From Corporate to Cash Flow Queen: How I Built a Midterm Rental Empire with Vivian Yip

00:00:00 - Jenn Boyles

Hello, and welcome to another episode of the direct booking success podcast. I'm your host, Jenn Boyles, and today I have Vivian Yip with me now. Vivian is the founder of Hestia by corporate Rentals USA. Welcome, Vivian.

00:00:15 - Vivian Yip

Thank you so much.

00:00:16 - Jenn Boyles

It is amazing to have you on today.

00:00:19 - Vivian Yip

I appreciate the invitation and your interest in midterm rentals.

00:00:23 - Jenn Boyles

Yes, yes. So let's start with a little bit about who you are and what you do.

00:00:30 - Vivian Yip

Sure. My name is Vivian Yip, and I live in Austin, Texas. I used to be of the corporate world for over two decades. My last stint was at Apple, where I worked there for seven years. I was launching iPhones. So iPhone twelve was my last project. And if anybody knows about iPhone twelve, that was the launch of the pandemic. So it was particularly hard and challenging. But, you know, we got through it, and I dreamt of a life where I could escape the corporate world in 2017. So I started putting in the effort to learn real estate investing while I was not working. So basically every waking moment that I wasn't at my corporate job, I was learning about real estate, taking care of my family, with the dream of never having to ask for another day off, because I just love to have fun. I really like traveling. I. My favorite thing to do is to eat my way around a city, walk everywhere as possible. And honestly, when you only have two or three weeks in a year and some of that time gets consumed by people's weddings or whatever, you don't get that chance to really enjoy those extended vacations. And that's what I really want in my life, is to be able to live in someone else's city and make it my own experience and enjoy the foods and the cuisine and learn people kind of like, you know, being like an Anthony Bourdain, you know, one of my favorite travel journalists ever. And that's just kind of how I want to see my. I wanted to see my life as opposed to sitting behind a desk. So I pursued real estate. My husband and I started flipping houses, and we have now nine properties in Austin, Texas. We're not brave enough yet to go and invest other places, although we're in a fractional investment for ten units in Cartersville, Georgia. And I learned how to cash flow on accidents in expensive places like Austin, because everybody knows, like, cash flow is the most important thing. Rich dad, poor dad talks about it. Cash flow kings, those guys talk about it. But it's really hard when the acquisition price of a property is so high and then the rental rates aren't on par with how to break even on your mortgage payment. So I learned that if you throw furniture in it, you can host it as a short term stay. And. But that's a lot of work. And then I accidentally pivoted into midterm rentals during the pandemic when Airbnb started canceling reservations, I had to figure out a way to control my own revenue. And so that's when I learned that midterm rentals was a thing, kind of on accident. And I've been addicted to it ever since. I sold that property to reinvest in more. And now six of those nine properties are midterm rentals.

00:03:23 - Jenn Boyles

Wonderful. Well, that's why I have you here today, to talk about midterm rentals, because it's something that I'm hearing more and more about, and I'm hearing other people that have been short term rentals pivoting into midterm rentals, sometimes because of regulations coming into their area, other times because it's something that works better for them and their lifestyle. So I can't wait to hear more about it. But I want to hear a bit more about your life, because apple. That sounds so cool. I am an apple junkie. So if you were here in my office, you would see all my products are apple. But you also have a canadian connection, don't you?

00:04:01 - Vivian Yip

I do. I grew up almost my entire life in Canada, with several stints in Hong Kong. And I was born in the US, but I lived in Vancouver, Calgary. I graduated from University of Toronto, and I moved to the US in zero five for a job.

00:04:17 - Jenn Boyles

Wow.

00:04:18 - Vivian Yip

And then you stayed. And then I stayed. And it's interesting because I've almost spent equal amounts of time in the US as in Canada. But I would say, culturally, I'm still pretty canadian.

00:04:30 - Jenn Boyles

Yeah, I don't. I think anybody who is canadian. And that leaves. I was away 21 years, and I think my canadian ness maybe came out even more being away. So. Yeah, no, I totally get it. And why Austin, Texas?

