Co-Hosts Mateo Bradford and John Stokinger welcome Heather Bayer Co-Founder at Vacation Rental Formula. The queen of vacation rental podcasts with over 390 episodes under her belt brings her knowledge, know-how, and confidence to a couple of guys solidifying their presence. With Ontario just now opening up again after six more months in lockdown, Heather chats with us about staying positive while the world around keeps throwing punches.  No BS, this is a great episode with a real class act! The No BS Short Term Rental Podcast brings the right people to the table at the right time giving their audience an inside view and real take on the industry like no other.  Learn more about your ad choices. Visit megaphone.fm/adchoices

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The Great White North Opens Up With Featured Guest Heather Bayer

Mateo, how are you?

I’m doing fine. How are you?

I’m great. It’s episode eight. We’re chugging along. I’m super stoked. We are blessed to have Heather Bayer joining us. We are not talking about age. I’ve already been told we’re not allowed to do that, so we’re not going to do that. Everyone is 27 or 28. We’re going to leave it at that. Heather Bayer of Vacation Rental Formula, CottageLINK Rental Management, and Cottage Blogger has been doing the podcast thing a heck of a lot longer but that’s not a bad thing. It’s a great thing. How many episodes? I can’t even remember. You know it off the tip of your tongue, Heather.

It’s coming up to 394.

Podcasting goals.

We’re putting out one a week. That was our goal. We might have to skip one with a holiday week or something like that but we’re putting out one a week. The goal is 50 a year.

When I started doing podcasts back in 2013, I was told that if you could get past your first seven, then you will be fine. You will be consistent. You’ve done it, guys.

We did it. We got past seven. That’s amazing.

From your mouth to the universe’s understanding, thank you. That means we made it, John.

We could take that with a grain of salt. We need to keep on putting out quality content and getting great guests, which we have. In the upcoming weeks, we have two amazing guests already scheduled. We’re on the right track, to say the least. I’m excited. Heather, you have some exciting news.

Ontario cottage rentals were opened up again. On June 5th, 2020, we opened up after the first lockdown. We had a fantastic summer. We went all the way through to December, and then it all hit again. We were locked down from Christmas Day or Boxing Day. Our government is prone to a little bit of flip-flopping. We were opened up for two weeks in February 2021. We all got excited and then got locked down again but hopefully, the Ontario roadmap to reopening has been launched. It has been busy.

We appreciate you spending a little bit of time with us. I know you’ve been busy, so thank you so much.

Let’s talk about it. I want to know what was going on in Canada. We have been talking about Europe, the US, and all these other places. We overlook our neighbor to the North.

I always like to say we’re like your attic. You know we’re up there but you have no idea what’s in it.

Fair enough.

That’s a great analogy.

We have a lot of good stuff in it if people come up here and explore it. However, it has been interesting once the borders were shut in March 2020. I was down in Texas. We hot-footed it back in March 2020 to get through before the borders closed. Here we have been ever since flip-flopping backward and forward. Sometimes we’re open. Sometimes we’re not.

There are gathering restrictions and a lot of ambiguity and interpretation. How do we interpret what our province is giving out? You have the federal input and then the state input. We have our federal input, which is to shut the borders, and then everything was then left to the provinces to sort out after that. I don’t know if you recall this. A number of years ago, we had a mayor of Toronto called Rob Ford. He had a little bit of an issue. Sadly, he passed away a couple of years ago. His brother Doug is our premier of the province. The Rob Ford mantle has moved to Doug Ford. If anyone out there is interested, you should go and Google Rob Ford Ontario.

What’s the story? Is his brother as much of a character as he was? I remember he was a pretty interesting guy.

He was a pretty interesting guy. There was some drug use involved. It was pretty much published, out-there, scandalous, and all sorts of media-related things. His brother is our premier, who started as many did doing a great job standing up every day. He said, “We are in this together, folks.” It was all rah-rah stuff. Since Christmas, it’s all crumbled. I know he’s looking for his positive public opinion, which has waned dramatically over the past.

We are now reopened. We believe there are some gathering restrictions indoors. We’ve got probably 2,000 rentals coming up over the course of the summer. We’re not in a position to go knocking on 2,000 doors and saying, “Excuse me. Are you keeping within the government restrictions?” All we can do is tell people to make their decisions. We will not be responsible for any fines that may be related to them not responding to those restrictions.

How are those policed anyways? It’s normally that nosy neighbor that is calling someone up. Unless it’s brought to the attention of someone, who’s going to care one way or the other?

