At the annual Outer Banks Top Real Estate Agent Panel, this year’s topic was a little different. Usually we pick a subject geared towards better serving our clients, generating more sales or tools that make our businesses more efficient. This year’s topic was more personal - it was about us, it was about our own Outer Banks real estate investments, and how we use them to build wealth. After all, we advise our out-of-area buyer clients on how to use a vacation rental as a wealth building vehicle pretty much every day. One of the best ways we can counsel them on that is if we do it right along with them.
I was one of four panelists selected to provide insight, with the goal being to mastermind with our fellow realtors who are curious about dipping their own toe in the local investment waters. As is usually the case when you teach something, you get more out of it than you put in. And wow, my fellow panelists and the other investors in attendance taught me so much.
Here’s what I learned:
1. The Outer Banks has one of the highest ROI’s of any short term rental market across the country.
It’s not a secret that most Outer Banks home buyers are from the north east. I learned that my first year in real estate - Virginia, Pennsylvania, Maryland, New York, New Jersey, and Ohio are our biggest feeder markets. I’ve also known we were a popular target market for various investment groups because I’ve taken their phone calls and shown them homes. But I had no idea our market was SO good that we were among the best markets in the nation for return on investment.
Those of us that choose to live on the Outer Banks don’t do it for money. In fact, most professionals take a big income cut to live here. But we do it willingly because we love the lifestyle, the beaches and the community. What a bonus to learn that the place we chose to live because we loved it is also one of the most lucrative investment markets.
2. Guest experience is EVERYTHING.
A unanimous focus of the panelist investors was on providing a positive guest experience. Having a well maintained, clean home where the guest feels welcome and comfortable is essential to their vacation rental investment success. If you don’t want to stay there, neither will your guest, and that means a bad review and a non-repeat guest.
If you’re a prospective buyer and you go to a management company or a realtor to ask for counsel on what makes a successful vacation rental investment, or what to spend money on that will net you the most income, there will be a lot of focus on providing amenities like pool or hot tub. And that’s smart b/c adding those things can generate more income. But all that money you spend to add those amenities will be for nothing if the home isn’t well cleaned, if the coffee maker is broken or if the guest feels like the person they’re communicating with in your management company is rude. Having amenities won’t make up for bad guest experience.
There are a lot of homes for guests to choose from, if you want consistent good renters, your product needs to meet or exceed their expectations. Cutting corners with cleanliness, customer service or maintenance will put you at a disadvantage for income and for wear and tear on the home.
3. Be pet friendly
Every single realtor in that room with rental investments allows pets, even the guy who doesn’t personally like dogs said that they’re welcome in every single one of his rentals. One of the panelists, Ray Meiggs, even created a cozy doghouse space for his guests. I have 3 short term rental properties on the Outer Banks and each one is pet friendly with a fenced yard.
Now more than ever, dogs are a part of our family. We want to travel with them when we can, especially to the Outer Banks where they have miles of beaches to run and chase a ball. We also don’t want to have to pay a dog sitter when we don’t have to. Being pet friendly is now tied as the #1 amenity guests look for in a home, right up there with having a private pool.
4. Make the home a reflection of your own beach experience.
My fellow investor Natalie Painter also owns a property management company called Preserve. When she consults with owners, she advises them to make their home a reflection of their own Outer Banks experience. She says it keeps owners engaged and passionate about the home and will make for a unique positive guest experience. I thought that was brilliant.
Why do you love the Outer Banks? Do you like to surf? Make a surf-themed room, or add a surfboard rack for those that also surf. Same goes for fishing. If you love to fish, find great artwork that is fishing themed, add some rod holders, provide big white buckets for surf-fishing.
My friend and fellow-investor Beth has a few Outer Banks rental investments and each one pays homage to her dog Tucker. For her oceanside home, she called it Tucker’s Sandbox. For her westside home that has great mature trees around it, she called it Tucker’s Treehouse. She caters to other dog lovers, providing food and water bowls, a collapsible crate, etc so that guests don’t have to pack those things. She has a loyal following of renters who appreciate the thought she puts in to their guest experience because it means a better vacation for them.
5. Mindset first, investment second.
Learning how to control your brain and your emotions is essential for life in general, and especially for investing in real estate. Purchasing a home is one of the most important decisions you’ll make, so inherently it comes with stress and anxiety. But b/c it’s such an important decision, it requires a logical, rational brain. Being able to control and quiet your mind to think rationally and clearly when you’re in a high stakes decision takes patience and practice.
My friends and fellow investors Ken and Stacey Baittinger work constantly on mindset awareness. They start their mornings with gratitude and meditation, so that they can think clearly and rationally amidst the chaos and emotion that inherently comes with real estate sales and investing.
I’ve seen buyers and sellers make bad financial decisions because emotions got too heavily involved. Every single realtor has seen it. We’re also not immune to it. Emotion is powerful, it is motivating, it is what makes us human in the best way. It’s also the biggest enemy when it’s left unchecked.
6. Passion is the fuel for success.
I expected a room full of investors to talk more like accountants, where the focus is on math, income, expenses. Cutting costs to increase profit margins. Thinking of a home simply as another “front door,” where the more doors you have, the more wealth you generate, and to spend as little as possible on its upkeep.
That wasn’t the case with our local investors. AT ALL. They focused on providing a quality product and exceeding expectations, not on the bottom line. Not because they don’t want to make money, but because in order to get to that pile of money, they need to make people happy. That’s what we talked about: how to make money by making people happy. Which is the coolest thing in the world and why real estate investing on the Outer Banks is like a drug to me.
They were passionate. They took joy in the process. They treat an investment purchase in many ways like it’s their child, providing it with all the tools they can to ensure it’s future success. They have emotion in the best way, controlled by willpower, rational thought and a future financial goal.
The most refreshing part of the event was seeing the genuine love these investors have for finding, creating and providing a quality home so that vacationers have the best experience possible in this place we all love so much.
