How to Build Retirement Income With Short-Term Rentals

Sandy Lee (00:00)
And we bought a four bedroom condo out there that’s pretty large and it was certainly the biggest purchase I’d ever made in my life. Like I had never bought a house like this. And it seemed crazy to go buy a condo that was worth three times what my house was in Houston, right? But but that’s what we did. And right away it started paying for itself. And now here we are a few years later, it cash flow is five thousand dollars a month and is a big part of my retirement income. So it’s it’s really been a great deal.

Joseph Crooms (01:59)
Hey everybody. This is Invest in Fuel Real Estate Pros Podcast. I’m your host, Joseph Crooms. Today I’m joined by someone I’ve been looking forward to chatting with. Her name is Sandy Lee, who’s been making some serious moves, especially in the vacation home industry. I hope I’m saying that correctly. And she has brings a a unique background. I’ll let her explain that. So Sandy, say hello to everyone.

Sandy Lee (02:29)
Hello. Thank you so much for having me here. I really appreciate it.

Joseph Crooms (02:33)
Good. I think our listeners are really going to take away something from this, from your approach to why you got into the business and and and what time that you got into the business, because you know, so that’s and so you have a time to explain those things in depth. So let’s dive in, okay? Okay. So first of all, for people who may not be fully familiar with your world, give us the short version. What’s your main focus these days and what markets are you operating in?

Sandy Lee (03:03)
Sure. So I’m a small investor. I’ve only got four short term rentals and they’re in four different markets. So I’m in Steamboat, Colorado, Orange Beach, Alabama. I’m in Asheville, North Carolina, and then I’m in the Hill Country in Texas as well. So just four fairly large vacation homes that my family uses and that I use for my business.

Joseph Crooms (03:23)
Okay, okay. And let me ask you this question. First of all, why did you h how did you make the transition from your prior career and h what advantage did it bring you into this real estate market?

Sandy Lee (03:36)
Yeah, so this is kind of a fun story. I I loved my career. I was in engineering and construction for more than 30 years. And the last couple of years of my business, I ran our private equity arm within our company. So that was just a huge, great, great education on how investing really worked because I was one of those very traditional people, had a big old 401(k) saved really nicely. So I had savings, I had stocks, I had but no real estate at all. Meanwhile, my son goes to school in Colorado and starts whispering ski condo all the time. And I’m like, absolutely not. We’re not doing that. We are not those people. We’re not like that. I’m just gonna stay with my investments. But in the back of my head, it was kind of clinking around. And next thing you knew, no, I did the big silly thing and bought a big ski condo in Steamboat, Colorado, and really just with the idea that it would pay for itself. But when it started doing really well, I started really thinking more like a business. And like you said, I had all these years of skills that I just did not know would translate over into real estate investing at all. I thought I’d be starting from scratch. But really, like any business, you’re running so many of the same things. It’s operations, it’s management of people, it’s, you know, managing your crews, it’s managing your revenues, your budgets. So many of your W-2 skills translate right into this career. It wasn’t nearly as scary as I thought.

Joseph Crooms (05:44)
Let’s talk about this first adventure that you undertook with your son planting this seed. What was that like? What was that like? What kinda level did it set you at? It was it couldn’t have been too small because you said this is a pretty big opportunity. Tell us about that.

Sandy Lee (05:50)
Right. Pretty big opportunity. My family is just my son and I. He’s twenty-five now. So when he was in college, he went to Colorado School of Mines out in Golden, Colorado. We had always gone skiing at Steamboat. It’s one of the sort of less expensive ski resorts out there. And he kept saying, you know, it’s a good investment. It’s a good investment. Just buy something out there that we could use all the time. Meanwhile, I think he just wanted a ski condo for he and his buddies. But anyway. But anyway, for about a year I sort of blew that off. You know, we were at the end of COVID and prices were really going up. But I started thinking about it and started doing some research as I was getting into my fifties. We talked about me starting late. I was thinking, I don’t want to work forever. So all these pieces kind of just came together beautifully. And we bought a four bedroom condo out there that’s pretty large and it was certainly the biggest purchase I’d ever made in my life. Like I had never bought a house like this. And it seemed crazy to go buy a condo that was worth three times what my house was in Houston, right? But but that’s what we did. And right away it started paying for itself. And now here we are a few years later, it cash flow is five thousand dollars a month and is a big part of my retirement income. So it’s it’s really been a great deal.

