How to Invest in Luxury Vacation Rentals

Kevin Anderson (00:00)
you’re investing for a vacation real estate, vacation rental, if you’re investing in a place that’s a hidden gem or that’s off the beaten path, then you’re to be working so much harder because you’ve got to find the people, right? Whereas when you’re in a prime location like Stowe, Vermont, like the middle of Chianti and Tuscany between Florence and Siena, which is a really high demand area, of course, we probably paid 50 to 100 % more than if we went down to

a really remote area of Italy, but at the same time, we have a ton of interest in all the time.

Scott Bursey (02:06)
Welcome back to the real estate pros podcast powered by investor fuel. I’m your host Scott Bursey. And today we’re joined by a pro whose expertise is in translating real estate success into written authority and market distinction. have Kevin Anderson from KA real estate holdings, whose niche is ghostwriting and editorial. Get ready to take notes because we’re deep diving. Kevin, welcome to the show.

Kevin Anderson (02:31)
Thank you. I’m happy to be here.

Scott Bursey (02:33)
It is awesome to have you here. So for those who may not be familiar with your journey, what’s the spark that got you into real estate and what is your main focus now?

Kevin Anderson (02:43)
Yeah, great question. I first got into real estate ⁓ with a vacation rental up in Stowe, Vermont.

⁓ The reason was mostly I wanted to have a place that was a value to our family. I’ve got four kids, so we were pretty active. And the winters in the Northeast are brutal. ⁓ But I wanted to make sure that it wasn’t just a place that was sitting empty and not being an investment. So we turned it into a vacation rental. ⁓ And then similarly, we did the same thing overseas in ⁓ Italy and Tuscany. The motivation was

similar, a place that we could just really cherish for our own and make our own but also ⁓ make into a profitable business and have it be self-sustaining. ⁓ And yeah, so that was the reason why ⁓ we move forward with Real Estate in the first place.

Scott Bursey (03:36)
How exciting! Tell us a little bit about your villas.

Kevin Anderson (03:41)
Yeah, so, yeah.

Poggio alla Corti, is, I’m wearing the vest right now, is the villa in Tuscany. It’s a vineyard, it’s an olive grove, it’s about 45 acres. The production is about 10,000 bottles of wine annually. It’s a delicious Chianti Classico. And there’s also, it’s also 1,000 years old. It’s an old fortress that’s been fully renovated into a luxury vacation rental.

So yeah, it’s got a pool, tennis court, bocce court, billiards hall inside, it’s a ⁓ fitness center. It’s really meant to be a place that all kinds of families or groups can enjoy and be really comfortable, but still be feeling the authenticity of being in the countryside, being on a working farm, being in a villa that has literally centuries of history in its walls.

Scott Bursey (04:39)
That’s awesome. What are some of the core strengths that your company is able to give to the market?

Kevin Anderson (04:47)
Yeah, so, ⁓

you know, what we really focused on was making sure we were in a really good location, something that was really desirable. And then, ⁓ and then also just making sure that we, we wanted to really check all the boxes. If someone was looking at properties and they’ve got a group ⁓ that’s diverse, we wanted to make sure that they, there was something there for everybody. So if they want quiet luxury, that they can just, you know, relax in the room and be comfortable and have a beautiful view. They’d have that if they want great, you know, if it’s more the shower.

products, and the bathroom amenities, and just being comfortable, they have that. But also for people with active lifestyle, who want to play tennis, who want to get in the pool, who want to go for walks and hikes, we just want to make sure that with any kind of group, whatever the dynamic was, that there’d be something there for everybody.

Scott Bursey (05:37)
Yes, that makes perfect sense. If someone’s listening to this and they’re thinking, this is someone I want to partner with or learn from, what do you want them to know about your business first?

