- Speaker #0
All right. Welcome to another episode of Millennial Money Matters with Kelly Turner.
- Speaker #1
And Derek Mazzarella. And we have a special guest today, Jess Starr. Jess, welcome.
- Speaker #2
Hey, thanks for having me.
- Speaker #0
All right. Jess, tell us a little bit about yourself and what you do.
- Speaker #2
I'm Jess Starr of the Starr team with Keller Williams Realty. I have been a realtor for over 20 years and we sell about 200 homes a year. It's been down a little bit because the market obviously has shifted here in Connecticut and the nation. I am a single income house with a family of six. We have a team of about 10 agents, and I'm also a super host of four Airbnb properties. We own 10 properties, invest in multiple other investments, and have a pretty sizable passive income we earn monthly. So I'd love to talk to you about that as well. We've been investors for about 15 years and became Airbnb hosts since 2020. So yeah.
- Speaker #1
Great. Yeah. Well, that's one of the things we're really interested to talk to you about is, because we always hear about the side hustles with Airbnb. So love to learn a little bit more about that. And I think Kelly, you got some information for us on that.
- Speaker #0
I do. I have some stats. So, you know, from the mortgage standpoint, the lending standpoint, I do get a lot of clients that come to me just like you as a realtor, like, I want to buy an Airbnb. I want to do short-term rentals because it became really hot on social media for a little bit, right? That everybody was like, the side hustle was the VRBO, the Airbnb. Yeah.
- Speaker #2
People are going to kill it.
- Speaker #0
Yeah. Everybody's going to make a million dollars. This is the path to generational wealth. And people don't realize a couple of things. Number one, these sort of short term rentals have been around for ages. Right. This is the beach house life. Right. Platforms are newer. Right. The platform style where you're booking these online. But they're not necessarily the instantaneous like I'm now all of a sudden raking in the big dollars and people don't realize the work that it goes into these. Yeah,
- Speaker #2
it's hard because I think they... think there's going to be an immediate gain when you do it. And the first year, my husband and I got into it. We don't have any partners. It's just us. We said, you know, we're going to think of this year as a wash because you have to invest the money in first. And I think a lot of people put, they don't think that way either. But we thought too, if we want to get the most return on these investments, we want to have a premium product so that we can command a premium price. So we were willing to put in more money than most so that we could get a premium price on the premium product we had, but a lot of... hosts don't want to do that either because they're going to put some money in and it costs, right?
- Speaker #1
Right. I just loaded up with Ikea furniture, right?
- Speaker #2
Yeah, no, right. We wanted the really high quality towels and we left special treats for everybody. And we had really good organic linens and all those things. So like, if you needed an item, I thought about if my family went away, if I wanted beach chairs and toys and all those things, I didn't want to have to think about anything. So five-star reviews on everything we had was my number one priority. And if somebody had an issue, I would Amazon something to them the next day. It just didn't matter. It was Disney level service, just like our real estate team all the way.
- Speaker #0
All the way. I love it. So some fun Airbnb stats. So Airbnb has 7 million listings worldwide, covering over 100,000 cities. So Airbnbs are everywhere at this point. Every country, every city, you're going to find an Airbnb. The average Airbnb host in the U.S. earns $14,000 per year. But that is... Well, and the trick with that is that is so location and property specific. I know people who own zero dollars a year or who earn zero dollars a year, and then there are people making six figures on some of these properties. So it really just depends on where you are and the level of service, as you said, that you have. Millennials make up up to 60% of Airbnb guests, which doesn't really surprise us. That's right. We're like the digital generation. And they are also, though, like a huge growing segment, as we've talked about, of the Airbnb hosts, right? We're seeing millennials really embracing it. And then 43% of Airbnb hosts use their rental income to help cover their mortgage or rent. And that's kind of the income piece to it.
- Speaker #2
Yeah. You know, the first year that we actually put our beach house on, we were taking a trip to Europe. And I said, this trip was so expensive for six of us to go to Europe. that I wanted the beach house to actually cover the cost. We couldn't use it that year anyway, because we'd be away for so long. So I'm like, this beach house is going to pay for our trip to Europe was how I saw it. And then I realized in 48 nights of rental, because of how high the nightly rental was in the area in Rhode Island, we could make, it actually covered our mortgage for the year. And then, so we just needed a few more, you know, weeks of rental to actually cover the trip to Europe too. I was like, oh, this is amazing. So. So we just thought, all right, well, let's put it on and we could be very strategic with how we used it and when we rented it so that we then had a free beach house. So I actually looked at it that if we just rented it for a few months out of the year, we could have a free beach house. I didn't actually care if I rented it anymore because I wanted to be able to use it. So that's how I saw that property.
