Short Stays, Big Dreams: A Travel & Vacation Rental Podcast
"Short Stays, Big Dreams: A Travel & Rental Podcast" dives into the world of short-term rental management, the stay industry, and travel, offering insights, expert interviews, and actionable tips to help you maximize your rental business and explore the latest travel trends.
Short Stays, Big Dreams: A Travel & Vacation Rental Podcast
Revolutionize Your Rental Business: Mastering Sustainable Luxury with Doug Schrader
Discover the innovative world of tiny home resorts with Doug Schrader, a pioneering builder who shares his visionary Highland Cottages concept. Inspired by a stunning Scottish resort, Doug has crafted a series of luxury accommodations designed specifically for couples, tapping into the growing demand for unique Airbnb experiences. We explore how these boutique-style cottages offer a lucrative, low-competition investment opportunity, reshaping the landscape of short-term rentals.
Journey with us as Doug reveals the remarkable transformation of a neglected farm into Highland Cottages, a haven of sustainability and efficiency. His approach to construction emphasizes minimal environmental impact, integrating the cottages harmoniously with the natural landscape. With insights into cutting-edge design and materials, Doug demonstrates how to balance quality and sustainability, delivering a high-end experience without compromising environmental values.
From the operational intricacies of managing short-term rentals to the strategic use of property management systems like Guesty, our conversation covers the essentials of running multiple Airbnb listings. Doug shares his transition from hands-on management to an investor-focused role, offering practical advice for those looking to scale their rental businesses. With a focus on personalized guest experiences and market research, this episode is packed with insights for both seasoned investors and newcomers eager to succeed in the evolving world of short-term rentals.
All right, welcome my beautiful people. Today I'm super excited because I'm going to be, or we're going to be, presenting a first of a beautiful project. But we're going to be talking to a short to rental operator that not only is a a innovator, but he's a visionary, and I firmly believe you're going to get a lot, a lot of value out of this video. I firmly believe you're going to get a lot of value out of this video. So, without further ado, I'm going to introduce Doug. Doug, let us know who you are and what you're about.
Speaker 2:Okay, thank you. It's a good privilege to be on your podcast. I appreciate it a lot. My name is Doug Schrader and I started building tiny homes about 10 years ago and we've shipped them all over. We've got tiny homes in about 30 different states, including Hawaii. We've got some shipped to New Zealand, we've shipped to Europe, so we've got a pretty wide reach. This resort, highland Cottages was just started about a year ago, or actually this year, but as far as being, we started renting out this year. We started the project last year, so it's pretty new project somewhere we're pretty excited about.
Speaker 1:Awesome and and I'm going to we had the privilege of staying here last night. Uh, explored the property. Beautiful property, love these cottages. We're going to dive deep into not only the manufacturer of the cottages, but his vision about this project. So let's begin there. What inspired you to create this beautiful resort here?
Speaker 2:Well, I guess the brainchild would have started in Scotland. Actually, like I said, we've been building tiny homes for 10 years and, uh, all of our tiny homes have been, uh, whether they're the eight by 20 is the smallest, all the way up to like a 10 by 40. They're they're a complete home, so they're made to live in. They have a bedroom space and a living space and a kitchen and the laundry, everything you need. And we were in Scotland in in uh 2022,.
Speaker 2:We were up in the Highlands doing a tour and came across this little tiny house resort and they had a little bit different business model. It was like these cottages were. It was like a glass front cottage and it was basically like a luxury hotel suite, so it didn't have the, the laundry and the full kitchen and it was just set up like a hotel suite real nice bed and amenities around it, bed and amenities around it. And so I kind of like that concept. I said I want to go home and create something like that. That was that is designed specifically for short term rental, not to live in, not to, not for full time living.
Speaker 2:And so we came home and designed this Highland cottage and I've actually owned this property for a number of years and I had it. I bought it like as an investment property a couple of years ago about four years ago probably and so I decided to go ahead and do a pilot project here, get these cottages up and go in here, build a resort, and the vision is to actually expand on that and put these all over and build a build a hospitality brand. Essentially is what we're trying to do, but I wanted a pilot program or product project here at home that I can. I can help investors and and and people who are interested in getting into the airbnb space with real numbers say hey, this is what we're doing here, this is what the input costs are, this is what cost operators. So this, this project, is kind of a uh, is kind of a spin-off of the whole, the whole tiny home lifestyle, but it's more of like the resort stay short-term stay type of thing.
Speaker 1:First of all, as I mentioned in the beginning, the intro. This is why I say his vision and the innovation right. Those of you that are in the short-term rental industry, you guys understand that today the industry is different than it was back. You know, even before I started, and here's what I mean by that. Brian Chesky, the owner or the founder of Airbnb if you're not following the industry and you're an operator, you should, because here's where the movement is going right. He just recently launched what's called ICONS, and ICONS is just a. You know it's a specifically places for short-term rentals, but it's not your typical three-bedroom, two-bath that. You know. It can be a long-term, mid-term or short-term. It is specifically designed for someone to come and have a unique experience, and he touched on it a little bit. So dive a little deeper into that. Like you mentioned, and for me, the purpose of this design was specifically for what?
Speaker 2:Well, we designed this to be a couples retreat. In my research and you obviously probably know this too, but in my research the highest profitability in the Airbnb space is for a couple's retreat, a one bedroom couple's retreat. And if you look at the AirDNA studies, that are I'm sure you're familiar with AirDNA yeah, correct For this area. If you go to like the we're in the lake we were around Guntersville Lakes there's lots of lots of Airbnbs, lots of vacation rentals and things. If you just look in Airbnb and look at the, the AirDNA data, the nightly rate for that is not that great. But you drop it down to a one bedroom, filter it down to a one bedroom and the nightly rate actually goes up probably 40, 50%. And in all the research I've done, if you can, if you can, if you can be specific about who you're targeting, which we are couples um, you can. You can pull that specific group in. They will pay more and the profitability is a lot higher on that and you have way less competition. So that's kind of.
