Airbnb Updates 2025: Pivot Strategies for Investors & Hosts

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In this episode of the Real Estate Pros Podcast, host Kristen Knapp interviews Karl Denton, owner of JKD Properties, about his journey in real estate, focusing on long-term, short-term, and midterm rentals. Karl shares insights on managing his real estate investments while working as a full-time fireman, the challenges of his first deal, and the evolution of his rental strategy, including the transition to midterm rentals and the importance of design in attracting tenants. He also discusses market trends, the impact of regulations on short-term rentals, and his future plans to explore the boutique hotel industry.

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Karl Denton (00:00)
Yeah, so it’s tough, right? There’s always constantly changes happening and I think everyone needs to be ready for, you know, to be able to pivot when needed. So like for us, we make sure that when we go into these units that we’re making in a short term rentals, that we can pivot to something else. Like we recently rehabbed and turned into a short term rental, our first big large single family. It’s a four bed, two bath, and it’s just fully an Airbnb right now. But our pivot would be

to either execute a sale because we’ve added the value in it, or we can just rent that out as long-term housing. We also can do room-by-room rental in that area as well. So there’s a lot of different pivot points that we make sure before we open these places up that we can do in that market. So we kind of want to always have three exit strategies is usually what we

Kristen Knapp (02:21)
Welcome back to the Real Estate Pros Podcast. I’m Kristen and I’m here with Karl Denton, is the owner of JKD Properties functioning out of Connecticut. We’re going to talk a little bit about long-term rentals, short-term rentals, and everything in between, midterm rentals too. So thank you so much for being here, Karl.

Karl Denton (02:34)
Yeah, thanks for having me. Happy to be here.

Kristen Knapp (02:36)
Yeah, so you’ve built this great portfolio with JKD, but let’s go to the beginning. How did you get started in real estate? How’d you fall in love with it?

Karl Denton (02:44)
Sure, yeah. So I’m actually a full-time fireman in Connecticut here. in 2019, I started getting interested. And ⁓ in 2020, I found the Bigger Pockets Forum, just kind of joined, was able to ask questions and kind of network with people, started going to some networking meetup events even before having a property. And then in February of 2021, we closed our first three family house.

⁓ That’s kind of how we got our first start.

Kristen Knapp (03:10)
That’s amazing. And so you’re still working full time with the fire department. Like how has this been kind of managing both?

Karl Denton (03:16)
Yeah, so we have a nice schedule at work. we right now we work like four days on four days off. So with that schedule, it allows me to have some free time to, you know, lot of guys will have second jobs or run their own companies. For me, I wanted to do something that was investing for the future and creating the life I want now and not having to wait to retirement for that. So I found real estate and kind of knew that that was an avenue. I just didn’t know how to manage it. And so by learning and

reading and going to these networking events, kind of figured out enough to know how to close my first deal. And yeah, from then, from there, we just started to scale up.

Kristen Knapp (03:55)
And how did that first deal feel? I imagine it’s probably scary to jump in, especially when it’s a brand new industry for you.

Karl Denton (04:02)
Yeah, for sure. Like we really didn’t know what we were doing. We had done a bigger loan to start off with and kind of dumped a lot of our life savings into it. And we didn’t really, you know, we just, I knew I was just going to do what I had to do to make it work and figure it out. And so ⁓ from there, the first year was, was a lot like we had to figure out how to build systems, how to onboard tenants. had to deal with current tenants that we took in that we had to raise their rents.

You know, we had a tenant that needed to exit their lease early because they got injured, you know, outside of our property. And thank God. So, you know, but there was a lot we had to learn. through that, we had accidentally fell into midterm housing. was kind of our next step because we had renovated one of the units and that was our first renovation. It was all sweat equity, me, my wife, and some help from friends and family. And so.

After we renovated that, the tenant pool just after COVID was huge. And we just were overwhelmed with trying to onboard the right tenant to meet the requirements that we wanted because a lot of them fell short. And so then we had gotten a phone call from a traveling nurse out of Houston, Texas. And I was just learning about traveling nurses that same week. And so it all just kind of fell together really quick. Like, you know, it almost seemed like, this a scam? But he was like, I’ll pay in full and I’m going to come.

Kristen Knapp (05:59)
for

Karl Denton (06:07)
And I’m like, the apartment’s empty. Like there’s no furniture. And he’s like, that’s fine. I’m going to sleep on the floor in a sleeping bag. And I was like, this cannot be real. But it was. I picked him up from the airport. was pretty funny how it all fell together. But yeah.

