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Show Summary
In this conversation, Katie Cline shares her journey into the world of short-term rentals, discussing her transition from a hospitality background to becoming a successful real estate investor. She emphasizes the importance of hospitality in the short-term rental space, detailing how to create memorable guest experiences and manage properties effectively. Katie highlights her insights on the significance of communication and the emotional connection with guests, as well as her future projects, including her podcasts that aim to inspire others in the real estate investment space.
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Investor Fuel Show Transcript:
Katie Cline (00:00)
the moment we open our doors to guests in short-term rentals, we are no longer just a real estate investor, but we are a host. And we are really shifting into hospitality. So yes, you have to love hospitality. You have to love getting to take care of people, getting to know people. You have to be able to put that emotional distance when they have a bigger reaction than you think is necessary. ⁓ Or…know that well enough about yourself to say, I’m going to outsource this to a management company or to a co-host, let them deal with it day to day, but that’s going to eat into your profits as well.
Dylan Silver (02:06)
Hey folks, welcome back to the show. Today’s guest, Katie Cline is an award winning publicist, hospitality veteran and short term rental expert. She’s the host of two podcasts, Second Home First and Suite Success. Having led global PR and communications for iconic hotel brands, Katie now brings those five star insights to her own SGR portfolio in upstate New York. Trout Landing, Gallant Fox and The Lazy Ore. You can find her at bykatiecline.com. Katie, thanks for taking the time today.Katie Cline (02:36)
It’s such a pleasure to be here. Thanks for having me, Dylan.Dylan Silver (02:38)
Now I’m very passionate personally about the short-term rental space. That’s really how I cut my teeth in real estate was as a wholesaler working with fix and flippers, many of which were fix and holding and getting into the STR space. Walk me through your history in STR. How did you get into short-term rentals?Katie Cline (02:58)
Sure. So I’m a fairly new real estate investor about five years in now. Five years ago, my husband and I bought a small flat in London. We were living in the UK at the time. It was a place that we lived in for the moment, but we always knew that when we moved back to the States, we would just hold onto it and convert it into a long-term rental. So that’s what that property is doing now. And when we moved back to the US, we were moving back to the New York City area where, as you know, real estate is eye-wateringly expensive.And we didn’t know if we wanted to be here long-term. The last time we lived in New York City, we were just the two of us. Now we were moving back with a child. We now have two children. So we weren’t sure if we had changed, if the area had changed, if this was really where we wanted to be long-term. So instead of figuring out a way to buy a primary home, we decided to rent our primary home and to buy our second home first. We bought a four-bedroom chalet near Lake George.
It’s place that’s really sentimentally special to my husband and I. We used to go camping there every summer. We just absolutely love it there. And so we thought, let’s buy this place. We can make some amazing memories with family and friends there. We can host moments with our family and friends that don’t have the city-sized limitations of our tiny apartment here. And maybe, given my background in hotels and hospitality, maybe we could rent it out on Airbnb and Verbo, and maybe just maybe…
we can cover some of our costs. Well, as you and probably most of your listeners would know, we did more than cover our costs. We covered all of them and we started to profit off of that as well. So about a year later, we decided to buy a second property about 40 minutes south in Saratoga. And really, it was only after we had set that property up, listed it on Airbnb and started to see the volume of bookings that we had. That first year, we were booked every single weekend from the beginning of May to the end of November.
And it was only at that moment that I kind of sat back and thought, I guess I’m a real estate investor now.
And that probably sounds so funny to you, to your listeners, to your viewers, but I think a lot of us, the idea of being a real estate investor can be really intimidating. It sounds like something I don’t have enough money for or enough knowledge in or something that like other people do, or that the only way that you’re in real estate investor is when you have a hundred doors.
