Everyone wants to experience what it feels like to generate income while having plenty of free time to spend on whatever they want with. Many see potential in the real estate industry to make us experience that. But how can someone thrive in a crowded market? In this episode, Rachel Gainsbrugh, the owner of Short Term Gems, shares her secret on how you can thrive in a crowded market with Airbnb. She explains that the Blue Ocean Strategy helps set you apart from this market’s feeding frenzy. So if you want to set yourself apart from the crowded market and save yourself from financial pains, don’t miss this episode. So, choose financial freedom, choose bliss, and hit that play button NOW!
I am excited to welcome to the show, Rachel Gainsbrugh. Rachel was born in Haiti with the drive to make a difference and not take her parents’ sacrifices for granted. She was raised in Miami, worked hard, became a doctor, and was left with over $500,000 in student loans. She ground hard to pay off her loans. When she found Airbnb investing, it became a game changer for her. She was able to make fifteen times on short-term real estate rentals over long-term rentals.
Now, she’s a healthcare professional by day and a rental investor by night. She’s the owner and manager of eighteen luxury short-term rentals with a lucrative cashflowing rental portfolio. She’s a mom, wife, and real estate coach that has been featured on Netflix TV, showcasing one of her luxury rentals. Rachel is passionate about helping professionals create a life they don’t need a vacation from through Airbnb investing. I love that. Rachel, welcome to the show.
Thank you so much. Thank you for having me and for taking the time to put out all of this valuable content to the community. I appreciate being here with you.
Thank you so much for that. Rachel, I’ve been waiting for you, and we’ve had to reschedule a couple of times. I do luxury home long-term rentals. I call them Executive Homes, and people do not talk about the luxury rental market often. I feel a bit alone in that industry. It’s so much fun to be having this conversation. I’m excited about it. Could you start by giving us a high-level of your story? I read your bio, but what brought you to real estate, and why short-term rentals?
What brought me to real estate was looking for not necessarily an exit strategy but an additional revenue stream outside of punching a clock and the whole W-2 thing. I love helping patients. That is my passion. Outside of that, I wanted to have savings set aside. We’d overcome a large amount of student loan debt. When I looked around, I looked at all the investing strategies out there. Crypto was making its way to the forefront as well. I just didn’t quite understand it. I said, “Let me just stick to real estate. I can see it. I can touch it. It’s real to me.”
I went to look into real estate investing. I consumed maybe a year and a half of the show and determined that short-term rentals were going to be the right fit for me. I felt that if I could position myself correctly and build a system around it, not only would I generate a significant amount of revenue compared to my counterparts that were investing in long-term rentals or syndications, I felt as though I would be able to do in a fraction of the time that most would be doing investing. Having a bit of a project management background and being able to leverage that, I figured that it was worth a try and the juice is worth the squeeze. It worked in my favor for sure.
Talk to me about short-term rentals versus long-term rentals. How do you see them, and why you chose this particular route?
I even niche further into short-term luxury rentals, but I will talk to you about short-term rentals versus long-term rentals. Fortunately, we live in a lower-cost-of-living area in Georgia, I was looking around at properties that would fit into my budget, and for that first purchase, I was looking at a budget of about $300,000 for a property.
I looked at some long-term rentals in some rural or remote areas in Georgia, and I found a 20-unit for $300,000. I was like, “This is going to be amazing and my research,” and I realized the rent rolls were about $160 a month. I was like, “I want to live there.” The rents were low, and with those lower rents, you are going to have challenges. I had to think about twenty individuals who may be needier than most with these types of rents. Is it worth it for me? Am I leveraging my revenue in a way where I’m not punching a clock or am I buying a whole new job?
For me, at that point in time, even though it was a long-term rental, which is going to be a little less hands-on than short-term rentals, it wasn’t worth it. I looked around at more long-term rental opportunities and I saw an average of anywhere from $300 to $400 a month, net revenue after all expenses were paid, and net operating incomes were not the greatest for long-term rentals.
