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<ul class="summary-list"><li>Kerri Gibson quit her tech job in 2017 and started her real estate investment journey.</li><li>Alongside her partner Philippe, she now has six short-term rental properties.</li></ul>This as-told-to essay is based on a transcribed conversation with Kerri Gibson, 48, based in Orford, Quebec, about her short-term rental business, Chalets Hygge. The following has been edited for length and clarity.I'm a <a target="_blank" class="" href="https://www.businessinsider.com/accountant-shortage-sexy-taxes-business-school-pwc-kpmg-2024-8">CPA</a> by training and spent roughly two decades working primarily in tax and accounting technology.It was a high-paced, high-stress career, and in 2017, when I was on the brink of <a target="_blank" class="" href="https://www.businessinsider.com/burnout-work-boss-left-office-on-stretcher-2024-4">burnout</a>, I decided to resign.During my time off, my partner and I decided to buy a house in our neighborhood and flip it. We'd previously renovated our home and really enjoyed it, and we talked about doing it again.While renovating it, we found we had a knack for architecture and design. A friend advised me to keep the house because it was in an area zoned for <a target="_blank" class="" href="https://www.businessinsider.com/quit-job-real-estate-investing-house-hacking-heloc-2024-7">short-term rentals</a>.We started <a target="_blank" class="" href="https://www.businessinsider.com/renting-airbnb-not-passive-wont-do-it-again-2024-7">renting out the house on Airbnb</a>. We became passionate about buying and renovating properties and turned this investment into a full-time venture for both of us.As owners and operators of our short-term rental business, we put a lot of work into creating a good experience for our guests. Some people consider <a target="_blank" class="" href="https://www.businessinsider.com/beginner-friendly-real-estate-investing-strategy-buy-condos-rookie-investors-2024-9">getting into real estate</a> as a source of passive income, but I wouldn't say it's passive at all.<h2 id="1228fda7-fac2-493d-8d2b-254b9024e6a4">I transitioned into full-time real estate first. My partner joined me years later.</h2>We closed on our first <a target="_blank" class="" href="https://www.businessinsider.com/how-to-profit-from-short-term-rentals-during-airbnb-downturns-2024-7">short-term rental property</a> in December 2017. The price was 129,000 Canadian dollars. We used savings to make a 20% downpayment and secured the rest with a mortgage.We paid for renovations, which took 11 months, out of pocket, too. It was really torn up, so cost us around CA75,000. This included a contractor who taught me a lot about things like laying tile and grouting. My partner, Philippe, also helped on evenings and weekends when he wasn't working.I was so <a target="_blank" class="" href="https://www.businessinsider.com/quit-amazon-manager-burned-out-from-employees-2024-10">burned out</a> from my old job. I found working with my hands on the house very fulfilling.In June 2018, we bought a second house for <a target="_blank" class="" href="https://www.businessinsider.com/buy-short-term-rental-property-investing-strategy-markets-good-investment-2023-12">short-term rental opportunities</a> while renovating the first one. I was nervous, but Philippe convinced me, saying the price was good and it was low-risk because we could always resell it. It was in much better shape than the first one, so it was ready for renting in two months.It cost around CA188,000. We used savings to make a 20% down payment and mortgaged the rest. We did the renovations ourselves and paid for the furniture out of pocket.Philippe and I decided I'd pursue the <a target="_blank" class="" href="https://www.businessinsider.com/daniel-daggers-selling-london-super-prime-real-estate-netflix-2024-8">real estate</a> full-time, and we'd live off his income until he joined me.<div type="image" title="Gibson with her partner, Philippe." height="1126" width="772" msid="114251054" hostid="261" sizebytes="60124"></div>Philippe took a job in Vancouver, so we moved away in May 2018. We also turned the property we were living in into a short-term rental. By March 2019, we had three rental properties generating income, but we were investing all the money coming back into renovations.That March, we bought a third property for CA129,500 with a 20% downpayment and mortgage. It took nine months to renovate, and I worked with a contractor because it needed a lot of work.We moved back to Quebec in August 2019 and bought another condo in Montreal. We funded the downpayment through an equity release in the form of a mortgage on our personal home turned short-term rental.In October 2019, we bought another house. It was CA220,000 with a 20% downpayment, which we financed using income from the other rental properties and personal savings.Then, in July 2020, we purchased a neighboring property. However, because our bank had a limit on the number of short-term rental properties you could take out personal loans for, we <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/personal-loans/how-to-borrow-money">borrowed money</a> from family to pay the full price of CA277,000 for it.We paid them back after selling our condo in Montreal and still have mortgages on five out of six short-term rentals. We now live in another house we bought and renovated in Orford.<h2 id="7622e5ee-c1f1-429d-854b-e89e5af4b219">We've been trying to rely less on third-party booking platforms like Airbnb</h2>We lived on Philippe's salary until 2020. For the first couple of years renting out properties, we ran at a loss due to the cost of getting started and reinvesting money back into buying properties. Upfront expenses of investment properties are significant. But the time it takes to be cash flowing is shrinking now we have formula that helps us execute faster.I was able to build income and wealth for our future, while Philippe's salary more than covered our daily expenses. He left his job in the legal software space in February 2020, and his severance package covered our living expenses for a while.When the COVID-19 pandemic hit, it disrupted our business, and we had to flip all our properties into monthly rentals to comply with government regulations. After COVID, the market exploded because everyone wanted to get away.Guests loved us and were referring their friends, and we were featured in some <a target="_blank" href="https://www.tvanouvelles.ca/2020/08/19/reservez-deja-votre-chalet-pour-noel">media</a> <a target="_blank" href="https://www.ledevoir.com/plaisirs/voyage/584434/quoi-faire-au-quebec-chalets-branches-routes-et-cartes-postales-a-explorer">outlets</a>.At that point, I realized that if we could keep occupancy up, we could live off of our six properties.I focused on our direct booking strategy. Third-party online travel agencies like Airbnb and Expedia hold too many cards — they decide whether you're on page one or page 25 of their website and how to handle complaints. I worked hard to build our social media presence and website. I pay for a property management software called Lodgify, which allows me to see every reservation across the different OTAs and our website and what days are open on our calendar.In 2019, I'd say all of our bookings were coming from OTAs like Airbnb, but in 2023, my calculations suggest that out of the CA340,000 we made in revenue, roughly 70% came from direct bookings.<h2 id="f9c05698-69b4-496a-8745-68df540a817e">Having a hospitality business is a full-time job, not a 'passive' income stream.</h2><a target="_blank" class="" href="https://www.businessinsider.com/housing-market-ice-age-homebuyers-mortgage-rates-spring-real-estate-2024-10">Real estate</a> has historically been thought of as <a target="_blank" class="" href="https://www.businessinsider.com/how-to-make-rental-property-truly-passive-investment-2024-8">passive income</a>, running short-term rentals is not passive.Providing the necessary level of hospitality is more of a full-time job. We're owner-operators who put a lot of work into the guest experience.We're available seven days a week. I work 50 hours a week doing marketing, bookkeeping, and maintenance. We also have an operations manager who handles day-to-day cleaning and inventory. Depending on the season, there'll also be two to three part-time cleaners.We love what we do and find it so fulfilling, so the good far outweighs the stress.The <a target="_blank" class="" href="https://www.businessinsider.com/how-hospitality-industry-capitalizing-solo-female-travelers-2022-12">hospitality industry</a> is flexible, and I do think there are ways people can do this in addition to another job, but I worry about the quality of service provided.You hear horror stories about people arriving at properties that aren't clean or where things are broken, and it has a negative impact on the industry.Side-hustling with short-term rentals needs to be done in a way that honors the industry.Even those who say they work four hours a day from a beach on their real estate business will have had to put a lot of work into their support and team structure to be successful.Do you have a real estate story you want to share with Business Insider? Email <a target="_blank" href="mailto:ccheong@businessinsider.com">ccheong@businessinsider.com</a>

I have 6 short-term rental properties. People think real estate is passive income, but I disagree.

