When it comes to luxury short-term rental properties, Rachel Gainsbrugh offers an incredible amount of know-how, advice and support to anyone interested in learning more about this lucrative opportunity. She sat down with Jason Hartman recently for an episode of the Women Investing Network Podcast to share her expertise in this sector. She has been there and done it with her own portfolio of luxury properties and has found her niche in helping other busy professionals specialize in luxury real estate investing, teaching them the ins & outs of setting up their own luxury rentals, and managing other peoples’ short term rental portfolios as well.
With half of her rentals in vacation destinations and the other half in more suburban locations, Rachel is a proud self-manager of all her properties and uses technology and her own systems to effectively manage both. Rachel partners as a “co-host” with other investors who already have luxury short-term rentals or need help setting them up that way, in order to provide a personal and customized management service. With her systems already in place, she can easily deal with the tasks of guest communication, reservations, the cleaning team, and everything that goes into managing a short-term rental property.
Getting Started with Luxury Short-Term Rental Properties
Rachel is a healthcare professional and got started investing in her own backyard. Drowning in student debt and working endless hours each week, she was looking for ways to generate revenue outside of healthcare. She felt that fix & flip wasn’t going to be the best option for her, so in 2019, she bought a property that was almost turnkey and got started there. Having studied and consumed a lot of real estate content the prior year, Rachel knew exactly what she needed to do in order to set it up as a luxury short-term rental. She thought that her best chance was niching into the luxury market and not competing in the red ocean with everyone else.
Her next property was in the same neighborhood and as soon as she started using a dynamic pricing tool called Price Labs, it estimated she could rent the house at $28,000 for 30 days. Initially, Rachel thought it unlikely because the house was in a suburban area and not a “destination.” She used the dynamic price option and the house got booked that night for $28,000 for a 30 day stay. The following month, it was booked for 15k. The next two months brought in 21k and 22k respectively.
A New Guest Avatar in the Marketplace
Rachel attributes the success of these properties to a new guest avatar in the market which she absolutely loves: multi-generational, multi-families traveling with pets, children and teens. Within this avatar, you have about four or five paying family groups, and so for one week, each family unit is paying about $1,000 to $2,000 (depending on the season), which isn’t bad for a six bedroom home for seven nights.
Rachel has also found new guest avatars in the local film industry; film companies are looking for nice accomodations for their executive producers and she has also stumbled across insurance sector guests. Allstate and State Farm Insurance have repeatedly reached out to Rachel for homes that meet the standard of living of their clients who might need a temporary living situation, due to home renovations, etc.
The next area of opportunity that came to Rachel’s attention was the Pocono area of Pennsylvania. She really likes the five to eight bedroom home that can serve a larger family unit and split the nightly rate and her Pocono properties have been extremely successful, both in summer and during the winter ski season. With her self management systems in place, she effectively manages out of state and is even starting construction on a luxury rental in Rosemary Beach, Florida.
Curating the Luxury Guest Experience
Rachel’s best piece of advice for anyone looking to enter this investment space is to design your properties in a way that really speaks to your guests. When it comes to luxury, it is not only about the accumulation of things, it is really about the experience. The luxury travel guest wants you to curate an experience that is authentic and unique for them.
Watch the full interview with Jason Hartman and Rachel Gainsbrugh on YouTube or listen on the Women Investing Network Podcast to hear more about Rachel’s short-term luxury rental portfolio, how to identify and evaluate the best markets to invest in today, her thoughts on HOAs, her upcoming TV deal and to learn more about this exciting opportunity!
