128: Optimizing Profitability of Short-Term Rentals with Samson Waters' Derrick Sabourin

00:00:00 Taylor Atkinson
Welcome back to the Kelowna Real Estate Podcast. I'm your mortgage broker host, Taylor Atkinson. And I'm your commercial agent host, Matt Glen. What's happening, Taylor? Blue skies today, which is nice. Thank God, man. It's been crazy. For a week and a bit, just smoked right in. It feels like it's going to stay until September, and then we wake up today, and it's just a nice day.


00:00:22 Matt Glen
Yeah. You know, like a couple of years ago, people were saying, hey, it's getting smokier and more fires. And I was kind of like, I don't know, is it? Maybe it's just like more media, more like awareness of it. But I mean, it is kind of like it just keeps coming year after year.


00:00:38 Taylor Atkinson
year. So we started the show in 2023, right? And then the first summer. was the crazy summer where I got evacuated at McKinley, like the big fire in the West side that jumped the lake. That was in 2023. And that summer obviously got cut short. That fire started on August 17th. And the reason why I know that is because it's my wife and I's anniversary. And we were out for anniversary dinner when we got called back to our house to get our stuff. Then the next summer, then we also started having all these real estate changes coming in, right? Like the short -term rental issue and like all this stuff. So then the following summer, the weather was nice. We didn't get any fires, but we also didn't get that much tourism because of the short -term rentals, the economy dipping, right? All that garbage that we have to deal with. And then the following summer, so that was 2024, and then 2025 last summer was also pretty nice. But I think, again, the uncertainty with those rules, but then also just the economy being down kind of killed tourism. And then this year, things were looking a little better. And now, beginning of August, we just get cooked by the fires.


00:01:40 Matt Glen
Yeah, well, great segue to Samson Waters, short term rental property management. So we had Derek on from there, who I've gotten to know really well over the last year or so. Yeah, we meet at, you know, volleyball once a week. And so I know I'm outside the profession, but inside as well. And that was kind of our question to him was like, hey, what's the vibe right now? Because I don't know about you, but I feel kind of disconnected, you know, like a couple of years ago, short term rental stuff was all the hype, right? That's kind of all the media. headlines that were coming out and then exactly what you mentioned you know tourism got crushed and fires and economics then this year we're like okay short -term rentals back but you know are are we gaining enough traction early enough i mean i feel like we're probably heading in that right direction especially with like how bc's been hosting fifa world cup and lions game up here and like summer games like lots of cool stuff And then this happens and man, it is a grind. And same with like wineries, right? Wineries had the cold snap and then the fires and now fires again, which affects the grapes. Oh, it's crazy. I was at a tasting a week or so ago. And they were like, yeah, the problem with the smoke is they don't actually know when that flavor is going to come out of the grapes. Like it could never, or it could come out once it's bottled five years later. So that's like the big risk when you have this like long -term smoke effect.


00:02:59 Taylor Atkinson
big risk when you have this like long -term smoke effect.


00:03:02 Matt Glen
But yeah, I guess the thing is like, you know, if you are looking at that short -term rental market as an investment, you know, connect with a company like Derek's and get some analysis done. Obviously this year is like a little bit skewed. Because of the fires?


00:03:16 Taylor Atkinson
fires? Man, so on social media, I've been seeing a lot of posts being like, tourists, it's time to go home. It's time to go home. The fires are here. And I'm just thinking, man, like places like wineries, economies like Kelowna's and the whole Okanaganos, like they make, I don't even know what, how much of the money, like it's a massive percentage happens in July and August. So if you just tell everyone to beat it right now, like it just is very hard to recover from like going forward. So I just feel so bad for these businesses. And I just feel like. Telling all the tourists to go home is probably not the right message to send. What do you think about that?


00:03:49 Matt Glen
Yeah, I guess the point that they're trying to prove is like open up accommodation and resources for people that have been evacuated, which is obviously fair. But I will note like a lot of friends and family are also just like leaving the city to say, hey, we're going to Vancouver or the island. You know, want to recover some of the summer and get some fresh air.


00:04:08 Taylor Atkinson
A few of the brokers in our office just left. Like to the island for the week I was working remotely. Like when I drive to work, like our office, like normally it's tough to find a parking spot. It's the last 10 days, all the spots are open. Everyone's just kind of beat it. Yeah. So I think you're totally right about that.


00:04:24 Matt Glen
We were looking at like renting a trailer and just going on a bit of a road trip and reaching out to some companies. It's like, yeah, we just had a cancellation. We just had a cancellation. It is a tough thing to, well, you just can't plan for it. But yeah, hopefully. Get a bit of rain coming through, clears the air out. Honestly, like September is one of the best months in Kelowna. So if you are a tourist wanting to come check out Kelowna, maybe September is the month to do it. And yeah, reach out to a guy like Derek that has a portfolio that you can find some rentals from. Again, if you're looking for an investment and you want to kind of analyze what's good out there, he kind of pulls back the curtains on what makes a property profitable, how to do some value adds, like geographic locations and what he's kind of seen in the market. So yeah, I really enjoyed the show with him. He's passionate. He knows what he's doing. Good to talk to you if you want to start a short -term rental. And his origin story, super cool. That will be at the very beginning of the show. That you don't want to miss out. I thought that was awesome.


