Is Airbnb Dead? 20-Year Investor Exposes the Truth About Short-Term Rentals (Ep. 285)

"You have a lot of these gurus that just switch their tune. Like, it's like, okay, one of them, one day they're telling you short-term rentals are awesome. The next day it's like, 'Short-term rentals suck. You gotta go to mid-term.' 'Oh, mid-terms are no good. I gotta go to RV parks.' 'Oh, RV parks are no good. I gotta go to storage sheds.' 'Forget about real estate altogether. Let's go to oil and gas,' right? And it's like — they change their tune as often as we change underwear. And it kind of is frustrating because every single one of the things that are being recommended can work. Every single one of them has pros, they have cons, and you have to understand the game you're gonna play. And almost all of these games, they're not get rich quick games. And they're games that if you're gonna enter into them, whether it's short-term rentals, whether it's mid-term rentals, whether it's storage units, whether it's long-term, mid-term, whatever you're doing, gotta learn to play the game."

Hello, hello, and welcome back to the podcast. Thank you very much for being here. All right. Today is an exciting topic for me. As you guys know, I love short-term rentals, Airbnb stuff. If you have had a meeting with me, you know I'm talking you out of everything else. And today, we are going to talk to Shawn Moore, the founder and CEO of Vodyssey. V-O-D-Y-S-S-E-Y, for those of you that are already wondering how to spell it. Thanks for being here, Shawn.

Mary Jo, thanks for having me. I'm super excited about our conversation today. This is gonna be fun.

Yeah. So, just a little background for those listening — I found Shawn, I'm not really even sure how. I don't even remember how, but I've been in his school network. He has a whole short-term rental class, course that he sells, and it is worth every penny and more. And so if you've met with me and you want short-term rentals, you know I have sent you over to Vodyssey to that. And so I've started listening to your podcast, and you're just super honest about expectations, how to buy. You're so knowledgeable about just the industry as a whole. So people are gonna get — you guys buckle up. You're gonna get some good info.

Love it. Love it.

I'm excited. Okay, so first of all, let's start with — I know your background a little bit, but can you share your background, just like real estate, how, what you've done and what brought us to short-term rentals?

That's all that's ever paid my bills. I got out of college. I had a job for about six months and met a real estate investor back in 2000. So I'm going on almost 26 years, 27 years now. And I started off back then doing fix and flips, and I said, "I'm gonna quit my job. I think I can make more money doing the fix and flips." And started doing that for six years, and then that was really what I really got into early on in my real estate investing career.

And then I got into development deals and started doing development deals leading up into the 2007, '08 kind of crash range, right? And during that time, we were buying stuff. We were young. We were buying boats and cars and trucks, and I ended up buying a vacation home as well in a just little small mountain town in Utah called Bear Lake, Utah. Bought a little A-frame — and not as a short-term rental by any stretch. It was just we were making some money, and we were spending our money and buying stuff.

And when the crash happened and everything started going down, we were in the development business and things were not looking good for us. I started losing homes. I started short-selling homes. I started losing vehicles. And kind of in a moment of trying to salvage things, we started throwing our vacation home to try to rent it on the weekends on Craigslist and, like, our local classified sections. This was before Airbnb was really even out, right? This was before they were even a company that you could go use.

But what I started realizing was in the weekends, this property started — everybody was renting our property, and this was when everything was just crashing all around us, and we were actually paying the bills on that, but making a little bit of extra money. And I was like, "What the heck is going on? This is kind of crazy." When real estate in general was losing value, this property was losing value, too. It was worth less than I bought it for, but it was cash flowing for me. It was making money, and everything else that I had wasn't.

And so long story short, fast-forward through the crash, and about 2011 or '12, I started getting back into some of the investing that we were doing, the development deals we were doing and looking at stuff. And just in the back of my mind, I was thinking, "It's pretty interesting how our vacation home did and started making us money." And by this time, Airbnb had launched, and we had VRBO, which was Vacation Rental by Owner back then. Nobody called it VRBO. And we started actually using this as an asset to produce money and really started looking at it as an asset class of maybe we might wanna look a little bit more into this, and we started doing that.

We started getting into short-term rental, like, researching it, looking at it as a viable option for an investment. Started by between about 2012 to 2014, during that transitionary period for us, I started going all in on short-term rentals. And so way before a lot of people in the game got introduced to it right after the COVID era.

So we've really watched this asset class grow up, really from the very infant stages of it being just kind of something you could do with an extra home, supplement a vacation home. It was kind of grandma's cabin. You'd rent them, or you'd buy them, and you'd furnish them with secondary furnishings and go to secondhand stores and yard sales and furnish them, and people would rent them on the weekends, right?

