Lodging is undoubted one of the first things you consider when planning for a vacation trip. Vacation rentals rose to the trend as the tourism industry starts to bloom. It's cheaper than staying in a hotel and offers a variety of unique experiences at the same time. What if you had a property set up for rentals instead? If you are the travel & adventure kind of person, then owning a vacation rental might be the thing for you. You'll earn extra income and have a vacation home to stay in whenever you miss the ocean! But, how can you make a success in this line of business?
Michael Hamilton loves surfing so much that every decision he makes revolves around surfing and travel. He loved the ocean as a kid, and growing up, he saw the ocean as a part of who he is. Michael founded Live Swell with Maria Feurer, his business partner/life partner, who is also an ocean enthusiast like him. Michael used his experience in real estate combined with their passion for the coastal life to create the perfect getaway that feels like home.
In this conversation, Michael shares how he was able to build a recognized status in the vacation rentals world. Being in real estate for many years, Michael gives expert advice in purchasing a property, appraising for value, solving the equity problem, and being financially literate. We also learn insider tips and wisdom in managing debt, having a model for your business, offering top quality services, welcoming guests, creating your listings, booking psychology, crafting unique experiences for your guests, and protecting against losses. More and more people are already embarking on their journey to experience what life has to offer. If you're tired of the traditional 9-5 route, tune in and hear how to live a balanced life- and that means living the rad ocean life! Don’t live just to exist. Live, and actually live.
Hi Oceanriders, and welcome to Episode 56 of The Oceanriders Podcast! I hope you're doing well, and that you're staying healthy and getting a daily dose of seawater. A lot of us, oceanriders, have to travel to the coast to score their coastal waves, and in some cases, the coasts can be further away down the road. I don't know about you, but in booking hotels for my holiday destinations, I've almost always booked holiday rentals instead. Even when Airbnb didn't exist, I've used holiday rentals. I've even rented out my own house a few times on Airbnb, and that's why I found today's conversation so helpful and insightful.
“Making the choice to not have to go to a 9-5 provided a lot of freedom. Choosing a path like this is, there's more freedom, but there's also more responsibility.” -Michael Hamilton
Today, my guest is Michael Hamilton, who is the co-founder of Live Swell. He's a surfer and is based in the Outer Banks USA. Michael has created a self-maintaining super host holiday rental business. He's turned holiday rentals and property investment into an art and has been awarded Airbnb Super Host status for the past five years. His model is so successful that he even wrote a book about it. So quite naturally, I was interested in finding out his tips and tricks to make a holiday rental property a success and to create a business model that turns out passive income indefinitely. Wouldn't that be a dream for you too? In this conversation, Michael takes us through his journey and gives us expert tips on how to create a successful short rental property business.
I hope you enjoy this episode.
Take care, have fun, and enjoy the waves.
Connect with Michael:
08:54 “A lot of times, it's not necessarily money that is somebody's issue- it's somebody's education around money.” -Michael Hamilton
10:00 “When we're purchasing the property, we're buying it with value in it.” -Michael Hamilton
14:12 “Debt is like fire and water. Fire is great to heat your house and cook food, but it could also be a disaster scenario, as in California. Water is the same thing. It's important for life, but it can also take people's lives. So debt, if it's used wisely is an accelerator of wealth.” -Michael Hamilton
17:36 “We want to develop a process for our business because it's easier to have a model to do something if you want to replicate it rather than try to reinvent the wheel every single time.” -Michael Hamilton
19:21 “At the end of the day, the money supports the mission. So any business needs to be able to make money to survive and continue.” -Michael Hamilton
21:30 “It's a lot more fun to work on a business than working in a business.” -Michael Hamilton
23:12 “Money can be raised but time is the great equalizer.” -Michael Hamilton
32:07 “Make your listing accurate and don't make the expectations too much outside of what the actual impression is going to be.” -Michael Hamilton
32:26 “Accuracy is kindness.” -Michael Hamilton
33:06 “The customers that have complaints are typically the ones that are giving you the stuff that people wouldn't tell you.” -Michael Hamilton
34:01 “Your listing is like a newspaper or a billboard. The first thing is, it has to be as catchy... in the thumbnail image and also your title.” -Michael Hamilton
37:34 “Match the right guest with the right property.” -Michael Hamilton
48:12 “Making the choice to not have to go to a 9-5 provided a lot of freedom. Choosing a path like this is, there's more freedom, but there's also more responsibility.” -Michael Hamilton
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Imi Barneaud: The Oceanriders Podcast, conversations with creatives, entrepreneurs, thinkers and dreamers who also happen to be surfers. My name is Imi, and I am your host.
Hi Oceanriders, and welcome to Episode 56 of The Oceanriders Podcast. I hope you're doing well, and that you're staying healthy and getting a daily dose of seawater. A lot of us oceanriders have to travel to the coast to score their quota waves, and in some cases, the coasts can be further away down the road. I don't know about you, but in booking hotels for my holiday destinations, I've almost always booked holiday rentals instead. Even when Airbnb didn't exist, I've used holiday rentals. I've even rented out my own house a few times on Airbnb, and that's why I found today's conversation so helpful and insightful.
Today, my guest is Michael Hamilton, who is co founder of Live Swell. He's a surfer and is based in the Outer Banks USA. Michael has created a self maintaining super host holiday rental business. He's turned holiday rentals and property investment into an art and has been awarded Airbnb Superhost status for the past five years. His model is so successful that he even wrote a book about it. So quite naturally, I was interested in finding out his tips and tricks to make a holiday rental property a success and to create a business model that turns out passive income indefinitely. Wouldn't that be a dream for you to? In this conversation, Michael takes us through his journey and gives us expert tips into how to create a successful short rental property business.