We’d spent many years paying off student loan debt. I wanted this next opportunity to be the most profitable as I could make it. Short-term rentals were it for sure, and we saw anywhere from $10,000 a month gross revenue to start, and properties that could net about $6,000 a month are one of our first properties. We’re thinking that would be the route to go as compared to long-term rentals.
Is that your profit or is that before management fees?
That’s profit because we self-manage using our own systems, and that was part of the project management I mentioned a little earlier.
In one of the notes you sent me, you mentioned that you could do this even if it’s not like a vacation destination place. Could you talk about how that works for you?
What’s interesting is that it’s a strategy we stumbled across because we have a property that is in a suburban area. It’s on a nice piece of land about two acres or so, which is huge for some areas, and it’s in a better school district, a little bit of higher per capita income in this particular area. We came across families who were displaced from their homes temporarily due to either a natural disaster or some type of mishap.
If there’s a fire, a significant water leak, or a pipe that bursts these are families that fit our demographic. We have larger homes, so we do host larger families. These are families who are going to be placed in a hotel for some time, and they need to be in a home for the next 4 months to 8 months as the supply chain is behind.
Finding a workforce to repair homes is can be a bit delayed, and we’re still encountering that. Those families have been staying with us anywhere from 4 months to 11 months. We just secured a 12-month contract with some of these families, and these are paid to us directly by the insurance company. These are our midterm rentals, but it’s specifically the insurance policyholder strategy that we leverage.
Do you get those people through insurance companies? Is that the channel that you use?
They come to us through a third party. The insurance companies themselves don’t necessarily seek out housing. They work through a third party to find housing for them, almost like a scout to find homes. Once we had one book in our local area, it’s always creating those relationships. We know those relationships are everything. As soon as we start to evaluate the property, give the notice to vacate period and say, “This property’s going to be vacant in a few weeks.” We start reaching back out to those same individuals and we just want to be top of mind.
“Don’t forget, this property’s going to be available on January 2nd, 2023.” We just got an inquiry. We have one that’s available on January 2nd. We said, “January 2nd, we’re going to be open again.” We keep those lines of communication going. It’s not necessarily your insurance, but it is a third party that works with AllState, State Farm, Travelers, or all of those insurance companies.
How would you find those people?
The first time honestly, they found our listing through Airbnb. As of this date, they don’t use Airbnb anymore to source properties for their policyholders. However, the policyholders use Airbnb, it’s a two-pronged attack. Say, something happens to your home, unfortunately. The insurance is going to use that third party to start looking for housing.
They may tell you, “You may want to look for an option as well,” and if you determine there is this property that’s an Airbnb that’s within my school district a few roads down, then you can go ahead and let them know that we found a property and then, they’ll work with the host or the homeowner to facilitate that transaction. I do know the insurance policyholders, the insurance at temporary housing agencies is not leveraging Airbnb any longer. Another site that we use to garnish that relationship is a site called CorporateHousingByOwner.com. We list there and they found us there as well.
Do you find that you have much fewer vacancies? What’s your turnover time when someone leaves and then you’re trying to get somebody else in? What does that look like?
For our 5 properties in 1 particular region that do primarily this midterm rental strategy with the insurance policy holder, we’ve had 7 vacancy days over the last several months. If I’m going to do short-term rentals in a vacation market, I prefer a vacancy of 65%. That’s going to be the biggest difference between short-term and long-term. For long-term, you want 100% occupancy. For short-term, you do not want 100% occupancy, especially with the larger homes.
At 65%, it’s my sweet spot. We’re able to go in there and make all of the changes that we need, tweak things if the home needs more TLC, and we have the time in between to adjust. However, with long-term rentals, you’re going to have the same person in the long term. For short-term rentals, there’s more handholding. Our maintenance needs to come in. We press and rush all of those things.