00:04:28 Taylor Atkinson
to some


00:05:20 Taylor Atkinson
All right, guys. This is a good show. Enjoy it. Also, one more thing. Don't forget to follow us on social media, like and subscribe on YouTube and wherever else we are. Those kinds of things really help out the show. So we really appreciate if you do that for us. Enjoy the show.


00:05:38 Matt Glen
Okay, Derek, welcome to Colonial Real Estate Podcast. Thanks for joining us, man. Thanks for having me on.


00:05:43 Derrick Sabourin
having me on. What's up, everyone?


00:05:44 Matt Glen
So I've seen you, I mean, in person at a bunch of... stuff lately. Volleyball, obviously, we're playing against each other. You always crush us. So that sucks. I guess you've been doing some webinars and stuff. And I thought it would be a great time to kind of connect and talk about what you're doing in the Okanagan. So maybe if you can give us a quick pitch on kind of your business here and how you got here, we'll start there. And yeah, that'd be awesome.


00:06:08 Derrick Sabourin
Totally. Yeah. So I actually used to be a high school teacher in Manitoba. Oh, really? Yeah. You know, graduated from university at 23 or 24. I taught for a year and a half. I was a Spanish and English teacher. So I did that for a little bit. But after I got that contract, I kind of like had this gut feeling that I wanted to pursue business. I had started a business like in high school slash university. It was like an online music school. And I really liked like the creativity that came with it. And so like I always had that knowing feeling. And so I actually ended up. quitting my job and joining Samson Waters, which at the time was only operating in Mexico. So my cousin started this company 10 years ago. She moved there for a WestJet vacations job to Playa del Carmen, Mexico. And her husband, Rick, moved with her. And he started on the side, this little property management company to fill his time and bring some extra income. And started with one property. was grinding. It literally started with just him, a backpack, and his bike. And he was grinding to start managing some properties out in the city. And slowly but surely, it became their main gig. And so Christine, she left WestJet. She joined the company. She's the CEO now. At that same time where I was having a quarter -life crisis about what I want to do with my life, they were in my ear. They were basically just saying, if you leap, the net will appear. And I vividly remember her saying, me on the phone. Yeah. It took me a few months to make the decision, but basically I left my job and the next week I moved to Mexico in Playa del Carmen to run their operation. So the main office at this time was in Playa del Carmen. It still is, but they had branched out already to, you know, a few other destinations. So they're in Puerto Vallarta, the Yucatan, Cabo San Lucas, like they're in a few other destinations, but that main office was in Playa. And so I moved to Playa to run that office. Keep in mind, like fairly new to the industry. Like they had given me, you know, some homework to do before moving there, but I didn't know what I was getting myself into. The team at the time was like 40 to 50 staff just at that office. And so it was a significant change up in what I was doing day to day from being a teacher. But essentially, you know, I worked there and I managed the operations in the team for a year. And then after that year, I kind of wanted to open my own branch. Didn't really know what that would look like. We looked at a few different destinations and ultimately landed on the Okanagan. My cousins had already moved to Vernon. And so it was kind of a perfect fit. While I was looking for strategies to start growing in the Okanagan, I had come across a management company that was already for sale. And so it was super serendipitous, like right in the market that we were looking to grow in, there was a company. looking to get out. And so it was, you know, a perfect timing. So it took a long time to finish that deal, but ultimately we closed on it in November of 2024. And so I have been here for almost two years now. So now with the acquisition of that company, we started managing, we were at 17 units at the start and we just wanted to really grow from, you know, from where we are. So Silver Star all the way throughout the entire Okanagan. And now we're at mid thirties. So maybe around 35 properties at this point. Yeah. Ultimately our goal right now is just to help homeowners, like, you know, earn some extra income from their, their rental. Of course, there's a ton of regulations that we've had to navigate in between, but that's ultimately what brought me here and what I'm doing today. Is it all short -term rentals that you do or long -term rentals? All short -term. So we do some midterm contracts as well for owners, but yeah, we're staying away from the long -term game.


00:09:46 Matt Glen
I love that story, man. I'm thinking like... Rich dad, poor dad, right? The poor dad is like a school teacher following, you know, all the rules that you're supposed to be doing. And then the rich dad's like entrepreneurial. And obviously you're like kind of lived both lives already. It's kind of funny too. I have to comment before we move on here, but when you're in your early twenties and you go to like a WestJet vacation,


00:09:55 Taylor Atkinson
you're supposed to


00:10:05 Taylor Atkinson
in your early twenties and you go to like a WestJet vacation, like I went out a few with buddies and every time we were there when we were young, at least a few guys from our group were like literally looking for jobs in Mexico to not leave. I should have introduced them to you.