Speaker 2:The model here is like these cottages are small, so they're not only they're not only inexpensive compared to a lot of other properties, but the, the amount you can that you can make on them is much higher because you're creating an experience specifically for couples. So we have a lot of people here who come for anniversaries, birthdays, honeymoons even, who come for anniversaries, birthdays, um honeymoons even, and or just to get away from from life for, you know, a few days. So they want to come, they want a quiet, serene setting, they want the the out, the outdoor shower, the hot tub, the private deck, all this stuff, you know, and and it creates an experience for a couple, and that's what we're really trying to create here at highland cottages is something specific that you can't get from just any Airbnb around.
Speaker 1:Here's the gold nugget people, especially if you guys are loyal subscribers. Here's the key component that he just talked about and that I always talk about. Number one is, if you're in this business, understand who your avatar is. Don't fully understand who his avatar is, and that is a specific niche. That makes it easier, especially when we're talking about targeting and marketing, because we're going to get into that a little bit. But marketing today is the most important part of any business, right? I've always said this without a customer, I don't care how phenomenal your product is, you don't have a business, right? I've always said this without a customer, I don't care how phenomenal your product is, you don't have a business right, and knowing your avatar, knowing who your specific customer is, makes it easier to get there. Now you touched on a little bit about the ROI for this property, your return on investment on it, so can you touch a little bit more? Why this is so much cheaper to build, but the ROI is higher.
Speaker 2:Yes. So, like our normal tiny homes that we build are around 400 square feet and they're a beautiful home. They are equipped for full-time living. Some of them even have two and three bedroom, you know, lofts and things, so you can sleep even I mean you can, you can, a small family can live there.
Speaker 2:But this product, because of the size and because it doesn't have the full kitchen, it doesn't have the laundry, it doesn't have all the extras to it, it costs a lot less. For example, this cottage is $99,000. And in in in most markets it'll generate about $50,000 per year. So when you look at the cost of the cottage and you look at, you know you need to maybe figure. Let's just say, $120,000 for your delivery and your decks and your hot tubs and your setups. But when you look at a cost like that versus any other, you know, like our normal tiny homes are close to $200,000. They're in the $170,000 to $200,000 range. They're not going to generate any more income than this.
Speaker 2:So that's what's specific about this product is because of the size and because of the way it's done. It's really simple. It only has one opening in the front. You see this big glass front door which is very expensive, but it still keeps the overall cost down and it makes the ROI so much higher on these than on any other tiny home that we build, or even maybe that you could buy where the cost is, you know, in the one hundred to one hundred and fifty thousand dollar range. And you're targeting families. If you target, if you sleep four people, five people, your your competition is exponentially larger than when you sleep two people. So that keeps the competition weight and there's nobody in the Southeast really doing exactly what I'm doing here, and that's what makes it special, that's what makes the ROI so high.
Speaker 1:Yeah, awesome, awesome. And you touched on this, on the fact of sleeping two people versus sleeping six people, and the ROI on that. There's another thing to keep in mind there and this is one of my biggest pet peeves. When I hear people on YouTube or quote unquote, experts always mention, you know, more beds, more heads, more money. That's not true, in fact. Doug just proved my point.
Speaker 1:So those that debate me all the time and here's another person that understands what I'm talking about it's more beds, more heads does not mean more money, because, remember, the bigger the property, the more your operating costs, and the people that say that, really, when they say that, I really think to myself. They're really not true business people, because a business is not just a specific product. It involves a lot of different things and one of the things you have to keep in mind is operating costs. Right, and maintaining this property versus maintaining a four bedroom, a four bath house, is way different, right, much more expensive. So I'm glad you touched on that because that's really important.
Speaker 1:So, um and and and in this particular resort, here and again, uh, for those of you that have not followed me on Instagram and are on our subscriber to the YouTube channel or to the podcast. Subscribe to the Instagram because we're going to do a lot of videos on this specific resort, because you really kind of appreciate it. Number one. The videos are going to be great, but until you're here, you kind of appreciate what this beautiful property is. The nature it's just amazing. So I want you to touch on how, when you were designing this, what role did the environment play in the design in this particular resort?
Speaker 2:Yes, and before, if I can, before I get to that I want to. I want to bring up one thing I forgot to mention. You brought up a good point about the low operating cost. We have four cottages here on this property. Our water bill is probably in the $60 range $80 range. You're talking maybe $20 per cottage. Our electric bill is about $60 range $80 range. You're talking maybe $20 per cottage.
Speaker 1:Our electric bill is about $60 to $80 per cottage. Listen to that.
Speaker 2:Listen to that. You've got a really, really low operating cost. Your utilities are just super low. But as far as the environment here in this property, are you asking about this property specifically or this region?
Speaker 1:No, no. This resort, so this Highland cottages, um the way you designed it. What role did the environment play? Yeah, so we we, we've.
Speaker 2:I've had this property for about four years and we started uh, it was kind of a rundown um farm, I guess you could say. There was an old barn on the property, an old pond, that was just mostly mud and and and stuff. So when we started laying this out, my, my, my, the key thing I wanted was I wanted privacy. I wanted all of these cottages to have a, because they're kind of the glamping style with the glass front that opens up. I wanted them to have a good outward view, but at the same time I wanted them to be secluded, because the whole, the whole point here is seclusion and privacy and intimacy for couples. So we had to lay it out with that in mind.
Speaker 2:The other thing that we wanted to factor, the other thing that's that's nice about these cottages, and I'll touch on this briefly but they, they, they require 50 amps of power. So a 200 amp service, which is a normal home service, can service four cottages. One septic can service four cottages. So because they're considered a one bedroom, you can put a four bedroom septic system in. So that played a little bit of a role in where we placed them, so that they could, you know, utilize a septic and they could and utilities. But if you have a property you're trying to develop for the input cost, the infrastructure costs, the utilities and the septic and things like that for what would be a traditional two, three bedroom home, you can put in four, up to four cottages on that. So that that had a lot to do with how we placed it and laid it out, to give them all privacy but yet to give them access to to the utilities and really save cost on that.
Speaker 1:Yeah, it's, it's, uh, and again, um, follow me on Instagram because you're going to see what I'm referring to. Like, for example, I'm not sure if in this video, you can see behind me the tree. The deck is built around the tree, right, so you didn't actually need to even knock down or clear a lot of your surroundings because of the size of the structure, uh, or speak on that.