An Airbnb rental was over-occupied. A neighbor called the police. The police came out and fined every person in the group $850. The owner was fined as well. There have been those but that was during the time of lockdown. In general, we certainly stuck with all the restrictions. We said, “If the government says no rentals, then no rentals because we’re a responsible company. We want to act within the guidelines.”

It was easy enough for them to go out therefore and find the odd ones that were out and about still renting. Once the majority of Toronto starts moving North to cottage country, how the heck are they going to cover every single rental? We’ve got 2,000 rentals coming up. There are dozens more agencies and thousands more independent owners.

You mentioned the lockdown. What was the catalyst for having a lockdown, reopening, and then having another six–month lockdown? I don’t understand. I’m curious if anyone else understands. Why re-lockdown? What was it?

It’s because of hospitalizations and intensive care units getting overrun. We had the second wave, which began around December 2021. It’s a pretty high second wave. That began to come down in February 2021. We have opened up again for two weeks. Almost immediately, those numbers started going up again. We were hit by a dramatic third wave in April 2021 where intensive care units were completely maxed out. They were moving patients from Toronto out to other areas. I would think that is the sole reason for them locking us back down again. Our numbers are back at some reasonable levels because we are at 60% vaccinated across the province. It’s the first vaccination. I’m not sure if you know that we have four months between our vaccinations.

Four months instead of a month here. That’s interesting.

First shot, four months, second shot.

They could get this number of 60% because you get 70% coverage with your first shot. If we get 60% of the population vaccinated with the first shot and then move into the second one. It appears to have worked.

Let’s knock on some wood.

I want to get into the US. That’s all. Open the borders for me.

I want to go to Canada.

When is that?

I have no idea. Apparently, there are some talks underway at the moment. Everything has a silver lining. I’m forever an optimist. I’m forever the one looking for the bright side of everything. Having the border shut has done one huge thing for us. That has stopped people traveling like me. Where are they going to go for their vacation? In the US, they’ve got a lot of options. Here in Ontario, we haven’t been able to travel from province to province. The border has been shut between us and other provinces.

That will probably be relaxed soon but it means that everybody planning a vacation has had to move to take the domestic route. They’re going to come two hours North to us, which has meant that since February 2021, we have been 100% booked for the summer. We’ve got 140 properties. The moment we took on a new property, the record was 45 minutes from listing a property to having not just a first booking but having the whole month of July booked. We have over 700 families on a waiting list.

That’s what happened here in the US. That’s what happened in the whole Eastern seaboard. In any of these drive–to locations, that’s exactly what happened. In companies, we’re seeing this. 2021 is even greater. the more Canada relaxes. Imagine when those borders open, everyone that’s here in the US that has been doing their domestic travel, staycation, or whatever they want to call it. It’s still a heck of a lot easier for us to go to Mexico or Canada than to fly overseas. It’s still an international destination. It’s fun and exciting when you take your family to do something like this. I’m glad that you’re seeing that occupancy.

The timing has been perfect. The timing could have been so different. Our primary season is July and August. As long as we get July and August, we can get through the rest of the year because July and August fuel the entire year. The timing has been perfect. In 2020, we opened up on June 5th. In 2021, we’re opening up on June 11th. It could have been different. It could have been that a third wave came in June, and we were shut down for July and August, which would have been devastating for everybody in our network and everybody who was involved in tourism. The silver lining was the timing.

Heather, I’ve got a good question. As a business owner and someone who has had to weather this storm, we think about the things that affect our business, natural disasters, and other things that may pop up and happen. Pandemics weren’t on the top of my list. How did your business survive? Tell me a little bit about your story from a business owner’s perspective.

When we hit March 2020, the government had been good financially. The first thing they did was offer a very substantial loan, $10,000 of which was not paid. We don’t have to pay that back. They offered up another loan later in the year. It wasn’t enough. We are carrying eight full-time staff. We had to furlough in March 2020 but we only did that for three months. We made the conscious decision that we would not do that again and use the time in September 2020 to go through the rest of the year to work on projects and make substantial changes. That was beneficial to us.

For many companies that are working year-round, you don’t have the benefit of that glorious time to sit and work on a project and not have a telephone ring or have an email come in. We took those opportunities. Having said that, it has been a struggle. We do rely on the December through June activity to pay our staff. It doesn’t make money but it pays the overheads. We have had nothing from December through June. We are fully booked. We are taking on new properties but we also had a large reduction in properties that we were able to book. We probably lost 30% or maybe 40% of our inventory.

Permanently or transitioned out?

I would say 20% has gone permanently. These are owners who decided to sell. We had a full summer of booking. The owner said, “The money truck has appeared outside my door.” They paid $400,000 for the property and they expect to get $850,000.

