--:-- Host (Ryan Hanley): ...was planning to hold it forever. Guy across the street let his property completely fall apart. It's condemned by the city, full of people in there doing drugs, squatting, all these things. Now people don't feel safe in my property. And I ended up having to sell it for a loss because that real estate is not desirable. It's not growing. So there's not a lot of appreciation. So when you're looking at short term, you want to make sure that you're buying desirable real estate in terms of there's a lot of tourism that comes there, beach markets, mountain markets, national park markets, places like that. But make sure more than anything that you understand as a tourist who goes there, what it is that tourists want when they go there, where they want to be, what they're trying to do so that you make sure you buy in the right location. The location is almost more important than the property itself.
--:-- Announcer: The Ryan Hanley Show shares the original ideas, habits, and mindsets of world-class original thinkers you can use to produce extraordinary results in your life and business. This is The Way.
--:-- Host (Ryan Hanley): Hello, everyone, and welcome back to the show. We have a tremendous conversation for you today with Avery Carl. Avery is the founder with her husband of The Short-Term Shop, where she teaches her clients how to buy short-term rentals. She also has 250 rentals herself, as well as being the top brokerage at EXP. We talk about her mindset, how she was driven out of the music industry to start the short-term rental business, what that mindset was that allowed her to give away or stop pursuing her passion, which was music, and find her career, which was short-term rentals, as well as how you actually buy short-term rentals successfully.
--:-- Avery is a wealth of knowledge. This conversation goes from mindset to tactics very quickly. And when you get to the tactics section, I promise you guys, if you're into short-term rentals, if you're looking to invest in real estate or property, this is a conversation you do not want to miss.
--:-- Before we get to Avery, I just want to mention again, Master of the Close. Go to masteroftheclose.com. If you deal with inbound leads, you need to be a member of Master of the Close. This is a low-ticket course that I put together to teach you the process that we developed at my insurance agency where we wrote over 1,200 clients in two and a half years. We did this with a very small team, closing qualified leads at north of 80%. We walked step-by-step through this process.
--:-- Guys, again, this is a low-ticket course. I just don't want this information to die. Inbound leads are such a huge part of business today, especially small business. And this process is easy to implement, works in every industry. I have done it personally in the technology space. I've done it in fitness and I've done it in insurance as well as coached clients in many other spaces. This process, easy to teach, easy to learn, and absolutely bulletproof. Go to masteroftheclose.com today.
--:-- Avery, it's awesome to have you on the show. Thanks for making the time for us.
--:-- Guest (Avery Carl): Yeah, thank you so much for having me on.
--:-- Host (Ryan Hanley): Yeah. So I tried having a rental property very early in my life. I didn't know anything about business, anything about rentals or property, and made a million mistakes and ultimately got so frustrated with the experience that I sold it. Now, 15 years later, at least in a small part, I regret that decision. But what attracted you to real estate to begin with? I know short-term rentals is where you're at, but you also sell a lot of real estate. What is it about property and real estate that just attracted you to it?
--:-- Guest (Avery Carl): Well, I've got 250 rentals, so I'm happy to answer any of your questions on any of that. But the reason that I started—my husband and I started investing in real estate—was because when we first got married, I had what I thought was my dream job. It was not. We had a little bit of money, maybe like eight or $9,000 saved up. And we were like, okay, we've gotten ahead a little bit. We've got some money saved. So what do we do with this? What do we invest in? We don't know how to pick stocks. Apparently you're not supposed to pick individual stocks. We need somebody to tell us what to do here.
--:-- So we went to an Edward Jones financial planning office in the same building as my corporate job. We went in there, met with a financial planner. We were all excited because we felt like we'd finally gotten ahead a little bit. And she basically told us we didn't have enough money for her to bother with. So we walked out with the wind totally let out of our sails. I don't remember, but I would guess we went to the bar. And we were like, well, now what do we do? We want to figure out how to be smart about this and not just have this sitting in the bank, or maybe we need to save up some more. But we wanted to do something now.
--:-- We had recently moved from New York City to Nashville, and that was back before Nashville jumped the shark entirely. It was back when Nashville was still cool. Sorry, people who are moving to Nashville. When it was still really cheap. This was back in 2012. Our real estate agent at the time was trying to get us to buy something in East Nashville, which was the hipster part of town that was appreciating really quickly. People's houses were worth $100,000 more two years after they bought them. And our agent was like, "You need to buy here because you'll get so much equity so quickly." And we were like, "Man, we're moving from Brooklyn to Tennessee. We're done with neighbors. We want to buy something out in the country." So we did. We bought something out in the country.
--:-- We kind of thought back to that and thought, well, maybe that's not a bad idea to buy one of those houses. Put—we've almost got enough for a down payment. We could save up a little more and make one, put a renter in it. They'll pay the expenses. And then by the time our future kids need to go to college or something, we'll have all this appreciation. Back then there was BiggerPockets and that was it. We hadn't even found that podcast yet. So we just bought this house. We got really lucky, found a house, bought it right off the MLS, cash flowed almost $1,000 a month. The mortgage was $647 a month and we were able to rent it out for $1,550. Not bad for a long-term rental.