So without further ado, please welcome, Michael Hamilton.
Hello Michael, and welcome to The Oceanriders Podcast. How are you today?
Michael Hamilton: I'm doing fantastic, Imi, thank you for having me on.
Imi Barneaud: Oh, it's absolute pleasure. I'm really excited about having this interview. I guess before we start, do you think you could introduce yourself to the listeners?
Michael Hamilton: Yeah, really simple. I think I'm probably like a lot of people listening to the podcast, I'm just a regular guy, I like to travel, I like to surf, I like to center my life around that. And like most people that get to adulthood, I went to college, finished high school here in the States, and then you go to college or university. Some others might refer to it. I got into the rat race, doing some things that I had interest in, but I was working in the corporate environment and started looking around, questioning things and saying, why do some people have certain results? Why are some people able to have a little bit more of a degree of freedom in their life as opposed to the situation, the scenario that I was in, saw a lot of my family in throughout most of my life, and eventually just thought about making some different decisions so that I could get more out of life that I enjoyed and that I wanted.
Imi Barneaud: Okay, so what was your actual profession before you became a Airbnb expert?
Michael Hamilton: Yeah, that's interesting. I did quite a few different things. The most recent before I got into Airbnb, I was working with a group that taught entrepreneurship, and specifically they taught an asset class of investing real estate. So I had worked with them, live events and seminars where they put on educational events for people that had interest in wanting to start a business, specifically in real estate investing. They were featured on different shows ,,they have on HGTV, they were kind of popular. I've listened to some other podcasts, I forget who the gentleman was, but he was talking about, spends a lot of time on financial education and reads a lot of Robert Kiyosaki. I had done that previously in my life, but definitely the most recent experience that influenced me getting into Airbnbs and specifically generating income from real estate assets was working with this group that taught it. So I didn't have a lot of experience when I got started with them. I was fortunate to be a sponge and learn, and I'm not going to say that had all the answers. There were some lessons that you learn from other places, and that was just previous to getting into real estate investing. I'll make a note to my first investments and I've been investing now for about 10 years, we're not short term rentals.
The first investment I ever made was a couple friends of mine that I knew from start, started to get to know through this network, bought mobile homes, renovated mobile homes and sold them. The reason I got interested in it is, one time, they asked me a question, they said: "Do you know who the biggest owner of mobile home parks is in the United States." And I was like, I have no idea who owns mobile homes. And they're like Warren Buffett. Warren Buffett. Yeah, it was a surprise to me too. I don't know if that's the same today. They changed their holdings and stuff. It was an affordable way to get my foot into real estate investing. And in the end, the investments at that time are about $10,000 each to get into it. They had a cash flow of about $500 a month.
Imi Barneaud: Wow.
Michael Hamilton: So those were the first ones. And then I got into traditional long term rentals and also learned how to renovate properties. The popular thing on all they need right now is the buy, fix and sell. And that's not an easy business. Real estate is easier when you get into it and you understand more about the business. It's not an easy business, I should say. But it's also a simple business when you have more tools and resources at your disposal. Now I'll dovetail this back, so how did I get into short term rentals? Well, going back to the beginning of the story, I love to travel, I love to surf. I stayed in hotels a lot when I was working, traveling across the country, I didn't like hotels, I didn't like the insincerity of hotels. So when I travel, on my own accord, I would stay in Vrvo's Homeaway, Airbnb. So having a taste and having done quite a few real estate investments, I said to my girlfriend, my partner Maria, I said that for the next opportunity that we're going to purchase, we're talking about a similar price range to buy a traditional long term rental as opposed to something that we could rent short term, and also have usage value out of it, things like that, so we tried it. Actually, I'm sitting in that first investment right now. Yeah, this is called the Chill Beach & Surf Bungalow. But that happened about six years ago. The first one went really, really well so we started to apply some different capitals, some other places, and we had as many as four places. We had a place in San Diego, I lived on the West Coast for a long time and wound up getting rid of that a couple years ago. We're actually about to close on our fourth place in a couple weeks here in North Carolina, in the Outer Banks. So there's some growth going on, and that's a cool thing as well. So I hope that answers that question.
Imi Barneaud: Yeah, yeah. In fact, it answers a few questions because I was interested in knowing how that actual holiday rental business bug actually got you in the first place. But you've obviously explained it very, very well. So you went from mobile homes to long term rentals, and then short term rentals. I was just wondering how, because it's quite complicated in Europe to actually get that credit. And if you want to invest in property, you need to have a super paycheck. It can't be more than 30% of your salary to the actual value of the mortgage and things like that. So how did you actually get that first foot in the door of getting into owning property? Because that's kind of complicated. I don't know if it's the same thing in America, but do you think could explain a bit more about how that first got in the door.
Michael Hamilton: Yeah, it's a great question, and it's a question that comes up for a lot of people. It's a question, unfortunately, but if somebody doesn't see lightning, it can be something that holds them back, and maybe they don't actually get to participate, and that's really unfortunate. What I've learned, and people may disagree with this or agree with this, a lot of times, it's not necessarily money that's somebody's issue, it's somebody's education around money. So what do I mean by that? You know, there's a lot of big prominent real estate investors out there, and then there's all different quotes. Some people say, well, don't buy real estate on your budget. Real estate is a very capital intensive asset class. So what's really, really important is to understand how you can purchase it. Now, there's a lot of investors that are out there that are buying real estate far beyond their budget. I've heard other quotes too, is the best real estate investors invest as if they had none of their own money. The beautiful thing about real estate is there are outlets out there, whether it's a bank or another private investor, they understand the asset class has been very safe and secure. Now, it is also going to depend on somebody's approach as they go into it. So my approach is very, very conservative. What we do in our businesses, we look to only find assets that we can acquire at a discount from fair market value, what does that mean? It means that when we're purchasing the property, we're buying it with value in it. I mean, I'll share these numbers and it's okay, the property that we're closing on here very shortly, the purchase price in US dollars is $319,000. And we had the appraisal the other day, it appraised for $350,000.