If we drive a vacancy or occupancy with our short-term rentals, the struggle is that the property’s not going to be in tip-top shape for the next guest. If it’s not in tip-top shape for the next, you risk complaints and refunds and you start to lose money at that point, so 65% occupancy is perfect. We’re able to get a higher revenue and get the property in tip-top shape in between. However, for these midterm rentals, we can go all day long 100%.If we drive up vacancy or occupancy with our short-term rentals, the struggle is that the property will not be in tip-top shape for the next guest. You risk complaints and refunds and start to lose money at that point. Click To Tweet
With your short-term rentals, more like the vacation ones, you like 65% occupancy?
How do you manage these properties remotely?
I use a number of technology tools to automate, eliminate, and delegate. As far as remote management, if the property is close to other properties where I want to make sure that the noise levels are kept under wraps. We use tools such as NoiseAware. Inside the properties, we will measure the decibels to make sure that there are no crazy parties happening. Other tools are channel managers that we use online to deconflict our calendars to make sure that we don’t get double bookings and the ring camera keyless door entry, those types of tools as well are primarily the automation or tech tools that we leverage.
Outside of that, our cleaning team, our maintenance, as well as our TaskRabbit runners pretty much run the whole business for us remotely. If there are any types of boots on the ground that are needed, they’re there to support, test this, and bridge any of those gaps. As far as guest communications, once we had our communications dialed in and created our SOPs, we were able to train someone to take over the guest communications. It’s important to have a system.
What do you mean by SOP?
Our Standard Operating Procedures. If a guest asks this question, here’s the answer. If they ask this question, here’s the answer. If something comes up that’s not a part of the script or our SOPs, then they didn’t escalate it to me. The last time I spoke with a guest, I had to intervene. I’m primarily responsible for bookkeeping and making sure the numbers look okay.
Do your cleaning team and your handyman come from TaskRabbit, or do you have people that you call when there’s a need, or how does that work for you?
I have three sets of cleaners. If something goes awry with the first, I have team B and team C. I keep those at bay, and then there’s an app called TurnoverBnB, if something goes wrong with all three. Many of my clients don’t have that to get started. That’s a great place to start. I like that tool as well. The handyman comes from various places.
For instance, Thumbtack is an app that I like to use. Thumbtack, for better or for worse, has some things there that people don’t love. What I do like about it is that it has a reciprocal system where you can rate the handyman or the vendor, and it’s like we all have to be on our best behavior. When you say you’re showing up, you show up so you’re not left high and dry. Also, I use another tool called NextDoor. It’s like a neighborhood tool to see who’s been suggested as a handyman. It’s living like a local. The NextDoor app is pretty cool as well.
Do you keep most of your properties close to you, or are they spread out? How far is the farthest one?
I’m in Georgia. I have some in the Poconos of Pennsylvania, but everything else is Georgia, Florida, and Tennessee.
I like this concept that you talk about, which is less is more, keeping fewer doors, but still making the same income. This is something that I’ve touted a lot. When you’re in the luxury market or the executive home market, you can see it. People have asked me many times if you’ve got a vacancy, it’s a much bigger deal than someone who has a lot more properties, which is true. Like you, I keep my properties in the highest condition. My vacancies are very short. I might have a vacancy of 1 to 4 weeks every 5 to 7 years. It’s very little, but could you talk to me about how you see that and what’s your approach to that?
It’s a very valid point. People want to hedge and make sure that they’re not putting themselves out there. It does require being proactive, especially for short-term rentals and midterm rentals. I mentioned earlier the importance of marketing, and we don’t move forward without collecting at least email addresses from our guests. We have the mechanism by which to do and you want to make sure you’re doing it all in the proper way.
With that being said, we add them to an email campaign, and we’ll send them an email once a month or once a quarter, just reminding them of how they were helped by being at our property if they know someone who can benefit from our property, for those who are staying with us for mid-term rentals.