--:-- We got that first rent check. We were like, "Wait a minute, this is pretty badass." Because my dream job that pays nothing—which was in the music business in Nashville, which pays nothing—after all my deductions and stuff, that was about what I was making on my W-2 job. So this house was making the same amount of money as me while I slept. And we thought, well, this is interesting. So then we went and sought out education on it and read all the books and listened to every podcast we could get our hands on. And we came upon short-term rentals really just because we had a little bit of a down payment left again for one single family home.
--:-- We had just been on vacation to the Smoky Mountains and stayed in a cabin. And we were looking for our second property. And we thought, man, those short-term rental cabins—this is about 2014, so Airbnb had not hit very hard yet, but it was starting to. We were like, "Well, what can we buy that's going to make us the most amount of money the fastest? We just stayed in this cabin in the Smokies and paid $200 a night. That's going to make more money for the same price as one of these houses in East Nashville. So let's try that."
--:-- Back then there was no self-management. You had to use a property manager. And we decided to self-manage from Nashville—it's about three and a half hours away—because when we started looking around at property managers, we found that the average split back then was 40% of your gross income. And we were like, "Wait a minute, no. We need that 40% to go buy more properties. How hard can this be?" We found a cleaner, we found a handyman, and we just posted it on Airbnb and Vrbo and figured out how to manage it from Nashville. I'll stop there because that's a lot. That was in 2014 that we bought that first one. Now I've got 250 doors. Eight of them are our vacation rentals.
--:-- Host (Ryan Hanley): There's a lot of entrepreneurial drive in there. I think the mistake that I see friends make—because I have a good buddy who's a realtor and he obviously pushes all of us to buy property. He doesn't get into the short terms as much, but he's always peppering us when he finds a decent two-family or three-family. "Hey guys, get involved." Some of my friends have gone down that path and been very successful and others have backed out, we'll call it. Maybe they get one and they just say, "This is enough."
--:-- To me, the difference in those personalities is the people who go in thinking this is a business. "I'm going to look at this like a business, an entrepreneurial endeavor. My business is owning properties, is renting properties."
--:-- [Ad break for Master of the Close]
--:-- Host (Ryan Hanley): They tend to push deeper to think of it differently, to think like you did. The easy part for you would have been property manager, 40%, okay, we don't make nearly enough or whatever, but I don't have to do the work. And that feels like the miss to me. It was probably the miss in my own scenario. I didn't realize the work that would be involved—that you can systematize and automate to a certain extent—but that there is a lot of work involved. Did you guys understand what you were getting into from the rip? Did you see it as an entrepreneurial endeavor, or did these decisions kind of cascade as you went? Did you pick up really quick that this is a business, we can actually make a full income, this can be what we do?
--:-- Guest (Avery Carl): We picked it up pretty quick. A lot of that is personality types, and there was a perfect storm of why this was a good idea to go all in on at the time.
--:-- Number one, I come from a background of collegiate athletics. I played soccer at University of Texas and I have a Big 12 championship ring. I learned very—I'm from an extremely small town in Mississippi. Mississippi notoriously does not produce good soccer players. We produce great football players, but not good soccer players. It was really crazy. The team that I was on, my club team, happened to be really good. Every single girl went and played D1. What I learned from that was I kind of realized in junior high, "Hey, I just wanted to get out of Mississippi so bad." Big city dreams, girl. I realized the harder that I worked at soccer, the better chance I had to get out. That was my ticket out. So from an early age, I started equating hard work with moving forward and climbing the ladder and getting things.
--:-- After all that was over, I graduated undergrad at the worst time to ever graduate—spring of 2009 when there were no jobs. I was a musician. I was a touring guitar player in a few bands. So I bartended and did the musician thing until the market swung back around. I thought, "I'm going to work in the music business because there will probably be a lot of people similar to me, musical background, who want to have big kid jobs now." So I got what I thought was my dream job and worked really hard at it. What I found was that the amount of work that I did was not proportional to the amount of moving forward that I was able to get. I'd get to work—I'm great in the mornings, not that great in the afternoons in terms of productivity—so I'd finish everything I had to do by like 11 a.m. And then I'd just sit there and wait for my boss to give me something else to do.
--:-- Eventually we found I'm a terrible employee because of that. I'm motivated by making more money or building something. I can't just sit in a desk all day and work for somebody else. When I thought about it, I'm like, "Well, my dad owns his own business. Both my grandfathers on either side owned their own businesses." So I didn't really have a role model of working for someone else, and I didn't even realize that. At the same time, we were thinking, we just got married, thinking about having kids in the future. And I was like, "I don't want to have to put them in daycare from 7 a.m. to 7 p.m. because our commute is an hour with traffic." So there was a sense of work not being fulfilling and also knowing that it wasn't going to be a good situation for our future kids. I put those two things together.
