CFD 591 – Getting Landlords To Say Yes

February 13th, 2020

One of the unique things that you need to understand is that people do things for their reasons, not theirs, and their reasons make sense to them. Be careful about assuming that the way you think is the way that everyone thinks. When it comes to talking to landlords as a short term rental operator and getting them to say yes, there is a proven process that you can use to start the conversation and close the deal.

  • Why do you think that landlords want? 

If you’re the one offering a solution to a problem, you’re in business. That means you need to understand the pain of the problem in order to make a sale/present yourself as the solution to the problem. If you’re not getting the answers from the people you’re talking to, it’s not the business model that’s broken, you’re probably just approaching the situation incorrectly.

Many of us put off our pain until the last possible moment, landlords have pain too, you just have to understand what that pain is. When someone is in pain, they don’t care about a person’s pedigree as long as they believe they can solve their problem. When it comes to talking to landlords, their biggest problem is vacancy and as long as you can speak competently by understanding that the landlord conversation becomes much easier.

The conversation is only difficult because you don’t yet have a thorough understanding of their problems yet. As you continue to have a better handle on the problem, you will run into another set of challenges. Namely, getting the person to admit that they have a problem.

The average short term rental guest stays at a venue for 5.6 days. That means that roughly five times a month, the unit has to be cleaned from top to bottom, which is an interesting point you can bring up in conversation with a landlord. How often does that happen with a traditional long term rental situation? The answer is almost never.

Another benefit to the landlord is a general decrease in wear and tear on the unit. Guests typically spend their time somewhere other than the unit itself, especially compared to long term tenants. Your relationship with a landlord is a symbiotic relationship where you are both helping each other.

  • What do you think the landlord gains by working with you as a short term rental operator?

The benefits of a consistently occupied unit not only leads to more reliable payments for the landlord, the building is valued based on its net operating income and if they can show that vacancy is going to be consistent, it can add up very fast for the landlord. 

The landlord also gets the advantage of decreased leasing fees and management fees. Working with you as a short term rental operator can save them thousands of dollars in leasing fees and every day the unit is vacant they are losing money, which is a problem you can solve directly.

As a short term rental operator, the landlord can be confident that their property will be sufficiently covered by the right insurance, which is not something they can always rely on with traditional tenants. Short term rentals also get to take advantage of all the technology available that most landlords have no idea how to make use of, including increased security and fire protection. We can protect their property better than they or their tenant can.

Professional operators can’t be taken advantage of in the way that the scare stories on the news are saying they can.

  • How To Start A Conversation With Any Landlord

Here’s the perfect script for starting the conversation with any landlord. 

“Hi, my name is (your first name). My company and I are looking to lease a number of properties in the area. Are you the right person to talk to about that?”

You want to plan the seed that when it comes to sign the lease, it’s going to be with a corporation and with someone who can potentially solve their vacancy problem. 

On the phone, there is no other goal than to get an appointment to see the property and that’s it. Once you’re on site avoid saying have an AirBnB business because that’s not factually accurate and the name has already been poisoned by news outlets all over the country.

Once you’re on the property, when someone asks you “is this AirBnB?”, you respond with how you acquire customers. When someone asks you “what does your company do?”, you respond with who you serve. Ultimately, the conversation should move towards getting around the landlord’s existing prejudices around short term rentals.

One principle to keep in mind when answering their questions is asymmetrical sharing, when you share your information with them they will feel obligated to answer your questions as well. Answering their questions is your opportunity to demonstrate your competency and ability to solve the landlord’s problem.

Another thing to keep in mind is that when you are touring the property, you should be spending that time in qualifying the property.

  • Does it matter how you dress when it comes to the appointment with the landlord?

How you dress does not matter, what matters is how confident you are when you show up. Whatever attire you have to wear to achieve that will work.

  • How do you navigate newly established business credit that does not reflect a rental history? What if the landlord does not want the entity to guarantee the lease?

The highest level of success will come from working with owner controlled buildings, business credit will not likely come into play unless you’re dealing with REIT. Most owners won’t care if you don’t have a history, don’t make that assumption.

If the landlord doesn’t want the entity to guarantee the lease, that’s fine. The entity is still on the lease, you just offer a personal guarantee.

Links:

cashflowdiary.com/howmanyunits

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