If it’s short-term rentals, we remind them of what a great time they had at their birthday party at our property. Thus, by collecting information such as the purpose of your visit, as well as who stayed with us, we can then market them as well. It’s important to be more proactive and it’s worth it. You do have that higher touch that can allow you to demand a nightly read that you desire.
Talk to me about your Blue Ocean Strategy and how does that differentiate you? I don’t even know what that means. What do those words mean? Can you tell me about that?
The Red Ocean is when you’re in that feeding frenzy with all the other properties, the sharks, and everyone’s going after the thing. The blue ocean is a wide ocean and you’re on your own. You’re like that unicorn. You don’t want to be a Me-Too. We call it like a Me-Too drug when you have another statin. It’s like, “Why do we have an eighth statin on the market?”
You’re like me-too drugs. You don’t want to be me-too, because when you’re me-too, that’s when you face oversaturation and those types of issues. Whereas when you’re unique, when you’re set apart, when you have identified who you are as a host and who the guest avatar is, that’s when you can have them see that you see them. They see your property and you’re marketing to them, and it says, “I see you. I know you.” Whether or not you’re priced a bit higher than what they would expect, they’re going to book with you they know, “Why hedge and stay over here when this particular property has everything that I need?”
That’s the power of operating in the Blue Ocean. You’re going to set yourself apart from the feeding frenzy or from the race to the bottom. When individuals are similar to others, the only differentiator is the price point. I’m going to keep dropping my price until I get there. When you’re operating the luxury and set yourself as a unique provider of hospitality, then you’re not going to be like the others.
For you, you chose to niche into the luxury market. Is that what you did?
Knowing what you know now, if you were talking to somebody who was getting started, what would you tell them to do to get the fastest results?
I would say, “Start.” Here’s the deal. You can overanalyze your life away. Surround yourself with the right folks for doing the thing that you’re looking to do who have achieved the goals that you are looking to achieve, and then just start.
What were some of the challenges that you had to overcome in starting this business?
It’s almost like you don’t know what you don’t know. Some of the challenges are being in the right rooms, having those conversations, and group learning. Even listening to other people’s situations, you’re like, “Maybe I’m not going to do that.” You never know what will come out of you hearing what others are saying in a group setting. Also, attending the local REIAs. Had I engaged and gone all in in that group learning, I would’ve probably avoided the HOA situations that we encountered. I would’ve not lost a whole lot of money on a deal due to not understanding things with taxes. I don’t love taxes, I am laser-focused on tax implications and tax opportunities.
That was such an amazing amount of information and so quickly. Thank you.
Thank you so much for having me. This is fun.
It has been fun. Thank you for that. Tell the audience how they can reach you. It sounds like you do coaching and you help people get started in this business. Is that true?
Absolutely. The best way to reach me is to grab my free list. I do have a free gift. For those who are always approaching me about short-term rentals and saying, “Where should I invest?” I have my top 75 cities for the highest profitability for short-term rentals in the US. If you go to 75 Gems, that’s 75Gems.com, you’ll grab my list and I’ll definitely have free training there and how to get in touch with me as well.
Thank you. I’m going to download that. That’s amazing. Rachel have things coming up in EXTRA ladies? I’m excited. Rachel and I are going to be talking about, “Financial Wellness is Wellness, too.” Ladies, you know how much I believe that your financial independence offers you a choice. Choice offers you options. Options allow you to have happiness. It goes both ways.Your financial independence offers you a choice. Choice offers you options. Options allow you to have happiness. Click To Tweet
Our financial wellness is a big determinant of how much bliss we can feel. I want to qualify that by saying that you can be very blissful even if you’re broke. It’s an inside job. That’s how I teach what I teach and how I believe. Financial freedom makes it easier. Any pain that we experience in life makes it harder for us to focus on being blissful. It creates more challenges for us. Whether it’s physical pain, mental pain, emotional pain, or financial pain, any of those kinds of pain are going to make being blissful harder. You’re going to have to work harder at it.