It’s insane.

Why would somebody not do that? They bought it as an investment. They’re selling it. We had a large number of owners do that. Mostly, they did it earlier in 2021. We were able to relocate everybody. When they’re up and selling their properties, we’ve got nowhere to relocate them to.

That’s an interesting thing because I’m assuming that Canada is the same as here. The prices of lumber and everything have skyrocketed. We’re seeing the real estate side of things. People that might not have even been buying have been in the market to buy because they were like, “I’m going to build a new home. This is what we do.” They’re snagging up homes instantly because it’s going to be a heck of a lot cheaper to go ahead and snag that home up for more inventory as opposed to buying it. Are you seeing that as well up in Ontario?

I spoke to somebody that was looking for property to buy. I have spent a lot of my time advising people who are looking to buy to rent out, “This is what you should look for.” I spoke to this guy. I was telling him what I felt were the most important features of this property. He said, “The most important feature for me is that the deck is in good condition. Forget everything else.” Priorities have changed for people. They’re looking at those things. A deck that might have cost them $1,500 years ago is now $4,000.

It has been a different market. I spoke to a potential owner who was looking at a property that was listed at $700,000. He said, “What do you think?” I hate this question, “What do you think I should offer?” I said, “I have no idea what you should offer. What’s happening is that $700,000 property will probably go for around $900,000 to $1 million.”

It’s insane.

It has turned the realty market and the rental market upside down. We rented a lot of our properties way back in September and October 2020. After last summer, people were on the ball. They wanted to lock in their 2021 vacation so they booked in September and October 2020. We are seeing odd cancellations here and there. I am shocked at the prices we were renting for in 2020.

Seriously, we rented that for $2,800 a week. We’re now taking that cancellation and listing it at $4,500 a week. It will go. We are not gouging. We are keeping comparable with the other property managers in the area. We have a good network of property managers. We discuss pricing back and forth. The pricing has gone from 20% to 50%. We have seen that everywhere.

With the lumber prices and everything increasing, we know that there’s an ebb and flow. We know that’s going to relax and go back down to a manageable number for people wanting to build and do everything. Do you think that the VR or short-term vacation rental space is going to ever come back down? Do you think it’s going to stay where it’s at?

I’m talking to owners all the time and saying, “You can get $7,500 to $8,000 a week for this property. Years ago, I might have listed it at $4,500. This may not be sustainable.” I’ve used those four words more than anything else, “Don’t go into this thinking that we will keep at this level.” Carl Shepherd said in that Skift Live interview, “I am not making any predictions for 2022.”

Here’s a shout–out to Carl Shepherd. I love Carl. He’s a great guy and a great mentor. He always drops these gems on us. It’s true. I was thinking you should put on your header or somewhere on your site, “These results are not sustainable and are not normal. Take advantage of this now.” It will be interesting to see. We know how markets go. They get in these frenzies and get used to these prices. When is the bottom going to fall out? Are we looking at that intelligently? How are we monitoring when this faucet is going to turn off?

There’s a MarketWatch article about Airbnb saying that Airbnb used to be where you got a deal. You’ve got the best value for accommodation. Now, it is mainstream. Vacation rentals are not a cheap option anymore. They are the preferred option. I love that too. The answer to your question, John, is sustainability. Who knows?

It’s the same with realty prices. There are a lot of people sitting there and going, “I’m not going to buy now because the time will come when interest rates go up.” All these people that moved out from the city to get a new version of life in the country might think, “Starbucks is not as close as I like it to be. I do have to go into the office now.” There’s a lot of not knowing going on at the moment.

It has to do with inventory too. I live in Fort Wayne, Indiana. The inventory for homes that are $200,000 up is 1/3 of what it was years ago. It’s a seller’s market, and it’s not a seller’s market. It’s a weird market.

It depends on where you are. I’m in Atlanta. I’m in the process of selling one of my properties. I had a tenant move out on Saturday. I showed it on Sunday. By Tuesday, I had four offers. They moved out. They haven’t touched it and haven’t cleaned it. They walked it dirty and were giving us probably 10% to 15% over what we were asking for.

That’s the same that could happen here because there’s no inventory if I were to list my home now. It’s crazy.

There’s stimulus money. This is the thing. All I hear are cash buyers and cash offers. Everyone is coming with cash. I’m out of the loop. It’s pretty incredible that people are sitting on cash like that but it can’t be. I can’t see that sustaining. We will see where that goes.