Kristen Knapp (06:17)
Yeah, I mean, I actually hear that a lot about traveling nurses. It’s just a great industry to support the midterm rentals. Can you talk more about that?

Karl Denton (06:25)
Yeah, so that was when we first started getting into midterm rentals. So, you know, he said that he’d pay higher than what we wanted for monthly, because it was going to be short term. It was about a three month contract. And it seems to be that’s typically what they come on as three month contracts with the option to extend. And so he came up and we learned a lot more from him. We linked up with some local hospitals and we listed on Furnish Finder, which is a platform that they use for traveling nurses, traveling corporate

professionals and things like that. So when listing on there, we had gotten more leads after that traveling nurse to get more traveling nurses and place them in this unit. And so we had used that for a couple more months after that. But then towards the winter time, we went to fill a gap on Airbnb because we actually weren’t getting any leads coming in. And it was my first year doing this. I wasn’t sure if maybe traveling nurses don’t travel during the holiday season because they go home to their families. I had no clue.

So we ended up filling a gap on Airbnb during that time. And then we just kept filling on Airbnb. And I was kind of like, uh-oh, like, was this the right move? But then it kept filling up and the nightly rates were higher. And then that next year we figured out how to structure it and actually pushed the nightly rates. And it made more sense to kind of do what we’re doing now. And we still discount for midterm. But we’ve substantially pushed the rate on midterm because we’ve kind of found our worth and figured out what everyone else is doing in the area and what they’re providing and found for providing a greater value. we’ve.

been priced as such to reflect that.

Kristen Knapp (07:50)
Yeah, that’s amazing. And I feel like with short-term rentals, it is all about the area. It’s really, I feel like that’s a very challenging part of it. So can you talk about how, like what kind of area are you in with this short-term rental? Why do you think it’s working? Why, you know, why are you guys staying busy?

Karl Denton (08:06)
Yeah, so we have a really nice building, but it’s most definitely in a like C class area It is it is downtown it is It’s very not your B class or a class area to say the least so but our place looks like an a class So that’s that’s that’s what keeps guests happy We actually have like lighting and everything outside to make it safe, and it’s all well kept but yeah, there’s some things that can happen on the streets and

and in that area, just like any downtown. ⁓ But I think the most important part for these guests that are coming here is that the place is designed nice. It feels comfy. It feels like home. It’s safe. We’ve never had any problems there because of how we run our place and have exterior lighting and everything so no one ever bothers anyone. And we’re priced accordingly for that area as well, but ⁓ there’s not a lot of people that are doing what we’re doing in our area.

the way we’re doing it. Like it’s not well designed. They don’t have as many amenities inside, like a fully loaded stock kitchen with everything that they could possibly want. So we found a lot of those things go a long way. And from being in sales previously for a little bit in college, I’ve kind of just learned to ask the customer, you know, or the guest in this, in this case of like, what’s most important for them to have for their stay.

And some of these people have had some requests where they’re like, I would love to have a hand mixer to bake cookies, right? And that’s something we didn’t have, but we would just buy it and put it in the unit because A, it’s adding to the unit and B, it makes the guests happy. And we’re going to gang a five star review off that, right? So we’ve started doing things like that, which I think makes the guests feel like it’s more personal to them. And it also makes sure that we have everything that they need. So we’re not scrambling to try to get it when they get there and they realize, I really needed this kind of coffee machine or this air fryer or whatnot that we didn’t have.

But in that area, I think that the downtown keeps us placed in between a local hospital and it keeps us very close to the highways that get you into about like 10 minutes into the major capital where there are other bigger hospitals and a lot of traveling professionals that may go either direction to the big hospitals or the smaller community hospitals. So it’s kind of right in the middle, which is helpful for our clients.

Kristen Knapp (10:44)
Yeah, that’s amazing. And I love what you touched on with providing the amenities because how simple is it to just buy a hand mixer, but it does provide so much value to the people renting your unit. I would love for you to go into more of that and kind of how, because I know that design is where you guys really stand out. I would love for you to talk about what kind of design choices you make that you feel really have a good return.

Karl Denton (11:07)
Yeah, so when we first started out, we had, we were very simple design. In fact, when we first started out, a little funny side story that with when we went to furnish the midterm, actually furnished it while our first guest was there because he had came and just said that he was going to sleep on a sleeping bag. And I figured if this, if this is going to work, we might as well furnish it, but maybe we shouldn’t spend thousands of dollars on furnishings. If we don’t know it’s going to truly work. we just furnished it enough to make it comfortable.