And then all the way to where we're at today, where this is very much a mainstream asset class. It's a lot of money being spent in it, a lot of professional hosts, people that are doing a lot of really high-end things in these properties, treating them as an actual asset, intentionally going into it as an investment. All the tax savings that are around them now. And so it's been a really wild ride watching it go from just kind of supplementing an old vacation home that somebody had to where it's at today, where it's very, very mainstream, and we've been in the middle of the whole thing.

I never, ever thought I would be a coach or an expert of any sort in this game. We just always were — if you know anything about me, I wanna be in the mountains on a horse or on a river with a fly rod in my hand and nobody else around. And so it's like I never thought of myself as this person that was gonna be on podcasts and talking about this, writing books and coaching people.

But in the midst of — I guess maybe right place, right time — we were in an asset class, and we were a few years ahead of people in it, and when everything started getting more and more popular, people wanted help with it, and we'd help them. And then I wrote a book, and then the book turned into a course and a class and a coaching organization, a community, and all those things, and it just added fuel to the fire of kind of everything we were doing.

And the rest became kinda history, where we were just talking about the good, the bad, the ugly, right? We weren't trying to sugarcoat it. Like you mentioned earlier, I'm not one that's gonna sit behind a mic and tell you it's the end-all be-all of everything. I love short-term rentals, but they have pros and cons, just like everything else.

There's a lot of mistakes you can make. There's a lot of risk that is associated with certain things. You've gotta understand how to play the game, and you gotta roll up your sleeves. It's not the golden ticket, if you will. It's not what everybody thought it was right after COVID. And we've always talked about that. We've always been kind of upfront and honest about that, and I think that that has helped us grow Vodyssey and also helped with the success that we've had with the investors who are buying these properties, 'cause they're walking into it with their eyes wide open.

And so kinda my little bit of backstory of how we've come to from there — but it was almost by accident that we got into this asset class and then just doubled down during a time when there was just hyper-growth in this asset class, and it's been a lot of fun to be in the game throughout that entire process.

So did you start the course — I know you said you started it 'cause people were asking for help, but did you see so much misinformation that you were almost to the point where you're like, "No, we have to be the ones speaking the truth"?

Yeah. A very interesting question. Nobody's ever actually ever asked me that. No. The answer to that is actually no. I actually got into it because there wasn't any information. There wasn't misinformation. There was no information. When I started doing this, and we started writing the book, there wasn't anybody doing this. At least this was before the time, like, the coaching business —

So what year did you write the book?

So I started writing it back in 2017, and I finished it up in 2019.

Oh, so it was prior to COVID.

Yeah. Yes. Prior to COVID. And so I published it and got it done in 2019. Then early 2020, we're ready to publish it. COVID hits, and ultimately — and this, it took me two years because back then, AI didn't write books for you. There was no ghostwriter. Oh, well, there was probably ghostwriters. There was no AI writing it, right? So I actually wrote every word in the book. Being said, every word that I wrote I rewrote 15 times, I felt like. I felt like I rewrote the book 100 times, and I still don't like the book. I still want to redo it, right?

So it became this foundational piece of I wanted to get the information out of what the major phases in this game are. Then we were about ready to publish it, and COVID hit, and we held it back. And then I have, like, one last chapter really kind of talking about the what-ifs. But really, yeah, this was all done prior to COVID, and we didn't even have — I don't really even have any updates. And I've gone to update the book a few times, and when I say I don't like it, there's always little things you want to change. But the fundamentals haven't changed at all for us.

And this was done before COVID really hit. And at the time, it was kind of almost like a time-saver for me to have the book and say, "Here's — go read this, and go check out the fundamentals." You know, you've seen the book, you've been inside of our course. The course and the recipe follows the same — like, I have nine steps in our course. There's nine chapters in the book. It's really the same blueprint following through those same phases of what we would normally do. But it was really an outline that somebody could look at and say, "Okay, here's what it's gonna take for me to succeed in this game."

As somebody that got familiar with Airbnb — and I'm guessing that happened for me during COVID as well — I just started listening to all these podcasts, and it was just one rose-colored glass after another. And I'm like, "This cannot possibly be this easy."

Yeah.

And so now you're hearing gurus, like, I almost lose my mind over it, Shawn. I quit sending them to you. But I hear these gurus that are saying — and there's a big one right now out in the real estate world, and he's got all these ads on Facebook — that short-term rentals are history. Nobody wants to invest in them anymore. Go to mid-term rentals. Go to long-term rentals. And I'm like, if you understand how to do it right, you don't have to change your asset class. You just have to be better in that asset class.

