Can your favorite vacation spot bring you financial security?
Have you ever gone on vacation and loved the place so much? And you thought to yourself, hey, what would it be like to own a vacation property here? This would be a place I could come visit when I wanted to. And then I could rent it out. So maybe it's kind of an income property at that point. But then maybe you started thinking yourself, well, how am I going to manage this property when I don't live in that location, and I'm busy with my full-time job?
Enter Steve Schwab!! Steve is the founder and CEO of Casago which is a very large vacation rental and property management company. Steve's company represents more than 2300 properties in 15 cities across the southwestern us and in Mexico. Steve absolutely knows this space.
Steve got his start right after being in the military and met a married couple in Mexico that was running a beach home company. Through some illness, one of the owners passed away. They asked Steve if he wanted to take it on. He did and found he had a passion for it.
Steve started with 19 properties from the company that had been there before and worked hard. He ended up calling a bunch of people that were there on the beach, and offered to manage their properties as well. And then we had the largest company in that town went bankrupt and shut down overnight, and Steve was able to walk in to start taking care of those homeowners. And through that reputation and word of mouth, that he was out there, making sure those homeowners were well cared for the company grew, and then the vision of taking it to other cities came on.
Casago is really focused on taking care of homeowners. A lot of homeowners who purchase second properties in cities that they don't necessarily live in, they have fallen in love with that destination, they want to come and enjoy it. And they also want to be able to use that property for income. And that's really where Casago stepped in, unlike a long term rental where, you know, it's just a pure investment, you put somebody in there for, you know, months or years at a time, you don't really get to enjoy the property. The vacation rental industry is something that allows you to unlock the potential of the unused time and your property to for investment purposes.
What does Casago do to facilitate a turnkey experience? Here are some of the items you don’t have to worry about if Casago is managing your property:
Marketing the property on over 200 different websites and using their proprietary software, to make sure there's no double bookings.
Background checks on everybody that comes through making sure that they are bringing the right people into your property.
Cleaning the property, inspect it, make sure there's no damage, and set it up to the hospitality ready.
After guest check out, Casago’s team goes back and does a complete inspection to make sure there was no damages or items missing, and prepare for the next guest, and then send the homeowner information on all that.
Maintain all the invoices and bills for the property (such as utilities) and they send you a check every month for your proceeds
Responds to all of the positive and negative reviews ourselves for the homeowner. If there’s a negative review, they pass those along to homeowners.
How do you choose a property?
When deciding where to buy, Steve says that it’s all about the location and where you love, before you buy it, make sure to try that property going back there and get to know the locals, get to know the other people that live there, if you're going to Mexico, go and meet some of the expats in town, listen to their advice, get their opinions, or go and meet other people that are in those communities. If you're in the United States, making sure that it fits your expectations of what it's going to be like, if you're going back year after year after year. You know, once you buy a vacation rental, you've really locked yourself into going back to that destination often make sure somewhere you truly love. Steve says that’s his first piece of advice, though that two or three years down the road, you don’t want to be tired of going to this location. But if you find something that you love, and somewhere that really is special to you, that's the time to start looking into --
is this a good vacation rental place? And is this something that works for me?
When you're going into look at where to buy in a city that you want to a second home, make sure it's got a close proximity to the attractions of that destination. For instance, you know, people go to a beach town to be close to the beach. If you're buying away from the beach where you can't see blue, you're not going to have as many rentals people going there for the attraction of being close to the beach or ski in ski out. Now those properties cost more. So, you have to decide what's in your in your budget, but
always consider your proximity and your access to the attraction of that destination. That's number one.
Number two, take a look at the inventory that's currently being offered in that city. How many one bedrooms are there? How many two bedrooms? How many four-bedroom single family homes are there, two pools matter. For instance, in Sedona, Arizona interestingly enough fireplaces matter, that's a big thing for Sedona. However, in Phoenix, swimming pools are everything. A home with a swimming pool, as opposed to home without the swimming pool is a 30% difference in vacation rental nights throughout the year. It matters, being in Mexico, if you're going to the beach destination, how are you going to sell that to somebody who's coming down site and seeing well as through pictures and pictures of the ocean, which is the main reason that going they're matters. So take a looking at the inventory of properties, and where the property sits, and what makes that property unique. And how much demand is there for the type of property, your mind will really determine how well your property rights. And then above and beyond that, then enter your amenities matter how well decorated is the property? What sort of amenities? Is the inside modern? These things will come into play when guests are posting pictures of your property and their vacation experience.
Neighborly Advice
It’s important that when you do this to reach out to your neighbors, make sure that when you're purchasing that your HOA isn't restricting short term rentals and checking with them, make sure they're not considering it. Steve mentioned a homeowner who purchased a property for the idea that he would come down, stay a few weeks’ time he would leave he rented out for the rest of the year. And a few weeks after he purchased, sure enough, an HOA had a meeting and decided no more short term rentals which was bad news for him, because he had bought the property for that purpose. Making sure that the communities you're in are vacation friendly will matter.
Check out episode #13 here.