Speaker 2:Speak on that aspect, so that that's a good point. So all we did really with this property is we cleared out all the underbrush and the privet and the vines and stuff that was there. But when we place the cottage, the beautiful thing about these is they come on wheels, they come on a chassis, so there's almost no foundation work. So you're not in here with excavators tearing up the ground, um, doing all that. So all we did is we, um, we selected our spots and we cleared out the underbrush and then we just kind of, just kind of you know, wove these things in here and in some cases, like we were missing trees by inches on both sides, but we just kind of placed them in here.
Speaker 2:Very low impact, I mean we, we did not disturb. The ground underneath the cottage lays just like it did, the ground around it lays just like it did. So very, very low impact. And then we built our decks and we just left the trees come right through all the decks. Uh, so we didn't want to disturb, we wanted to just be as as integrated into nature as we could possibly make it. And that's the beauty of these is, you're not getting in here with an excavator digging, making footers, pouring a foundation, it's just simply you wheel it in. You do need to have footers. So what we did is we just just poured piers just of an auger. And we poured a piers and then we just wheeled it right over top of that and blocked up off of that, very low impact. The ground still slopes underneath, everything lays natural. So real low impact.
Speaker 1:Yeah, phenomenal. Like I said, I love it. Um, before we get into running the actual business, let's dive a little deeper into the, the tiny home market. So, um, you know your company. Uh, timbercraft is really known for its high quality. But walk us through the manufacturing process like how does that work?
Speaker 2:sure. So we, we start with the, with the trailer foundation and, um, it comes on an i-beam frame. It's very, very strong. They are the, the front we've, like I said, we deliver these all over the the world essentially. So I mean the, the foundation, the chassis under is very road worthy and we can deliver them anywhere. And then we, we do standard two before construction, like a residential home. However, these are all ANSI certified park models, so they all come with a certification label and what that means is that we build to the standards of the ANSI 119.5 park model certification, standard two before construction.
Speaker 2:However, we go above and beyond that in that we strap every stud top and bottom, we bolt the plates down very good, we glue all of our sheeting on, we glue all of our decking on, we encapsulate it in closed-cell spray foam, which is the hard foam, the rigid. It adds a lot of strength, tremendous R value. And then the inside is completely done in shiplap. So there's no sheetrock in the home, the floors are hardwood, the bathroom is tile. There's no sheetrock in the home, the hardwood, the floors are hardwood, the bathroom is tile. There's no, you know, cheap finishes or anything like that. And then everything inside, all the cabinetry is custom built by our our cabinet guy, which is one of the best in the industry. So everything is, you know, dovetail drawers soft clothes.
Speaker 1:Yeah, I attest, listen the cabinet. The commentary here is phenomenal.
Speaker 2:It's top notch, and I say I don't say it arrogantly because I'm not doing it, but our cabinet guy is tremendously really good. So there's a lot of high-end finishes that we're doing in these homes that just kind of set them apart from a standard, you know, budget-built tiny home.
Speaker 1:And what's the like. What would you say is like the biggest challenge building these and even selling these um, they really kind of sell themselves once people catch the concept.
Speaker 2:The, the building, the manufacturing part of it is pretty simple. We've been doing like I said for 10 years. We have an assembly line, um, that we that we run. So there was a time, right after pandemic, where we had a real hard time getting certain supplies. That's kind of went away. So that's not really an issue really to build them. They're, they're, they're, they're very repeatable, very systematic, they're very easy to build. Really, what happens is, when it comes to selling these things, is you have to. You have to sell people on the concept, because one of the questions I get a lot when people see my product here, they say, well, I'd like to have that, but I want it to sleep four or six people. And I say, okay, you're missing the point. That's great, if you want that, that's fine. We have tiny homes all day long, but this cottage specifically is not designed that way. So it's kind of like selling people on that business model and then the ROI sells itself than the.
Speaker 1:ROI cells itself. You know, yeah, and and going back to the construction, how because you do this in this area I think you guys really, really hit a home run is is balancing the aesthetics with, with the what's the word? Like the efficiencies of it. Can you expand on that? Well?
Speaker 2:I don't know. I'm glad you feel that way. I always, you know, welcome feedback and input on that, because we try to do that. That's what we're trying to accomplish is get you everything you need but nothing more than you need, you know, kind of. So I spent a lot of time on the design. I think it's pretty well balanced as far as the size that's needed to get the experience. But as you go bigger you get increased costs, you know, and so we're trying to keep it, keep it small, keep it simple, keep it to where it runs on a 50 amp service and things like that. So it is very efficient. If you get up to like our, our larger park models that that are 400 square feet, that that sleep, you know, four to six people, then you're going to a amp service. You're adding a multi zone mini split. You're just adding a lot more things that that increase the cost and operating cost as well. So we're trying to hit the balance here with this.
Speaker 2:We do have a couple versions of this that we can offer. One is what we call a studio version, so it would be for like a home gym or something, and all it would have is the bathroom and the kitchenette area but, no, built in bed, so you could actually turn this into like a yoga studio or a home workout thing. And then we also have a slightly larger model. That is about where you have, like this, this black front with the cedar on the side. We have the same thing here on the other side and it's about six feet longer and it has a small. It has a small bunk room on the other side and it's about six feet longer and it has a small. Um, it has a small bunk room on the side.
Speaker 2:We're sleeping more, if you want to, if you're resort, you know. So we do have other options to get. We also have one with a small kitchen on the side. If if that's the model you're going for. The reason we don't need that here is because we're targeting couples first of all, and because we're very close to a lot of um, really nice um restaurants downtown. I we're just a few minutes away from the lake and from all that. So if you're back in a really remote setting where the couple's not going to be able to get out and go buy dinner very easily, we do have one with more of a fuller kitchen that we can do as well.
Speaker 1:So one more thing before we move on and talk more about business Again, your innovation here for me is phenomenal, and some of the stuff like the building beds, the cabinets and all that Let me do this In the industry, because I'm not too familiar with the industry what separates how you build them with other other companies in terms of using technology in the tiny home industry? Yeah yeah, yeah, yeah.