100%. I get so frustrated as well. Originally when I got into this, there was no information. It wasn't even misinformation. Then what happened is at the same time that COVID hit, also what happened is there was a lot of courses and teachers teaching people how to sell a course, right? How to go become the expert, become the guru, become the influencer, right? And then all of a sudden, everybody jumped on the short-term rental bandwagon.

And to give them the benefit of the doubt, their introduction to this world was rose-colored glasses. There was two years where having a short-term rental was like having toilet paper during COVID. Every single person looked like a genius in this game, right? Everybody looked like they were making money. And so maybe they weren't really spewing misinformation, they were spewing their view of this world. Which their view of this world was, "This is easy money," right? "And this is an easy game to play." It was never going to last, right?

And it was. It truly was.

And so that was never gonna last. The hardest part for me during that period of time was telling people, "It's not as easy as it seems like right now. This is not going to last," right? And everybody's like, "Whatever," right? "This is awesome." And then things changed, and then people struggled. And we're like, "Hey, listen, you didn't dial in the fundamentals," right?

The fundamentals are not important when everything's on fire and there's a massive supply-demand gap. You don't have to have the fundamentals. But eventually that supply-demand gap's gonna even off, and you're gonna have to understand how to actually play the game you're in, right?

And so that happened, and then you have a lot of these gurus that just switch their tune. Like, it's like, okay, one of them, one day they're telling you short-term rentals are awesome. The next day it's like, "Short-term rentals suck. You gotta go to mid-term." "Oh, mid-terms are no good. I gotta go to RV parks." "Oh, RV parks are no good. I gotta go to storage sheds." "Okay, forget about real estate altogether. Let's go to oil and gas," right? And it's like — they change their tune as often as we change underwear.

And it kind of is frustrating because every single one of the things that are being recommended can work. Every single one of them has pros, they have cons, and you have to understand the game you're gonna play. And almost all of these games, they're not get rich quick games. And they're games that if you're gonna enter into them, whether it's short-term rentals, whether it's mid-term rentals, whether it's storage units, whether it's long-term, mid-term, whatever you're doing, you gotta learn to play the game.

And short-term rentals have now become a mainstream asset, and any mainstream mature asset class is going to have winners and it's going to have losers. And what I mean by that is the Pareto principle's there for a reason, right? In any business, in any asset class, usually 20% of the industry itself makes 80% of the money in that industry, right? Short-term rentals are no different.

Now it's like saying, "Hey, listen, we gotta understand how to play the game we're gonna play if we want to succeed in it." And so now our tune is just saying, "Hey, listen, I wanna work with the people who are really interested in this long term and wanna dial in the fundamentals." If you're looking for something that's easy, if you're looking for something that's quick, you're probably not gonna get along with me anyways, right? Because it can be great. We have a lot of people who have a lot of success with their short-term rentals, and there's a lot of massive advantages on the tax side.

Look what happens right now this time of year. We're the second half of the year. We're leading into the fourth quarter, and everybody's thinking about, "Oh, crap, I don't wanna have this massive tax bill. I need to hurry and buy a short-term rental." A lot of people are taking advantage on the guru side of that — and I do air quotes on purpose. I hate the word guru. I hate being called a guru. I don't like it, you know?

All of the experts out there that are telling you, "Hey, let's go get this" — you can have every single deal out there looks really, really good on paper when you add in the tax advantages to it. When you have the massive tax savings that we do with short-term rentals, almost every single deal, when you look at the underwriting package, looks amazing, especially year one. What everybody is forgetting to tell you is you're actually buying a long-term asset that has to produce for you long term.

And so I'm gonna have the same tax savings on a good quality asset as I am on a really bad asset that's gonna lose me money. But on the front end, an amateur investor or somebody that's not used to looking at it — they all look good. Both of those assets look really good on the front end.

And a lot of the experts, what they're failing to teach people or mention to people is after year one, that's a one-time tax savings that you get. After year one, you've got this asset. If it's not making you money — if it's losing you money, it's costing you money every year. We love depreciation losses. We love paper losses. We don't like real losses. I don't like losing money on an asset every single month, right?

After year one, those losses become real if you didn't buy the right asset and you didn't understand the game you're playing. And now all of a sudden it gets really frustrating owning a property that costs you money every month, and it's a big drain on you, and you decide, "Okay, now I'm gonna sell it."

