How We Started A $270K/Month Business Managing Vacation Rentals
Hello! Who are you and what business did you start?🔗
Hi, I’m Lara! I’m the owner and co-founder of Home Sweet City. We’re based in Washington, D.C. and we help busy homeowners make extra money by renting their homes on platforms like Airbnb.
We are a ‘full-service’ company which means the owner can be completely hands-off, (in some cases even living abroad) and still enjoy the extra money rolling in each month. This includes managing the set up of the home (design, photography) to the guest communication before they arrive, during, and after their stay. Any maintenance issues that arise are also our responsibility.
What started in desperation when we had no income during the 08/09 crash, has turned into a full-time business for both myself and my husband with six full-time staff and many contractors (cleaning, maintenance, laundry) who assist in the day to day running of the business.
The most exciting part of what we have created is being able to be home and present for our young family, we have 2 girls 3 and 7 years old. Gone are the days of working nights or traveling for days and sometimes weeks at a time.
We have been able to move to a larger home, and with the business generating a $2.7M+ annual turnover we have more disposable income and freedom than we have ever had before.
What's your backstory and how did you come up with the idea?🔗
I came from the UK in January 2009 on a 2-year work posting that ended abruptly 8 weeks later.
My furniture was on a shipping container on its way here and I was about to close on a new home, I felt there was no going back and I just had to make this work. I had also just met Alex on a work trip and we had stayed in touch.
While I was trying to secure another job that would sponsor me to remain in the USA, I managed to keep the house and the sale went through by April. Shortly after Alex and I moved in together. He had also lost his job as a loan officer due to the downturn and so we decided we had to try and utilize our house to generate income.
Our first thought was to just rent our basement to a long term tenant and maybe make $1,000 per month if we were lucky. That would help for sure, but then as I did my research on how much we could make I stumbled across a home on craigslist that was renting by the night on this site that had just launched, ‘Airbnb’. Of course, we all know Airbnb now but back then it was so new, I was intrigued! I didn’t even know how much we could make but it seemed that renting by the night could be far more lucrative.
Low on cash, we took our credit card and bought what we needed to get by, along with some second-hand furniture from the main house (upstairs) we set up our little studio basement with all you could ever need for a short stay. The result was small but super functional!
Fast forward a few months and we were solidly booked making on average $2,400-$3,000 per month in this tiny space, not just on Airbnb but other sites too. It completely covered our mortgage payments!
Then one day I was chatting to my hairstylist about what we were doing and she asked me if it’s something they could do in their basement. It suddenly dawned on me that we could maybe scale this idea and help others do the same thing, on a commission basis.
Over the coming months, we both managed to get new jobs but we were excited that this could be something big and also we were loving meeting amazing people from all over the world. We decided that if this venture was viable, we would grow to take on enough properties that would allow us to ultimately quit our full-time jobs.
Take us through the process of designing, prototyping, and manufacturing your first product.🔗
We didn’t know what to charge or how to manage multiple listings but step by step we tested things out, used simple techniques and free software to help us manage the day-to-day. A large part of the process was interior design and decorating. We soon realized that the best-performing properties were the ones that had fabulous design and so between my background in design and Alex’s love for interiors we were soon offering this to homeowners as an additional paid service.
Whilst start-up costs were minimal, we did need to make sure we were protected from a liability point of view so had a lawyer draw up our owner and guest agreements. This felt like a huge investment at the time but was obviously necessary and money well spent.
When we had around 10 properties we realized that as we were growing it was becoming increasingly difficult to manage multiple calendars and cleaning. We realized that there was software out there to help. This was a huge leap forward for us to implement a PMS (Property Management System) to streamline our operations and free up our time to help grow the business.
No question one of the biggest headaches and learning curves we had were issues with guests. We did have some crazy situations that really we just had to learn through experience.
Describe the process of launching the business.🔗
We always say that the business itself was launched the day we opened our doors to our firsts guests in the basement of our own home. It just grew steadily from there. Luckily we didn’t need a huge amount of financial investment to grow, we had a lot of word of mouth clients. I remember buying an SEO package from GoDaddy which to this day is one of the best investments I think we ever made. It helped us to be consistently on the first page of Google for both homeowners and travelers alike. Of course, things have become much more sophisticated since then but it was certainly a great foundation.
We were the first to market doing this in the DC area that in itself made me concerned that if no one else is doing this, is it even viable? But I got a huge sense of relief when we started to see other companies doing the same.
One of the greatest memories I have is our first piece of PR, a local paper asking to interview us as we had done a marketing push offering to help owners rent their homes during the Inauguration. It was such a great feeling!