00:04:45 - Vivian Yip

So after I moved to Chicago for a job relocation, several years later, I got an offer at Apple, and then they relocated me to Austin, which is interesting because I stayed in a midterm rental when I transitioned as well, so. But I would call that more like a corporate rental.

00:05:02 - Jenn Boyles

Yeah. Great. Great. Cool. Well, let's get into the midterm rental side of things first. Can you tell us exactly what is a midterm rental?

00:05:13 - Vivian Yip

So, midterm rentals are basically defined by your county. Typically, it's 28 days or 30 days and more, depending on how your county or city defines what a short term rental is. And a midterm rental is basically anything between that short term rental versus a twelve month lease. In Austin, a 30 day rental becomes a midterm rental. And in my definition, a midterm rental is basically a short term rental, fully furnished kind of property. But you only host extended stays. And if you're lucky to be in a place where there's no regulations, then you can also put in and fill in the gaps with short term stays to maximize both occupancy and revenue.

00:05:55 - Jenn Boyles

What is sort of the pros and cons of having someone there? 30 plus days?

00:06:00 - Vivian Yip

Let's start with the cons. I think the people are most terrified of tenancy, and it's true. I mean, you can have someone squat in a 30 day property, but when I talk to an eviction attorney, he's like, they can squat in a short term rental property. As soon as they access your property, you're at risk. So you just have to be comfortable with that. Then there's, you know, obviously you can have ways to write your lease that makes it less risk for you and de risk your business that way. There's so many pros. I would say that I never have to deal with complaints about parties or noise. It's so much less touch. Like, I literally check in with them once every 15 to 30 days just to see if they need anything. Every now and then I'll hear from them if they need maintenance on, on something small. The biggest one is your bottom line is better, because when you do midterm rentals, you only give them a starter package of consumables, like the toilet paper, paper towels, dish soap and all that kind of stuff. And then they're responsible for replenishing the rest. So if you think about how much a pack of toilet paper costs these days, it's like $16 to $18 for a decent sized pack. And then paper towels are another $20 or twelve to $20, depending what size you get. And that all adds up in these short term stays. And in midterm rentals, it's so easy. The operation side is easy, the harder side, the con is the lead generation can be a bit tough. But once you get the property, it's smooth sailing.

00:07:34 - Jenn Boyles

And are there any other user unique needs of midterm rental guests versus short term? Like, what are they really looking for?

00:07:43 - Vivian Yip

I think the biggest difference between someone transitioning from short term rentals into midterm rentals is, number one, clean out your garage. That garage is no longer a storage unit. Like people want to park in there. They want. Maybe they've had to relocate from their current property and they want to use that garage space to hold some of the things that they want to have with them. Maybe their house is being worked on by contractors and they have sentimental items or valuable items that they don't want to get sold. Clear your garage. Number one. Number 2 million people in the US sleep with a CPAP machine, including myself. Case for sleep apnea. And a lot of short term rentals don't have nightstands. So super simple, right? Just put a nightstand in there. And then the third thing I would say would be a dresser in every bedroom. In short term rentals, you can expect that they'll be happy with one of those luggage holders and they'll live out of a suitcase for a weekend. But if they're going to stay in your property for 30 days, maybe even six months to a year, they want to be able to put their stuff somewhere. So I would say those are probably the top three. And then for us, with our properties, we ensure that they're fully stocked so that people can really have a great meal and cook and really live life like they would if they were in their own home.

00:09:02 - Jenn Boyles

Yeah, I guess it's just thinking that they're going to be. Put yourself in the guest shoes and see how they would stay for a longer period of time. Because I know that in my property, storage isn't a big thing because people are there for a short amount of time. Yep. But if I was going to be staying there 30 days. Yes. Dressers, closets, you know, places to put your stuff, places to hide your suitcases.

00:09:26 - Vivian Yip

You don't have to look at them every day. And a dedicated workspace is probably one of the things that people really want because we're still in this kind of hybrid workforce environment where some people get to stay at home and work for a few days and then go into the office or they work from home the entire time. So having a comfortable workspace and high speed Internet is always great.

00:09:48 - Jenn Boyles

Definitely.

