The Co-Host Model That Built a 130-Property STR Empire

0:00I wanted to work on my business. I didn't want to work in it. And so I straight away was like, "Right, I need a team. I can't do this on my own." actually, no, sorry, I'm lying to you. Let me let me back this up a bit. That occurred when I had made 17 beds in a in a row. So, I firstly I was like after I got my first client, the next ones came on fairly quickly and I was like, I can do this. I can do this on my own. Well, I couldn't. And it was the the day that I made 17 beds in a row and I went home and I went, "This is crap." Like, who's you were cleaning?

0:34You were cleaning the properties, too. I'm terrible at Kirby. I am the worst cleaner in the world. But I was cleaning. I was setting these properties up. I was doing everything to start with. And this is going to resonate with a lot of listeners right now who are probably out there listening to this podcast while they're cleaning right now or answering guest communications. Because it's very hard to trust in others and to delegate to others. I thought I knew it all. No one's going to do it better than me. So here I am doing all the cleaning. I at the end of that day there were two options.

1:09I was either going to give it all away and go and find a job. Or I needed help. And so very fortunately, the next day I found I sat down with a gentleman that I had been selling advertising with, Glenn, who's 70 years old. Glenn said to me, "I don't want to stop work." He had been told he had to retire from his job. I don't want to stop work. I want to keep earning an income. I want to do it on my own terms, and I want to be my own boss. And I said, "Well, have you got a mop, a bucket, a smartphone, and a vehicle?" Yes.

1:43Yes. Yes. And I said, "Here's 10 properties and I want you to look after all the guest facing you day-to-day tasks. I want you to do the communication on the app. Meet the people when they arrive." So yes, we were doing personal check-ins at that stage. This is 2016 to 2019. No smart locks. Like how the industry has changed. So, he's doing the check-ins, he's doing the the cleans, he's doing the laundry, but he's also knows that property inside out so that if there is a broken wine glass, he's the first to notice it.

2:21And so, he took over those 10 properties and it was like a little franchise model that I'd set up. So, to run the numbers for your listeners, I was charging 25% commission as a property manager, keeping that cleaning fee. Glenn, my first co-host that came on in my model, my structure was being paid 6% commission plus the cleaning fee, the whole cleaning fee. So for him, he was able to have a piece of the pie. He had ownership. He was loyal.

2:53His KPIs, the key performance indicators that I set for him were just based purely on the review system of Airbnb. So I said to him, "We need 4.8 stars and higher. If you drop below that, I will get you some more training, but otherwise, you stay above that and you show me capacity that you can take on more and I'm going to go and get more properties and give them to you. And so, while he was looking after the day-to-day operations, I was able to go off and look after the part of the business that I knew best, and that was marketing, acquiring new properties, onboarding those properties, and dealing with homeowners.

3:31And, and that's kind of how it started. So, we ended up having 14 Glenn's that were co-hosts and it was like it's like a business in a box. I was I was basically able to you know delegate a number of properties to that co-host. They looked after the guest facing tasks and they got a piece of the pie and so they were encouraging people to stay longer because they knew that they'd make more money. They were able to you know offer upsells which I then did some splits with and the upsells were tours and travel and experiences which I see Mr.

4:08Chesy has now rolled in under Airbnb again. So but it really worked Kirby and that with that structure I simply was able to scale to 130 properties within 3 years really easily actually. So by just putting on more co-hosts. That is amazing. That is amazing. And again, another example of a win-win. You know, you set it up with Glenn. He's probably had no interest in trying to market and create this from scratch, but you hand him, like you said, a business in a box, which, you know, he's got time on his hands.

4:43He has the skill set to do it. The incentives were aligned. I think that's so huge, too. It's not like you're paying them hourly. You know, very motivated to to try to increase revenue, which helps you and helps the owner. I just I love it as you explain that. What What were some of the challenges that came up? I'm sure there was there were challenges with some of the Glenns that you started working with. What did you learn or advice that you'd have for others who might want to start using this type of model? Sure.

5:14I'm going to tell you a funny story. It's a bit of a rude story, so you if you're precious, you need to block your ears right now. But Glenn, so he was my first co-host. And then I started putting on extra co-hosts. And I thought, well, who better to train them than the person that's already knows what he's doing, Glenn. And he was a much better cleaner than I was. But he I remember one day we put two young backpackers. They u were early 20s, gorgeous girls. We said, "Go out with Glenn, learn the ropes, learn learn everything that he does." And of course, he showed them how to clean the property.