<keyword id="20503776" type="General" weightage="100" keywordseo="rental-income" source="keywords">Rental income</keyword> in major <keyword id="20026638" type="General" weightage="20" keywordseo="Indian-cities" source="keywords">Indian cities</keyword> has risen by 14.6% every year, and a meager 2.6% on a quarterly basis, said a recent report by Magicbricks, a <keyword id="19895040" type="General" weightage="20" keywordseo="real-estate" source="keywords">real estate</keyword> platform. Explaining the rental income dynamics, Abhishek Bhadra, Head of Research, Magicbricks, noted that with economic activity peaking, they anticipate continued growth in both <keyword id="21466032" type="General" weightage="20" keywordseo="rental-demand" source="keywords">rental demand</keyword> and rents in the short to medium term. "Additionally, the supply of rental units is expected to improve as the stock of under-construction properties nears completion. Overall, the current landscape presents a promising opportunity for landlords and investors, encouraging greater participation in the <keyword id="20052080" type="General" weightage="20" keywordseo="rental-market" source="keywords">rental market</keyword>," said the Head of Research. Rental income is a major source of earning for millions of Indians. <keyword id="19932272" type="General" weightage="20" keywordseo="navi-mumbai" source="keywords">Navi Mumbai</keyword> saw 6.2 % jump quarterly, while Hyderabad (4.2%), and Ahmedabad (4%) exhibited the most significant increase in average rents. In Navi Mumbai, the average rent increased from Rs 28.99 per square feet (psf) per month in Jan-Mar 2024 to Rs 30.78 psf per month in Apr-Jun 2024. Similarly, average rents in Hyderabad increased from Rs 22.01 psf to Rs 22.93 psf per month, while in Ahmedabad, rents rose from Rs 17.25 psf to Rs 17.94 psf per month. The report observed a significant 14.8% quarterly increase in rental demand during this period, following a 16% quarterly increase in the previous quarter. However, the report asserted that the supply has decreased by 2.2% quarterly across the cities due to high absorption rates, leading to a rise in rents. The highest rents are in cities of Mumbai (Rs 82.28 psf) per month, Delhi (Rs 33.72 psf) per month and <keyword id="19919131" type="General" weightage="20" keywordseo="thane" source="keywords">Thane</keyword> (Rs 29.84 psf) per month. The <keyword id="22641758" type="General" weightage="20" keywordseo="Magicbricks-report" source="keywords">Magicbricks report</keyword> further observed that average rents in Greater Noida is Rs 14.52 psf per month, Rs 20.10 psf per month in Noida and Rs 28 psf per month in Bengaluru. With high rental demand and rents, <keyword id="19951618" type="General" weightage="20" keywordseo="residential-real-estate" source="keywords">residential real estate</keyword> continues to be a lucrative investment market. While across the top 13 cities, the average rental yield is 3.6%, investments in Ahmedabad, Pune and Kolkata demonstrated the highest rental yields (3.8%), observed the report.

Rental income in key Indian cities spiked over 14%, says Magicbricks report

Unprotected at the margins of the rental market

The government on Tuesday proposed a <keyword id="20789519" type="General" weightage="20" keywordseo="transit-oriented-development" source="keywords">transit-oriented development</keyword> plan for 14 large cities with a population of over 30 lakh in its budget for 2024-25 and said it will formulate a framework for the creative redevelopment of cities. Presenting the Budget in the Lok Sabha, Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> underscored that the Union government will work with states to facilitate the development of cities as "growth hubs". "This will be achieved through economic and transit planning, and orderly development of peri-urban areas utilising <keyword id="22517779" type="General" weightage="20" keywordseo="town-planning-schemes" source="keywords">town planning schemes</keyword>", the minister said. "Transit-oriented development plans for 14 large cities with a population above 30 lakh will be formulated, along with an implementation and financing strategy," Sitharaman said in her budget speech. The minister also announced Central assistance of Rs 2.2 lakh crore for <keyword id="20957520" type="General" weightage="20" keywordseo="urban-housing" source="keywords">urban housing</keyword> over the next five years as well as an <keyword id="22517780" type="General" weightage="20" keywordseo="interest-subsidy-scheme" source="keywords">interest subsidy scheme</keyword> to facilitate loans at affordable rates for urban housing works. She said the Central government will put in place measures for an efficient and transparent <keyword id="20071228" type="General" weightage="20" keywordseo="rental-housing" source="keywords">rental housing</keyword> market with enhanced availability. The minister proposed a scheme to support the development of 100 weekly haats or street food hubs in select cities. Sitharaman added that rental housing with dormitory type accommodation for industrial workers will be facilitated in PPP (public-private partnership) mode with VGF (viability gap funding) support and commitment from anchor industries." Enabling policies and regulations for efficient and transparent rental housing markets with enhanced availability will also be put in place, she said. About <keyword id="19939560" type="General" weightage="20" keywordseo="water-supply" source="keywords">water supply</keyword> and <keyword id="20082835" type="General" weightage="20" keywordseo="sanitation" source="keywords">sanitation</keyword>, the minister announced that the Centre in partnership with state governments and multilateral development banks will promote water supply, sewage treatment and <keyword id="19973309" type="General" weightage="20" keywordseo="solid-waste-management" source="keywords">solid waste management</keyword> projects and services for 100 large cities through bankable projects. According to her, these projects will also envisage use of treated water for irrigation and filling up of tanks in nearby areas. The minister stressed that the Central government will encourage states, which continue to charge high stamp duty, to moderate the rates for all, and also consider further lowering duties for properties purchased by women. This reform will be made an essential component of urban development schemes, she added.