But really, we were starting to realize we own three properties. We didn’t live in any of them. We’re real estate investors now. And so this summer, two months after having our second child, we closed down our third property in the Finger Lakes, taking all of our knowledge and our learnings from the first two properties. We were actually able to fully renovate and furnish that home in just seven days and launched it, taking all of those learnings and
Dylan Silver (06:08)
No, yeah.Katie Cline (06:28)
had 10 weeks to have it online before we winterized and were able to sit at about 82 % occupancy for those 10 weeks. So it was such a moment of, wow, we’ve really learned a lot throughout our journey and each time we can get smarter with how we do this.Dylan Silver (06:43)
Are you self-managing these properties?Katie Cline (06:45)
I am, yes, and I also co-host a fourth as well.Dylan Silver (06:47)
I’ve heard this from ⁓ short-term rental hosts that you have to enjoy being a short-term rental host. You can’t just run into this as someone who’s looking at it purely from the investor lens and not looking at it from, do I enjoy hosting people? Do I enjoy maybe a text message later on in the day? Hey, what’s going on here? Hey, this isn’t working. Hey, the WiFi’s down, right? Something like this. And then also too, depending onKatie Cline (06:55)
Yes.Dylan Silver (07:16)
the vibe of the place. Some people are offering all kinds of additional, you know, almost concierge services. I spoke with a gentleman in Florida who has golf carts and jet skis, you know, ready for people. this can be, you know, everything from, hey, this is something that people are going to stay in because it’s close to the airport to like an all-inclusive getaway destination.Katie Cline (07:38)
Dylan, you are touching on something so important here. And I think it’s really important for people to remember thatthe moment we open our doors to guests in short-term rentals, we are no longer just a real estate investor, but we are a host. And we are really shifting into hospitality. So yes, you have to love hospitality. You have to love getting to take care of people, getting to know people. You have to be able to put that emotional distance when they have a bigger reaction than you think is necessary. ⁓ Or…
know that well enough about yourself to say, I’m going to outsource this to a management company or to a co-host, let them deal with it day to day, but that’s going to eat into your profits as well.
So personally for me, I want to keep as much as my profits as possible. That’s why I self-manage. I also really enjoy it. And I also believe, rightly or wrongly, that I can probably deliver a better experience for my guests than any management company could.
Dylan Silver (08:32)
Now let’s walk through some of the ways where, know, folks who are getting into the short-term rental space can really succeed and conversely ways that, you know, they can maybe shoot themselves in the foot if they’re thinking, hey, I’m just gonna let this go on autopilot. It sounds like you’re very much involved in that guest experience. Walk me through that. What types of things are you doing to have that next level hospitality?Katie Cline (08:48)
Yes.So first, think it begins with the actual asset that you’re investing in. A lot of times people will look at these lists that say like, these are the top markets that you should invest in for real estate. And that’s great. And there’s merit to certain things in those lists. But I personally am more of what I like to think of as a lifestyle investor. So when we bought our first place, it was in Lake George because that was sentimentally special to us. When we bought our second place, it was in Saratoga because yes, it was a great short-term rental market.
but it’s a place that we want to move to. So this was a great way for us to test out and make sure we actually want to move to the area before we commit to something like that, especially picking up kids and moving them. And then thirdly, the reason we bought in the Finger Lakes was because I love being by the water, who doesn’t? And shockingly, Waterfront Real Estate is still fairly affordable in the Finger Lakes and they have an amazing tourism boom because they have great wineries, breweries, distilleries.
So all of that as an investor I liked, but mostly as a person who wants to sip her coffee looking at the water, I liked that too. So I like to think people should start with that. If it’s your first investment, it’s not like your umpteenth door, where do you want to spend time that is maybe different than what your day-to-day life gives? ⁓ I live in New York City. I can walk to everything. I have like 17 coffee shops within a 10-minute walk of me. So what I really like about our first property is I can’t see a neighbor.
I am surrounded by trees. When I wake up in the morning, all I hear is birdsong. That is completely different from my day-to-day life. So I would really encourage people to first think about where you’re investing and why, and don’t just do it because someone said it’s a good place or you think you should do it. What does it add to your life too?
And then secondly, when it comes to actually hosting people, I like to take a lot of learnings from my time working in the hotel space. So…
there are two kind of things that came out of that. One is what are the things that the hotel industry does really, really well and how can we do that in short-term rentals? And then what are the things that the hotel industry struggles to do as well as short-term rentals and how can we really supercharge those as almost our superpowers in a way? So if we start with the first one, one thing I like to think about is the art of the arrival.
So when I was working for the hotel brand La Meridien, we did this study that found the first 10 minutes of a guest stay sets the tone for the entire experience, right? And so when I think about that for my guests, it’s did I give them good enough directions or did they drive past my house five times before finding it? If they arrived that night, did the light come on? Did it stay on long enough for them to get the suitcases out, for them to get the baby out of the car?
Did I give them a personalized key code or are they digging around in the dark for like a physical key? When they open the door, does it smell clean? Does it look clean? If they’re arriving in the summer, is it cool? If they’re arriving in the winter, is the house already warm? Those types of things that right away are gonna make your shoulders come down, make you relax. And I know that for the rest of this day, we’re starting on a good place as opposed to if they walked in and any of those things were awry. Now I’m gonna have to make up for it.
