A stairway to heaven? Maybe. Higher cash flow for California landlords might be as simple as changing the number of enclosed staircases required in small multifamily buildings. 

That’s the debate surrounding Assembly Bill 835. California’s fire marshal is finalizing a report to comply with the bill and potentially reshape real estate investment across the state.

Why Staircase Rules Matter to Small Landlords

Under today’s International Building Code, which is followed in some capacity by most U.S. jurisdictions, buildings above three units must include at least two enclosed staircases, which shape the core of any apartment building. Assembly Bill 835 seeks to allow single-stair multifamily buildings with more than three units.

The proposed ruling is by no means unique in America. Many jurisdictions, including Seattle and New York, allow single-family staircase buildings (up to six units). It is, however, a financial game-changer for small landlords, as California YIMBY’s website explains, reducing construction costs, creating more livable square footage, and allowing apartment buildings to be constructed on smaller, narrower, and oddly shaped lots. More apartments equal more cash flow.

AB 835’s author, Assemblymember Alex Lee, sees the bill as opening more sites rather than a dramatic rewrite of the code. Lee told Mitpitasbeat:

“I see AB 835 as a first step to revising California’s building code on apartment staircases. If California were to permit single?staircase apartments above three stories, we could unlock previously undevelopable properties and create more high-density housing. Single?stair apartments also allow for more efficient use of building spaces, along with a greater variety of housing units.” 

In practical terms, eliminating an extra staircase could create more usable exterior space, provide sorely needed extra parking, and facilitate higher rents and lower tenant turnover.

The Opposition

The Pew Charitable Trusts estimates that single-stair four-to-six-unit buildings with relatively small floor plans cost roughly 6% to 13% less to build than comparable dual-stair designs, partly because they sit on narrower lots and use simpler cores. In addition, Pew states that safety is not compromised by eliminating the second staircase.

National Fire Protection Association president Jim Pauley stated, however, that safety records could not be viewed uniformly, saying, “While the report celebrates the outcome of modern safety codes, it could also be used to open the door wider to bypassing the very process that developed them,” pointing out that well-funded fire departments in New York and Seattle, which both allow a single exit staircase in buildings up to four stories under their respective codes, allow for much faster response times than elsewhere in the country.

Fire unions have taken a harder line. The International Association of Fire Fighters (IAFF) has launched campaigns in various U.S. states and cities, including Los Angeles and Connecticut, arguing that single exit designs “jeopardize escape routes and complicate firefighter response.” In short, they claim affordability should not come before safety.

“We all want to see more affordable housing built, but not at the expense of people’s lives,” General President Edward Kelly said on the IAFF website. “One stairwell means one way in and one way out. When firefighters are going up and families are trying to get down, that’s a recipe for disaster.”

His sentiments were echoed by IAFF General Secretary-Treasurer Frank Líma, who stated: 

“The removal of a second stairway as an emergency exit—a critical life safety feature—is not an acceptable trade-off for additional housing. That’s the bottom line. The proponents of this ‘only one way out’ design have an overreliance on fire alarms and sprinklers to perform without fail. And that’s a big gamble on public safety.”  

More Tech, Building Codes, and Safer Units

Advocates of single-staircase multifamily buildings point to increased safety standards and building codes, which have resulted in fewer fires. “New fire safety standards in our building code have made it so new buildings are much safer overall,” Los Angeles council member Nithya Raman said in support of considering the change.

As with many issues, the case for building code reform has ultimately become political: Advocates of an outright gas stove ban—often the cause of fires in apartment buildings—in favor of electrification have come up against the oil and gas industry, supported by the Trump administration.

Other States Are Following Suit

The single-staircase argument is being adopted elsewhere. Colorado, Pennsylvania, Rhode Island, Minnesota, Oregon, Virginia, and Washington state have already adopted some form of single-staircase allowance for buildings over three stories, with some limitations tied to building size, according to Pew.

The Push for Greater Housing Supply

The 2027 edition of the International Building Code is expected to ratify the single staircase for apartments up to four stories, under certain defined limits, according to Boston Indicators and other sources. The pressure to increase housing supply and staunch the affordability crisis by expanding the number of permissible units in small multifamily buildings has been a central argument for zoning reform advocates, keen to end single-family-zoned neighborhoods.

As Single-Family Stalls, Multifamily Housing Takes on More Importance

Single-family housing starts hit an 11-month low in mid-2025 amid higher borrowing and construction costs, underscoring the importance of maximizing multifamily housing. Conversely, multifamily starts soared 30.6% in June compared with the previous year, with all regions except the Midwest reporting stronger multifamily gains, according to KPMG Economics, which summarized National Association of Home Builders data.

Final Thoughts: Practical Strategies for Landlords to Increase Cash Flow in Small Multifamily Buildings

Even if building code reform is successful in advocating for single staircases in small multifamily buildings, retrofitting apartment buildings accordingly is usually far more expensive than it’s worth. 

However, there are more practical ways to increase cash flow with your existing multifamily units. These include:

• Adding ADUs: If zoning and space allow it, adding an ADU on your existing lot is a relatively easy way to generate more cash flow without getting involved in major construction.
• Take advantage of “missing middle” housing reforms: Zoning changes in some U.S. cities have legalized duplexes, triplexes, and fourplexes in heavily residential districts, often removing parking minimums to allow more units.
• Implement a classic value-add strategy: Upgrading kitchens and bathrooms is a proven way to increase rents, especially for landlords with under-rented buildings in rapidly appreciating neighborhoods.
• Upgrades and separating utilities: If practical, adding in unit laundry rooms, upgrading parking facilities, implementing a ratio utility billing system (RUBS), and sub-metering systems where it’s allowed are all practical, relatively easy ways to increase cash flow.

Ashley:
What if the cashflow number you’re chasing is actually holding you back from getting your first deal? Today we’re breaking down the real math behind minimum cashflow, why it matters and when it doesn’t.

Tony:
We’ve also got a question that stops a lot of rookies in their tracks, should you buy an investment property before you buy your primary home? Plus, we’ll tackle how to build a rock solid out-of-state investing team when you’re totally brand new.

Ashley:
This is the Real Estate Rookie podcast. I’m Ashley Kehr.

Tony:
And I’m Tony j Robinson. And with that, let’s get into today’s first question. Alright, today’s first question comes from John in the BiggerPockets form and John says, as the market is changing and I’m seeing in my market that more houses are producing lower cashflow, what would be your minimum cashflow that you’d like to see from an investment? I know that there is a lot to consider, but if cashflow really is king, would you be okay with a $150 a month cashflow in a growing metropolitan area? We’re seeing different versions of this question I think pop up a lot recently around can we still get cashflow? How much cashflow should I take? What’s good cashflow versus what isn’t? I think that there’s a lot that goes into this and I’m curious for you, Ash, what’s your take on it as well? But I think the good cashflow can vary a lot depending on the person, depending on how much capital you put into that deal, depending on so many different factors.
So to boil it down to say, is it good or is it bad a thing? Is it a little difficult? Funny enough you say one 50 because that was the actual cashflow. My very first deal that I ever did, that first long-term rental that I bought in Shreveport, Louisiana, my cashflow after everything, property management vacancy CapEx, was 150 bucks per month. To me, that was an amazing deal because I had $0 in that property. I literally had $0 into that deal, so I had an infinite return. So for me, 150 bucks, I had a pm, maybe it took me a couple hours a month to deal with the pm, but it was 150 bucks and basically free money that I was getting. I had a tenant paying down the mortgage. It wasn’t a super strong appreciating market, but still there was some level of appreciation. So for me, one 50 was great. So that’s how I would approach it like, well, what am I putting into it? How much time is it involving? Am I getting any other ancillary benefits? But what’s your take ash?

Ashley:
Yeah, the last thing I would add is what else could you do with any money invested into the property or with your time that you’re going to be putting into managing this property and really seeing if there’s a better opportunity for you? But I think that can also get you stuck in analysis paralysis where you becoming too concerned about getting the best and the greatest return on your first deal. That first deal is going to bring you so much value by propelling yourself into your real estate investing journey.

Tony:
I think it’s also important to understand what kind of market you’re buying in. Are you buying in a market that’s meant for high cashflow or are you buying in a market that’s meant for maybe more appreciation? And if your main focus is just maximizing cashflow, then yeah, maybe 150 bucks a month isn’t enough for you and you need to go into a market where you can maybe extract more on a monthly basis. But if you’re buying in a market like where I live in southern California where appreciation historically has been really, really high, then 150 bucks a month is probably pretty good if you know you’re going to gain eight, 10% a year in appreciation or something to that effect. So I think the market types in managing those expectations is important. But the other thing Ashley, I think is, and John didn’t really specify here, but when he says 150 bucks per month in cashflow, is that true net cashflow or are you just taking gross rent minus your mortgage and calling that cashflow?
Because in addition to just your mortgage and whatever other kind of ancillary property expenses you, you still have to account for things like potential vacancies, repairs and maintenance CapEx, and if your one 50 doesn’t include those, that I would assume that once you start adding those things in, you might be barely breaking even or potentially negative. So at that point, I think generally speaking, probably not going to recommend that anyone does that deal If you’re actively losing money every single month on a property, there are probably some unique situations where it does make sense, but in a general sense, usually we don’t want to be negative on a deal. So I think also looking at are you actually calculating the true net net cashflow? And guys, this is why the BiggerPockets calculators I think are so helpful because it forces you to make sure you’re accounting for all of those things that a lot of Ricky Investors might miss. Ashley, I guess one last question for you on this one, how important do you think cash reserves are when determining the type of cashflow that you’re willing to accept?

Ashley:
Are you saying how much you should have saved before

Tony:
Not quite

Ashley:
Deal? What do you mean?

Tony:
Yeah, so I guess when I think about 150 bucks per month, if your water heater goes out and say it’s only been running for six months at 150 bucks per month, you don’t even have enough to replace your water heater.

Ashley:
Well, I think that goes back to the true cashflow is one 50 after you’ve already accounted to saving 8% for repairs and maintenance going forward too, and cap CapEx saving for that. So I think that’s a big factor in how that compares. If you are already counting that you’re going to spend X amount every year anyways and repairs maintenance and capital improvements as to whether, but if you’re not in that one 50, that one 50 is going to be in up when you need that roof or that hvac and you’re going to end up, if you’re not accounting for those variable expenses, you’re going to realize a couple of years from now you actually have negative cashflow on that property.

Tony:
And I guess that’s where I was taken is if you’re jumping into this deal and maybe you use all of your extra cash on actually acquiring the property and you don’t have enough set aside for some of these surprise expenses, even if you’re setting money aside on a monthly basis for CapEx and reserves, if something big happens in month number three, you probably haven’t set aside a whole heck of a lot. And if you don’t have any excess funds, then yeah, 150 bucks per month is definitely not enough. So I think there’s also a discussion around, or at least you should take into account how much reserves you have going into the deal to weather some of these storms because I think it does make a difference

Ashley:
Up next, should your first move to be buying an investment property instead of your own home. A lot of rookies think this shortcut gets them ahead. We’ll break it down right after this. We just talked about minimum cashflow and now we’re moving into a decision a ton of rookies wrestle with. So this question is from the BiggerPockets forums and it says, Hey everyone, I am weighing the options between buying an investment property before a primary. I am still staying at home. My girlfriend has one more year of law school, and then we’ll stay with my parents for one year before looking to buy our primary home with joint income so she can have a year’s income at least to show I have a real estate mentor who is helping walk me through the whole process. Nothing crazy on top of all this, I will still be working and saving.
Should I look to dive into a rental property or just wait to buy one after we get our primary? I feel it’s better to start building the foundation early. I totally agree with that. It’s better to start now than to wait, and it doesn’t necessarily mean starting with a rental before, starting with your primary. One thing that I noticed that I want to call out is saying that he wants to wait for his girlfriend to have one full year of income before going and purchasing their primary. My sister literally graduated college, had an offer letter to work part-time, not even full-time, and she got approved for an FHA loan to purchase a property on her own. So I don’t necessarily think you need to wait.

Tony:
Yeah, my very first investment deal, I talked to that lender earlier in the year. I did not get approved for anything. I got a new job offer in the middle of that year with a totally different company. It wasn’t in the same company, a completely different job. And same with that offer letter. They said, okay, cool, we can approve you based on this offer letter. I hadn’t even started the job yet and I was able to get approved. So yeah, I mean, I agree with you that you don’t have to wait the full year.

Ashley:
So I guess his question comes up too is should he buy the rental property or wait till after the primary? And I think this really comes down to what you can do. So if you’re able, you have the capital, you have the time to buy a rental property now and still have enough capital to buy your primary, yes, go ahead. I actually think that the best thing to do is to buy a small multifamily, a duplex and live in one side and rent out the other side. And then you are accomplishing both of these things. You’re going to get better financing than you would for an investment property because you’re going to be living there and you’re already used to living with people because you’re living with your parents. So at least you’d get your own side of the duplex possibly. Or you could do rent by the room in a property too. So I know everyone’s sick of talking about house hacking, but I think this would be a great scenario to combine getting your primary and to have your first investment property.