Budget 2024-25: Govt announces transit-oriented development plan for large cities

<ul class="summary-list"><li>Investors agree: Short-term rentals are more lucrative but require more time than long-term rentals.</li><li>Some are shifting to offering mid-term rentals, which are typically defined as 30- to 90-day stays.</li></ul>When Business Insider caught up with Amberly Grant in October 2024, she admitted that it had been "a total s--- week and a half."The 36-year-old is <a target="_blank" href="https://www.businessinsider.com/millennial-coast-fire-saved-over-half-her-income-financial-independence-2024-10">on track to retire early</a> thanks to smart investments, including real estate, but her short-term rentals were causing her extra stress at the time of the interview."I had someone trash my unit, steal the TV. I had a cleaner not show up," she told BI. "This week, for whatever reason, is like every five seconds I'm turning around and I'm losing money and having to deal with a problem. And then I could go a whole month and everything's OK and on autopilot. That's the problem with short-term rentals: It just blows up from time to time."Grant puts up with the occasional blow-up because her Airbnb units bring in a lot more money than her long-term rentals. Comparatively, those properties are "simple," said the Colorado-based investor. "You have one person you're dealing with."That's the consensus among real-estate investors: Hosting shorter stays throughout the year is more lucrative than having tenants sign a 12-month lease.Especially with higher interest rates, which increase your monthly mortgage payment, "long-term rentals are just hard," said <a target="_blank" href="https://www.businessinsider.com/real-estate-investing-strategy-how-to-operate-mid-term-rentals-2023-8">seasoned real-estate investor Zeona McIntyre</a>. "In a lot of places with high home prices, and with the higher interest rates, often the mortgage is going to be more than what you could even charge for rent."In her experience, the same property that may produce $200 in cash flow a month from a long-term tenant could earn up to $1,000 a month from tenants doing shorter stays.The trade-off is time and effort. You're managing bookings and multiple guests a month, constantly optimizing your listing, keeping up with local regulations, and coordinating with cleaners.<div type="image" title="amberly grant" height="878" width="814" msid="114592789" hostid="261" sizebytes="64512"></div>Full-time real-estate investor Avery Heilbron categorizes short-term and long-term rentals as "two completely different things."He manages a mixture of both. Two of Heilbron's 14 total units are Airbnbs. He focuses on unique stays — he has a cabin with a fire pit and hot tub, and a tiny home with a sauna — and says he brings in close to $5,000 a month from each."The Airbnb is definitely more work, definitely not what I would consider a passive activity. You're actively thinking about it — how to make it better — and checking pricing and all that stuff, whereas the long-term, you just sign a tenant and might have a couple of maintenance issues or requests throughout the year," he said.It also requires a separate skillet. He considers the short-term rental business "more of a hospitality business than real-estate investing."<h2 id="ce4b9c86-ec50-4ce8-a290-363f0134dcd4">The 'sweet spot' of real-estate investing: Mid-term rentals</h2>Short- and long-term rentals aren't the only options for real-estate investors. There's an in-between — mid-term rentals, which are typically defined as 30- to 90-day stays — and it could offer the best of both worlds: generous cash flow for relatively passive work.McIntyre is convinced that mid-term rentals are the "sweet spot" in real-estate investing.The strategy didn't come on her radar until 2020 when the COVID-19 pandemic hit and sent her Airbnb business into a tailspin."I was ramping up for a busy summer season. Some of my places were booked all the way through May. But when Covid came around in March, Airbnb said, 'We're going to let everyone cancel for free,'" said McIntyre. "I saw one or two cancellations at first, and then it was everything — all of my bookings canceled at once."<div type="image" title="zeona mcintyre" height="864" width="1152" msid="114592793" hostid="261" sizebytes="41374"></div>That's what led her to experiment with mid-term rentals, which she'd heard about through one of her friends who was having success catering specifically to travel nurses.She listed her properties on Furnished Finder, which helps traveling professionals find temporary housing, and was surprised with the result: "I realized there are tons of people looking all the time for longer stays — and longer stays are kind of awesome because people don't need as much from you. They're OK to go buy their own toilet paper and change the batteries because they're living there. It was a whole different vibe from short-term rentals and way less stressful."Today, more than three years after the pandemic hit, "it's my preferred method," said McIntyre, who wrote "<a target="_blank" href="https://affiliate.insider.com?h=371f5fc4fda0515bca1bdc6966e3d3b81bd82f1e2b8fb49b5500260e3c044d7f&amp;postID=671a7818e5b5408300689ea1&amp;postSlug=real-estate-investors-shifting-investing-strategy-offering-mid-term-rentals-2024-10&amp;site=bi&amp;u=https%3A%2F%2Fwww.amazon.com%2F30-Day-Stay-Investors-Mastering-Medium-Term%2Fdp%2F1947200828">30-Day Stay</a>," to help other investors find and operate mid-term rentals. "I want a longer tenant in there, and I don't want to have to think about it for three months."Heilbron is interested in adding some mid-term rentals to his portfolio. He's converting a 750-square-foot detached garage on his primary home's property into a rental that will help offset his current mortgage. He plans to list the garage for "30 plus days stays," he said.Seattle-based investor Peter Keane-Rivera says he's changing his strategy heading into 2025 and "hybridizing" his Airbnb unit, a 70s-themed "<a target="_blank" href="https://www.businessinsider.com/real-estate-investor-setting-up-successful-airbnb-short-term-rental-2023-3">Groovy Guest House</a>," which he's operated as a short-term vacation rental for about two years. He also rents two single-family homes by the room to long-term tenants.<div type="image" title="peter keane rivera" height="3024" width="4032" msid="114592786" hostid="261" sizebytes="1614002"></div>He enjoys the work that goes into managing a short-term rental. "It does allow you to provide a unique service and really to have control over the quality of that service," he said, explaining that he is more interested in offering 30-plus day stays to create more consistent revenue during the slow season."In the summertime, it pulls in a lot — in June and July, I made almost $5,000 on a one-bedroom in the outskirts of Seattle, so I'm fairly satisfied with that — but in the wintertime, there are lower margins," said Keane-Rivera. "I'd rather get something closer to market rent rates, not have to worry about it for four to five months during the slowest seasons, and then spin it back up for spring, summer, and fall to maximize the return."He believes the ability to toggle between short- and mid-term rentals "is a real asset," he said, adding that if he expands to a second Airbnb unit, he'd use the same strategy: "For eight months out of the year I'd run it as an Airbnb and then during the low season, run it as a mid-term rental."

Real-estate investors agree: Short-term rentals bring in more money but cause headaches. Here's the 'sweet spot' some are shifting to.