- Speaker #0
And was that your first Airbnb?
- Speaker #2
Actually, no. We had bought a property in St. Petersburg, Florida. And that was our first technical Airbnb property. It was a midterm rental, so that's 30 days or more. And then because we bought that one, it made me think of this one because we were going away. And that one was a short-term rental, meaning, you know. Three days to a week or more.
- Speaker #0
A week or more. Now, for the midterm rental, what made you decide to have the St. Pete property be a midterm rental instead of a short-term rental?
- Speaker #2
The condo association. All right. That one said that it had to be 30 days or more. So this is also a warning. So when you guys are looking into investing, really know, have a good realtor. So we are licensed in three states ourselves as a team here in Connecticut, Rhode Island, and Mass. But. If you're looking to go buy in different states, make sure the agent that you're working with and connect with an agent locally that you know they can refer you to somebody. That's what we do all the time. But that they connect you with somebody in the area that knows the condo associations because every association is different. I've even bought two properties in the same. It looks like the same association, but they're not. Each building is a different association down there. I found that out as I was under contract in a different one. So and each association has different rules and regulations. So one of those condos I was under contract. on the second down there. Didn't let you rent for a year.
- Speaker #1
Oh yeah. I had clients move to, not move, they bought a second home in Florida as well. And the same thing, that full year before you can rent anything out.
- Speaker #2
So I had to get an out of contract on that one and go pin on a different one. That was the second Airbnb in Florida that I bought. So anyway, so be very careful, read those rules and regulations and all those things when you're buying too.
- Speaker #0
Yeah. And there is also state and local regulations to know about. So there are states that are really in towns that are really starting to regulate these more. Some of the regulations are really just purely safety. Like you have to have a fire marshal inspection. They treat them a little bit more like commercial properties. You need to have proper egress, things like that. But some of them are more restrictive. There are some cities and towns where you have to live on the property, right? As an owner, you must live on the property to rent it out. Well, that doesn't work if it's your vacation house. So it's really making sure that you're educated as well.
- Speaker #2
Well, the other things that people need to keep in mind around that, too, is the type of insurance you need to have, too, is actually different. It's not vacation rental insurance. It's a different insurance altogether. And it's not insurance that like Airbnb would have to cover your belongings. It is actually a different insurance altogether. So you need to make sure you're telling your insurance provider that this is a vacation rental. It's through. one of the vacation rental sites. It could be VRBO or Furnished Find or any of those too. So make sure you're doing that too. And like in Rhode Island and other states, you have to register with the town and the local municipalities, like the states as well, because there's different taxes that they have too. And they change all the time, guys. So make sure you're up to date and you're registered so you don't get in trouble and slept on the wrist with other fines.
- Speaker #1
Sounds like a lot of work. Why would anyone do this?
- Speaker #2
I know. It's so weird. Sometimes I ask myself that too. But when you're a six-finger earner, then you don't ask yourself as much.
- Speaker #0
Yeah, there you go.
- Speaker #1
The money helps.
- Speaker #2
It's all right. All right,
- Speaker #0
Derek, you've got some money questions. I do.
- Speaker #1
All right. So let's say, all right, I'm an investor. I'm like, all right, I'm seeing stuff online and I come to you, Jess. I'm like, all right, I'm trying to decide. I've got maybe a property. Do I rent it monthly? Do I do the midterm rental? Do I do the short term? How do you kind of go through that process with a client?
- Speaker #2
So what we'll do is I actually have a bunch of calculators I'm happy to share with people or any of your listeners if they want to. get that, they're free to reach out to me. We've created calculators that we actually use to assess each property that we have. So I took it and I looked at properties that we had, for example, and I said, okay, if it's a long-term rental that I have right now, and I'm making X, if I could reposition it into a midterm or a short-term rental, would it be performing better? And sometimes like my husband and I will reevaluate our portfolio and we'll look at it and say, okay, is this performing to the capacity it needs to? Or, and we do this because we have a mindset of, we want to earn a certain amount of money. every month passively so that we can hit certain goals in our life, right? So sometimes that's just reevaluating certain things within our portfolio. And other times that's, do we need to acquire another asset in order to hit that number passively?
