Table of Contents
Episode 352 – December 15, 2022
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Vancouver has seen it’s fair share of new restrictions on Airbnbs while many stratas have simultaneously regulated the minimum duration of tenancies to limit nightly rentals.
This has forced many investors to question whether the juice is worth the squeeze when it comes to furnished rentals in Vancouver. Jordan Deyrmenjian, Founder and CEO of Artin Properties and Airbnb Superhost, sits down with Matt & Adam to discuss setting up short term rentals, navigating the complicated rental landscape in the City of Vancouver, and how investors can 4X their rental income!
This is short term rentals 101. Listen up!
Guest Information
Jordan Deyrmenjian
Jordan Deyrmenjian is the Founder and CEO of Artin Properties. At 18 years old, Jordan Deyrmenjian began renovating the home of his grandfather, Artin Deyrmenjian, who had passed away two years prior. With no previous experience, Jordan transformed an East-side Vancouver Special into a modern luxury home. During the renovation, Vancouver’s housing market had dropped substantially due to the implementation of the foreign buyer’s tax. Jordan’s initial plan to sell the home after adding value to it through a renovation no longer held its original promise. In an attempt to satisfy the construction loan that financed the renovation, Jordan began to offer his home as a short-term rental while still living at the home. Over the next six months, he found passion in providing an authentic and memorable experience for those who had rented his home while visiting the city in which he was so fortunate to grow up: Vancouver BC.
Today, the company which Jordan named after his grandfather, Artin Deyrmenjian, manages over 80 properties across BC, employs six full-time office staff and over fifteen in-house cleaners. Jordan’s vision for Artin is to establish its signature brand – the Shotel. The Shotel is a boutique collection of his homes which will focus on offering the privacy and comfort of a home with the amenities, standards and luxuries of a 5-star hotel.
Episode Summary
Can you Airbnb your property in Vancouver? And can you really get 3X market rent through short-term rentals? Learn how to maximize rental income through Airbnb, corporate and short-term rentals in Vancouver with Jordan Deyrmenjian of Artin Properties.
Who is Jordan Deyrmenjian? What is Artin Properties?
I’m 24 years old, born and raised here in Vancouver. I started Artin Properties3.5 years ago with a home my siblings and I inherited from my grandfather, who was an immigrant from Egypt of Armenian descent. The home is at 35th and Victoria Drive; it’s a six-bedroom Vancouver special.
I renovated that home and finished what was supposed to be a flip. But by the time I was finished, the market had come down. I was 18/19 years old and trying to figure out how to go from pursuing a hockey career to renovating a home. One of the biggest skills I learned was just how to talk to people.
How did you find an opportunity in a market downturn?
Once we were done the renovation, the home ended up looking quite good. It took over a year and cost $250,000 so by then, the market had come down 20%. But after all of that time and money invested into the house, we wanted to get something out of it.
So we considered renting it out and I thought we could make about $5500/month from a residential lease. But at the time, my dad’s girlfriend was doing short-term rentals through Airbnb with her laneway house and making $6000-7000/month. So we decided to give that a shot. We furnished the house all through Craigslist with mostly used IKEA stuff.
I watched a couple of videos on YouTube about Airbnb and fell in love with it. I became very passionate about providing authentic experiences for people visiting Vancouver.
Growing up in Vancouver and not travelling through much of Canada as a child, I just assumed the rest of Canada looked like this. Anytime I did go on vacation, I always got homesick. And then after playing hockey across Canada in my teens, I realized how lucky I was to live in Vancouver. I knew I needed to figure out a way to afford to live in this city.
Luckily, I was successful right away. My girlfriend also has a very good sense of design and hospitality. As we progressed, we learned a lot. I learned to outsource cleaning, look into different retailers, etc. I was able to scale, not in terms of properties, but in terms of efficiency. There are a lot of great resources out there to learn from.
I got obsessed with it, executed and wasn’t afraid to put in the extra effort. Less than a year in, I was doubling the rent and by the summer, I was making 4X the rent. At the beginning, I was living at the house when I could and would stay with my girlfriend to maximize occupancy. I did whatever I could to make it work.
When I first started out, I had no clue what I was doing. We were given a stop-work order because I didn’t know we needed permits. And when I went in for the permits, I just had drawings on loose-leaf paper. They laughed at me! I felt really lost but I was determined to make it work.
My realtor noticed what I was doing and introduced me to someone with a laneway house at Main and 39th who wanted to do something similar. That was my first short-term rental client. In the midst of this, I was at university and trying to decide if this was something I wanted to do full time.
Real estate is tied to money and I like the finer things in life. I wanted to make the most of the opportunity of being young and knowing that my family worked very hard for what we had.