Kevin Anderson (06:35)
Yeah, well, you know, think service customer service has always been the forefront of all of our businesses. Making sure that we’re always giving the best customer service right up front is incredibly important. You being responsive and having that customer service first impression, it really will save you a lot of potential pain and heartache because it establishes a foundation of trust. So if anything goes wrong later, you’re going to establish that trust with the client and they’re going to be much more

amenable to if something goes wrong during the stay or that needs to be adjusted for. So setting that first impression is really critical, but just customer service in general and making sure that we’re thinking one step ahead. And our properties are, our angle is really to make it, to give any possible service that the client would want, that the guests would want while they’re there. So whether that’s having meals made in the villa,

whether that’s daily turnover, having washing machine facilities and having laundry services. Just having all the little things that if they want to take advantage of those things, that they’re there for them. So just having a comprehensive service suite was really important for us, especially targeting a high-end luxury market.

Scott Bursey (07:56)
Exceptional customer service. couldn’t agree more on that front. So no business is perfect. What’s one thing that you’re still figuring out or something that you’ve had to work around recently?

Kevin Anderson (08:09)
Yeah. So, I mean, ⁓ there was a lot of learning curves in acquiring the Villa in the first place, overseas especially. When you’re investing in an ancient property like that, it’s very typical to have a lot of codes and bylaws around the property. And there’s a lot of hoops to jump through. The previous owner that we brought it from, there was a couple of hoops that they didn’t jump through properly that we then had to figure out. that became quite expensive in terms, and time consuming in terms of getting

lawyers involved and figuring out how to just make sure that we were jumping through all the proper hoops to make the villa a functional and legal property that we could rent out. So there was a lot of challenges there.

Now things are kind of clipping at a good rate, ⁓ but there’s always things that come up. I think one of our biggest challenges now is just making sure that the teams on the ground are all in sync. When you’re working with any kind of property, it’s just so critical. It’s going to save you a lot of time, especially if you can just make sure they have really good management and that everybody’s on the same page and has all the same expectations.

especially with language barriers and stuff that hasn’t been always easy, but it’s something that we really prioritize.

Scott Bursey (09:23)
And it’s so key. And Kevin, what do you feel is the biggest opportunity right now? This could be like a market shift or new offering or something of that nature.

Kevin Anderson (09:33)
Yeah, so for us, we’re really looking at appealing to…

to high-end groups or businesses that are looking to have, for instance, like conferences or weddings, anything that, anywhere that you can really, where you can provide a needed service for a high-budget client, essentially. And so that’s kind of what we’re focusing on. And so, for instance, making sure that we’re fully equipped with the proper AV and everything that a business could have their…

team do a retreat at the Villa or ensuring that we have all of the proper equipment for like a yoga retreat to be at the Villa. These kind of group activities or weddings these kinds of things that are a premium price ⁓ offering and if you can if you can ensure that you have the right services and the right ⁓

the right amenities for to support those groups. It’s something that you can really market and leverage directly. So that’s that’s definitely the direction we’re going in. We do a lot of writers retreats. My company, ⁓ Kevin Anderson Associates, KAA, it works with celebrities and business owners, billionaires, helping them write their books and get them to market. And so what we’ve been doing at the Villa is part of this initiative of really trying to appeal to groups and whatnot, is we host these writers retreats.

So the writers retreats will have a best-selling author, a big executive from Harper or random, and then a literary agent. And they’ll all work together with a very small group. Again, when you’re appealing to that kind of client base, you want to keep it pretty selective. You don’t want to have a group of 30 people. You want to keep it really exclusive and make sure that you have all the little things covered for that in terms of the amenities and the things that they would expect.

any kind of luxury vacation. But then we’ve looped that into something that’s actually meaningful for them beyond just having a nice vacation. It’s helping them with their writing. It’s helping them develop their book. It’s helping them think through something that’s really meaningful to them. And we’re bringing the highest and ⁓ New York Times bestselling writer and a literary agent, the highest ⁓ level of mentor there to help them do it. So it becomes something that’s a real value add to them and also checks all the boxes in terms of a place that they’re really going to want to vacation and be anyway.

So that’s something that we’ve really been, a direction we’ve been going in and it’s been really successful. Last year we had four retreats, ⁓ all of which we sold out and this year we’re already mostly sold out and have five retreats going this year.

Scott Bursey (12:52)
that’s awesome. And how many guests can the Villa have for a retreat?

