008 - Future of the Vacation Rental Industry

2 Wealth Show S2 Ep8 – Future of the Vacation Rental Industry

Andy Moore gets interviewed by Justin Bogard and Super E in the 8th episode of season 2. 

Get to know who Andy Moore is and his perspective on the vacation rental industry! 

Key Takeaways:  

1. Traction Platform
2. Turn Downtime Into Opportunity
3. Raise the Bar

 Resources and links discussed  

• Videocast on BrightPath Notes YouTube Channel 
• Videocast on Elizabeth Maora YouTube Channel 
• BrightPath Notes Website - https://brightpathnotes.com 
• Elizabeth Maora LLC Website - https://elizabethmaorallc.com 
• Andy Moore Websites - https://www.choosegulfcoast.com and https://www.gcvacationrentals.com
• Book - Traction by Gino Wickman

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About the Hosts 

Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!  

Super E – Real Estate Investor specializing in short-term rentals and the management of them. She connects investors with short-term tenants and manages everything in-between.

Connect with the Hosts: 

• @2wealthshow – Facebook/Instagram 
• @wealth_show - Twitter 

Transcript

Justin Bogard: 0:04

Welcome to the 2 wealth show, a show that shares how you can create real wealth for you and your family. I'm one of your hosts, Justin Bogard. And my cohost is Elizabeth Sickles, AKA super E. I am a real estate note investor specializing in performing residential real estate debt. I find the deals acquire them for my own portfolio as well as educate investors while walking them through the process of owning a real estate. Note, my cohost, super E, a real estate investor specializing in short term rentals in the management of them. She connects investors with short term tenants and manages everything in between. Our show was sponsored by bright path notes and Elizabeth May aura. You can find out more information by visiting our websites at brightpathnotes.com and ElizabethMaora.com.

Elizabeth Maora: 1:05

So hello everybody. I am Elizabeth with Elizabeth Maora and we have a very special vacation rental guest today with us. Andy Moore from Andy. Tell us where you're from.

Andy Moore: 1:18

Uh, I operate out of Sarasota, uh, the on the Gulf coast of Florida.

Justin Bogard: 1:25

Oh man, that sounds like a vacation right there. So that would be on the uh, West side of Florida.

Andy Moore: 1:37

Yeah, that's on the West side, just off the Tampa, uh, North of Naples. It's where we operate. It's our home to the, uh, best beaches in the U S as voted for year on year.

Justin Bogard: 1:52

Okay. Awesome. Well, it sounds like I needed to get, I'm on the wrong side of Florida then. I'm usually on the other side. I got to get over to the, to the better side then, huh. Andy, it's nice to meet you. Thanks for being on our podcast today and I'm Justin Bogard and my company's bright path notes and what I do, just Andy, so you know a little bit about me is I'm a note investor. I'm not sure if you've ever created loans before or bought or sold loans before, but that's the business that I'm in. I started out in real estate just like most people fixing and flipping and doing wholesaling deals. I've never done a vacation rentals or short term rentals. I've definitely stayed in them. I learned a lot about Elizabeth and I look forward to learning a little bit more. From what your perspective is.

Andy Moore: 2:32

So yeah, Nice to meet you.

Justin Bogard: 2:34

Yeah. Nice to meet you too. Elizabeth. What will we got in store for today?

Elizabeth Maora: 2:39

All right. So Andy is a very savvy businessman. We met at an executive conference in California last June, and then he let me come down and spend a couple of days in his operation in Florida. So I learned a ton. I'm completely changed my business, so we just wanted to get Andy on the show. He has a very interesting, um, opinion and outtake as well as what's going on right now and how he's positioning his business to really capitalize on the opportunities coming forward. So any, do you want to tell us how you got into vacation rentals in the first place?

Andy Moore: 3:15

Uh, sure. Yeah. Uh, okay. A lot of people, a vacation rental. Uh, I'm from the UK originally and I, uh, came up, okay. I'm on vacation, say in the Disney world area in a vacation rental. Uh, and eventually after coming back for three days, spend some time and the Sarasota area on the Gulf coast decided to buy a property and I had a vacation rental. Uh, that I was doing the, I'll be back in the late nineties, early two thousands. Uh, unfortunately I couldn't find a management company that address my needs. So, uh, uh, throwing an idea around in my head for a while, decided to emigrate from the UK. So the U S a and stopped my own property management company with the one property that had with the idea of getting them into uh, yeah, managing for other people. And that was in 2003, so, uh, going on 17 years ago and now we manage uh, about a thousand uh, rentals but people in this area,

Elizabeth Maora: 4:42

congratulations. Yeah, that's a, that's a big portfolio there.