Tony:
Yeah, couldn’t agree more. Ash, you hit the exact point that I was going to make is that it doesn’t have to be either or just make it an and go do both and then maybe you buy one today and then when your wife does finish law school and she’s got this new attorney degree or career, then you go out and buy another one that’s a primary residence. And even if you guys just stay on that same cycle of buying one new property every year for the next 10 years as your primary in a decade, you’ve got 10 properties with really good long-term fixed debt that are hopefully cashflowing pretty well. We keep referencing back to this episode, but Matt Krueger, I can’t recall the exact episode number, but if you just search YouTube for Matt Krueger and Real Estate Rick, you’ll find his episode. But that was his exact strategy every year he just bought a new primary residence and then rented out the old one, and that stacks up over time.
It seems like you guys are young, didn’t mention anything about kids. So you’ve probably got a certain level of flexibility that might get harder as you kind of start to mature in life and responsibility. So I love the idea of doing both. I think, and to your point, Ashley, you said this earlier, if you do want to separate them, just making sure you have enough capital. But I think the other piece too is keeping close tabs on your DTI, just to make sure that if you guys do buy the rental today, will you have enough in terms of debt to income ratio? Will you have enough room there to still get qualified for that primary down the road or where there may be some challenges there? And again, I think working with a good lender, they’ll be able to answer that question for you. But I agree, Ash, I think waiting the best time to buy a real estate deal is yesterday, and then the second best time to buy a real estate deal is today.
So if you guys have the right deal, if you guys have the right resources right now, pull the trigger and then take the next steps to figure out how you guys get the primary from there. Alright, so coming up, if you’re going out of state for your first deal, who do you hire first and how do you know you’re not being taken advantage of? So stick around and we’ll answer those questions right after we’re from today’s show sponsors. Alright guys, let’s jump back in. We’ve talked about cashflow. We’ve talked about whether you should buy a primary or a rental first, and now we’re diving into one of the biggest sticking points for rookie investors and that’s building teams out of state. So this next question comes from Kevin in the BiggerPockets forum and Kevin says, I’m looking to buy my first rental property. I live in California.
I feel like we’ve been getting a lot of these. I live in California types, I live in California and want to buy out of state. I’m a buy and hold investor looking to buy a small single family home that at most needs major cosmetic work done. My questions to all of you is how do you go about building a team and in what order do you recommend doing those things? For example, should you find a real estate agent before or after finding a house you want to put an offer on? Do you hire a property management company before or after you purchase a property? Will an agent and property management company help you find good deals? Any other suggestions you can offer as a beginner would be appreciated? Alright, I bought my first rental property exactly fitting this story. It was a single family home, mostly cosmetic renovations, and it was, I dunno, 2000 miles away from where I lived.
I’ll tell you my experience and what sequence of events I followed, and then we can go from there. But for me, I actually found my lender first, which is not I think the most standard way, but that was the approach that I took. I found a lender in that market first who offered a really, really unique and just really compelling loan product for real estate investors. The lender then introduced me to an agent and then I did my own research, but between the agent and my lender, I also found a general contractor. They both have their list of recommendations and one person was on both of those lists that ended up being my general contractor. And then I just did my own research and met with a bunch of different property managers in that market. But my sequence was lender. The lender kind of gave me the buy box of what I needed to purchase in that market to fit the requirements of their loan.
I then went to the agent and said, Hey, here’s the buy box that the lender just gave me. Help me find something. Once I found the deal, I then had the general contractor who came in to kind of vet and make sure the scope of work was lined in and they handled the rehab and the PM came in. Actually before I closed, I had been chatting with them, but I didn’t actually hire them until we got close to the end of the rehab. And then they were the ones that were kind going through near the end of the rehab to make sure the blue tape and putting everything like, Hey, fix this, fix this, because they were going to take over the management. So they actually helped me finish off the rehab to make sure it was rent ready. And then when the rehab was done, the GC literally took the keys, drove them over to the property manager’s office and said, Hey, here you go. And the PM took it from there. So that was my sequence of events. Lender, agent, contractor, and then pm.

Ashley:
Yeah, I guess for me it was a little bit different because I was working as a property manager, so I knew going into it that I was going to self-manage the property, but I just think BiggerPockets just has so many resources to find these team members that before you even find the deal, if you know what market you’re looking in, you can connect with an agent, a lender, an insurance agent, all of these people to help you get the deal. I do think it is important to know that there are least options. So this can go for long-term rentals or short-term rentals. I think, Tony, you’ve mentioned that in one of the markets you invest in and it was harder to find cleaners because it wasn’t as populated or it was very much just short-term rentals. So there wasn’t a lot of people. I think maybe even your hotel even that it’s more of a tourist destination that it’s hard to find people to work.
So I think there is some element where you need to at least do some research to make sure you can find team members and that there is a wide variety of selection. So that maybe if the first property manager doesn’t work out, you know that there’s another one in the area that you can go to. So biggerpockets.com/teams is where you can find all of your market specific team members and you can talk with them them. We always recommend asking questions to ’em, not in the form of do you work with investors, but how many? So not asking yes or no questions, but actually having questions where they have to give you some information as to verify what they’re doing instead of them just being able to say yes and maybe only one investor they actually work with. So

Tony:
I guess on that note, actually, let’s maybe talk about red flags that you might see from an agent or even a potential contractor. On the agent side, I think one red flag is if you ask that agent questions that anyone who works with investors should probably be able to, I guess even before that, the first question that you should ask, and we talked about this before, is ask that agent what percentage of their transactions last year involved real estate investors as their clients? And if it was like 1%, maybe that’s not the right agent for you to work with, but if it was like 50 plus percent or 90% or Hey, I only work with investors, that’s someone who’s going to understand what it’s really like and what you are focused on as an investor. When we buy our primary residence, it’s very much an emotional transaction.
We’re raising our family here, we’re making memories here. We want to see ourselves having Christmas morning and Thanksgiving dinner and whatever it may be, and celebrating birthdays. When we’re buying an investment property, we are more so focused on the numbers. Is this going to work? Is it going to cashflow? Is it going to give me whatever it’s that I’m looking for on this deal? And an agent who really understands investing will be able to tell you, Hey, this is a really nice neighborhood, but I very rarely see things cashflow over here. And hey, this is an up and coming neighborhood where maybe it’s not an A class, but it’s a solid B class, but you can get much better returns in this market. Or, Hey, we actually don’t want to buy homes over here because there’s issues with flood insurance and none of my investor clients like buying here because it’s always hard to do that. So you want them to be able to give you those kind of insights that as an investor will allow you to make a more informed decision about what to buy. So those are maybe potential red flags to look out for. On the Asian side, Ashley, with any of the other team members, can you think of any other maybe red flags that you’re like, I don’t know if I want to work with that kind of person?

Ashley:
I’ll give you one recently for a lender as in a lender just giving you a disclosure. So this is where you fill out the loan application, you have your property under contract, you know what you’re going to buy, and the lender sends you a disclosure without discussing your options for the interest rate or telling you their fees upfront and they’re just sending it to you thinking you don’t know what you’re doing. So this was literally a disclosure I read the other day where they’re like, oh, great news. I locked you in at this percentage rate. I was like, oh, cool, that’s an awesome rate. And then I get the disclosure and it’s saying that I’m paying $3,000 in points for this interest rate. And I know when I’ve worked with other lenders, there is a table that tells you it’s like a scale, a sliding scale.
If you pay 5,000 in points, you can knock down 1% of interest. If you pay $500, you’re knocking off 0.01 of your interest rate. And that’s where I go and I say, okay, how long am I going to hold this loan for? Where’s the breakeven point where it makes sense for me to pay X amount? I’m going to hold the property for X amount of years, whatever this lender just put in what they thought was best. And they also included an underwriting fee that wasn’t discussed or negotiated ahead of time. And so I think make sure you are reading your disclosure and asking questions if you don’t know what those fees or those things are. There’s also, if you just Google loan disclosure estimate, if you just Google it, there’s a government website that literally goes line item by line item telling you what every single thing means on the loan estimate disclosure that you’re getting and what the fees are for. And you can find out this is a fee that is charged by the lender. This is something that is standard that you’re going to be charged no matter what. So I think when you’re working with a lender, how much are they trying to get by you? And it can lead with you asking the right questions upfront, what are your underwriting fees? Things like that. What are my options for points for interest rates, things like that too. So just on the lending side, those are some things to be cautious of.

Tony:
Yeah, those are all great points, Ashley. And just shopping. Just make sure you’re shopping any lender that you work with to see if not only just the interest rate, but the overall cost and the product that you’re getting. I think just last piece on just the red flags, I would say from a contractor, a general contractor’s perspective, we can probably do an entire episode on bad general contractors, but I think a few things to look out for. Number one, very similar to the agent, make sure that they’ve got experience actually working on investment properties because the contractor who is maybe just like a small time handyman that goes to people’s houses and fix their blinds when they fall down or kind of ran a little knickknacks, is different from someone who’s going to be able to do a four rehab. So I think understand the scope of their experience first.
You maybe don’t want to be their first Guinea pig of a full renovation project. And then also just do they actually work with investors? Because sometimes if you’ve got someone who just says, really high-end kitchen renovations for primary residences, they’re not going to be enough for you as a real estate investor to work with. And that was, I think part of my challenge is when we first started as well, is that I would just open up Zillow or not Zillow, open up Yelp and some of the businesses in there, they have great reviews, but they’re all focused on residential, like me as the homeowner and their pricing and their just entire business model is different than the contractors who work with investors. The ones who work with investors know they’re probably going to make a little bit less on a per job basis, but they’ll make that up because they’re doing it in a more volume, right?
I’m going to be a repeat client. You’re not going to do my kitchen once every 10 or 15 years. We’re going to do like 10 a year. So they know that they’ll make it up in volume. So understanding, I think just again, the breakdown of their client pool and how much of that is investor focused. And then just big one, if you are an outstate investor working with the general contractor one, try and get as many referrals as you can, and ideally, referrals that didn’t come or not referrals, references is what I really mean to say here. Try and get as many references as you can. And of course, any references they’re willing to provide the better. But if you can find maybe, I don’t know, from talking to other folks in the community agents, lenders, property management companies like, Hey, what have you heard about this general contractor?
And try and gets some references that way as well. If the PM’s like, oh man, you definitely don’t want to go with John Smith down there because I’ve heard nothing terrible things about him. And you talk to the local lender, they’re like, oh yeah, John Smith, he talks a good game, but he’s not worth his weight. But talk to other folks inside that community and see what their take is on that person as well, because it is easier, I think, as someone who’s not there in that market, and you don’t really have that finger on the pulse to maybe talk to someone who’s a smooth talker and you’re like, man, they’re saying all the right things, but then the project starts and it’s a completely different story. So just trying to do a little bit of homework, trying to do a little bit of research before you get into bed with these guys, I think will be really important.

Ashley:
Thank you guys so much for joining us today. I’m Ashley. He’s Tony, and if you guys have a question, leave it in the BiggerPockets forums or you can DM us on Instagram at Wilford Rentals or at Tony j Robinson. Thanks so much for joining us. We’ll see you guys next time.

Every few years, travel quietly changes its personality. Not in a dramatic, sky-is-falling kind of way. More like when you show up at your favorite restaurant and realize they raised prices, changed the menu, and now you’re supposed to order from a QR code while squinting at your phone like a confused raccoon.

That’s where we are with travel and hospitality heading into 2026. And if you run a short-term rental, these shifts are already showing up in your bookings, pricing, and those increasingly specific guest messages you get at 11 p.m. asking if the coffee maker uses pods or grounds.

Here’s what’s actually happening, and why it matters if you’re trying to fill a calendar this year.

Guests Are Waiting Longer to Book

Travelers are still traveling. They’re just thinking way harder before they hit that Book button.

People are booking closer to their arrival dates, comparing more options, and obsessing over what they’re getting for their money. It’s not that demand disappeared. It’s that guests are shopping like it’s 2009 again, and they just got laid off from Lehman Brothers.

This is why some hosts feel like interest is there, but bookings feel slower or weirdly unpredictable. Your property isn’t suddenly bad. Guests are just doing more homework before committing.

If your pricing strategy only works when people book three months out or when they don’t bother comparing you to the listing next door, 2026 is going to feel pretty uncomfortable.

Taxes and Fees Are Killing Everyone’s Vibe

Between lodging taxes, tourism fees, cleaning fees, service fees, and whatever random charges your city just invented, travel is getting more expensive—and nobody’s happy about it.

Most guests don’t blame you directly. But they do become way more sensitive to whether they’re getting ripped off. They don’t mind paying more. They mind feeling stupid for paying more.

This is why listings that look overpriced relative to what they actually offer are getting destroyed in the booking game. Clear expectations and strong photos matter more than ever. If your listing looks like a 2018 iPhone photo shoot and you’re charging 2026 prices, good luck.

The Flood of New Airbnbs Is Finally Slowing Down

After years of everyone and their cousin launching an Airbnb (seriously, your cousin Todd bought a cabin in the woods and thinks he’s a hospitality mogul now), supply growth is finally cooling in a lot of markets.

That’s not because STRs stopped working. It’s because regulation, financing requirements, and basic reality finally showed up to the party.

This is genuinely good news for operators who know what they’re doing. Fewer new listings means less noise and more room for quality properties to actually stand out instead of drowning in a sea of beige couches and “Live Laugh Love” signs.

The downside? Mediocre listings no longer get carried by market momentum. You either earn your bookings now, or you sit empty, wondering why nobody wants to stay in your generic three-bedroom with the same Wayfair furniture as everyone else.

Guests Actually Care About the Place Now (Wild, I Know)

There was a time when guests just wanted a clean bed, Wi-Fi that worked, and maybe some coffee in the morning. That time is over.

In 2026, the property itself is part of the experience. Comfort, layout, design, cleanliness, and all those small details you thought nobody noticed? Yeah, they’re noticing. Hard.

This doesn’t mean you need to spend $50K on a full renovation with gold-plated faucets. It does mean you need to be intentional about everything. Does the space actually make sense for how people travel? Is the couch comfortable or just decorative? Can someone figure out how to turn on the shower without a YouTube tutorial?

The listings crushing it right now feel thoughtful. The ones struggling feel like someone bought furniture in bulk and called it a day.

Travel Demand Is Spreading Out

Peak season used to mean one or two obvious months when you printed money, and then spent the rest of the year wondering if anyone still knew your property existed.

Now? Demand is showing up in weird places and at weird times.

Fall trips are getting bigger. Shoulder seasons actually matter? Smaller cities and drivable destinations are getting attention because people realized they don’t need to fly to Europe to have a good time. Guests are choosing experiences over Instagram-famous bucket list spots.

This is why markets people used to ignore are quietly outperforming. If you’re still only planning around summer weekends and holidays, you’re missing half the picture—and probably half your potential revenue.

AI Is Already Deciding Where People Go

Guests are using ChatGPT and other AI tools to plan trips, compare options, and narrow down choices faster than you can say “algorithm.” That means listings that communicate clearly and convert quickly are eating everyone else’s lunch. 

You don’t need to sound like a robot wrote your description. You just need to be obvious, helpful, and easy to understand.

Confused guests bounce to the next listing. Clear listings book. It’s really that simple.

Nobody Books in a Straight Line Anymore

The booking process is an absolute mess now. Someone sees your listing on Instagram, checks it on Airbnb, Googles it to see if you’re secretly a scam, sends it to their partner, forgets about it for three days, remembers it at 2 a.m., and then finally books while standing in line at Starbucks.

If you’re only showing up on one platform and hoping for the best, you’re making this harder on yourself. Hosts who appear in multiple places feel more legit and convert better, even if they have no idea why.

It’s not about being everywhere. It’s about not being invisible.

Personalization Is the Advantage Nobody Talks About

Guests notice when a place feels like it was actually designed for them. Not in a creepy surveillance way; in a “wow, someone actually thought about this” way. Some examples:

• Flexible check-in times
• Clear local recommendations that aren’t just Yelp’s top 10
• Spaces designed for how people actually use them instead of how they look in photos
• Kitchen stocked with more than one sad coffee mug

These things don’t cost a fortune, but they completely change how guests feel about their stay and what they write in reviews.

Generic stays get generic results. Thoughtful stays get repeat bookings.

Tech Is Finally Making This Job Less Annoying

The best tech in 2026 isn’t flashy. It’s not some app that promises to automate your entire life while you sip cocktails on a beach. It’s quiet, reduces mistakes, catches maintenance issues before they become disasters, and keeps your cleaners and guests on the same page so you’re not playing telephone at 9 p.m. on a Friday.

Hosts who rely on memory and good vibes are stressed out all the time. But hosts who built actual systems feel calm and maybe even take a day off once in a while.

You don’t need every tool. You just need the right ones.

Hotels and STRs Are Basically Dating Now

Hotels want the flexibility and personality of short-term rentals. STRs want the consistency and operational systems of hotels. The lines are blurring.

