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[00:00:00] Sarah: Hello, everyone. Welcome back for another great episode. My name is Sarah Karakaian.
[00:00:03] Annette: I’m Annette Grant, and together we are–
[00:00:05] Both Annette & Sarah: Thanks for Visiting.
[00:00:05] Sarah: And this is the–
[00:00:06] Both Annette & Sarah: Hosting Hotline.
[00:00:08] Sarah: We’ve got a great question today about pivoting.
[00:00:15] Questions: Hello, Annette and Sarah. My name’s Leticia Mains. I am from Birmingham, Alabama. However, my husband and I have a listing, short-term rental in Chalmette, Louisiana, right outside New Orleans, about 15 to 20 minutes away. And you guys have been such an inspiration to me. We started our journey of short-term rental where we purchased the house in Chalmette March 15th, and it is now May, and we are now ready to list, or have started to list.
One of the things I’ve learned from y’all has been how to pivot. And in this process, when we thought we were going to go day-to-day rental, we ended up having to do a 30-day or more rental due to the regulations in the county and in the city. So my question to you would be, what other ways in this process can you think of that you had to pivot? And can you give some examples of each? Thank you.
[00:01:15] Sarah: I love this question for many reasons. One of them being, she doesn’t even have a challenge right now that she’s facing, but she’s thinking ahead. And I really love it when people think ahead.
[00:01:25] Annette: And Leticia, Annette wants to stay in Chalmette. Sorry, I had to do it. My dad jokes. And kudos to you. You’re already pivoting. You could be boohooing and like, oh my gosh, this thing isn’t happening. We’re going to go to long-term. Just be prepared too. You might have some more. Not you might. You will have some more headed your way. But Sarah, you’ve got a hit list there of pivots that have taken place.
[00:01:48] Sarah: Well, let’s learn from Leticia, and I’m hoping, listeners, especially if you’re in a more metro or more populated markets or– even if you’re in a typical vacation rental market, this has happened when you are doing your pro forma, when you’re thinking about buying a property, and you decide one of two things.
If regulations change and there is no going to mid-term rental, long-term rental, it is a vacation rental or bust, when you go to sell it, are you confident that X, Y, Z will happen and you’ll be happy? Or run those numbers with midterm rental, and long-term rental, an easy sell in mind. So let’s learn from Leticia and how she pivoted. But she’s asking us what are other ways we’ve pivoted in our business and how we’ve done that. Some examples. And as I say this, Annette, I’m sure you’ll have more ideas that’ll pop into your mind.
[00:02:34] Annette: I do.
[00:02:35] Sarah: One being, right now, uh, on our Instagram stories, we are sharing behind the scenes. I’m about ready to list one of our properties that is in a neighborhood that my idea was to midterm rent it because in this neighborhood, it’s a great school district. When people get in it, they don’t want to leave. And so when they do want to renovate their homes, they don’t want to change addresses either because their kiddos are in school, so they need to move to a furnished rental in order to through those renovations.
[00:03:03] Annette: Yeah. This is a neighborhood where everyone does full guts, so they’re out of their house for six to 12 months. And a couple of my friends have already done it where they have to rent an apartment. They pay dual housing. Um, and so Sarah was going to do that, but at the end of the day–
[00:03:18] Sarah: It just was too dicey for me. There is an entire apartment complex that pretty much dedicates itself to serving these individuals. So that is a little bit of proof of concept. But the landscaping there was a lot. Taxes are crazy high. When I ran the number of, what if I had a month or two of vacancy, what would that do to my numbers? I didn’t like it after a while. And you know what? There wasn’t a lot of competition for the curated home, but just not at this point in my life. So we’re selling it.
[00:03:47] Annette: Letting it go. Let her go.
[00:03:49] Sarah: Yeah. So we pivoted there. Another way we’ve pivoted is offboarding high dollar clients. So owners we worked with, properties we worked with that paid us a lot of money in commissions that we let go for a few reasons, one of them was the client wanted to change relationship. Essentially, they wanted us to manage just the cleaning aspect, and I had to make a decision of, we’re not a cleaning company. We are a full service short-term rental management company. And I, again, ran numbers, figured some stuff out, and I realized that’s not something I wanted to focus on just to keep a little bit of that revenue. So we said no.
Another client had some safety issues. We talked about this in a previous episode. That I wasn’t comfortable with. Even though we made a lot of money, we couldn’t get on the same page with preventative safety situations. We weren’t doing anything illegal, but I still didn’t feel comfortable. We pivoted. We let you go. I’ll find other properties. We’ll figure it out.
Third way that you might have to pivot, Leticia, is as you grow or as you delegate responsibilities to other people. For example, maybe you find a great cleaning team, or you find a great inspector, or a guest services person to help you manage the guest communication. You hire them for that reason, but you find out that’s actually not the best seat for them to sit in. Maybe you have to pivot their position. Maybe a cleaner is actually a really great inspector, or an inspector is a really good guest services agent, or a guest services agent that you tried out as an inspector needs to go back to being guest services. So being able to pivot there. Just because you make a decision doesn’t mean it needs to be final.
[00:05:26] Annette: And I think this is a behind the scenes pivoting too. We’ve pivoted banks. We’ve pivoted accountants. We’ve pivoted attorneys. There’s just been– over time, as your needs change– all of the vendors that we’ve ever worked with have been great, but when we wanted to niche down or get more focused, that caused us to take a look at those relationships and who would help us the most there.
And the biggest thing too is pivoting exactly what we want to be doing day-to-day, what type of properties, what the portfolio looks like. So we’re excited for you, Leticia, because it’s just like, you’re going to keep having that loss aversion of not holding on the things for so long too tightly. Know when it’s time to either pivot or cut and run.
[00:06:10] Sarah: Just because you made the decision doesn’t mean you just stick with it. One of my favorite pieces of business advice I’ve gotten along the way is to make decisions fast. So when you make that decision and it’s not working, pivot.The more you vacillate, the more mental mortgage it takes up.
[00:06:23] Annette: Mm-hmm.
[00:06:24] Sarah: And you’re going to start to get stagnant. So don’t be crazy town about it.
[00:06:29] Annette: Knee jerk. Yeah.
[00:06:30] Sarah: Knee jerk. But you’re smart, everyone out there. It’s okay if you need to pivot. With that–
[00:06:35] Annette: And thanks for calling in too.
[00:06:36] Sarah: Yeah. Leticia. If you want to call in and have your question answered here on the podcast, go to thanksforvisiting.me. And in the upper right-hand corner is a red button. It says, “Ask TFV.” We’ll ask you to record your voice. We’ll answer it here on the podcast. With that, I am Sarah Karakaian.
[00:06:51] Annette: I am Annette Grant, and together we are–
[00:06:52] Both Annette & Sarah: Thanks for Visiting.
[00:06:53] Sarah: We’ll talk to you next time.