Andy Moore: 4:48

It keeps us busy.

Elizabeth Maora: 4:52

What's even more fascinating? Can you tell us the breakdown of traditional, so people that rent annually versus vacation rentals. And then also what's really fascinating is how many full time staff you have for a thousand properties.

Andy Moore: 5:07

Okay. Yeah. Well we a thousand. We, it's like we started with the vacation rental business cause it was a lower barrier to entry. I was essentially cutting grass and cleaning poles. I was that was there the jumbo dumps about a four. Oh no. Uh, how's the company matured? We got to intellectually renting off the house and then 2009 hits and we saw an opportunity in the, uh, annual rental space and we started annual rental program and that ramps up really quickly that loudly. So the economic climate at the, and, uh, we focused on not heavily but about five years. And then in 2019, so last year we acquired quite a big company, uh, right. 382 units. Uh, we purchased that book, which took us up to up a thousand units. Okay. The advantage, the advantage of working with an annual rental portfolio is that it gives you, uh, it gives you the ability to forecast your ability to budget it levels off the income. Uh, whereas if you were relying solely on the vacation rental in times that we're living in at the moment that the, uh, the coronavirus, then yeah, we would be in then dire straits for sure. But, uh, the, the annual rental gives us that stability. Uh, we've got a total of, uh, including some maintenance staff. We've got a total of about 25 bodies here. Wow. 25 employees, expensive, which, uh, a U S. And then we have remote workers out of Mexico.

Justin Bogard: 7:21

Okay. And so what's the, um, what's the distance wise, how big of an area is all your rentals that you have? The, the VRBOs and the, and the annual renters?

Andy Moore: 7:36

Yeah. Gee, we'd probably cover, uh, we probably the, the very tip of Manatee County, the very, southern Sarasota County I would gauge that. I know, wow. 80 miles. Oh wow. Uh, we have four offices to serve this, uh, those properties.

Justin Bogard: 8:02

Oh wow. That's awesome. Yeah. So andy, do you have a website that people could go to if they want to check out some of your, some of your VRBOs?

Andy Moore: 8:15

Yeah, we do. I mean, that's, that's, that's a case in point, I think. Uh, I would, uh, if anyone is managing vacation rentals or managing annual rentals, I would, I would, it's start looking at your websites. We, we actually have two websites. Oh wow. They have a website, uh, which is our, Owner facing website is where we, uh, we acquired the owners. It's what are our outreach goes and that's chooseGulfcoast.com. Okay. And then we have a vacation rental specific websites, not outreached vacation rental guests. Uh, and that's GCvacationrentals.com. What I find is, yeah, but I haven't studied both annual rentals on vacation. We can take the best practices from each. I'd apply them to, our organization I do see in the annual rental world and Oh, so in the vacation rental world when they come in their own world. Okay. They don't take the best practices as an example. I don't think vacation rental management companies, I don't think they, that that sales outreach too. The asset owners, yes. Is that as strong as it is a gambling? Um, by comparison, are there things in the annual world? Well, the outreach too, uh, potential tenants is a strong as it is for guests and their vacation rental world. Uh, and went by no means, but I do think that by having a foot it gives us that. Alright, good perspective and more broad overview of where the market is.

Justin Bogard: 10:11

Yeah, that was a good point. You brought up at the beginning about how your portfolio is divided up disproportionately for the VRBOs versus the annual rental. So it makes sense why, Mmm. You obviously see it now. You know what's, what's being hit hardest obviously is the in yours is the VRBOs versus the annual. So yeah. Elizabeth and I were talking about that last episode.

Andy Moore: 10:33

Yeah, absolutely. I mean I think everyone, everyone is good. So my interest in the vacation rental world side's in right now. I was in, we have$600,000 worth of cancellations in a week. Uh wow. Which was devastating really. Cause I'm not saying you spend that money, I'm not saying you. Yeah. But the record is certainly been acknowledged on that and then to give all on the spot and I started again. It's, yeah, it's kicking safe, but we're in it. We're in a white bull fortunate situation and we see some of our peers are. Yeah.