And actually on one of my podcasts, Suite Success, I interviewed a gentleman called Rory Sutherland. He is a behavioral psychologist, a TEDx speaker, a New York Times bestselling author. He’s an incredible man. And he talked about something called confirmation bias. And this really supports the entire point, which is that we as humans subconsciously want to believe we are the smartest things ever. So whatever we found in those first 10 minutes…
we are going to spend the rest of our trip looking for proof points that support our initial finding. So if we see another cobweb, we’re going to go, ⁓ see, this place is dirty. I knew it was bad. Or if we had a great arrival experience, and then I send a message the next day and say, just checking in, want to make sure you found the house OK, they’re going to think, ⁓ this host is wonderful. I just knew this place was great. So that’s one of the lessons I take from hotels to apply to my short-term rentals. Conversely,
being in rooms and in boardrooms in hotel companies, talking about competitors with short-term rentals, some of the things that we have to our advantage is, number one, we have a different offering. We, by and large, have kitchens. We have different bedrooms. We have communal spaces, right? Those are really important to certain guests for certain trips, particularly me when I’m traveling with my children. I like that my kids can go to bed and my husband and I don’t have to tiptoe and be quiet. We can sit up
and watch TV and chat and have a glass of wine. I like that I can store my son’s bottles in the fridge, like those little things that in order to get that in a hotel, either you can’t or you’d have to pay more money for. Another thing is I think when people travel, they really want to feel like they’re in the destination that they’re in. They don’t want to have their same exact experience of normal day-to-day life. They want to feel like they are wherever they’re visiting.
So nothing ruins that faster than walking into a hotel lobby. I love hotels. I will always love hotels. But when you walk through a hotel lobby, it’s very clear you’re a visitor. You’re visiting this place, right? And maybe it’s a gorgeous hotel lobby. Wonderful. But when you pull into a driveway that’s yours, even for the weekend, that’s your house, that’s your kitchen, that’s your washer dryer, right? And so you’re giving your guests that immediacy of you’re local here, this is your place for the weekend. And I think that really goes a long way.
Dylan Silver (14:54)
Yeah, you said so many nuggets right there that resonate. I’ve never heard someone put it so succinctly, but those first 10 minutes, I mean, that’s gonna completely color your experience. If it goes great, it’s gonna be hard to detract from that, right? And if it goes poorly, now you’re gonna have an uphill battle. But then also too, right? It’s to a point where if you have a great experience in a short-term rental because you felt like you were part ofKatie Cline (15:12)
Mm-hmm.Dylan Silver (15:23)
that area you had in the kitchen, right? You’re cooking food there, right? You’re not having to look for where laundry’s done. You’re able to do it right there. You’re gonna say, the next time I go to a similar place, I’m gonna look for a similar experience. And so now the bar’s been set. Now you’re, it’s almost like, well, okay, I this great experience. I can’t go back. I was in first class now. I can’t go back.Katie Cline (15:36)
Mm-hmm. Mm-hmm.It’s true. I’ve actually had a guest tell me like, you’re one of the best hosts that we’ve ever had. And in a way, that’s kind of funny because I didn’t really do anything. It’s not like I was like, here’s a gold bar. Thank you for coming. Or here’s like $5,000. Like, no, I was just kind, considerate, seeing them as individuals, using that moment of being a human versus being a corporation like hotels mostly are and saying like, hey, what brings you to town?
leaving that open-ended for people to be able to engage if they want to, they don’t have to. But if they tell me, we’re coming to celebrate my dad’s 65th birthday, I’m then able as Katie the human to be like, that’s so great. We celebrated my dad’s 70th birthday here. Here were some things that I planned for that weekend with him. Maybe your dad would enjoy that too. Again, we’re building that relationship from the beginning so that if or when something goes wrong during their stay,
They almost have a bias towards me to be like, I know Katie wouldn’t have wanted that to happen rather than like, ugh, this short-term rental sucks.