- Speaker #1
Does that make sense? Yeah. Yeah. So you're kind of doing the math. I think kind of like what we do here at financial planning is you've got to start with your goal. What's your goal? Is your goal to be as passive as possible? Then maybe the monthly rentals probably make the most sense. But if you want to have more upside of the income, that's where ARBB is probably going to help.
- Speaker #2
Well, so here's the thing. You start just like you do with anything. You start more likely than not managing the properties yourself, right? Because you want to make the most money in your mind, so you manage them yourself. Until you realize that managing yourself is not as passive as you think it is, right? Because you're putting the time and the hours in. You're saving that money in your mind, but then you realize, okay, really, if I started paying someone, I probably would be a lot more passive and earning it. So until that property starts performing to where you need to, you're unable to. fully step out of it so it's not totally passive. When it does start performing to where you need to, you need to get the company and the people in to actually manage it on your behalf. So you have to calculate those numbers with those fees built in. So again, I'd suggest to everybody to re-evaluate their entire portfolio of their properties every year. Also re-evaluate your contractors that you have every year. Is your cleaning person, and that's actually where the Airbnb stuff gets tricky, Is your cleaning person? the most cost effective because the cleaning bills those are the ones that can cost you the most in the long run so it's good to reevaluate those things over time too and for our area up here like our southington property that one you know we have to reevaluate okay we had a lot of snow this year and they jacked all our snow prices up big time so tiny little property used to be 50 bucks a plow and suddenly it's 80 over three inches yeah
- Speaker #0
and you're like well and are you kidding yeah In each property, it's not just, right, you have to, especially when you're purchasing them, you know, is think about where is this located? What services do I need there? You know, if you're talking and Jess and I talk about Vermont mountain homes all the time, I'm going to buy a ski house. Well, I need, not only do I need plowing, but I need shoveling. I need, you know, snow blowing and I need it to be immediate. Yeah. What am I paying for that? I need the cleaning crew.
- Speaker #2
Sometimes roof raking too.
- Speaker #0
Roof raking. A hot tub. Do you have a hot tub that needs to be cleaned? Those are very, very hot in those sort of, you know, Vermont ski towns. Well, you have to turn over the hot tub every time you have a visitor. That costs money and there are people who do just that, right? Their job is they come and clean your hot tub. So you have to take all of that into consideration. So it's not just as simple as like, hey, I bought this house and I'm going to rent it out. Yeah.
- Speaker #2
And it looks super sexy, guys. Like when you're looking at Instagram and all the influencers and they're like, look, now I'm driving a Rivian and I've got a Tesla. I'm so great. And we used to work at Dunkin Donuts. But five years later, we're doing this. You're like, OK, awesome. And you're not showing all the stuff in between that happened to get there. Like I will take pictures of my kids scrubbing the floors and moving the stuff out and like, you know, a party of stuff if we're actually doing it ourselves. Because I think it's good to show the real side of things and what you're actually doing to get to that part.
- Speaker #1
Yeah, there's always that level of, all right, I've got to build this thing for a few years or a while to get it up and running. You're going to make a ton of mistakes probably up front. I'm sure there's probably some things that when you first started, you're like, wow, if I did that over again, I'd do something differently. Yeah. And we don't see that.
- Speaker #2
Yeah. I think the other thing, too, to keep in mind is like turnover time. So like let's say people don't talk about this either. The time that it takes to turn properties over, depending upon the cleaning crew you have. And, you know, you start off and sometimes the cleaning crew could be somebody that you know that might be cleaning your house that could do it. And that might not be the right cleaning crew. You might need a couple people to turn it over. And I am anal about the turnovers. Like, I want all that bedding done. I mean the comforters, too. And there's a lot of Airbnb hosts that don't do that. Right? Think about that. But think about it. I had a friend that's an Airbnb host that said, Jess, do you think hotels clean the comforters?
- Speaker #0
No,
- Speaker #2
they do not. No. Right. But my Airbnbs do.
- Speaker #0
So in years.
