Homestead America
Market rent: $1500 (Incentives include Parking Spot, Cable, Internet, & utilities)
Our earnings: $3,244.83 on average per month!
Background
The Cottage is a small one bedroom house located on a busy intersection in the heart of Columbus. The unit has location challenges that make it challenging to find a long term tenant but we found it perfect for a short term rental. The cottage is on a busy street, and when we took over the unit, it had the additional challenge of having a major 4 lane construction project going on right outside the unit, with crews sometimes starting work at 6 a.m. (which most long term tenants would have problems with). We got the opportunity to partner with the owner, Homestead America, because we had worked with their team at The Harlow Building project and were happy to turn this into a short term rental. Homestead America is an industry leader in multifamily and student rentals with properties in nine states. The company has 5,000 units and owns 10,000 student beds. Their owners are very savvy business people and we jumped at the chance to partner with them on this project.
Process
The unit was already furnished and in excellent condition so we were able to upload the listing as soon as our professional photography was finished. We wanted to make sure that the photos didn’t “highlight” that the unit was on a major road in Columbus or that there was no yard. Instead, we focused on the positives including a professionally designed interior that had been done with the Homestead team. An important aspect to integrate into your business is to make sure you work with a professional photographer. They take photos in multiple exposures and then merge the layers in post. They also use multiple high end lenses and lighting to ensure every single photo shows the unit in the best possible light. We swear by our team of photographers. Keep in mind the equipment they use is expensive so don’t be surprised if you have to pay a premium to get your units professionally photographed.
The second thing we wanted to really focus on is our online presence of the unit. Most people that have short term rentals only list them on multiple platforms (which is still great), but they completely miss out on returning consumers. The main reason why people list on multiple platforms is because it creates an increased exposure and demand for the units. To follow up this even further, try retargeting past consumers a year after the stay to book with you again in the future. There are geo fences that you can set up to track every person that enters in a specific location by using the data stored on their smartphones. Then you load those individuals into an email campaign with your marketing team to retarget those customers and try to get them to book your unit again and again.
Regarding this unit, we also employed social media ads directed towards our listing pages, SEO optimization with each booking channel and 24/7 customer support with our team. Social media ads are extremely technical and hard to learn (to actually get results) if you haven’t been exposed to them for a long time. It is critical to stay up to date with each advertiser’s terms and conditions. Right now, Facebook is the main culprit and you have to make sure you adhere to all of their rules and regulations, even if they aren’t specifically detailed how they can get flagged. Having these ads get flagged can actually shut down and permanently ban your facebook ads account and in some cases the pages inside them if you aren’t careful. But there are tremendous benefits: If you do it right as we have done, your listings can have 109-300 link clicks and over 10,000 impressions a day and become extremely profitable.
Result
We were able to turn a little one bedroom house on a busy street in German Village into an absolute cash cow that made over $19,470 in the first 6 months. Not that there weren’t a few hiccups along the way. Because the unit is a house and has a parking lot nearby, we found guests liked to throw parties there. Although parties can actually help you make a decent amount of extra cash with fees and replacement charges, they open the door to a lot of liability and can cause issues for the next guest if there is still a smoke odor. A couple of things we did to help lessen the parties were requiring the guest to book not just one but two nights, turning off instant book, and having our team personally vet each person that wanted to stay in the unit. Meaning, if people do not have a certain amount of positive reviews, profile photo, and verified identity, do not accept the booking. This will result in a lower amount of demand for the unit which is a drawback but you can make up for that with better marketing and review management. Overall, we absolutely love that little house and we hope we can manage it for as long as possible.
