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In this episode of the Real Estate Pros podcast, host Erika chats with Kenny Bedwell, a successful investor in the short-term rental market. Kenny shares his journey from a corporate job to real estate investing, emphasizing the importance of diversification and understanding market dynamics. He discusses the creation of his company, STR Insights, which helps investors find viable markets and properties. Kenny also highlights common pitfalls in real estate investment and the significance of enhancing guest experiences to ensure success in the short-term rental business.
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Kenny Bedwell (00:00)
And I actually found a property. I’ll share some numbers. bought it. This is, I bought the first one using my software officially at the beginning of 2022. And I bought it for $350,000. And every year, so the past two years I have generated, I’ve grossed.⁓ $140,000 to $150,000 a year gross. net $80,000 a year on that property. So that’s a 350K purchase. I net 80K a year on a property like that.
Erika (02:03)
Hey everyone, welcome to the Real Estate Pros podcast. I’m your host, Erika, and today I’m excited to be chatting with Kenny Bedwell. He’s been shaking things up in the short-term rental space, and he has an awesome company called STR Insights. Kenny, I’m glad to have you here.Kenny Bedwell (02:22)
Thanks, thanks for having me on Erika. Super excited to be here.Erika (02:25)
I think our listeners are really going to have a lot to take away with what you’re doing in the rental space. So, you let’s dive on in. First, Kenny, can you share with our listeners what drove you to get interested in real estate? What was that like?Kenny Bedwell (02:41)
Yeah, for sure. So I started investing in 2017. I was actually doing a corporate job at the time at Citibank and I wanted to invest in, just get outside of just normal stocks and bonds. That’s what I worked in day to day. Oh, I’ve got a visitor with me all of a sudden. The kind of the joys of real estate, I’ve got a toddler with me. So anyway, she’s gonna join me for a second.But so in 2017, I started investing in real estate because I wanted to get outside of just stocks and bonds and the equities world that I was in ⁓ in the day to day.
Erika (03:20)
Yeah, what was that transition like? Was it smooth? Was it bumpy? Did you go all in?Kenny Bedwell (03:27)
Yeah, yeah, that’s a great question. ⁓ I first, I’m very conservative. I am ⁓ not super big into, you know, just jumping all in without knowing. And so I bought, actually bought a duplex and I house hacked in one side, meaning I lived in one side and rented out the other side. And I decided to do it on Airbnb because somebody told me that I could make more money doing that. And my conservative side was like, Hey,If this doesn’t work out, I could just long-term rent it and we’ll be fine. We’ll just try this out. And back in 2017, you could do things like that. Throw properties up on Airbnb and it would make money. And guess what? It made a ton of money. I made three times the amount of money that I would made on a long-term rental. And so that really inspired me to kind of get started and grow my portfolio. And then by the time COVID hit, I hit the ground running. Airbnb had exploded and I was making a ton of money from that. And I had
At the time I had about a portfolio of 10 properties, a few that I owned and I also property managed some. So that’s kind of how it got going to a point where I was like, Hey, maybe I can do this full time and I don’t have to go into the office. ⁓ You know, at the, COVID it was like come in two days a week, go home for three days and work virtually, which made no sense to me either, but whatever. So long story short, I decided to leave my job after
that kind of explosion with Airbnb during that COVID time and really expand my portfolio.
Erika (05:49)
Yeah, can you share more about your portfolio, what markets you’re operating in, what kind of opportunities you see out there?Kenny Bedwell (05:57)
Yeah, for sure. once again, I’m a big, you know, I’m a little more conservative ⁓ approach. I’m a big believer in diversification. I don’t own just a bunch of short-term rentals. I own some long-term rentals ⁓ and I invest in, you know, I have a 401k and IRA and all that fun stuff. But ⁓ I first decided to expand outside of where I live. So I lived in Buffalo, New York at the time andI actually gathered a bunch of data and just said, where are markets I don’t know about out there that could work and make sense for me based on revenue potential and median listing price. And I found some new markets. I found some in New York, North Carolina. And so today I’ve used that data and those insights. So I have property in New York, North Carolina. I have some in Kentucky, Texas, Arizona, and I recently purchased a hotel in New Orleans.
