Hosting Hotline: The Secret to Scaling a Short-Term Rental Business (Episode 334)

Download the full transcript PDF.

[00:00:00] Sarah: Hello, listeners. Welcome back for another great episode. My name is Sarah Karakaian.

[00:00:03] Annett: I am Annette Grant. And together we’re–

[00:00:05] Both Annette & Sarah: Thanks for Visiting.

[00:00:06] Sarah: And this is the–

[00:00:07] Both Annette & Sarah: Hosting Hotline.

[00:00:08] Sarah: If you want to get your questions answered on the Hosting Hotline, go ahead and go to, ask your question, and help thousands of other hosts get answers to things that are probably weighing on their mind as well. Today we have a great question about scaling.

[00:00:25] Questions: Hey, my name is Jennifer. Love listening to your podcast. It’s really given us a good foundation for having our first short-term rental. I run Pepin Forest Treehouse out in Wisconsin, and we’re at @pepinforesttreehouse on Instagram. My question is, I hear a lot of people on podcasts, and when they share their stories, they’ll often be like, we started with one property and then the next year we bought five properties, or we bought 10 properties.

[00:00:50] I have a huge question mark on what that exponential growth looks like and what the missing details are there. I know you guys have talked about financing and different things on programs, but I feel like there’s still a big question mark for me of, how does the growth become exponential, and how do people tend to do it so quickly?

[00:01:11] I would love just some information on the missing financing pieces of that, and what does that look like with debt to income ratios and all those sorts of things. How are people doing the exponential growth in such a short timeline? Because even for us, I don’t even know what that would look like. What’s the secret that I’m missing?

[00:01:33] Sarah: Mm. FOMO gets us all.

[00:01:36] Annett: This is the challenge that we’re all faced with on a daily basis when we’re consuming content online via podcasts, which we love podcasts, social media, is we are just inundated with the scaling messaging and we really– I just want to offer that.

[00:01:57] Don’t believe everything on the internet. Don’t believe everything you hear. I would offer that most of the time if someone is scaling at that rate, they are not doing it alone. Because Jennifer, what I hear in your voice is that you’re trying to figure this out for you and your partner, and I highly doubt that if someone is scaling at that rate, they are doing it by themselves.

[00:02:21] They’re probably bringing on private lenders and partners. I just want you to know that when you’re growing, you don’t want to just grow for growth’s sake. This is a term I learned so long ago, and I hold it in my heart very near and dear, is volume is vanity, profit is sanity.

[00:02:38] So they might be scaling, but we have no idea what that looks like under the hood. We have no idea what the partnerships look like, what the profitability is. So that’s my first part of just pausing what you see and what you hear. And be very careful to believe everything that you hear and see out there.

[00:03:00] Sarah: And I’ll be vulnerable right now. Annette and I, we put our voices on this podcast and on Instagram, into our email list every week, and it is a conscious choice to make sure that we remain transparent and vulnerable because to spread content that is toxic or that leads people to believe that it’s easy breezy over here, and that we don’t constantly ask if we are doing enough or if we’re moving fast enough, I would be lying if I said that Annette and I had it all figured out.

[00:03:34] But here’s what Annette and I do have, is backstage passes to a lot of really successful short-term rental real estate investors. And I can tell you, they are taking it slow and steady. And I don’t want to name names here, but they’ve got great followings on YouTube, on Instagram, and I’ve seen they’ve bought a lot of land, let’s say, and they’ve had some really creative seller financing, Jennifer, where they find those deals where it is a win-win for both the seller and the buyer, and it buys them some time to get a concept up before they get that next one because the land acquisition came at such a good price and partnership with the seller. So there’s one example. 

[00:04:22] And I know he tells a story all the time, our coach, Mike Hicks hasn’t gone to a bank since 2008. Jennifer, he leverages partners and his reputation and his skillset of building unique properties that defy market trends because they are different from everything around him.

[00:04:42] And people with money want to be a part of that at great rates because they want to be part of that story. They trust Mike, and therefore Mike is able to do things that the bank would hold him back from doing. But Mike has, I think, what, 10, 11, 12 properties, something like that. I know he is got some projects he hasn’t launched yet. That’s over how many years now?