So right there, when we turn the key, we're building an equity into the property. So that's something that lenders like to see, there's lenders and there's also going to be the equity part of it. You have those couple things going on, if somebody's buying at market value or they're overpaying, well, it's going to be a harder opportunity to sell somebody. But if I could get back to more specific questions, and it may be a little bit different in Europe than it is in the States. We have two types of lending here, we have what's called credit based lending, which somebody is looking at the quantity of your paycheck and they're also looking at your credit score to see how creditworthy you are. There's another type of lending that's called asset based lending. So for example, if somebody's buying a 300 unit apartment building, their paycheck probably isn't going to cover what's necessary to show, okay, well, we cover the debt on this. Apartment buildings are commercial assets and they are financed based upon how well they produce, how much it is? What are they expecting from the rents relative to the expenses? I don't know if this is in Europe, but the product alone I'm actually using for the very first time on this newest acquisition is exactly that. It is a product on a single family zone house, and they are looking at what's called the debt service coverage ratio. So does the income that's coming in have enough to cover the debt and some of the other expenses, and it's not a credit based loan. So they're looking at it as if it was a commercial building. Now, there are other ways to get started for people.
One of the most difficult ones, and I struggle with it too, it's not easy raising money. In my book, I talk about an animal that loves this show, but it's a good example if you have a version of Shark Tank. Shark Tank in the United States shows where people have a business opportunity, a vacation rental is a business opportunity. I'm looking at my yoga mat right here, somebody built those yoga mats, that was a business opportunity. They might not have had all the capital to get started, or they wanted to scale, or that's what it took to sell maybe a $20,000, sorry, a $20 product if you needed to scale in order for it to really make sense. The other beautiful thing about real estate is it applies just like all businesses. If you can learn how to raise money and bring on partners, you can solve part of the equity piece. Every piece of real estate or in a business is part equity, which is what the owner is putting in cash or maybe, another way to create equity in real estate is to force appreciation. What does that mean? That means that if I go in and I buy a house that's distressed because somebody didn't take care of it, the property I'm buying right now was a house going through probate, somebody passed away in the house, it wasn't cared for a long time. There's a lot of work that has to be done. Not everybody's prepared to do that, but it becomes an opportunity for somebody that's prepared and can say, okay, well, I'll take this off your hand. It's going to be a hard thing on property to sell, and they understand too that in exchange for that value, they're going to have to give up a little bit on the price point.
But what it does do is it creates an opportunity to go in and say, okay, we're going to put in X amount of dollars, but we don't want to just get X amount of appreciation out of it, we want to get one and a half, or two times, or three times on what we're putting in. So that's the model that's worked for us, and somebody put that tough love on me one time, because I had the same concern, Real Estate's really capital intensive. I'm not prepared to participate in every single deal, but if I can take more of the ownership, the responsibility to understand that, it's my education, and if I can get better educated around how to raise money, understand money, learn money, you're going to be in a better position. The one other thing I'll add to this, because it's important, sometimes people fear debt. Debt is like fire and water. Fires great to heat your house, cook food, could also be a disaster scenario, as in California. Water, the same thing. It's important for life, but it can also take people's lives. So debt, if it's used wisely as an accelerator of wealth, and I literally was writing yesterday, I'm getting back into more online content. This year was a little strange with COVID and I had to take on some more responsibilities, but now we're actually getting more outsourced, like yourself, I'm getting more back into the online stuff and I'm writing an article on how to actually short the US dollar.
Imi Barneaud: Wow.
Michael Hamilton: By investing in whether it's a traditional rental asset, a vacation rental asset, and it's a financial principle, it's exactly what the gentleman was talking about on an earlier podcast being more financially literate.
Imi Barneaud: That's really interesting. I guess it's really well explained also in your book that we were able to purchase online. I'm recommending it to the listeners because I had to read and there's some priceless information and tips in there about rentals and holiday rentals, and actually, financial education, which is really cool. But maybe we'll get into that a bit later. How do you actually find your first property in the Outer Banks? Was it a trip? Or do you have family there?
Michael Hamilton: Yeah, yeah. I guess I'll start with how I got introduced to the Outer Banks. I grew up on the East Coast. I'm pretty fortunate that I've spent a lot of time in different places. I mentioned California, really lived there for the past dozen years of my life. There's something about the East Coast where I learned to surf, and I grew up on Long Island. So it's 30 mile with Island and you're surrounded by water, there's ocean beaches. I knew I wanted a place on the East Coast, my family's on the East Coast. But at that time, I just really wasn't looking at New York. My parents are starting to age, my partner Maria's parents are starting to age so we said to ourselves, the corporate world just goes awry, which we were in at the time, and that was at the time that we purchased the first rental in the Outer Banks. I said: "Look, this is going to make as much sense as a long term rental, but it's also something that we can use, have the usage benefits, then we can take advantage of some time on the East Coast." What a great experience. So that was the first investment, this first short term rental investment was really saying, if things were to get really bad, I have a place in an affordable area where my payment on the place isn't that much if I needed to personally be there. It all worked out really, really well to the point where we said: "Okay, well, let's get the next one. Let's get the next one because they performed really well." It wasn't by an accident that they performed well, we worked at it. We wanted to do something that we were happy doing and could be our own boss and be on a path. It didn't happen with the first rental, you can just leave your job. It had happened over the course of a few years where we got comfortable, well, we're really starting to replace the income and we could see the potential, replace more income. I hope that answers that question.