It’s really started to expand and grow and become ⁓ diverse on where I invest. And that’s helped me ⁓ prepare for worst case scenarios, things happening, you know, like if a hurricane, we had that actually happen in North Carolina. We had a hurricane come through in Asheville out of all places. And it just completely devastated the area. And if I had my entire portfolio there, I would have been in big trouble, especially as an entrepreneur with two, obviously you saw one toddler, but I’ve got two.
Maybe the other one will run in and surprise us. But take that entire portfolio out if it gets hit by a hurricane. So I’m a really, really, really big believer in diversification, not just from natural disasters, but also too with regulatory risks. I’ve seen so many places, and this actually happened to Buffalo recently, the city, whether it’s hotel lobbyists come in and say, hey, they pay some people and they say, hey,
cut out the, you know, like, let’s stop Airbnb’s and they just shut it off the next day. So I’m a big, big, big ⁓ believer in diversification of markets and even the types of properties you own as well.
Erika (08:02)
diversification really can be handy depending on the situation that you have. Was that part of your inspiration with forming STR insights or at what part of your journey did that come along?Kenny Bedwell (08:17)
Yeah. So, uh, when I was, this was like 2020, 2021, I was growing this portfolio and, I had a mentor at the time and he was talking aboutswan events. was talking about co this was when COVID excuse me, COVID was really, really blowing up, uh, obviously 2020 and 2021. And, and he was talking about diversification and he said, you know, you don’t know, no one predicted COVID. No one even expected that to happen. No one even knew.
that that could happen for, you know, in the way that the impact that it had. And so he said, you got to protect yourself. And that’s where I started to get this idea of like, okay, I really need to invest outside of this one market, but where? Because I only know the places that I personally vacation to, because that’s what I was buying at the time of vacation rentals. And so what’s going to fit my budget? I wasn’t rich. I didn’t have like,
hundreds and hundreds of thousands of dollars, I was doing well, but I needed to know where I could invest that I didn’t know about yet. And so what I did, I used my data analyst skills from Citibank and I took data of revenue from Airbnb and VRBO of properties and median listing prices and put it together to figure out what markets were viable for Airbnb in terms of the ROI.
And then I was able to sort through those based on my budget and what my ROI goals were to find some markets that outside of where I was currently investing and knew about.
And I actually found a property. I’ll share some numbers. bought it. This is, I bought the first one using my software
at the beginning of 2022. And I bought it for $350,000. And every year, so the past two years I have generated, I’ve grossed.
⁓ $140,000 to $150,000 a year gross. net $80,000 a year on that property. So that’s a 350K purchase. I net 80K a year on a property like that.
And that software I made, it actually was just spreadsheets. It wasn’t even software. And I shared it with a few other investor friends and they used it and they found markets and they invest in those markets and they were doing really well too.
Erika (11:05)
YouKenny Bedwell (11:13)
And they were actually the ones who convinced me to turn it into actual software and make it public for other people to use. And that wasn’t even on my radar. And so I decided to take that leap and turn it into a company and public and ⁓ shared that software with other people. And the success stories have been rolling in. We’ve since transitioned more into consulting.where we still have our software, but we also help people and coach and mentor and actually do find the markets and deals as well. And that’s kind of our main thing at STR Insights. But I love the investing portion. I tell people all the time that my clients I work with, I tell you, look, if I tell you to buy a property and I tell you I would buy that property and you don’t buy it, I will probably go and buy that property. So like, I’m like, I’m right there with you. Like I’m looking for good deals as well. And so.
⁓ I like to consider myself investor first and then business owner, but honestly it’s hat on, hat off all the time.