<ul class="summary-list"><li>Airbnb CEO Brian Chesky said properties run by people with many listings had lower average ratings.</li><li>Chesky told The Verge's Decoder podcast that small-scale hosts give guests a "local feel."</li></ul>Airbnb CEO <a target="_blank" href="https://www.businessinsider.com/airbnb-ceo-brian-chesky-30-billion-startup-2016-8">Brian Chesky</a> said last week that hosts with more rental properties don't always get the best reviews.last week that hosts with more rental properties don't always give guests the best experience.Speaking on the October 28 <a target="_blank" href="https://www.theverge.com/24279570/airbnb-ceo-brian-chesky-founder-mode-apple-steve-jobs-management-decoder-podcast-2024">episode of The Verge's Decoder podcast</a>, Chesky described Airbnb's new Co-Host Network, a tool that connects homeowners with locals in their area who will manage their listings for a fee.The company prefers to feature smaller-scale operators in the Co-Host Network, he said."These would be people who only manage a few properties, so they're not going to be managing you and 100 other homes. Maybe three, four, or five other homes," he added.Chesky said that <a target="_blank" class="" href="https://www.businessinsider.com/airbnb-commercial-hosting-causing-mess-for-rental-housing-market-2022-7">professional third-party property management companies</a> often have grand ambitions."You tend to need economies of scale, so you're going to be managing hundreds of properties, even thousands of properties," he told Verge editor-in-chef Nilay Patel. "If you manage thousands of properties, now you have a whole bunch of employees. Then, you probably have a company name, and your employees probably wear a T-shirt with a company name on the T-shirt."But that growth and professionalization don't necessarily translate into guest satisfaction.Chesky said that the average review score for listings run by third-party managers was 4.62 out of five stars, which Chesky described as "significantly below the median range review score."In recent years, professional hosts with a large number of listings have played a significant role in the market as investors and third-party managers scaled up the number of properties on their rosters.In September, short-term-rental analytics site AirDNA <a target="_blank" class="" href="https://www.airdna.co/blog/the-best-airbnb-property-management-services">reported</a> that across Airbnb and its rival Vrbo, property managers with more than 21 active listings controlled 28% of all active listings and generated 36% of the industry's total revenue.Chesky said on the podcast that small-scale <a target="_blank" class="" href="https://www.businessinsider.com/hosts-contributed-to-airbnb-downfall-experts-fees-high-costs-say-2024-8">hosts</a> are more likely to offer a "local feel," an experience more aligned with <a target="_blank" class="" href="https://www.businessinsider.com/how-airbnb-was-founded-a-visual-history-2016-2">the company's original purpose</a>."It kind of moves Airbnb a little closer toward the roots," he said.In the company's third-quarter <a target="_blank" class="" href="https://www.businessinsider.com/airbnb-earnings-shares-most-interesting-things-cohost-2024-11">earnings call</a> Thursday, Chesky announced that the Co-Host Network debuted on October 16 with 10,000 cohosts already registered. In the first three weeks after its launch, an additional 20,000 individuals expressed an interest to join it, he said.<h2 id="53112fb8-a1fe-411a-884b-0fe9a2bd46a6">Airbnb's growth poses some new challenges</h2>Chesky's remarks on the podcast come during a key moment for the short-term-rental giant.Following explosive growth over the last decade, <a target="_blank" href="https://www.businessinsider.com/meteoric-rise-spectacular-fall-airbnb-queen-vacation-rentals-real-estate2024-4">especially during the pandemic</a>, cities around the world, from Barcelona to <a target="_blank" href="https://www.businessinsider.com/nyc-short-term-rental-airbnb-ban-housing-market-impact-data-2024-10">New York City</a>, are <a target="_blank" class="" href="https://www.businessinsider.com/cities-fighting-airbnbs-with-regulations-for-short-term-rentals-2022-5">reexamining their relationships with short-term rentals</a>. Some places are increasing taxes on Airbnbs, while others have opted for more restrictive rules like requiring homeowners to stay on-site with guests.Concerns that a growing number of Airbnbs <a target="_blank" class="" href="https://www.businessinsider.com/airbnb-ban-budapest-hungary-terezvaros-neighborhood-vote-referendum-2024-9">threatens the number of homes available for locals</a> has animated local debates over regulations, <a target="_blank" href="https://www.businessinsider.com/barcelona-airbnb-ban-florence-amsterdam-lisbon-are-regulations-working-2024-8">though research is still inconclusive</a> on how short-term-rental bans impact rents and home prices.On the podcast, Cheksy said that larger hosting operations can mimic "an industrial hospitality experience," like <a target="_blank" class="" href="https://www.businessinsider.com/airbnb-vs-hotel-some-travelers-choose-hotels-for-price-quality-2024-8">a hotel</a>."People want a local feel, as compared to Amazon, delivery, or other types of businesses where scale makes the service better," he said. "Hospitality at scale often makes the service more challenging."Chesky added that some large-scale hosts are better than others."If anyone's listening and they work at or are a third-party property manager, we love the ones guests love," he told The Verge. "Although the average rating across the board isn't as high, there are some unbelievable property managers, and we love them."

Airbnb hosts with a lot of properties get lower ratings from guests, CEO Brian Chesky said