Imi Barneaud: Yeah. yeah. You've actually turned it into a model, which is called the Live Swell Proven Process. Could you talk to us about that?
Michael Hamilton: Yeah. I got introduced to the process, in business, and I can give some examples. We want to develop a process for our business because it's easier to have a model to do something if you want to replicate it rather than try to reinvent the wheel every single time. So for example, we were just bringing on a couple new housekeepers. There are certain expectations that, I'm not gonna say I'm immune to cleaning, I've cleaned houses in the past. I think it was a good thing because I learned that it's not easy. I learned also, what are all the things that I would want to have done for a guest to make sure that the property is sparkling clean. It's a very simple example of, okay, well, I'm gonna go through the kitchen and I'm gonna write down exactly every single thing I use, every single product I use. So there becomes a black and white checklist, and it kind of reduces the gray areas for interpretation of what was supposed to be done and what wasn't supposed to be done. We can hold people accountable, we can help them improve and things like that. So the Live Swell Proven Process is simply the process that's got us to successful rentals, and it's the same process we use from acquisition. So how do we evaluate a property? Well, we have a tool that we use that we can put in a number and say, here's a purchase price, here's how much it cost to renovate it, here's what we believe it'll produce in revenue.
Now, we can do that a little bit easier now because we've had examples and that sort of thing. So if somebody doesn't have that, they're gonna have to try to forecast, okay, well, what can I come up with? So once we analyze a property, we can make an offer on it. There's an offer system on that and we're gonna offer retail? Probably not, we're in this to make money, we're not hitting this, take advantage of people. But at the end of the day, the money supports the mission. So we need to be able, any business needs to be able to make money to survive and continue. So after acquisition, then there's renovation processes, and then we'll go into getting the rental ready, and then we'll actually go into, once the rental is stabilized, there's an operation. There's an operation manual to it, every hotel, Marriott, whatever it is, they have an operations manual for all their different personnel to make sure that process is going right. So when a guest is on site, and then the guest checks out, and then what are you doing after a guest checks out? Follow up with them, keep them engaged. They're the absolute best on engagement after, they're always still working on things and improving them. But yeah, yeah.
So that that concept comes from, let me think of the book here really quick, Traction by Gino Wickman, that book, we model a lot of our business off of Traction by Gino Whickman. And there's another prominent author called Michael Gerber. Michael Gerber wrote a book called The E Myth. And what the E in that stands for? It's the entrepreneurs myth. A lot of people think they're going to get into entrepreneurship to enjoy all this time, all this money, or they get into a business because somebody likes to bake and they wanted to start a bakery. Everything is completely okay about that, but a lot of times, what happens? The myth, the riches, the time, freedoms don't necessarily happen. And the reason that Michael Gerber talks, why he mentioned that is because people get stuck working in their business and they're not working on their business. So for example, the baker, she's a great baker but she's baking the cakes all the time. If she's using that time to just bake cakes, she doesn't necessarily have time to build her business. However, I would take the alternative. If she creates a recipe, writes it down as a great training program, teaches and instructs somebody to come behind her and make those cakes and she gets the same exact result, that's as if she was doing it. Now, she's freed up her time to grow and work on that business. And for me, it's a lot more fun to work on a business than working in a business.
Imi Barneaud: Yeah, I tend to feel the same thing as well. I set up my business six or seven years ago, it was great setting it up, setting up the procedures, setting out programming, everything, the website, blah, blah, blah. And then once everything was rolling, I just lost a lot of interest in it and I pivoted into something else. But yeah, I get that it's really creating that project from day one is more exciting than actually having it rolling around consistently. I don't know if I've expressed myself properly, but I get that totally. What I really like as well is the fact that you say in your book, that it's becoming a technician isn't sort of the solution. It's like you really have to manage those processes and create those processes to delegate to others, and to have a good team of people working with you.
Michael Hamilton: Yeah, that's exactly right. Michael Gerber, where I got that graphic is from him. He talks about, there's technical roles and there's nothing wrong with being a technician. But if you do want to grow and you want to expand a business, it's gonna be really difficult if you're doing all, if you're doing everything. I think I put an image in there of an octopus on roller skates, try to draw the parallel, if you're flying around, and that's stressful too, me, it can be stressful. So, yeah, I hope people get some value out of that. That's an important concept. Tim Ferriss, I know somebody that you listen to, I think it's him that says, sometimes your most valuable non renewable resource, there's 168 hours in a week, right? And everybody has the same amount to spend, that's the great equalizer at the end of the day. Money can be got, money can be raised and stuff like that. But time is the great equalizer. Somebody was fortunate, I was very fortunate people, impress that upon me, and I've definitely taken it to heart and stuff like that.
Imi Barneaud: So which parts of the Live Swell Process do you prefer doing?
Michael Hamilton: What do I prefer doing? I like going out and assessing new properties. I like the acquisitions. I'd like the renovations, inspecting the renovations. My partner Maria, she really deals with the operations, deals with the communications, and she's much better at that than I am. We're all learning, but yeah, definitely the acquisitions are exciting to me. And the renovations, we're going to have one of those coming up here really soon. We've thought to ourselves, this is our fifth property that we're renting. And in the years of renting, like I said, we got rid of one, so this will be back to four. We wanted to do a lot of video content on it after having several years, thousands of guests and having done the rent part of this before, it's gonna be really challenging for people to hire contractors and get bamboozled and lose the pot. I mean, there's a lot of stuff that can go awry in real estate business. We were planning on doing some sort of, I don't know exactly what it's gonna look like yet, but we're going to try to really document this particular renovation so that people come and behind us, or people maybe started before us that want a different perspective can get some ideas as to what does it look like, what is these parts of the list of approval process look like?
