Identifying The Right Market For Your Business

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In this podcast, Drew Pierce, a thriving short-term rental host, shares insights on identifying ideal vacation rental markets. Drew manages nine properties in Florida and Tennessee, focusing on providing experiential stays.

His method involves pinpointing markets with 1000+ rentals, using AirDNA's demand scores and ROI analysis. He recommends seeking higher-margin markets to cushion early mistakes.

Remote management tips include hiring trustworthy housekeepers via platforms like TurnoverBnB and implementing detailed cleaning checklists. Drew's journey began after a memorable family vacation, leveraging his business management and sales background for success in the hospitality industry.

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Timestamps (audio)



[00:00:00] Liam: Welcome back to the Boostly podcast. This is the podcast that gives hosts the tools, the tactics, the training, and most importantly, the confidence on how you can go out there and get more direct bookings. Today, we are going to be talking about how you can identify the right market to be in, and to help us do that, we're going to talk to a successful short-term running host and ask the questions, which you can listen to the answers and take that information and perhaps implement that into your business as a host.

[00:00:26] So. Let's dive in, let's find out all the information that we want to find out and, uh, and go behind the host with him. So welcome along, Drew. Thank you for joining me.

[00:00:35] Drew: Oh, thank you for having me, Liam. It's honoured to be here.

[00:00:38] Liam: So I know we've, we've talked before. We've spoken about websites before, and, uh, I'm kind of unfamiliar with your business, but for people who have just tuned in and, uh, don't know who Drew Pierce is or Sage Vacations, can you kind of give us the background?

[00:00:51] What kind of business model do you use? How many units were in the world, all that cool stuff?

The business background

[00:00:58] Drew: Sure. So the, the business is currently located, um, in the United States and the Florida market, Orlando, Florida market, as well as the, uh, Gatlinburg, Pigeon Forest, Tennessee markets as well. We, uh, currently have about nine properties and, you know, we're, we're growing, you know, every year, fortunately.

[00:01:18] And. And so that's, uh, what we do though. That's, that's different than anyone else is that, uh, we, we try to focus more on the experience, I think with everything else. And we, we, we make it, so we, that's part of, uh, kind of our business models. We're, we're not catering to people who are just looking for a place to sleep, but they're also looking for, you know, that experience whenever they go and stay someplace, an extension of whatever it is that they're doing in that particular location.

[00:01:43] Liam: Experience is so important and more and more people are booking for not just, you know, like say a bed to sleep in, but actually because they're booking with emotions, they're thinking, Hey, what emotions am I going to have? What kind of experience am I going to have? Which is cool. So we'll dive into that.

[00:01:59] Those nine units that you've got at the moment, what kind of setup are they arbitrage? Are they owned? Are they managed?

[00:02:06] Drew: Seven of them are owned. , by me and the investors jointly. And then two of them, I just barely started. So, um, they, those are managed.

[00:02:16] Liam: Nice. Nice. So, uh, starting to diversify the model, uh, which is, which is cool.

How to identify unit locations and tips

[00:02:21] How did you identify these locations and what tips would you be able to share around

[00:02:27] Drew: that? Yeah, I think honestly, the easiest way to do that is just to take you step by step. Like what my process is, which is pretty proprietary. I don't tell many people this, so you guys are getting exclusive access to this if you will.

[00:02:39] Um, the first thing that I do is identify. Um, anywhere here in the United States, that's kind of where I'm currently just focusing on here in this country and identifying where all the top locations are for vacation destinations in each country. And so right, or excuse me, in each state. And right now, that list of markets I'm looking at is over 900 different markets that I'm looking at.

[00:03:01] So I go through and then I. You know, that's easy. Just there's a Google process with that. And the next thing I do is I look at the travel demand using air DNA, you know, the air DNA score. For those of you who don't know what that is, that's it gives you a score and says Is the market growing and is the demand keeping up with it?

[00:03:20] So it's a good sustainable market. And I go there and I look at, um What the rental demand score is in that market. The other thing that I do is because what I'm not just looking for a place to make a quick buck. I'm looking for, I'm looking to build a brand. So I'm only looking in markets that have already about 1000 plus vacation rentals in that market as well.

[00:03:41] So After I narrow, so I narrow it down from about 900 plus markets to about say 200 markets where they have about 1000 plus and then anything that has a rental demand square about 80 or higher, that will narrow it down again to say 30 or 40. And then from there, I narrow it down again to see which markets are going to have the highest ROI.

[00:04:03] And so I just look at what the average rental is. Uh, revenue rental, um, is in that market. And then I also look at the average home price. And from there, you can just calculate a very simple ROI. And then that's how I get it narrowed down to like say my top three markets. That I'm going to be looking at. And if you follow this model.

[00:04:23] It's pretty much a 90% chance you're going to be successful because you've already narrowed it down to where the markets are going to be the best and don't be afraid to look outside your backyard. You know, I live, thousands of miles away from my nearest rental, and it's very doable and that's how I started, I didn't start my backyard I even started and the reason why I did that is because when you're first getting started, you're going to make mistakes.

[00:04:48] It's inevitable. Everybody's going to do it. You know, um, the path to success is through failure. And so when you do make mistakes, it's nice to be in a market where that is. Has higher margins and you can kind of, it's, it's forgivable. You know, you can, you can stumble a little bit.

How do you manage your team from afar

[00:05:03] Liam: How do you manage the units from afar?