Speaker 2:Well, it's a good question. I don't know if I have a definitive answer, but we sell. Like I said, we sell these homes all over and I've always asked myself, like why is somebody in California buying my tiny home when there's tiny home builders much closer, right, right? Myself like why is somebody in california buying my tiny home when there's tiny home builders much closer, right, right, uh, why is somebody in maine or wherever? So the fact that they're buying our product says they like our product and, and I think the short answer to that there's, there's some. There's some really good builders out there. There's not there's not a lot, but there's a few really good other tiny home builders that I would say are good. There's a lot of that. I would say do not build real good quality, but there are some good ones.
Speaker 2:But I think what really separates timber craft in my mind from most of the builders out there is the aesthetics of it and the design. What we build, the designs that we build, the windows and the doors and the products that we use. Not many people are doing and so like, for instance, a lot of the homes that would be comparable to ours would have like ribbed metal on the roof. Instead of the sanding seam, ours are standing seam. Standing seam means there's no visible fasteners that can leak or anything. Ours are all closed cell spray foam. Ours have all like gel wind windows and really nice fiberglass doors, where a lot of companies are using vinyl. It's a fine product. It's just that there are things that separate timber craft from a lot of those based on the finishes and the designs and the styles. But I think that's probably the biggest reason that they just they look at a timber craft and they say we hear that a lot Like I can tell it's timber craft, so it has to do with kind of some of that, and the vertical siding is something that's kind of a timbercraft specific thing. I mean, there's other companies doing it, but we kind of started the vertical siding board and bat and we started the clad windows. You remember our very first timbercraft home that really went viral was our first Denali and it had the red windows, it had the green siding and the beige, the beige trim and it just popped and we took that.
Speaker 2:What happened in the beginning with timbercraft is we started in 2014. The first couple years were pretty slow and the industry was just getting started. There wasn't a marketplace for it really, and after a couple years, uh, it looked like it was. I didn't know where it was going, you know. But we designed the, the denali model and basically what.
Speaker 2:What I decided to do is I was like I went to a lot of shows, talked to a lot of people and I decided to design a tiny home that answered everybody's questions, like can I get a bathtub, can I get a stand-up bedroom, can I get? You know, back in the early days everybody had loft bedrooms and tiny showers and stuff. So I built the Denali and I put the color scheme on it with the green and the red and really made it pop. And I mean, if you look at our web traffic and our sales, they just went like that, like it just so. It was the appeal of the visuals and the design and the sound. That's what I say is kind of, because there's a lot of other good builders out there, but when you really look at the detail that we put into them, it's kind of unmatched, I think and I don't to agree because I've seen a lot, we visited a lot.
Speaker 1:By far it's one of the best we've seen. So I applaud you for that. But you said something interesting because I want to deviate for a second and go into actually running the business. You mentioned that in the beginning, first couple of years, you were like huh, like like let's expand on that. What, what like go deeper into that all right.
Speaker 2:So so to start out with timbercraft, funny story is I I started, I got this idea. You ever heard of jay shaffer? Yeah, okay, so. So jay shaffer had had a few books out in the beginning, right? So in 2014, I was looking for a life change because I was.
Speaker 2:I've been a general contractor home builder all my life and I was sick and tired of it all. Right, I was just sick and tired of the of dealing with, with everything that goes along with general contracting. I wanted something different, and I picked up one of his books at lowe's and looked through this book and you know, it's this tiny home thing, like you know. And so I was like, well, this is really interesting because it kind of appeals. Because there's two things. I'm really I've been doing home design for 20 years. I bought a CAD program way back in my early 20s and I started doing CAD design, so that's been kind of a part of my. My interest is home design scale, size, proportion. All this stuff is really important to me, and so I've always liked small design, because I feel like when you go big, you can waste a lot of space. There's no penalty. When you go small, you have to be really good, you have to really really be careful. So I got this book, I got inspired. I'm like this is really cool. I started Googling tiny homes and all of a sudden I'm like this is like a trend, so I want to try this. And this was back when. So, and this was back when august of 2014.
Speaker 2:Yeah, I remember the day I told my wife I said I'm gonna do this, and I still was building big homes too, but I said I'm gonna do this. So I ordered a trailer and uh, and I I built my first. It's called the inez. It's on the website. Uh, it's an 8 by 20, really small, because that's back, kind of when that was. That was kind of the size. And I built my dad's shop because I didn't have a place and funny thing was he didn't have a garage door big enough to get the house out. So I bought and I I figured all this ahead of time, so I backed the trailer in, I took all the running gear out from under the trailer, set the trailer flat on the ground, built the entire house to finish, drug it out, blocked it back up, cribbed it back up and put the axles under it. It's funny, but anyway, that's how I had to do it.
Speaker 2:So, anyway, that was my first tiny home and I sold it, believe it or not, on Craigslist, like there was no tiny house marketplace. This is 2014, 2015. There was no marketplace. There was a lot of popularity, a lot of you know there's a buzzword tiny house, tiny house, you know, seal everywhere, but there wasn't really a network to support it. There was no marketplace, nothing. So I sold on craigslist and, uh, by the time I got it done, I was like I really want to do this and so I started building the shop, putting the shop up and, um, I kept finishing out some of my bigger builds that I had going my, you know, standard home, and so I ended up selling the one on craigslist. I got two orders off of that and by the time I moved into my shop in the winter of 2015, I had two builds sold and that was it, and a website bill and uh, so I was just like. Everybody thought I was crazy man. I was just going for it, you know, and so it, you know, and I was by myself.
Speaker 2:I had not a single employee, like I did everything and in about spring of 2015, or maybe, yeah, somewhere in there I hired, maybe early, like 2014. I mean February of 2015,. Roughly, I hired my first employee, and just just an age to help her. He wasn't really, and then, in about summer of that year, I um justin, who is now my, my general manager over here at timbercraft, and so he's been with me since the beginning. Basically, I said um, and, and then I hired my cabinet guy as well. So I hired some of my key guys up front, but, yeah, in 2015, man, uh, it was okay. 2016 was okay by, uh, probably mid 2016, I told my it doesn't, if it doesn't get better, I'm getting out before it's too late, like I'm just gonna give up on it, right, but in 2016 is when I designed that first Denali, and I took it to a show in the tiny house jamboree. That was big back in, like 2015, 2016. In Colorado, drove it all the way out there and it went crazy.