Honestly? That’s good for hosts willing to steal the best ideas from both sides. You don’t need room service or a concierge desk. But you do need reliability, clear communication, and a property that doesn’t fall apart the second someone uses the shower.

Borrow what works. Skip what doesn’t.

What This Actually Means for You

Short-term rentals still work in 2026. They just don’t work accidentally anymore.

Guests are more intentional about where they book. Competition is quieter, but way sharper. The hosts winning right now aren’t louder or flashier. They’re clearer, better prepared, and way easier to book.

If your STR strategy still assumes the market will do the heavy lifting for you, this year is going to feel hard. Like really hard.

But if you’re willing to treat hosting like an actual hospitality business instead of a side hustle you check on twice a month, it’s going to feel like an opportunity.

Travel didn’t slow down. It just grew up. And the hosts who grow up with it are going to be fine.

Extreme weather is increasingly raining down on real estate transactions, with insurers and lenders kicking up storms and killing deals if a new metric—a climate disaster score—doesn’t offer a sunny outlook.

As extreme weather events increase in frequency and ferocity nationwide, homebuyers and investors have had to recalibrate their pricing based on a climate risk score, The Wall Street Journal reports. This follows 27 $1 billion extreme weather events in 2024 in the U.S. that caused an estimated $182 billion in damage, according to NOAA data.

The Worse the Score, the More the Insurance Costs

A U.S. Treasury Department report shows that insurance is becoming more expensive and harder to obtain in areas with higher climate risk scores. The danger is clear to small landlords who do not have deep pockets to mitigate a high disaster score: High insurance is a cash flow killer.

This is a contentious issue, with many property owners disputing the scores assigned to their properties. They are not the only ones.

“Accurately estimating future flood risk at every property in a single city or watershed—let alone the entire United States—is fundamentally not possible, given current knowledge,” James Doss-Gollin, an assistant professor of engineering and a climate-risks specialist at Rice University in Houston, told the Journal.

For sellers, including flippers and investors looking to trade up or liquidate, a bad score can derail a deal by scaring away potential buyers and prompting discounts, as acknowledged in a Zillow analysis last year.

How Climate Scores Infiltrated Real Estate Deals

The increase in climate-related insurance losses presented an opportunity for climate analytics firms such as First Street, which has raised vast amounts of Wall Street money when it switched from its nonprofit status to a for-profit company, forming alliances with real estate websites such as Zillow, to offer climate stats to potential buyers and sellers.

Increased data has enabled in-depth climate modeling, offering insights into the likelihood of potential disasters, not just for neighborhoods, but also for individual parcels, including flood, wildfire, wind, heat, and air quality risks, on existing pages with interactive maps and links to First Street’s reports. Zillow described the company as “the standard for climate risk financial modeling” in a 2024 press release, saying the partnership would put the same risk data to use as banks, insurers, and large investors.

The Data Problem

But what if the data were flawed? 

In late 2025, The New York Times reported that the data was turning off buyers from transacting on properties that had not experienced any disaster events in decades. Art Carter, CEO of the California Regional MLS, told the Times that “displaying the probability of a specific home flooding this year or within the next five years can have a significant impact on the perceived desirability of that property.” After a backlash from the real estate industry, Zillow quietly removed prominently displayed climate risk scores from more than 1 million listings in late 2025.

“When we saw entire neighborhoods with a 50% probability of the home flooding this year and a 99% probability of the home flooding in the next five years, especially in areas that haven’t flooded in the last 40 to 50 years, we grew very suspicious,” Carter told the Times.

Despite Zillow’s retreat, other listings sites such as Redfin and Homes.com still display climate risk scores.

“Our models are built on transparent, peer-reviewed science, and the full methodologies are publicly available for anyone to review on our website,” Matthew Eby, First Street’s chief executive, said in a statement to the Times. He added that the company’s models have been validated by major banks, federal agencies, insurers, and engineering firms. 

Eby told TechCrunch: “When buyers lack access to clear climate-risk information, they make the biggest financial decision of their lives while flying blind.”

The Cash Flow Killer: Rising Insurance Costs

For investors, surging insurance costs have become a cash flow nightmare. Reuters analyzed the Treasury’s findings and discovered homeowners in the highest-risk areas paid $2,321—82% more than those in low-risk zones.

Even worse for investors: Those in high-risk areas were also more likely to be dropped by their insurers, according to the Treasury study of over 246 million insurance policies conducted between 2018 and 2022.

Mandated Upgrades and Higher Deductibles

A January 2025 study by commercial real estate brokerage JLL revealed the scale of the challenge for larger multifamily properties. Insurers are demanding higher deductibles while imposing coverage conditions: flood barriers, impact-resistant windows, upgraded roofing, improved drainage, and fire-resistant building materials.

The upside? Owners who complete these upgrades gain access to lower premiums and more favorable terms.  

How Investors Can Lower Their Climate Risk Score and Insurance Costs

Small landlords aren’t powerless against climate risk scores. There are concrete steps you can take to offset the risks, such as strategic site selection, targeted property upgrades, and smart insurance shopping. The key is proving to insurers that you’ve lowered risk and increased resilience. 

As mentioned, data shows that location is still the biggest driver of premiums and nonrenewal risk. According to the U.S. Treasury, owners in the top 20% of climate-risk ZIP codes not only paid about 82% more in premiums than those in lower-risk areas, but faced the highest nonrenewal rates.

A report by global investment group GIC warned that the real estate market could lose up to $559 billion, affecting 28% of real estate asset value in the S&P Global REIT Index, from physical climate risks by 2050. 

According to Climate X, here are specific steps smaller landlords can take to offset their climate-related insurance costs:

1. Buy in low-risk locations: Use First Street’s property-level climate assessments to avoid high-risk areas.
2. Target safer micro-locations: Even if you are in a generally flood-prone area, target properties on slightly higher ground, neighborhoods protected by upgraded/new levees and drainage systems, or fire-susceptible areas. Ensure the property is set back from woodland and constructed from fire-resistant materials.
3. Invest in resilience upgrades: In flood-risk areas, this includes elevating electrical panels, HVAC systems, and water heaters above projected flood levels. Add a sump pump and backflow preventers, and improve site grading and drainage to move water away from the property. For wildfire prevention, create defensible space, and use fire-resistant, resilient materials.
4. Create a paper trail of improvements for insurance companies: Keep detailed records of all mitigation work, including photos, invoices, permits, engineering reports, and code-compliance certificates, to provide clear proof to underwriters that risk has been reduced.
5. Use experienced insurance brokers: It’s worth paying an insurance broker for their expertise in placing coverage in climate-exposed markets.
6. Consider higher deductibles once resilience upgrades have been completed: Industry insurance guides say this move can lower annual premiums while mitigating the risk of high out-of-pocket expenses.
7. Bundle multiple properties with a single carrier: Bundling multiple properties under one insurance roof can increase negotiating power and save around 10%-25% in costs. Also consider special programs that reward “green” buildings and owners with a low claims history.

Final Thoughts

Extreme weather events and climate-related insurance costs have been touted as accelerants of the next real estate crash. Banks and insurers take this seriously, so there’s no getting around it if your business is property investing.

However, now more than ever, people need a place to live, so take steps to ensure your properties can withstand the insurance storm that will rear its head if you invest in a risk-prone area. Take a short-term financial haircut for a long-term gain.

Dave:
Should you invest in real estate or pour your money into the stock market? It’s a question you’re probably asking yourself right now as you create your financial plans for the year and work on building wealth. So today we’re digging into it. Should you put a down payment on that local property or buy more into the S&P 500? Hey everyone. I’m Dave Meyer. Welcome to the BiggerPockets podcast. Today’s episode is a follow-up to one of our most popular shows from a year ago. We’ve got former BiggerPockets CEO, Scott Trench. A year ago on this show, he proclaimed himself a big bear on the stock market and he announced he was selling $1 million from his stock portfolio to reposition that capital into real estate in Denver. Now, a year later, S&P is up. It’s up 15% from that conversation and Scott is back. And I’ll get an update on his life since stepping away as CEO of BiggerPockets, his recent work hosting the BiggerPockets Money Podcast.
And then I’ll ask him if he has any regrets about that big financial decision he made last year. But more importantly, I’m also going to get his take on the markets, stock and real estate and more for the rest of 2026. I want to find out, is Scott doubling down on real estate and continuing to sell off equities? Or maybe he’s changed his outlook and he’s back to stockpiling ETFs for the next 12 months. And I’m curious what he recommends for other investors striving towards the same level of financial freedom that he’s achieved himself. So let’s find out. Scott Trench, welcome back to the BiggerPockets Podcast. It’s so good to see you. Thanks for being here. Good to see you as well, Dave. It’s been a while and I’m sure the audience is eager to hear. For those of you who don’t know, Scott graduated successfully, financially free now and stepped away as BiggerPockets CEO a couple months ago.
So tell us what you’ve been up to.

Scott:
Yeah. I’ve been doing a lot of lifting weights, a lot of hiking. I got a ski pass for the first time since 2017.

Dave:
Dude, that is way too long living in Colorado.

Scott:
Yeah. But this year the goal is to go 10 times. So I got a ski trip planned for two week, three weeks from now. And yeah, just been hanging out enjoying life and been doing the BiggerPockets Money podcast and having a blast doing that. It’s been really fun.

Dave:
Nice. What’s been going on over at Money? What are you guys focusing on these days?

Scott:
Yeah, basically the goal is to build a DIY financial planning toolkit. So I think it’s very frustrating that you can’t even find a basic spreadsheet to put in your financial position if you are a somewhat sophisticated investor with some kind of complexity. So just like creating, here’s a basic personal financial statement, here’s a goal setting template, here’s some calculators that can help you make very basic decisions around there.

Dave:
Oh, cool.

Scott:
And eventually what I’d like to do is I’d like to put out about 25 different financial plans for fake people that others might find familiar. Oh, I’m a real estate investor with a complex portfolio. I’m a broke at 50 trying to catch up to retirement and just kind of like, oh, you should do something different in this situation than over here and provide those kind of templates so people can make their own plans and maybe bring them to an advisor.

Dave:
I’d love to see them. I absolutely understand this pain point. It is very difficult to find these things. I am pretty good at this stuff and I’ve struggled even to make my own financial planning stuff in Excel because it really, especially when you’re in real estate, it is difficult to build that into a traditional retirement plan, figure out where you want to allocate resources. So please send them my way once they are done and we’ll share them with the audience, of course. But we are here today because I want to understand, I always enjoy sort of just talking to you and about the market and what you’re doing and strategy. I think this is something you’ve always been great at and it’s fun to talk to you about. So we’re going to get to that. We’re going to hear about Scott’s 2026 predictions approach to investing, but we got to hold you accountable to your 2025 goals because you were here a year ago doing this.
So let’s go through your 2025 predictions.

Scott:
Well, just to kind of start the conversation here, one of the reasons I’ve gotten into vibe coding is because I’m awful at the prediction. So this was a disaster from a prediction standpoint. So last year I put together a deck call, I get irrational exuberance 3.0. And I’m like, the stock market, the S&P 500 in particular is at all time highs or close to all time highs from a Cape or Schiller PE ratio. That’s crazy. I don’t understand that. I’m not taking a part in that. I was like, “Gold is urged recently. I don’t understand Bitcoin. I’m not taking a part of that. Bonds are too low. Where do you go for all this stuff?” And so my move at that time was to sell portions of my stock portfolio and move it into paid off real estate because I’m like, “I can get a six, 7% cap rate deal here in Denver all cash right now and go with that.
” And so that’s what I did. I ended up selling a million dollars of S&P 500 and putting that into a quadplex. I actually sold a little bit more than that and I bought another duplex a few months later. And so that quadplex, I underwrote to a six and a half percent cap rate and I just did my taxes and annualized, it was almost exactly that, like 6.42% with property management. So I got what I was looking for with that quadplex. The duplex has some work, so I’m finishing up stabilizing that. There’s a tenant in place and so I began to work three or four months post close. So we’ll have to come back next year to see what that cap rate ends up being, but it should be higher. That was what I did with those funds. And so I got my cap rate and depending on how what you want to assume for appreciation on an illiquid asset, some appreciation there.
And then I missed out on like the 12% growth from February when I sold to the end of the year or recording this in the early January of the S&P 500 plus whatever yield came from it. So that’s like a $100,000 loss on those moves compared to what I would have gotten if I just stayed in the S&P 500 over the course of the year. Now, who knows what the S&P of 500 will do this year. Maybe it goes up even more and that move looks even worse. Maybe it immediately crashes
Or doesn’t go anywhere for a while and that ends up. So time will tell how that ends up looking, but from year one perspective doesn’t look so good on that front.

Dave:
Well, I love the honesty, but it’s like you’re still up. You’re just perhaps up on paper as of today less than it would be. We’ll see. No one knows. But I’m curious, just like from a philosophical perspective, is that something you regret or beat yourself up on? Or how do you think about that kind of decision?

Scott:
No. The first property every single month, every single month I’m able to transfer five and a half, 6,000 bucks. Some months is a little less when I have like property taxes or insurance and there’s a reserve in there for CapEx, but I’m able to just transfer that and I spend it. Yeah,

Dave:
It’s great. Pays

Scott:
For my life. Second one, again, for the first three or four months it did, and I knew I had this project in there that was all factored into my underwriting. So once I get that stabilized, that should do the same a little bit lower, like four and a half to 5,000 on that. And that just feels great between those two properties alone, not to mention the rest of my rental portfolio and the still half of my net worth that is in the stock market in investments that are either the S&P 500 directly or in other stock market ownership.

Dave:
Yeah. I think that’s the right way to look at it because it’s obviously, it can be easy and somewhat tempting to say, “Oh, I should have done this. I should have done that. ” But I made a similar decision. I did not sell nearly as much stock, but I sold some stock at the beginning of last year too, just because I felt like there was risk. And I didn’t necessarily think the stock market was going to crash, but I think the probability of the crash is going up and I’d rather just take risk off the board. And the way I think about that is I’m willing to give up some potential gains to take risk off the board. And sometimes that works out where, yeah, you don’t realize as many gains as you would have in the stock market. But like a year ago, who knew which way the wind was going to blow?
And I think it’s a totally rational decision to try and hedge your risk and real estate, I think just more of a sure thing, at least in the last year or so. And I would argue going into this year as well.

Scott:
Yeah. I felt and feel way better about it in terms of like, I’m spending that money, right?That’s the difference. If I was saying, “Oh, I’m going to wait 30 years and just accumulate,” then maybe that’s different. But I’m actually spending the cash flows generated by this rental property to fund my lifestyle. That’s a major improvement for me in this particular situation, although it clearly has cost me somewhere approaching six figures-ish.

Dave:
But again, we’ll see. I guess that’s a good transition to what we’re looking forward to in 2026. How are you feeling about the stock market this year?