00:09:48 - Vivian Yip

Definitely.

00:09:49 - Jenn Boyles

So let's talk about your lead generation. How are you actually getting these guests that to come and stay for midterm rentals?

00:09:58 - Vivian Yip

There's multiple sources. There's Airbnb, of course. You know, biggerpockets was talking about a statistic, you know, about a year ago that 25% of nights booked on Airbnb are for 30 day stays and more. Now, I would say maybe half of my bookings come from Airbnb. But the other half I get from direct bookings that I've, you know, created relationships with or through realtors, sometimes even furnish finder. But a lot of them come from my own legion business, and that's really helped out, helped us out.

00:10:32 - Jenn Boyles

So it's relationships, isn't it? It's relationships building. Do you just ring up a company and say, hey, I'm here, you know, this is what we're offering. Is this something that your employees need?

00:10:41 - Vivian Yip

Absolutely not even their employees. When I started this business about a year and a half ago, there's only me. There's 24 hours of me. And I decided I could either go pursue the corporate space or I could pursue the insurance space. And people are like, well, what's insurance? Well, insurance, temporary housing is really, really big business here in the US. If you live in a single family home and your home were to have water damage, maybe your dishwasher exploded or had a leak, or maybe your air conditioning unit or your water tank is next to your living room, or whatever happens, it explodes, you've got a big damage where you have to move out and contractors need to work on your place for the next three to four months. Your insurance basically allows you to have funds, if you have the right coverage, to move out of your home and into a temporary home. And we service a lot of those clients that have to move out of the temporary, move into a temporary home. So going back to 24 hours in my day, I spent all of last year, I can't even tell you the hundreds if not thousands of phone calls that I made, emails creating all my email lists, developing relationships, and building that out so that I could recession proof my business. Okay, we think about recession. People keep talking about this, you know, recession that might be coming. And if I decided that if I was going to choose between focusing my effort on the insurance space or the corporate space, I chose insurance because this recession proof. And in corporate, at the time, the big companies were all having massive layoffs. And I didn't, it didn't feel right to me to call them and be like, hey, who are you relocating right now? Because chances are they probably just had a really big layoff. So this year I'm on a different mission, not only to continue nurturing those insurance relationships that we've built and that has become really fruitful, but to also pursue figuring out how to expand into the corporate space. Oh, I love it.

00:12:40 - Jenn Boyles

I think it's a really good point with the insurance side of things. And for those that are having, especially here in BC regulations are coming in very harshly. Regulations. You know, midterm rentals is definitely an area that I can see people pivoting to.

00:12:57 - Vivian Yip

Yep.

00:12:58 - Jenn Boyles

How else are you going to keep your business afloat when the government's trying to shut you down? Which is quite sad, but let's not dwell too much on that. I want to hear more about midterm rentals and what about the relationships in the community and your neighbors? I know that a lot of people, you know, are saying, oh, my neighbors, I don't want an Airbnb in my neighborhood, and things like that. How is it for when you're providing a midterm rental versus a short term rental?

00:13:26 - Vivian Yip

So far, I've been doing this for four and a half years. I've honestly never had a problem with any of my neighbors because I see the same consistent people coming in and out. I do have a property management company here in Austin. We have a total of 21 properties right now. And my partner had a complaint from the HOA on one of the properties that we managed, and she actually sat with the HoA board of directors and said, honestly, we're just helping people that have to move out of their houses. And she was able to get the HOA director to sign on one of her properties. So the buy in is there. I think when you explain to people that you're just helping people that are relocating, they're transitioning. They've had a house fire. This is a business of hospitality where you're helping people, and we're serving a real market need that doesn't have to do with partying or loud music or inappropriate behavior. So it's honestly a super boring but super lucrative business.

00:14:21 - Jenn Boyles

Right? I love it. Yeah, I love it. I love it. Well, that's great, because I think neighbors sometimes can be a real issue depending on the type of guests. And if you're just opening your property up to Airbnb, you know, the other otas, you just never know who's going to be coming, walking through that door.