Speaker 2:The funny thing was, though, is this was 2016, right, and so everybody's mind was still, you know, centered on this tiny, tiny, tiny home, like, like I'm talking eight by 20, eight by 24. So I come up with this, and when I, when I called him, they had me and I don't say this disparagingly, but they had me placed towards the front of the line, I mean in the front of the show there, and I called them. I says you know, talk to me a little bit about my tiny home and what size it was. It was an eight by 37. And they kind of freaked out. They're like that's not really a tiny home. I said, yeah, it's a tiny home. I'm pulling it with my pickup truck. So they ended up moving me all the way to the back. I back, which I don't know why that was. You know, but I have my, because a lot of people there didn't.
Speaker 2:It's funny, cause in 2016, there was a lot of tiny home builders there that were like, when I pulled up, they're like that's not a tiny home. But my concept is, if you're building an eight by 20, eight by 24, your market is so small there's not many people can live like that. But if you actually build something that people can live in, then your market's huge. Like, if you build something that's livable and so that's always been my concept with Timbercraft is build something that I would live in, that you would live in that's livable, not something that you have to be. A hippie that lives out by the river in a van wants to live in, you know, so I got a lot of flack for it, unfortunately, but that's OK, but in the end, that turned out to be my winner.
Speaker 2:Yes, it got me on the map and here's why I wanted you to.
Speaker 1:This is why I wanted you to talk about it and dig deep into that. And it goes back to what I said in the intro. You're an innovator, right, and a disruptor in any industry is going to get hate. It's going to get a lot of hate, but I firmly believe if you don't, if you're not getting hate, that means you're not doing something right. Because when you are disrupting something and have the ability, like you, have people telling you you're crazy, do it.
Speaker 1:I won't rehash my story in this podcast, but I was the same way. I bought a property that everyone told me you are crazy, you're nuts, what are you doing? And and you know, and in the beginning, you know, I did in the beginning, like halfway through it, probably the same thing happened to you. And when you started this business, halfway through it, you were questioning man, should I have done this? Yeah, you know, should I go back to doing what I was doing? And and luckily, you hung on long enough to realize that you, that you were right and same with me.
Speaker 1:I mean, there was times I, I, I would sit at night because I couldn't sleep. My mind was always racing, yeah, and I would sit and I was like man, am I doing the right thing that property needed? It's not as big as this, but it was a disaster. I had a vision for that property. I knew that property. Once I finished, I needed to finish. I'm not a contractor. You had that leg up that. You knew how to build stuff. I had to rely on a lot of people, how to rely on hiring, um, how to you know, I made a lot of mistake in that area, fired a lot of people, but but I, I kept persevering. I mean, I tell people all the time I made zero money for two years of my business, zero, in fact, my first year. I lost thousands, if not almost 100,000, in my first year. Like I lost and I'm like, oh, my wife's, like you're going to bankrupt us, you're going to file for bankruptcy.
Speaker 1:But I'm glad you hung on. So now let's talk about running this beautiful place here. So how do you manage, or how do you balance, running this and still running a timber crack?
Speaker 2:Well, that's a good question. My wife gives me a lot of help here, okay, so that does help, and the thing that helps us on this, too, is we use a rental management software that kind of takes a lot, of, a lot of that out of force. So let me stop you there, because I want to.
Speaker 1:I want to dig deep into that because there's a lot of people, a lot of people to follow, follow my channel or are either want to get into the short-term rental industry or starting out, and that's a big component. I consult a lot of new short-term rental operators and the first thing I tell them is that you have to have to get a PMS system or property management system. So talk about your property management system.
Speaker 2:The one that we're using. Yeah, we're using Guesty're using guesty. Okay, um, it's similar to hostfully, and there's, there's a handful of them, but what, what they? What those management softwares allow you to do is is they they?
Speaker 2:and I have a good. I have a good web developer as well, so she built me a really good website. And then the, the management software, allows it to sync with. So we're on Airbnb, we're on Vrbo, we're on Bookingcom, we're on Glamping Hub and then my website. We're on five different websites and that management software syncs all that together, sends out all the automatic messaging, syncs all the calendars and just does all of that for me. So it really when somebody comes in and rents the property, it handles everything, unless there's a problem or they have a question or anything, then I'm readily available and I do a lot of interacting with them as needed, you know. So that takes care of a lot of that.
Speaker 2:And then, as far as the, the, the goal here is that right now we have some some cleaning ladies hired and then my wife does some too, and so we kind of just and I do a lot of the lawn care and stuff, and it's like we're in the infant stage, so we're still hands-on, right.
Speaker 2:But the goal is and the money is there Once we get to where we're comfortable with it, we can hand off all of that and still make a good living hands off, and that's my goal. I don't want to be working here all my life mowing the grass and everything and I want her being out here every every week cleaning, cleaning these homes. But but for now we're we're more than willing to do it and you know if, if a couple couple, for instance wanted to do something like this, this would make a really good living for a couple, just if he wanted to take care of the grounds and help her with she wanted to do the cleaning and they didn't want to hire anybody. You can be totally self-employed and make a good living, but I'm doing it kind of as an investment and it's kind of a. You know, the big picture is I want to do more of these so I can't be hands-on on all of them.
Speaker 1:Yeah, that's a good point you just made in terms of either being because I tell people all the time you're either going to be an investor, right, or you're going to be an operator. But oftentimes you get people that think they're investors but they're truly only operators and they conflate the two and then they're. They're a lot. A lot of people are not going to want to cut grass and clean and do all that stuff. Um, they just looked at the, the amount of money they can make, and like I want to do that, yeah. And then when they do it, they realize I don't want to do this for the rest of my life and they don't.