Imi Barneaud: Excellent. Excellent. So you've got the whole system set up for buying the property, assessing property, renovations, ready to market. You got the first customers coming in. Could you talk about the actual secret service tip, which I thought was a brilliant idea.
Michael Hamilton: Yeah. Full disclosure, I mean, the Secret Service doesn't come from me, it's not my idea. There was a book, actually the company I was working with at the time and had us reading a lot of customer service books, they were good at promoting that sort of stuff. I think it was a book, and if I'm wrong on this one, I'm wrong. But I think it's John DiJulius, it's called The Customer Service Revolution. He's talking about, I believe, Ritz-Carlton. One of the things that Ritz-Carlton does is they do secret service to their guests. And what is the secret service? It's really about customer intelligence. And by that, he doesn't mean that he's assessing their IQ, he's assessing what their preferences are. Somehow, some way through their booking process, or them knowing these customers over frequent visits. They've learned about what coffee do they like? Do they like their sheets tucked in or not tucked in? Are they one of those people? Is there a particular treat that they might like? So we try to just adapt that in. Cesar Ritz has a famous quote, I think I put it in the book. I think it's something effective, everybody likes to be served, but they'd like to be served visibly. And so we said, well, if this is good enough for Ritz-Carlton, we'd like to model success. A lot of what we create is not, because we're just coming up with some crazy ideas. It's modeling what people have done before that works, and how can you apply it?
And so, yeah, we apply that Secret Service concept into our brand, and it's evolved, actually since the book. I think it's still evolving because Maria is testing things. But most recently, what she did is she created what's called a pre arrival planner. So after somebody books, they would get an email, message direct to their email, we would take it off the platform, whether it's Airbnb or VRBO, and just ask them, answer some questions about their trip. I mean, right now, with the pandemic and the COVID scenario, one of the questions was the effect of, what's your preference around meeting people so we would know if you had to go over the property, or whatever it was. Do we need to be, is this the kind of person that's very concerned, and we need to be mindful of that. What activities are they interested in so we can get some information, point them in that direction. And then the more information we get from that pre arrival planner, two, we get content ideas.
So we leave a couple bicycles, layout, is kind of a narrow Island, it's only about a mile across, maybe in its deepest parts and there's a bike path on there. All these different things that can help add value to their experience, we try to do. I will give you one example of the secret service that I remember very particularly. There was a gentleman, and I think it's the story I used in the book too. There was a gentleman coming down, it was a news broadcaster and he was covering a hurricane down South Carolina, I think the eye was supposed to pass there. On his way back to New York, he was from New York driving back, wanting to stop on the Outer Banks. And somehow we were tipped off that they were into astrology and meteorology, and all these things so he said, Okay, gentlemen is coming with a couple of his kids, it's over a telescope. One of the things a lot of people don't realize about the Outer Banks is when we get to a lot of storms, like clearing, the sky can get very beautiful, and open up, and you can see the Milky Way sometimes with the naked eye. But having a telescope, we thought would be something that would add value. So if you just get some ideas and get intelligence preferences and see how you can apply it, it can make a big impact on somebody.
Imi Barneaud: Absolutely. Does that cost you a lot? I mean, compared to the actual value of the rental, do you have a sort of maximum budget that you fixed for the secret service?
Michael Hamilton: Yeah, there's definitely going to be an excessive maximum. That telescope idea is one of the more expensive ones. So typically, they're not any more than 5% of whatever the value of the rental is. Now, that can actually be in the hundreds of dollars. Very, very rarely are we secret servicing in that range. We also do what's called a welcome gift. And yes, those aren't necessarily secret services because they're not fit somebody's preference exactly.
Imi Barneaud: So you were saying, beyond the secret service, you also have these welcome packs. What do you usually put in them?
Michael Hamilton: We designed the welcome pack, the welcome gift really to just make a first impression or help with the first impression because it's not the only piece of the first impression, that's your cleanliness, what does it place smell like when they get in there? What does it look like? There's so many things, and we really like to use things that are gonna get involved in people's senses. So in the Outer Banks, the primary secret, not secret service, welcome gift that we use is something called Outer Banks Rum Balls. The Outer Banks is a very rich pirate history. Actually today, it's kind of like a dreary day. I can see like the Black Pearl pulling in. But anyway, there's a rum distillery not too far from here, and they brew a brand of Outer Banks Rum, it's called Kill Devil Rum, actually. And they also make these rum balls. And the runm balls they make, it's a chocolate candy, and the inside is some sort of like rum type tasting cake. They're really delicious, and they're not cheap, but we reached out to the group and we said: "Hey, look, we have a lot of guests coming and we'd like to give them something tasty from the area that's local." And we were able to start a wholesale relationship with them, and we get their product about 50% of what it retails for. People really seem to like that. Now, if somebody is opposed to alcohol in a way that might not be the best welcome gift to leave, even though it's a cake, it's not like somebody's gonna get drunk on eating five rum balls. But another thing we do too is a tote bag. We have a relationship with a company that produces tote bags. It's got like the navy and white colors, and it's branded with the Live Swell logo. So in the summer, we typically leave that for guests that are staying five plus days. And it helps because maybe not everybody brings a beach bag. Those are some of those ideas.
Imi Barneaud: That's gorgeous. It's gorgeous. I guess what would be the best advice you could give, an Airbnb host to actually make their business bloom. What would be the most important factor when welcoming guests on that kind of platform?