[00:05:05] So you're in several different markets. Uh, you've got some closer by some thousands of miles away. What is the secret source who helps you and, uh, how do you effectively manage from that far?

[00:05:17] Drew: Yeah, that's the number one question I get from people, you know, cause they're all very nervous about, you know, they want to be able to see the property themselves to be within 20 minutes or something like that and go check on any time that they want.

[00:05:28] And it just comes down to picking people that you trust to do it and that's the most important thing is just making sure you have people there on the ground that you can trust. So the first thing you have to do is find a really good housekeeper housekeeping company. Somebody that you hire individually, it's, it's difficult to hire an individual until you have at least four or five properties that are constantly booked.

[00:05:50] You know, so I'd recommend probably starting with a cleaning company first and then transitioning to hiring your housekeeping crew, just to save on that cost. And you have more quality control, things like that.

[00:05:59] Liam: Having a checklist for your cleaner. I know a lot of people when they start doing short-term rental, they just go, Hey, let's send my clean around and they've cleaned it.

[00:06:09] Great. But especially for people listening to this, who are in the early days, you just need some sort of, what does that clean involve? What is checked off, you know, especially if it's a cleaner who might not be familiar with doing short-term rentals, you know, they, it's slightly different. Isn't it compared to, um, standard home cleans, because at the end of the day, need to check all drawers that are empty and need to check the cutlery drawer, you know, check everything is, is, is in good condition?

[00:06:35] And it's just great having those kinds of apps, which you can then view the clean and all the information from a thousand miles away. So, um, that makes sense.

[00:06:45] Drew: And something to add to that as well as that Turno has a marketplace, so you can find housekeepers on there as well cleaning companies in particular.

[00:06:52] So, yeah, so that's how I found my first cleaners, as well as just through there like I said because not everyone. It doesn't make sense for most people to hire a full-time housekeeper with one property or two properties just not enough work for them to do, but a cleaning company makes sense because You know, they supposedly will have something like, you know, 20 plus properties that they're cleaning.

[00:07:12] So adding on one, just yours, makes a lot of sense for them. The nice thing is that they know what they're signing up for. They know that industry and kind of what's expected of them because they're already working with lots of other homeowners in the area. And so it's a great head start. And then that way you can kind of still tweak and refine, you know, the things that they're doing for you, but it gives you a huge boost when you're first getting started.

[00:07:34] I feel like it just makes your life a lot easier when you're working with a professional who's already familiar with the industry.

[00:07:39] Liam: And one of the hardest things to do is to find good people. So anybody listening to this, looking for a cleaner turnover, uh, turnover, B and B or turno now, um, you know, it's a great, great way to find your first, uh, first cleaner and first, uh, people who will help push your business forward.

How did you get into hospitality?

[00:07:55] How did you. Get into hospitality. What was the thing that started this? And what did you do before your life in hospitality?

[00:08:03] Drew: So I had always just wanted, I always thought it would just be fun to be a homeowner, essentially, like, you know, one day what I want to do is just buy a house wherever I want it to be in this vacation destination and design it how I want it, you know, and just get a management company to manage it for me.

[00:08:20] That was initially my goal. And then. I went, um, with my family and, and another, another family, we went on a vacation down to St. George. It's Zion National Park here in Utah. And we just had a great time there. And we and a lot of it had little to do with the area that we're in because we didn't go out and explore much.

[00:08:41] It was just an excuse to leave our houses and hang out together for a few days. And. We just kind of just, I noticed a lot of things that they did that were just little things that just made the stay enjoyable. You know, they, they, everything was marked about how to do this, how to do that, you know, with the TV remotes.

[00:09:01] And like I said, the check-in instructions were just super simple to follow. And, you know, we went into, they even said, Hey, if you, if you kids want to ride a bike, we provide these. Bikes in this little garage area. And I think here's the code to get into the garage. And, you know, we even use those and it was just a great experience.

[00:09:17] And I remember just turning to my wife at the time and saying, you know, I, I think, I think I could do this, you know, I think we could do this at no point in waiting, why don't we just go ahead and do it? And. And that's kind of how I decided to get into it. So I wasn't like what most people are accidental hosts, you know, things like that, I, it was a conscious decision.

[00:09:37] I'm going to get into this and I'm going to do it to make money. And, um, I guess leading up to that, you know, I didn't have a lot of experience in hospitality before this. My experience was, um, you know, in business management, fortunately, both of my parents are entrepreneurs. They, um, my dad's a chiropractor and.

[00:09:55] And a martial arts school owner. And I did very little with his clinic, but I did a lot with his, um, with the martial arts school. I started teaching there. I mean, not like a full-time, but you know, I remember teaching my first class when I was just eight years old, teaching four-year-olds some stuff. And then I, you know, was involved with it pretty much my entire life leading up to it.

[00:10:14] And as I got older, I became more and more involved in the business. So I understood kind of. how to make a business tick, how to make it run, how to market it and things like that. So I was learning all those great skills just along the way, but unfortunately, I was working for my parents. So I wasn't making much money.

[00:10:30] So then I had to get into sales and that's kind of where I was at at the time. I had about eight, nine years of sales experience at that point is when I got started, um, into the hospitality business. So that's what I was doing before. Uh, doing Airbnb full-time, you know, vacation rentals,

[00:10:49] Liam: having a blast.

[00:10:50] Gonna get it on the Boostly podcast. Bruce Lee. Let Bruce Lee 'cause it's so hard on the tees. Loose leaf. I looked up those rhymes. Don't write it, just do it loosely.