Host: Christine Karpinski
Guest: Bev Babich, a vacation homeowner who manages her properties as a co-op with other owners.
- How to start a co-op group for vacation rentals
- Dividing responsibilities among the co-op
- How to organize bookings and income
- How many participants would be ideal for co-op rentals
- Potential problems to watch out for
Christine: Today we're going to talk to Bev. She owns in Summit County, Colorado and has gotten together with a bunch of other owners to work things out. Bev, thanks so much for joining us today.
Bev Babich: Thank you for calling me.
Christine: OK. Now, we're going to get right into this. Your property is where?
Bev: My personal property is in Frisco, Colorado, right on a river there.
Christine: Frisco. Is it near ski areas? What kind of... paint me a picture?
Bev: It's right in the middle between four ski areas. So, we have Copper Mountain, Breckenridge, Keystone and Arapahoe Basin all within a 15 mile radius.
#Christine: Neat. Great location, I am sure. So, you've formed, what you told me, is a co op with other owners. Can you tell me a little bit about how you started with this and how did it even come about? Tell me a little bit about it.
Bev: Well, some of our owners that are in the co op at this time didn't have property managers. Originally, we were all friends and neighbors, all at the same little complex in Keystone.
We had monthly socials at which the wine does flow, and we all got to complaining about our management companies, and I was just getting into buying and doing my first vacation property so I was trying to keep my mouth shut. But, they were saying things like this, that and the other thing, complaining and finally somebody spoke up and said, "We've got a bunch of smart people here. Why can't we do these ourselves?"
[Mine] was a lucky enough property that we did have a live-in manager. So, we were basically paying for the same services twice, both with a management company plus our live-in manager who we, of course, paid. So, that's how we got kicked off. We just formed our little group of friends and neighbors, and away we went.
Christine: It started over a glass of wine, imagine that.
Bev: It was more like three.
Christine: OK. Three glasses of wine. So, then, what did you do? You know, you all decided you were going to get rid of the management company. Tell me the steps that you took.
Bev: Well, basically, we had to wait until the contracts of everybody ran out because you are contracted to those people. Those that did not have contracts like myself who were just getting started were able to start immediately. We just figured out who had what talents.
I was one of the least talented people in the group, so...
Christine: Oh, come on.
#Bev: My only gift was the gift of gab, so I was given the phones and some of the answering of the email. We have a gentleman who puts together our different web pages and listings. We have a gal who was actually a professional bookkeeper and is now retired, but she's able to handle the tax situation, housekeeping and making sure everything works well. The division of labor has worked really, really well. We even have a few people who can do things like tile work.
Bev: So, if you're unable to contribute to the group or wish not to do so, it is possible to pay people for their services. We just keep everything ‘within friends' type of low prices that well undercut any prices you'd pay elsewhere in the county.
Christine: OK. So, you've got one person that just handles keeping track of all the websites, and I'm assuming that means the listings on VRBO or HomeAway.
Bev: That's correct.
Christine: Do they also do personal web pages?
Bev: A couple of our owners do, but we have found that HomeAway and VRBO‑type websites basically work better than a private web page.
Christine: So why put your efforts into something that...
Bev: You're just doubling your efforts and it's much nicer to just have a lot of traffic from one location and one website or listing or two listings to worry about than having to worry about lots of little websites.
Christine: OK. So, one person handles all of the website stuff. Another person handles the phone calls. I imagine your phone number is on all of the listings.
Bev: That's me. Yes.
Christine: Oh my, and then you might handle some of the emails. Is there another person that also handles emails?
Bev: Well, sometimes if I'm unavailable, somebody else will just log on to my email address. I just give them my password, and they just get right on my email and answer those emails that come in. I can't be there 24 hours a day, though I try.
Bev: They all do come to me. Everybody thinks they are talking to me, but it's not always me.
Christine: Right. Then, you've got another person that does all of the bookkeeping. Does that person handle the money as well?
Bev: No, all checks are written directly to the owner.
Bev: It's a constant cash flow situation. It works very well for each individual owner. She just helps us with figuring out tax amounts and stuff like that because it's different depending on where you are in the county, that kind of thing. So, that helps, and she helps keeps things straight, like some of the housekeeping things and who owes who what because we have a co‑op. Some people kind of earn points; other people don't.
Bev: So, you have to work all of that out. There has to be somebody there to keep track of all that.
#Christine: So, I'm thinking, I own multiple properties. Between me and my husband we answer all the inquiries and phone calls and all that. I'm thinking sometimes even just because it's the two of us and if he and I haven't communicated and if I've been on the road or whatever, sometimes we mess up because we're duplicating efforts. Maybe, he's already confirmed with somebody on the phone, and I'm answering the email. How do you keep all of it straight?
Bev: Well, that's real easy because we've routed everything through one phone number and one email address. Then, they are right there and we keep a master set of calendar books, and nothing is finalized until it's in that book. So, that makes it very, very easy.
Christine: So, you've developed a system that just sort of works?
Bev: Yes, it works real well for us. It's something that's evolved just shy of 14 years.
Christine: Oh, wow.
Bev: So, we've been doing this a long, long time.
Christine: A long time.
Bev: And, you have your ups and your downs in anything like this. You make your mistakes, but you go on, you pick yourself up and keep going.