Erika (12:13)
Yeah. Yep. It’s that kind of life. With the consulting that you do, do you tend to find that investors kind of run into the same issues, whether it’s something with their property or just how they go about finding the right place? Any pitfalls or things our listeners should be aware of?Kenny Bedwell (12:18)
You get it, you get it, yeah.Yeah, so our consulting primarily focuses on the acquisition side. And the biggest places where people mess up on the acquisition side is simply running the numbers, how to run the numbers. So first off, knowing what markets actually work. We hear the, I call it the boogie man term in our space, and that term is saturation. What does that look like? What do markets, ⁓ which markets are too competitive and have too many Airbnbs? We’ve heard that so many times.
⁓ I see it all the time on YouTube or social media, at least I do, I don’t know if other people do, you know, there’s, you know, we’re not making any money, the Airbnb busts or the bubble has popped and all these different things. so I, ⁓ first it’s educating clients on which markets actually make sense based on their goals. Meaning like, why are you buying a short-term metal? What are you trying to gain from it? You know, the answer, the obvious answer a lot of them say is, well, I want to make money.
Making sure we all want to make money. That’s a simple answer. But like we get so many benefits from real estate. We get tax savings. We get appreciation. There’s equity pay down. And then finally you make money, which is what we call cashflow. So there’s got to be more meaning and purpose and goal driven purpose like that. Why behind what we’re doing? And that really helps us know where we should invest because we have these goals that
The purpose, why are we doing this? Why are we spending all this hard earned money and sweat equity and things? Why not just go throw it in, you know, into the stock market? You know, you can get an 8 % return, you know, so I, the biggest thing that I help people with is, understanding what their goals are. And then I can tell them, look, we should be investing here and here’s why. And, um, you know, this is what we should expect in the marketplace.
Erika (14:26)
I want to go back to some of the short-term rentals that you have and with them being in all different markets I’m sure you have a lot of different stories but I want to focus on some of the hard stuff because that’s where you can learn valuable lessons from maybe a deal went sideways maybe you completely had to pivot can you share one of those moments and what you learned from it?Kenny Bedwell (14:44)
Yes. Yeah.boy, ⁓ yes. mean, so everything is not
in this space. You can, it’s very easy to mess up. It’s easy because it’s, you’re really doing two things. Number one, you have to buy good real estate, meaning you don’t want to buy over the market price. You want to buy something that’s too expensive or something that’s, you know, like a money pit. And then the second thing is in short term rentals and it’s just,
the unfortunate reality of it is you have to run and operate a successful business ⁓ that’s hospitable. We live and die on guest reviews. so buying properties that set us up for success, not only from a real estate ROI standpoint, but also from a guest experience standpoint, it’s a one-two punch that you have to do. And I’m gonna be honest with you, I’ve screwed up both.
One of you know, I’ll shoot out a couple stories here and if you like one that we want to dive into let’s do it but ⁓ you know egg on my head or egg on my face kind of situations, but you know, I bought land in ⁓ Arizona that near the Grand Canyon I was gonna build on and because I really like that area and we you know, it’s a good short-term rental market But we didn’t check the regulations, you know, and they were like, well, you can only build a you know two bedrooms and we overpaid for the land We didn’t do that research
that check with the county to know what we could and couldn’t build on that land. just didn’t work out. So now I have empty land in the middle of Arizona that, you know, probably some squatters are living on. I don’t know. ⁓ But the property taxes are cheaper. Just going to hold on to it for a while. But it’s there. And it’s just kind of one of those things where I was like, crap, we made a mistake there. That was a real setback. ⁓ You know, other properties we bought, they were in the right location. They look like really good properties, but we didn’t think about the guest experience.