- Speaker #2
Yeah, that's what I'm saying. So but like, but the hotels don't do that. Yeah, you're staying in a hotel and you're like, you know, they don't do those comforters. How many people have stayed in these hotels? So and I really want that done. So you have to think of what's the process for that. So I have these beautiful thick bedspreads. Well, that stinks to try to do that. But if I get the duvet cover over, you know, the bedspread, well, then I can take that off and do that a lot easier. And maybe I actually need to invest in by two duvet covers. So. They can take it with them, do it in between and just flip it the next time. So they're not sitting there eight hours waiting for the laundry.
- Speaker #0
For the laundry. Yeah. And laundry, I feel like is expensive. People don't realize, right? You're running four or five loads of laundry. You know, one of the complaints I saw online about Airbnbs is the chore list upon leaving. Yeah. What's your thoughts on that? I don't know. Derek, have you stayed at an Airbnb?
- Speaker #1
Yes, I have.
- Speaker #0
Have you done the chore list?
- Speaker #1
Have I done a chore list? Yeah, there's been some things like, oh, make sure to put the trash here, right? And all that.
- Speaker #2
stuff um a couple that i have have like small list but i haven't had anything where i've been like oh my god this is like what are they asking me to do yeah i should give you what my tour list and you guys tell me if i'm on all right let's look at it my tour list is you start the dishwasher leave your dishes in the dishwasher we'll unload it start it your garbage goes into the garbage bin obviously ideally it would be awesome if you emptied the fridge i don't ask that but if you'd emptied it that'd be ideal um and we ask you to strip the beds and throw it in the wash if you can get it to the dryer awesome if you can't that's okay but at least you started it throw all your towels together into the bathtub.
- Speaker #1
Oh, the bathtub.
- Speaker #2
Yep. Because they're all wet. I don't want them on the floor in the, you know, on the wood floor.
- Speaker #1
You sound like someone from experience because I feel like I've been like, oh, whatever.
- Speaker #0
You've seen this before.
- Speaker #2
Yeah. I'm a mom. I have kids at home. I know they're going to throw them on the, you know, wood floor, throw them wherever. And I'm like, okay, what makes the most sense? Throw them in the bathtub. They're wet. So the cleaning crew can get it. I have extra sets of every sheet, every towel, every everything. So also, if they've trashed them, then I can just say, take it from the closet, throw that out. If you can't bleach it or do whatever, toss it. The biggest thing that I hate as an Airbnb host, which I think everybody should talk about, I try to get nice white towels, but this ticks me off more than anything. Tanner. Self-Tanner. It's a freaking nightmare. They ruin all my towels and I hate it. You would think it was makeup. I buy these like special little makeup towels that say makeup. I leave them out for everybody, but it's a stinking tanner.
- Speaker #0
I never would have thought about that. I will say the makeup, those black makeup washcloths, key. I'm a makeup wearer and I, whenever I see those, I'm like, oh, thank God.
- Speaker #2
I leave those out for everybody. Most people are awesome at it, but it's the tanner that trashes the towels.
- Speaker #1
So I actually- Just the tanner or towels, huh?
- Speaker #2
I actually may switch all my towels to gray for that reason.
- Speaker #0
Yeah. No, I think you're choreless. So we stay at an Airbnb in Martha's Vineyard every summer. And that's very similar to what our chore list is. What our host does there. Now, this one, we don't run it via a website. So it's a little bit different. But we pay a large cleaning deposit up front. And then he refunds you at the end once the cleaning people come. Yeah. Because his cleaning people charge by the hour. depending on how clean it was, how much it costs him, he refunds you. So the incentive is so, let me tell you, I am crazy. That fridge is cleaned out because I want my money back. Yeah. I want my money back. So I'm like crazy.
- Speaker #2
I'm going to need these details after this. Yeah.
- Speaker #0
It's really genius. But like, so we leave the house spotless because I want as much money back as I can possibly get. Fun fact. You probably figured that out on the podcast already. But Yeah, I thought it was it's a smart move because the incentive is very high. Yeah. to keep it really clean. Well,
- Speaker #2
so here's another fun fact. My other goal being a vacation rental host was I only wanted to use the platform really once because if I did a great job, I didn't mind paying all those fees. But if I did a great job and I earned those reviews, what I have throughout every single property is book with us for a discount. So I have a QR code in every single property and I have a website I've created that they can book direct again. I also make them sign a waiver at... for certain things to use, like our kayaks, for example, in Rhode Island. So they have to give us their email address. I get their phone numbers beforehand. So I'm also building my database for all our past guests. And I'll send specials out as well so that they can rebook. So I get that information, which is great. We've got a database, number one. So that's key to build your business, right? For any business. They can rebook. I don't need the website again. So I save on Airbnb fees. We can actually charge more and make more. The guest saves. pays less. So it's a win-win on both sides, which is great. And then I have loyalty from them too, which is good. And I'm not worried because I can also tell I'm not sending it to the guest that was a jerk. Right.