<ul class="summary-list"><li>A proposed plan in Maui would phase out 7,000-plus short-term rentals to address housing shortages.</li><li>Rental owners say their property values will tank. One said his family may have to leave Maui.</li></ul>Andrew Church has lived on <a target="_blank" class="" href="https://www.businessinsider.com/hawaiian-local-thoughts-feelings-about-tourism-2023-11">Maui</a> for more than two decades, while his long-term partner and fiancée, with whom he has a daughter, was born and raised on the island.After working and saving for years, Church started purchasing properties to operate as rentals in September 2022 and now has four units. His vacation rentals are now the primary source of income for his family.Maui officials have rolled out a plan to phase out 7,000-plus short-term rentals in an effort to open up more housing for local residents and bring down housing costs — a move that Church said will devastate his family."My family is losing sleep every night over this thing," Church told Business Insider. He said if the ban takes effect, he might not be able to pay his mortgage and would probably have to sell everything and leave Maui, where his fiancé's family roots go back over a century."By enforcing this ban, they are going to bankrupt my family," he said.With some of the most expensive real estate in the US, Maui has long had housing issues. Hawaii's median home price is higher than nearly every other US state. Maui specifically had a median home price of around $1.1 million in July 2024, compared to the countrywide median home price of $438,706, according to Redfin.The island's housing problems were exacerbated by the <a target="_blank" class="" href="https://www.businessinsider.com/maui-fires-where-to-visit-avoid-2023-8">wildfire that devastated Lahaina</a> in August 2023, destroying much of the downtown and displacing thousands of residents.The plan to phase out some short-term rentals came in the wake of the fire, but as a tourist destination with local housing issues, Maui is hardly alone. Barcelona and <a target="_blank" class="" href="https://www.businessinsider.com/airbnb-numbers-shrink-hotel-prices-soar-ban-nyc-2024-6">New York City</a> are among the cities that have banned or implemented restrictions on Airbnb and vacation rentals.But on an island the size of Maui, where the <a target="_blank" class="" href="https://www.businessinsider.com/four-seasons-maui-manager-great-time-visit-deals-less-crowds-2024-7">tourism industry</a> is estimated to be directly or indirectly responsible for 70% of every dollar generated, the consequences could be significant.<h2 id="577b47e3-5221-4d7e-a6cd-34798463da7c">Owners say their property values will tank</h2>The ban, which applies to properties on the so-called "Minatoya List," includes 7,160 units largely concentrated in the touristy areas of South Maui, primarily Kihei, and West Maui, mostly Kaanapali.The properties are technically zoned for residential apartments but, since 2001, have been allowed to legally operate as short-term rentals — and have been taxed to that effect. The list is named for the city employee who initially wrote a memo about allowing the short-term rentals, which was eventually put into law.<div type="image" title="Aerial view of fire damage in Lahaina" height="723" width="1024" msid="113169089" hostid="261" sizebytes="184546"></div>Maui Mayor Richard Bissen earlier this year announced a plan to end those permissions. The Maui Planning Commission voted unanimously in favor of it, recommending it be approved by the city council. If approved, the ban will take effect, depending on the area, in 2025 and 2026.Church said three of his four properties are on the list, but when he bought them in 2022 and 2023, he had no idea the list existed. When researching the properties, he confirmed their tax status as short-term rentals on the county site.He said the units were marketed and sold to him as vacation rentals and that no one, not a real-estate agent or a government official, mentioned the list to him. Church said other owners he knows said the same thing and are also concerned about the financial impacts of the ban. The Maui County mayor's office did not provide comment when reached by Business Insider.Jason Gobey, another <a target="_blank" class="" href="https://www.businessinsider.com/airbnb-hosts-competition-summer-travel-direct-bookings-influencers-boost-revenue-2024-5">short-term rental owner</a>, told BI he researched and spoke to real-estate agents as well as others before buying his one-bedroom condo in Kihei in 2019. He also said he confirmed the property's tax status as a short-term rental and had no idea there could be an issue with it.Gobey and his wife live in Arizona but spend about four months of the year on Maui. He said he does not make a substantial profit on his condo but that buying it and renting it out was the only way they could afford to visit Maui as often as they do, during which time they are also spending heavily on the local economy."We bought it to use it," he said. "But we need some income off of it."Both owners said their property value is going to plunge as a result of the ban. They said plenty of similar units have been listed for sale since the ban was proposed, but that no one is buying them. They feel certain that if they eventually sell their properties it will be at a substantial loss.Though some of the Minatoya List properties will likely be converted to long-term rentals, Church said it is not financially feasible for him. Due to the high costs associated with property maintenance, he thinks he would have to charge far too much to make a long-term rental work.Gobey said since he and his wife spend a month on Maui every few months or so, his unit will just sit empty when they are not on the island. Both owners said the people who help them maintain the units, like proper managers and cleaners, would also lose work as a direct result of the ban.<div type="image" title="Beach scene" height="683" width="1024" msid="113169086" hostid="261" sizebytes="88980"></div><h2 id="8211afe0-0b5d-4768-8694-bf33b931d67c">The ban should help Maui's housing problem, but the wider impacts are unclear</h2>The owners also said they did not think phasing out their rentals would actually solve Maui's housing crisis, saying the value of the properties would likely still be higher than the average family could afford.However, Justin Tyndall, an associate professor of economics at the University of Hawaii at Manoa, said the policy change would have a <a target="_blank" class="" href="https://uhero.hawaii.edu/maui-short-term-rentals-the-minatoya-list-and-housing-supply/">significant positive impact on housing in Maui</a>, increasing the long-term residential housing stock by 13%."That would just be a huge flood of new units. Some of them would end up for sale, or some of them would be rented out to locals," he told BI, adding, "It would definitely make housing more affordable."Even if many of the properties would still be unattainable to lower-income residents, increasing the supply of housing would likely put downward pressure on home prices and rents more broadly.Tyndall said Maui's housing issue largely comes down to a lack of housing supply resulting in extremely high prices. A significant driver of that is how few new construction projects there have been on the island over the past two decades, in part due to government regulations that make obtaining a permit difficult and costly.He said some of those regulations make sense, like those intended to protect ecologically sensitive areas, while others are misguided, and that there are changes the government could make to encourage developers to build more housing.But the benefit of adding the Minatoya List properties to the housing stock is that they are already built.He said the property value of those units will almost certainly go down, but that that's not a bad thing for the broader Maui housing problem. He also noted that 85% of the units on the list are owned by people who live out of state, while 92% are owned by people who don't live on Maui.While he said there's a consensus among experts that the change will benefit Maui housing by increasing supply and bringing down costs, he is still looking into what the broader impacts might be."Maui is so dependent on tourism, taking away 7,000 visitor accommodation units will certainly reduce tourism levels," Tyndall said. "It's unclear by how much."He added that most hotels on the island generally operate at 60 to 70% capacity, so some would-be short-term renters will likely end up there, but at this point, it's still a big unknown.If the change leads to a significant reduction in <a target="_blank" class="" href="https://www.businessinsider.com/maui-food-truck-owner-irresponsible-to-tell-tourists-island-is-closed-2023-8">tourists visiting Maui</a>, it would mean less tax revenue for the county and job losses for people in the service industry.As for the short-term rental owners, Tyndall said folks should've known this was a possibility and that many people who work in real estate at least knew about the list."Property investment involves risk," he said."There's no guarantee you can operate a vacation rental in perpetuity."Are you a short-term rental owner on Maui, or have you or your family struggled to obtain housing on Maui? Want to share your perspective on the plan to phase out some vacation rentals? Contact this reporter at <a target="_blank" href="mailto:kvlamis@businessinsider.com">kvlamis@businessinsider.com</a>.

Maui could soon ban some Airbnbs. Short-term rental owners say it will be financially devastating for them.