5:50But Glenn decides that, well, in Glenn's world, he cleans the bathrooms last and he cleans the showers last. He cleans the showers naked. So, these poor girls, that's amazing, got the full frontal and didn't know what to do with themselves. Needless to say, they didn't work out. They decided that it wasn't the right role for them. But it certainly taught me a thing or two that I can't just I've got to actually keep training people or not assume that they are going to they clean clothes on.

6:28Yeah. So that was one of the the little you know learnings for me. But, you know, everything from learning, you know, what to do with laundry, like we we used every different trick in the book that, you know, we did the laundry ourselves, turned our houses into Chinese laundry, we would say, with sheets hanging everywhere. I think my husband learned how to fold a fitted sheet pretty quickly. But we did that. We took we outsourced. We went to laundromats. We did I think we made every mistake in the book in trying to figure out the right way to do things.

7:05And I think now if you're listening at this to this podcast and you're thinking, I want to scale my business. I want to turn my hobby into a business. Can I just say how lucky you are that you've got people like Kirby, you've got myself, you've got others in the industry who are willing to share the strategies and the structure and the techniques, the tasks that we have done, tried and tested already so you don't have to reinvent the wheel. And I think that's really important that now if you're looking to get into this industry, it's a lot easier than it was way back then when we had nothing to go from.

7:42There were no YouTube channels. There when there's no free training at least now you know people can listen to a podcast and go okay what should I do with revenue management or folding fitted sheets so yeah do do you recommend that strategy today or do you think you know using like VAS or something like that would be a better strategy what what's your thoughts on that yeah look if I was to start again today I often ask myself this what would I do?

8:14And I would probably put that same structure in place that I had with the co-hosts. However, the one mistake that I made and I would change it now is that I was giving Glenn 10 properties to look after 24/7. He was so like you said he didn't have the business brain or you know the co-hosts were coming in with not the foresight to start up a business themselves but they were very grateful to receive this business in a box. So he had 10 properties to look after and he was hungry for the money.

8:47He was hungry he didn't want to he didn't want to stop working. So unfortunately he probably slept with his phone. He didn't have a break. Now, in hindsight, I should have put on virtual assistants or some sort of now we've got AI messaging like Host Buddy AI. I love those guys at the moment. They're probably one of my favorite companies in the space. But I would have put someone like that into into the situation. So, so that from say 6:00 at night till 10:00 the next morning, Glenn didn't have to answer any guest communications.

9:22It was something that, yeah, looking back now, I probably was, it was probably a bit of burnout that was caused by in with some of the co-hosts because I was so excited to be in this business and they so excited to earn money that they didn't want to miss a phone call or a a message from the guest. Yeah. Yeah. And I I see that a lot with hosts just in general that like they start off and it works really great. They're like, "We got to scale this." and then they scale it and all of a sudden like they hit that point where it's like they never get a second to to do anything else and so it's it's almost like they're forced into the point of leaning into to help at some point.

10:07What was it for you then as you scaled this so quickly and it was working? What was sort of the lynch pin? Like why why were you I mean obviously you ended up selling your your business. What was the the reason for that? Why not just continue to grow it? Was there a a a point where it was like too big or I could say it was just really good psychic ability knowing that co was about to come two months later but it wasn't. I mean the timing was im you know impeccable.

10:40It was the end of 2019. I get this knock on the door from these guys saying, "We want to buy your business." Now, my initial reaction was, "No, don't touch it. It's my baby. I've grown this, you know, into what it is." But I was 3 and a half years in and I had written Million-Dollar Host, which I've strategically placed behind me as a, you know, self-promotion. Million-dollar host had gone bestseller around the world and I was starting to get invitations like from Airbnb and Brian Chesy to go and visit their offices or fly across to speak at an international conference.

11:18So, I was getting all these really exciting opportunities and I realized I had I had to take a really good hard look at what I wanted out of life. And this is something that I remind people that I coach over and over again is to re-evaluate and reassess where you're sitting either with your partner or yourself on a regular basis. What are your likes? What are your dislikes? What gives you energy? What drains you of energy? And I realized that my passion had changed.

11:49My passion for speaking with homeowners, speaking with guests, maybe had deteriorated, whereas my love for educating and really helping other people recreate the the success that I've seen in short-term rentals, that had really gone up. And I was getting my excitement and my joy out of seeing other people succeed. And so education really was the shining light. So the book had gone bestseller.