No question one of the biggest headaches and learning curves we had were issues with guests. I must emphasize that most guests are an absolute pleasure to host but we did have some crazy situations that really we just had to learn through experience and put safety protocols in place to protect us for future scenarios. (One day I will write a book on all the crazy stories and experiences we have had!)
Operationally, since we worked from home, we initially had to store all of our clean linens and towels in our attic and each day we would start by preparing the clean linen bags ready for the team in the field to drop off at each home. It soon started to take over as we would have sometimes up to 20 turns in one day which meant 20 large bags of linens all labeled on the floor, we could barely move but we were growing! Shortly after with great relief to get our home back we opened a facility in NE DC to store linens, cleaning supplies, and our guest supplies.
Since launch, what has worked to attract and retain customers?🔗
We have always tried to keep our homeowners happy, anything we can do to make sure they know that we have their backs and that they can put their trust in us. This has gone a long way to help us build a good reputation locally and we never struggle for new business referrals. We also work closely with our competitors sharing ideas, and new business leads.
To date, we have done very little digital marketing, only because the effort and investment we made didn’t really seem to move the needle. We are about to embark on some targeted Facebook and Instagram marketing for a new product we are looking to launch soon.
How are you doing today and what does the future look like?🔗
Since 2009 we grew the business steadily to where we are today which is 75 properties. Our goal is not to be a giant company but to be the best, to be super profitable, and culturally be a place people want to work.
We have been a very profitable year on year for 5 years now. With COVID-19, we were hit very hard this year but have managed to stay afloat and profitable by downsizing our team temporarily and keeping our overheads low. We anticipate that travel in 2021 will be huge as the vaccines are rolled out and people will be desperate to travel again. We will be ready!
We have plans to roll out a digital product shortly which will make all the expertise we have developed over the years accessible to more folks and not just in the DC area. More to come!
Through starting the business, have you learned anything particularly helpful or advantageous?🔗
We have always tried to be very available for PR interviews when there were local stories getting attention. Most recently there was a legislation change in Washington, D.C. that threatened short-term rentals in the area. We were very proactive in getting heard and had articles were written about us in the Washingtonian and previously in The Washington Post.
Get ‘scrappy’, find the most basic version of your product or service or offering, and test it out in the cheapest and fastest way possible. This way you can test your idea and refine it quickly and cheaply.
We are entrepreneurs of course, so risk-taking comes naturally, but I think it has always been helpful to bounce ideas off other people, family, friends, and experts to validate and refine our thinking.
Even with legislation potentially set to decimate our business we have managed to come out of it with an offering that still stands the test of time.
COVID-19 is another example of where we have had to transform the way we think and introduce protocols that we would have never imagined having to do. It has taught me above all that in the face of extreme adversity, be it financial, legal, or during a global pandemic, where there is perseverance, positivity, and kindness there is always a way through!
What platform/tools do you use for your business?🔗
We use Liverez which is our front-end website and then manages the connection between Airbnb and other booking platforms. It also assists us operationally by managing the property calendars in the background and cleaning schedules. It also generates our owner statements and helps us manage our trust accounting. Really, it touches most aspects of the business so is a key investment.
We also use Grasshopper for our client and guest communications which were a game-changer for us in helping us to separate our personal life from our business by allowing us to screen hours emergency calls professionally and effectively.
For our guest emails, we use Mailchimp and have used a graphic designer to help us with our communications and branding.
What have been the most influential books, podcasts, or other resources?🔗
I am embarrassed to say I am not a huge reader at the moment with 2 young kids life is pretty busy. The biggest resource for us that has been the most helpful is being part of a mastermind group where a bunch of owners of similar companies in different US cities gets together every month to exchange ideas, brainstorm, and innovate together, it has been amazing!
I have just started to listen to more podcasts and I am really enjoying some of the ones that focus on digital marketing and entrepreneurial space.
Advice for other entrepreneurs who want to get started or are just starting?🔗
Get ‘scrappy’, find the most basic version of your product or service or offering and test it out in the cheapest and fastest way possible. This way you can test your idea and refine it quickly and cheaply.
Figure out your business model early and make sure you have a profitable offering. It's all about the numbers, if they don’t stack up it’s never going to work!
If it seems really hard to get things off the ground, make sure you find someone who will listen and encourage you. Get the support you need to help you and back you. Your own negative thoughts can be your worst enemy! Anyone can start on their own, it doesn't matter how old you are, how much money you have, or what your background is. If you are truly passionate about your idea all you need is the determination to succeed!
Where can we go to learn more?🔗
If you have any questions or comments, drop a comment below!
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