00:14:39 - Vivian Yip

Correct. A friend of mine sent me a photo that she. She just hosted her first booking.com guest, and she's like, never again. And she sent me a photo of her ring camera with the guy getting arrested in front of her front driveway. It's like, I don't know about. I've never done booking.com. Have you? I'm too scared.

00:14:59 - Jenn Boyles

Well, yes, because I'm in England, so booking.com is very prevalent in Europe and England.

00:15:06 - Vivian Yip

Got it.

00:15:07 - Jenn Boyles

Yeah. So cool. So this is really great to hear more about midterm rentals and the pros of it. And yeah, maybe you feel like it's sort of the boring side of the business, but I would rather have boring than be putting out fires.

00:15:22 - Vivian Yip

Hey, boring and cash flowing at the same rate of strs with less work is honestly super attractive. Right? Your freedom of time, of not spending your Sundays chasing cleaners to see if there's any damages in the property after they left, or making sure that you have a turnover for the same day check in, or what, do I need to drop everything and go buy and replenish supplies? I mean, those days are gone. You're only doing those like, once every few months. It's once you experience the freedom of midterm rentals. It's a game changer.

00:15:56 - Jenn Boyles

Yeah, sounds amazing. So if someone's listening to this and they're going, this sounds amazing, but how do I get started? Started? What would be your advice?

00:16:03 - Vivian Yip

It depends on what stage they're at. I would say that if you're in the short term rental game and you want to move into midterm rental, there's an entire different strategy, from pricing to calendar management to legal things like leases and background screening. So it's a totally different game that you're going to need to spend some time and get educated on. Luckily, I have a course for that, so you can reach out to me for more information. And it's very affordable. And for someone that's just starting out, or maybe they don't own a property, there's other ways to do it. You can co host, you can do rental arbitrage if you need to furnish a property. I have an agreement with court furniture, which is the nation's largest furniture rental company. So you can contact them and just say, I want to rent furniture as part of the Hestia program, and you can get significant discounts and you can rent your furniture as opposed to trying to drop, you know, thousands and thousands of dollars on furniture right up front, and you can eventually purchase it as well if you want to. So there's like a rent to purchase program, which is great, so it's less money upfront, so there's multitudes of ways to tackle it. You have to first determine who your avatar is. So in this business, we talk about Avatar, right? In midterm rentals, there's about eight different avatars, the major one. So we're talking the insurance claims, we have government, we have corporate relocations, travel nurses, construction teams, academics, travel nurses, things like that. So you have to determine who you're trying to attract just like you would a short term rental and then cater your listing and all your amenities towards that and you will get the right guests that you're trying to attract. It's just.

00:17:48 - Jenn Boyles

Yeah, it's pivoting, isn't it? From, if you're going from short term to midterm, there's things to think about. But also knowing who your ideal guest is and if that person is someone who is going to be staying 30 plus days, it's knowing what they need and what you can do to support them. And that in turn will bring them in because they see that you're set up and you're a perfect fit for them, don't you think?

00:18:13 - Vivian Yip

Yep, 100%.

00:18:15 - Jenn Boyles

Yeah. Cool. So what is next then? What do you think is coming sort of next with this broader landscape of hospitality relation to short term and midterm rentals?

00:18:28 - Vivian Yip

This is a topic that I've been thinking about for a couple of years now because I kind of saw the sliding scale of what's happening with Airbnb and short term rentals. Regulations are changing. People are becoming a lot more aggressive towards an animosity towards quote unquote Airbnb and short term rentals in general. And I thought I discovered this midterm rental strategy, which I kept myself for a long time, but then I had all these people that would reach out to me and say, hey, I need something in south Austin or I need something in another city. And I realized that instead of holding all these as secrets and change my mindset to one of abundance and start helping other people do lead generation. But I felt like I couldn't help everybody. Like I wanted to stay in the single family space because there's a niche there. So now I created a brand that represents a beautiful single family home space that someone can move into and expect a consistent set of amenities, a consistent set of hospitality. And that's when I created Hestia. Do you know what Hestia means? No, I don't. She's the greek goddess of hospitality, hearth and home.

00:19:42 - Jenn Boyles

Wonderful.