12:21These opportunities came up. But I'm going to also be really honest and I don't mention this a lot on any other podcasts. Stress is not my friend. I already mentioned to you that stress in a corporate setting burnt me out a few years earlier. Now, the stress of knowing that you've got 130 properties and you know anywhere from maybe 4 to 500 people per night that are staying in Julie's property. That stressed me out even though I had a really good team and I had a really good really good structure and systems and you know it was at the stage where I was only working 10 hours a week.

13:02So I would turn up to the office and the girls at the office would say stop. What are you doing? Don't touch anything. Because they knew that they knew my b business better than I did. But I always had in the back of my head four to 500 people. I'm responsible for 4 to 500 people. And that stress probably gave me the the push that I needed to say, "Okay, I'm going to sign off, sell my business." But I was very, very, very fussy about who I was selling to. I wanted to make sure that the new owners were going to retain that structure that I'd set up, look after Glenn and his naked shower cleaning, whatever he wants to do.

13:42But I wanted to make sure that my staff were looked after, my homeowners, there was no no changes really for them and that people still thought they were staying at Julie's property. So, they still to this day have to log in to Airbnb into my account with my birthday. So, it's a wonder I don't get birthday cards from these new owners every year. But, but I just it was it was something that I thought, right, it's the right fit. The adoptive parents can have the baby that I built and I can go off and help start educating people and create masterminds and retreats and write more books and so that was the the reason for selling.

14:22Wow. Yeah, that's that's really interesting. I I appreciate that insight and the honesty there. I it's funny cuz I I have been approached to manage other people's Airbnbs quite a bit. And it was something I considered for a while, but I think different personality types are very different. And I had to really do some introspection around like what is it that gets me excited? And also why did I get in this in the first place? And it was to not have bosses. And I'm the type very similarly that if if I have if I'm managing on them four other people, I feel like they're the boss and I'm like have to get every detail perfect and they're looking over my shoulder all the time.

15:03And so I can imagine how stressful that would be with 130 130 bosses looking over your shoulder. So actually just on that though, Kirby, I think that micromanagement that you feel if you're in property management and you're listening in right now, it is real. Like that micromanagement is real, but you have got the power to to put some boundaries in place and to re and this is something that it took me about probably two years to learn was that I could set boundaries. I could make sure that when I'm onboarding a property that I say to that homeowner, I am only available between these hours of the day.

15:43I'll ring you. You don't have to ring me. You just need and it was a reassurance thing as well. You just sit back, relax, and at every month I'm going to send you a big fat check. I didn't make any promises on how fat that check was, but I I learned very quickly that it's okay to say no to homeowners as well. If a homeowner is micromanaging you, I really took pleasure in saying, "I think you should self-manage." And at the end of the day, fire those homeowners. So, you know, if they're taking up too much of your time, they're probably not worth it.

16:16No matter how amazing their properties are. Yeah, absolutely. So, so when these people knocked on your door, how did you evaluate what the business was worth at that point if you weren't pursuing it? What did that look like? That was probably the hardest thing ever because there the in 2019 there there was not a lot of history of other people selling short-term rental companies. Unlike now where there is a a valuation you know you can work out on your yearly profit or management fees.

16:52There's a multiplier of about 2.5 to three I think at the moment depending where you are in the world and also depending on what sort of business you've got set up. So, please know that I'm I'm throwing these figures out there, but it is really something that you need to get a a proper valuation on depending on your software and what your contracts are like, but when somebody came and knocked on my door, I had no idea. I I was, you know, dear in headlights, I'm not sure. And so we that negotiation went back and forth.

17:23Now, unfortunately, I can't divulge the amount that I sold for, but it was enough to never have to work again. It was the ultimate payday, but it was but it was really it was an interesting way that they they approached it, too. And I'll just let you know that with the sale of my business, they gave me about 75% of the the funds on settlement day, but then we had an earnout period, so I had to continue working for that company. I got a salary to continue working as their manager, but I worked for them for another three, four months, I think it was, to continue to earn whatever money was coming in.

18:04We just went 50/50 and then until I got to the the period that I had earned out, sorry, I collected the full amount, but then they also very cleverly, this company gave me shares in their company. So I am now a major shareholder of a company called Home Time in Australia and very very smart because that meant that I didn't I want well I didn't ever want to but I was not going to go and start a business in opposition. So that anti-competition clause that was already in there was really strong and I was always going to refer business to them.

18:42So that was really very smart and you know if you're listening in right now you're thinking of selling or purchasing a a portfolio yeah just think about you know what options how can you structure the deal to make sure that you know that it might work for be a win-win for both parties.