Vacation Like A Pro - Stephen Petasky On What To Look For In An Airbnb Investment
Stephen Petasky (@stephenpetasky) is the CEO and Founder of the Luxus Group. Prior to launching Luxus, Stephen spent 10 years as the president and owner of retail grocery stores, bringing years of experience and entrepreneurship to this new industry. He joins Chris Van Vliet to talk about what to look for when buying a vacation home, what makes a good Airbnb and a bad one, his favorite places to vacation and much more!
Find out more about Stephen Petasky and Luxus Group here: https://luxusgroup.com/
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“That’s a great point. To be clear our business has multiple prongs from the vacation aspect. We develop inventory, we do some luxury Airbnb, we have a large co-ownership fund where investors pull together to buy property. People ask if there are good buys out there, but good is a relative term. Good is comparative to what you can achieve. So there are some good Airbnb's, but the 2010 to 2019 cycle was where you could not mess up a buy. But now you have to be surgical, and people are now getting multiple bids for their property. It is not impossible though, and as the capital has accelerated, so has rental rates. The demand for renting safe havens outside of hotels and cruise ships has also accelerated, that is down to COVID. I think you can get good rates, but it’s the capital appreciation that will take longer.”
“So Airbnb was founded in 2008 and didn’t really get its wings until about 2010 or 2011. We were in 2007 and we were not in the rental space at the time. My wife and I had our first son and we love travelling. We were committed to still doing it and we were not going to stop because we now have a child. We looked at our options, and hotels are ok, but not as romantic if there is a child sleeping in the same room as you. Renting homes had an inconsistency of the pool not looking right or you know, homes just didn’t look right. We looked at buying a second home, but we couldn’t afford it and didn’t like the restrictions. So then the idea came of what if we had 20 second homes that we could travel to at any given time. Obviously we needed $20 million, so we were very short! So then we thought well what if we brought a load of our friends in, which is not a new concept, but we are one of the few that have done it on this scale. We shared these homes with 18 friends and family and it just snowballed. Our friends told their friends and we built up a collection of vacation homes.”
“Just as a quick side note, Luxus is Latin for luxury, it is not a ripoff of Lexus. For us, when we are shopping, there are a couple of things. Firstly, there is the balance of capital appreciation or Airbnb rentals, and the second is how much we will enjoy it. Nothing against $250,000 properties, but we were looking at what type of vacation we would enjoy and would want to spend time in. So we looked for that balance of appreciation, could we rent it on the market and what felt good. Do we want to be by the beach, by a golf course or in the city? That weighted scale makes us want to pull the trigger.”
“If it’s your first time and you are dipping your toe into this, pick something you want to stay in. You never know, one day there might be a global pandemic! Our clients actually got to move into these at that time. So pick something you love, worst case scenario if it doesn’t work, at least you can enjoy it.”
“From an investor perspective it used to be open, but it was very restrictive to Canada due to security. We don’t have any open funds right now, but we are spreading the word more. We have a YouTube channel to try and educate people more, and we are trying to open this up to impact more people’s lives.”
“The YouTube channel is posting 20 minute snippets and provides people with free content on buying homes, selling them and everything in between. We are just dumping the free content out there. It’s called The Luxus Group on YouTube.”
“I would say that the biggest mistake people make is buying on emotion and not having the proper diligence. A vacation home should be an emotional purchase, but if people don’t spend enough time doing their diligence, they will suffer. The real estate agent can say ‘Oh if you don’t but it today then it’s gone…’ Then you write this 7 figure cheque, and 2 days later you get buyers remorse. Fortunately I don’t have that, because even if I miss a deal, we always balance that scale. We check all the boxes and it really makes people more informed.”
“I would say, gosh there have been so many mentors, but be in it for the long game. It is hard to do things fast in the real estate game, so look for the long term gain. Any time I think I can make a quick buck, is it right for the long game? You don’t want to burn a bridge for a quick win. If you think about the 20 year plan, you will get there, just don’t sacrifice your integrity and ethics.”
“Success is relative too. Some days you feel successful, sometimes not. But with family, when you don’t feel successful because of the market or a situation, keeping family close helps. There is no perfect balance, but there is harmony in the imbalance. I can be stuck at work, but it can mean longer time away with the family in the long run. There is no ideal way to do it, but I think that kids are so smart. Keep them in the loop and they will understand.”
“Hawaii, you can’t go wrong there. I think any lake country right now, places like Idaho and Montana, anywhere where they are close to water but in the safety of the United States. Then I would probably say Vegas, it’s had a good run but now it is really coming into its own as a city, not just the nightlife.”
“The people around me, our health and my family.”