Scott:
One of the things that this year I’m going to, with my humble pie in, and I’m not going to be using words like irrational exuberance 3.0 or anything like that. And I’m not even going to pretend or have any input at all on any asset class outside of real estate. I feel like my real estate takes over the years have been generally fairly close. I’ve never been wildly crazy in the wrong direction on those in my time at BiggerPockets. So I feel comfortable talking about that, but I have no idea what the hell’s going to happen with Bitcoin.
I don’t understand gold and all this stuff, dedolarization, like if that’s going to continue or just revert wildly. I think I could flip a coin and come up with something on those items there. The S&P 500, the same stuff I was talking about last year continues to scare me and there it’s like, hey, it’s trading, it’s like at a 40 times Cape ratio. Some people don’t like Cape. It’s at the highest ever price to sales ratio in history. It’s trading at a highly elevated price to forward earnings in there, very high trailing earnings. One thing that I’ve been noodling on is AI spend, AI CapEx alone is like 400, 430 billion is where I think it’s going to shake out in 2025, and it’s going to be 600 billion next year. And what’s interesting about that is, I’m sure you notice this, but I use AO all the time now.
Of course. I’m switching between these vibe coding apps all the time. It’s free or very low cost each time I use it. And every three months, the model I’m using is made obsolete by the next one developed by some competitor. And so I’m like, what’s interesting about that is as I believe that the bulk of that is capitalized by these companies. So it’s not showing up in your price to earnings report when you look at global S&P 500 price to earnings for a trailing basis,
But it’s spend. It’s not capital expenditure. It’s spend because of how rapidly it becomes obsolete, in my view. So I think that’s like even like another thing on there that I’m like, okay, I’m interested in. But at the same time, it truly is making things more productive. It’s truly making life easier and faster and making everything easier for me as an individual. So surely that’s going to show up on the scoreboard somewhere in profits or earnings or revenue or individual income somewhere in the world that’s going to show up on the scoreboard, making the world a better place or people more productive at least.
But it’s just like, is that all going to translate to corporate profits for these, the Mag seven or the FANGs? I don’t know how that’ll play out. So I only have questions this year and I’m like, I’m sitting very comfortable with my diversified, safe, boring portfolio, large cash position of like two and a half years of spending and my paid off rentals. And I’ll probably miss out on something, but I just have no idea where it’s going to be, where that next piece is going to come from. And I think that there’s still plenty of risk on the table. So that’s my take this year. And next year we can count the next 200,000 that I miss out on this particular move.

Dave:
I’m sort of in a similar head space as you that’s like, I’m at a point in my career luckily where I don’t need to maximize profits. And part of me just wants to just kind of like protect what I got and keep going slow and steady. So I’d love to actually talk to you more about portfolio allocation, Scott, because this is a super important and tricky question for our audience, but we got to take a quick break. We’ll get to that right after this. Running your real estate business doesn’t have to feel like juggling five different tools. With ReSimply, you can pull motivated seller lists, skip chase them instantly for free, and reach out with calls or texts all from one streamlined platform. But the real magic is AI agents that answer inbound calls, follow up with prospects, and they even grade your conversations so you know where you stand.
And that means less time and busy work and more time closing deals. Start your free trial and lock in 50% off your first month at resimply.com/biggerpockets. That’s R-E-S-I-M-P-L-I.com/biggerpockets. Welcome back to the BiggerPockets Podcast. I’m here with Scott Trench talking about his takes on 2026. We talked a little bit about 2025. Scott, you sort of hit on, we’ve sort of been circling around this idea of like portfolio allocation, how much money you put where. And this is a tough question for people. You alluded to this when you’re talking about sort of financial planning. How do you think about allocating capital and maybe you’re willing to share some of how your portfolio is allocated, at least in percentage points right now?

Scott:
Sure. I mean, my portfolio is very straightforward. About 40 to 45% is in real estate equity here in Denver, Colorado in multifamily properties that I own and I have a property manager, but could operate here. And that’s what I know. I’m kind of like digging my heels in for a slog on that front for a little bit, but it’s with a low leverage, I’m generating pretty good cash flow from that. Almost entirely alone funds my lifestyle. And then the other 55% of my wealth is spread across various retirement accounts, free tax retirement accounts like my 401ks or equivalents, post-tax like the Roth, my HSAs, my after tax brokerage accounts, and that position includes a two and a half year cash reserve and then is allocated into fairly aggressive stock investments. Generally speaking, my new investments, the new cash that I put into it when I do have cash inflows is tending to go into value stocks right now, particularly I like these relatively low fee, actively managed value funds from Avantus, both domestic, international, and emerging market.

Dave:
Why such a big cash position?

Scott:
So several reasons. One is I have a real estate investor. Two is I’m no longer the CEO of a big company, so I don’t have this large income coming in. And then third, I wrote a book called Set for Life, and I think it would be particularly embarrassing to go bankrupt after having authored touch a book. So I keep a particularly large cash position, even if it is a drag in my overall portfolio returns.

Dave:
See, people don’t talk about the unexpected, the hidden consequences of being an author or a public personality. You have to hedge against going bankrupt for … Everyone needs to, but you need to do it a little bit more. It’s pretty funny. All right. Well, cool. Thank you for sharing that because I think sometimes I talk to real estate investors on this show, like Henry, James Dainer, people you know as well. They’re 100% in real estate and you clearly believe in real estate. So why so much in the stock market then?

Scott:
Well, I’m 35, but I won. I’m very lucky. I got what I wanted out of my financial portfolio. I do what I want with my day at this point. And so I just want to maintain that position on an indefinite basis and be able to harvest my portfolio. I’m a little bit even more conservative probably than this like 3.5, 3.75% safe withdrawal rate for my portfolio. So it’s that diversification across these different stock portfolios to make sure that the growth is there long term to sustain that position.

Dave:
Well, good for you and congratulations. It’s an incredible place to be being able to say that you’ve won at 35, I think is the dream for pretty much everyone. So let’s turn our attention to real estate because obviously we all want to hear your take on real estate right now. You alluded to a slog. So what are you seeing in the market right now?

Scott:
For real estate, I’m going to just dive in there. And I think that the word I’m going to use to describe what’s going to take place over the next three years is absorption.That’s
It. That’s the theme I’ve got here. And I think that that is really going to be the main driver of what happens in the real estate market across the nation. Now, every region’s different, but I think in most regions around the country, on average, you saw rents not go up very much, maybe decline a little bit. And that’s really a problem for real estate investors who are really betting on inflation implicitly on housing costs as part of the core thesis behind the investment. And the reason you didn’t see that, we’ve talked about this for years, is the onslaught of multifamily supply. We’re specifically talking about the residential market right now and the historic deliveries in 2024 and in the first half of 2025. So we’ve talked about that for years and those abated in the second half of 2025 and now heading into 2026, we’re going to see relatively low net new deliveries of multifamily across the nation.
And what’s going to happen, I think in 2026 is that vacancy rate is just going to come creeping down. It’s going to come down maybe 200, 300 basis points in some of these markets like a Denver. And what that’s going to do is that’s going to drive rent growth. Two years ago, I would’ve send rent growth was going to be very high in Denver in 2026. And the reason I’m going to say it’s going to be more muted absorption this year is because the demand side of the equation has changed in a lot of these places with a lot less movement. And I think a big part of that is the huge change in immigration policy in this country. For sure. And for the record, I think it’s a good thing to have the border under control in there. We won’t get into more politics than that, but just that alone is stopping several hundred thousand net new illegal immigrant arrivals on a monthly basis.
On top of that, you have deportations. I really don’t know what source to believe on deportation data at this point. I think it’s actually wild how hard it is to get believable data on that point. And these are either voluntary or involuntary,
But no matter how you slice it, you’re getting close to about half a percent or maybe even a little bit more than that in terms of population differences nationally versus what you would’ve forecast two years ago if you just expected those numbers to continue.
So there’s other forces that play with that, but I think that alone is actually going to have a fairly reasonable impact on and slowing absorption rates over what you might have otherwise thought was going to happen into, at this point, your overall vacancy and it’s going to compound each year. And so I think you’re going to see that rent growth that I thought was going to be really high in 2026, 2027, and 2028, two years ago. I think you’re going to see it much more muted. I think you’re going to see something in the three to 4% range for rent growth in 2026,

Speaker 3:
And then

Scott:
You’re going to see something a little bit higher than that in 2027 and higher yet again in 2028. So it’s still going to be strong rent growth, but it’s not going to be … I was putting up some big forecast numbers. I thought we were going to be bumping double digits in 2027 for rent growth, at least in some markets. And I think that that number needs to be tempered now because the demand side is just a little lower. Rent growth is common, but it’s not going to be the party that in rent growth that I think landlords were thinking was going to happen two or three years ago based on this delivery curve on the supply side.

Dave:
I’m a little more pessimistic than you are, to be honest. Like on a national basis, I think it’s going to stay close to flat, maybe one to 2%.

Scott:
No way. No, no, because you’re going to see net absorption.

Dave:
I’m just worried about household formation. I just think the demand side, maybe I’m too pessimistic, but I worry about how stretched people are. The rent burden numbers are really high. The wage growth numbers are starting to come down. The unemployment rate for young people is really high. So obviously it’ll be market to market, but on a national basis, I think if I had to bet, I’d say it’s between zero and two, not up to four, but we’ll come back next year, hold us to this.

Scott:
I’ll go a little bit more optimistic than that. I’d say it’s going to be in the three to four range, 3.0% to 4.5%, somewhere in that range.

Dave:
Well, I started around BPCon last year calling this era that we’re in the great stall. It just feels like everything is stuck and prices are kind of flat, rent’s kind of flat. What do you think this means, one, for prices and then perhaps more importantly, strategically for our audience, what do you do about this?

Scott:
I don’t know. From a pricing, pricing is so difficult for me because I look at the Denver total pricing and I would’ve said, “There’s no way I’m not coming on this podcast here in January 2025, not under contract of my next rental property, just deploying another round of that liquidity that I have. ” And I look around the market in the last three months, two months, and I don’t see very many deals to buy compared to what I saw in June and January, February last year. This is small multifamily in Denver, so it’s a subsector of that. But I’m like, why is it actually harder for me to buy an unlevered property right now at a great deal or price point than it was this time last year? I would’ve expected either that rent growth to start propelling and that’s why I’m finding that challenge or I’d expected the prices to continue going down and I’m buying that whole curve down a pricing perspective.
So that didn’t happen either from a pricing perspective. I’m not seeing the prices go down. I’m just seeing stuff not really sell. A lot of people put something on the market and then take it down. But I think that’s the real problem here is nobody really needs to sell
And that may not be the case for a long time.

Dave:
Well, especially in residential, right, because people have fixed rate debt, so they’re just going to hold on.

Scott:
Yeah. And a third of properties are owned free and clear or some crazy number like that. It’s like 40.

Dave:
Yeah, it’s crazy. Yeah. But I guess the only forcing function could be if rents keep not going up, but taxes are going up, insurances are going up, maintenance and repairs. So your margins could get compressed even though things are kind of stable from a price perspective. And so that might be an impetus for some people to sell.

Scott:
Yeah. There should be, in theory, reasons to sell. People move, people get divorced, people die, people get sick, people have problems at their properties or whatever, but I mean, it just doesn’t seem to be happening yet. So I think that’s going to be a challenge here. I don’t really know what to make of it.

Dave:
So you’re actively looking, it sounds like, but just not finding the right deals.

Scott:
Yes.

Dave:
And to you, a good deal, you’re buying for cash, so you’re looking for a six and a half percent cap rate. I mean, it’s a good cap rate in Denver, but is that sort of your buy box?

Scott:
Last year, my moves were really made because I’m leaving my position here, I need income or I want more income to make sure that I feel really good about defending my day-to-day lifestyle. Now it’s more like, okay, I’m actually chasing yield if I do this and I’m just not finding the opportunity that I would’ve guessed would be here at this point.

Dave:
Yeah, it’s interesting. I still look at the Dever market. I’m willing to buy. I haven’t bought something in Denver since 2018, and it doesn’t look that good to me, to be honest, but other parts of the country, I do feel like we’re getting more inventory. When I look at properties in the Midwest, it’s starting to open up for the first time in two or three years. I was looking at properties in the Northeast and the Southeast. It really, I think, is just market to market specific, which is how real estate is supposed to be. But it makes it kind of hard, especially for newer investors. What do you recommend to people? Do you wait? Do you just set a strict buy box and be patient? What’s your advice?

Scott:
I think that the core challenge right now for folks that are not buying all cash is negative leverage, right? And so when you’re buying even a six cap using six and a half percent debt fixed for 30 years, that’s a pretty all in bet on appreciation and on rent growth. And so I think that’s the challenge is you really have got to wait. You’ve really got to hunt for those deals that don’t have that negative leverage if you’re going to use that or you got to force value. The opportunities are probably still there for very creative and very ambitious. And folks who are willing to rent by the room, do short-term rental work or live in that property where they’re sharing with roommates or find that assumable mortgage. But I think you got to have a really great deal, great financing, or one of these other cashflow strategies to really get the same advantage, the relative advantage out of house hacking that I got with a simple duplex purchase.

Dave:
Yeah. There was a time for most of the 2010s where if someone asked me where to get started, I just say house hacking, no doubt, no questions asked. But there’s some limitations to it now, especially in really expensive markets, Denver, Seattle, San Francisco, renting is better. Even house hacking, I think you and I collaborated on a house hacking calculator once and are buying and renting and stuff. And I’ve put it in and renting is cheaper in a lot of places. I would, for certain people, recommend renting and making sure you still invest that money into something like either in an index fund or into a cashflowing rental somewhere else. But yeah, I don’t think it is as simple as it used to be, but in a lot of less expensive markets, it does, I think still makes sense. It might not be as good, but as I’ve talked about a lot on the show, I think trying to compare your returns now to 2014 doesn’t really make sense.
What makes sense is, is this the best use of my time and money today? And for some people, that is still true. But again, in those expensive markets, that might not be true anymore.

Scott:
Yeah. This brings us in a circle, wonderful circle to two things. So you say renting is better and they’re not building new housing. So is rent going to really go down? That’s like core to that thesis of rent should grow over the next three years in particular. And then the second thing, I think the other question I think that someone I’d be asking myself is, “Man, I believe in index fund investing. I believe in buying US stocks and holding on for the long term.” And I also believe that price does matter at some point and price in terms of stocks is not just the absolute price or whether it’s an all- time high, who cares if it’s an all- time high. It’s the ratio, the amount of income you’re buying per dollar that you invest. And right now you’re paying as much as you’ve ever paid for that in US history other than a point in time around 1999 or 2000.
And that’s, I think the other challenge to this is what are your alternatives in terms of building wealth? And I think that that’s what’s confusing me and you, it sounds like last year, and worries me to a certain degree and maybe worries other people who listen to this. I think that’s the challenge investors have to figure out. For me, the answer has been diversification, and that’s maybe sleep better at night, but it certainly didn’t put more points on the board in 2025.