Joseph Crooms (07:17)
Let’s talk about all the other properties that you have. Tell me you know, now you gotta let your s your your feet are wet, you’re more seasoned. Let’s talk about those.

Sandy Lee (07:25)
Sure. So what I won with in Steamboat, I tried to replicate everywhere else. And what that was was it wasn’t what the market was right then. It was what it was going to be in three to five years. In Steamboat in particular, Aspen had just bought Steamboat. They were cracking down on licenses. So supply was going to be constricted. They were doing a bunch of renovations at the base and adding a gondola. So it was like, okay, right now it’s okay, but in three years it’s going to be amazing. So then it was how can I do that everywhere? So Orange Beach was my next one. It’s a it’s a new build home. So arguably a little bit less of a perfect investment, but it’s a beautiful home that we love. And what was happening there is the Gulf Shores Airport is only ten minutes away and it was going public. So that seems like a great time to get in there. It backs up to the state park. So it’s it’s a place our family love. It pays for itself. It’s not my biggest cash flower, but that makes sense with the new build because we’ve paid a premium there, right? I also have a cabin in the mountains near Asheville that is another place where it’s on a ski resort that was actually shut down when I bought it. So I knew that a year later when it finally opened things would really take off there. Same story. That’s what it’s doing. My my revenues this year are already double what they were last year because I’m in that place where it’s just growing and growing. And then finally I have a little bit of a smaller place in the Hill Country in Texas. It’s in Gruene. It’s right by Gruene Hall, which down here is a well known dance hall that’s the oldest in Texas and they get all kinds of big country acts that come through. It’s hard to get an Uber out there. So I thought, let’s get a condo that’s within walking distance because people will use it rather than worrying about the transportation. So sure enough, a little bit different there, but same theory everywhere. How is the market going to grow in the next three years? Was my was my way of looking at all all four of them.

Joseph Crooms (09:15)
Sandy, what sharpened your vision to foresee how you need to look at real estate? What what background, what what part of your background added to that?

Sandy Lee (09:26)
It was really those last couple of years of my career when I had the opportunity to run our private equity division. This was a real aside. I had no real financial background before that. It was all engineering and construction. So I took some classes on financial modeling. I started looking at how investments could really work over a period of time. And that’s how I look at all of my homes now, too. It’s not a snapshot, it’s not a one-time calculator, it’s a mine’s a 12-year financial model. I want that two years to get my feet on the ground. And then I want to see how is that asset going to grow for me over the next 10 years? Because the whole game for me is increasing my personal wealth over time while putting off enough cash to live on, right? That’s the whole game. And so that financial background that I was blessed to have at the end of my career in engineering and construction really changed the way I look at investments overall.

Joseph Crooms (10:52)
Love it. What caught my attention by what you were saying is how you let’s talk about the construction, the engineering. You know when inspectors come or when you inspect, do you how do you look at property as in from that perspective?

Sandy Lee (11:08)
Absolutely. So I do have just enough background. No, no, I’ve my background was building refineries and chemical plants. So a little bit different for sure. But it’s still it’s that detailed lens. It’s that having done large projects within my corporate career in a lot of different roles. I did some of our services roles for a while also, but it’s that ability to multitask. It’s that ability to look at a lot of different aspects of not just a deal, but the operations. It’s you know, coming up with the right tools to manage supplies. It’s hiring the right people, having all those years in management. All of that was just such good background to be able to do this. And I think everybody’s got that, right? If you’ve got a W-2, you might think, man, I’d have to start over. But we’re all learning our whole lives. And I think it’s a benefit to start later. Sure. I wish I had started 20 years earlier, but I didn’t. And I have found that it’s been not as hard as I

Joseph Crooms (12:06)
What you the experience.

Sandy Lee (12:08)
Yeah, absolutely. That experience we get when we’re a little older is is not to be dismissed. It matters.