Christine: Now, do you also have somebody that meets and greets the renters? What about if something goes wrong with the place, who are they calling?
Bev: Well each owner does self‑manage.
Christine: Oh, OK.
Bev: But we do have a gentleman who has created a small‑business up in Summit County, and he does anything along those lines you would like done. He will do walkthroughs weekly, check your hot tub, he'll change light bulbs, anything like that. He even makes sure the trash cans get out.
Christine: Oh wow.
Bev: ...and picked up so that the snow‑plows and the animals don't get to them. So it's just a matter of building an infrastructure of people that work well for you. Most of us use the same housekeepers, so that all makes it real easy. Having him there and he's kind of a paid employee by each person, he charges a monthly fee for whatever it is you need done.
Bev: And it just works really well.
Christine: It sounds almost too good to be true.
Bev: Well that's why we keep an extremely limited group of people.
#Christine: Huh. Now how many people do you have in your group?
Bev: At this time we have nine people and 21 properties. Basically the only way you can join our group is by purchasing a property from an owner who is selling out. Now, we have rented to a couple of interesting things, where somebody has bought a property, but they already owned two others. So we suddenly had three thrown into the pot, but we worked through it, it works out just fine.
Christine: So you keep the group pretty close?
Bev: Yeah, it's a pretty limited group, yes.
#Christine: OK, so in fourteen years of all this, doing this, I imagine there had to have been some sort of arguments or disasters that happened between the owners. You know, when you get that many people to try to all get along, and when you're talking money and business, sometimes it doesn't work. Have you run into that?
Bev: We really don't have that much of that kind of problem. And there's always the chance that, you know, you can be voted out of the group. So, people pretty much mind their Ps and Qs.
Christine: Ah ha.
Bev: Never had to do that, one time came a little bit close, but because all monies are directed directly to the owner, there is no handling each other's money. So that takes away the biggest points of contention in most groups like this.
Christine: This is probably true. But, you know, money seems to be the root of all evil right?
Bev: Yeah, and these are people who know each other for an extended period of time before they even got into this. So it's not like, well the majority of us, there's a couple of new ones that come in. But, you know, it's just one of those things where we truly enjoy each others' company.
Christine: Oh neat. Now, if you were suggesting, if someone were to come to you and ask you about getting one of these things started, would you recommend something like this?
Bev: Well, I wouldn't recommend it for just a bunch of strangers jumping in bed together, so to speak. If it's people you know would either carry their own load, or pay for the services that the other people do provide, than you could probably make it happen.
Christine: Oh nice. So basically, what you're saying is if you're not pulling your weight in time, you've got to pull your weight in cash.
Bev: Yeah. You've got that right.
Christine: So then, if I understand this correctly, and you don't have to divulge all your inner secrets of your group, but, since you're taking all the reservations, all the phone calls, all the emails, than part of that money goes directly to you?
Bev: Meaning the percentage that the owner would pay for that?
Christine: Well yeah.
Bev: Yes, that would go directly to me.
Christine: OK. So it can sort of add up like a little job as well.
Bev: It has done that. I have owned a couple of small businesses that are very flexible, thank goodness, and they've kind of gotten put on the back‑burner. Because, as we each increase our holdings, it's getting to be more and more time consuming as time goes on. And I have found that it's very portable, I can take it with me. I even took the phones with me to Australia for 30 days one time. No one even knew I was gone, it was kind of scary, because I answered my phone and chatted with them just like I was right here in Denver.
Christine: Oh my goodness, that's amazing.
Bev: Oh you can go on cruises and things now and still are able to handle phones and email. It's amazing what technology can do for you.
Christine: It sounds like it's just a really good network that you've got going on and sorry everybody else that's listening that wants to join her little network, because as you said, it's a rather closed community. However, you know, I think that if you would like to do something similar, you can see that is has worked for someone. You can unload the parts of your vacation rental life that you loath doing, like I hate charging the credit cards each month and I love to take the reservations and love speaking to the potential rentals, but I don't like doing all that back end stuff. And if you can find somebody that you could divvy up the duties with, and find somebody that you would trust would do a great job, then I guess it's a great relationship to have.
Bev: Yeah you'll find that the bookkeeping person is very often a side person who doesn't do well on phones, and they're thrilled to sit with their numbers and their books. And me, you give me a set of numbers and books, and I'm cross‑eyed, like nope, go away.
Christine: Wow it really takes a village to run a vacation rental business.
Bev: Oh it does. It's so nice to have come tax time, to have somebody present you with your information for your tax account and all prepped and ready to roll.
Christine: OK you're just making everybody jealous out there. I think it's such a great thing that you've got going on. Thank you so much for sharing your story and I wish you and your entire group the best, it sounds like you have a good thing going.
Bev: Well I just think we were just lucky to have the right people at the right place and the right time, with the right properties. And having the VRBO, and the HomeAway group start up their businesses pretty close to the same time, it was just the perfect marriage.
Christine: Perfect, perfect. Well, thank you for joining us again, her name is Bev Babich, she joins us from Colorado where she's got a really neat co‑op that she works with to run their vacation rental business. You may want to heed her advice.
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© Copyright HomeAway, Inc. 2008
Published: January 14, 2008
HomeAway,Owner Community, Renting 101, Renting by Owner Essentials,Managing Vacation Rental Properties as a Co-op, multiple vacation rentals, multiple vacation homes