- Speaker #1
Yeah. You know, you know, I reported all the guests,
- Speaker #2
guests that broke all the toys or whatever else, you know what I mean? Like there there's people that are going to treat it like it was their own property. So the cool thing is I have guests that treat it like their family home that they come back to too, which is great.
- Speaker #0
Yeah. That's how we feel about the place that we go to. We go every year. It's like our house. My kids love it. They look forward to it. It's ours as far as we're concerned. Yep.
- Speaker #2
And that's the way, like if you're not going to buy yourself a beach house, that's how we want them to feel about our home.
- Speaker #1
Yeah. So that sounds like a lot in general, managing one property. So how do you do four? How do you kind of scale up? Well,
- Speaker #2
I have four children too. So I'm used to the like... Um, for, so I actually have, you know, with my real estate team, I have virtual assistants that help us do a lot with the real estate. And when we were slow, all of a sudden I was like, you know what? I can use you to help me with this. So they help manage our social media page. You can follow us at five star properties. It is two R's in star, by the way, like my last name. Um, even though we had our social media accounts hacked, that one was saved. I don't know why. Thank God.
- Speaker #0
Small miracles. Yeah.
- Speaker #2
Well, we had all individual sites for each property too, but that was the only one that was saved. I'm like. So anyway, so they help manage all those accounts. We have individual leases that we do. They help manage all that too. And they do help manage and automate some of those systems for me. But I created a lot of those systems. So once it's created, and that was some work and some headaches, but then it's just duplicatable. So I wanted it done right on that first one, which was our one in St. Pete, that first condo that we did. once that was done that was awesome because we could just repeat the process. If you do it right the first time and spend that time, even though it was painstaking to do it right the first time, you then just create a system and it was repeatable. So we have a welcome book and we call it the Don't Bother Me book. So the welcome book goes out before they even come and it's got everything answered in it. I mean, down to restaurants, it goes down to where the mail is, where the garbage is, everything. We also created videos that we can send to them as well. So it'll, of me literally walking to point where each one of the things is from the mail to the video to the... workout room to the pool. So I'm like, listen, if you need anything, you just let me know. But here's a video list. Here's the book. There's also a welcome book inside. When you come in, your code is the last four numbers of your cell phone. So you can't forget it.
- Speaker #0
That's why you can't forget it. Well, I think part of the allure of Airbnb is that sort of anonymity that like people don't they they don't they do don't really want to interact with you. They just want to go and pretend it's their house. Right.
- Speaker #2
That's like that's what you think. Really? My guests, they're like my best friends. They're like, listen, Jess. So this is what we were thinking. What did you like? Where did you go? I'm like, listen, go to Sunset, order this, tell them I said hello. And then once you do it, like,
- Speaker #1
so you're basically a part time traveling while you're there. Yeah.
- Speaker #2
I love the locations that they're going to so much that it, and it's really like, I saw it as like a concierge level service and it wasn't a burden to me because we loved what we did. So, and it was curating an experience. Yeah,
- Speaker #1
you're building relationships with those people too. So that's why I went to your point when you have that list and you ask them back and like, oh yeah, I love Jess's place.
- Speaker #2
Yes. And now they tell their friends. So that's the coolest part. So it was just like with my real estate business, it just was word of mouth and it kept going.
- Speaker #0
which was awesome and honestly because of the airbnb we've actually gotten more real estate business with it yeah because people it's again it's just the more people who know you the more people who know that level of service that you offer if you offer it in one thing you're obviously offering it in another yeah so like the southington when we literally listed multiple properties from the people that stayed there because they were visiting their parents somebody passed away some other friend needed this so they
- Speaker #2
just sent it our way so it was great like close those deals But it was. Only because we were doing the right thing and taking care of people.