Dave:
I think diversification is the only way to go in this kind of economy. No one knows. It is as hard to predict or to guess what’s going to happen probably as it’s ever been. Maybe people always said that, but it does feel that way that a lot of the rules are different now or there’s a lot of variables we haven’t had to contend with in the past. And so it just feels super confusing. So I get it. But I find myself gravitating, I’ve always gravitated towards real estate, but when I think about what I’m doing in 2026, it just feels less volatile to me. If I can find a good deal, I feel pretty good about buying that and that it’s going to be good. Finding a deal is hard, but I don’t have the same level of nervousness about it that I do with the stock market where I’m like, it’s totally out of my control.
There are forces of AI that I really don’t understand, but real estate, it’s like finding a deal is harder than it used to be. But when you find one, I feel pretty good that I can operate that and that my performance is going to be what I expect it to be. Sounds like you hit yours on the head as well. And that’s sort of what gives me comfort about real estate in this kind of a climate.

Scott:
Yeah. So I mean, again, I sleep better at night with it, but I’m not putting more points on the board. So I don’t know what that looks like. I think that this year it’s kind of like you’re irrationally confused maybe is the- Or

Dave:
Rationally confused. Maybe it is rational just to be

Scott:
Confused right now. But yeah, I’m not confident there’s going to be very large price changes on a national basis for housing in this country and in terms of the asset value.

Dave:
I agree.

Scott:
I do believe I’m a little bit more bullish on rent growth than you because of the very low supply that we’re expecting

Speaker 3:
In

Scott:
2026. Six, interest rates are anybody’s guess. So on the supply side, low, demand side, still low, but not as low as the supply side. I think you’re going to see rent growth. And then I think interest rates are the wild card. Maybe a new Fed share comes in and lowers rates or maybe they lower rates and we still can’t lower interest rates because other things increase treasury yields for various reasons. So I don’t know what’s going to happen on that front. And then I think that the stock market, it sounds like price to earnings and price to sales and none of those things matter anymore because AI is just going to come in and blow things up so far and so high that none of the old rules matter and it just goes to the moon on stocks.

Dave:
Yeah, for sure. Well, thank you, Scott, for being here. It’s always fun catching up with you. Congrats on the family and everything seems to be going well. And we’d love to see all the progress that you’re making over at Money when you’re ready to share it

Scott:
With us. Yeah, absolutely. Just go over there anytime at biggerpocketsmoney.com and check it out. And Dave, congratulations on another great year with BiggerPockets and more booming business for you in your real estate portfolio.

Dave:
Well, thank you. Thank you. And we’ll definitely have you back on soon, Scott. Thanks for being here. Yeah,

Scott:
Let’s talk about how wrong I am with that rent forecast.

Dave:
Yeah, we’ll see which one is right. Or we might both be totally wrong. Well, thank you all so much for listening to this episode of the BiggerPockets Podcast. I’m Dave Meyer. He’ Scott Trench. We’ll see you next time.

Ashley:
We all want to make money, and today we have another real estate related revenue opportunity for rookie investors that doesn’t involve buying a property.

Tony:
Today, we’re bringing on the host of the BiggerPockets Bigger Stays YouTube channel to break down the lucrative world of Airbnb co-hosting. Garrett Brown is going to walk us through his step-by-step blueprint of how you can start up a co-hosting business and how to be successful.

Ashley:
This is The Real Estate Rookie Podcast. I’m Ashley Kehr.

Tony:
And I’m Tony J. Robinson.

Ashley:
Before we welcome Garrett, I wanted to share today’s sponsor and one of the tools I use for my own real estate investing. They say real estate is passive income, but if you spend a Sunday night buried in spreadsheets, you know better. We hear it from investors all the time, spending hours every month sorting through receipts and bank transactions, trying to guess if you’re making any money. And when tax season hits, it’s like trying to solve a Rubik’s cube blindfolded. That’s where Baseline comes in, BiggerPockets official banking platform. It takes every rent payment and expense to the right property and a Schedule E category as you bank. So you get tax-ready financial reports in real time, not at the end of the year. You can instantly see how each unit is performing when you’re making money and losing money and make changes while it still counts.
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Tony:
Well, Garrett, welcome back to the Real Estate Rookie Podcast, man. Thanks for jumping on to join us today.

Garrett:
Always happy to jump on and talk anything real estate related that we can talk about.

Tony:
Garrett, we’re here today to talk about co-hosting. And I think before we get too deep into the weeds, for all of our Rickies who may not be familiar with the phrase co-hosting, can you just define it for us? What does it mean to co-host as an Airbnb?

Garrett:
Sure. So Airbnb kind of popularized and coined the phrase co-host, but it’s essentially you’re doing property management for a short-term rental. And you got to be a little careful with the term property management because reason Airbnb developed the co-host term is because a lot of states have legalities around being a property manager. I’m doing air quotes here, how you can collect money and there may be a license involved. But Airbnb has kind of changed it to where you don’t necessarily retain the money from an owner. You only get your percentage cut that you get from the management side. So they’ve kind of circumvented some of these legalities. And I’m sure a lawyer probably could explain those things better, but basically you’re just helping out an owner with their property and most likely getting a percentage cut of the rental revenue that’s coming in.

Tony:
And I think there’s a bit of a sliding scale here as well because I think when I think about a traditional long-term property manager, and Ashley can check me if I’m wrong here, most of them probably all do the same thing. They kind of full cycle everything from lease up to tenant issues, turnover, whatever it may be. But in the short-term rental space, there’s some co-hosts who only deal with guest messaging and they’re just in there to help you respond to guests and do all those other things. But everything else, your pricing, the maintenance and consumables, you’ve got to handle yourself. And then on the other end of that spectrum, there’s the full service option where they do everything. Not only are they communicating with the guests, but they’re taking those maintenance requests. They’re going out and finding the vendors, they’re doing everything, they’re managing your pricing, they’re keeping it stocked.
So there’s a bit of a spectrum there, Garrett. So for you, where within that spectrum when you talk about co-hosting, do you actually fall?

Garrett:
I only do full service. It’s from a perspective of … I’ve seen people try just messaging and some things like that, and they’ll do lower percentages. But what I see is that it doesn’t really make a functional relationship between the owner and the co-host. And so I personally only do full service management where we handle everything top to bottom for these owners. We also get paid a lot more on the percentage. Ours typically is 20 to 25% and we’ll dive into the full numbers of it and how we set it up. But usually the messaging or more hands-off co-hosting is probably between five to 15% tops. And those particularly didn’t align well with the business model and my own real estate investing journey that I’ve kind of been on. So we do full service.

Ashley:
Well, it has to be kind of hard to do your job if you’re relying on the owner to do a certain part of it. And I’m not doing that. And I say that as an owner myself, that I probably would have to be nagged to get stuff done so they could actually perform their job. But Garrett, I’m curious as to what came first, the chicken or the egg. Did you become a short-term rental investor first, then a co-host, or did you start co-hosting first?

Garrett:
I was a short-term rental investor first myself. I owned the units. I started off with three units back in 2019. I was managing them myself. I learned a lot and I ended up selling those units and getting into bigger, more profitable units once I learned some things, which I still was about three units that I was managing myself. I think that anybody that wants to get into this space is going to need to at least have some experience. And you don’t necessarily have to be a full-fledged investor, even though this is bigger pockets and we always are talking and trying to educate that real estate investments are where the wealth is built and even on the short-term rental side. But if I didn’t own properties, I would’ve gone and worked under another co-host or a property management company or vacation rental property management company is a better way to put it, to just get some experience and learn the ins and outs because there’s a lot of things you don’t know.
And it’s also a lot harder to get co-hosting clients if you have zero experience. Still possible, still a ton of people that do it, but I always recommend to at least get your feet wet in the game the best way you can to make sure it’s even something you like and will develop the skillset that is kind of needed. But I will caveat that saying that I know plenty of people that didn’t have any experience were able to hustle and get their first client and they’ve grown to 30, 40 units and are very successful. So there’s a little bit here and there that happens, but I would suggest you at least have some experience before you start going pitching co-hosting primarily is my advice.

Ashley:
At any point during your journey, did you use a co-host at all or have you always self-managed?

Garrett:
I have always self-managed. And anybody even watching this, I always will preach to people to try self-managing. I went to school for hotel management. I actually, there’s a degree for that. People are always shocked, but there actually is a hospitality degree and I went to college for that. So I’ve knew a lot of the ins and outs. I’ve worked in hotels. So I came from the mindset that I never was going to need a co-host, but anybody that is considering hiring one, if you’re listening on that side, I would do your own self-management for a couple months or whatever to give it a try so that way you know exactly what a good co-host is doing. I see too many people buy a property, they hire a property management company or a co-host or whatever you want to call it, and then they’re like, okay, cool, we’ll just run it.
And they don’t have any idea if they’re even good. They don’t know the ins and outs. They don’t know how they’re managing the guests. Is that the proper way to probably do it? So you learn a lot when you self-manage, but I’ve seen a lot of people self-manage, decide that they hate it, and then that’s when they hire a co-host. And I think that is the best recipe for success to know that if you’re hiring somebody that’s actually qualified and is going to make your life easier, which is what the point of a co-host is.

Ashley:
Tony, you only self-managed your properties. You’ve never used a co-host or a company, have you?

Tony:
Actually, the very, very first short rental that we bought when we purchased it, actually I think it was the second short-term rental that we bought, the current owners had a property manager on it. No, actually it was our first one too. I think it was maybe the first part too. Anyway.

Ashley:
Actually, that one I went and stayed with you at.

Tony:
Yeah, I think that was one of them.

Ashley:
And Smokey Mountains, that one had to have the property manager for a little while too. Yeah.

Tony:
Exactly. Yeah. So when you’re buying from an existing owner that already has a property manager in place, a lot of times they’ll say like, “Hey, we’ve got reservations that extend past your close of escrow. Is it okay if we continue to manage those reservations so we don’t have to cancel? We’ll still take our management fee and then we’ll give you whatever’s the net profit.” So we’ve actually done that a couple of times, but it was always like a very short time period, 30-ish days after closing for them to kind of wrap things up and then we always took it over ourselves. So Garrett, I’m curious, man, co-hosting, I think the benefit is that aside, if you compare it to buying real estate, you don’t have to worry about a down payment, you don’t have to worry about paying to furnish or add amenities. You don’t have to worry about anything really financial, right?
But maybe it’s not the right fit for everyone. So I guess what questions should someone ask themselves before they even think about jumping into the world of Airbnb co-hosting?

Garrett:
So I definitely think that co-hosting mixed with buying some of your own short-term rental properties or properties in general is a true way to balance your own, the issue of not having enough funds to get your next place, but also getting the cash flow that you need in place. So if you have never managed, and this is why I’m so adamant about at least maybe trying to work under a company to know if it’s something you like. Short-term rentals is nothing but real estate investing mixed with the hospitality business. And people always underestimate the hospitality business side. I kind of think short-term rentals are like a gateway drug to either going buy more real estate investing or go and buy your own business or something along those lines because it’s kind of like a happy marriage of both. So if you’ve never done it and you don’t have any hospitality experience, I would 100% try to work under someone and decide if this is for you.
There’s so many softwares and automations now that it has become so much easier in the past few years to manage your properties and not be stuck texting guests all day and doing things. But short-term rentals are never going to be fully passive. If it is, then you have probably the best co-host that’s ever existed and they probably need a raise because there’s always going to, even as an owner, you’re still going to always have to step in and make some decisions and help the co-hosts with some things. So I would just try your best to get experience either managing your own property, working under someone, or like if you have a family member that happens to have a lakehouse, like do some studying, go to the BiggerStays YouTube channel, reach out to me, I can help you through some things and try to give it a shot that way.
And there’s tons of things we can talk about of how to set up your systems, but some of the time trial by fire is the best way to know if you’re going to learn it. But if you hate fixing things, hate having customer or guest interactions, and this may not be the business for you because there’s still going to be a level of hospitality that you have to implement in your business.

Tony:
Garrett, one of my biggest hesitations around jumping into co-hosting personally is the idea that now as a co-host, not only am I kind of focused on and beholden to guest satisfaction, but now on the other end of that spectrum, I also have this owner that I’m beholden to and I have to worry about them being satisfied. Is that a concern for you? How do you kind of navigate that balance of keeping your guests happy, but also having to answer to an owner?

Garrett:
Yeah. And that is easily one of … Even within my team, we kind of joke all day of how much we love owning units because it’s like we only deal with the guests. But when you co-host, you are serving the guest and the owner. My biggest thing that I’ve learned, I’ve taken on … When I first started co-hosting, I probably said yes to way more than I needed to. Any property that was coming to me, Airbnb has the co-host network now where you can put yourself on there to be a potential co-host within, I think, 60 miles of your area that you’re working in. And I used to say yes to almost everybody that came along. And then I eventually realized that not every property makes sense to have a co-host. If they’re going to make $30,000 in the year, it’s probably not worth anybody’s time for you to be the manager of it and dealing with what the money you’re going to make probably $2,000 that year, unless you live right next door to it, probably not the best move.
So now we’ve gotten better with vetting owners to where we know the property is going to make a certain range. I personally now only take either really unique stays or places that are either lakefront or have some type of massive pool or something, like some big draw feature that I know it’s probably going to make $100,000 in gross revenue that year.That’s my personal baseline. And I also have questions to ask the owner. You got to vet the owner out and make sure that it’s going to be somebody you want to work with. Guests you can’t do anything about. They’re always going to be a wild card, but the owner is going to be a consistent. So we ask the owner, “Would you be willing to put a budget in to improve the property and spend money on the things that need to be done? Will they do a deep cleaning before you even take over the … Pay $500 for a deep cleaning?” Little things like that and talk about your operations.
And if you’re getting signals from them that they’re like, “Oh, that costs too much for the cleaning.” Or even for one owner in particular, we charge 20% on the rental. We also have a tech fee each month and we also have a setup fee. This owner kept messaging me, “Hey, can you do 17%? Hey, could you do 18%? Could you do 16%?” I think three different text messages. That already is a massive red flag. If they are trying to negotiate a two or 3% deal with you and y’all haven’t even started, those type of red flags, if your gut’s telling you like, “Hey, this owner probably is a little difficult,” unless it’s just a cash cow, multimillion dollar place on the mountains or something, you have a great opportunity, you’re probably going to regret taking that place after a while because the owner is just going to … We call them golden handcuffs, basically, where you’re stuck to the owner, they get to make all the rules, but they’re kind of making your life more difficult.
I had another owner that was arguing with the cleaning fee of what we charge and what the cleaners have. And it’s like the fact that we haven’t even started and you’re worried about what my team is charging that you have nothing to do with, probably a bad sign. So there definitely is a little bit of just feeling out the owners. And I can’t recommend enough of getting some baseline questions and just being very candid with the owner and seeing what the reaction is and trusting your gut.

Ashley:
That’s great advice because I’m thinking of myself as an owner and you would not want to be my … So before we go to break, I have to hit you with some rapid fire questions because I want people to continue listening to this episode. And I think these are three questions that everybody is already thinking. How much time a week are you spending co-hosting?

