If you are looking to rent a property with the intention of being an Airbnb host, the question then becomes, how do you convince a landlord to allow for short-term rentals in your contract? Today’s guest is a veteran Airbnb host who is ready to share his strategy for securing negotiating power with property-owners, as well as other lessons he’s learned in his lengthy Airbnb hosting career.
Roger Lee moved to Taipei in 2010 to assist with a property renovation project, converting a family home into studio apartments for rental. His ability to speak English gave him leverage as a property manager, securing short-term rentals through sites like Craigslist. With that experience under his belt, Roger set out on his own, renting properties that were candidates for renovation from willing landlords for short-term rental on Airbnb. He has worked his way up to nine listings, including his hip Taipei bachelor pad.
Today Roger takes us on his journey to successful property management, sharing his advice for aspiring hosts, the lessons he’s learned after seven years of experience in the market, and his point of view regarding Airbnb’s place in the travel industry. Listen and learn how to convince property-owners to allow for short-term rentals – and how Roger uses this podcast as a sleep aid!
How Roger got his start in property management
How Roger established negotiating power with landlords to allow for short-term rentals
Roger’s advice for aspiring property managers looking to rent units for Airbnb
Roger’s greatest hosting challenge
The most significant lesson Roger has learned from Airbnb hosting
Roger’s take on the value of Airbnb
This episode is sponsored by Hostfully.com where you can create a custom digital guidebook for your guests!
Complete Transcript for Get Paid for Your Pad Episode 161
Welcome to Get Paid for Your Pad. The definitive show on Airbnb hosting, featuring the best advice on how to maximize profits from your Airbnb listing, as well as real-life experiences from Airbnb hosts all over the world. Welcome.
Jasper: This episode is brought to you by Hostfully, a company that helps you make beautiful guidebooks for your listing. Specially for Get Paid for Your Pad listeners, get two free months of their premium version. For more details visit hostfully.com/pad.
Welcome everybody to another episode of Get Paid for Your Pad. I am in Taipei Taiwan, and today I am talking to an Airbnb host here in Taipei. I actually got to talking to him when I was looking for a place to stay. He has a pretty cool bachelor pad right in the area that I like, so I sent him a message. Unfortunately his pad wasn't available, but he told me that he's been listening to the podcast, and that's how we started chatting. We met up in Taipei, actually had drinks, and we had some sushi together. And one of the funniest things that he told me is that he listens to my podcast before he goes to sleep, because it helps him to get to sleep. So I felt that was pretty funny. So welcome to the show Roger Lee.
Roger Lee: Jasper, all my pleasure to be here. What's up?
Jasper: It's going well man. I'm glad the rain has stopped here in Taipei. I actually saw some sun today, so that's pretty good.
Roger Lee: It's a nice day out, actually. It's a really nice day out. Yesterday is like world was ending. [crosstalk 00:02:11] this past week.
Jasper: Yeah. I mean honestly, I've never seen so much water come out of the sky as in the last like seven days. And I think there's been some floodings actually in Taiwan, haven't there?
Roger Lee: Yeah. I've seen some cars be covered past the hood in water. At least in videos, online, I've seen it. Not in person. In Taipei City, Taipei Proper, the irrigation is excellent. We had probably no flooding, but outside Taipei, smaller cities, they're really dealing with some waist-deep kind of problems.
Jasper: Yeah, it's pretty insane how hard it can rain here. The first thing I wanted to ask you Roger, because I felt it was really funny. So my podcast makes you fall asleep?
Roger Lee: Yep. I can't tell you how difficult of a problem I have with sleeping, but your podcast is the best solution I've ever found.
Jasper: Can you elaborate on that?
Roger Lee: No. No I'm just kidding?
Jasper: Is it my boring voice?
Roger Lee: No, actually I kind of think of it as a range of how engaging something is, or how boring it is. And if something is too engaging for my mind, I'll focus on it. I'll think, and I'll have a lot of thoughts about it, like I'm studying. So I won't be able to go to sleep. And then at the other spectrum, if it's too boring, then I just start thinking about other stuff that I'm worried about, and those are the things that … The same problem, right? Kind of on the other end. And with your podcast, you have me kind of really in a sweet spot, where it engages my mind a bit, but it's still like work, so it's still something that I can kind of tune out and eventually fall asleep to. So it's actually just the perfect thing.
Jasper: That's funny because I do the same thing. I listen to audio books, and I sometimes also listen to a lot of podcasts when I go to sleep. My rationale is kind of that, if I don't fall asleep, then at least I'm doing something useful. I'm learning something. I'm listening to interesting information. So we all have these times sometimes when you go to bed, but then it takes 30-45 minutes before you're actually sleeping. So instead of just staring at the ceiling, at least I feel like I'm doing something useful.