The other thing that most people don't understand is when they go sell that, if it's a bad asset and they bought the wrong one, not only do they have all the cost of selling it and all the losses that they had while they owned it, they have to give all that money back. It's called recapture. The IRS is gonna recapture those losses, and you're gonna owe that money back in taxes anyways. Those savings are gonna go right back to the IRS.

So what I want people to understand when they hear that part of this conversation is make sure that the tax tail doesn't wag the investment dog. Make sure that — because everybody's telling you how good these deals look right now on the tax side, which they do, they're amazing, but you still have to buy good deals without the taxes. If I would buy it without the tax savings, that means it's usually gonna be a good deal, and the tax savings is just a cherry on top of the sundae. If it doesn't look good without the tax savings, it's not worth buying. And that's where I think some of the big pushes, especially this time of year, come from a lot of these experts pushing a lot of mediocre to subpar properties that we would never touch with a 10-foot pole.

I've seen so many of them that — and this is what drew me to you — is so many of them didn't start till 2020, '21, '22. And now they're giving us advice in '23, '24, '25 about what we need to do. And yes, they have experience 'cause they were there in 2020. They've got three or four years experience under them. But it's the same as if somebody's gonna go to an agent that teaches infinite banking that's been in the business six months or someone like me that's been in the business 16 years — it's a whole different story, right?

It's totally different, yep.

Who's been around? Who understands it? You've been through the flipping, the long-term rentals, an '08 crash. Like, you've been through all of that. So people like yourself tend to be more conservative and more realistic, and you are doing the underwriting, which is very important.

The underwriting piece of it — and I'm just gonna give a shout-out to your course, because the underwriting course is… And I don't know, what's the cost of the course today?

10 grand. $9,800.

Okay. So $10,000, that's what I paid.

Yep.

People are like, "$10,000?" I'm like, "You could buy the wrong house and lose $300,000 and you're concerned about 10 grand?" Like, that's a — I'd find $10,000 in credit cards to go put the course on, because in the course, you're showing how to look at the numbers to make sure that it is a good buy. Because you can't just look at a house and go, "Well, I think it's gonna be a good buy."

I have an Airbnb. I got stupidly lucky, but it is also an Airbnb across the road from us on 40 acres. I was not gonna have neighbors. I bought it. I did not care if it didn't work.

You were protecting your privacy, yeah.

Yes, exactly. So it just so happened that it's turned out to be, in my opinion, a really good Airbnb. I had no idea what I was doing, right? But now my next one, I'm going through the course. And I am looking at the statistics of AirDNA. I'm using the Excel spreadsheets you guys provide. I'm watching all the videos. I will schedule my appointment with your internal people to make sure that I've done it right, 'cause I have questions. Like, that for $10,000 you get to talk to real people, and they get to review all your numbers — like, that's insane.

Yeah.

And it's a one-time fee. It's not $10,000 a year. And so when you're looking at it as an investment, that course is killer. You've got the — oh, my gosh. What's it? The board for us to ask questions on.

In the community section? Yeah. In the Empire Club?

Yes. So we can go in, we can ask questions of other members. You're in there answering. Other people are in there answering. It is so valuable to not make the wrong decision, because so many people don't pull the trigger. They want something cash flow, and let's just say that they just want a second income, or they wanna get out of their job, which is what most people are doing with Airbnbs. Not everybody is looking for a tax write-off.

But then they're so paralyzed by not knowing the numbers and not knowing how to do it, not knowing how to decorate, not knowing how to take pictures, not knowing how to put a listing up. You guys have taken all of the objections away. For a measly 10 grand, you've taken all the objections away so that now I can go get that right Airbnb wherever I decide in the country to get it, and I can start making some cash flow right away.

Yeah, and I appreciate you saying that. And it is, to me, that's what we're trying to do. One, we want you walking into the game with your eyes wide open. We wanna mitigate your risk first and foremost, right? To the point — it's like you're not making a decision to buy a $10,000 support system. You're making a decision to go buy a $500,000, $600,000 property. And it's very easy to make more than a $10,000 mistake on those types of properties.

And so first and foremost, we wanna make sure you understand how to mitigate risk, right? Because you're buying something that is scary and inherently something most people have not done before, and we're not in that era of every single property's going to work. Some of them are not gonna work. And so you need to know what to recognize there, and there's a whole bunch of — there's so many moving parts. I always tell people, "This is not a game of one silver bullet. It's a game of hundreds of golden BBs." Like, when you get into something, you don't know what you don't know when you're diving into something.

And so we wanna do that. And then secondly, we wanna maximize your success, right? We wanna understand what levers you're gonna pull to be able to say, "Hey, listen, this is going to work in this market. This other thing is gonna work here," and what levers can I pull to really maximize my success so that I can gain those unfair advantages?