Speaker 1:They didn't put the systems and processes in place to it to be able to let go, right. That's why I'm glad you, from the very beginning, you started with a pms system. Uh, and guess, he's a great pms system. Um, although I've had, you know, I we've, we've, I've got on on on podcasts with people that that, well, there's always a debate which, which, which, uh, pms system is better than the other, and my answer is always the best PMS system is the one you're going to use. Yeah, right, because you can have Guesties, has, has all the bells and whistles, but if you don't really spend time in learning that, then you're wasting your money on all the bells and whistles. And you know like I tell my story. When I got into the short-term rental industry, pms systems didn't exist, because I got in even before Airbnb existed, and so we were doing a lot of stuff by spreadsheets and Excel.
Speaker 1:That's how we ran our operations. Operations and back in probably 2015 yeah, I think was 15, um, maybe I've been 14 I I wanted to automate, so I hired a company. It was very expensive, but our company designed a pms system for me. Uh, and then shortly thereafter, when that was done here's an interesting side note that company that designed that for me got bought up by Guesty. Really, yeah.
Speaker 2:Yeah, so that's cool. Yeah, yeah, they're worth it, they. There's an onboarding cost. You know that's going to cost you some money out of pocket, but once that onboarding cost is, the monthly fee is so low it's just completely worth it to me. And to me that's why you touched on the part about investor versus operator. If I'm going to sell this business model to others, I have to sell it to people who are hands-off investors, and so if it doesn't cashflow with you hiring somebody to do it, it's not really sellable, because not many people not everybody there's some, but not everybody's going to be a hands-on operator. So that's that's part of the whole. Idea is be able to learn myself how to automate it hands-off and then when somebody else wants to get into it, I can show them how to do it and you can make plenty of money with that. And if you want to do hands-on, you make an extra you make extra money.
Speaker 1:Yeah, 30, 50,000, whatever you're paying.
Speaker 1:And like and like you said, if you, if you're a couple out there, or um, and you're tired of what you're doing or don't like what you're doing cause that's the big one I tell people all the time. Also, if you have a very good W2 job, keep it. Yeah, banks are more willing to lend you money as a W-2 employee than a self-employed person, and you can take that, go to the bank, leverage other people's money and then invest that in something like this. Let other people run it, manage it. You're making your money, it builds equity and you're still working at your job, though, don't you know? I, you know?
Speaker 1:I hear this another pet peeve of mine when I hear people I'm going to become a real estate investor. I read all these books. I'm going to do all this. I'm going to become a real estate investor. They buy, they buy, they buy, they buy, they buy, they buy, they buy, they buy, they buy. They buy two properties, they quit their job and they think it's going to work out.
Speaker 1:I'm like man two properties first of all, probably not going to pay all your bills, uh, you're going to be doing a lot of work and you have to. You have to continue to expand uh and grow for to do it. And again, a lot of people after they're in the business, they realize, man, that's not really what I wanted to do. So I'm glad you touched that. So let's talk about so you mentioned currently right now, probably 50% of the time you guys are managing this. You do have some extra cleaners, but you do not have like a full time employee specifically to that. Right, I do not. Ok, so, in terms of guest relations, you're using that PMS system to help run that guest relations relations. But if a guest comes here, especially one that is not from the area and and they're looking for like stuff to do, do you guys have like a guidebook, uh, that you provide to them, or do you guys give them suggestions? How do?
Speaker 2:you? Yeah, we do, we do that a lot and and and we're also I don't want to to portray that we're hands off in in guest relations, because we really do have a lot of interaction with them. It's just the system automates everything. But we have a lot of people, like just this last week, somebody was coming for a surprise. They surprised their surprise, his wife for her birthday or something. They order flowers from a local flower shop. We went and got them, put them up here, you know, set them up.
Speaker 2:We've had people that want, like I want to. You know, can you get me a wine and some beer on ice or whatever you know? And so, flowers, whatever. So we do we do help make the experience nice for them and and, yes, there's plenty of um recommendations on our website of things to do in the area and we also have a list that we give out to people as well, for, like, there's a, there's a spa here that does massages, there's great restaurants, there's walking trails, there's a lot of things that people can do in town antique shopping, coffee shops and everything. So, yes, we like to see people visit the town and get the whole experience. We do have some brochures in the cottage with some of those things. But yes, we love to communicate with them, help them with their experience.
Speaker 1:But that's phenomenal. We, we have, um, uh, a glamping place in colombia and one of the first things, uh, I still remember this to this day and um, we had a, a couple from the netherlands, yeah, go, and they're like, hey, we love the place, but what do we do? What can we do here? So that's when I quickly realized that people don't just come for the accommodations, they come for the experience, yeah and uh, so we teamed up with with some of the ranchers there and we horse, we do horse back riding trails, yeah, or trips, and um, atvs and and so that's pretty cool.
Speaker 1:All right. So in like running this type of, you know, cottage, tiny home, resorts, et cetera. What do you see? What are some of the challenges to running something like this versus buying a single family home and Airbnb and that?
Speaker 2:I've never had that, so I'm not exactly sure. But the challenges that we face here with this property, I think, is when you have multiple homes on the same property and stuff you're always going to have, it seems like there's always a lot of, a lot more upkeep with multiple properties than there is with just one. Now I've got four water heaters. You know, I've got four of everything in this property. So so that from that standpoint I would say there's, there's definitely more to keep up with. But as far as you know, since they're new and since they're well-built, that that really isn't that much of an issue here. I wouldn't say.
Speaker 1:And I would argue it's actually. That's really. I'm glad that's your challenge because you know I talk to a person that manages and runs hundreds of short-term rentals all over the world. That becomes very difficult, you know, especially in the. Yeah, we're pretty small compared to that. Well, not just the fact, but they're here. So you know you can send one person and one person can handle all four. Me, if I have, especially in the summers where ACs are going out, and I have one in Miami go out, one in West Palm and one in Broward yeah, I can't send one guy. Yeah, you know.
Speaker 2:you know I gotta get three or four people to go because it's the distance is so great so that's the good thing about being in the business as well, because I have a full team over there. Yeah, I have my own electricians, my own plumbers, all my own people so and and they all obviously live around here because we have our business here. So it's pretty easy to be pretty, pretty quick and responsive. If's any trouble, get things taken care of either, even if I'm not home, you know.