[00:05:04] Annett: And it’s not to say that it cannot be done, Jennifer. And we also want to be very transparent. Trust me, every single day Sarah and I are on the internet seeing all of the messaging too, of like, what’s going on here? What are we doing wrong? And we’re like, wait a second. We just got to stay in our lane and stay in our lane and know our risk also.

[00:05:21] You talked about debt to income ratio there. You’re right. You are just going to hit a ceiling. Sarah and I are going through a deal right now. We hope to share with all of you very, very soon. And we’re going to give a lot of behind the scenes of what happened there on lending.

[00:05:36] And yeah, you’re going to hit that ceiling. So I want to offer that planning ahead with a lender right now. Like, hey, where do we need to be if you want to buy this property by yourself? But I’m going to say what you’re seeing out there absolutely is possible, but I would say they most likely have partners in the deal if they are scaling that fast, I’m assuming.

[00:05:58] And that’s an assumption. But we also don’t know. We don’t know people’s story. We don’t know what kind of wealth that they might have. They absolutely could have sold a business, or they could have a trust fund. They could have sold a property and had a equity in it, or had a windfall of cash.

[00:06:19] So this stuff can happen, but I don’t want you judging yourself on other things like that. That doesn’t mean that there’s a missing piece or a question mark or you’re not equipped with the knowledge to be able to scale. We don’t know people’s backstories and how they have access to the cash that they might have to help them individually scale also. Yes, it is possible, and those are some of the scenarios where they could do that.

[00:06:46] Sarah: And try to, instead of asking how do you go from one property one year to five next year, ask how you can go from a 10% profit margin to a 30% profit margin. Or getting that one property that that person’s five, you knock it out of the park because you have a smart location, an amazing concept. Think about that profit margin, and maybe when you have a conversation, someone asks you, how many doors you have? And you say, two to their 10 or 15. But what they don’t know is your profit margin and that money that you’re keeping each and every year.

[00:07:19] And don’t worry, Annette and I have to tell ourselves that same reminder because you go to those real estate events, you listen to those podcasts. I say it sometimes just because I’m like, you know what? I just need a little pick me up today. Or stay away from the conversations because I need to do that work still with my mindset.

[00:07:38] But that’s where it’s at, Jennifer. It’s how much money you’re taking home to your family, what that profit margin is, and making sure, especially being in 2024 here and moving forward, the stays have to be special. We have to stand out, and it really is less about quantity and more about quality and how much you’re keeping.

[00:07:57] Annett: I love it.

[00:07:58] Sarah: All right.

[00:07:59] Annett: But we’re there with you, Jennifer. But there isn’t a question mark out. And guess what? As long as you have questions, though– I love that you called us and asked us this. You’re going to figure that out for yourself. But this is asking the questions, getting with your lender, getting with your business partner.

[00:08:16] What are your next steps in just chipping away at those goals? And think about what scaling would be. Again, like Sarah’s saying, what’s the profit? What does scaling look like for you? And really understanding reverse engineering what your lifestyle and what your financial goals are to help you. You might not need those 10 properties. You might be able to hit those financial goals with three properties. So we really want you to dig in there. But great question. Thanks for calling in.

[00:08:41] Sarah: Yeah. Anyone who has any other feedback or tips for Jennifer and you want to share them with her, you can reach out to us at, and we’ll be sure to share them on our Instagram channel. But remember, hosting These are the questions that are going around in your mind. I’m sure it’s not just Jennifer wondering how the heck is everyone else out there crushing it. What does crushing it mean for me?

[00:09:05] And it just brings a conversation to the forefront, which is a healthy place to bring questions, to ponder, to answer, to solve for ourselves. So go to, ask the questions. We’ll answer them here on the podcast. And with that, I’m Sarah Karakaian.

[00:09:20] Annett: I am Annette Grant. And together we are–

[00:09:22] Both Annette & Sarah: Thanks for Visiting.

[00:09:23] Sarah: Talk to you next time.