00:10:18 Matt Glen
I mean, it obviously made it easier to transition to that, like having Spanish as a background.


00:10:25 Derrick Sabourin
Yeah, yeah, yeah, totally. Yeah. This is another thing. I majored in Spanish in university. That was my major, like to become a teacher. Okay. And so it was like perfect synchronicity there as well, because I was already fluent by the time I had moved there. But to be honest, like the first... I'm going to say like three months where I'm having meetings with staff and I need to understand Spanish to know what's going on. Like I needed to have someone translate what was going on because like the first few months that they speak so quickly and sometimes they use slang and you don't actually know what they're saying. But yeah, it was still a transition, even though I was, I was fluent.


00:11:00 Matt Glen
That's awesome. Your life path is like led you like in the direction where you've ended up, obviously to the Kelowna real estate podcast. Exactly. The funny thing is, too, I find a lot of successful entrepreneurs, investors, real estate agents, anyone like taking that leap. They generally take the leap. They're kind of swimming upstream in terms of like for you guys, you know, to expand into the Okanagan during legislation change, like throughout the province was arguably like, you know, some could say, well, it's the hardest time to do it. And maybe that's where the opportunity arose where, you know, this other management company just said, hey, like. We're sick of this or like we don't like the direction it's going. But I find that's where people become most successful because they don't know anything else. Right. Like it's not like it's just easy to do business. So, yeah, I'm excited to see where you guys are going now. And maybe we can just talk a little bit about the Okanagan policy and like what's been going on. Obviously, we've seen some changes in the spring. So, yeah. Can you give us a quick recap on that?


00:12:01 Derrick Sabourin
Totally. Yeah. So for those who are unaware, in May of 2024, the B .C. government basically. outline that there's a few stipulations, but basically if the house is not your principal residence, you cannot rent it on the short -term rental market. There's a lot of caveats and a lot of different ways to look at it. But basically, if we're talking Kelowna specifically, it hit the tourism market pretty badly. And so vacancy skyrocketed ever since. And so I believe the highest it came to was like 6%. And so it led the city of Kelowna to apply for an exemption because basically... They were going to wait until November to flip the rules back, but they applied for an exemption to have it apply as of June 1st. And so just in June, we finally have 21 buildings that were purpose -built for short -term rentals that are allowed to be back on the market. Even though the city of Kelowna allowed these 21 buildings to have... short -term rentals in them, you still needed the strata themselves to vote into the bylaw that they allow it. Some of them didn't. Some of them are saying, you know, it's a seven night minimum. Some of them aren't like, you know, there's levels of short -term rental that they're allowing. And so it's not like, you know, just because you're in one of these buildings, you can automatically do it. There's definitely, you have to do your research. Do you know how many of the 21 opted in or opted out?


00:13:17 Taylor Atkinson
or opted out?


00:13:17 Derrick Sabourin
17 opted in. Okay. All right. But even for example, like Aqua. is one of the ones that opted in, but Aqua Tower one, two night minimums, Aqua Tower two and three, seven night minimums. There is an AGM happening soon, like where they're going to talk about that. And by the time this podcast comes out, that AGM might've happened.


00:13:36 Matt Glen
I think when they originally developed Aqua two, it was only supposed to be phase one that was going to be short -term allowable, but maybe that was just like a marketing pitch too, to like sell phase one. I don't know. I think that's true because they had like the different pools where you're only allowed to access the one.


00:13:47 Taylor Atkinson
think that's true because they had like the different


00:13:47 Matt Glen
think that's true because they


00:13:50 Taylor Atkinson
where you're only allowed to access the one. So I think you're right too.


00:13:53 Matt Glen
Yeah, I mean, like it's constantly changing, which is frustrating. But again, like people like yourself, you kind of find the opportunities when you're in the headwinds there. So I like I feel and Matt, like you comment on this, too. Like, I feel I've been kind of numb to short term rental. Like, you know, five years ago, it was like all people spoke about. Last summer, it was like, whatever. It's never going to happen. We're over it this summer. It's like, great. We've seen policy change, which Kelowna set the president province -wide. So instead of delaying for that fall policy change, now other municipalities can have it in the spring if they meet that vacancy requirement. But I still haven't seen... Your boot's on the ground. So maybe can you tell us, what's it like? Are people thriving? Is business back? Are Airbnb's pumping? I just feel like tourism really hasn't... gotten back to the level that it used to because people just don't really think Airbnb is still like a viable thing here? So it takes time to get listed,