00:19:43 - Vivian Yip

So the Hestia brand to me is a accumulation of a curated group of other property owners that have single family homes that love hospitality like I do, that want to be rewarded for the kind of property and hospitality they give out. Like, nobody ever gets mad at the four Seasons for charging more money per day compared to the super eight. It's the same kind of building, it's the same kind of asset, but the value is different. So if you change the value and you change your clientele, then you're really running a different kind of business. So that's the idea behind Hestia. It's about collaboration instead of competition, and coming together to offer a consistent service and brand experience for the companies that will pay for it. So that is what I see in the future, is being able to differentiate yourself from the sea of competition out there. As short term rent regulations continue to tighten, people are going to start sliding into midterm rentals before they go into long term rental, because for many people, those short term numbers are the only ones that worked. And midterm rental is their hope that is going to work before they go to long term rental, because the reason why they went to short term first was because long term rental numbers didn't work to begin with. So I see. I see a saturation in midterm rentals, and it's already coming.

00:21:11 - Jenn Boyles

Do you think there's room in the space right now?

00:21:14 - Vivian Yip

Oh, yeah. When I talk to realtors, many of them have no idea what it is. So I created a, like a fast track course that's free for realtors to really learn what midterm rentals are, so they could speak intelligently about midterm rentals and help them attract business to people looking to invest in midterm rentals. Because, you know, biggerpockets just recorded something with a friend of mine, and she's going to talk all about midterm rentals as soon as that episode comes out. I see a flood of people starting to think about investing in midterm rentals.

00:21:45 - Jenn Boyles

Yeah, no, I can see that it's going to be a big trend coming forward, you know, for those real estate investors as well as for those who want to provide hospitality.

00:21:57 - Vivian Yip

True.

00:21:57 - Jenn Boyles

And. And want to take care of their space. I know that there's a lot of hesitation for long term renting, thinking that, you know, they can't get in to see the house, they can't see if it's being taken care of, and that. So a midterm rental seems to be a bit. A bit of the best of both worlds.

00:22:15 - Vivian Yip

It is. It's a really great balance. And honestly, like, you came from England, right. I heard that a lot of people, they don't just. They don't rent unfurnished places. They rent furnished homes in general as a normal practice. Is that true?

00:22:31 - Jenn Boyles

It's changed a bit. But when I first went to England, oh, 21 years ago, yes. I would rent. I'd rent a flat or a house, and it would be furnished because I wasn't gonna go out and buy all this new furniture, but I lived in a house with three other girls and everything in the house was furnished. We could just ring up our landlord and say, we need a new oven, and then one would deliver to the next day. So I see that still happening, probably in bigger cities. But once you moved out, once you're a bit older, you've got stuff with you, then you're looking for unfurnished. I don't think you would see many in North America furnished long term rental.

00:23:14 - Vivian Yip

Not unless you do corporate stays. So there's a friend of mine, he does midterm rentals with the US government, and he has leases from two to five years, fully furnished.

00:23:27 - Jenn Boyles

Right.

00:23:28 - Vivian Yip

So, I mean, when I lived in Hong Kong, my mom was a bank executive, so we stayed in a fully furnished for five years at a time. Can you imagine getting a five year midterm rental contract?

00:23:39 - Jenn Boyles

Be amazing. Amazing.

00:23:42 - Vivian Yip

Yep. But that corporate space is a whole different, like a whole different area. Like, our quality is great, but there's still some work to do to get into the big guy.

00:23:53 - Jenn Boyles

Yeah. So what do you think they're looking for?

00:23:55 - Vivian Yip

So they're looking for accountability. They're looking for consistency. They're looking for quality. In fact, I didn't know this until I went to the conference in Tucson last month for the ChIpa conference, which is a corporate housing providers association. But before every reservation, they send in an inspection company and they'll do an 84 point checklist before they allow their guests to check in. So this stringent quality is like, it's super tight. So that's something that I would love to get our brand to, but we're not there yet. We still have quite a bit of work to get to that level.