Dylan Silver (16:51)
That’s a huge, you know, a huge point that people miss, right, is you’re going to have to be in communication, right? So unless you’re delegating that to someone else, expect to receive some type of communication if they’re there for really any period of time, because unlike a hotel, this is now someone’s home, literally, for that time period. So if they don’t know how to turn the stove on, you’re going to be the first person that they reach out to. And if you’reKatie Cline (17:11)
Mm-hmm.Dylan Silver (17:20)
unable to get in contact with them, that’s now a source for a potentially negative review because if they can’t eat breakfast because you’re not picking up your phone, doesn’t matter if you respond three hours later, they missed a meal, right?Katie Cline (17:31)
Exactly, exactly. And I think knowing that this is a transaction too. I see a lot of chatter and forums and such where people get annoyed. ⁓ Or, know, for example, how I said I asked these open-ended questions. There are some guests who won’t respond. There are some guests who are not going to message me during their stay. They don’t want that. That’s totally fine. And I’ve seen people be like, well, they haven’t told me why they’re coming yet. Should I cancel this stay?If you book a room at the Ritz-Carlton, the Ritz-Carlton sends you a confirmation email. They don’t say, hey, Dylan, please explain to me exactly who you’re coming with, the purpose of your trip, and then we will determine if it is worthy for you to stay here. That’s ridiculous, right? So I think we need to put things through that hotel lens. Similar with amenities. I see a lot of chatter around like, oh, I don’t need to provide shampoo and conditioner. They’ll bring their own. Or I give them enough garbage bags to get them started for their stay. They can go get the rest.
Dylan Silver (18:05)
Yeah.Katie Cline (18:26)
for their stay. Now look, if you’re hosting someone for 30 plus days, I get it. You may not be able to give them enough. And also to your point earlier of like, if you are a budget stay near an airport and you are charging like less than $100 a night, you don’t need to be giving bells and whistles either. You know who your target audience is. But for me, know, my property in Lake George in the summertime will do $12, $1300 a night. Is it fair that during a three or four night stay,a guest should have to go to the grocery store, buy a full bag of garbage bags, of which they probably need five more. That’s not fair. I don’t think that that’s how they should be experiencing it. And also, is it really costing me that much more to just provide a surplus of garbage bags? I think there is this fear that people are going to be like, look, she left a whole box of garbage bags. I’m going to put that in my suitcase. The likelihood of that happening is so low. But what
Dylan Silver (19:18)
youKatie Cline (19:21)
has a really high likelihood is them having everything that they need at their fingertips, not needing to think about it, not needing to go, oh my gosh, we don’t have another garbage bag and it’s 8 p.m. and it’s cold outside and the baby just got to sleep and now I have to run out to the grocery store to do that. That’s going to frustrate them way more than the $3 I spent on leaving extra garbage bags.Dylan Silver (19:43)
I mean, from the hotel space, right? So I’ve seen in my lifetime, it used to be they had the shampoos at some places and they were just out and about. Now I’ve gone into some places and they’re under a lock and key. So they’re still there. It’s just you can’t take them with you. So I don’t know if some people want to do that, but you know, it’s a great point, right? So mean, if people are spending, you know, money really for a ⁓ upscale place, you know, what else is going to come with that?Katie Cline (19:56)
YouMm-hmm.
Dylan Silver (20:10)
And I don’tknow that it would necessarily be the source of a negative review, but if you’re trying to give someone an overwhelmingly positive experience that just knocks their socks off, that first 10 minutes, right, them not having to go out of their way to kind of fill the home with things to make it feel like a home during the duration of their stay, that’s gonna go, I know certainly for me, I would be raving about it to my friend that said, look, if you’re going to this place, you have to be staying here, because I had such a great experience. We are coming up on time here though, Katie.
any new projects that you’re working on and then also what’s the best way for folks to get in contact.
Katie Cline (20:44)
Absolutely. So I am the host of a podcast called Suite Success that’s Suite like Hotel Suite. I like to think of that as almost diary of a CEO style conversations with people in the hospitality industry. So you get to really hear about people as humans and their stories that led them there and take all of those hospitality insights and apply it to whatever business that you’re working on. And then most recently I launched a second podcast called Second Home First. And again, that’s really targeted at people like me whowere intimidated potentially to think of themselves as a real estate investor, though I was always interested in investing in real estate. And they just want to have a second home, or they’re starting to question a lot of what you and I were talking about before we even started recording. Cost of living is high. For me to rent my apartment in New York City costs about $2,000 to $4,000 a month less than if I were to buy this exact same apartment here. That just doesn’t make sense.
Instead, I could take that extra $2,000 to $4,000 a month, buy one property, now three properties, that then start generating income for me and provide me options, freedom, income, all of these things that we all want so much, right? So that I’m not locked in to having to make certain choices just to afford my mortgage every single month. So those are my two podcasts. You can find me at Buy Your Second Home First.
or suitesuccesspodcast.com. And then on Instagram, as you mentioned earlier, I’m by Katie Cline , and that’s BY Katie with a K and Cline with a C.
Dylan Silver (22:12)
Katie, thank you so much for your time today. Thanks for coming on the show.Katie Cline (22:15)
Pleasure to be here. Thanks for having me.
