Year one with a co-host at 20 percent, and the diligence that actually mattered

I bought a 2/2 condo in a small ski adjacent town and a 3/1 bungalow twenty minutes from a regional hospital, and I never had any intention of running either myself. I interviewed four co-hosts and hired the third one, and the reason was the paperwork she was willing to hand over.

What I asked for: twelve months of payout statements from three of her existing owners with names redacted, ADR and occupancy broken out by month per unit rather than a portfolio average, and her cleaner roster with what she pays per turn. Two of the four wouldn't produce per unit numbers. One produced them and the occupancy was fine while the ADR was 20 percent under what the market was doing, which told me she was buying occupancy with price. The one I hired had a soft shoulder season on paper and told me why before I asked.

Terms: 20 percent of nightly revenue, cleaning billed to guests and passed through to the cleaner at cost with no markup, per unit statement by the 10th, and a written floor nightly rate she cannot go under without emailing me first.

Year one. Bungalow: ADR $147, occupancy 68 percent, $44,700 gross nightly. Condo: ADR $232, occupancy 54 percent, $45,800 gross nightly. Combined $90,500, her fee $18,100. Cleaning ran about $11,200 and the guest cleaning fees covered roughly that. After supplies, utilities, insurance, the annual registration and the channel software, I netted about $48,600 before debt. Long term comps on the two would have been near $42,600 gross for the year and maybe $30,000 net, so the spread paid for the fee and then some. Registration renews annually here and the rules are city specific, so I don't treat that $48,600 as repeatable without checking the ordinance again each year.

The part that nearly broke it. In February the condo's dynamic pricing minimum was still sitting at $95 from a slow December setting, and an auto accept rule took three separate week long stays at close to that during a strong stretch. Call it $2,300 of upside gone. That's what produced the written floor rate clause, which did not exist for the first five months. Second problem, the bungalow's cleaner quit in month five with two days notice and four turnovers got covered by her own staff at $95 a turn against a $70 baseline. Guests never knew, which is what I was paying for.

What I keep: cleaning at cost with the invoice attached, and per unit statements instead of a portfolio summary. The summary hides exactly the thing you need to see.