--:-- My husband is the same way on the work thing. He was feeling kind of fat and sloppy one time after a night out, went for a one-mile run—first one ever—and now he's run 30 marathons. So we both kind of do everything extra. It was definitely personality type and wanting to get out of having to answer to somebody else. I just knew that that boss at the time was not going to be somebody who was ever going to understand, "Oh, my child has strep throat. I need to stay home." We wanted something different. We wanted our lifestyle to be designed a little differently. All of that together pushed us forward on, "Oh hey, we can build an actual business out of this instead of just letting it take a backseat and build up appreciation in the background."
--:-- Host (Ryan Hanley): I want to stay on your entrepreneurial perspective for a second. You can obviously fast forward and rewind as it makes sense in this answer. I have a lot of people that are very successful on the show, yourself included. I like to get their perspective on this particular question. My industry is the insurance industry. Every little boy's dream is to grow up and be an insurance agent, right? So I'm living the dream. No, I'm actually—I firmly believe and firmly fall into the school of thought that you find what you're good at and that becomes your passion, not this whole idea of following your passion. As you found with your music career.
--:-- I thought I wanted to be a professional baseball player. I saw my only way out as being a baseball player. I came from a town of 900 where we said you could leave your doors open because the criminals lived in our town. They didn't steal in our town. My whole goal, same as you, was get the hell out of here. Whatever I got to do. I saw academics to a certain extent, but being athletic was my way out. I ended up playing baseball in college and played a little after. But at a certain point, I hit reality where there's no career here in this sport.
--:-- I see a lot of people who have these early dreams and they hit that wall. And somewhere in there, a switch flips. They go from being passionate, driven, intense, intentional to, "Well, I'm making a paycheck. This is about as good as it gets. I'm going to get the dad bod or mom bod. I'm going to stop following—maybe I'll play golf once a month." Somewhere in your journey and that calculation between soccer success, wanting to be a musician, etc., you gave yourself permission to keep pushing. Is that just intrinsic to you? Did you have mentors? Was it your family? Was it just the fact that you had this partner and your husband who also shared some of that intensity and energy? I think a lot of people get stuck in the transition from early life passions to a fulfilling career, which you've obviously found and you've made that transition. Where do you think you got that permission to do that? And permission, I mean, giving yourself permission. How did you get through that phase to keep growing what you're doing today?
--:-- Guest (Avery Carl): That's a really good question. Definitely my husband and I are on the same page about the hard work and being a little too much about everything. We're both very intense people. Him more than me. He's really loud and in your face. It can be a little exhausting to have a conversation with him. Maybe it was growing up in the millennial generation of hard work fixes everything. My dad was a professional athlete and my mom is kind of a perfectionist. Just having that instilled in all three of us kids—my sister, my brother as well—about always working hard. What's the most important thing in anything is that you worked hard, even if you didn't win, even if you insert thing here. As long as you can say you tried your hardest and you did your best, then that's what's most important.
--:-- I'm just kind of somebody—maybe I'm a very high anxiety person. Maybe it's something to do with that. But there is no good enough. There is no best. So we just keep pushing and pushing. I think it's a perfect combination of the way I was raised and the partner that I chose and just enjoying the building of things. I like the building more than once it's built. I like the building phase. It makes me feel fulfilled. Like I did something. I can go to sleep at night feeling like I did something. I had terrible, terrible anxiety in college because I felt like I wasn't doing anything. I wasn't moving forward. I think that continuing to build kind of keeps that anxiety level a little bit lower.
--:-- For my kids, now that we've—they're still very small, four and six—what I'm going to tell them is, you can pursue those passions, those things that you're probably never going to make a million dollars at. But you can start building income while you're doing that. For our generation, it was kind of like you have to choose. You can be poor and be a musician and do the thing you want to do, or you can go get a big girl job and be successful. For this generation, for our kids—are they Gen Alpha or are they something younger? I don't know. Who knows? But you can do both. There's a way to do both. You don't have to choose, "I'm going to go sit in a desk all day or I'm going to pursue my dreams." There's a way to make money while you're pursuing the thing that's probably not going to make money.
--:-- Host (Ryan Hanley): One more question on mindset because I'm just very interested. I found a lot of high achievers are high anxiety people as well. You may have answered some of this question already in the idea of building. I myself am also high anxiety. I feel the exact same way. I was a terrible employee for the most part because—I'm not going to get into my backstory because this show is about you. But I have also had a very tumultuous past with large companies for that exact reason. You're sitting at your desk stamping TPS reports, sliding them across. You're making an income. Yeah, it's stable. But you're like, "I have no idea how I'm contributing to this big thing." I also would get all my work done.
--:-- I remember a time in my career, I was 24 years old. I was working for an accounting firm as a consultant and I had every player in Major League Baseball's batting average and most of their stats memorized because I was into baseball. I was working for this company. I could get all my work done in the first two hours and I had nothing else to do. So I just looked at baseball. I wish I had been more entrepreneurial at that time.