Heather, I’ve been following you for quite a while on your Facebook page. I’ve been following the posts that you put online. I had a question for you. You mentioned you’re forever an optimist. In the whole year and a half that you’ve been dealing with this, there are probably 3 or 4 posts where you went ahead and put your feelings right there on your sleeve. Was that hard for you to go ahead and come out maybe not super optimistic? In the end, there was always optimism but you put your feelings out there.

I don’t think so. It was realism. I’m an optimist but I’m also a realist. We all go through it. I don’t know if you remember that there was an old movie called Pollyanna many years ago. It was a Disney movie. It was about this girl, “Everything would go fine.” Positivity has gone nuts. I’ve been called Pollyanna over the course of my life but that does not mean that I’m not realistic as well. You have serious downtimes where you sit back and go, “It’s all flooding in. I don’t know where we are going with this.” I did that. I can’t remember what I wrote in that post, which is probably the one you’re referencing.

It’s one of my Facebook groups. As soon as I posted that, I had this call from my business partner. He said, “What’s up? What’s going on? What can I do?” I don’t think he had ever seen a post like that. It was one of those days but everybody goes through it. It’s fair to come across and share that realism. I hear it from others. Evelyn Badia is from The Hosting Journey. Evelyn is upfront. She’s going through some amazing stuff. She’s dealing with cancer. She’s going through chemotherapy. She has also bought five properties in Georgia and Arizona, having sold her place in New York. I talk to Evelyn a lot. She’s super positive but she’s very raw and sharing as well. Occasionally, I’m going to emulate that. That’s exactly what I’m feeling.

I know you’re a positive person, and everyone knows you’re a positive person but you’re sharing that realism. Not every day and not every month is optimistic. It’s real.

It takes strength to tell the real story. When you paint the optimism brush, people oftentimes see that part and think that’s 24/7 365. They’re not mutually exclusive. You can be an optimist and face troubles but still struggle and have down days. I appreciate you doing that and bringing that out because that side of the narrative doesn’t necessarily get highlighted. When you think, “You have to have a positive outlook,” it doesn’t mean you can’t say, “I’m down. This sucks,” or those types of things. That’s not the complete truth.

I put it out there to my team and my business partners and say, “You’re going to talk me off the edge because I’m out there on the edge.” We hired somebody to come in for the summer to help out with issues. We have a fabulous customer service manager. She needs help for the summer and somebody who will work weekends. We found this person. We had been training her. Out of the blue, she suddenly said, “I’m sorry. I can’t work weekends.”

That was hard. We had to let her go. We are now in the process of hiring. At that time, we weren’t open. We didn’t know when we were going to open. These things happen to us all in this business. Somebody will quit at the most inopportune time. You have to be ready for it. No matter how much emergency planning you do, and I do a lot of emergency planning, it doesn’t cover everything that will happen but you’ve got to take it, turn it around, and make it work to your advantage. That doesn’t stop me from coming out and posting, “That was shit. It was a shitty day.”

Your attitude points to it. It’s what you do with it, knowing these things are going to happen, finding your strength, and not committing to that being the result and that you can turn it around. There is a silver lining.

I’m very much a pragmatist. Shit happens. Deal with it. You can’t go back and start micromanaging what happened before. That comes later. In the immediacy, you’ve got to get on with it and deal with what comes your way but it doesn’t stop you from feeling pretty down about it at the time.

I appreciate you being able to speak to that because, for me too, 2020 was a struggle. I try to be positive. I struggled through 2020. Seriously, John knows it. He’s a friend of mine. All my close friends know that it was not a good year personally but it was hearing that I wasn’t alone and hearing that there were other people within this space that also struggled, weren’t always positive, and didn’t know how this was going to end, and that was okay. I appreciate that perspective and narrative.

I’m sorry if I put you on the spot there. I didn’t think you would care though.

I don’t care. I find the whole social media thing fascinating. I’m often ready to post something, “It’s got political connotations here. I’m going to step back and not do that.” That is something I will not do. I’m not nailing my flag to the wall at all.

It’s tough. To pivot a little bit from this, we talked about the amount of short-term rental hosts in the US or North America. Skift is reporting that there are short-term rental managers but there are other companies that are saying they’re closer to 20,000. All of these rental managers are all going through the same things. They’re all dealing with these different problems. They’re all coming from their perspective.

Let’s give you a story from one person that I’ve talked to a couple of times. This guy is called Richard Caldwell. He runs a very small property management company in Alberta. He has been pretty much shut down since March 2020 because the majority of his clients come across the border. His is a devastating story because he tried to bring in the domestic market but there are so many companies in those ski areas that are vying for any trade whatsoever. These are the people that are still going to be struggling until our borders open. There are a lot of them who deal with traffic coming across the border and don’t have a domestic market. I feel for them.