Garrett:
So I spend 10 to 15 hours. I have a big team I have built out though. That is one thing that has … The cool thing about co-hosting is it’s helped me scale my cash flow so much to match my own investments that I now have the loose cash to hire a team. I have three full-time assistants, an operation manager that’s on salary, a full social media team, all kinds of things. But that come from co-hosting and having that cash flow to be able to put back into my business.

Ashley:
How many properties are you co-hosting for? I

Garrett:
Think it’s 16 currently.

Ashley:
And how much are you bringing in a month?

Garrett:
Co-hosting a loan, I’d say, because some of them have different variance rates, and that’s one thing that I’ve been able to … I even have one co-host client that I get 65% of the bookings. I can go into the details about it, but we make probably $50,000 a month between the 16 rentals, I’d say. A few caveats of where that money goes and how the payouts go. But we probably retain profit-wise, I’d say $20,000 a month, maybe a little less between … But some of those come with a lot higher rental agreements that I was able to work out with certain tiny home builders that I partnered with.

Ashley:
Well, we have to take a short break, but I hope that really caught your attention if you’re looking to make an extra 20K. And not to forget, Garrett works a full-time job and has his own rentals too. So we’re going to take a short break, but when we come back, we’re going to show you how to step-by-step implement your own co-hosting business. We’ll be right back. Okay. Thank you for taking the time to check out our show sponsors. We are back with Garrett. So Garrett, can you walk us through a step-by-step business plan for getting co-hosting off the ground? What are the tools, the resources we need? What are the first things we should be doing to actually start co-hosting?

Garrett:
So the first big thing with co-hosting is getting … Let’s say you don’t have any co-hosting clients at all. And let’s just have the idea that you don’t even have a short-term rental even. We’ll make this as simple as possible for people. There’s two real ways that I have seen me, and I know there’s a lot of other options out there, but there’s two real, I want to say free, but there’s probably a little cost associated here, time cost for sure. First is you can go on Airbnb and find properties that are … They look like they’re struggling. They maybe have really bad photos, their ratings, the reviews are really bad. Whatever sticks out to you that is not working for their listing, I want you to … And Airbnb makes this a little tricky. I’m a realtor, so I have my real estate license.
So I have a lot access to a lot of data on the backend in Texas of who owns a property and things like that. But if you don’t have that access, you go on Airbnb, and this is fun to me because it’s kind of like being a detective to figure out who the owner is and how to get in touch with them. So you go on Airbnb, you start looking at the photos and Airbnb will show you a general location to where that property is. So you already at least kind of know where it is. You can see some streets. Sometimes it may even show you the exact streets it’s on, but you look at the photos, see if you see any street numbers on … Sometimes photographers will leave, you’ll see the house and they’ll have one, two, three, six on the house. So that may be the street address.
You also look at the aerial photos to see what houses are nearby, kind of like the orientation. Is it facing a lake a certain way? Is it facing a street a certain way? And then I use my real estate license. Maybe you know a realtor in your area that can help you pinpoint something, but there also is some cool softwares like PropStream is a really good one. You can get into PropStream and start searching around that exact area and click a few listings and they’ll pull up photos from past MLS listings or wherever the data they get from. And eventually you’ll probably find that house in PropStream and they’ll be able to show you the owner.You’ll see the house, be like, “That’s the house.” I can see it in the Airbnb photos. They’ll give you the owner contact information. One of my favorite co-hosting listings that I ever have, which is easily one of the most profitable ones I ever have was a really unique stay.
I’ve been trying to get in touch with this guy for months. I knew exactly what the house looked at, but I couldn’t pinpoint it down. I eventually got on … I used PropStream this time because I was working within the software already and I was like, “Let me try some more things out on it. ” This was a year ago when I first really got into co-hosting really, really tough. I ended up finding the guy. I took his information. I can’t remember if PropStream had his telephone number or not, but you also can go to whitepages.com. It’s like $5 a month. You can type that address in. I got his text, I got his phone number, I got his email, all that. I just text the guy and I was like, “Hey, your property’s basically way nicer, way more complete, but like, hey, I could tell your property’s been struggling a little bit.
We do co-hosting in the area. I know we can bring it to the top of the market.” And instantly, the guy was super excited to finally hear from us. I’d send him some letters and I never heard back from him. And so I was like, “Let me get this guy’s phone number.” I text him, started a great relationship, easily one of my best. So you can go the Airbnb investigative route, which is fun because you got to piece clues together and be like, “Oh, this property looks at it like it’s at this cross street.” But the other really cool route that I’ve seen a ton of people be very successful with is get into Facebook groups. Every single little city, even in my area, one of the counties is called Polk County and they have a massive Facebook group with 80,000 people in it that is Polk County talk.
There’s people all the time popping up like, “Hey, does anybody know a cleaner for a vacation rental? Does anybody know a photographer or a contractor?” I’ll send them a message and go, “Hey, I work in the area. Let me know if you need anything.” Or there’s also Airbnb owners Facebook groups. And sometimes people will, you can join those and in Texas, there’s like an Airbnb masterminds of Texas free Facebook group. You join it, hosts will all the time jump in and go, “I’m not getting any bookings. What should I do? ” I’ll send them either a DM with five or six very simple … I’ll go look at their listing and send them a DM with five or six simple things that I think will help their listing and show value. I don’t ask for any money. I don’t ask for anything. Don’t tell them I even co-host.
I just provide value to them. And then it’s up to them at that point to decide, okay, this guy actually knows a little bit. Maybe I should talk to him a little more because he actually gave me some great insight and didn’t even ask for any help. And 99% of the time you go on their Facebook list or their Airbnb listing and it’s like, “Hey, you need better photos. Hey, you need to adjust your minimum stay. Hey, you need to be pet friendly.” It’s kind of simple stuff, but to the owner, it’s revolutionary because they’re not thinking about this. Even with the property-

Ashley:
They’re literally describing our first call together that we did for Fingertips. I didn’t want to throw you under the bus, Ashley. Those are literally the thing. Except for the photos. I did use a professional job. You did have

Garrett:
Good photos, for sure.

Ashley:
But you did have me rearrange them, that was for sure.

Garrett:
Yeah. But you’ll be shocked. People underestimate Facebook groups so much. I will always stand on this soapbox until years to come. Facebook groups are one of the most underutilized way to gain traction in any type of real estate investment or business that you’re looking for. You just have to look in the right Facebook group and know how to provide value. That’s what it all comes down to is providing value.

Tony:
Garrett, that was an amazing masterclass on sourcing potential clients. And I just want to add my own experience. So we at one point explored the idea of co-hosting and we’d actually put together a pretty solid approach for sourcing clients. And it was similar to yours, but we actually used, and you can use either AirDNA or you can use a PriceLabs market dashboard. But for example, if you use PriceLabs in their market dashboard tool, when you go into a certain market, PriceLabs will give you all of the listings within that market. And then what we did was we sorted it in reverse order from lowest review score to highest review score. And then one of the columns that PriceLabs and both ARD&A give you are the latitude and the longitude coordinates for that listing. So we would then take those lat and those long coordinates, plug them into Google Maps, do StreetView, confirm that it was the right address.
And sometimes it’d be spot on. Other times it’d be right down the road and you have to take the blue man or the yellow man walk them down the road. But pretty quickly we could find the actual address and then we would do what you did where we take that address, put it in the prop stream, get the owner’s information. And our approach was creating postcards, but what we did with the postcard was we would actually take a picture of the front of their house and then we would put the negative reviews on the postcard. And a lot of the listings now that Airbnb added … So you guys know Airbnb has like top 1%, top 5%, but they also have a bottom 10% and it’s right above the review. So if you’re listing this in the bottom 10%, it’ll literally say right above your reviews, this listing is in the bottom 10% of homes based on guest experience or whatever it may be.
And we took a screenshot of that and we mailed those out to a bunch of owners and that’s how we kind of got the phone ringing initially. Very much like a sniper approach, but the response rate was actually pretty solid. It looks like one of the guys actually forwarded that letter to his property manager because then we got a lot of threatening calls from that PM after the fact, but it was a very, I think, effective strategy to try and source people.

Garrett:
Yeah, no, I love that. I actually didn’t even know that you could get the latitude and longitude from price labs or air DNA. So now I’m like, my brain’s exploding even more there because like, oh, I can’t wait to really dive in there. But yeah, no, that is a great approach. We had a little success with postcards. We didn’t do something like that, but I do love that idea. I’m sure there were some property managers very upset, but you should be performing better if we have to point this out. I mean, come on.

Tony:
Yeah. Imagine paying someone and you’re listening to the bottom 10%. It’s crazy. So Garret, going back to like the 30,000 foot view, the step by step. So it sounds like step number one is to identify potential clients and then reach out to them. I guess, so let’s say that someone picks up the phone or they call you back from a postcard. What does that initial conversation look like to get them from, “Hey, I’m potentially interested,” to them actually signing on as a client?

Garrett:
You have to figure out their pain point. Even in all my realtor days and everything, I don’t want to call it a sales call because in the end we’re like, we’re value in a service based thing. But most of the time, the reason the owner ended up calling you because they realized there’s an issue and you are probably the solution for it. So when I take the, I call it the lighthouse is the one that I’ve referred to a few times where I text the guy, got his number a few years ago. When we had our first initial call, my first question just right off the bat, like, “How’s it going for you? Oh, we’ve had one booking all year.” And I was like, “Well, what’s the issue? What have you seen be the biggest pain point?” And he’s like, “Oh, well, we have to have a three-day minimum because I’m worried that we’re not making enough money and I’m always worried I can’t drive up there.” And they just start rattling off things.
You just need to be a good listener and figure out what their biggest issue is that they have and solve that immediately for them.
And this is why you need to be prepared too. You can’t just send out all this stuff and you don’t know anything about co-hosting or running a good short-term rental because you’re going to get questions and you’re not going to be able to answer. You’re going to be like, “Oh, well, dang, that sucks. Good luck.” But he presented like, “Hey, I have to do three-day minimum because our cleaning fee is so expensive.” And he started rattling off things. And I took each one, I reiterated the problems. I’m like, “Okay, so you’re having an issue with getting things fixed. You’re worried that you’re going to be on vacation with your family and something’s going to break.” And then I address those problems of how we solve those. And I have a team in place. I don’t live far from the area. Sometimes that’s even just not … You don’t want to put yourself out there as being the runner of sorts, but if you’re just starting and you don’t have a team, you are the team.
You’re the coach, owner, player, and mascot. So you got to wear all the different hats there. So figure out how you can solve that problem for the host. And there’s always common issues. Like I said, the most common by far is, I can’t deal with it when I’m not there, we’re struggling. We have to block off dates because I just took over another one not long ago. She was like, “We’ve only been able to run it a couple months a year because we live in Mexico 10 months of the year.” And I was like, “Well, that is a super simple solution because my whole team’s in place. I live near the area. We have systems and structure. We have a cleaning team that handles everything. We have 24 hour coverage to assistance and all that. ” Between AI and just having a couple of virtual assistants, you can achieve all that.
You just have to make sure you understand what you’re, I don’t want to say selling to the host, but make sure you understand what you’re providing to the host. But easiest way to get more clients, figure out their pain point and solve it for them.
You always be shocked at what the small issue is that allows them to decide that you’re the right one for the property. It’s never like 20 different issues. It’s usually one or two big things that you can easily come up with a solution and they’re more than willing to at least probably give you a chance.

Tony:
Okay. Let’s talk, right? I mean, because after you do all of this active listening and you’re understanding what their pain points are and then you present your co-hosting as a solution, what are maybe the biggest objections you typically hear and how do you overcome those?

Garrett:
Biggest is always like, “Oh, it costs too much.” Or like, “Why am I going to give you 20%?” That’s usually the first one. Like we even mentioned earlier, some people will be like, “Well, what about 17%?” And you got to stick to your numbers, but then you also tell them how I kind of frame it is even with the person that had one booking all year, we presented it as like, “Hey, we can do this tweak. We can make you pet friendly. Our cleaning team will be enhanced.” And then that price becomes … And we’ll also work on, we have dynamic pricing. So you’re not even going to see that 20% from your bottom line because we’re going to increase your revenue so much that If you’re making $20,000 this year and if you can bring us on and pay us 20% and we can still make you $40,000 that year and you work less, which one sounds better?
You got to just kind of talk to them in plain numbers and tell them how the reason that the 20% or whatever rate you want to charge isn’t going to be a big deal because you’re going to increase their revenue with the tactics that you have. So also I get very tactile as far as helping them understand of why pet friendly is so big because it’s the number one search filter on Airbnb. We talk about how high level our cleaning team is. And then we also talk about how we’re going to adjust their calendar to make it book better. And it’s good when you have case studies and experience, because I can very easily rattle off numbers that we do in the area and have an idea of what they’re going to make. But some real simple solutions is a lot of owners don’t know what air DNA is or price labs or something.
Go on air DNA or price labs and get the revenue that is expected. It’s not always guaranteed. It’s a suggestion more than anything. But take that number to the host. And then also I bring some competitors in their area and say, “Hey, this place that is two streets down from you is making double what you’re making. Air DNA says you should be making 50K and you’re making 25K. Our company can take you to that next level.” The other thing too is you need to stand out because there’s a lot of people. And two really cool ways that we’ve stood out recently is there’s a company called Breezeway.
They have a short-term rental safety inspection certification, a lot of words there. But it was like three or $400. And there’s a great guy, Justin Ford, he’s amazing. We took the course, it saved us thousands of dollars on our insurance bill with proper insurance too, which is my own units. But as a co-host, now we go and tell owners like, “Hey, we’re short-term rental safety certified. We know what to look for to make sure guests are safe.” We walk them through all the liability things, which is something that owners care a lot about and they don’t think about. We talk about how they need to get specific short-term rental insurance from proper or steadily or something like that. And then the other really big thing is we tell, because they’re always worried about parties and damage, we tell them like, “Hey, as a part of our co-hosting fee, we can supply between 1500, it depends on how big the property is and how much it costs, between $1,500 and $10,000 of guest damage insurance that we will cover in our percentage.” We use a company called Safely.
It’s like five to $7 per night that we pay it out of our thing. But that peace of mind for owners is … We’ve sold so many owners when we tell them those two things that we’re short-term rental safety certified and we also can provide our own damage protection that they don’t even have to worry about. And it came in handy. A week ago, a guest at one of my co-host properties broke the door jamb. They said if the door just fell off, which is hilarious because we all know that didn’t happen, broke it. I take security deposits, but I didn’t even go to the guest. I put it into Safely. It was like $600. I sent an invoice, my handyman fixed it. They paid it out within two or three days. Guests never got charged. Owner never … They knew because I wanted to show them how good the insurance is, but I didn’t even have to tell the owner.
We could have just handled it and kept it moving. So those are two really cool benefits that I’ve been able to bring on a lot of owners recently by just showing that I’m a little different and that I really care about the owners and their property and their place and their revenue.