--:-- Getting back to my question, I think a lot of high achievers deal with anxiety for various reasons. It is very, very common. Some harness it as you have. I'm not saying every moment of your life has been perfectly dealt with anxiety. I completely get that. I'm there with you. But you have found a way to, in general, harness that energy and turn it into positivity. Besides this idea of building, are there any other mindsets, hacks, tricks, mantras, books, something that's helped you continue to focus that energy that you feel inside you in a positive direction to reach 250 rentals? That's a freaking incredible number. I'm sure you have more and you do a lot more beyond just manage those. You found a way to harness that energy. Do you have any other tactics or thoughts for people who do deal with anxiety and maybe haven't found a great way of channeling that? Obviously, exercise is a good one.
--:-- Guest (Avery Carl): For me, one of the biggest ones is the brokerage side of our business. Our company is called The Short-Term Shop, and we help other investors buy and learn to self-manage their own short-term vacation rentals, just like we did. Sales jobs like that are very build-y. You're always trying different marketing to see if you can bring in more income. The more clients you get, the more income. Sales jobs, I think I found really help with that.
--:-- For me, I'm constantly trying to figure out, okay, we've got offices in 20 markets. We were the top team at EXP out of 85,000 agents the past three years in a row. The best year we ever had, we sold a billion dollars in real estate. I think that sales, for me at least, contributes to that building factor and helps with the, "Okay, the harder I work, I do help more people or I do make more money," or whatever your thing is. If you're somebody sitting in that desk thinking, "Man, this sucks," maybe try a sales job if you're not ready to go out and be an entrepreneur yourself yet. It really does help when you're working towards that bonus or that commission because your compensation is now a little more proportional with the amount of work that you put in. For me, that helped with switching from a straight marketing job to a sales job and then going fully entrepreneurial. I don't know if that's really answering your question at all.
--:-- Host (Ryan Hanley): No, I think that's great advice. That's actually my path to entrepreneurship was through sales. I was working as a consultant for this large accounting firm. By all accounts, a very good job. I hated every single day of it, but on paper, it was a good job. I was making good money. I worked for a big company, lots of stability, all that kind of stuff. But I was miserable. It wasn't until my father-in-law—or ex-father-in-law now, but father-in-law at the time—basically came to me and I think he just didn't want his little girl to be married to a bum. He didn't necessarily understand what I did for a living. So he said, "I want you to come sell insurance at my insurance agency."
--:-- I had always had this thing of wanting to own my own business, but I didn't have—I came from a family where my mom's been a receptionist at the same company for 40 years, and my dad was a union member on the railroad. Their whole message to me growing up was, "Go work for the big company. Get the safe job. That way you don't have to worry about stuff." That was what I had to break. It wasn't until I became a salesman and then I was like, "Oh wait, if I work harder, if I work smarter, if I make more connections, I can make more money." That's wonderful advice. That's exactly how I launched my own entrepreneurial career.
--:-- Okay, I want to get out of mindset and move into short-term rentals. I'm very fascinated by this space. I'm petrified of owning property because of my mistakes that I made earlier. Some of this is going to be like free consulting for me that you didn't realize you would have to do.
--:-- My early mistakes were I owned a very old building. It was built in 1905. I'm not handy at all. I can fix basic stuff, basic dad stuff, but I'm not a handy guy necessarily. I'm not doing mechanicals. The number of times that I've taken 110 right into my body and dropped the screwdriver or whatever I was doing. I'm a moron and don't know how to do electrical. All those mistakes. We were only cash flowing $100 a month on the property, which was tough. What broke my back was I got a call on Christmas Eve that we had an oil furnace—because again, old as hell, middle of an old ass city—that went poof on Christmas Eve. So now I'm trying to find a furnace guy who also can handle an oil unit on Christmas Eve. We had to pay 5x rate in order to get someone there because we live in upstate New York and it's cold as hell. You can't have your tenants not have heat on Christmas Day in the middle of the winter in upstate New York. There's a lot of mistakes in there that I believe I made—building age, whatever.
--:-- So if someone tunes into the podcast and is like, "Okay, I've been thinking about real estate for a while. Short-term rentals seem like something I might be interested in." What's the first step to get into this game? Where do you start?
--:-- Host (Ryan Hanley): What are the pre-work you need to do before you step in and take on something like this?
--:-- Guest (Avery Carl): Well, you can read my first book. Yes, you guys know every resource that Avery discusses, and feel free to share all the resources you have—your books, courses, anything like that. We'll have links in the show notes for you guys. So wherever you're listening or watching, just scroll down and you can find all the stuff that Avery talks about. I just want to make that clear.
--:-- Host (Ryan Hanley): Yep.
--:-- Guest (Avery Carl): So I would start there. You could start your search with my company, The Short-Term Shop. We have offices in 20 markets across the country that are all very vacation rental friendly and mature vacation rental markets. You don't have to worry about regulations, things like that. We'll help you find the right one. We'll teach you how to manage it for free and make sure we do that while you're under contract. So we make sure you know what you're doing before you even close. We'll teach you how to use all the property management software, how to set up your listings, et cetera.
--:-- But if you want to take the hard road, then I would say think of a place that you went growing up with your parents, or maybe now with your own kids or your spouse or whoever, where you went on vacation and you didn't stay in a hotel. You stayed in a beach house, condo, cabin, something like that where you've been a tourist, and start there.