00:14:51 Derrick Sabourin
takes time to get listed, right? So like June 1st was the date that people were allowed to, but that was the date they were able to start their application. So people are still in that process of applying. Like right now we have four that we're currently in the process of applying. I've definitely found that ever since June, honestly, ever since like that happened, we've gotten more leads of people looking for management. I guess my answer to that is that it's going to take some time for it to rebound back to where it was. So for context, if we look at June of 2023, so before all these regulations came into play, Kelowna was at around 2 ,000 listings. June of this year, we're at around 1 ,000. So we're at around 50 % at this point of where we were before these regulations came into play. seeing this as a long -term game to say like, you know, it'll take time for people to get used to it. And like you said, like short -term rentals have become kind of like a taboo thing and people like tend to not want to talk about it or to, you know, address it. But I do think that, you know, over time, we're going to come back to that 2023 level, if not higher over the course of the next few years. Are the thousand listings getting filled up? Is it busy? The ones that we're managing, we're definitely seeing a lot of activity this summer for sure. Yeah. Like, I think people were still coming. They were just having to stay in these hotels. Right. And so the more supply that we're, that we're offering, I don't think we're hitting the ceiling anywhere. Like I have some properties in Silver Star that are, I don't have, I manage properties on Silver Star that they rent them to come to Kelowna in the summer. Oh, really? Yeah. And so like, I'm still seeing more demand than we're seeing supply.


00:16:28 Matt Glen
Interesting. Yeah. I mean, the nice part about the industry. is it is kind of self -regulating in terms of like if the market gets flooded with units, there is no demand for them. Like, you know, investors aren't going to sit there for years with like lack of revenue. So I think that's why like the intervention at a provincial level just was a terrible idea because it. it does self -regulate, but I understand obviously what they're trying to achieve. So maybe we can talk a little bit about, you know, how you guys differentiate yourself from other management companies, like your revenue management style, occupancy, stuff like that.


00:17:05 Derrick Sabourin
Yeah. The first thing that where we differentiate ourselves is our service tiers. So we have different tiers depending on the level of service the owner is looking for. So some of these owners, for example, with these principal residence requirements, they maybe want to just rent their basement suite or their carriage house. They live on site, but they just want someone to get the guests. They want to do the cleanings themselves. They're already there, so may as well be somewhat involved in it. So we have a tier for those people. And then we also have two different tiers for those who want hands -off management, where it's like completely, they'll never hear a peep from us and the property stays in perfect condition, et cetera, et cetera. And so that's the first thing I would say is that we are able to sort of service both types of owners that are looking for, for management. Whereas most companies will just have the hands off tier and, you know, call it a day kind of thing.


00:17:55 Taylor Atkinson
thing. Yeah.


00:17:56 Derrick Sabourin
Yeah. The other part is we have. A lot of experience in hyper -competitive markets like we were talking about before in Mexico. Let's just take Playa del Carmen. There's 15 ,000 listings in the one city. So if you don't have all of your algorithms and all of your data in a row, you're up. likely going to fall behind. And so we're always comparing ourselves to market average. And we are constantly outperforming market average because we do look at these small things, right? The average host, the average Airbnb host, isn't looking at the data to say, you know, what's the average length of stay of a guest in Kelowna? What is the average booking window? All of these things, like they're not looking at those pieces of data, whereas we're looking at that and constantly tweaking like our listings based on that data. Another cool thing that we do to differentiate ourselves is I've created a discount pass. So I collaborate with different businesses in the Okanagan and I give our guests who are coming to stay in our properties discounts to these businesses. But I've created like a pass on your phone. I don't know if you'll be able to see it. Oh, yeah. Yeah. Once you show this pass to any of our like. approved vendors, I call them. You get discounts in Vernon, you can get like 10 % off a sauna, ice bath at Cedar and Soap, different things like that, where we have like, you know, partnerships in place. So our guests are getting value from that, right? They're coming to our market. They want to know what to do. We're giving them like a list of local companies that they can go and check out and then be a deal on them. So I think it's a win, win, win for forever.


00:19:23 Taylor Atkinson
Where are you focusing your business? Is it Kelowna, Vernon, Silverstar, and Big White?


00:19:27 Derrick Sabourin
So primarily for myself, Vernon, Kelowna, and Silverstar. I also have a business partner, Megan, who is expanding South Okanagan. So like all the way down to Penticton, even a Soyuz. So she's in charge of kind of the South. And then I have more like the North. We're like diversifying where exactly we want to expand to. But yeah, I'd say for myself, the North Okanagan and for Megan, the South Okanagan.


00:19:50 Matt Glen
What's the, like say hands off? approach, like owners don't want anything to do with it. Is there like a flat rate charge percentage wise that you guys take for like gross commission on it?


00:20:02 Derrick Sabourin
Yeah. So if we're talking on the rent, we have two tiers. So the first tier is a 25 % that we take plus a monthly fee depending on the bedroom count. And this monthly fee allows us to go in and proactively take care of all the maintenance items like, you know, maybe a faucet's loose or light bulbs need to get changed, filters need to get changed, all those types of things. So we go and proactively take care of those things. They can opt for that or they can do a flat 35 % commission with no monthly fee. And so both of those options offer like the same benefit in terms of the hands -offness of the management. The 35 % tier, we actually also throw in some discounts to our vacation rentals in Mexico, as well as a few other perks, like they get some free cleanings and stuff like that throughout the year. But yeah, those are kind of our two hands -off tiers for the owners.