And so one of our number one goals at Vodyssey is I don't wanna blend into the crowd. We have our 1% Club for a reason. We wanna do what it takes to really maximize and get our unfair share of business wherever we go into business at and whatever we're doing. And you have to be intentional about that. There's intentional ways to do that. If I wanna be in the 1% Club, that means I have to do things different than 99% of the other people in my market, right?

And so what is that gonna be? I don't know. You know, everybody wants to be the best. Everybody wants to win. We all wanna make the maximum amount of money. None of us want to lose. We wanna mitigate our risk, but what are we willing to do about it?

And that's where when we started forming at Vodyssey, not only the blueprint and the recipe to follow, but you mentioned the Empire Club, the community of people that are in there that have all paid that amount of money to be there. It's not a bunch of keyboard warriors on BiggerPockets or on a free Facebook group, and they're telling you what to do, and they've never actually ever even owned a property.

They're real people sharing the good, the bad, the ugly. It's the other thing that we really promote at Vodyssey is don't be afraid to share some of the things that you did wrong or that didn't work. Like, we don't delete those posts in the group. We wanna learn from them. We wanna learn from each other.

And I think that there's a lot of value when you're walking into a game to understand — you mentioned the experience. I mean, the collective experience inside of Vodyssey, there's nothing else like it in the nation. There's nothing even close. Our experience tracks back 20 years in this game. My first one I bought in 2006. That's 20 years ago when we started renting short-term rentals. That's a lot of time.

But what time equals is a whole bunch of mistakes. It's a whole bunch of things that went wrong. It's a whole bunch of lessons learned along the way that you don't have to learn on your own, versus somebody that might have been into it for three or four years. Sure, it's three or four years. It's great. It's a great start, but it's not 20. And it's not the collective 2,000 other members that have been in this for another three or four years and thousands of properties. There's a lot of lessons learned in something like that.

And no matter what you're doing — and it's the same with you with the banking system and stuff — it's like there's no reason ever to go reinvent the wheel in today's day and age. The hardest part is just choosing the right expert that has the experience.

Every single time somebody asks us what we do different than everybody else, I say, "Well, first of all, most everybody follows the exact same blueprint," which is our blueprint because it was the first one to model after. Second, the difference is experience. The difference is the time in the saddle is what I always tell them, right? Go look and see how long somebody's been doing this, how many properties they've been a part of, what collective experience they have inside of a community, if you're gonna be a part of a community. And make your judgment there, because the fundamentals are the fundamentals, for the most part. We do things different, but at the end of the day, the fundamentals are what they are.

So where do you see — so many people are saying, "Oh, it's a bad market right now." What does that market look like, and what have you had for experience currently?

Yeah. So, well, there's two markets, right? Everybody thinks it's a bad market, and usually they're referring to the real estate market, right? And so the short-term rental market is as robust as we've ever seen it. We're setting record high numbers of revenue in almost every market across the board. The consumer continues to spend more money on short-term rentals as an asset class than — I mean, every single year. Year over year, we're hitting new high water marks as far as revenue.

And so that market is really good for us, and that's a really encouraging sign when we go say, "If I'm gonna invest in something, do I have the revenue base on the back end? Do I have the customer base on the back end that wants to spend money on what I'm buying?" And so that is really, really good right now.

When people talk about the real estate market, the challenges are three. One, we have really high prices right now. Prices have not come down, and we don't see them coming down. I mean, we've seen property sitting on the market a little bit longer. You can negotiate a little bit better, which is great, but prices are still really high.

We've got really high interest rates. Interest rates are high, and they're holding, and they're talking about even raising them, not bringing them down in the near future. So that is a second headwind. And the third headwind is low inventory. There's not a lot to choose from. Because people aren't putting their houses on the market. People aren't selling stuff. They're not trading up like we normally would see.

And so with low inventory, high prices, high interest rates, those are all three headwinds that make somebody say, "Now's not a good time to buy." So when you're an investor — and I can say this with as much conviction and confidence as I could hopefully portray on a podcast — those are the exact times you wanna be buying. You wanna buy when everybody else sees the headwinds. Warren Buffett said it best when he had his famous quote of, "Be greedy when others are fearful, and fearful when others are greedy."

And so when everybody thinks it's a good time to buy, that's when you need to push the brakes. When everybody thinks it's a bad time to buy, that's when you need to start looking for those opportunities, because that's when they're out there. The market is going to shift to the positive, and when rates come down…

The issue is there's an inverse relationship between prices and rates. High rates usually mean lower prices, right? So what we're not seeing, though, is prices drop right now. So we're actually seeing this really weird real estate market where everybody's expecting prices to come down, but they're not, because inventory levels are too low. We still have more supply than we have demand.