--:-- I think a lot of people, the biggest mistake they make is they go Google "best place to invest in short-term rentals." And they get all these lists from the big property management companies, from the data companies that say, "These are the best places to stay, to invest in short-term rentals." But a lot of them don't like—either they're looking at just strictly numbers. And so they'll tell you to buy somewhere that's weird and cheap. Like, I don't know, Indianapolis. Super cheap. You can make some decent money there, but it's not—there's a reason that it's just not desirable real estate. It's not growing. And I'm just—Indianapolis is a very arbitrary pick, but somewhere in the Midwest where those cities aren't really growing, which is why the real estate is really cheap, which is why it looks better on paper.
--:-- I got my ass handed to me in the Midwest buying apartment buildings because I'm like, "Oh, great. The cash flow looks great across the board here." And then one thing happened outside my control three years after I owned my property. I wasn't planning to flip it, wasn't planning to sell it, was planning to hold it forever. Guy across the street let his property completely fall apart. It's condemned by the city, full of people in there doing drugs, squatting, all these things. Now people don't feel safe in my property. And I ended up having to sell it for a loss because that real estate is not desirable. It's not growing. So there's not a lot of appreciation.
--:-- So when you're looking at short term, you want to make sure that you're buying desirable real estate in terms of there's a lot of tourism that comes there—beach markets, mountain markets, national park markets, places like that. But make sure more than anything that you understand as a tourist who goes there, what it is that tourists want when they go there, where they want to be, what they're trying to do, so that you make sure you buy in the right location. The location is almost more important than the property itself.
--:-- I saw a lot of people get in trouble in 2020 when it was 100 offers on every single property, buying properties in good markets but a little too far away from the attractions—like 45 minutes out—thinking, "Oh, well, people will pay less to have to drive into the attractions." Those people were the first ones who had to sell when the market settled down, because when the tourism settled down after COVID, people only really want to be really close to the attraction.
--:-- So understand the market that you're choosing. Understand where and what the tourists want to do there, who's coming there and when and why. And then start looking at the data from AirDNA, Price Labs, that tells you the income history of these types of markets. Start with those two things.
--:-- Also, most importantly, when you pick a market, make sure you check the regulations by calling the local county or city and asking what their regulations are. I've seen very experienced investors buy a bunch of properties in a market and not check the process for that before they bought them, and then be incredibly shocked when they run into roadblocks with actually getting the permit. So make sure you check all that before you get under contract.
--:-- Host (Ryan Hanley): And I apologize for my naivety in some of these questions. So I live in the Albany, New York area. Does where I buy matter? Let's say my girlfriend's from Colorado, right? She's from Durango. Great ski town. There's tons of skiing, tons of hiking, mountain stuff. Let's say we wanted to buy a short-term rental in Colorado. So many states between us and Colorado, multiple time zones. Is that an issue? Non-issue? Should I be looking within a couple hours of my home? The first thing I would be nervous about is what are my exposures if I can't drive there in a reasonable amount of time?
--:-- Guest (Avery Carl): About zero. So it does not matter. There's really no reason other than to just do an annual checkup on your property. People are like, "Well, what do I do in an emergency?" What are you going to do? If it catches on fire, what are you going to do? Go insert yourself into the situation? No. Hopefully they've called the police already, but you're going to call the police. If something breaks, like a toilet, are you going to drive over there and fix it? No, you're going to call somebody to fix it. If a toilet breaks in my office back here, I'm not fixing it. I'm calling somebody to fix it. If a toilet breaks in my place in Tennessee, I live in Florida, I'm calling somebody. So it's the same process. It's just further away.
--:-- You do want to go visit your properties at least once a year just to make sure. But in terms of where you want to invest, I think Durango is a great place to invest. And since there are a lot of short-term rentals there—what is it, Purgatory Mountain that's up there by Durango? That's a big one. There's going to be a lot of infrastructure already in terms of cleaners and handymen. It's going to be easy to plug in.
--:-- But if you're somebody that it's going to keep you up at night to not be within driving distance of your property, that's okay. It's not wrong to invest closer to you, like maybe the Finger Lakes. That's not wrong either. But don't let driving distance limit you if you do want to invest across the country. I would say 99% of our clients at The Short-Term Shop—so there's 5,000 of them—don't live within three or four hours of their properties that they own.
--:-- Host (Ryan Hanley): Oh, that's wild.
--:-- Guest (Avery Carl): Yeah, you can do it all remote.
--:-- Host (Ryan Hanley): What about international? We just went to Turks and Caicos, stayed in a Vrbo. Texted with the woman, have no idea who she is. She was very kind, but then whoever her onboarding person is met us at the gate, handed us the keys, "Have a nice week. I'll be back at the end." Boom. That was pretty straightforward. Are there additional risks? And I'm assuming you don't want to start international, but is that an option? Have you done that?