Speaker 1:So, excuse me, so along those same lines. So let's say, for example, I have, you know, a plot, a lot. You know I have five acres, or I have 10 acres, um, uh, undeveloped. What we do, that process.
Speaker 2:Yeah, we, we are actually working on, on, on um. Our goal, like I said, is to build a hospitality brand and we have several different levels of that that we're going to do. So one is, at the very least, we just sell you the cottage, you set it up, do what you want, and then we would vet you. If your property and everything kind of matches the, the theme and and the, you know the style and and the vibe that we're looking for, we would offer a um, uh, you, we would allow you to list your website, your, your cottage, your resort, on our website. So eventually, like my website now is just this resort, highland cottagescom. But eventually I'd like to be able to go to Highland cottagescom and you can select Florida or you can select Tennessee, you can select Alabama and you can pick your resort and there would be a continuity of design and style and all of that. So they kind of cause we're trying to build brand recognition and and and and and and and and experience that you can experience all these different places. So that would be the, the um, you, you could buy it, set it up. We can kind of walk you through it.
Speaker 2:The second level is where we would sell you a package deal. We have package deals and we have pricing for all of that. So let's see you buy one or two or three or four cottages. The package deal would include the cottage, all the furnishings, a starter pack with all your because we kind of know how many things you Need to start all that. It would come with the hot tub. It would come with with a hot tub. It would come with um, with a uh, a uh, a rate plan. We would do the research, do a rate plan. We would give you kind of like a pricing uh chart we'd give you, we'd pay for your onboarding, get you onboarded with guesty we would pay for, uh, we'd be like one year of advertising promotion on our website and we'd have a kind of a package program.
Speaker 2:So, like, you would have a little bit more value there and then eventually, like like I said with Highland Cottages, you could go there and you could select a region or a state and be able to stay. And then the third level of it would be is, let's just say, you're an investor, you have, you know, half a million or a million dollars or you have unlimited money, and you say, hey, I want to resort like this. We would actually do this acquisition and develop a whole property, but somewhere in between there we have different levels. We're really just trying to get the concept out there. Sell people on the business model and we'll work with you any way we can on that, because we have quite a few different options available for that.
Speaker 1:So let me just recap that. So let's say, for example, in my scenario, hypothetically I have 10 acres. I call you up and say, hey, doug, I got 10 acres. How can we team up on this 10 acres? I have no idea and don't know anything about construction, don't know anything about the short-term rental industry. So we would sit down, you'd do a consultation and then you'll do an on-site visit.
Speaker 2:I could, yeah, yeah, so some of that would be. Depends, like I said, depends on what level you want to do it. But we would be more than happy to do on-site visits and site you know construction consultation throughout the project Because, yes, there is a lot to learn, there's a lot, and you know we do that even with our tiny homes the way it is now, because we sell tiny homes all over, people call us and say what do I need to do to put a tiny one on my property right? And we'll walk them through that. So that's not, that's not a problem. We don't charge for just basic consultation like that. But yes, if you wanted a site visit, we could help you lay out your property, decide how many you need. Uh, and some of that. We definitely would work with you on that, absolutely.
Speaker 1:Okay In terms of the future, like where do you see, you know what are the trends that you're seeing in relations to tiny homes, vacation rentals, and how do you, how do you, how are you, adapting to those trends?
Speaker 2:Well, I haven't been in it very long, obviously, but I do try to keep up with a lot of what's going on, and what I've noticed with the industry is, like we talked earlier, the experience is what people are really buying, and so what I'm trying to do is is is, um, even add more value in here and try to figure out what we can offer. We're not there yet, but we're, we're thinking about it. You know, different things we can offer, maybe even like, for instance, um, we have a right down, uh, at the bottom of the I don't know if you've been into the town or not, but but so there's a walking trail along there. Um, offering e-bike rentals. So you rent my cabin, hey, we'll, we'll furnish you some e-bikes you can ride the trails. You try to put in more things like that, or put together tours with, like, a local uh brewery or winery or or different things like that. So we're trying to.
Speaker 2:We haven't got that yet, but we're working towards maybe adding more things in, like just day trips or experiences that people can can add to it. Maybe work with the spa down. You know, you get a couple's massage along with with your stay or whatever kind of a package deal. So that's a little bit where we're trying to go with this project, because this is so specific to certain things, but other than that, I don't. You know, that's really the only experience, or the only thing I have is this this is space right here.
Speaker 1:Yeah, I mean I will say this because you have not been in the short-term rental industry for long, but, like I said, this is why I said in the beginning you're a visionary and your innovation is phenomenal, because this is where the trend's going. I've said this before and I'm going to say it again Long gone are the days where you're going to put a simple home on Airbnb and you're going to make money. That's gone, so it's got to be unique Again. You don't have to be a genius. People always ask me Fernando, you've had a lot of luck investing in real estate. You know. You know what's your secret? I'm like, I don't have a secret. This is what I do. I go and see where Starbucks is building a Starbucks and then I buy there, because Starbucks, what they did, they did the homework for me. Yeah, people don't know. Starbucks only buys properties and and areas that they feel are in neighborhoods that they feel are going to appreciate and value quickly. So if I see Starbucks is building a house in this neighborhood, I'm buying our store in this neighborhood. I'm buying a house in that neighborhood because I know Starbucks is betting that that neighbor is going to go up or that neighbor is going to increase in value. And you know that's my secret In the short-term rental game, I follow Airbnb.
Speaker 1:Airbnb does all the studies, all the stuff and again, I'll mention it again they're shifting. So if you look at Airbnb in the last two years because part of that, they did some other stuff the last two years they no longer focus on single family homes. It's all unique. They have categories now in terms of cabins. Everything's categorized now, and the reason they did that is because they understand that an experience is what people is looking for. So that's why they created icons. You know, if you're not familiar with icons, I highly recommend you go on Airbnb and look to see what they're offering in terms of icon. So so it's just a lot of unique, very unique, specific properties.