Roger Lee: Yeah. Something along those lines pretty much.
Jasper: Awesome man. Well let's go very far back in time, because you've been doing Airbnb for a very, very long time. The topic of this podcast is how to run a business using Airbnb. You turned a bunch of apartments into one giant Airbnb business here in Taipei, and that's basically your main business. You're living off it. It's similar to what I have done for a very long time, although I only have one apartment, and you have several. We're going to be talking about how did you set it up? How did you build it? What kind of properties did you buy? And what's turned out working the best for you? So I'm really excited to get into it. Sorry, did you want to say something?
Roger Lee: I would not like to frame it like that. I would just like to say I'm a normal guy, and it's totally not a business. I'm just doing this to pass the time.
Jasper: Awesome. Okay, well let's go back to 2010, that's when you started right?
Roger Lee: Yeah at the very end of 2010.
Jasper: So tell us about how you got started.
Roger Lee: I was actually just helping someone out, going over kind of like what Taipei is. I'd just moved here because I thought it was the best place in the world to live. And I thought it was also a great place to do small business and small projects. I was helping someone out, working on their project. And what they were doing is …
If I step back a little, Taipei was kind of like really starting to develop in the 1950s. Ever since then the residential places that have been being built, they're all like three, four, five bedrooms so that families could live together. And as Taipei started developing, and started getting students and immigrants and people from other cities that wanted to work here as a profession, there started to be a need for studios. You know people to just be able to live by themselves, like studios and one bedrooms. And back then, like 30-40 years ago, there are just none. They are just not being made because there's no demand for them.
So there's like an interesting business model that kind of happened when there started being this need for them, people would gut like a three-four bedroom place, and then chop it up into a bunch of studios. So when they used to get like $500 U.S. for rent for example, you would get like $300 times four per studio. So it was like a really good investment. People would make their money back in a few years.
And this person I was helping out, it was like her first project, and she didn't really know what she was doing. So I was kind of figuring out the whole way along too. I really did my best. It was a fifth floor walkup. I had to like carry all these cement bags up and like these cinder blocks up. That was some of the more strenuous as far as physical labor things I did. But I also did painting and stuff like that. But eventually I got these studios up and running, and I also did the renting out part for them as well. Back then, I'd never heard of Airbnb, and pretty much how we know it today did not exist.
So I'd just go on like Craigslist and a bunch of local sites and just try to rent it out, whether it's by the day or by the month or by the year. And just because I think probably I'm an English speaker, I ended up getting a lot of short-term tenants. More like weeks at a time, or months at a time. Whether they're here to visit friends or vacation, but because those particular units were right outside of the University here, I got a lot of students here as well who were maybe learning Chinese or studying for a semester or two here.
That was kind of my original foray into property management, and how I got started. So I pretty much did a lot of the bulk of this work to get these studios up and running. I learned a lot on the way. And I kind of just thought, you know, that is easy making the numbers work. So why don't I just look at more units and see. It doesn't take that much time. It just takes a lot of time up front, and then whatever I end up doing, I can always just have these as income. Like be a landlord, basically. That's kind of how I got started with all of this.
Jasper: And then you decided to expand? Did you rent more units, or did you buy more units?
Roger Lee: I rented all my units. So I got lucky on some of them, because some of them were owned by landlords who just didn't care about them. So me coming in as, in their eyes, I'm an investor. So they wouldn't want to even pay for air conditioners for places, like in Taipei on a subtropical island, right? So they weren't getting anyone interested. So me coming in, I'd like renovate the whole place for them, and it ended up being a really good relationship. So whatever I wanted to write in the contract, I had a lot of negotiating power. So back then, Airbnb was … No one ever heard of it, so good reputation or bad reputation, it didn't exist. So all my properties say I can rent it out short-term.
Jasper: Right and this is an interesting topic, because I know there's a lot of people who are renting places, and then they want to put them in Airbnb. But often it's against the regulations. It's against the building regulations, or there's a cost in the contract. So I think a lot of people are looking for those landlords that allow them to rent out on Airbnb. So could you provide any advice or any guidance for people who are looking to set up a similar structure as you have? Like how do you convince the landlords that it's okay to do Airbnb in short-term?
Roger Lee: Well I think one part of the magic is that I kind of got in the game before it was high profile. So I think nowadays, it's a lot more and more difficult, especially in Taipei, a little bit of bad reputation, it scares people off really easily. Especially, you know landlords are normally older people that just maybe they have their own business already, or they're retired. And they just don't want any trouble. So like a whiff of trouble, people are gone. I think that's a really big part of whether it's luck, or whether it comes down to convincing. That you have to kind of make sure that if these people, if they fit this kind of profile, that they don't think it's going to be any trouble at all. So I think that's one major thing.