00:20:49 Matt Glen
Yeah. And I would imagine like anytime I have clients that were analyzing Airbnb properties and they're like, yeah, we're going to self -manage and here's kind of what we're projecting. I'm like, yeah,


00:21:00 Matt Glen
but, um, and I'm all for like self -management, like that's fine. But like, it does come down to the fact, like all the things you were listening before, like software, like figuring out like how to get the most out of your, your calendar and like up in the nightly rates, you're not missing like a holiday from say. you know, some American visitors, like missing something like that can cost them that 35 % split like so easily, you know? So like really, it doesn't even cost you out of pocket to use you guys, you know, obviously if you're good at your job and you're filling up the calendar. So is that kind of like the main pitch when clients have any kind of resistance to paying you guys?


00:21:39 Derrick Sabourin
That's exactly what I tell them, Taylor, is that if they self -manage, likely what they are going to do is only list on Airbnb or only list on Vrbo. That in itself is costing you 30, 35 % already off the top, right? So what I tell them all the time is that not only are you spending less time on this is you're going to actually make more money doing it this way too. So maybe it's a break even, but like, I think that people believe that, you know, running a... They call them Airbnb, but it's a short -term rental. If you're utilizing all the platforms, they think that it's so simple because they can just set it on one platform and kind of try and automate as much as possible and try and forget about it. But essentially, the biggest revenue drivers are pricing and listing on multiple platforms. So pricing is making sure that your price every single night is optimal. If you're priced too high, you're missing out on bookings. If you're priced too low, you could have captured more bookings. So finding the sweet spot with that and then listing it on as many platforms as possible. I'm constantly meeting with platforms that are sort of newer or that are capturing like a different segment of guests that we're not already capturing. And I'm trying to make sure that... all of our listings are on as many platforms as possible at all times.


00:22:51 Matt Glen
Is there a current platform that you like in terms of like, I feel, okay, yeah, everyone knows Airbnb and VRBO, but like, I feel like Airbnb's fees and everything have gone up like exponentially. So are there competitors that are coming in now that are just like making Airbnb less competitive in the market? Not to give away like secrets for how you guys - No, no, no,


00:23:12 Derrick Sabourin
- No, no, no, you're good. You're good. This is a great question. So we're actually, I'm trying to connect to this platform. There's this new platform called Stay Finder. And it's really cool because what it does is it basically lists your property and it tells you how much the property would cost if you booked directly on the management website versus if you booked on Airbnb versus if you booked on VRBO. So you can directly see on this website how much extra you're paying by booking on these other platforms. This is not at all a paid ad. They're just sweet. And so they send the traffic to your direct booking website. So that's the beauty,


00:23:48 Matt Glen
the beauty, right? Like people can book direct with you and other short -term rental management companies. That's where clients could save a lot because like as an owner, you don't really have that ability to create your own website and drive that traffic there. But for you guys to have a larger portfolio, for sure you can do that. And then those repeat customers as well, right? Maybe they find you on Airbnb, but then the next year they just contact you directly. Yeah, there's huge value there. And I would say like, obviously anyone can do this themselves, right? But like... It's easier for you guys to implement because at scale, you can afford the software and justify it. Where if other clients wanted to do that and buy the software themselves to do automated pricing and stuff, they lose the profit there.


00:24:28 Derrick Sabourin
Totally. This is the whole game for us. How do we get as many people that come from platforms to book again with us on our website in the future? This is the whole game. Every conference that you go to as a short -term rental manager, they're all talking about how to do this. Essentially, the way that I'm approaching this problem is I'm trying to give such a good experience with the free value that I'm giving guests. For example, with that discount pass I was talking about, educating them that they could have saved money if they booked on our website, and then adding them to our newsletter and trying to provide value throughout the year so that when they do think of that vacation next time... Like they have our name and they had a good experience already and they'll come back again. That's kind of like the game that we play day in and day out is trying to get those people back in. And so, yeah, we're constantly trying to optimize how much like our percentage of direct bookings versus OTA bookings to online travel agents, like any of the third party ones.


00:25:23 Matt Glen
Nice. Interesting. Yeah, that's crazy to think about. Now to really pull back the curtains, like geographically right now, as an investor. Where are the biggest opportunities in terms of profit, like revenue? Is there a market that's not being serviced properly? Because I feel like six, seven years ago, you could just throw a dart and make money and everyone was just swimming in cash with Airbnb. It was like the thing. And then everyone got absolutely crushed the last couple of years. There's got to be some future opportunities on the horizon.


