for the concierge service. Can we still not lose too much money?
– Is it still worth going there?
– How much will it cost us?
– Well yes, it’s possible. This is why it is important to consider it. And that's also why it's important to have an apartment hunter who is also attentive on the subject of seasonal rental, and to consider him in the load profile from the start. Projects like that really exist. It's a bit like, as we talked about a few months ago, remember, people who say: “But no, it's impossible. » They maintain that it is strictly impossible to have a profitable project. Do you remember?
- Yes yes.
– And so, we laughed about it, saying to ourselves that we see people who do that every day, and we know some, so obviously it’s possible. But suddenly, I lost track of what I wanted to say. In fact, if we consider all that from the start in the initial price, it actually shapes the choice of project, and therefore, it ensures that the right projects are taken on straight away. So yes, it is possible. And afterwards, it's true that this percentage, I remember when we talked about it, you told me that, a bit, as if you had stumbled upon a scam: "I found something! The joke, they take 25% from you! » And I replied: “But no, it’s normal. »
– “That’s the price!” »
– That’s it!
– By the way, the seasonal rental concierge also takes care of something that is quite enormous.
- Yes ! It's really not for nothing that I'm looking for a concierge service!
- So ! You are right to point this out, and it's really a huge job, that is to say that there is the whole contact part with travelers which takes a crazy amount of time, because you have a lot of questions from people to respond to, so that ultimately, only part of them reserves; ensure that there is operationally good service delivery; make sure there is someone, also, personally, because when you have a concierge, you have a team. There is also the fact of being present if there is a problem in the apartment: hot water problem, electricity problem, etc. It's the manager of the concierge who will make sure that someone is passing by, either him or someone in the team. It's a pretty huge time commitment. And besides, I take it a bit backwards. There is also, when you are the manager of a concierge service, a crucial issue, to ensure that in fact, you will be profitable, despite the 20-25%. Because it can be such a waste of time devoted to all that, that for them, they have to be extremely sharp on the management of the apartment to ensure that it holds up. So it may seem, at first, a bit much, but in the end, it's still realistic. You have to take it through the prism of the project.
– I have another question that is a little different in the choice of property. There, for example, it's true that I'm on two properties. And so, we put, in fact, a profitability criterion to have something that stands up. And by discussing with the person who will potentially manage the concierge service, she gave us other criteria. Should we focus on profitability, or are the criteria specific to short-term rentals, for example, being in the city center, having parking spaces important?
– That’s an excellent question. If I try to dig a little deeper into the question you ask me, what I'm saying to myself, and correct me if I'm wrong, but it's perhaps the criteria, too, which are in affinity with short-term rentals , are also criteria that will allow you to have, if ever, an efficient apartment over the long term, right? City center, parking and all.
– Yes, it’s attractive, whether you come there for a day or longer.
– That’s it! I tell myself that in the end, perhaps these are good practices that will allow you to make the right choice of apartments. I'll answer a bit...but it's probably hard to deprive yourself of both. You can't do without profitability. Afterwards, perhaps, to be more precise, perhaps it is also to be chosen on a case-by-case basis, that is to say, to see what you have to give up to have this profitability.
- All right.
– A very concrete example. If you see that there is one that is perfect, city center, perfect, good service, enormous potential: excellent profitability, but the parking space. Typically, in seasonal rentals, the absence of a parking space can be fine. There are plenty of apartments that are a failure without a parking space. But if, on the contrary, it's really a property that is extremely remote, borders a farmhouse, it's hard to find, etc. I'm going to the extreme of the city center, eh!
- Yes.
– My example is not at all excessive!
– Weighted, eh!
– There you go, we are in half measure.
– So, here we try. We can say to ourselves: “I have profitability, but…”
– It’s not very huge!
– That’s it!
– For seasonal rentals, this is perhaps not the criterion that we will go for.
- All right !