<ul class="summary-list"><li>Brian Chesky, a former hockey player and industrial design student, is <a target="_blank" href="https://www.forbes.com/profile/brian-chesky/?sh=67d0629444d3">now worth $7.9 billion</a>.</li><li>Chesky started Airbnb after renting out his apartment to conference-goers who couldn't find a hotel.</li></ul>Brian Chesky has helped Airbnb bounce back from many obstacles — and built his Silicon Valley legacy along the way.The now-43-year-old CEO majored in industrial design at the prestigious Rhode Island School of Design and also dabbled in hockey and bodybuilding in his 20s.After graduation, an idea he hatched with his San Francisco roommate Joe Gebbia blossomed into tech unicorn Airbnb, which has positioned Chesky as one of Silicon Valley's key players.As of August 2024, Airbnb is worth nearly $73 billion. It had its first profitable year in 2022, and has become synonymous with short-term rentals across the US.Still, the company's stock fell a record 14% in the second quarter of 2024, and <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/airbnb-stock-price-consumer-demand-slowing-inflation-travel-pandemic-spending-2024-8">Airbnb noted in its earnings call</a> that travelers aren't booking as many stays.Chesky owns an estimated 11% of the short-term rental giant. His current net worth is $7.9 billion, according to <a target="_blank" class="" href="https://www.forbes.com/profile/brian-chesky/?sh=67d0629444d3">Forbes</a>, which also ranked him as one of the most eligible billionaires in the world alongside Kim Kardashian and Elon Musk.Here's how Brian Chesky, an upstate New York native, became one of the richest young tech founders in America.<h2 id="d229cff2-2c44-4ed3-928c-6af27d384255">Before running Airbnb, Chesky attended art school</h2>Chesky grew up in Niskayuna, New York, north of Albany. He was into hockey, and he also liked to draw and design new versions of Nike sneakers, which turned into an interest in art.Chesky's high school yearbook quote was, "I'm sure I'll amount to nothing." He thought it was funny — his dad didn't.In 1999, Chesky attended Rhode Island School of Design, where he served as captain of the hockey team and studied industrial design.At RISD, Chesky met Joe Gebbia, with whom he would eventually cofound Airbnb. Right before graduation, Gebbia reportedly pulled Chesky aside and said, "Before you get on the plane, there's something I need to tell you. We're going to start a company one day, and they're going to write a book about it," Fortune <a target="_blank" class="" href="https://fortune.com/longform/brian-chesky-airbnb/">reported</a>.<h2 id="abd9e7b9-adfe-4a41-abd9-bce2ff8658fb">It all started as a quick way to make cash</h2>He eventually moved to San Francisco and in with Gebbia, but the two unemployed grads soon ran out of cash.Then, when a design conference came to town in October 2007 and caused all the hotels to sell out, Gebbia pitched Chesky the idea of renting out their space to those who couldn't find a place to stay — a "designer's bed and breakfast."The roommates ended up housing three people that weekend, offering up air mattresses and floor space, as well as Pop-Tarts for breakfast.A few months later, Gebbia and Chesky were joined by their engineer friend, Nathan Blecharczyk. Together, the three guys started what was then called <a target="_blank" href="http://Airbedandbreakfast.com">Airbedandbreakfast.com</a> in August 2008. Chesky "gravitated naturally to the role of leader," Fortune wrote in 2015.<h2 id="730ed8fb-268e-48f2-8b59-8183521d5ee6">Things took off for Airbnb in the 2010s</h2>Since then, Airbnb has not only shortened its name but has listings in more than 220 countries worldwide. The company has served an estimated 1.5 billion guests since its 2008 launch.In 2015, Chesky was named as one of the most influential people alive in <a target="_blank" class="" href="https://time.com/collection/2015-time-100/">Time 100</a>. <a target="_blank" class="" href="https://www.businessinsider.com/jony-ive-airbnb-brian-chesky-time-100-list-2015-4">Apple's former design chief, Jony Ive,</a> wrote at the time that Chesky's "audacity is fabulous."Chesky is not married, though he was previously in a relationship with artist Elissa Patel. He has two golden retrievers named Sophie and Sandy.<h2 id="38a076e1-a0d8-421f-9da4-2059bc3e11b6">The pandemic caused ups and downs for the company</h2>Fast forward to February 2020, when cancellations began rolling in due to a mysterious virus. Chesky and his team were three weeks away from filing for Airbnb's IPO.The early days of the pandemic seemed grim. Airbnb's revenue plummeted 80% due to <a target="_blank" class="" href="https://www.businessinsider.com/airbnb-ipo-goldman-sachs-pandemic-2022-7">COVID-related travel restrictions</a>. The company burned through its cash reserves and opted to raise $2 billion in debt and equity financing to stay afloat. Its valuation, previously $31 billion, slipped to $18 billion.<a target="_blank" class="" href="https://www.businessinsider.com/airbnb-boss-laid-off-staff-pandemic-asked-ceos-hire-thousands-2023-10">Airbnb laid off 1,900 employees</a>, about 25% of its full-time staff. Employees said they felt betrayed, but Chesky was also praised for his handling of the situation. Workers were given generous severance packages, and Chesky offered to help find them jobs elsewhere.He reflected on the firings during an appearance on <a target="_blank" rel=" nofollow" href="https://www.youtube.com/watch?v=ia6Di_ytiSE">The Diary of a CEO podcast with Steven Bartlett</a> in 2023."This is how I want to be remembered. I only remember that when I'm in peril, we're in our darkest hour, I'm not just worrying about how we will survive, I'm trying to call CEOs of other companies to see if they can hire our people," Chesky said.But then travelers burned out from lockdown turned to <a target="_blank" class="" href="https://www.businessinsider.com/vacation-rentals-jump-127-percent-april-may-domestic-travel-surge-2020-5">Airbnb over traditional hotels</a>. Bookings bounced back by as much as 127% between April 2020 and May 2020.<h2 id="06fce8ec-091e-4bbf-a018-d35129707d79">Airbnb goes public</h2>Airbnb went public on December 10, 2020, under the Nasdaq ticker symbol ABNB. Barron's called it a "blockbuster" IPO. On its first day of trading, the company was valued at $86 billion, <a target="_blank" class="" href="https://www.businessinsider.com/airbnb-ipo-valuation-tops-three-hotel-chains-combined-opening-day-2020-12">more than hotel rivals Marriott, Hilton, and Intercontinental combined</a>.Between 2020 and 2022, when interest rates were relatively low, many people bought homes to use as <a target="_blank" class="" href="https://www.businessinsider.com/millennials-first-homes-are-ones-they-rent-out-on-airbnb-2022-4">investment properties</a>, planning to rent them out on Airbnb and other short-term-rental sites to help cover their mortgages or simply make extra money.Demand for travel and experiences surged— so much so that Airbnb recorded its first profitable year in 2022, with a $1.9 billion profit. (It lost $352 million in 2021.)<h2 id="08c2048b-dd4b-4ead-ac82-e1a390b2d4e2">Chesky gives back often</h2>Chesky and Airbnb's two other cofounders publicly signed the Giving Pledge in 2016, a philanthropic initiative started by <a target="_blank" class="" href="https://www.businessinsider.com/billionaires-join-the-bill-gates-and-warren-buffet-giving-pledge-to-give-away-their-wealth-2016-6">Warren Buffett, Bill Gates, and Melinda French Gates</a>. By doing so, they promise to donate more than half of their wealth within their lifetimes.In 2022, Chesky personally donated $100 million to the Voyagers Scholarship run by former <a target="_blank" class="" href="https://www.obama.org/press-releases/the-obamas-and-brian-chesky-announce-the-inaugural-cohort-of-voyager-scholarship-recipients/">President and First Lady Obama</a>, which awards $50,000 in tuition for college juniors pursuing public service. Airbnb provides housing to recipients for summer internships and post-grad travel.When Russia invaded Ukraine in February 2022, Chesky announced the company would work to house 100,000 refugees with free two-week stays.In November 2022, <a target="_blank" class="" href="https://www.businessinsider.com/airbnb-ceo-brian-chesky-home-listing-free-aircover-guest-verification-2022-11">Chesky listed a guest room </a>in his home on Airbnb, featuring a queen-sized bed and a piece of Airbnb history: the novelty cereal boxes that Chesky sold in 2008 to fund the early days of the company. Chesky told outlets he would make cookies and go to the gym with guests.<h2 id="f8474071-426e-4de9-baaf-881789cfc349">Short-term rental crackdowns and layoffs plagued Airbnb after its profitable year</h2>Countless other real-estate firms conducted mass layoffs due to the cooling housing market. In March 2023, <a target="_blank" class="" href="https://www.businessinsider.com/real-estate-tech-layoffs-25-companies-that-have-laid-people-off-2022-7">Airbnb cut 30% of its recruiting staff</a>, representing 0.4% of its total headcount of 6,800.In August — amid protests from locals — <a target="_blank" class="" href="https://www.businessinsider.com/barcelona-airbnb-ban-florence-amsterdam-lisbon-are-regulations-working-2024-8">Barcelona</a> said it would push to fully ban and eliminate all of its registered short-term rental listings by 2028. Elsewhere, cities like New York, Tokyo, and Vancouver now require hosts to live in the units they're renting out.During its Q2 earnings call, Airbnb told investors that its marketing costs would grow faster than revenue in Q3."Kicking up marketing spend at a moment when demand is softening tends to be the ultimate backbreaker for an internet stock in our experience," analysts from RBC wrote in a note.This story was originally published in 2016. It was last updated in September 2024.