Elizabeth Maora: 11:16

Good. Why is that? Why do you say that you guys are in a better position?

Andy Moore: 11:24

Uh, I think it's better to be, it's better to be lucky than good, right? Hear that quite a lot. Mmm. We, our season, I would say peak. Yeah. Vacation rental business. We do 60%. Oh wow. On our annual revenue in the first quarter. So yeah. The, we'd already, we'd already, uh, through March we'd already taken those rentals. We have a lot of snowbirds, Northern visitors, people from Canada all come to this area during the, the Q1 so we've already realized that revenue, uh, there's people in the Outerbanks, there's people in, uh, yeah, yeah. Who, I really hurting right now because that just coming into that peak period that could just come in into what they, I realizing that peak revenue earning. Okay. There you go. Then that has to cancel that they're not going to be an operations anymore. Okay. Yeah. Who knows how long this is going to last. So we have that advantage. And then also, sorry, having the buffer of the annual rent, which that is a house. Yeah, yeah. Uh, at least we can keep the doors open, lay off any staff we've been, yeah, keeping my head above water.

Justin Bogard: 12:56

Nice. Congratulations. Yeah, that's a, that's something, you know, that makes you feel a little bit better that you can keep things moving and at least not go no backwards too far so to speak. So, uh, but you've, you've survived the 2008, 2009 financial crisis and you know, obviously you're definitely going to survive this because you're set up well for it. So Elizabeth had mentioned that you're very process oriented and uh, so I'm interested to hear, because I know Elizabeth get like an engineering mind, so it sounds like you might be similar, but I'm interested in hearing your, your processes or at least if you can kind of just kind of frame it for us what for your business model.

Andy Moore: 13:39

Sure. Yeah. I mean, I wouldn't go as far as an engineering mind. I have ideas and implementation that kind of lets me down. Uh, I'm more of a big picture, but while I have realized this, okay, I didn't have a business degree. I fell into owning a business, but for me there was no guidance. There's no, uh, there's no textbook that was going to teach me how to do this. Uh, talk to your management in itself. No one really goes to school for property management. Uh, so yeah. Oh, self taught. One of the books I read a few years ago was that okay. The book called Traction Gino Wickman and that's basically, yeah, common sense approach to how to manage a growing company and that relies very heavily on accountability processes and people. And I really thought that to heart. Um, and we hit the scene, uh, where, where we were losing properties as quickly as we were bringing them on. We were staff as quickly as we were hiring. It was, it was, Oh, an organized chaos. It really was. Okay. Yeah. Something has to change. Well, I was putting so much money into bringing property owners on, but then losing them because of the delivery of the service. Uh, growth is great and cash hides a lot of problems. But when you actually started digging into yeah, what is going on? Just because it became clear then something have to change. So we really followed that model and introduce, uh, a lot of processes and systems based on Gino's book. Uh huh. We, we separated our company. And so the departments, which is unusual in the the annual rental world and which is very portfolio driven. But when read books against that and fought hard for departmental responsibilities and total accountability within a defined, uh huh. Defined tasks, so good. We can look at each other around the table and hold each other accountable. Wow. We record, wow. What we call KPIs scorecards, uh, and rolled out over the, over about two years rolled out the whole traction platform. Uh, it was received very well. It is applicable to practice management because there's no real textbook for or playbook for property management. And then as a result of that, I took on some coaching courses, uh, and then became a, an EOS or traction implement that and of how it's a number of companies around the country develop the right playbook. Uh, do you use it? And I think it's, I think it's a great tool that property managers can use, uh, to take them to the next level.

Justin Bogard: 16:50

That's awesome. So you mentioned something about having, uh, you making, uh, your business into different departments. And so there's one thing that Elizabeth and I had talked about on a previous episode with another, uh, hosting person like yourself is do you have a linen manager?

Speaker 3: 17:12

We do now. Uh,

Andy Moore: 17:15

one other thing. We just hired someone who actually came from a Argentina. Yeah. Yeah. And which we assume that opportunity right now and Ms. Thomas. Yeah. And these times, this is a great opportunity, uh, to pick up silence. Yeah. That's probably it. Yeah. Yeah. Sometimes people as a result, right. One of that questions. Wow. And who's responsible? It was so left field for us because the properties or how's that cleaning the properties, the using the facilities on this, in the property. We manage single family and condos. So they've all got, they've all got laundry rooms. Uh, and, but she was surprised by that because she had a whole, yeah. Got it. Yeah. So when the drives a limit so that for that. Okay.