And so, but when rates come down, there's a massive — and you know this — amount of money sitting on the sidelines in cash equivalent money market accounts. I mean, we almost got $8 trillion, close to. I think it's up to $7.9 trillion, and it keeps going up, and that's a lot of money sitting on the sidelines. When rates come down and borrowing gets a little bit cheaper, there's a lot of that money that floods into tangible assets, specifically real estate. And so ultimately —

When rates come down, then people overpay for houses.

Prices are — exactly, prices skyrocket.

And so now you've got a fast buy, you have no negotiation, you're overpaying. Like, we had a friend put an offer in on a house just last night, and we found out that it went for, like, almost $20,000 over asking. And so our market is crazy.

Yeah. And wait till rates drop.

Every market's a little different, but — crazy.

It's gonna be, and that's what we're seeing a lot across the board. Rates come down — you think now's a bad time to buy. Wait till rates drop, because that's what a lot of retail buyers are waiting for, is rates to drop. It's gonna be an all-out madhouse to try to buy whatever existing inventory is. I mean, we already experienced this after COVID, where you're making multiple offers on properties, you don't even get to see them, you remove all your contingencies, you're paying over ask price.

And we're seeing it right now in certain markets, even while things are as stale as they are right now. Like, I want something to happen. As a real estate guy, I'm like, this is just kind of a blah market. But it also is a market that you can go find some good deals, because when rates come down, I think it's just gonna be an all-out rush to go buy assets. That's when it's gonna be crazy. And prices are gonna skyrocket. So you're gonna pay more for those properties. And it's gonna be really good if you have those properties in your portfolio if and when that happens. Because the nice thing is your prices go up, you already own the assets. You can refinance at a lower rate.

Now, you still need to make sure they underwrite today. So the challenge with it right now is you're looking at a lot more homes. The acquisition phase is like a marathon. There's a lot of people we just talked about a minute ago trying to buy a property by the end of the year, and some of them are gonna have a hard time finding a good quality asset by the end of the year. Not that there's not properties on the market. There's properties, but they don't underwrite with the prices they are, the interest rates that they are, and the revenue they're gonna generate on the back end. And so it's being patient enough to find those good properties. But when you do, it's an amazing time to be buying and stacking assets, because there's going to come a time when things change a little bit and rates come down, and ultimately those prices are gonna skyrocket back up.

Well, if you can still underwrite it at 7% interest, get it. If it's cash flowing at 7% and it still pays for itself, why aren't you buying? What are you waiting for? A bigger profit margin? That house is always gonna sell for more later. It's not gonna go down in price. It's gonna be more later. And I've not been in the real estate world for 25, 30 years like you have, but this isn't rocket science. Like, we do not have the supply, so they're going to continue to go up.

Yeah, and that supply-demand gap doesn't fix itself overnight, and we've had this deficit ever since the Great Recession, right? When a lot of subcontractors got out of the business, a lot of small builders got out of the business, never got back in. And so you have all of your mom-and-pop builders, a huge portion of them that left the business and went bankrupt, got out of the business, did something else, never got back in the business.

And so our inventory gap has been so wide, and it just keeps widening, and it's getting worse now because you don't have enough builders building. The national builders are sitting on a lot of land, and they're not building. They're just building it slow, and they're not catching up that demand. But also, you don't have the trade-up buyers because there's a lot of people that are like, "I'm not selling my home that I have a 3% mortgage on and going and buying something else at 7."

So you have all these trade-up buyers that are just sitting. They're remodeling, they're adding additions, but they're not getting rid of those nice mortgages that they have at 3 or 4%. And that doesn't fix itself overnight. And to your point, I always tell people, it doesn't matter if it's 3%, 5%, 12%. If somebody else is paying it and it cash flows, who cares, right? And then if it comes down from the 7 to the 3, you just gave yourself a raise. That's all that happened there.

And if it goes up to the 12, you're better.

It doesn't matter, 'cause you're locked in.

Exactly. So where do you see short-term rentals going in 10 years? If I'd have asked you in 2020, it may have been a different story. But just curious as somebody that eats, sleeps, and breathes it — where are we at in 10 years?

You know, I feel like it's a very mainstream, established, mature market. I think you're gonna start to see that stable growth. I mean, we're still sitting around that 9 to 11% growth every year. I think you're gonna start to stabilize on the growth as far as the consumer side spending money. I think you're gonna have that kinda just keep up with regular inflation, somewhere in that 3 to 5% range of dollars being spent. I think you probably have another few years of that hypergrowth, of that 9 to 11, 12%, which is what we're seeing.