Kevin Anderson (12:57)
So it sleeps 18, but for a retreat, everyone has to have their own room and bathroom. So usually we just do about nine. So we’ll have six to nine retreaters that’ll all have their own bed with a bathroom. And then the mentors stay just next door.

Scott Bursey (13:21)
and any challenges that you’re watching closely, like market risk or something of that nature, Kevin.

Kevin Anderson (13:28)
Yeah, so,

I mean, we’re always looking at the different directions that the market’s going, especially when we’re considering new properties. that’s why, so for me, everyone’s got their own ideas. Some people are really looking for that area that’s suddenly going to boom and be the next thing. For me, that’s a little more risky than what I feel comfortable investing in. Our philosophy at K.A. Real Estate has always been find properties that in low K.A.

that are already super high in demand. You do play a premium for those, but you know that you have a…

You know that you’re going to have a volume of interested people in renting it. You just have to make sure that you’re standing at or above the rest of the competition. And we just felt strongly that we could do that by just making sure that we’re like, you know, I keep saying the same thing, checking all the boxes. I just want to make sure that we have everything. the, you know, the photography has got to be there, the, the amenities has got to be there. The concierge services has to be there as long as, as long as we can check all the boxes and have something that’s really special and unique, we can make sure we can stand out among the competition.

but we know that we’re always going to have,

you’re investing for a vacation real estate, vacation rental, if you’re investing in a place that’s a hidden gem or that’s off the beaten path, then you’re to be working so much harder because you’ve got to find the people, right? Whereas when you’re in a prime location like Stowe, Vermont, like the middle of Chianti and Tuscany between Florence and Siena, which is a really high demand area, of course, we probably paid 50 to 100 % more than if we went down to

a really remote area of Italy, but at the same time, we have a ton of interest in all the time.

So we just got to make sure we’re appealing. And then it just becomes how do you stand up and make yourself unique and how do you become responsive and actually just close the deal rather than having to fight and find guests and find your pipeline.

Scott Bursey (15:27)
Absolutely. And speaking of competition, what is your competition look like?

Kevin Anderson (16:12)
yeah, interesting. I yeah, we don’t my my philosophy has always been to focus more myself in my competition. The only time I look at the competition is just to see kind of a get a price check and also see what

we what ideas we might want to incorporate that they’re doing that we’re not. And then I just really focus on making sure that we’re doing the best that we possibly can and that we’re showing up in all the right places. So competition, our competition in, for instance, in in Tuscany, there’s two things. So one would be other riders retreats. ⁓ Nothing’s as high end as what we are. That’s kind how we’ve really kind of carved our market niche. It’s really for people who want

But no, this is not like your backpackers, know, hostile type of retreat, right? It’s something that’s really comfortable. It’s really going to have the highest end. ⁓ It’s not camp. You this is, you you’re really getting a level of high, a high level of service and instruction, but also really, really great amenities, five-star amenities. The other competition, if you’re looking outside retreats, when you’re just talking about the Villa and how it compares to other…

other properties.

You know, where it’s right, you know, the way that we really differentiate ourselves is that we just we made sure that we had a property that had a little bit of everything. And so it’s very rare to find a property that has a pool, a tennis court, a bocce court, a billiards hall, a gym, a vineyard, an olive grove that’s all in a historic property that also has in that also has a staff with housekeeping and and all the services at the house. It’s just not

common to have something with all those different things looped into one. So when we’ve priced the property, we’ve looked at a lot of comps and it’s almost none that have all of those things. So you look at what has close to all of those and then we’re pricing a little bit above that. And yeah, so far it’s been a model that’s really worked. We were able to elevate the pricing from the previous owner who was also renting out the villa. But the first year we elevated by 30 % and then the next

year by 50. So and it’s it’s sold you know it’s pretty much sold out all of all 26 and it’s only you know it’s only early April and 27 is already getting a lot of activity too. You know what some of the struggles with with just being

Well, with any real estate acquisition, you always got to make sure you have a great team that’s working for you and that understands the local area and understands what they need to do to make sure that everything goes wrong. Just standard management, but overseas it’s especially important. And so having someone that knows the language that can speak to you fluently in English and can also speak Italian to the local workers and all that stuff is really critical.