Speaker 1:One of it I'll give you an example One is a tiny house which is and I don't I don't watch a lot of movies, but apparently there's a movie that was made with a house and they had balloons and it flew, and I don't know if you're familiar with that movie. Well, anyways, that house and with the balloons that went in the air, they created that house and that's an Airbnb. Oh yeah, so you can stay there and actually go up in the air with the house. Yes, and it's the exact replica of what was the house in the movie. So, anyways, again, this is unique, it's an experience and it's something that I believe we're going to see a lot more in the future. So good for you on that.
Speaker 1:I think I have maybe one or two more questions, and it will be actually. I have one more question, and this is a question that I always like to close with, and that is what advice would you give anyone that's looking to get into specifically I won't say short-term rentals, because you're specifically in this type of industry specifically in the cottage, tiny home, village type short-term rental game.
Speaker 2:You're talking about for, like, short-term rentals. Short-term rentals, yeah, short-term rentals as a short-term rentals.
Speaker 1:Short-term rentals, yeah, Short-term rentals as a short-term rental operator, but looking to do something like this, what? What advice would you give that person right off the bat?
Speaker 2:Well, um, I would definitely say, to start with, do your research through air DNA or one of those companies and kind of see what, because that's going to give you a little bit of a picture of what you can make in your area and what your competition is. And and another thing that you can find out, just like, for instance, when I did my research on it, I found out that a hot tub adds $40 per night on average. Okay, so you started to do your research for your area, you narrow it down a little bit and then you look at this home as 20% occupancy. This one has 80. What is this home? Not? You know what is this home. What does this home have? A lot of it. And another thing that's really important, I believe, and is higher professional photography and even if you can get models in your photos and do some of that, because that makes, if people can feel like they're in the space, they're living in the space, it's livable, it makes it, it presents itself much better. So I would do the research really well and then look at those key factors that are going to make a difference in your area. Sometimes I look at it like when I did my research in this area. Um, you'll see a home and it's only getting 20 to 30 occupancy and you look at it and it's like, well, number one, the pictures are terrible, the, the decorations is there's. No, there's nothing here. I mean, this is like my grandma's 1970 rancher house. You know, so you, so you kind of you kind of see and then look at this one here, well, what does it have that's present? So kind of, do some research and then add the, add those benefits or those features in that people are willing to pay for and provide them that experience.
Speaker 2:But I think it can be done almost anywhere. There may be parts of the country where it'd be more difficult, but I believe you need to be. This is my personal opinion. I think you need to be within maybe an hour, hour and a half of a pretty good metropolitan area, and there's lots of places like that. So if you're within that area, you don't need to be on the water, you don't need to be on a bluff overlooking, you don't need anything, but just a, just a kind of a secluded acreage with access. So if you're going to do the Highland Cottage model, for instance, there is no built-in kitchen, like I said. So you do want to be, you don't want to be. You know, 30 minutes from town really. So there's a few little key factors, I would say, for this business model that work really well, but it can be done anywhere nearly, I would say I, I'm gonna agree.
Speaker 1:So, um, about the other thing that I always said, like, for example, I'm in. Uh, when I started this business, I started in the fort in fort Lauderdale, the South Florida area, and, um, unlike a lot of people, I was under the impression that I needed to be close to the beach. Um, you know, I needed to have a pool. Uh, you know I needed to sleep. Eight plus people, uh, so those are my first investments. And then, as I, as I started learning and investing in other areas, when I really learned on how to invest in real estate, I wasn't buying in those areas anymore. And when I was looking at my bottom dollar, when my net income per property the ones that made me the most money were not on the beach, were, uh, didn't have a pool.
Speaker 1:Um they did have a hot tub, though Uh didn't have a pool. They weren't big. In fact, a two, a two, two or two one made me more money than than four bedrooms or greater.
Speaker 2:Yeah.
Speaker 1:So so my mindset started shifting. And again, this is before our DNA existed, because now you have the data. Now you have no excuse, right? Because now you have places you can go and get all this information, you can do your research, check your data. But the point here is, like you said, you don't have to be in certain specific areas for it to work. I firmly believe it can work anywhere and I've proved it could work anywhere. We have locations where we're not nowhere near a metropolitan area. It gets 30 minutes into town or even longer to get into town, but they do really, really well. But they do well because I have certain amenities that I know people want and I know some of the experiences they want, Like I mentioned, the one in Colombia.
Speaker 1:This is in the middle of nowhere. Now. It's in a beautiful area. It's called La Zona Cafetera in Colombia, where the majority of the coffee is produced, but you know, there's no nightclubs, there's no fancy restaurants, In fact, there's very little restaurants, but people love going there. There are a few little local shops. Um, there are a few little little local shops. In fact, the town near it's called Salento. Uh, has become a big tourist spots because a lot of people started doing these glamping type type uh um, little mini resorts and now it's become extremely popular. Now it became like, like I want to say, if you look in the last two years in that specific area, that area used to be known for the coffee, but now it's a tourist area.
Speaker 2:Yeah.
Speaker 1:You know now people go there for the seat for the horseback riding. Anyways, I'm going to conclude that Greatly appreciate you having you on the show today. Hope you guys got a lot of knowledge.
Speaker 2:Tell us where people can find you timbercrafttinyhomescom and highlandcottagescom and baltic saunascom. We build saunas as well.
Speaker 1:Oh, really yeah also. So listen, people, we're gonna I'm gonna put all his information in the description down below and especially guys, guys, I highly recommend, if you're even interested in buying one of these or creating a place like this, I highly recommend come visit, come stay so you can get a feel what it is. I heard I don't know if it's true, I don't want to put you on the spot I heard that if a potential customer emails you, that if you have the time, you'll give them a tour of your factory.
Speaker 2:Absolutely. And one more thing I'd like to bring there If you come and visit us, you stay in my cottage and you decide to buy one, I'll refund your night. Or if you want to come and stay in it first to see if you like it, come by night, stay with us. If you like it, you buy from us to see if you like it. Come by night, stay with us, if you like it, you buy from us, we'll refund your night. We'll give you a free night Just to give you a no risk opportunity to come try it out for yourself.
Speaker 1:Yeah, people, hey, listen, take them up on it. You're not gonna regret it. So guys, subscribe. If you haven't subscribed, follow me on Instagram. Buy me a coffee if you wanna have a conversation, love.