- Speaker #1
Well, yeah, that's the most important thing, for sure.
- Speaker #2
Do everything you do with care, and I think it'll always come back to you. But it's a great side hustle to do, but it is work. So when people are like, oh, it's no big deal, it's going to be great and so easy, like, no, everything you do, you have to be willing to put in the work. And I think right now there's a lot of people that think everything is a side hustle and it's so easy and they want it like this, but they're not willing to do the work. So be willing to do the work and be willing to care more than anybody else. Because I have friends with the same Airbnbs on the same block, so that should be the same. But they didn't do the same work that I did. So theirs don't rent like mine do, and they don't get the price that I get.
- Speaker #0
Yeah, because it's about the experience. Right. Now, have any of your places been trashed? I think that's the big fear for a lot of people. Party time, bachelorette party, bachelor party.
- Speaker #2
No, you know, I had one, like, leave it kind of crummy. Like, they just were sloppy people, I think. And that was... my one, I caved one time on one of my standards and that was, I let a shorter booking happen. And because we made a certain dollar amount, I, in my mind, I said, if I let it go less nights, like say two nights, I was like, then more people will come and they can afford it more. So it's not going to be the type caliber of people I want in this property. So I wanted three nights or more because it was, would command a different person. Yep. And I could tell. because I could tell the type of beer cans that were left in the fire pit at my beach house. I'm like, nope, not that.
- Speaker #1
That's why it's important to hold those standards. I think everyone learns that lesson in business. You're like, every time you cave to that standard that you set for yourself and make an exception, that's not where you want to be.
- Speaker #2
My husband laughed at me and I was like, this is why. You're like,
- Speaker #0
I knew it. I knew it.
- Speaker #2
He's like, you said it so funny, but now I see what you mean. So there's that.
- Speaker #0
I love it. What other questions you got there, Derek?
- Speaker #1
I mean, it's gonna be hard to say, right? Because each property is a little different, but like upfront cost wise, is it, I mean, how do you, how do you kind of figure that out if, when you're kind of looking at the property, I don't know if there's, there's probably no certain metric you have for that, but.
- Speaker #2
Well, so there's certain things like when you're acquiring a property, number one, like, are you buying, when I bought the properties in Florida, those properties, one of them I bought and I completely gutted. So it didn't come with any furniture, but a lot of properties in Florida, when you buy, because a lot of vacation areas, or people pass away um you can buy with furniture and that kind of thing yeah is it always the furniture you want the second kind of i bought it that's jack carpet it looks pretty hot right now everyone knows a second condo was like grandma's condo so it wasn't necessarily the furniture i want but i have an eye for design so i was like you know what i can make this room old florida and really update it and do x y and z and it looked adorable by the time i was done which was great but i had to be able to throw stuff out and put in the work again yeah to do it. So sometimes that's even more when you start with a blank palette, you know, different. So that saved us some yet cost us more time. So it's a cost benefit analysis. I would say on an Airbnb, you can probably get it all done all in, but you have to be a shopper and know where to go. So think Wayfair, Amazon, but look luxury on a beer can budget. And you can use marketplace too, like crazy too. And home goods for a lot of these things. Rooms to go is also a really great. resource as well. I think you go all in 10 grand or less. Gotcha.
- Speaker #1
Is there, so what are the items that in your opinion, you feel like you should pay up for this stuff? Like I'm sure beds are probably up there, right?
- Speaker #2
Or so this is the thing that I get like ranked high on, on my linens. I get ranked high on my accessories. So meaning like beach chairs and things like I have great anything you need in the kitchen, any appliance, any platter, any anything you're going to need to entertain. I have it all. Anything you're going to need for the beach, period. I have it all. Anything you need for a kid. I have it. Games, you name it. I've got it. My linens, my like towels, all that stuff. My mattresses. I always get like you've got the best mattresses. Where do I get it? People actually always want to buy the stuff I have in my, and they, the number one thing they take from us is our pillows, not just decorative pillows, the normal pillows you sleep on.
- Speaker #0
The sleeping pillows.
- Speaker #2
The sleeping pillows. I did a video on Facebook about this. They take our sleeping pillows and they take my, this is the, it just irritates me because they're adorable. They take my little flower arrangements. Oh no. What? It's only happened twice, but I was like, that is so irritating because they were so cute. Like, you know, the little tulips and water roses or whatever.