00:25:57 Derrick Sabourin
I like these 17 buildings that are now exempt, of course, because, you know, if there's few restrictions on them, that's a huge portion of the battle. For example, if you have like a night restriction, you're sort of at a handicap in terms of what you can generate. Right. So first of all, I like the buildings that are that are properly fully exempt with two nightmares. This is a tough question for me to answer because it's very much listing by listing, right? It comes down to the amenities that the property has. Does it have, say, a hot tub or a sauna that it can differentiate itself with? Does it have access to the lake? Or if it's on a mountain, is it ski and ski out? All of these small things are super nuanced, but it makes a big difference when it comes to short -term rental data. So rather than giving you one like... place that I would park my money in. I would say instead that before I ever make an investment like this, I would really look at the comps and look at the amenities and the location of each one. If this building has, for example, a shared hot tub, what percentage increase does that give me versus this other one that I like that doesn't, but it's maybe closer to the lake. Those are all things that we look at. I can see the amenity. that brings in the most percentage increase of the rental value. So for example, right now I can tell you that in the Okanagan, the amenity that will make the biggest impact on your short -term rental is a hot tub. So it's not a secret. A lot of people like hot tubs in terms of the numbers, like the data that I can see. If we compare properties that don't have a hot tub versus have a hot tub, it's about a 50 % increase. That being said, when we look at the properties that can have a hot tub, it's naturally probably going to be a bigger unit. It'll have maybe more things to do. So it'll have a higher rate attached to it already. But still, even just with the numbers I'm seeing, it's still pretty significant. This is the Okanagan that I'm seeing. So whether it's on a ski hill or in Kelowna, even in Kelowna, if you add a hot tub, it makes it a lot easier to rent it out in the winter. Because now people have something to keep themselves busy. Are you talking like a hot tub in the strata unit that you're in or like a hot tub on the deck?


00:28:02 Taylor Atkinson
tub in the strata unit that you're


00:28:04 Derrick Sabourin
in or like a hot tub on the deck? Sort of on the deck. I had some developers ask me about my opinion because they wanted to optimize their space for short -term rentals. The first thing that you want to look at if you want to have an optimal ROI on your rental is to optimize for occupancy. If your property can hold more people... optimize for that. If you can fit two bunk beds instead of just one in a room, optimize for that because the larger the group, of course, the larger the rate. So that's like the number one thing. For example, if you can get a two bedroom to like eight people where there's, you know, four in one room, two on a queen bed or a king bed, and then a pullout couch, if the square footage permits that, and you know, it's not crammed or anything, I always, you know, recommend that number one. Number two is the amenities that you have. And so this developer was asking me about, you know, what they should do for amenities. And I told them, first of all, optimize for occupancy. And then I said, if you can't put a hot tub on each deck, because they were thinking of doing that, at least have one share that they have like on the rooftop. That way you can still advertise in the listing, right? So people are seeing it and it's still catching eyeballs. It might not have as much of a percentage increase on the revenue because it's shared, but it's still huge in terms of like the impact it can have on the performance. Nice.


00:29:20 Matt Glen
Interesting. I find even like us as a family are going to book overseas somewhere. Like you look for those amenities, even if you like when you get there, sometimes you don't even use them like that frequently. Right. It's not like you're just like wasting money to be like, oh, we're going to get a hot tub. But if there's two listings and one's 20 bucks more a night and it has like. access to a hot tub you're just you know going to go that direction and like you might not even use it because you know your calendar books up with other things you're doing traveling exactly exactly yeah optimizing the bedrooms is is a good one you pointed out there you know you kind of want to have that balance you obviously don't want to like cram people into it and make it like a ski bum style place but yeah how's how's silver star been doing because


00:29:32 Taylor Atkinson
It's not


00:29:48 Derrick Sabourin
exactly exactly yeah


00:29:49 Matt Glen
optimizing the bedrooms is is a good one you pointed out there you know you kind of want to have that balance you obviously don't want to like cram people into it and make it like a ski bum style place but yeah how's how's silver star been doing because They weren't impacted like any ski resort. I can't remember. It was less than 10 ,000 population designated a resort or whatever the stipulation was. They weren't affected by short -term rental legislation. So is Silverstar just like pumping along? Are you guys very happy with the revenue you're seeing there? And like, what did you do differently in that portfolio to kind of add value to current owners there?