And we did that because one of the local colleges was actually going out of into the summertime. And so all the kids were leaving. And so they were getting rid of like all the furnishings and we were buying some of the good furnishings from them off Facebook marketplace. But then we went to the college and realized a lot of these things just throwing out these giant roll off dumpsters. It’s perfectly good stuff. So we actually went dumpster diving, which was crazy and got a lot of these good things, cleaned them all up. The guest who was there, who was staying with us from Houston even helped.

cleaned it all up, he was happy enough to get a bed, mattress, all this stuff. And obviously, those kind of furnishings we purchased, a lot of the hard stuff like the coffee tables and the lamps and things like that, we ended up getting basically used secondhand from lot of these college kids that didn’t have room to bring a lot of this stuff home, like pots and pans sets we ended up getting, and we ended up washing and everything. So it was pretty funny. So from furnishing it to that, we had listed on Furnished Finder. Going to Airbnb, we knew we needed to up our game a little bit.

⁓ And so we had going to these local networking events. We linked up with some interior designers and that was their specialty. So I was like, Hey, can you help us redesign maybe just the living room so that it takes pictures well, and then we can use those pictures for our listing so that it really pops in the photos on Airbnb. Cause that’s really important on the Airbnb side that you pop in the photos versus furnish finder. You just have to be affordable and have the amenities that these people want for traveling nurses. So they redesigned the whole living room.

And we had like put pictures on the wall, put a nice rug and everything kind of tied together. So as far as the designs go, we just leave that up to the professionals. They go on, they tell us what to buy on Amazon and they give us a whole layout of how to put it. And really what ties a lot of it together was just like how the colors work with the carpet and the couch. And, you know, we had a really small space. So the coffee table, the top of it actually like lifts up on these little two hydraulics and hinges.

so that it’s also like a, you can eat there as well. Cause there’s no dining table in these one bedroom apartments are very like studio-ish. So that was, that was a nice touch. And then they were able to even build like a little reading nook in the corner. And by putting the pictures on the wall and one of the ideas they had was they had the TV on the night, or not a nightstand, but on the entertainment table and they put frames around the actual TV. So the TV, if you look at it, it ends up looking like a picture on the wall almost cause the way it’s.

arrange the photos around it. was like things like that that really helped to keep the space small but mighty and really like look well designed and actually be a good use for the guests where they could have a reading nook in a little living room and a place to eat right in front of the TV all in the same space as well as like if they were working from home really comfortable space to work in. So we noticed bookings just from that design of that room nearly doubled.

Kristen Knapp (14:57)
Wow.

Karl Denton (14:57)
And

we realized the importance of having design and tying things together and spending some money on a little higher end furnishings and things like that. And that was our experimental unit. then from then, our second unit we opened up was in that same building on the top floor. And we actually pushed the envelope with a lot of more luxury finishes. And we found that even by doing that, we were able to push.

We’re able to push pricing and everything according with that. And that’s actually booked more expensive than that other middle unit. And the middle unit, try to cater a little cheaper anyways for the midterm travelers is it’s a comfort unit. And we didn’t have to fully gut and redo that one, but we chose to do that to the next one and found the returns even more. So there’s a lot of value in the design and amenities and whatnot within the unit.

Kristen Knapp (15:42)
Wow, I think you touched on so many interesting things there. mean, starting out when you guys were essentially getting the secondhand furnishings, I mean, that’s a really scrappy, good way to kind of go about it because even when you’re just trying to make it livable, not going above and beyond, that’s still a lot of furniture and that’s still a lot of stuff.

Karl Denton (16:01)
It is. Yeah.

Kristen Knapp (16:03)
So I mean I feel like that and like Facebook marketplace up like all those places are great ways to kind of furnish on a budget But I also love how you know now that you guys are really taking the design very like at the forefront of what you’re doing kind of making the spaces very livable and homey and Dual purposes like making a small space really, you know bang for your buck

I think that’s a really, really fascinating piece to call out for sure. So, you know, with short-term listings, I feel like there’s so much information being thrown around in so many different areas. I think that there’s threats to Airbnb and threats to, you know, Verbo and all these other places. What’s your outlook on the short-term market right now and where do you see things going?