The rise of Airbnb CEO Brian Chesky, who overcame the COVID-19 travel slump and is now leading the company through rental crackdowns

<ul class="summary-list"><li>Barcelona plans to end short-term rentals by 2029 to address the housing crisis.</li><li>Rents in Barcelona rose 36% from 2018 to 2022 amid a broader Spanish rental crisis.</li></ul><a target="_blank" href="https://www.businessinsider.com/surprising-things-moving-to-barcelona-spain-from-us-long-process-2024-3">Barcelona</a> plans to end short-term rentals after complaints that <a target="_blank" href="https://www.businessinsider.com/everything-you-need-to-know-about-traveling-to-barcelona-spain">tourism</a> has priced locals out of the housing market.In a blow to platforms such as Airbnb, the Spanish city will stop issuing new licenses and will not renew existing ones, Barcelona's mayor, Jaume Collboni, said at a press conference on Friday. The plan is that by 2029, no homes will be allowed to operate as short-term tourist accommodations."The city cannot allow such a large number of flats to be used for tourist activity at a time of difficulty of access to housing and when the <a target="_blank" href="https://www.businessinsider.com/barcelona-shop-puts-sign-to-deter-tourists-taking-selfies-2023-7">negative effects of tourist overcrowding</a> are obvious," Collboni said.Like other Spanish cities, Barcelona requires properties to have a <a target="_blank" href="https://ownpropertyabroad.com/blog/register-property-airbnb-in-spain/#:~:text=Catalonia%2FBarcelona,d'%C3%9As%20Tur%C3%ADstic)%20here.">tourist license</a> before they can be listed as rentals. There are about 10,000 apartments registered as tourist rentals.The move is the latest by Spanish authorities to ease the housing crisis and reduce the cost of renting. Rents in Barcelona spiked 36% between 2018 and 2022, while those in the Spanish capital of Madrid were up 16%, according to an <a target="_blank" href="https://www.ey.com/es_es/strategy-transactions/the-living-property-telescope">EY property report</a>.Barcelona became a short-term rental hot spot as tourists flocked to the city: The number of tourists increased from <a target="_blank" href="http://www.cefg.eu/files/repository/20141014144126_BarcelonaDataSheet_eng.pdf">7.4 million in 2012</a> to <a target="_blank" href="https://www.observatoriturisme.barcelona/es/noticias/el-destino-barcelona-cierra-el-a%C3%B1o-2023-con-26-m-de-turistas-y-un-impacto-econ%C3%B3mico-del#:~:text=Seg%C3%BAn%20los%20c%C3%A1lculos%20del%20OTB,26%20M%20de%20personas%20turistas.">15.6 million last year</a>. Government officials have sparred with Airbnb and similar platforms over the years, imposing <a target="_blank" href="https://www.businessinsider.com/r-barcelona-fines-homesharing-sites-airbnb-and-homeaway-2016-11">fines</a> and various kinds of regulation that stopped well short of the new plan to not renew licenses.Airbnb didn't immediately respond to a request for comment from Business Insider sent outside standard business hours.In April last year, the Spanish government passed a historic <a target="_blank" href="https://www.catalannews.com/business/item/spain-passes-new-housing-law-all-you-need-to-know">housing law</a> to address the issue, which included caps on rent increases, price limits in special zones, and an end to surprise evictions. Earlier this year, the government also <a target="_blank" href="https://www.businessinsider.com/spain-scrapping-golden-visas-real-estate-investment-wealthy-foreigners-2024-4">scrapped "golden visas"</a> to non-EU nationals, saying the visa program was adding to housing-supply pressures.But critics say the Barcelona ban will do little to change the rental climate.The opposition politician Damià Calvet said that not all 10,000 homes would go back on the market."Pretending that all 10,000 will have a residential use is not realistic," he told <a target="_blank" href="https://www.spanishpropertyinsight.com/2024/06/22/barcelona-announces-radical-step-of-banning-all-tourist-rentals-but-the-housing-crisis-will-only-get-worse/">local media</a>. Calvet said not all homes with licenses were actually rented out to tourists, with many owners keeping the license just to add value to the property in case they wanted to sell down the line."Tourist apartments represent just 0.77% of Barcelona's housing stock," Enrique Alcántara, the president of the Barcelona Tourist Apartments Association, told media after the announcement. "All it will do is increase the number of illegal tourist rentals," he added.<h2 id="59b31b74-4a4c-47db-a07b-71df21bb1eca">Global short-term rental restrictions</h2>Other cities are similarly eyeing short-term rental restrictions to manage skyrocketing housing costs in what's been deemed the "Airbnb effect."In Irvine, California, a ban on short-term stays in 2018 brought the <a target="_blank" href="https://www.businessinsider.com/airbnb-ban-makes-rents-housing-prices-drop-irvine-california-study-2023-11">cost of long-term rentals down 3%</a>, or an average decrease of $114 a month, according to a study published in Real Estate Economics. Late last year, <a target="_blank" href="https://www.businessinsider.com/nyc-airbnb-crackdown-regulations-hosts-quitting-selling-homes-2023-9">New York City</a> implemented a similar move.Cities including Vancouver, Tokyo, London, Amsterdam, and Paris have all placed restrictions on the short-term rental market.Some Southeast Asian countries have banned short-term rentals completely.In Singapore, it's illegal to rent any residential property for less than three months, while Thailand, like Irvine, forbids rentals for less than 30 days.

Barcelona plans to ban short-term rentals, hitting the owners of 10,000 apartments

<ul class="summary-list"><li>Airbnb temporarily banned parties in 2020 and made the ban permanent in 2022.</li><li>The company said it uses AI that checks "hundreds" of factors on an account before blocked an attempted booking.</li></ul>Airbnb is using AI technology to crack down on people using its properties to host wild New Year's Eve parties.Airbnb first banned parties temporarily in 2020 and <a target="_blank" rel="" href="https://www.businessinsider.com/airbnb-stop-ban-parties-tech-screening-tool-2022-8">has introduced a variety</a> of measures to stop them since, BI previously <a target="_blank" href="https://www.businessinsider.com/airbnb-wants-you-to-snitch-on-partying-renters-again-this-summer-2023-5">reported</a>. The company <a target="_blank" rel="" href="https://www.businessinsider.com/airbnb-makes-party-ban-permanent-policy-2022-6">made the ban permanent in 2022</a> and enforces it particularly strictly around holidays like Memorial Day, <a target="_blank" href="https://www.businessinsider.com/airbnb-uses-ai-to-identify-guests-hosting-house-parties-booking-2023-10">Halloween,</a> and <a target="_blank" rel="" href="https://www.businessinsider.com/airbnb-cracks-down-partying-new-years-eve-2022-12">New Year's Eve</a>.For Memorial Day in 2023, the company said it added restrictions to some one and two-night reservations and blocked reservations that it deemed high risk based on the user's past ratings and their distance from the booking, as well as if their reservation was made at the last minute.Last year, the company blocked 63,550 New Year's Eve bookings in the United States, 13,200 in the United Kingdom, and 5,400 in Australia, the company said in a December 18 <a target="_blank" href="https://news.airbnb.com/airbnb-using-ai-to-help-clampdown-on-new-years-eve-parties-globally/">blog post</a>.In the post, the company said it will be activating "proprietary AI and machine learning technology" to block booking attempts for full homes over the holiday weekend that "could be potentially higher-risk for a disruptive and unauthorized party.""When it comes to how we use technology like AI, we're focused on taking a thoughtful approach that aims to benefit Hosts, guests and neighborhoods," Airnbnb head of trust and safety, Naba Banerjee, said in the post. "We're optimistic these measures will help have a positive impact for the communities we serve."The company said it will be using the program over the holiday weekend in the United States, including Puerto Rico, Canada, the United Kingdom, France, Spain, Australia, and New Zealand.The technology scrapes through "hundreds" of different factors for each potential booking, including the duration of the trip, how far the booking is from their location, and if the reservation is being made at the last-minute, according to the post.The post states that the company will block some bookings for full homes that are one to three days in length if they are deemed "high risk." Those who are able to successfully book an Airbnb locally over the weekend will be asked to confirm that they know Airbnb bans parties.