Joseph Crooms (12:14)
So with that older, it’s wiser too.

Sandy Lee (12:17)
It can be. And sometimes it’s not. Sometimes it’s crazier. But it’s a in my case it was a little of both, right? A little crazier, a little wiser.

Joseph Crooms (12:24)
So let me actually say, I I know managing all these things can i it can get a little cumbersome, but what’s been the key to keeping your machine running smoothly?

Sandy Lee (12:37)
It’s the tech stack. It’s the it’s the having the right software pieces all day long that make your business come together. For short-term rentals, really the key is having a good property management software that can coordinate with an Airbnb listing, a VRBO listing, a Booking.com listing, and your personal website just to keep all of those pieces together. It sounds so simple, but that one thing and setting that up even from your first property. It’s worth it’s a worthy of investment because instead of just throwing it on Airbnb and seeing what I could make, I had it on four different platforms from day one. I I say I tripled my revenue from the beginning, just because once you’re out there competing on all these different platforms, you’re going to get more reservations, more gap nights filled, things like that.

Joseph Crooms (13:24)
So before you came to that knowledge of you know, how to utilize AI, how to use the different platforms, what was your revenue like in in the beginning and how much have you increased because of it?

Sandy Lee (13:37)
Yeah, that’s a great question. Actually, my first year, not knowing what I was doing, I used a a a manager for my property. And once I saw kind of how that was going, my my revenues there just made the mortgage. They just made my expenses. I did make money, but not a lot. So once I changed to self managing about four years ago now, every single year my revenues have gone up twenty percent. And so that’s something that I’m super proud of and hopeful. Hope I can keep this train going, right? I’m certainly working at it, but it’s it’s about consistent improvement with me.

Joseph Crooms (14:12)
Let me ask you this question also. You know, we talked about running smoothly. How much are are you and you s basically into short term rentals, am I correct?

Sandy Lee (14:20)
Yes, only short term rentals. Okay.

Joseph Crooms (14:22)
Okay. How l how many weeks or do you get a month? Is that considered more of a long term if you you know, let’s talk about that.

Sandy Lee (15:11)
Yeah, my occupancy numbers are anywhere between forty five and sixty five percent typically. I do have one property where I was struggling for revenue and I’ve upped that occupancy to over seventy percent now. And I did that on purpose with some lower pricing just to fill up the nights. It’s always a revenue question for me. If I started out with lower occupancies and I’ve lowered my pricing to get higher occupancies. It’s really just how to maximize that overall number.

Joseph Crooms (15:40)
How many is how many weeks are are those gap periods, you know, on a basis that do you do two weeks, three weeks,

Sandy Lee (15:48)
No, I rent by the night. So many of my properties, even the larger ones, you can go in and do two nights. Some of my properties you can even do one night, especially at the last second. And having a good cleaning crew is really the key to that. Someone who wants to do the clean, wants the extra business. But those quick turnovers are everybody sort of wins there, right? The guests can pay less and get a shorter vacation. My cleaners make more money because they want the work. And then I’m able to fill that calendar. I think less and less people are taking one and two week vacations. And so giving that flexibility to the traveler and being able to have the operations that can support that, I think has been really important for me.

Joseph Crooms (16:27)
How how how long is your season?

Sandy Lee (16:29)
My seasons are a little all over the place, but I have some ski and some beach. And so my ski season obviously is really concentrated from December to March. My beach seasons are really concentrated in the summer. But that’s okay. I just offer the place at much lower rates in the off season and I get to travel there and use all of the places in the off season, which was my game from the beginning, was retirement would look like traveling around and hiking in Colorado and going to the beach during the winter a and Alabama just is super fun to me. I love that part.

Joseph Crooms (17:03)
That sounds amazing. So here’s a good question for you, Sandy. And I I think our audience is gonna love it. Now every operator ha I know has a moment when things just get real. Maybe a deal that went sideways, it could be in the beginning and or in the in and whatever you wanna want to share with us. Can you give us a time that you had to pivot fast, mind sharing one of those moments with us?