--:-- Guest (Avery Carl): I have not done that. I know several people who have. Really, you just want to make sure that you as an American are allowed to buy property in that country, that you're allowed to finance property in that country. Some countries require you have a citizen of that country buy it with you. So I might not start with international just because there's that extra layer of crap to deal with when you're already learning a new business, but it's doable. People do it. It's just not something that I've done.
--:-- Host (Ryan Hanley): What about these obscure—that's not the right word—we'll call them eclectic properties? Tree houses, yurts. I don't really get down with some of the mountain hippie-ish culture, so I don't always know what all these buildings are, but I see them sometimes and they look interesting but crazy at the same time. I got a buddy who bought this piece of property just outside of the Adirondack State Park. He put four pop-up A-frame homes on them, almost like little tiny homes, separated just enough that they can't really see each other. He does phenomenally well. But they're kind of odd structures. Does that entice people? Is that a niche market? Do those come in and out of style? Is there a risk there? Or is that the kind of thing you may want to over-index on because they do draw more people in?
--:-- Guest (Avery Carl): That's a really, really good question. So unique stays can be something that really works well, but you're right, they do kind of come in and out of style. Especially if you're doing tents or structures that are not truly real estate—not with a permanent foundation—you kind of miss out on a lot of the tax benefits that you'd be able to get if it were real estate. Tents are going to be depreciating, or domes, or any of the above. And you're going to have to replace those eventually. Whereas a piece of real estate, you can redo it and remodel and things like that, but it doesn't just completely lose its value. It appreciates.
--:-- So those can be—there are a lot of people who are really successful with that. For me, I like to go with tried and true. A lot of the markets that I'm in, I'm not going to be able to convert anything that I own to a long-term rental. I'm not going to be able to convert a $1.8 million, 4,500 square foot beach house into a long-term rental. That's just not in a vacation market. So for me, instead of an exit strategy, I look at the past. Destin, Florida, where that property is, has gotten 10 million tourists every year for the past—I don't know how many years they've had that many. But I know my grandmother came here and rented vacation rentals in the 30s. So I just like to see a lot of tourism. And I like to stick with the thing that we know works, which is buying a beach house. People are always going to do beach houses.
--:-- I do feel like you have a little bit more of a pool of tourism to draw from with a more traditional piece of real estate than the teepees and the huts and the domes and the yurts. I think with those, you're looking at probably single people, younger couples traveling together, whereas we get a lot of families in our bigger ones. So I prefer the traditional vacation rental route to the unique stays thing, but there's a lot of people who are super successful with the unique stays. That's the cool thing about real estate investing—there's not really a wrong way. You can screw it up really easily, but there's not a wrong way to do it.
--:-- Host (Ryan Hanley): We stayed in a Vrbo—I don't know why I always use Vrbo, that's just the way it's been the last couple times—in Woodstock, New York, which is only about an hour from where I'm sitting. It's a cool little cheeky town, and it was the wintertime. We were just looking to get away from the kids for a couple days. What was funny is I was looking at the properties, and they were all just outside of town. It's cool. I got a standard house, kind of what you described. But the three houses that were on the other side of the road, they were all owned by the same person. And they were pitching, "Bathe in the crick. We have an outdoor shower." I was looking at it and thinking, I feel like that just limits your market. Unless I'm at a beach and I'm just rinsing off, if your only shower is an outdoor shower, you've got to be a pretty specific type of person that looks at that and goes, "That's where I want to stay." I'm not that person.
--:-- Guest (Avery Carl): Yeah, it feels like it limits your market a lot. And as you said, it all depends on how you market it and who you're trying to attract and what type of people come to that community.
--:-- Host (Ryan Hanley): Obviously you've done this a tremendous amount, and you've helped 5,000 people with your business. What is the most common thing that you see them trip over before they come to you? Once they're working with you, you have a template and all that kind of stuff. But I'm assuming for a lot of them, they try to do it themselves, they hit some roadblock, and they need help. What is usually that thing that pushes them towards needing someone to really walk them through the process?
--:-- Guest (Avery Carl): That's a great question. Right now, people get really hung up when they're googling or looking at different influencers that talk about this stuff. They get real hung up on, "Oh, I have to buy in a market where nobody's talking about. I have to do this thing that nobody's talking about. I have to be in this place that nobody is. I don't want to have competition." When really, I call them mega markets—like the Panama City beaches, or Myrtle Beach, or Smoky Mountains in Tennessee—where there's a lot of rentals. There always have been a lot of rentals.
--:-- Some people will say, "Oh, it's saturated." Well, places get saturated because there's a reason there's enough tourism to support a lot of investors being really successful, to where other investors are trying to do it too. So I actually prefer investing in those mega type markets because it's very easy to get up and running, especially as a new person. There's plenty of designers, plenty of cleaners, plenty of handymen. People are used to giving you the door code and the vendor goes in and sets up the furniture or whatever.
--:-- Whereas if you're trying to trailblaze and do what has not been done before, you're going to have to go find a regular housekeeper who cleans primary homes and teach them how to turn a vacation rental. As a new investor, do you know how to turn a vacation rental? No, you don't. And it's just harder to find the right types of vendors to learn how to do the vacation rental model and not the primary home model. You can be successful in going where no one's gone before, but why not just plug into something that's easy?