How Airbnb uses AI to weed out people trying to use its rental properties for New Year's parties

<ul class="summary-list"><li>Shannon St. Val pivoted from her job in finance to pursue a career in real estate.</li><li>She is now the founder and owner of a short-term vacation-rental company.</li></ul>Shannon St. Val is the founder and owner of <a target="_blank" href="https://ep-mg.com/">Elevate Vacation Rentals</a>, a short-term vacation-rental company based in New York. She left her job in finance to manage short-term rental properties and shares how she started, how she makes money, and the challenges of the industry.This as-told-to essay is based on a conversation with Shannon St. Val. It has been edited for length and clarity.My career in property management hasn't been a straight path. My degrees are in finance and real estate, and I graduated in 2008 when the <a target="_blank" class="" href="https://www.businessinsider.com/office-commercial-real-estate-cre-crash-2008-gfc-delinquency-vacancy-2024-3">subprime meltdown</a> happened. I thought I would be working in commercial real estate, but then all the real-estate jobs disappeared and I started working in finance.I worked at Klynveld Peat Marwick Goerdeler, or KPMG, on the consulting side, specializing in financial operations for big banks and broker-dealers, specifically for investment-management firms.I knew I didn't want to work in finance for too long because the culture was intense. In 2016, I left my job to be my own boss. I took many of my finance and consulting skills and founded my own short-term property management company.At first, I started managing a few properties for myself, and then when COVID happened, I had to pivot and expand. I decided to take on clients outside New York instead of just managing my own. It's been my dream to return to real estate with property management.<h2 id="f5bbe9fe-75d5-46bf-9651-eee295b6fd7e">How I find clients</h2>A lot of my early clients came through word of mouth. I had friends, particularly people I met in the finance industry, who had houses in <a target="_blank" class="" href="https://www.businessinsider.com/marthas-vineyard-ferry-review-new-england-2024-7">Martha's Vineyard</a> or <a target="_blank" class="" href="https://www.businessinsider.com/hamptons-hot-spots-visitors-buyers-from-real-estate-agent-2024-6">the Hamptons</a> and would ask, "Hey, you're managing properties. I have a house. Can you manage mine?" Some people will advertise on social media, but I've gotten my business through <a target="_blank" class="" href="https://www.businessinsider.com/small-business-founders-explain-grow-your-company-referrals-2023-10">referrals</a>. If you do good business, people will refer you to their network.Some property managers who are just starting have found success in <a target="_blank" class="" href="https://www.businessinsider.com/cold-email-formula-that-landed-me-response-from-meta-executive-2024-5">cold pitching</a>. This means reaching out to short-term rental owners and saying, "I know you may have a manager, but I'm willing to work for a lower rate for the first year." Then, if you meet their expectations, you can increase the rate.Some companies can do outbound emails or outbound marketing for you, where you blast local owners or anyone who recently bought a new house in that particular vacation-rental area, advertising your services.<h2 id="25cfe19f-2fc1-49c4-8eee-5946221a2bc7">How I earn a living from property management</h2>There are two ways to earn money from managing short-term properties. The first is by working with vacation-rental owners and charging a commission on the nightly rate. I've seen commissions as low as 10% and as high as 30%, but the industry standard is typically 15% to 20%.I also manage a building. It's a master lease, which means I pay a flat rate and collect rent from each unit as a short-term vacation rental. Some homeowners just want their flat-rate rent and don't want to be involved, so I'll do a short-term rental. You have to be a little more sophisticated in this because if you don't budget and know your expected revenue, you could misprice it and lose a lot of money. With that model, we want to get at least a 25% to 30% return to provide a buffer in slower months.<h2 id="10437455-20ce-4e54-81a9-64cada1f3402">My typical day</h2>Your typical workday will depend on how many properties you manage. We're managing roughly 30 properties now, so we have a team that handles guest support. I work about eight or nine hours a day, but the job is really 24/7. If there's an emergency, you need to be available.My typical schedule involves a lot of meetings. We always meet with the cleaning team to discuss maintenance and cleaning issues. We go over that once a week with one of the cleaning companies we work with. In the middle of the day, we'll work on pricing reports for owners, update the listings, and read through guest reviews.We also schedule <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/home-inspection">property checks and inspections</a> at least once or twice a month, depending on the property. It requires a lot of coordination, so you'll have to get used to talking on the phone frequently, rather than texting or Slacking messages.<h2 id="6416bf44-fab1-45cc-8b50-23bbf7277ff0">The challenges and rewards of property management</h2>Managing properties is time-consuming, especially if you're doing short-term rentals. You have to have 24-hour guest support, and things like cleaning crews and a maintenance person have to be coordinated for each property. The logistics are significantly harder with vacation-rental management versus standard property management.The most rewarding part of the job is helping my clients or the owners see the untapped value in their homes and helping them earn more money than they would have anticipated. I get thrilled when I double their income. I'm also happy to get a five-star review or feedback that we were super attentive, paid attention to detail, provided great customer service, or resolved an issue quickly.<h2 id="be52c448-f4a1-4953-97a8-8fcbc0d51a77">Advice for transitioning to property management</h2>You have to be very organized, have structured processes, and be good at communicating with multiple stakeholders, including the vendors, owners, and guests. My corporate background helped me a lot because it had so much structure, and I came in with project management and logistical skills. I have a certification through the <a target="_blank" href="https://www.pmi.org/">Project Management Institute</a>, but getting a degree or certification is optional.To break into the industry, I recommend working for a vacation-rental company before branching out independently. Use the time to learn some of their best practices before you move on. Check out national companies like <a target="_blank" href="https://www.vacasa.com/">Vacasa</a> or <a target="_blank" href="https://www.hostgenius.ca/locations/tampa">Host Genius</a>, which usually hire in different markets.You could also work with a smaller company like mine, where you just reach out and say, "Hey, do you have any roles?" There's always something to be done, and management companies are always looking for good help. Another way to break in is to attend a <a target="_blank" href="https://www.vrma.org/events/event-calendar">regional or national vacation-rental management conference</a> to network. Find a conference in your area, and you'll meet a lot of managers in one setting.<h2 id="4fabd0d5-be6d-4e5a-ba5d-90ebef4300ff">What I wish I'd known before starting out</h2>Property management can be very rewarding, but I didn't realize how important it was to overcommunicate. I also didn't know how hard managing so many stakeholders would be. For every property, I usually have between four and seven different people involved. I have the owner, the lawn person, the trash person, the regular maintenance person, the cleaner for that house, and then I have my guest support.Sometimes, keeping track of who's who can be overwhelming. So if you want to manage a larger <a target="_blank" class="" href="https://www.businessinsider.com/financing-strategies-for-real-estate-investing-how-to-scale-portfolio-2024-5">portfolio</a>, you need a really good process and team to keep track of everything. You also have to be extremely organized, provide good customer service, and pay close attention to detail.

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