Sandy Lee (17:04)
Yeah, it’s pretty great. Yeah, absolutely. I mentioned the property that I was having revenue trouble with and had to bring up to over 70% to really make it work. That was the Orange Beach property. I bought a new build in a neighborhood where I was one of the first six or seven houses there. It’s a wonderful location. I knew that ten years down the road I’d be happy about that. But boy, when all those houses came online at one time, the competition got really fierce. And so instead of being proud and having higher prices, I really had to rethink the whole thing. How am I going to sell my home? And so I lowered my prices, but I also made sure that I was the best stocked. You know, people aren’t looking for a roll of paper towels. They’re not looking for soap. It’s the silly things. Do great things for your clients. Have coffee pods out. Have a great coffee bar. Build in extra things to the home. Have a fire pit, right? Like how do I make my home stand out? And that’s worked like a charm. My only job for that house was always just to pay for itself because it’s it’s a pretty expensive house. So paying for that one in the short term, making it cover all the expenses. And then I can see that five years down the road with appreciation the way it’s going in that market, it’s doing its job.

Joseph Crooms (18:38)
How long have you had that house?

Sandy Lee (18:39)
That has I’ve had three years.

Joseph Crooms (18:41)
And are you starting to sort of see the shift now?

Sandy Lee (18:44)
Absolutely. It that one, while my overall portfolio has grown twenty percent a year, that one is growing more like three to five percent a year. So it’s just lower. It’s just a lower curve and it’s a lower appreciation right now. But that’s what’s happened in Alabama since I bought. I kind of bought at the height of everybody going there and now I’m living through what some would consider a downturn. A lot of people are selling. I’m not. I’m doubling down and making sure my operations are good. And I intend to still be standing and be profitable the entire time when everyone else is out. I love that.

Joseph Crooms (19:17)
And yeah, I that I I love the determination. Yeah, I love that’s the kind of stuff people don’t talk about enough. And honestly, what separates the people who are just dabbling from the ones who stay in the the the game for the long term? Let me ask you what is your focus on solving or scaling next? What’s your next real goal for Sandy?

Sandy Lee (19:20)
Absolutely. Love my portfolio right where it is for now. So my goal is just to stay in it. I can see that my returns compared to the stock market range anywhere from low teens to I’ve got one in the 30s, right? So my returns are right where I want them to be. A lot of that money is in appreciation and mortgage pay down, enough cash flow to live on, though. I’m where I want to be. What I really want to do now is teach others about this, as you and I are talking, you know, we both we both are in this industry where we’re teaching others and inspiring others. I still really believe in short term rentals. I can’t believe what this has done for my life from a lifestyle standpoint, from a financial standpoint. And so I’ve put together as as you know, a course that just helps people with the step by step of how to do it on their own. That’s my focus now.

Joseph Crooms (20:27)
What’s the cost?

Sandy Lee (20:28)
My course is called STR Jumpstart and it’s not terribly long. It’s got 53 lessons in there, a bunch of downloads with that 12 year financial model that I talked about. It takes about five hours to take, but my big thing is instead of asking for sticky long-term money and coaching and expensive things, it’s a one-time $500 course. Get in, get what you need, and then I’m available for questions. So I’ve tried to make it accessible for people who are really just starting out and just want the how do I set up my software? What do I actually go buy? How do I use AI to my best benefit? How do I not? Right? Like the actual how to’s on getting started from finding a market to operating your rental. That’s what I’ve tried to do.

Joseph Crooms (21:12)
That’s wonderful, Sandy, do you have on video or is it online or or did you use AI to help market it?

Sandy Lee (21:19)
I ha I am trying to use AI to help market it now, but like I said, marketing is not my strong suit. So I’m working on that. I’ve got a YouTube channel now as well with STR Jumpstart. The course itself is with Thinkific, which is an online learning platform. So that keeps it really organized for the student. They get they get their downloads all right there and everything.

Joseph Crooms (21:37)
sharing that. Yeah, so that next move can either compound things or create chaos depending on how you play it. And I guess that course is going to uplift you with new clients and and people asking questions. So now I know a lot of people listen are either early in their journey or looking to level up. I think they’ll benefit from hearing this. When it comes to building relationships and growing the network. What’s been the biggest difference for you?