And another major thing is like I came into these properties, and they were all pretty … As far as it goes, just needs a lot of investment. They were like run-down. So if you want to say, I'll invest a bunch of money in this place, then I think that gives you a lot of negotiating power. And if you say, what I'm going to do is rent it out, like that's why the money is going in, then that's something that'll convince a landlord a lot more sharply.
And another thing is that they have to be kind of clear about what's going to happen with the neighbors, because there's all kinds of relationships between the landlords and the neighbors right? So some landlords just don't care about the neighbors, and that might help for kind of the signature, but then afterwards the neighbors will cause you problems. Will be like, you know, they don't like your landlord. He didn't do these things in the past, and then kind of demand them on you. So you can kind of consider that.
But there's also the other spectrum, where the neighbors are kind of controlling the situation, or like the landlord is super respectful of the neighbors. And then if that's the case, it can be like they can actually help you and say like, oh they're gonna try this. We're gonna help out this kid, you know, he's just a young guy trying to make it. It's a new market or whatever, and we're gonna see how it goes. If it doesn't work out then I'll have him leave, through these kind of contracts in the clause. So these are all different ways to think about how to work with your landlord.
Jasper: I think one of the good points you're making is when you look for a landlord, when you're trying to negotiate with the landlord to convince to allow you to do Airbnb, you always have to think about what's the upside for the landlord, right? I mean if you're just going to be paying the same that somebody else would be paying, then there might be more liability for the landlord because of regulations or because safety concerns, the neighbors. So you gotta provide some sort of upside to the landlord. I think looking for places that are rundown, and then offering to put some money into it, if the landlord allows you to rent out on Airbnb, is a pretty good strategy. I mean I imagine.
Roger Lee: Yeah, I would say especially in those cases, the landlord might even be kind of down to a really small pool of people who can rent the place period. And then if you're willing to work with him, even though you have kind of your own terms, then I think you're moving up pretty high on their list of people that they would want to rent to.
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So how many properties do you have now?
Roger Lee: I have nine including the place I live.
Jasper: Awesome, I loved your place by the way. I wish I could have stayed there.
Roger Lee: I think you have to submit a resume and interview with me, before I let you stay here. It's a pretty difficult process.
Jasper: Hey man come on, I'm helping you sleep.
Roger Lee: Submit your bank statements, maybe social security number. No, but I haven't rented out my place in, I think I told you, like a year and a half or something. And that was only for New Year's when I was like … Actually what I did was I have a bunch of Hyatt Points, so I just use my Hyatt points to rent a hotel room at the Hyatt. And I just stayed there and rented out my own place, just for a buck.
Jasper: Right, New Year's is a pretty good time to rent out. I bet you're getting really good rates.
Roger Lee: Yeah, Taipei's an awesome place to come during, I mean any time of year really. Really it's pretty awesome all time of year. I'd say August, don't come in August, but otherwise awesome place to come. New Year's, you get fireworks coming out of 101, that's like unbelievable. It's so cool.
Jasper: I know, yeah that definitely would be amazing. I'm looking at the 101 Tower right now from my window actually. And for those who haven't been to Taipei, the 101 Tower is … I don't know exactly what the ranking is now, but it used to be the tallest structure or tallest residential building or tallest office building in the world. One of those, but it no longer is.
Roger Lee: All three.
Jasper: It used to be all three, huh? But since then, it's got taken over by the building in Dubai, right?
Roger Lee: Right, that was the first one, and then I believe there's one in Shanghai now.
Jasper: Okay. Interesting. But it's still an amazing structure. I've been up there a couple of times. Obviously, the view is really cool, but also what I find really interesting about the tower is the mechanism that they installed to make sure that the building doesn't collapse or get damaged during earthquakes. Because there's quite a few earthquakes down here, isn't it?
Roger Lee: Yep. Sometimes you get woken up in the middle of the night. But I think it's kind of pretty cool, rather than anything to be worried about.
Jasper: Yeah, I have to tell you, I experienced my third earthquake last year here in Taipei, and it was by far the strongest that I've ever experienced. And that got me quite scared to be honest. I really didn't know what to do, because what do you do when there's an earthquake? I basically just sat on my bed and prayed that it would be over.
Roger Lee: I like to play with my phone. I like to make Facebook posts to see who has the coolest Facebook post about the earthquake within 10 minutes. Or I like to maybe message my friend and make an earthquake joke. But other than that, they're really nothing to worry about in my opinion.
Jasper: Well you've clearly gone through more earthquakes than I have in my life.
Roger Lee: Well I have to say, you've been around Taipei a lot. I think a lot of people have kind of a weird notion of earthquakes, as far as I understand. But if you just go around Taipei, like how many buildings do you see are destroyed by earthquakes?