Karl Denton (16:49)
Yeah, so it’s tough, right? There’s always constantly changes happening and I think everyone needs to be ready for, you know, to be able to pivot when needed. So like for us, we make sure that when we go into these units that we’re making in a short term rentals, that we can pivot to something else. Like we recently rehabbed and turned into a short term rental, our first big large single family. It’s a four bed, two bath, and it’s just fully an Airbnb right now. But our pivot would be

to either execute a sale because we’ve added the value in it, or we can just rent that out as long-term housing. We also can do room-by-room rental in that area as well. So there’s a lot of different pivot points that we make sure before we open these places up that we can do in that market. So we kind of want to always have three exit strategies is usually what we

But as far as like the regulations go,

You want to make sure that if you’re buying in a new market that there is regulation because you risk having no regulation by them then creating the regulation after you bought the property in that area, right? So that’s the risk. So you have to judge your risk versus reward if there’s no regulation, but there’s a big reward like a lake house for a really good deal. I mean, it’s still a lake house. So maybe, you know, buy it.

and try to Airbnb it, but if they come down and say you can’t Airbnb or the HOA maybe that you have on it and a place says you can’t Airbnb, right? If that’s gonna ruin your deal, you need to make sure you have two different other exit strategies. I would just be mindful of that going into new markets and areas you’re unfamiliar with and always to call your local town and zoning and see kind of what they have to say. Cause some places say, Hey, we charge $150 a listing every year. And like,

You want to see that though, because they’ve already established regulation, which means they’re probably not going to reestablish or change that regulation anytime soon, as long as there hasn’t been any issues with it. Other places have regulations that say Airbnbs are not allowed, but they aren’t enforcing it until a local neighbor has an issue with your Airbnb. like there’s some gray area, but really we like to tell people if you’re looking at new markets, go somewhere where there’s regulation, because you’re probably safer.

But I know Airbnb recently is also trying to combat a lot of direct bookings. So like, you know, I used to always tell people on myself, I’m starting to set up a direct booking website, you know, where your repeat guests can go to direct book and you can try to also using SEO optimizing, get people to book there first before going to Airbnb or maybe seeing your listing on Airbnb and typing some keywords that you have in your listing on Google and then finding the result that you have a direct booking site and they can book there for cheaper.

So as of recent, Airbnb saw that everyone was going over to these third party, what they call PMS, which is the property management software. so Airbnb is essentially rolling out now to punish these people earlier than they’re going to punish the rest of everyone. But Airbnb is restructuring to go to advertise probably that they have no fees. And so what they’re doing is they’re taking the fees they normally have charged and throwing it back to us hosts. And they’re saying, hey, it’s only going to be a 15.5 % increase.

just increase your nightly rate 15.5%, right? So if you’re at $100, you’re gonna be at $115.50, right? you know, it’s because of the property management softwares that are hosting these direct booking websites, and that’s actually killing, I think, revenue for Airbnb. So as a company, they unfortunately have to come back and try to stay alive here because they’re realizing that if they don’t do anything,

year over year, the revenue is probably going to go down as people establish these direct booking websites, taking money off platform. So it’s a hard place to be in between, but basically like have a direct booking website because it doesn’t really cost too much to establish that. And at least repeat guests can come back through there. ⁓ just know that you’re going to have to, you can still offer a discount, but Airbnb is going to go.

Kristen Knapp (20:39)
Great.

Karl Denton (20:46)
away from having fees. So everyone’s going to be like, well, why would I go through direct booking if Airbnb is going to protect me and they don’t have any fees, right? Because now the host is going to pay those fees. I imagine VRBO and other platforms that haven’t rolled anything out like that are going to follow suit within the next year. So that’s something new to look and know going into Airbnb that they’re now rolling those fees onto the host. So you’re going to have to charge more for your nightly rate and it’s going to be harder for you.

to get direct bookings possibly because you can no longer say save the Airbnb fees because they’re going to advertise there is no fees, but there are, they’re just on the host. So I think those are some of the changes and things we look at when going and opening a new Airbnb in a new market, it’s the regulations and now that’s just the local news and what’s happening on the platform itself and things that they’re going to be changing because things are always changing, but they are sometimes for the better and they’re sometimes for the worse.

Kristen Knapp (21:20)
right?

Karl Denton (21:39)
You know, they’ve added things to the platform that you can create more experiences and services at your place to generate more revenue. But they’ve also now are throwing all the fees onto the host. So now we have to figure out in our business what to do, which is simply going to be up the nightly fee, you know, and go from there.