00:30:23 Derrick Sabourin
Yeah. So Silverstar is an interesting one because Silverstar already has a really good summer market too. Like they have a ton of hiking and biking that they do up there. Yeah. So it's actually still increasing every year, year over year. And yeah, if we compare occupancy from like last year to this year, we're up about 5%. Yeah. So Silver Star has been crushing. Like you're saying, all of the ski resorts are sort of exempt from all of these legislations. They were able to squeak by. Essentially at Silver Star, you know, when we took over the company that we took over from. They were doing a great job. The things that I was able to optimize on were those two things that I mentioned earlier. So pricing and listing, like getting exposure on different platforms. That alone, we were able to increase the revenue by 71 % from previous to the next year. That's on average for the owners. So it's also nice because it came with like a laundry facility. So we're able to... operationally like take in more units than we were currently doing so yeah it was a great setup like the laundry rooms there all the linens all the towels are all in one area it's almost like a hotel operation in a sense it's just individually owned by owners Those two boots, so the pricing and the platform optimization was definitely huge for us. But like when it came to pricing, so static pricing is essentially how people used to price their rentals. Like maybe look at their competitors and they would just manually place a rate. Sometimes it was a random rate. Sometimes people didn't do that much research and they would just maybe increase it on weekends if they were feeling creative. And then they would bring it back down for weekdays and then kind of hope that those rates worked. And you're kind of going in blind. Maybe you're looking at your neighbor and you're just kind of copying his rates. The problem with this method is what if your neighbor is not getting any bookings? What if he's priced way too high? Or if he is getting bookings, what if he's priced way too low? You have no idea. So the reason that we don't do this is because we now have access to data for every single market, right? So we can see not... Only what people are listing their price as, but what it's actually getting booked at, right? So I don't necessarily care what your listing is saying per night. I only care about what it's actually getting booked at, right? I mean, we have three different softwares that we use for pricing and data for this stuff. But essentially what we do is we look at on average, like for example, if I'm doing a comparison for a property on Silverstar, like a three bedroom property, I'm looking at all of the three bedrooms in Silverstar. What are their average daily rates? What's their occupancy? And I'm looking at all of this, that it's actually getting booked as opposed to just looking at a listing, clicking on one night and being like, what is the price? So that lever in itself alone was responsible for the vast majority of the increase. But the interesting part is along with this strategy, sometimes the optimal thing to do is to lower the price slightly, right? Like let's say you have a Monday to Thursday that's open. If you leave your price the same as it was before. it might not get booked, right? The odds are lower that it will get booked. So we have to lower the price in order to get these last minute bookings and to fill those gaps. And so there was definitely some hesitation from some of the owners asking why the rates are lower now than they were before. But it just took time over the course of us getting exponentially higher rates and sometimes, and then slightly lower rates and other times for them to see that this is actually part of a much bigger strategy to optimize the revenue all year long, as opposed to just sticking to one rate and hoping that it sticks. You know what I mean? Yes.


00:33:45 Matt Glen
I don't have the stomach for that either. Like if I'm looking at, you know, a calendar being like, God, I have no bookings in the next six weeks or like it's November and like the ski cabin hasn't really filled up in any bookings. I just have to like shut it off and like let the managers do their thing. Cause otherwise I'm like, my God, we're making no money this year. But like. Every year it just, it fills up and like it performs how it's supposed to. So yeah, it's like owner self -managing, like unless you can emotionally disconnect from that.


00:34:11 Taylor Atkinson
it's like owner


00:34:14 Matt Glen
you can emotionally disconnect from that. And like, I don't know, you're more of a gambler than I am.


00:34:19 Derrick Sabourin
Yeah. That's a completely normal feeling. And honestly, most clients feel that, right? We had a condo building in Cabo San Lucas. We had two in the same building, both three bedrooms, same layout, same everything. Okay. one of the owners insisted that we have like a minimum night rate. And I forget what he set this rate at, but it must've been, you know, decently high because owner number two didn't have any minimum set, right? So he was kind of more, you know, feeling a little bit braver, maybe more of a gambler. But anyways, this property without minimums outperformed the property with a minimum by 57%. Whoa. And it was just from the owner saying like, you know, I'm okay with capturing some bookings that are lower at times, knowing that other bookings are going to be high. Essentially owner number two is able to let us do our thing by filling in the gaps as much as we can, which is what we specialize in, right? Like we are looking at this every day. And so by having less restrictions, by definition, we're just able to do our job more, right? So not to say that, you know, we're against setting minimums. We do set minimums to a certain extent. It's just that, you know, setting it too high. can definitely be more of a shot in the foot, you know, than if you were to just sort of, I guess, trust the data.


00:35:31 Matt Glen
So you guys are obviously still managing in Mexico right now. Yeah. Still have that portfolio going. Are there any other markets that you guys are exploring or you're like, no, we're happy with the portfolio right now, Okanagan, Mexico, like it's a good balance.


00:35:43 Derrick Sabourin
Definitely. Right now it's just the Okanagan in Mexico. We have had... You know, some people approach us to open other destinations, but for now, it's really just our core focus. You know, we're open to expanding further in the future. I think it's just a matter of like really implementing ourselves in this market first before we look at other other places. Yeah. Just like I said, like now that we're covering North Okanagan all the way to the very south, it is. already quite a bit of territory together.


00:36:09 Matt Glen
Yeah. So if a homeowner investor, like either they have a property or they're looking to buy a property, how does the process look? They contact you guys, you maybe like do an analysis perform of specific properties and kind of give them some ideas on what it would look like in terms of how to outfit it and stuff like that. Like, can you just walk us through if someone reaches out to you how that looks?