- Speaker #0
like oh this must be for me yeah i was like these are adorable and they match the bedding so perfectly you're stolen and put pillows people jack your pillows jack my pillow my pillows are great but they're from amazon like they're not but you just found one that you like that clearly people like yeah do you have them at your house now yeah uh so my husband and i had this revelation our
- Speaker #2
airbnb's are nicer than our own home okay all of a sudden our home is getting an an upgrade because I actually went so all in on them and you know the kids can go feral sometimes. So I'm like, I'm not putting it in, but now, yeah, our house.
- Speaker #1
You should put a QR code on the pillowcases. Like this is where you get them.
- Speaker #2
So actually I am creating an entire buy list on Amazon. So if somebody wants to start an Airbnb, they can reach out to me and they can do a buy list directly from me.
- Speaker #0
Look at that. Look at that. What a great idea. And another way to generate passive income.
- Speaker #2
So they can buy the entire list at some point soon from me on how to buy and set up an Airbnb. You literally can put an order pad together. I'm going to sell that. And then also the direct link to buy directly.
- Speaker #0
Wow.
- Speaker #1
It's genius. Are you going to make those affiliate links? Yep. Good job.
- Speaker #0
Genius. Genius, Jess.
- Speaker #2
Not so bad, right?
- Speaker #0
No, I love it. I love it. All right. So as we wrap up, what would you say is the biggest mistake that you made in starting these? Is it an item you purchased? Is it an assumption you made?
- Speaker #2
So this was an assumption. So when you look at... one of the sites that we like to use is AirDNA, right? When evaluating a property, AirDNA lets you see how often a property is booked when you're figuring out, you know, your numbers, correct? So what do I mean by that? Like, okay, occupancy rate. That's a really popular term that people put around. So they're like, okay, this is great. A good occupancy rate that you'd see a lot of times is between 60 to 80% that a property is occupied. So that would mean in a month. So you can figure out your number. So we had a property that. it was supposed to be like 70% occupied. Awesome. So you'd say 70% in a month, right? What if it was 70% for the year?
- Speaker #0
Oh, yeah. That feels a little different.
- Speaker #2
Yeah. If it was 70% for the year, that can mean a certain number of months. It's not occupied. Yeah. Which did apply.
- Speaker #0
Oh.
- Speaker #2
So, and it's great other times. So what I mean by that is like, you have to be super smart about saving in those other months because winter is coming, friends. Yeah.
- Speaker #1
Yeah, like if you have a Rhode Island beach house, I'm sure it's not packed in the winter,
- Speaker #2
right? It's not. But even Southington, the first couple months of the year are painful because sometimes it's great for snow or weddings and other times it's crickets. So you have to be smart with what you're doing. And sometimes people come because they're visiting family. That's an area that people like to visit family or they come up because of colleges and that kind of thing. But it's also now getting pretty saturated with other Airbnbs. So you have to be smart about it. And like the Rhode Island one, we're just like, we rent it because we want to pay our mortgage and do improvements. And once those things are met for the year, we're like, we're good.
- Speaker #0
We're good.
- Speaker #2
We don't care if we rent it.
- Speaker #0
It's the deck. The point is,
- Speaker #1
you know that number. You know how many times you have to do it, and you know if you can get it.
- Speaker #2
We're like, the deck will cost this to put on, and the mortgage is this, and oh, we hit it. Great.
- Speaker #0
Perfect. We're done. And now we're going to go down to Rhode Island and enjoy it for ourselves. And I think that's the piece, you know, a good piece of advice for a lot of people is, can you be like a straight Airbnb investor? Absolutely. Yes. To start though. it does help to have a house like your Rhode Island house where you also want to enjoy it and you're going to dip your toes in the Airbnb water while the incentive isn't necessarily just the money, right? It's also your house that you're going to enjoy as well.
- Speaker #2
Sometimes you also need to have a spot that you can just go and relax. We also use that. So when I said, remember I said there's a couple of different ways, like your net worth, your passive income, save on taxes. Well, there's something called which this is a lot of things to touch base on, but there's something called the cost segregation study.
- Speaker #0
You guys talked about that at all?
- Speaker #1
We've not talked about it. We have not had an account, but go ahead.