But I think in 10 years it's gonna look a lot like what it does right now. I really think as far as what it takes to succeed, what we're competing against, what the consumer expects — expectations have changed so rapidly since the post-COVID era. From the consumer standpoint, from what the hosts are willing to do, I still don't think we're going to see — and I think it's gonna always stay a mom and pop type of an investment.

What I mean by that is you see a lot of institutional money going into a lot of other real estate asset classes, especially the ones that are very mainstream, whether it's apartment complexes, whether it's commercial, whether it's long-term rentals, all of that stuff. You got institutional money that goes in and puts massive amounts of money in it.

Short-term rentals are a little bit different. Institutional investors really like this asset class, and I know because we get called by them all the time, but they're trying to place $50 million, $100 million, even $20 million, and it's really hard to do that with short-term rentals because they're individual properties that have to have unique individual experiences. They don't wanna go buy $100 million in homes, right? And so they would rather say, "I'll take $100 million, and I'll go buy this hotel. I'll go buy an apartment complex. I don't wanna go buy 100 single family homes," right?

And so the institutional investors that need to place those bigger dollar amounts, where they're coming in and investing into this space is with institutional-grade tools on the software side, on the management side, on the lending side. And so they're saying, "Hey, we really like this asset class." And so we've benefited from that as investors, as retail investors — which I call retail investors, just your mom-and-pop average Americans that are buying properties, right?

And so as a retail investor, a lot of what we're seeing now is institutional-grade tools because it's such a mature mainstream asset class. There's so much money being spent and used that a lot of those institutional investors are investing into the tool side of it and the resource side of it for us as retail investors. And it's a hard asset class to scale at a lot of money.

And so I think that you're gonna see it 10 years from now — I think it's gonna look a lot like what it does now. You have to be very intentional about the underwriting. You have to be very intentional about operating at the top of the market, 'cause that's where the money is made. And if you're not gonna do that, it's not gonna be worth playing the game, ultimately, unless you're just trying to supplement a vacation home for yourself. But if you're really looking at it as an investment, you've got great tools available. Tap into them. You've got underwriting tools that are very — no underwriting is perfect, but they're to the point now where you can project where you're gonna come out revenue-wise based on what you're doing.

And I think 10 years from now, I don't know that it changes a whole lot, 'cause consumer behavior doesn't change. Even looking back when I wrote the book 10 years ago, the fundamentals that I wrote about in the acquisition phase, which is all about buying the right property in the right area; the fundamentals of the setup and management phase, which is creating a unique experience and delivering that to a target audience; and then ultimately the marketing phase, the final piece of just getting somebody to choose you above and beyond everybody else — those phases haven't changed in the last 10 years, and we've seen massive changes in the asset class.

And I think that the reason I don't think it looks a whole lot different than it does today is because consumers don't change. Consumer behavior doesn't change. We wanna pay for certain things. We know that we want something unique and different and personalized, and we don't typically change overnight as consumers, and the consumer's already spoken that they like this asset class. So as long as we know the money's being spent by the consumer on the back end, and then now we know what it takes to succeed and dialing in those fundamentals, I think it's just a matter of kind of pretty steady growth along the way.

I feel like there's this time period where we're changing the renter, the tenant, the guest. The guest is having to change their mindset about Airbnbs, 'cause we went from good Airbnbs to really crappy Airbnbs and, oh, a hotel is better now and cleaner because people weren't taking care of them — to now we're having to teach those people what to look for. And so your top Airbnbs are always gonna succeed because they're clean, they're stocked.

I was hearing so many people say, "Oh, I'm not staying in them anymore. I'm gonna stay in a hotel." Well, you can do that, but I had just heard — one of my clients had said that he was in an Airbnb 'cause he had to go somewhere for work. So he was renting this Airbnb for 97 days or something, okay? They gave him three dishwasher pods to wash dishes with. They wouldn't give him any more. They only gave him toilet paper for, like, three days. He had to go buy the rest of his toilet paper. He did end up moving from that Airbnb to another Airbnb that was equally as awful, and I'm like, "You've got to be kidding me."

Like, if you were staying at my Airbnb, I'd have had, like, packages of toilet paper out. I don't limit your towels. I don't limit how many guests you have come over. I don't care. It's a gathering spot, whatever. It sleeps eight. If you want more than eight, yeah, okay, we might need to have that discussion, but I don't care if you have 25 people there. Because so-and-so got married, and they're coming out to hang out.