Sandy Lee (22:07)
So this is a different world than when I was building my relationships in my career. We’re no longer going to an office every day, especially in the world that you and I are in. I’m learning to build my relationships just like this through Facebook groups, through learning podcast networks, even to going to conferences, learning to build relationships in a different way in a whole new industry. Certainly a challenge, but people are out there. Don’t be afraid to reach out to people in a Facebook group when you have a question. Don’t be afraid to email someone when you have a question has really been a lesson for me and and what I think we ought to be talking more about. People are accessible. We wanna help.

Joseph Crooms (22:45)
You know, Sandy, and you just sorta dovetailed into that. How do you think AI is gonna really move your business?

Sandy Lee (22:54)
I love AI. I am having so much fun with it. I think many of us are. I’m personally using Claude, and it actually connects directly into my property management software. So it’s got all of this information for me. Then it can then it can dovetail into so many other applications. I think first I’ll tell you how I’m not using it. I’m not using it to talk to my guests. And I think that’s really important. I’ve kept that hospitality piece first. But I’m using it for data mining, for dashboards, for revenue projections. I’m using it to track my supplies. Amazon and Costco and Walmart all send emails to a specific email that Claude goes and gets. It looks at where I’ve sent all of my supplies and has built me this great supply tracker. So I know what I need when I need it. I know how much consumption is being used at each property. I did that in a couple of hours, and that’s just something that in the old days we would have spent weeks trying to figure out or not figure it out at all. So now we know where everything’s going, how it’s being used. I am loving what AI can do for us when you just have a crazy idea and you put in a prompt and it’s for a hundred dollars a month, I feel like I’ve got a whole crew. It’s amazing. I’m really impressed.

Joseph Crooms (24:05)
Sounds great. Sandy, when we’re coming to the end, and so you can’t fake relationships. And before I actually to wrap this up, talk about why you don’t use it for relating to your client.

Sandy Lee (24:22)
Absolutely. I and I think this is where the larger companies are going straight to bots and AI and talking to their clients that way. And I think that’s maybe one way to do it, but I think there’s a huge benefit to keeping my guest responses real time and all it does not take very much. I’ve only got four properties. I believe if I was much larger, I would hire a human to handle all of that messaging for me because I believe the benefit to a guest hearing from you when their internet just went out or they have a coffee maker that’s broken or anything else, hearing from you right away and being able to solve that problem for them personally, I believe is why I have almost all five star reviews. And that that means revenue, right? It’s not just a soft, nice to do thing. Good reviews mean revenue in the future. So it’s a business thing for me.

Joseph Crooms (25:12)
And that’s why relationships are everything in this space. All right. Yeah. All right, Sandy, before we wrap up, if someone wanted to reach out to you, connect with you, maybe collaborate or learn something about w you know what you’re doing, what’s the best way to reach you? And you can reach out to

Sandy Lee (25:28)
Yeah, great. I’m on Insta @STRJumpstart. I’m on YouTube at STR Jumpstart and I’ve got a website called strjumpstart.com. So it’s all just kinda easy to find.

Joseph Crooms (25:39)
One more time, Sandy.

Sandy Lee (25:41)
I’m on Insta @STRJumpstart. That’s short term rentals. So STR Jumpstart. I’m on YouTube at STR Jumpstart and I’ve got a website, strjumpstart.com.

Joseph Crooms (25:51)
Wow. Perfect. Well listen, I appreciate your time. I love your story. I love your philosophy that you have developed. Thank your son for planting the seed because I can see how he planted and it it just blossomed into something so beautiful for you. Yeah, we need more people in this space who are doing the the the right way. Thanks again for being here and for those of you tuning in

Sandy Lee (26:09)
Absolutely.

Joseph Crooms (26:17)
I know you got some value from this. Make sure you subscribe. We got some more conversations coming with operators just like Miss Sandy Lee and who are out there doing building real businesses. So we’ll see you on the next episode, Sandy. Say goodbye to everyone.

Sandy Lee (26:35)
Thank you so much for having me. It’s been a joy.

Joseph Crooms (26:38)
Sounds good. Goodbye guys.