Jasper: I don't think I've seen any.
Roger Lee: Well, then what's there to worry about?
Jasper: That's a good point.
Roger Lee: Yeah, I mean like-
Jasper: I still get scared though.
Roger Lee: Most of the places have been built within 70 years or whatever, so within 70 years how many buildings are destroyed by earthquakes?
Jasper: How many earthquakes are there here per year?
Roger Lee: A lot.
Jasper: A lot right? It's almost like a little storm or something.
Roger Lee: Yeah, I would say like a decent one once every few months is not uncommon at all.
Jasper: Anyway, let's move back to the topic of Airbnb. I wanted to ask you, you've been doing this about seven years or so. What are the biggest challenges that you've seen, and also what are the biggest learning lessons?
Roger Lee: Something I was really annoyed about was smart pricing. That was really tough. Right when it came out, I think a lot of my instinct, as well as a lot of other people's instincts were, you know, there's a low [inaudible 00:20:43] you'll accept, and then this is like the highest that it should be. And it ended up being only priced at the lowest. And I was kind of thinking, that's not what we agreed to.
But I feel like, just as far as what happens in the market, everyone kind of did that. And it kind of just messed up the market. Especially at the same time, China announced that they weren't sending anymore tourists, like they were significantly reducing tourists. I forget what number it is, but it's a really significant number. So both of them happened at the same time, and I think that kind of just screwed up the market at the time. And I thought that was really unfortunate.
Another thing that I think is … I want to say it's a challenge, but it's more of a learning experience. Which is that, you know you have to deal with all these different kinds of people. And I think when it comes to just life, that's just how it is. You have to deal with jerks, no matter if you have the best job in the world, or not. There's just like no such thing as a job where you don't have to deal with jerks. It's kind of why people pay for things is so that you can be a jerk to someone. Maybe some people think this, maybe including me.
But kind of how Airbnb works is like if someone … Sometimes I feel like if someone's being a jerk and making a big fuss about nothing, or something like that. And then they contact Airbnb. Airbnb might just be like, we'll just take this back to zero, like you guys never met, and it could be unfair, it could be not fair. Fair is kind of a wide range. So in that sense, I think that's kind of like it can be a pretty poor way to start or end my day is a fair way to put it.
But other than that, it's completely transformed the market. It's probably the best thing to happen to travel in my lifetime, maybe more than just my lifetime. Well, not better than airplanes, but in my lifetime. And then it's just kind of pretty incredible thing overall, so that's what I have to say.
Jasper: What's the learning lesson from sort of the more negative experiences that you had with your guests? Is the learning experience that this is just part of the business? So you just gotta deal with it?
Roger Lee: Yeah, I don't really know. I mean there's a small gamut. I would say always trying to take the high road. I know it's tiring. I know it's very often unfair. But I think it's probably just still the safest way. Then aside from that, I think you also kind of want to know everybody's trying to cultivate this culture that everyone should be, I don't know, maybe like nice to each other, and that it's a community. And I totally agree with that. I think that's the best possible outcome.
It's kind of like when we first had Ebay when I was growing up. The reviews were kind of like the first step to making Ebay possible. This is like the next step to making a real world community, where people are actually meeting each other. Instead of, for example, like Reddit, people up and down each person's post based on if they think it's good or not. Which is kind of a similar thing, but in our case, people are actually meeting each other in person, and we're actually creating this kind of community. Which is not just ambitious, but really could be a pretty amazing thing as it evolves the next 10-20 years.
I have to say, I've met some pretty awesome people that have been my guests. And that's really probably the best part about doing this. Some people that I'm really tight friends with.
Jasper: Awesome man. Well I think it's pretty impressive what you've done. You're very modest about it, which is a good thing. But I think it's awesome what you've done and wish you all the best in the future with your Airbnb business. Hopefully I get to stay at that nice little pad that you have in the future sometime. But thanks for coming on the show, and it will be funny, next week you can listen to yourself when you go to sleep.
Roger Lee: I'll probably skip myself. There's no way I'm going to be able to fall asleep if that's the case. I'll probably have nightmares.
Jasper: Yeah, it's a funny thing. Nobody likes to listen to themselves right? I remember the first episode that I published, I listened to it, and then I was like, “Oh my God. I don't know how many hate comments I'm going to get on this.” But you know what? I never really got any, so it's all good. But anyway, thanks Roger. Thanks for your time. And to our listeners, thanks for listening. On Friday we'll be back with this week's newest episode, so I'll see you then.
Roger Lee: It's been awesome Jasper, much love to you and all your fan base.
Jasper: Awesome dude. Take care. Bye-bye.
Roger Lee: Later.