Please excuse my unfamiliarity with the Great White North. Is that around Tremblant?

Tremblant is in Quebec. This is Alberta all the way over to the West Coast. His place is in Canmore, Alberta, which is North of Idaho and Washington.

That sounds about right. It’s going into British Columbia.

Alberta is to the East of BC.

It’s probably Eastern Washington.

It’s all the Rockies vacation areas. There are a lot of people there who have been struggling. In BC, there’s a Vancouver market that’s more local but in Alberta, I know they have struggled. They had real problems with their COVID issues. They have been pushing out some of their ICU patients to other provinces even.

They’re ill-equipped to handle the surge in that space.

They’re a much smaller province. Like the US, we’re not one homogenous country. We have a lot of very different locations and tourism regions. Tremblant is fantastic in Quebec. It’s maybe a five-hour drive for me. I’ve moved seven hours but it’s not that far. Quebec has had its issues but it’s coming out of it too. They have more of a domestic market. It’s a nice ski hill. There are no massive mountains. It attracts a lot more people coming out of Montreal than maybe Ottawa.

The interesting thing in Canada, in general, to think about is how vast of a country it is. You have your densely populated areas but then there’s space.

I can’t remember the statistic but it’s something like 90% of Canadians lives within two hours of the US border. It gets too cold for the North. The mosquitoes are the size of B-52s when you get further North.

I grew up in Maine. The state bird in Maine was the black fly.

We think the pandemic killed off the black fly here because we have not had them in 2021. There are no black flies. It was been weird. It’s like, “There was something else good that came out of all this. There are no black flies.”

Here is to an amazing summer. You are open. I’m so excited for Alberta and for you. I hope that the other provinces follow suit if they haven’t already. Do you have any words of wisdom or anything you would like to leave our audience, Heather?

Learn from this. Years ago, I did a presentation at VRMA on emergency management. It was very sparsely attended. I came up with a whole load of things that you needed to prepare for. At the end of that long laundry list of things you need to prepare for was, “You never know there could be a pandemic.”

I said, “You’ve got to prepare for that as well.” We have been through the SARS pandemic in 2003 anyway, which was on a much smaller scale. It seemed large at the time but we put things in place at that time. One of them was this thing that if a pandemic strikes, the owners of second homes would want to go and move into them. We had to be prepared for this happening and how we would relocate guests and deal with all this. When this started, we had some of these instances where owners wanted to relocate all their guests. We had the procedures in place. Learn from what has happened and apply it going forward because this won’t be the last time. There was such a lot of learning to take forward.

I hope they allow you to continue to teach that. It’s going to be important to have these conversations at VRMA and the other events. We’re talking about how to prepare for events like this. Now that we know this is the reality in our world, hopefully, you can share your experience and your emergency planning with other managers and help them best prepare for this.

The pandemic wasn’t the last on that list. The zombie apocalypse was the last on the list.

You never know.

We never knew about a pandemic, so let’s be prepared.

I’ve got one last question for you. What are you excited about going into the rest of 2021 and 2022?

I am excited about the border opening so I can head South, spend my entire winter from November through April in Gulf Shores, Alabama, and work from there. I’ve always worked from home. I now want to work from away. That’s what I’m excited about. I’m always excited in general. There are always some opportunities out there.

If the borders open up, are we going to see you in San Antonio?

I’m not sure the border is going to be opened up by that time but we shall see. If they are, I very likely will be there.

I find this hard to believe. If you’re tuning in to us, you’ve probably already tuned in to Heather Bayer before but tune in to Vacation Rental Formula. Can you go ahead and put your information out there, Heather?

It’s the Vacation Rental Success Podcast out of my company, which is the Vacation Rental Formula where we are building up training materials for property managers. My passion is to help small property managers to achieve greatness. Whatever I can do with my twenty years of experience running a property management company, I will do that. You can find me at VacationRentalFormula.com. Email me at Heather@VacationRentalFormula.com. I’m always happy to hear from people. Listen to the podcast and every podcast that’s out there because there are some amazing ones. Thank you for coming into the space and adding your unique perspective as well.

Thank you so much for coming on board. We knew we couldn’t compete with tips, tricks, and success. That’s not our forte. That’s why our focus is on the news and culture.

I love it.

Thanks so much, Heather. We appreciate you.

You are very welcome.

Important Links

• Vacation Rental Formula
• CottageLINK Rental Management
• Carl Shepherd – LinkedIn
• The Hosting Journey
• VRMA
• Vacation Rental Success Podcast
• Heather@VacationRentalFormula.com
• http://Megaphone.fm/adchoices