Ashley:
So for that software, is that fee paid, the owners are paying that directly or is that part of your fee structure that you have set where some of these different things that maybe a normal co-host wouldn’t know to get the safely insurance coverage or whatever? But how does your fee structure work and what are some of the things that you include or don’t include?

Garrett:
So we include that in our fee structure. We kind of consider that not at cost of doing business, but more like I said, it’s an upsell of why we are a full service premium concierge co-host. We charge 20% for the nightly rental rate of almost every property. Like I mentioned, I do have some where I get 65%, which we can talk about, but completely different structure. That’s more of like a partnership between me and the tiny home builders. But most of them, we do 20% nightly rental rate. We collect the full cleaning fee, which most of them are pretty even with what the cleaners charge me, but there’s a couple where I still make maybe 20 or 30 bucks off the cleaning because of logistics and other things too, and how we’re able to price it.

Tony:
Garrett, let me just ask you really quickly. So on the cleaning fee, are you just sourcing the cleaning out to third party cleaners or does your property management company actually have cleaners on your team that are doing the turns?

Garrett:
So I’m in two markets where we have multiple units in each. One market, I actually have hourly cleaners that work for my property management company. The second market, we do a subcontractor. She’s been with me for three or four years. We kicked the tire on bringing her on hourly and did a couple different reasons. It wasn’t going to work for either side fully. So we pay her per project and she has a full team out there that she kind of takes. I kind of consider her in- house, but she’s still a 1099 subcontractor. So we outsource it, but she started with one property with me and she’s grown to five or six people that work under her. And so I trust her. She knows how I operate. And so we always turn the cleanings over to the team that we have in place there. And there’s a lot, again, Facebook groups.
I found all of my cleaners through Facebook groups. People think I’m crazy, but every single cleaner I work with and that is on our team came through a local Facebook group through a little trial and error. And so we do that. We take the full cleaning fee. Most of the time we don’t make money on it. Sometimes we make a little bit. We also charge, and this is something recently I’ve implemented, we charge $1,000 property setup fee for each time we bring on a property, and that is to get new pictures. There’s so many things that I learned that you would expect owners to do. And then you get to the property and you’re like, there’s 10 Amazon boxes here and you didn’t unload any of them. Now you’re expecting me to do it, which is fine. But that’s when I started implementing the setup fees.
So I can bring myself or my helper to go out there and to get the pictures and the videography. And then we also now have implemented $100 a month tech fee. We used to not do this, but honestly, the softwares are what run a lot of these properties. And a couple properties, there’d be some months where they weren’t as profitable as we want and we were almost barely breaking even on them. And a lot of it was because of extra software that we paid between Logify is my property management software. We have Price Labs, we have HostBuddy, Turno, my business line of phoneware. We do just having our website hosted that we have to have another property on there, things like that. So that’s why we started doing $100 a month tech fee, which I just implemented that. So I know some people that do that and some people that don’t, but I think going forward, it’s kind of something that people should go ahead and start charging to the owner.
But when you’re just starting off, one of my friends, Alison Kraft, who I think she even was on the rookie podcast maybe at some point, I can’t remember, but she’s a rockstar. She’s got like 20 or 30 units. And her first unit, she was like, “I took like 8% on the co-hosting. I didn’t know or like 10%, something wild, but she still made like two or $3,000 a month.” So there’s ability out there to have some flexibility. And when you’re first starting, you probably can’t get to what we did where you can do 20%, $1,000 setup fee, $100 tech fee. We can do that because we’ve built the reputation and have the numbers that back us. But sometimes when you start off, you might have to take a little lower or not be able to do that and just get the trial by fire going so that way you can learn all these things as you grow the business

Tony:
Side. Gary, we’ve learned so much already and I appreciate you sharing all this with us. We’re going to take a quick break, but when we come back, I want to go over how do you set yourself apart from other co-hosts and really what kind of boosts your income as a co-host in this space as well. So we’ll be right back after we’re from today’s show sponsors. So we’re back here with Garrett. And Garrett, I want to understand, you talked a little bit before the break about liability and the track record that you have, but as more folks come into the space of Airbnb co-hosting, what are some of the things that they should focus on and that you focus on to try and separate yourself from the other co-hosting options that exist out there?

Garrett:
So I touched on a couple earlier when I talked about the liability side and understanding that to educate owners on the guest damage side, the insurance they need, and also how you’re going to set them up for success on the safety of their property. I personally think my hot take going into 20s, 26, and I don’t think this is much of a hot take because my numbers and my bookings will tell you this, we do like 90% direct bookings now, is pricing is going to matter a lot less in 2026 and marketing is really what is going to move the needle for short-term rentals everywhere. There’s so many options now, so many things. And if you’re just trying to do like, “Oh, we have the best…” Everybody has dynamic pricing. I can’t remember, I think I was talking to Sean Rocky Geech a week ago and we were talking about how 70% of listings now use some form of dynamic pricing.
So it’s not an add-on bonus anymore. It’s kind of a necessity. But if you can somehow, which this is kind of one of my strengths I feel like, and it is the marketing side, but if you can learn some small things about marketing, whether it’s how to really build your search engine optimization for your website, how to even run some simple TikToks and IG reels or hire somebody to help you with it. And even like paid ads, even in my company now, we have a full-time paid ads person that we are able to show this to owners, say, “Hey, we have a person that works full-time on the ads. We have our own marketing spend that we spend each month, but would you want to contribute your own personal marketing spend that only goes to your property to increase your visibility and increase the bookings and your revenue and all that?
” We break it down in a business sense. So if you’re a co-host, there’s no more negotiables on you got to know pricing, you have to have top-notch service, top-notch automations and guest concierge to it, but that extra bit that I guarantee you is going to not only make more revenue for you, but also close more deals is that you can speak a little bit of the marketing language that is going to be needed going into 2026 with some of these properties. And I say all that too, on my main website, we have all of our properties, right? But each week we will go in and write a blog for one of the particular houses or not each … Once every few months, each property gets its own blog basically that is search engine optimization driven. So we have a property, the Lighthouse again, it’s on Lake Livingston.
We will do a blog that says the best vacation rental near Lake Livingston or near Houston or whatever the keywords we want to use is. Now, that blog will live on Google and there’s a good chance of somebody typing in, especially the higher your site gets ranked and you do some things. If somebody typing in best vacation rental near Lake Livingston, there’s a good chance that blog is going to pop up and you’re serving the owner with more additional outside marketing that really is free. You can create a blog in 15, 20 minutes now. So I give that as an example, but I just want to incentivize people to learn the marketing side a little bit or turn it over to somebody that does know it because that going into 2026, everybody has professional pictures, everybody has dynamic pricing, everybody’s listed on multiple platforms. That’s not a way to stand out anymore.
Now it’s about getting your property in front of eyeballs that were not on Airbnb and all the OTAs already, and you need to capture them before they get there. Instagram is the new OTA, if you want to be honest. So that’s where everybody’s searching TikTok and Instagram. That should be where a lot of your focus is going into into 2026.

Ashley:
Gary, you’ve mentioned a bunch of times that you’ve built a team to really help you run this business, but what about for a rookie investor just getting started? Do they need to hire a team right away and who would be your first hire?

Garrett:
So if you work full-time like me and you have a busy life and you’re going to at least need boots on the ground and the first hire always is going to be your boots on the ground team. You don’t need the virtual assistance and all that, like operations manager, all the stuff that I have now. But when you first do it, you have to have a rockstar cleaner, a backup cleaner as well. You’re going to have to have one. People always shy away from that, but there’s going to be a time where your main cleaner can’t make it, and then you need a rockstar handy person and you need to know all the subcontractors in the area. That alone is going to save you and pay your cleaners and handy people well, because they’re going to go above and beyond for you, that way you don’t have to always drive out to the property and handle all these things that you really shouldn’t as you’re building a business.
But if you get that set up and you start to, you’re a little overwhelmed, I’ll give you the easy … I don’t want to say the easy route. I’ll give you the route I would do going forward is using something like HostBuddyAI or any kind of these AI tools that are out there. There’s one called Conduit. I even got an email today of a new one called Hosto or something like that. But some of these AI tools are better hosts than even me. They’ll answer questions overnight, they’ll reply in two to three minutes. I even sometimes like a guest will send me something and I have to copy it, put it into ChatGPT and go, “Make this nicer, make my response nice because I have too much emotion in this. ” And then I’ll send it back. But HostBuddy and all the other ones out there, they take the emotion out of it and they’re a host on twenty four seven for you.
And it’s like $10 per property. It’s going to be very integral into getting back your time when you have one or two properties. You’ll still have to have a human touch to it. So you’ll have to monitor it and do a few things there. But if you start growing after that, it would be easily getting a really, really good virtual assistant that can handle a lot of these very mundane tasks and things as you grow. But for your first couple properties, I don’t think you really need a team if you get an amazing cleaner and an amazing handy person there because you can handle most of the other thing and automate a lot of it for the messaging and all that kind of side. But boots on the ground, there’s no AI for that unfortunately yet. Maybe coming. I don’t know.

Ashley:
And Garrett, you really helped me open my eyes to a lot of this. I started using Hospitable and just when I used to have somebody co-host for me, they would message me and say, “I’m going to be on a flight. I won’t have WiFi. Can you just watch the messages for me? ” So I just thought that was a standard thing. Now that I have Hospitable and it literally responds to pretty much every message for me, I’m on the airplane like, “Oh, three messages taken care of. I didn’t have to do anything. Here it is. ” So that was a big eye-opening thing to me too, because usually I’m very skeptical of AI, but I have never ever seen AI this good because you do the chatbots on website when you ask for help and it’s just like awful. This is so good and I have to agree way better than I ever could.
They have the little improve button and I’ll just like, if that, it will make it so much nice if I even have to respond to the person.

Garrett:
And most of the time they never even realize they’re talking to AI. It just does so well. And some of these tools, Hospitable has a great AI engine. They most of the time think they are talking to you and that’s all we want.

Ashley:
Everyone thinks Ashley is so nice.

Garrett:
Yep. I love it.

Tony:
As we wrap things up here, I think just what is your long-term vision for co-hosting? Do you want to build this into the next Vacasa or Evolve where you’ve got thousands of units or tens of thousands of units? What’s your goal? How big do you want to scale this thing?

Garrett:
So I definitely do not want to get to that level for a million different reasons we won’t talk about on this podcast. But the cool thing about, and what I want to lead people with this, and even into 2026, I’m really geeking out basically over commercial real estate. I mean, I know Tony, both y’all have probably been involved in some projects, but the really cool thing about co-hosting is that you can get, say you get … I have 20 … Or I think I have 16 now, but we’re growing a lot more. If I get 50 contracts in a couple years, you can sell those contracts as a business to somebody that is looking to either buy your business or a private equity firm or whatever. And a lot of people, so you have 50 contracts and you’re making 20% and they’re estimated to make, let’s say $50,000.
So 50 times 10, that’s the $500,000, somewhere around there. I’m sure my math maybe is a little off. You could sell that business with those contracts to somebody for like between a one or 3x multiple, depending on your teams and your operation and all this. And you could sell that and exit out at a million dollars possibly evaluation and maybe even … There’s so many exit routes when you have a business because you can sell it as a business or I can just keep it in internal as long as I want and let it … Because now that I have this team and all this, it makes my units that I own more profitable because I’ve had the economies of scale where I’m spreading out the marketing, I’m spreading out the cost of my VAs, I’m spreading out the cost of my helpers and things.
So the really cool thing about it is you can sell it as a business or it can make your own real estate investments even more profitable going forward as you figure out what your exit plan is. My exit is I probably want to sell the co-hosting business in about five years and hopefully exit out in the great fashion that I just outlined.

Ashley:
Well, Garrett, thank you so much for joining us today. Can you let everyone know where they can reach out to you and find out more information?

Garrett:
Yep, of course. Bigger Stays YouTube channel is the BiggerPockets short-term rental YouTube channel. We also have our Bigger Stays newsletter that goes out each week. And on Instagram, I am Garrett Brown RE. Always happy to chat and talk anything Airbnb or real estate investing in the world for y’all.

Ashley:
Thank you so much for joining us. We always appreciate you coming onto the show. I’m Ashley. He’s Tony, and we’ll see you guys next time.

For the last seven years, my wife and I went from basically no assets to a roughly $1 million net worth. And we did it entirely through saving money and investing—not selling a business or inheriting money. 

During that time, we’ve saved 45%-70% of our relatively modest incomes. My wife was a school counselor earning a teacher’s salary, and I’m still growing my business and reinvesting most of the profits. 

How do we do it? And how do other people find their own ways of saving half their income? Here are some strategies.

Automate Your Savings as Your First “Expense”

After every paycheck, the first “expense” to come out of it should be your savings. 

Many payroll providers let you split your direct deposit into both your checking and savings accounts. Or you can just set up automated recurring transfers from checking to savings or your brokerage account. 

Nowadays, robo-advisors can even pull money from your checking account on the cadence you set. I use Schwab’s, and it pulls money every week and auto-invests it for me. 

I also practice dollar-cost averaging with my real estate investments, not just my stocks. Every month, my co-investing club meets to vet a new passive real estate investment. Each member can invest $5,000 or more if they like, and I invest every month from my savings. 

Score Free Housing

There are many ways to score free housing. Yes, you can house hack with a multifamily. But that’s far from the only way to do it. Here are some other ways:

• My friend used to rent out her spare bedroom suite on Airbnb. She didn’t even own—she lived in a rented apartment. She found that if she rented it for two long weekends each month, it covered nearly all her monthly rent. 
• My business partner used to host a foreign exchange student. The stipend covered most of her monthly mortgage payment.
• When I bought my first home, I rented out a bedroom. It covered three-quarters of my mortgage payment, and I made a lifelong friend. 
• When my wife and I lived overseas, her job provided us with free furnished housing. 

Get creative and research the many ways to score free housing beyond house hacking. 

Ditch a Car

When my wife and I first moved abroad, we unthinkingly went to rent two cars. Then we asked a question that would change our lives: Do we really each need our own car? 

We decided to try sharing one car for a month as an experiment. Sure enough, it worked completely fine, especially with one of us working remotely. 

A few years later, we moved to South America, and the free housing was within walking distance of my wife’s school. We asked ourselves a new question: Do we need a car at all? 

It turns out that we didn’t. For six years, we lived car-free, walking, biking, and scootering and occasionally Ubering. 

When we moved back to the States, we bought a used car, which we currently share. Given that it costs nearly $12,000 a year to own a car, avoiding one creates huge savings. 

If you must buy a car, buy a boring, reliable used car that you can drive for decades. It’s not a fashion statement—it’s your transportation expense. And the lower it is, the more you can save to build wealth fast. 

Make Nearly All Your Own Food

DoorDash and Uber Eats have made it too convenient to order delivery. If you want to both save money and eat healthier, learn how to cook. My wife and I make enough for dinner that we each have leftovers for lunch the next day. 

Sure, we occasionally enjoy a dinner out, but we don’t indulge our lazy instincts to just pay someone else to make our food for us. 