00:24:34 - Jenn Boyles

But it sounds like you've really found the right niche for you right now. 50% of your bookings coming in direct through these relationships that you have built, which is massive. Like, that is really an amazing accomplishment. So kudos to you because a lot of people are, you know, they look at short term rentals, mid term rentals, and the first thing they think of are the platforms that they can bring. They can be the answer to all their prayers. And we know that, yes, they're good for a certain extent, but they're not the answer to all of our prayers. So, kudos to you for really. For really doing that. So I need to ask you, what does direct booking success mean to you?

00:25:20 - Vivian Yip

It means having the freedom from anxiety, okay, of losing your business, potentially overnight. For me, it's not about if you lose your business overnight with Airbnb, it's when. I mean, I hear it all the time. I belong to pretty much every Facebook group there is out there in the. In the local market. And literally every other day, my account was shut down. I have 50 properties. My account was shut down because my guests complained about a camera that doesn't even exist. Whatever it is, it's scary, right? Like, I had. I'm going to tell you something that happened to me last week, and I'm still scared. One of the properties that I co host for the owner lives in Florida, and she sent her handyman to come check on her property while I had guests there. I had no idea that her handyman was going to show up. But that property back in the day, it's in an eclectic part of Austin, but it's beautiful. It's over the lake, it's lakefront property. And the handyman showed up with a gun because he was afraid that someone was trespassing. So my guest had a guy show up, knock on their door with a revolver in his hand. And luckily we were able to toss the guests down because she called the police and everything. But I had to contact my owner and I was like, did you send somebody with a gun to the property? She's like, oh, my God, I'm so sorry. I didn't mean for him to go guns blazing. But honestly, that property, I warned her. I said, there's a chance that you're gonna get shut down overnight for something that was mostly innocent. I mean, it is innocent. Like, he was actually thinking that he was defending the property. But due to a misunderstanding, we could probably lose our listing overnight. But mind you, guns are legal here in Austin. We don't need a permit to carry here. So what he did wasn't illegal, but it did startle the guest. So, you know, these things are going to happen. Not to say that it was right, but like, some things, things are going to happen that are out of your control, that you can lose your account overnight without you being able to control it. A good friend, a friend of mine, he lost all his bookings. He lost like $25,000 in bookings this summer because he was shut down overnight. So it's really important for you to diversify where you get your bookings from. It's important for you to have a well rounded business, be well connected. And I hate to say it so cliche, but your network is your net worth.

00:27:46 - Jenn Boyles

Yeah, no, I totally, totally agree. And I wish that there was a way to go into all these Facebook groups and just have an automated message that every time somebody says, I'm being shut down, this is happening. Just be like, you know, start treating your, your Airbnb as a business. Yes. Diversify.

00:28:05 - Vivian Yip

Right? If you have an asset that's a couple hundred thousand dollars, wouldn't you protect it? So I think that if you don't do a direct booking website, at least at minimum get a property management system that you can capture email addresses and phone numbers. That way if you get shut down, at least you still have that source of information and you have a warm lead to work with someone that's already stayed in your property that you can say, hey, you know, I offer direct booking now and you can do that whenever you're ready.

00:28:34 - Jenn Boyles

And it's not just the issues with the platforms regulations. I know here in BC what's going on, and I've had conversations with people and they've been 100% on Airbnb. So the regulations are going to come in and they have no gas details, they have nothing to continue that business and to continue the direct booking side of things. So it is a stark warning, I think, for everyone to diversify. And I know the people listening to this are like we're preaching to the choir. They are direct booking focused so we don't have to worry too much.

00:29:10 - Vivian Yip

Yes.

00:29:10 - Jenn Boyles

But yeah, I completely agree with you. Thank you so much, Vivian, for coming on today. It's been lovely to meet you. I'm going to put the links in the show notes. So corporaterentalsusa.com and I'm going to put your socials in there as well.

00:29:29 - Vivian Yip

Awesome. Thank you so much for having me on the show today. Really appreciate the opportunity to talk to your STR audience about the beauty and power of midterm rentals that helped me quit my six figure corporate job and replace it with financial freedom and having my own business now. It's amazing.

00:29:49 - Jenn Boyles

No, it's wonderful. Thank you so much for coming on.