- Speaker #0
Yes, this is a huge thing. So when I talked about saving on taxes, this is something where you can depreciate the entire physical asset and any adjoining assets, like our entire granite stone wall that wraps the property and our detached two-car garage on top of it. So it brings down your taxable income if you are a real estate person or a real estate agent, which is huge. So that means you're bringing down your taxable income. that is a massive, massive tax savings. Because as a real estate agent, we are writing massive checks every single year to pay our taxes. So we want to do things that bring down our taxable income. So I wanted to do that. And this is a sizable property value wise. So I wanted to do that because I wanted to pay less in taxes. So whether it rents a thousand percent of the time or not, I don't really care.
- Speaker #2
You're getting your savings.
- Speaker #1
Well, all right. Once again, disclaimer, because I know there's a compliance listening. So talk to an accountant about it.
- Speaker #0
I am not a financial planner. I am not a tax advisor. I'm not a tax strategist. I'm merely a real estate agent.
- Speaker #1
But I think you do bring up a good point because when you have rental real estate, so not a house that you live in, there are a lot of tax savings opportunities there. Like you can almost pretty much make a lot of money on it, depreciate it. And it looks like for the government, you didn't really make much or if anything.
- Speaker #0
Yeah. because also any New sheets I have to buy. Any improvements like, you know, we have to put in an outdoor shower. It's a need for our property. It's a beach rental. So we have to do that. And we need to do a new deck. And we put in AC units because, well, that was something that the property needed and it needed new counters in the kitchen as an update. So we put in new appliances, too. Yeah.
- Speaker #2
Well,
- Speaker #0
and you also appreciate all that.
- Speaker #2
The other piece that we're not talking about in this, and I think that's the the the last thing, too, is the you are also just from the straight real estate investment side. You are. growing this asset over and over and over again. So someday down the line, if you want to sell it, you will have also vastly improved the value of this home. So you're like making money in multiple ways from the same asset. And I think that's something that, you know, don't lose sight of that either when you're looking at these properties, right? So because you put the new deck on and the outdoor shower and the new countertops, this house is worth just that much more. Yeah.
- Speaker #1
And you're getting mortgage paid down.
- Speaker #0
And the mortgage is getting paid. And like, here's the thing. I. Everybody's always so scared to buy because they're like, oh my gosh, the interest rates are so high. Oh my gosh, you know, the prices are so high. Well, I had waited 15 years to buy this beach house. I kept trying and it never happened. And then in 2020, when I thought the world was going to, you know what, in a handbasket, I was like, is this the worst time ever to buy? Am I the biggest idiot or was it smart? And so I ended up buying this house. And I had already just bought a house earlier that year as a long-term investment in February. And this was in July. And it happened to be a neighbor that walked in. by that led us by the only other house that was on the pond for five generations in one family like our other family so i we bought it and i look at the value of this house now from when we bought it and it is more than double in value and i can't believe how blessed we were but i'm never selling this house but i will die on the front lawn it's fine it's fine it's fine like it may like like what a great investment right and we talk sometimes about investing weight
- Speaker #2
in what you feel passionate about, like you are making money and helping your family off of something that you love.
- Speaker #0
Yes. Obviously, you can tell. Yeah,
- Speaker #2
you love it. And it's helped you also build all these other properties that you are just making money off of. So what a cool story.
- Speaker #0
Yeah. And it's just fun because you know what? When you're passionate about it, then you get to get other people excited about it too. Yeah. And educating people through the process is just so much fun. So I hope everybody does look into being long-term. and midterm and short-term hosts. And if you have properties already, look at them to see if they're performing to their max capacity, because we had properties that weren't, and we flipped them, even just like local rentals here that we had that were long-term, and we flipped them to midterm rentals and like tripled the income.
- Speaker #1
Wow. That's great. Well, so Jess, thanks for coming on. But one last thing, where can people find more about you?
- Speaker #0
Well, on the socials. You can find us at starteam.com. I think because all my social media got hacked, unfortunately. uh recently but on instagram it's jessica c select star we'll i'm sure we can post it yeah we'll put it in the show notes that so we'll add a bunch of stuff there too but star team on youtube as well so we'll put them all in there we'll put them all in the show notes thank you so much awesome thank you thank you for having me guys the
- Speaker #3
opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. This guest and their company are not affiliated with or endorsed by LPL Financial or Advisors Business.