One of the bliss strategies is to help get past those pains. Self-care is important. You want to take care of yourself. You want to take care of your emotional self. You want to make sure that you’re feeding yourself right, exercising, and all of those things in my book called Choose Bliss. One of the pieces that’s important that people don’t tend to bag and talk about is true. Financial pain needs to be handled.
We get to a point financially where it’s not financial pain anymore, and then we can get to the next point where it can support our bliss by allowing us to do more for our families, more in the world, and live more freely doing the things that we value most. Financial freedom is an important piece of bliss. That’s why I do this show. When Rachel was talking about, “Financial Wellness is Wellness, too,” I was all in. We’re going to be talking about that in EXTRA, and I’m excited about that. Before we do that, Rachel, are you ready for our three rapid-fire questions?
What is a super tip on getting started investing in real estate?
Surround yourself with those who are doing what you want to do. That comes with everything, not only investing, but health and wellness, and all the things. Be in the right rooms and don’t go at it alone.Be in the right rooms. Surround yourself with people who are doing what you want to do, and don't go in and don't go at it alone. Click To Tweet
What is one strategy for being successful as a real estate investor?
For me, it’s measuring my goals. You don’t pay attention to what you don’t measure. You pay attention to what you measure. Every month, we’re looking at our portfolio. We’re assessing what we’re doing well and what we’re not doing so well. We make adjustments along the way.
What is a daily practice that you do that you would say contributes to your personal success?
For me, it’s prioritizing. There’s a lot of noise out there. First thing in the morning, I want to write down my top three and make sure that it aligns with my big rocks. If it does, then that’s what I focus on because there’s a lot of noise, emails coming through, alerts on the phone, and all the things. Focusing on my top three and determining what those are ahead of time has been my daily habit that contributes to my success.
I love that. Thank you. This has been so much fun, Rachel. Thank you so much for all you’ve contributed so far.
What an honor. Thank you so much for having me.
Ladies, we have more. In EXTRA, we’re going to be talking about, “Financial Wellness is Wellness too.” If you’re subscribed To EXTRA, please stay tuned. If you’re not, but would like to be, go to RealEstateInvestingforWomenEXTRA.com and you can subscribe there. For those of you that are leaving Rachel and I now, thank you so much for joining us. I love hanging out with you ladies. Thank you so much. I appreciate you, and until I see you next time, always remember, goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon.
It was from my earliest real-estate investment, and my mind was BLOWN. At that moment, I realized that if I could make 1 dollar doing this… then I could easily make thousands more. I immediately saw the potential this lucrative industry had for job and income replacement. And that’s how I was able to change the game and get the odds in my favor.
This was huge, especially for a woman like me. Why? I was born in Haiti—the poorest country in the Western Hemisphere. I was driven to make a difference and not take my parents’ sacrifices for granted. I was raised in the inner-city of Miami where I worked hard, got straight A’s and went on to get my doctorate.
To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com
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Moneeka Sawyer is often described as one of the most blissful people you will ever meet. She has been investing in Real Estate for over 20 years, so has been through all the different cycles of the market. Still, she has turned $10,000 into over $5,000,000, working only 5-10 hours per MONTH with very little stress.
While building her multi-million dollar business, she has traveled to over 55 countries, dances every single day, supports causes that are important to her, and spends lots of time with her husband of over 20 years.
She is the international best-selling author of the multiple award-winning books “Choose Bliss: The Power and Practice of Joy and Contentment” and “Real Estate Investing for Women: Expert Conversations to Increase Wealth and Happiness the Blissful Way.”
Moneeka has been featured on stages including Carnegie Hall and Nasdaq, radio, podcasts such as Achieve Your Goals with Hal Elrod, and TV stations including ABC, CBS, FOX, and the CW, impacting over 150 million people.