--:-- And you're never really competing with an entire market. You're competing with your bedroom count. And then further still, if you look up Destin, for example, there's thousands of rentals, but a good 45%, maybe even 60% of them, when you look at them, they've got terrible pictures and they're painted pink from the 90s. It looks like the Golden Girls lived in there with wicker furniture and stuff. So if you're doing it right and managing well and you have good decor, you're really only competing with a very small fraction of the market. So I think people being afraid of competition in those heavy tourism markets makes them make bad decisions sometimes.
--:-- Host (Ryan Hanley): I love that take. The most important point there is the support industries have good infrastructure in those places. That's a really good point that I think a lot of people probably wouldn't think about. Essentially what Avery said is that the handyman knows how to use the punch pad, knows that you're a short-term rental host, knows that they need to come in and punch out or whatever the structure is. They're used to it. You're not explaining it to them for the first time. They probably have 100 other short-term rental customers that call them as well. So they probably have good references and they're known in the community. These are all things that are really important. If you're states away from that person and you need to call them because a pipe burst, you want to know that they understand the process.
--:-- So do you—obviously, especially since COVID, short-term rentals have really skyrocketed. They've become ubiquitous. Oftentimes, if I'm not going somewhere for a work event, I go to either Airbnb or Vrbo. If we're vacationing, most often we'll look at those places first. Do you see that turning? Where do you see us in the curve? Are we at peak short-term rentals? Are we still on the upswing? Do you ever wake up and go, "Oh shit, what if no one ever wants to stay in a short-term rental again?"
--:-- Guest (Avery Carl): I think that we're in a stabilization. The vacation rental industry is a $10 billion industry. So I don't think we're ever in danger of nobody ever staying in a short-term rental again. But I do think you have to choose your markets wisely. That's why I only invest in vacation markets. I don't buy in metro or suburban markets, areas that aren't dependent on tourism, because those areas tend to end up with anti-short-term rental regulations that are pushed either by the hotel lobby or by primary homeowners. And dude, I get that. I live—I chose to live in a vacation market and I make my money on vacation rentals, and I still don't really want one next to me. So I totally get that. So we try to stay in vacation markets for that reason.
--:-- And I think that a lot of people try to make it short-term rentals versus hotels. I make 100% of my money on short-term rental income, but there are certain trips I'm going to stay in a hotel and certain trips that I'm going to stay in vacation rentals. It's not either or. If I've got to go speak at a conference, I'm staying at a hotel. If I don't have my kids with me, I'm staying at a hotel. I want to be waited on. I'm staying at a hotel that has room service for sure. But if we're going somewhere with the kids or my parents are coming, anything like that, it's going to be a vacation rental because we all want to be together. We don't want to be in separate hotel rooms. So it's just a different choice for different purposes.
--:-- Host (Ryan Hanley): That makes a lot of sense. When you're looking at it, you said vacation areas. But is there anywhere else besides vacation spots? What about small micro towns or sprawling cities? I have a buddy that refuses to stay in hotels. He only goes short-term rentals when he travels, even to conferences. He actually prefers some Texas cities for conferences because they're kind of sprawling and the houses tend to be very accessible to downtowns. New York City feels like it might be tough. I know there is some regulation there against short terms in certain buildings, and there's so many options in New York. So let's say for whatever reason, vacation spots made me nervous or I didn't understand them. Is there a secondary spot? Can you look into some communities if you know a community very well? Is that a trend that's coming, or do you think it's just never going to work?
--:-- Guest (Avery Carl): No, it just depends. There are markets that I have very eloquently named them "vacation-ish" markets. They are metro markets, but they're areas where there's either a ton of conferences—like Scottsdale, for example. We have an office there, and there's like 300 conference spaces. There's more conference spaces in Scottsdale than anywhere else in the country. That's an area where vacation rentals do awesome. And if you decide you don't like it, you can convert it to a long-term rental and it'll be just fine. Same thing with the Sarasota Clearwater area or Austin. Those can totally work. It's just, you're going to have to navigate some regulations in those markets. Not Scottsdale, but the other ones.
--:-- Host (Ryan Hanley): I kind of want to wrap up with you projecting out into the future with property in general. It doesn't have to stay just on short terms. I recently bought the house that I live in. Do you see interest rates coming down? Where do you see property? It feels very tough for me. A lot of the conversation with guests has been around the idea that right now, young people are struggling to get into homes. The rates have gone way up. Where I'm at in upstate New York, when COVID happened, all these New York City people flooded our area. The price of homes doubled. Homes that were going for $250,000 to $300,000 were selling for $600,000 in the same community in under two years. We really haven't seen those prices recede too much. They've stabilized, but we certainly haven't seen them come back down.