Cultivate Free Hobbies

Cooking is the ultimate practical hobby, saving you money even as you eat better. But it’s far from the only one. 

I love hiking. It’s free, it’s exercise, you get fresh air, and you can do it with friends and family. 

I also love reading: also free due to this newfangled service called a library. 

Even my business, the co-investing club, serves two roles in my life. Yes, it generates income for me, but it also lets me invest small amounts in the kinds of real estate investments that normally require $50,000 to $100,000 at a minimum. That’s the whole reason I started it in the first place—I wanted to spread my own personal money across more real estate investments. 

As a final example, it’s been a lifelong dream to write novels. Last year, I finally got serious about it and am currently about halfway through my first one. As a hobby, it’s not only free, but it also has the potential to generate income (assuming it doesn’t suck). 

I know other people who do woodworking as a hobby business, or plan travel for other people, or pet sit. Hobbies can make you money rather than costing you money, if you get intentional about them. 

Avoid Consumer Debt

As I wrote recently, savings begets more savings. By spending less money, you avoid high-interest consumer debt like credit card balances or buy now, pay later (BNPL). 

And if you have some existing debt, a high savings rate helps you knock it out much faster, again saving you money on interest. 

Travel Hack

My friend who used to rent out her apartment on Airbnb? She wasn’t there half the time anyway—because she was off traveling the world for free. 

She enjoys free business class flights all over the world, using points and miles. You can learn how to do it too. 

You can also save money by traveling with friends and sharing accommodations on VRBO or Airbnb. If you both have kids, that also makes it easier to take turns wrangling the children. 

Pool Resources

Despite having a 5-year-old, my wife and I don’t have a babysitter on speed dial. Family and friends watch our daughter for up to a week at a time, and we look out for them and their kids when possible as well. 

You can share pet care as well, or carpool, or pass books around. Break out of the mindset of paying for everything yourself, and start building the kinds of deep relationships that let you share responsibilities. 

For that matter, this is exactly what we do as an investment club each month. By combining our knowledge and money, we can invest both smarter and with smaller amounts. 

Borrow Instead of Buy

When I want to read a book, the first place I go is the Libby app on my phone to check the local library. I borrow e-books for my Kindle and audiobooks to listen to while working out. 

There are also public tool libraries, where people can borrow tools. Sometimes they require a small membership fee, but that costs a lot less than buying tools yourself. 

You can join a gym instead of buying all your own weights and equipment. Or better yet, take free workout classes on YouTube. 

Borrow clothes or jewelry if you need something you don’t own (and clearly don’t need very often). And so it goes.

Move Overseas

When we lived overseas, we saved 60%-70% of our income. Since moving back to the States, it’s closer to 45%-50%.

Overseas, the savings all stack on top of one another. We didn’t need a car, living in a walkable city with cheap Ubers. High-end health insurance was affordable. We didn’t pay full U.S. income taxes due to the foreign earned income exclusion. We got free housing from my wife’s employer. 

And of course, the cost of living is much cheaper in regions like South America, Eastern and Central Europe, and most of Asia and Africa. 

I also became a better real estate investor by living overseas. Who’d have thought?

At a 10% savings rate, yes, it will take you 40 years to reach financial independence. At a 50%-70% savings rate, you can do it in under 10 years. 

Go ahead and keep living paycheck to paycheck if you enjoy the stress of it—or start supercharging your savings rate and wealth to escape the rat race fast.

Eviction filings are up nationally, eclipsing pre-pandemic highs that could well test the rental market for years to come, while landlords struggle with elevated expenses.

During and after the COVID-19 pandemic, many landlords faced a nationwide eviction moratorium and court closures, leading to missed rent while maintenance and other expenses piled up. In many instances, emergency rental assistance arrived slowly, forcing many landlords to skirt insolvency.

Moratoriums were lifted as the housing crisis deepened, making it far from an easy landing for both tenants and landlords. Princeton University’s Eviction Lab, which tracks filings in multiple states and more than 30 cities, found that eviction filings nationally have returned to near-historic averages and, in some places, surpassed them. 

With each state and many cities having their own unique laws to protect tenants, becoming a landlord in 2026 is far from plain sailing.

Soaring Numbers

In the 12 months through late 2025, cities such as Nashville, Tennessee; Austin, Texas; and Greenville, South Carolina recorded filing rates far above their local baselines, with Nashville’s filing about 46% higher than its 2023-24 average, and Greenville’s rate reaching 21% of renter households. The United Planning Organization noted in an April 2025 white paper on Washington, D.C., regarding the 10-year high in evictions there that the dramatic increase was due to rising rents, expiring federal and local rental assistance, and a shortage of affordable units.

States With the Heaviest Eviction Activity

Virginia

There have been over 139,000 filings in the last 12 months in Virginia, which equate to 13% of the renting households in Eviction Lab’s monitored areas. Areas such as Richmond and parts of Northern Virginia have been particularly affected.

Tennessee

In Nashville, filings in 2025 were far higher than pre-pandemic norms.

Texas

Large urban counties in Texas, including Harris County (Houston) and Dallas County, report elevated findings compared to 2019, while Austin reached a five-year high for evictions in August, placing Texas amongst the states with some of the highest filing numbers.

Indiana and Missouri

Indiana had one of the highest eviction rates before, during, and after the pandemic, aided by landlord-tenant laws that favored landlords, meaning tenants could be out after a month behind on rent. Indianapolis has a particularly high rate of eviction amongst minorities. In June of last year, a judge ordered Indiana to resume its pandemic-era rental assistance program.

On the other hand, Missouri has the distinction of having some of the lowest eviction filing fees in the country. High-risk minority neighborhoods have been particularly affected in major cities such as St. Louis.

Minnesota

Court data and legal organizations say the state is on track for near-record eviction numbers, with over 23,000 cases filed by late November 2025, up by 30% from the roughly 15,000 annual filings prior to the pandemic, according to the nonprofit HOME Line.

Public housing in the Twin Cities accounts for only a fraction of Minnesota’s eviction filings. Most come from private landlords, including small owners with a handful of units.

Displacement and Gentrification

The changing face of many cities is driving up rents as affluent renters move in, pushing long-standing renters out.

“What happens is we have these very high-income folks coming in, like tech workers, and that skews what is considered affordable,” Shoshana Krieger, project director for Austin-based nonprofit Building and Strengthening Tenant Action (BASTA), told KUT.org. Krieger works with renters facing eviction and other housing issues. “This impacts our lower-income people, where their wages or income haven’t grown at the same rate.”

Austin’s median family income for a family of four has gone from $76,800 to $133,800 over the last decade.

Low-Income Renters and the Patchwork of Eviction Laws

It’s hardly surprising that low-income renters are particularly vulnerable to eviction, particularly those earning below $75,000 a year, according to the Urban Institute. Complicating issues is the confusing patchwork of eviction laws across the country. 

If you are considering investing, it’s essential to know your city’s tenant protections. Simply deciding to invest in a state or city with lower eviction numbers might not tell the complete story. Tenant protections can often be as simple as longer notice periods, stricter documentation requirements, and limits on late fees. However, if these are ignored, the peril of refilling and delaying the eviction process awaits.

The Pressure on Small Landlords

For small landlords, the spread of the right-to-council policies and other tenant-representation initiatives can keep nonpaying tenants in their apartments longer. In New York City, for example, the right-to-counsel law applies to a large share of low-income tenants.

While corporate landlords have generally been able to withstand the uptick in evictions and the delays resulting from legal representation, smaller landlords have had a tougher time. The costs of filing and court fees, and the churn of continually renovating apartments, have a devastating effect on the bottom line. The Federal Reserve Bank of St. Louis points out that corporate single-family rental investors file for eviction at a much higher rate than small-scale investors, suggesting that institutional landlords can absorb eviction costs far more easily.

Final Thoughts

Continually having to file for eviction is the death knell to a small landlording business. The best eviction is the one you never have to file. 

However, amid the affordability crisis, rising evictions are increasingly prevalent in the residential investment business. It’s invaluable for landlords to take the necessary steps around tenant selection and eviction.

Use eviction as leverage

It’s important to proceed with eviction steps once rent is late, but if a tenant can catch up within a certain time frame, it probably makes more sense to negotiate a solution rather than incur turnover costs.

Pay attention to local laws

Landlord-tenant laws vary widely across the country. Make sure you are familiar with your own situation before you invest, not after.

Know your rental assistance pipeline

Many counties and cities have rental assistance funds or nonprofit organizations that can help tenants who are unable to pay rent. When a tenant falls behind, provide them with this info, as not only could it help them catch up, but it also creates a documented record that you pursued alternatives before going to court.

Tighten screening

Don’t go easy on background checks or on verifying income and references. You want the best of the best tenants in your properties.

Budget for legal hassles

With legal assistance for tenants, evictions are taking longer than ever. Create a financial buffer to account for this.

Condos could be the sleeper real estate investment you never thought you needed. If you’re looking to buy a severely discounted asset to capitalize on cash flow, a condo might just be the ticket because nationwide, condos have just experienced their steepest drop in value since 2012, despite house prices continuing to rise.

According to data from financial data and technology company Intercontinental Exchange, as cited by The Wall Street Journal, condo prices plunged in September and October 2025, with the biggest discounts in pricey coastal metros and investor-heavy second-home markets such as Florida. 

In Manhattan, a condo-saturated borough, one-third of the condos that changed hands between July 2024 and July 2025 sold at a loss, according to brokerage Brown Harris Stevens.

“The most promising opportunities for condo buying right now are in inner cities and areas with central locations that experienced drastic price adjustments, owing to the trend of remote work. Fairly located properties are available at significant discounts to buyers who do not mind the momentary mood,” real estate expert Andrew Reichek, founder of Bode Builders, told MarketWatch.

A Perfect Storm of Soaring Costs

So what’s the catch? Condos have been caught in a perfect storm of soaring HOA fees and insurance costs stemming from the collapse of Champlain Towers South, a 13-story, 136-unit complex in Surfside, Florida, in June 2021. Additionally, hybrid and remote work has cooled condo demand in urban areas, as workers can move to single-family homes in more affordable areas, dubbed “Zoomtowns” by Business Insider.

Jennifer Roberts, real estate broker at Coldwell Banker Warburg, told MarketWatch:

“Higher HOA and common charge fees and insurance costs are making [some] condos less affordable. Plus, older condo buildings are facing huge assessments and become a money pit. If one has a longer time horizon, it’s a good time to buy where the market is soft to take advantage of negotiating opportunities and being well-positioned for when the market recovers.” 

The Condo Malaise Is Nationwide

Condos are also getting hit from the financing side. The Surfside collapse prompted Fannie Mae and Freddie Mac to increase structural scrutiny of condos, requiring reserve funding for deferred maintenance before approving loans, leading many condo building sponsors and developers to pursue all-cash deals, according to MarketWatch. 

And the condo malaise isn’t just limited to Florida and New York. Texas cities Austin and San Antonio are experiencing a supply glut, forcing prices down, according to the Journal. Meanwhile, West Coast cities San Francisco and Portland are still reeling from the pandemic’s damage to their downtowns.

A Golden Opportunity

This delicate situation may encourage deep-pocketed investors, such as Wall Street heavyweights facing a ban by President Trump from buying single-family houses, to purchase condos for cash instead, though it’s too early to speculate. What is not debatable is that deeply discounted condos present a golden opportunity for potential landlord investors, provided they can navigate the additional costs of ownership and offset them with low mortgage payments and high rents.

Former Owner-Occupants Turned Landlords

The first wave of new condo landlords is likely to be former owner-occupants who have rented their residences rather than taking a financial hit by selling at a loss. This is especially worthwhile for owners who have low interest rates, and it’s a strategy that could be employed by all cash buyers who can swoop in and buy low. 

For investors seeking financing, it is still possible to get a great condo deal by adhering to strict underwriting guidelines that focus on HOA and insurance costs.

A Seven-Step Condo Cash Flow Strategy for Small Landlords

Step 1: Analyze a prospective condo based on the rent it can generate 

Calculate rents after HOA costs, rather than price per square foot. You can use the standard 1% rule to determine cash flow (i.e., if a property costs $300,000, it should generate $3,000 in rent), and adjust it for HOA costs.

Example:

• Purchase price: $300,000
• HOA: $600/month
• Target rent: $3,200-$3,600/month

If rents haven’t fallen in line with prices, the deal deserves deeper analysis.

Step 2: Analyze HOA profiles meticulously

All HOA fees are not created equal. Look for those that are about 15%-30% of the gross rent—less is always preferable. 

Here’s what else to look for:

• It has fully funded reserves (or at least 70% funded)
• There is no deferred structural maintenance.
• It has clear post-Surfside compliance documentation.
• There’s no pending litigation with insurers and contractors

Beware of red flags, such as vague language around “future capital needs,” HOA yearly increases of more than 10%, recent insurance nonrenewals, and high investor concentration (a complex with a majority of owner-occupied condos is always the most stable).

Step 3: Target fixable financial problems, not broken buildings

Examples:

• A catch-up plan is in place for underfunded reserves.
• Delayed engineering reports are scheduled.
• Buildings are transitioning from nonwarrantable to warrantable within one to two years.

Smart financing choices:

• You can put down 20%-25% in a conventional loan to minimize interest rate costs.
• Target local banks and portfolio lenders with flexible financing options.
• Look to purchase with cash (if you are able) and refinance later—BRRRR style.

Step 4: Geography counts, as insurance matters more than ever

• Target lower insurance areas such as inland metros.
• Northeastern and Midwest urban cores are in high demand.

Step 5: Consider rent demand

Condo values fell because buyers disappeared, not renters. Condos are usually built in urban areas with a high concentration of well-paying jobs. 

Look for condos near hospitals, universities, and transit hubs, staying away from luxury cores and instead focusing on secondary downtowns where prices are lower. Focus on cities where single-family rentals are unaffordable. 

Target these professionals to ensure premium rents:

• Medical personnel
• Graduate students
• Urban downsizes
• Corporate renters
• Divorced professionals returning to the city

Step 6: Underwrite conservatively

You are essentially buying a condo for cash flow, so keep appreciation out of the buying rationale. Buy below replacement cost, and invest for the long term. Estimate a stable rent growth of 2%-3% and an HOA creep of 3%-5%.

Step 7: Plan to have a three-pronged exit strategy

1. Cash flow hold for another investor.
2. Refinance once a building becomes warrantable.
3. Retail resale once buyer financing improves.

Final Thoughts

Condos are the deals hiding in plain sight. Because the condo narrative is so negative at the moment, many investors are bypassing them, expecting HOA fees and insurance costs to kill most deals. However, given the deep discounts being offered, they deserve an investigation.

One advantage of a cash-flowing condo is that, as part of an enclosed building, there are no external issues such as snow and leaf removal, roof upkeep, or gutter and downspout concerns to worry about. 

For the hands-off investor, condos make a lot of sense. Finding one that checks all the boxes is the all-important first step.