Michael Hamilton: The most important thing when welcoming guests, I'm gonna actually make those two parts. You see, I like to use other people's quotes and stuff, disappointment equals reality minus expectations. If I got that equation correctly, disappointment equals reality minus expectations, I think I got the equation right. But anyway, somebody is booking your place based upon the advertisement, the expectations that they're seeing in your listing, and if I can give one piece of advice I would say, make your listing accurate and don't make the expectations outside of what the actual impression is going to be. And then just to tag along to that cleanliness is so important right now. It's always been intolerable for us and for people that we work with. In our world, we believe accuracy is kindness. We inspect and we give feedback. We're of the mindset of, and we want to be with people that want to improve. So if you're doing your own cleanings, I would say, make sure they're really good. And if you're hiring somebody, make sure you're hiring somebody really good, and make sure you're helping them improve. Yeah, not beating them up, but helping them prove that you can get the result that you're looking for, and the result the guests are looking for. Because people are clean right now, there's a lot of opportunity, there's a lot of rentals out there, it's going to be tough, and that's what I would say to those important things. But just always be improving, listen to your customers, listen to your customers that have complaints. The customers that have complaints are typically the ones that are giving you the stuff that people wouldn't tell you. Just kind of going through the motions saying, Yeah, everything's okay. It's actually more valuable to have the people that say that those glasses over there were a little dingy. Yeah, I didn't notice that when I looked at them because I've been looking at them for two years.
Imi Barneaud: Yeah.
Michael Hamilton: They got to get out of there. Those are the kinds of things that I would recommend.
Imi Barneaud: In your opinion, what's the best money shot for that Airbnb listing? Is there a method into what kind of, what you should shoot in a Airbnb listing? What you should have as that main photo image?
Michael Hamilton: Oh, so I think you're talking directly about the listing?
Imi Barneaud: Yes, sorry. Yes.
Michael Hamilton: What are the most impactful things that somebody can do on a listing?
Imi Barneaud: Yeah.
Michael Hamilton: The most important things that I would say on a listing is, your listing is like a newspaper or a billboard. The first thing on it is got to be as catchy in what people are going to see when they search. They might search Cornwall, or the Outer Banks Kill Devil Hills, whatever it is. They're going to see two things that come up. There's going to be a thumbnail image, which is your first image that you upload there, and also your title. So those are the two main things that you're going to get an opportunity to get somebody to click your rental. So if that cover, the thumbnail image isn't somewhat attractive, and the title isn't somewhat catchy, or mention a specific amenity, or something that might be unique, they might not click it and they'll go to the next one. So that's your opportunity right there to get them to the listing page. So once you've gotten them, the listing page is gonna be other things you focus on, but those would be the two most important to get somebody to click, in my view. What I recommend too is test change.
Imi Barneaud: Yeah.
Michael Hamilton: We found people in our marketplace that have copied a lot of our titles. And that's okay, that's fine. In school, you get castigated for copying, right? But in the business world, you get rewarded for it. Do I love it when I see it? I might bark something a little bit, but then I'm like, yeah, that actually feels good because somebody saw value in that process, and it's good.
Imi Barneaud: Yeah, that's really interesting. And also, what I really like about your recommendation is to actually use the P&L in your listing description. Maybe you could elaborate on what type, what parts of P&L you use in that description.
Michael Hamilton: Yes. So NLP, neuro linguistic programming, and that's just using language to help people get into more of their subconscious mind. A lot of our conscious mind will have knee jerk reactions and kind of move us out of some things. The idea behind neuro linguistic programming is it can help people get a sense of what an experience might be with using sensory type words. So an example of that would be, feel the sand between your toes. So using the feeling words, and when somebody maybe saying, picture and imagine, feeling the ocean breeze and hearing the crashing waves while you're sipping your morning coffee on the porch.
Imi Barneaud: Yeah.
Michael Hamilton: You're catching me on the cuff here. But things like that where you're using sensory type words to describe an experience can allow those images to get into somebody's subconscious mind and help them book now. Some people in the sales and marketing world use NLP for manipulative ways. NLP can be used to help people get what they want. We're also very, very clear in our listing about who it's for and who it's not. We put disclaimers towards the end about what we believe the property is, what kind of boxes of checks off, and if that's not you, then we would directly say, respectfully, this place isn't for you and you're gonna want to consider finding another place. I think using a combination of those things is really important. Because at the end of the day, you can only host one group of people per property. Fortunately, on the supply side, a lot more, we get a lot of demand so we don't necessarily have to say yes to every single guest. We want to ultimately, for our sake, for the guests sake, match the right guest with the right property. It's terrible to get somebody into a property and then like, it's happened rarely, but we've had some, in any business, Disney worlds going to get a bad review, the happiest place on earth. Sometimes you're going to get the wrong group in there. So the better language is that, and that's why I said, in your first question, the accuracy in the listing, setting the right expectations, that's the stuff that's gonna help avoid those experiences of getting the wrong person, matched for the rental and that sort of thing.
Imi Barneaud: That's excellent. That's really, really good advice. I love the way that, yeah, that getting that description right and actually telling people who it's not for is really good as well. I definitely urge people to apply those principles because that will help people out in renting the houses. I was just wondering if you could sort of talk about your book, Vacation Rental Confidential, so you were saying that you're actually updating it?
Michael Hamilton: No, I must have misspoke somehow there.
Imi Barneaud: Sorry.
Michael Hamilton: It's not being updated. When I wrote that book, it was primarily 2018. It was released in July of 2019, so it's been available for about a year. Over that time, we're constantly evolving. We're thinking about, well, how do we improve this? How do we approve that? I mentioned the more recent one that we're using called the pre arrival planner, it's basically giving us a cheat sheet of what are the guests preferences when they're coming.
Imi Barneaud: Yeah.