Like, I can't believe in today's world people are still running an Airbnb like that. People are gonna quickly learn to start looking for the better ones. But I feel like we as Airbnb hosts have to tell them that those good ones exist, because there's more bad than good.

Yeah. Oh, you're so right, but I also think that the word is getting out, and the consumer is starting to be aware of that, right? I think that we went from this massive growth, and then we went to the people that were like, "Man, I'm never staying in an Airbnb again 'cause every time — it's unpredictable. It's garbage. They don't do this. They don't do that," right? "The host is peeking in on me," or whatever else. Like, there's all kinds of these horror stories out there.

And what I think it is is it's making the guest aware, and I think this is a really good thing, by the way — that not all Airbnbs are created equal. Not all short-term rental hosts are created equal, and it's their job to do a little bit of due diligence. Like, look into it.

And I think that that's where we're loving it when we have properties at the top of the market, and like you said, I'm gonna make sure that they're stocked to the gills. I talk about it all the time on our coaching call. I was just talking about it today, and it's like, what do we provide? I said, "We make sure the guest doesn't run out of anything." Like, I have fully stocked paper goods, cleaners, soaps, everything in every single one of our Airbnbs, and we just pay for it. I don't even want them to think about running out, right?

But the guest is also — there is a bit of a trust recession out there, which is the guest is starting to become more skeptical, and they're starting to be more discerning when they're searching, and they're looking at those reviews, and they're paying attention to those types of things that are getting reviewed on. And I think that's a really good thing for those of us operating at the top of the market, treating it as a professional. And I also think it's really good for those that are not, to get exposed.

Even Airbnb now, they don't let you bury the bad reviews. If somebody says that you weren't stocked, and it comes up more than once in a review, they don't bury it, so you can't just get away with getting a couple more good reviews and nobody sees it. They keep it right at the top. And so they're doing these AI summaries of the good and the bad of these properties, and a lot of these AI summaries are starting to say, "Yeah, they gave me one half thing of paper towels, and I ran out of toilet paper," or, "I didn't have this," or, "I had to bring my own sheets," or, "I had to take out the garbage." Whatever their rules are, they're starting to really put that front and center to the guest, so the guest can make a better decision if they wanna deal with that or not.

And I think that that is kind of self-education too. I almost don't even think that we have to do it. We have to operate at a top high-end level. Like, we have to operate, and it takes those things that we're gonna do a little bit different. And I do think that the middle of the market is exposing themselves pretty fast, and the guest is getting pretty quick to recognize the good properties from the bad. And they talk and they understand, and they know what to look for now, and they're very skeptical. And I think that that's good, because those middle of the market properties should be exposed for some of that stuff, because we're not all created equal, and the guest needs to know that.

I educate people that use Airbnbs a lot. They just have no idea. They go on, they rent. They don't know how the reviews work. They don't know how any of that stuff works, and so it is good to have some bit of a conversation with them about it.

For sure. Yeah.

All right. So you gotta leave, so we're out of time, but I'm nowhere near done. However, everything that I have to ask is basically on your podcast. So tell us how we can find the podcast, how we can find you, all the good stuff.

Love it. Appreciate it. And so if you want to find me, vodyssey.com — V-O-D-Y-S-S-E-Y dot com — that has lots of different information. There's links to the podcast, the YouTube channel, the book, all that stuff.

If you are on a podcast searching, it's called the Vacation Rental Revolution podcast. We do two episodes every single week. One of them is kind of a market watch type of an episode — what's going on in the markets, the regulations, and lending, how it has affected our short-term rental investing. And then on the end of the week, I always have short-term rental investors sharing their story and their journey into it. So yeah, if you want to be part of those conversations, we'd love to have you.

If you ever want to talk to us, on that website you can book a call with our team, and we can chat about your situation, what you're looking to do. And so easiest one is vodyssey.com, and that has links to everything.

And I'm just gonna do one more shout-out to the course, because once you're in the course, every day of the week you are able to talk to Shawn, you're able to talk to an accountant, you're able to talk to a designer, you're able to talk to — who else do you have on?

We've got listing optimization. Accountants are on every — photographers. We got marketing experts.

Yeah, there you go. Little bit of everything. And it's amazing. Every single week at the exact same time every week. I've never been able to jump on. However, I know they're there.

You get the recordings.

I know they're there. Yeah.

Well, thank you very much for your time. I appreciate it.

Absolutely.

You guys know the routine. If you have questions on anything, let me know, maryjo@withoutthebank.com, and we'll catch you on the next podcast. Have a great rest of your day.