bought a property, a really beautiful historic home in downtown Buffalo. It was built in 1864. Had a really cool history behind it. Beautiful wood interiors, everything. You know, we did some few updates to that property. It was beautiful. But the problem was that it was, it was a house that could sleep 12 on Airbnb, but it could only park one vehicle in the driveway. It was a very small little parking pad. And then there was nowhere else to park. So like
who’s staying there that’s going to, you know, at 12 people in one car, that doesn’t work. So, and we just got destroyed in the guest reviews and it was such a cool property, but because the guest reviews and the guest experience was poor, we had to sell the property and move on from it, you know? And so one of the things I tell people is, especially investing in any real estate at all, you’re going to make mistakes. That’s inevitable. Some of the best investors, the wisest, it’s most successful investors in this space or in real estate that I know of. ⁓
they’ve made mistakes, they make bad buys. And you know what they do though, that separates them from everybody else? They know when to cut their losses and move on. And that’s another thing too, I see a lot of people struggle with. And so if you can accept that, accept the losses, the defeats and learn from it, which is the important part, and then go down and have a win on the next purchase, you’re gonna do fine, you’re gonna be okay. But we will have moments where we… ⁓
you know, we’ll make mistakes and we’ll mess up. you know, I do, I, happens to me, you know, probably once a year, ⁓ but that’s as long as I can learn from it and go, you know what? I can do this better next time. It’s going to help me in the future tenfold.
Erika (19:09)
Yeah, yeah, absolutely. And when it comes to those negative experiences that you have when people are renting, going forward, how do you enhance that experience and make sure it’s a good one, whether it’s things going smoothly or something with your process?Kenny Bedwell (19:32)
Yeah, yeah, that’s a really good question. I could spend a, I just record a podcast on that actually. So I could spend like 30 minutes talking about it, but I’ll keep it brief. When we purchase properties, we have for short-term rentals specifically, we have to put ourselves in the shoes of the guest. What will they enjoy? What will they prefer when they come and stay at this property? So what I mean by that is if you buy a property and it’s outdated,the kitchen is ugly, the bathrooms are outdated, there’s window AC units and there’s ⁓ radiant heating and just outdated things, you’re gonna have guest complaints because most people don’t like that stuff. Most people aren’t used to that stuff. And people wanna stay in properties that are nicer than the ones that they currently live in when they’re on vacation. That’s just a matter of fact. And so when we buy properties,
We have to focus on, we can make improvements to the property all day, every day. I do it all the time, but I’m making improvements so that I can manage guest experience afterward. makes it so much easier. After I do my updates, I had a property once, one of these old houses in New York I bought, it was built in 1910. I ran it as is in its current condition. It wasn’t that bad, but it was still not great. ⁓ And I ran it for one year and I got so many, they’re like, people were like, the place is clean, but.
It just is outdated. It just feels dusty, but there’s no dust. Like that was, I got that a lot. It was like so frustrating because it was a four star, three star review and we live and die on reviews. And so I told people, said after one year, I shut it down. I’m doing a complete reno. We did a hundred thousand dollar reno on this like $400,000 house. And after that zero complaints, five star reviews across the board, rarely anything, any messages from guests about anything at all. It was just.
it was a great opportunity. And that’s just updating the property. That doesn’t include like if you add amenities and you add other additional things to the property to improve the guest experience as well. And that’s another element to think about it is like, hey, how can I find these properties that I can add amenities to that will enhance the guest experience besides it just being a nice updated property?
Erika (21:50)
Yeah, do you find that that’s really kind of dependent on the market that you’re in that you have to customize what you add on?Kenny Bedwell (21:58)
100%. It all depends on who is coming to the market and why are they coming to the market? For example, a property I purchased recently. So last it’s been a year. I purchased is in ⁓ Kentucky. It was on the Bourbon Trail. For those of you who aren’t familiar with the Kentucky Bourbon Trail, it’s like the Napa Valley, but for bourbon, there are over 50 distilleries in between this Louisville and Lexington area of Kentucky andgroups come down and they go and they go drink at distilleries, go to the horse racing, PGA, there’s big golf scene down there and country music and all that fun stuff. But so I bought a property down there. And so the first thing I started with is before I bought the property was who is coming here. And when you think about it, who’s coming to these types of markets, people who are older, it’s not going to be families. I families could, but we’re thinking about the ideal guest avatar, older people, forties, fifties, sixties, who are going and visiting these distilleries groups. Okay.