--:-- I know a lot of my younger friends who are in their mid-20s, early 30s, looking to buy their first home, are frustrated as all hell. They're looking at what their friends who bought earlier or are a little older have—the mortgages they're in and the prices they paid—and they're struggling to make it work. Do you see the market turning back a little bit? Where do you see opportunity for those individuals to own property? Is it worth renting and having a vacation property like a short-term rental? Is that a way to go? Should we always focus on getting a primary home first and then looking to get into the rental game? Just do some prognostication over the property market in general and where you see things going.
--:-- Guest (Avery Carl): Yes. So a lot of people don't realize this, but 2023 and 2024 are statistically the worst real estate market that we have seen in the history of recording the real estate market. Worse than 2008, worse than all of that. Fewer homes were sold in '23 and '24 than the whole 2008 debacle because those rates jumped. Not that they jumped so high—they've been much higher years ago—but because they jumped so much so fast that it really kind of stopped everything. Everything has ground to a halt.
--:-- Everybody was calling for this big crash and thinking that all these prices were going to go down. The crash happened, guys. I think we're at the end of the crash, but the prices didn't do what everybody was hoping. They kept increasing. The reason for that is because we have a big housing shortage.
--:-- In terms of interest rates, I don't see how they can not have to come down in the next couple years because there's so many industries that depend on that housing market—whether it's finance, whether it's not just the real estate agent industry. And people can't afford to get into homes. It's crossed my mind a number of times in the past two years: Are my kids going to be able to afford to buy houses when they're old enough? And I don't have an answer to that.
--:-- Host (Ryan Hanley): But if they follow your short-term rental buying strategy, then they certainly will.
--:-- Guest (Avery Carl): Yes, yes. So we're hoping to kind of bring them into the family business at some point. But here's my thing, and I'm by no means an economist. I believe I had a C in macroeconomics in college.
--:-- Host (Ryan Hanley): Cs get degrees.
--:-- Guest (Avery Carl): Something's going to have to move because they can't just have the entire general public unable to buy houses. I don't know what that's going to look like. Maybe it's interest rates. I don't think that giving a down payment assistance—which has been talked about—is going to help. I think that's just going to make things more unaffordable because more people are going to use that to buy houses. I don't know what the future holds, but I do know that rates are going to have to come down. They're going to have to get things moving again.
--:-- Past that, it's hard to say. If you're able to buy a house right now with rates the way they are, I would go ahead and use this window before all the buyers come flooding back in when rates inevitably do go down. I think a bunch of people that are sitting on the sidelines are all going to bum rush the market, and we're going to be back to multiple offers on everything. I don't think it'll be as bad as it was in 2021, but I think that if you can get into something now, you've got a better chance of getting a discount off of the asking price, and you can refinance later. Don't say I told you to buy something that doesn't work and bank on refinancing later. Buy something that you can swing now. Hopefully, when rates do go down, you can refinance later.
--:-- In terms of being able to start real estate investing, there's always going to be less competition on buying duplexes, triplexes, and fourplexes. So you can use a primary home loan to buy one of those, live in one unit, rent out the other units, sell it in a year—you do have to live there a year—and go buy another one. You can keep doing that, and you can put down as little as 5%, it might be 3%, 3 to 5%. You don't have to save up a 25% down payment to buy these things. You can have 12 units in three years by doing that. So that's a really great strategy that I would probably use if I was getting started today.
--:-- You could short-term the other units or long-term the other units. Or you can be renting your primary house and still get a 10% down payment vacation home loan on an Airbnb that has to be over 50 miles from your primary. So that's another way too. If you only have one down payment and you don't want to do the multiplex thing, you could just keep renting, buy that short-term rental, let that income start accruing, and then do it again somewhere else.
--:-- Host (Ryan Hanley): I absolutely love that advice, and I think you're 100% right about if you can swing it now, now is the time. Because what's in between the lines there is that when people start bum rushing, since prices have not receded as much as we thought, they're only going to go up. When there's multiple offers on these properties, when rates come down, the prices are only going to go up. So maybe they've pulled back 10%, 5%, whatever depending on your market, they're only going up. Waiting too long and waiting for the right interest rate is kind of like trying to time the stock market. It simply doesn't work.
--:-- Obviously, Avery, you are an incredible wealth of knowledge. Tell people where they can go to get more from you, where they can get involved with your organization. You've got a great podcast. So tell everyone where to go.
--:-- Guest (Avery Carl): All right. So our website, if you want to work with us in any capacity, is theshorttermshop.com. You can follow us on YouTube at The Short Term Shop, Instagram at The Short Term Shop. We've got a low-ticket course. We feel like information should be available to everyone. STS—Short Term Shop—STSplus.com. I have a new book coming out in February called *Smarter Short-Term Rentals*, and you can get that at the BiggerPockets bookstore. I'll get the exact link for you. I think it's biggerpockets.com/smarterSTR, but I'll get that for sure.
--:-- Host (Ryan Hanley): I love it. I appreciate your time. I appreciate you. Thank you so much.
--:-- Guest (Avery Carl): Thank you. Let's go. Make it look easy.
--:-- Announcer: Thank you for listening to The Ryan Hanley Show. Be sure to subscribe and leave us a comment or review wherever you listen to podcasts.
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