I think that’s been a real…

a boon for us is having us here in the States understanding the US market a little bit more, the US client, but also having people that understand what needs to be done on the ground. And just having that alignment has been really good. One of the things that gave us an edge, ⁓ actually I have it right here. So we got, there’s a magazine in the Boston area called the North Shore Magazine. ⁓ It features a lot of local businesses and ⁓ we were able to get, they did a story

on the villa, which is right here. So they did a story on the villa and had it the local…

in the local magazine in the Boston area because they really loved the story. Someone from New England setting up over there and all the challenges in the story all behind it. And they ran this story in this magazine. We got like four bookings and they’re all week long bookings. all these really valuable bookings within like a week of this article coming out. So having that kind of edge of just having

having someone that understands the American sentimentality of what they really are looking for out there, but then they can still have a really authentic, like everything there is going to be, you know, it’s all wine from the actual property. It’s a local Italian team. It’s a villa that’s been, that has centuries of history from in that region. You’re walking on a Roman road, you know, all around it. You know, these kinds of things, it’s given, of having a foot in both worlds, I think has really helped.

Scott Bursey (20:51)
Sure, it sounds like you truly have the market capture.

Kevin Anderson (20:54)
Yeah, it’s been good so far. But the one thing that I know is different for some people, some people are looking at real estate only as an investment. And I get that and I get the understanding and I do some of that too. I mean, I have a bunch of long-term rental properties in Florida. And with those properties, there’s not a whole lot of passion that goes into them. It’s more of a numbers game and just making sure that you can be passionate about investment in

state of course. However, I’ve found a lot more value and a lot more in, in, and it just…

It’s been a lot more rewarding for me anyway, to have properties that I can go and enjoy with my family as well. Of course, that can taint the way that you look at things, both positively and negatively, because it can alter your decisions and maybe make you less profit-focused and put your guard down and make mistakes, sure. But the value that it’s had for us and our family to be able to build memories in these places, as well as make a profitable business at the same time, has just been…

incredible. mean, that’s just priceless.

Scott Bursey (22:04)
outstanding. Is there any ⁓ key takeaway or golden nuggets you’d like to share with our listeners?

Kevin Anderson (22:10)
Yeah, know, just like anything else, you got to do what you love, you know, and make sure something you’re passionate about. And if your real estate investment is, if you can make that your passion and it’s something that you really…

love and you enjoy it every day, that’s something, you again, it’s like that classic, you you do something you love. If you’re working on something you love, then you never, you know, you never work another day in your life. And I, you know, and I think that’s been a critical component for us. And then I think secondly, just, you know,

when investing in a vacation rental type property, just really think about, is it worth trying to, is it worth trying to work, how hard do wanna work to get your, to get your guests to see your place? anything you can do to make yourself the most.

strategic location, the most strategic amenities, is going to just make sure that your place stands above the rest. And that’s going to do a lot of work for you in and of itself. Yes, it’s going to be a higher investment, higher sticker price, but you’re also going to be able to charge a lot more and you’re not going to have to chase, ⁓ run around looking for people to fill the listings. ⁓

Scott Bursey (23:24)
Kevin, we’ve got a massive community of pro listeners that are definitely getting a lot more fuel on this subject. What’s the best way for them to reach you?

Kevin Anderson (23:33)
Yeah, there’s a couple ways. I’m on LinkedIn. ⁓ You can find me, Kevin Anderson. I’m usually working at KAA, Kevin Anderson and Associates, the book writing company. That’s probably the best way to connect with me. And yeah, I’m happy to give any kind of advice and help out any way I can, especially if you’re doing foreign investments in the EU ⁓ or the UK. I’ve learned a lot of things the hard way. Happy to help.

Scott Bursey (23:58)
Kevin, thanks so much for being here today and supplying your generous time.

Kevin Anderson (24:06)
Of course, happy to do it.

Scott Bursey (24:07)
And to our listeners, we appreciate each and every one of you. If you got some massive fuel from this episode, please subscribe. We have a lineup of exceptional operators just like Kevin coming up down the road. Until next time, keep your standards high and your vision clear. We’ll see you on the next episode, everyone.