Kristen Knapp (21:55)
Yeah, I mean that’s such good information for people and it’s a lot of stuff I wouldn’t have thought about like the fees on the other end and also if there’s not regulations in the city to be a little wary that maybe they’re coming. ⁓

Karl Denton (22:08)
Yeah.

Kristen Knapp (22:09)
Robin, such great information. We’re coming kind of to the end of our time, but to wrap it up, I would love for you to talk about kind of the future of what you see your next step being. Because I know we talked a little bit about the boutique hotel industry and how that could be a really ⁓ promising industry in the short term game.

Karl Denton (22:26)
Yeah, so we’re currently just looking at the top of the surface of that. We recently have had that on our horizon, but it’s looking more and more like it might be in our three-year plan to close on something like that. Probably something that’s like $5 million and under, probably $40 and under.

Kristen Knapp (22:39)
Right.

Karl Denton (22:45)
You know, we just don’t know what market yet. We’re to look at some of our local markets that are near the beach area and whatnot, because those do perform well during the summer months. ⁓ And then we can discount it during the off season. So we’re kind of looking, we’re going to look at those first, because those are in our backyard here. And then, you know, if we can get some local deals and meet some of the owners that might be older, willing to sell or sell or finance, that’s the goal with a lot of those. ⁓ But yeah, the reason.

that got me looking into that is because the regulation, the Airbnb changes, there’s just a lot that they have control over kind of how you run your business. But when you kind of break the mold out of that and you go into the boutique hotel space, turns in almost to a commercial, right? So you’re actually running a hotel. You’re just running a hotel much nicer than a regular hotel where you have higher design, amenities, experiences in those places. And so,

That’s kind of why we’re looking at them because then if there’s regulation or they change regulation on a lot of the Airbnb’s, especially the residential, it doesn’t really affect you as a large boutique hotel because you’re a commercial hotel. Same thing with Airbnb regulations. That doesn’t really affect you as much. You may utilize the platform to host on and Airbnb actually caters more to hotels because they want to keep the hotels happy because the hotels obviously were probably upset when Airbnb came out.

So they actually get discounted fees and whatnot being a hotel. I don’t know if that applies for boutique hotels, but I do know that applies for a lot of the bigger name hotels that list on Airbnb. And people wonder why they’re on Airbnb. It’s because Airbnb, to keep them happy is saying, hey, we’ll give you some perks being a hotel and you can list in our platform type thing to continue getting more business. But that’s kind of why we’re looking at boutique hotels. And we just want to scale larger. And we think that we’ve done a good job so far in.

crawling out of the long-term renters hole to scaling our portfolio to produce a lot more than a typical rental would. And so, you know, the next step for us is probably to get one more of these, which are closed before the end of this year, hopefully, and probably be a three-family. We’ll do some more listings in that one of the areas that performs highly for us. And then after that, we’re going to be looking at boutique hotels, how to structure it, how to find the deals, how to find the sellers and…

get it seller financed and we’ll probably have to have a couple partners in that for sure. usually it’s, know, the initial funding is backed by investors that come into the deal. And so with that game, it’s not so much get buying it for the cashflow, it’s buying it for the appreciation, right? So it’s the five year plan. Once you purchase it after five years, your investors who invested in it will get paid out. And usually that money’s for the renovations and the what.

the add value in those units that have to be done to get it up and running as a boutique hotel because you’re usually taking it over as a failing motel or just a regular hotel that’s ran by like mom pop has been running the same way for years you

Kristen Knapp (25:31)
Yeah, mean, great information and I think that that’s a really good outlook on kind of the future of this and how you can have a safe bet in the short-term space. Well, this has been really great, really insightful. Thank you so much for sharing so much with us. ⁓ Tell people where they can find you.

Karl Denton (25:46)
Yeah, absolutely. Thanks for having me.

Yeah, so typically you can find me on my Instagram, which is stashtocache. S-T-A-C-H-E, to cache. And ⁓ that’s typically where I post everything on my stories on there. People can connect and message me on there. I am also on the BiggerPockets forums and I have a profile on there, so you can find me with my name, Karl Denton on there. Those are pretty much two ways to get in contact with me there.

Kristen Knapp (26:15)
Amazing. I love Stash to Cash. That’s very clever. ⁓ thank you so much for your curl. And thank you everybody for listening. We hope you learned a lot and I will see you back next time. Bye.

Karl Denton (26:19)
Yeah, thank you. All right, yeah, thanks for having me.

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Airbnb Updates 2025: Pivot Strategies for Investors & Hosts

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