00:36:31 Derrick Sabourin
Yeah, totally. So, I mean, yeah, people who reach out to us either A, are looking to buy and kind of want to have like a helping hand in the process to guide them like with like, you know, revenue estimates. So that's one type of person. In that case, what we do is we, you know, we look at all of the data that I was talking to you about and we look at comps and we look at potential amenities that would be most optimal for them. We're basically focusing on ROI. How can we get the most out of this short -term rental for this person? Other people who already have a unit, it's the same process, but those people tend to not be as open to adding amenities or to changing certain things. And so for those people, it's just, we explain sort of how our process works of management, which tier they prefer. We do a walkthrough with them. If they're in person, like if we were able to, we like to do a walkthrough throughout the property and give our pointers and give them some advice. And then lastly, it's just about getting the licensing and we take care of all the licensing as well. That's another benefit that we offer is dealing with the city of Kelowna and the province of BC to get all of the registration numbers in line. And then we go live in as soon as two weeks. Two weeks to three weeks is typically from when the process starts to when we can actually get listed on a platform. Can you explain to people how many sets of bedding they need and towels and cutlery?


00:37:43 Taylor Atkinson
you explain to people how many sets of bedding they need and towels and cutlery? Yeah,


00:37:48 Derrick Sabourin
we have a checklist. We have a huge checklist that we give. It's kind of up to the owner to make sure that it's stock. We can go and purchase it for them. But yeah, we have a minimum set list. Each bedroom should have all of this. The kitchen should have all of this. We typically take care of all of the laundry anyway. So we'll advise them on that too.


00:38:04 Matt Glen
And is the licensing with the city right now? timeframe? Like what's the process like? Is it super backlogged or? Megan,


00:38:11 Derrick Sabourin
my business partner, she filed one for one of the exempt buildings and it took like two or three days for them to process it. However, I'm doing one for a client right now. It's just a basement suite. It's been a week and a half and it's still in process. And so I think it depends on sort of the type of unit you're purchasing. But then the province of BC is typically pretty quick with it. I think their turnaround day is like within, you know, three to five business days. That's pretty good.


00:38:35 Matt Glen
pretty good. That's quite a bit better than I thought. And like when we spoke with the city the last few episodes we've had them on, I think a common issue for them was by law enforcement. let's say 2020, 2021, like they were just run off their feet with complaints with bachelor and bachelorette parties and these, you know, massive houses being rented out and they just, they couldn't police it really. Is it now more reliant on you guys? Like, are they giving a preference to like registered licensed companies like yourself to be like, yeah, we want to work with you guys because we know it's going to be a better managed property. Or like, is there anything in the permitting process there that we have to like tick some boxes to kind of help the city?


00:39:19 Derrick Sabourin
I think that the city prefers when it's a proper management company, because we already know what they require in the process. We go in with a checklist of things we need to do to get licensed, and we just send it to them right away, as opposed to them going back and forth with people who have done this for their first time doing it. So I don't know that for a fact, though. I'm just guessing. but I believe that the process would be a lot quicker when it's with a management company. What we do, especially if we're in an area where we're mindful of the noise, like for example, one of our properties, the owner lives in the basement and then rents out the top space. And so we recommend installing noise aware sensors. So basically it's a noise sensor. We get notified if it surpasses a certain level and it prompts us to message the guests to keep it down. And it's killer. It's unreal. Like every time we're like on it proactively, we're able to get rid of a potentially like bad situation where the owner's complaining, maybe the neighbors are complaining or anything like that. We always recommend to the owner on the onboarding process to have some sort of noise aware device. That way they stay covered, we stay covered. And then the guests can sort of hopefully correct their behavior before it gets out of hand.


00:40:29 Taylor Atkinson
Yeah. Awesome. Do you have to have like the business license? Post it? Yeah. Okay. I mean,


00:40:34 Derrick Sabourin
mean, some markets, for example, in Silverstar, there's no business license that they give out for that, but you do require the provincial registry number that you have. So the number with BC that you do need to have it on all the listings.


00:40:46 Taylor Atkinson
That would probably help a lot with bylaw, having them legit only ones on there. Yeah. Yeah, totally.


00:40:52 Matt Glen
Awesome, man. Well, obviously, if anyone wants to reach out to you or the company, how do they find you?


00:40:57 Derrick Sabourin
Sure. Yeah, you can reach out to me at Derek. So D -E -R -R -I -C -K at samsonwaters .com. Samson without a P. It's not Samson. It's Samson. Actually, cool story. So the way they named the company, my cousins, their kids' names are Mason and Sam. And so they combined them to make Samson Waters. That's how the name happened. Nice.


00:41:17 Matt Glen
Nice. That's awesome. Well, yeah, here's to... Airbnb, short -term rental, VRBO, tourism coming back to Kelowna. I mean, obviously we're recording this end of July, so it's just kind of mid -season. And like you said, I mean, June 1st was kind of took a couple of weeks to get everyone ramped up. So yeah, we'll see what happens over the next couple of months here. But thanks for coming on, buddy. I appreciate it.


00:41:40 Derrick Sabourin
Yeah, I really appreciate you guys having me on. Thank you. Thanks a lot, Derek. You're obviously passionate about this. It's good to see. Appreciate that. Thank you.