Michael Hamilton: Getting a better idea of when they're awry. All these sorts of things can help us just craft a better experience. They mentioned the beach chairs are really important, and then maybe bring an extra beach chair that's kind of cool or unique that they might really value. So yeah, I'm not planning on updating it yet, maybe in a few years, something like that, but that's the thing about books. When Tim Ferriss wrote his book, The 4-Hour Workweek, and eventually I later wrote my book. The thing I took from him when he wrote it, he said, I really wanted to focus more on the principles and the strategies rather than specific technologies, and things like that. Because if you have a certain set of guiding principles and strategies, wherever the available tools and resources are at the time, you're gonna be able to apply that too. That's what I tried to do in the book is talk more about principles strategies, but ultimately at the end of the day, technologies are going to change. Pre arrival planner is going to be maybe something different down the road and those sort of things. So that's what I really gained from Tim Ferriss, and I tried to apply it in that text as well.
Imi Barneaud: Yeah, yeah. I guess also, there's the elephant that's in the room at the moment with vacation rentals, which is COVID-19, I just wondered how you've been able to overcome the challenges over the past few months.
Michael Hamilton: Yeah, that's a really good question. The answer I think for a lot of people is, it depends a lot, it also is really going to depend where you are. We're very, very fortunate, we weren't very fortunate when the pandemic first hit, we are on a barrier island in the Atlantic, and the only way to access us is through two bridges, or there's some fairies that can get you there. The local county made a decision and is probably the right decision. I don't know if it was the right or the wrong decision, but they decided to close those bridges to access for many visitors, or even if you were an owner of a property, but you weren't, this isn't your primary residence, it was like your second home or your vacation home, you weren't allowed to enter.
Imi Barneaud: Wow.
Michael Hamilton: So for two months, we were completely shut down of income. And Airbnb has their policies, those months were no income so that was a little tough. Now, just a side of this and we'll get right back to it, I don't know that it's gonna happen or not, but we do have insurance policies that have a loss of income piece to it. Now, we have attorneys that are fighting to see if that'll actually apply, because the insurance companies are nine plans. I'm hearing mixed reviews of people getting their claims paid, and people not getting their claims paid. My feeling is it's probably not going to get paid, but just having insurance so that you can protect against losses is going to be very, very important. The change I'll get to, once our bridges opened up, and even before our bridges opened up, we had a tremendous amount of demand because we're in a remote location, our closest airports are an hour and a half away. Our real estate market right now is exploding.
Imi Barneaud: Really.
Michael Hamilton: And it's because we are in a non urban to remote location, suburban environment. In the United States right now, real estate wise, you are having tremendous booms in areas that are suburban and not sitting in not urban. So people are getting out of the cities, moving away from the close living proximities. I guess my feeling is, if you're running a short term rental business in an area that's more urban, it could be a little tougher right now. I don't know exactly, but my feeling is, people are starting to travel a little bit more, I'm seeing that. But we've been very, very fortunate. We've had more demand, we've actually been able to keep rates even a little bit higher in our offseason, we rent all year long and our real estate values have skyrocketed so it's kind of a strange phenomenon. Before the whole scenario, we asked some of our housekeeping stuff, do you even want to clean anymore? And some of them said no, because they were scared about it. Myself and Maria, we didn't know what's going to happen this year. So the first couple months after COVID, we actually had to step back in and do some of the things that we had hired some people for in the past. Now that we're very confident, there is an election this year in the United States, but we're very confident we're going to see the same kind of activity next year and the following year that we saw once the pandemic, once they open things back up. We feel good here. Cleaning wise, I think that might have been part of the question, too. I mean, it's just completely intolerant to have a place that's not sparkling clean at this point. There's been some changes there, but in terms of demand, we've been very fortunate, but I don't think every area is going to be very fortunate. I think it's gonna be more the suburbs, in the near term. I think, urban areas over time are, vaccines and other therapies, and people are more comfortable traveling amid the pandemic, those areas will start to recover.
Imi Barneaud: Yeah, but that's pretty interesting. Yeah, that you've you managed to sort of surf that wave, which actually brings me to the next part of this conversation, which is you and surfing. Tell us about your surfing history
Michael Hamilton: Yeah. I got into surfing a little bit later in my life. I'd always been an ocean kid, my parents we're ocean beach bums. They love tanning on the south shore beaches of Long Island, and I love to go shelling and body surf and bodyboard. We would take trips to the coast of New Jersey, down there. I remember going to Ron Jon Surf Shop, a famous surf shop in the United States, and like begging my dad to buy me this hundred dollar bodyboard, and he was so mad about it because they were expensive at the time. But anyway, yeah, it was a great thing. My introduction to the ocean was very early in my life and it definitely was playing a central role. I was more into organized sports. I was recruited to play professionally as a baseball player, and I was in college, and I hurt my arm. It was my sophomore year in university, and I went to the doctor and they said: "Look, you got a couple options. You can either get surgery, or you can just self rehabilitate." And one of the exercises they recommended was swimming and living on an island. When I would go to the beach, they had a state-run lifeguard corps. One of my friends from high school was a swimmer. He was a collegiate swimmer and swam in college. Somehow, we got talking and he's like: "Why don't you take the lifeguard test?" I'm like: "Ray, most of these people are college swimmers. I'm a decent athlete, but I'm coming off an injury." And he's like: "I'll train you." So I got into the pool with them. He started and I took lessons as a kid right to swim, but I wasn't not a competitive swimmer, by any means. So he just started to train me. I learned how to do flip turns. And then eventually, I had to take this competitive test when I became an ocean lifeguard.