Justin Bogard: 18:27

And that was, I don't know who we were talking to about that, but that was, that was pretty funny. We were both were just like, huh. That's interesting cause I know Elizabeth, she charges for people to have lamps and stuff and lights is extra. She split. I'm just kidding. She does do that. Is that a little fun with that?

Elizabeth Maora: 18:47

Okay. So and Andy, because you are so processed driven and obviously very studious with your financials, can you talk about where you see the vacation rental industry going and what you guys specifically are doing right now? Where are the opportunities going to be and where are they?

Andy Moore: 19:07

Uh, okay. I mean from a, Oh my, from a macro level. Aye. I think we're at a pivotal point in the vacation rental industry. It's a very immature industry that has gotten a lot of press focus over the last Oh yes. Ah, most of it. Yeah. I used to be good. I would say it's certainly if suddenly shine a light on it, on an industry that didn't get much, uh, like previously. Uh, if we really want to be you, I travel sector Mmm. Through short term accommodation or services to hotels. We have to step up and be at that level. And when you have AirBNB and home away big companies. Yeah. Make sure why location rental companies, uh, not giving refunds and essentially yes. Uh, washing the hands of the situation and saying promise the owners are on their own guess. Yeah. We're not figuring it out. But maybe if you talk to the property manager or the host, I'll help you out. There was so much dysfunction going around. They went around if all you, if I wasn't there with entrenched in this industry and I was a consumer, I don't know. Is it troubling? Uh, with my family? What kind of, how we've as it industry over the last he weeks, it would give me pause. I'm thinking, is my, is my heart better off place with that hotel chain? Because at least then I feel like I've got my back. Alright. I think we have to, you have to address the elephant in the room. What are we if are going to be a mom and pop organization, just just that, a couple of books while we own a second home, then let's own it and let's be, and we've got to raise the bar I don't think we've done that.

Elizabeth Maora: 21:29

Awesome. Awesome Elizabeth, great questions that you threw out there today. We're kind of running tight on time here. Andy. We appreciate you being honest stuff. So this is kind of the opportunity where we have people just kind of have some closing thoughts. I know you ended this pretty well with what you see the, the outlook is for the VRBO business. Uh, well I could call it short term business. So do you have any closing remarks or thoughts that you would, you'd like to give or share about maybe just being a business for yourself or just running a property management company like you have?

Andy Moore: 22:04

Sure. Uh, 2000, I think 2009, 2009 that was the making of our company. Yeah. Wow. We turned it into an opportunity. Mmm. I think, yeah. 2020 is that is another opportunity. I think there's people who don't want to be in this industry cause it's a pretty hard industry. We're going to use this as an excuse to exit. Ah, okay. I think that, okay. The companies that are focused on growth while manage financially sound, they can double down. Now I'd take advantage of a market that's been rocked. Mmm. That's what we're doing. Piggy backing off Elizabeth questions from earlier. We're doubling down on our marketing. Wait, we see this opportunity over to property owners. One leadership property owners. Yeah. Forever. We're trying to justify what we do as an industry. Do we just collect rent? Do we just clean houses? Uh, did we just send the maintenance on? Yeah. I think I can do this or this house with professionals. We need to stand up. I'm sure. Alright. What we can do for them. We know about legislation. We know, uh, how to respond to the guests. We know that when we can go into properties and one of the things the property owners just are scared of right now, they're crying out for leadership. And I think this is a pivotal moment for the property management industry and the fortune management companies have a forward thinking to put the hand up, show leadership and grow their own businesses. So that's what doing here because we do think this is a what's it's devastating on one hand, we do also see it as a great opportunity.

Justin Bogard: 23:55

Awesome. Thanks for sharing all that Andy and thanks for being our guest on today's episode number eight. Um, so we're gonna have to sign off here. So I'm Justin Bogard with bright path notes. I'm Elizabeth with ElizabethMaora And go ahead and Andy put, plug yourself in my friend.

Andy Moore: 24:14

I'm Andy Moore with Gulf coast property management.

Justin Bogard: 24:18

All right guys, check out our show notes to get Andy's websites and the book he mentioned. Until next time guys. See ya. 2 wealth show is produced by Justin Bogard and super E sponsored by BrightPath notes and Elizabeth Maora. Thanks for listening and watching our show.