What else do they like? Well, you know, when, you’re staying with a group of people, especially if it’s more than, you know, like close friends and it’s like an actual big group of people, you’re probably going to want to stay and have your own bedroom and bathroom. You’re not going to be sharing. Right. So when I bought this big property, I bought a nine bedroom, seven bath. It was like the one property I found that had more than like five or six bathrooms because for that size, because I know that the, I do a guest avatar.
They’re gonna want their own bathrooms. I start to not, I didn’t build this property, I found it. And then, but as we’re adding amenities, for example, the hot tub, okay, this property can sleep 28 people. Well, an eight person hot tub isn’t gonna cut it. And since we’re not hosting a lot of families and we’re targeting these big groups, we need two hot tubs. So we have two hot tubs. We also have a theater room, a yoga studio, a gym.
A private gym on the property. have a heated pool, two ponds that people can fish on. And I mean, yes, we host families still. I mean, it’s not like anti-family, but the design, the aesthetics, it’s all moody. It’s dark, it’s targeted towards king beds. There’s not bunk beds in the property. It’s all targeted towards adults. That property we bought for a million. So here’s some numbers. We bought it for a million. We put over 400,000 into furnishings, amenities.
improvements to the property and everything. It reappraised for 1.6 million. So we have a little bit of equity in it. So we got it for, we put 400,000 in this year. It grossed in its first year, it grossed $350,000 in gross income. The net is 175. So we’re netting $175,000 on this property because we specifically targeted
the guest avatar, who is coming there and why they’re coming there and created an experience around that. Our competition is not doing that. They’re just trying to, they’re getting nice places and they’re adding nice amenities, but they’re trying to shotgun it. I call it shotgunning, like, like trying to attract everyone. When you attract everyone, you attract no one. Marketing 101.
Erika (25:07)
Yeah,absolutely. Well,
everything you’ve shared today has been awesome, so insightful and helpful for our listeners today.
Kenny Bedwell (25:19)
Yeah, yeah. Well, thank you so much for having me on the show. Hopefully the visit with the toddler was okay. It’s part of life now, or they just kind of walk in, sit in your lap and smile and wave and then walk away. anyway, it was good to be on the show and share some insights. So thanks for having me.Erika (25:36)
Yeah. ⁓Yeah, I totally get the toddler thing. If someone listening today, Kenny wants to reach out, connect, maybe they want to use your services, what’s the best way for them to reach you?
Kenny Bedwell (25:52)
obviously I have a website, strinsights.com. Insights is spelled I-N-S-I-G-H-T-S dot com. But honestly, I just tell people, reach out to me personally. I try to respond to all the messages I get from people. ⁓ So I’m on social media @Kenny_Bedwell. It’s spelled as it sounds, Bedwell. So Kenny_Bedwell.Reach out to me, me a message, hey Kenny, I heard you on the podcast, would love to chat or have a couple questions or I’m getting started, what do I need to know? My goal is to help people. You don’t need to pay me to have a conversation with me. My goal is just to help you and get you pointed in the right direction and then hear about your successes. So I love hearing people find successes and wins across this industry. So reach out to me.
Erika (26:40)
people do because you really have a passion for this. Thanks again for being here.Kenny Bedwell (26:46)
Thanks. ⁓Erika (26:47)
For our listeners who are listening today, if you got value from this episode, make sure that you’re subscribed to the Real Estate Pros podcast. We’ve got more conversations lined up with pros like Kenny, who are out there building fantastic real estate businesses. We’ll see you on the next episode.