When you're around that kind of a group of collegiate level swimmers in the area that I was in, in New York, there's some people that are, you wouldn't believe 40, 50, 60 years old that are lifeguards, and part of that is because it's an union based position. So a lot of police officers, firemen, and teachers would do it because it would also help them with their civil service. And as I got into the lifeguarding thing, I started surfing and just surfing more and more. I got really hooked. I remember sitting on the stand with one of the older gentlemen who was a university swim coach and he was asking, what am I going to do after the summer? I'm like: "I want to recreate more." And it's like: "Well, where are you gonna go? Hawaii or California?" And I was like: "I don't know, I guess I'm gonna go to California." So then I moved to California, and I was there for a dozen years, and I've been very fortunate. I've traveled most of the world. I mean, I love your area where you're in the South of France. I wasn't fortunate to, it's when I was there to operate. I've been to San Sebastian, I've been to multiple times. Bali, I love Bali. I've been there a couple times. When I lived in California, I practically almost lived in Baja, Mexico to take all these trips, it's about a 30 minute drive to get into Mexico. So yeah, I've been really fortunate. I love surfing, it's made a really big impact in my life. And a lot of the decisions that I've made, and I'm sure a lot of surfers have made, about other things in life have to do with revolving around surfing and traveling.
Imi Barneaud: So how do you actually balance your lifestyle with some surfing at the moment?
Michael Hamilton: I'm really fortunate that there's windows, the thing that I'm more challenged with now is getting good quality waves back on the East Coast. The winds are all over the place, the storms are a little bit more erratic. Making the choice to not have to go to a nine to five, not necessarily have to answer to a manager, that's provided a lot of freedom. Okay, here comes the window of the waves, I'm going to be available. And balancing it really by making sure I'm getting the things done on the time that I have available for it, or the not ideal time to be on the beach, or surfing. And the thing I would say about choosing a path like this is, there's more freedom, but there's also more responsibility. It's a little bit of a given to take. Self motivating for some people isn't very easy to do. And sometimes, some days for me is not easy to do either.
Imi Barneaud: Oh, that's fantastic. So what's your favorite board?
Michael Hamilton: I surf a lot of boards. Growing up on the East Coast, I learned to longboard, I absolutely am. I'm in love with longboards. I ride traditionally, I'm running my longboard at 9'0" with thruster fin setup. I always get my board shaped epoxy. I'm a little bit of a bigger guy so I appreciate the extra buoyancy, the extra float that the epoxy gives. I'm also klutzy and clumsy. So I'm dinging it going downstairs, it doesn't ding on me. So yeah, that's one of my primary boards. I recently just got shapes and I picked it up in April, I went out to California to pick it up, because my shaper is still out there. Jim Ellington, Ellington Surfboards in San Diego, it's 6'1" fish.
Imi Barneaud: Wow, nice.
Michael Hamilton: And I've wanted a fish because I've ridden short boards for a long time, but as a bigger guy, if you don't have enough push and everything else, I mean, I want to choose my longboard so I can go out there and catch waves and have fun. So the fish has really expanded the opportunity to get into waves that are, maybe waist high or chest high that I used to not really be able to get into, and have as much fun on. So I'm really having a lot of fun on the fish right now.
Imi Barneaud: Excellent. Excellent. Well, that's a lovely way to finish this interview and park the bus. I was just wondering, how do you feel right now?
Michael Hamilton: I feel fantastic.
Imi Barneaud: Okay, well listen, maybe that what we could do is actually let the listeners know how to get in touch with you, or where to find you on social media, or online, if you could give us your socials and website.
Michael Hamilton: Yes. So the Live Swell Beach Bungalows is very simple, it's just W-W-W.L-I-V-E-S-W-E-L-L.C-O-M, so the dash is in the middle, not on the bottom, live-swell.com. And a little interesting thing about when we actually created a logo, that dash in the middle is actually a surfboard, that might remember it a little bit more. Instagram, we post on Instagram, it's just @live_swell. And then my personal email, I'm open to questions and things like that, I was looking for people to give us ideas on what content, we have opportunities for people to learn, even opportunities for people to get involved and invest as well.
Imi Barneaud: Excellent.
Michael Hamilton: Yeah, that's kind of interesting. You mentioned getting access to capital was one of the first questions in this conversation. Well, that's actually one of those opportunities that we have there. And so yeah, those are the different things that we're working on. And the book was written because we know there were people coming behind us, people coming in, people before, so hopefully that can help some folks. And the thing I wanted to say, I mean, I know it's not easy to put on a podcast, to get people on here, to do the content, edit the content, so I really applaud your efforts, time, energy and effort to put that on.
Imi Barneaud: That's so sweet. Thank you ever so much. Well, listen, my God, this has been a wonderful conversation. I've learned so much, actually talking to you. I also read your book so I definitely, if people who are listening, have vacation rentals and want to sort of super boost them to check out your website because there's a zillion really, really useful tips inside there. And thank you ever so much for being my guest today, Michael.
Michael Hamilton: Great. Thank you.
Imi Barneaud: All right. Take care and stay safe. See you soon. Ciao.
That was a super interesting conversation, I hope you enjoyed it. If you have an Airbnb or are considering investing, I must encourage you to connect to live-swell.com, it's spelt L-I-V-E-S-W-E-L-L.C-O-M to purchase Michael's book, Vacation Rental Confidential.
I hope you're enjoying the podcast so far. If you are, you can share the love. There are so many ways you can support my efforts. First of all, subscribe to the podcast on your app. This way, all the shows will automatically download onto your phone and you won't miss an episode. Second, rate or review it on Apple podcasts. Your reviews will help somebody else choose this podcast and perhaps they'll be inspired to follow a path similar to one of my guests. And finally, you can head over to my web shop, theoceanridersshop.com and get some cool and environmentally friendly t shirts or sweatshirts and help me pay for my awesome editor. I've just released some new t-shirts and sweatshirts to keep you on this winter, so head over to theoceanridersshop.com. Also, you can use a special discount code, discount code is BETHECHANGE20, it's all in capital letters, and that will give you a 20% discount on your order.
Anyway, thank you ever so much for listening, and thank you Michael for being my guest today. Until next episode, take care. Have fun and enjoy the wave. Ciao.