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How did you start Artin Properties? Where did the name come from?
Artin is my grandfather’s name. I named the company after him because I wouldn’t be doing this if it wasn’t for him. My dad worked a lot when I was a kid and my grandfather was a mentor for me. One of the last things he said to me was to keep my integrity. That’s what his name means to me and how I want to do long term business. I wanted to continue his legacy.
Once I had my second client and started tripling his rent, I realized either I was good at this or there was a market gap – or both. This was about 2019. A friend of mine was doing something similar and had scaled to 100 properties. So I called him up to learn what he was doing.
How did covid affect your short-term rental business?
My dad referred me to a client in late 2019. I furnished their property, got it ready for Airbnb and the day it was listed was March 16, 2020. That was the day the pandemic was announced worldwide. Obviously that had a huge impact on my business. No one knew what was going on, I had a home to fill and I had exams at the same time.
So I started thinking about how else I could rent out these homes. This client didn’t want a typical long-term tenancy because he wanted his kids to still be able to come back home when they wanted to. So I called every company I could think of and was able to find short-term tenants through a corporate insurance company. It wasn’t the same numbers as I was doing on Airbnb but it did impress the client and kept things going.
Because that client was impressed, I reached out to ask him about the opportunity to do this with his other properties. He gave me a shot with a rundown home on Cambie and 20th. I told him I needed $30,000 to renovate or else it wasn’t going to work. He took another chance on me and I ended up spending $50,000. But I got it done in 30 days and doubled his rent right away in the middle of a pandemic.
At that time, people were very eager to finally get out of their house but waves of restrictions kept coming. There was less supply in the market, which worked in my favour. So I was able to fill the 4-5 homes I had at the time through short-term leases with insurance companies, film production companies and Airbnb.
H3: How did you continue to grow your property management agency?
I needed to pay my bills so I started cold-calling and reaching out to leads in 2021. I connected with someone inSquamish, furnished her property and tripled her rent. She was so impressed that she introduced me to eight more people. From there, I kept growing and was able to invest in myself and my business.
I hired my first employee to take care of invoicing and admin. After a great summer in 2021, I hired a few more people and kept cold-calling as my overhead went up.
I explain to all of my clients that our services:
- Expose your property to a market that will pay a premium
- Provide you with more accessibility and control of your property
- Provide you with our comprehensive management
Plus, we ensure the process is seamless and successful!
Some cold calls work, most don’t. But I was relentless. I saw this as my opportunity to set myself apart so I devoted myself entirely.
We currently have about 100 properties under management with lots more coming. A year ago, we were at 25. I’ve probably gotten 20-30 properties through cold calls but the majority are through word of mouth.
I don’t just do Airbnb, a large part of my portfolio is corporate, but it’s the same idea. My guests are going to think of the times they were in my homes as some of the most important times of their year. We get to influence how that goes and we take that seriously.
The most important thing to me is to provide a service that leaves people with a memorable impression. That’s how Airbnb started.
What’s been the biggest challenge in scaling?
The biggest challenge is keeping the integrity of the company. For example, it’s a lot harder to manage the inventory or consistency of the cleans. After we hit 25 properties, I had to bring the cleaning in-house. I couldn’t let a cleaning company’s problems become my problems.
Nailing down the service of the company is my biggest focus right now, as well as sales. People have been frantic about travel since Feb 2022. People are coming back to travel and planning their trips again; there’s a noticeable difference in the market. It brings me back to my covid days when I had to get creative and rent these homes out in a way that provided value under the parameters set by my clients. We’re a very client-focused company.
With some clients, they only give us a two week window to rent out their condo. For others, they want us to rent out the place while their kid is in college or away on summer vacation. The 30-day market has been growing. It’s a bit easier to rent out a home for a year rather than month to month to get 100% occupancy.
How is the short-term rental market in 2022?
I’ve 5X my business during the 2022 uptick in travel and so now all of my clients have very high expectations. So it’s about keeping them happy. But I’m straight with people. I explain to them that we may have been 3X-ing your rent over the summer and only 1.5X-ing it now, but it will still be 2X over the year.
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When should someone consider putting their property on Airbnb or using it for short-term rentals? What is the process of working with Artin Properties?
It depends on your location. The first step of working with Artin Properties would be for me or someone on my team to come see the property. We would then figure out what the market rent would be for a long term residential tenancy. Next, we would look into your building’s by-laws and the city by-laws to ensure you’re allowed to do short-term rentals.
You can only Airbnb your property in Vancouver if you’re the principal resident. That’s the only way to get a licence. To be a principal resident, you have to prove that you live there. If you can’t do that, you can’t get a licence and you’re not allowed to do it.
There’s no requirement for how many days you must live at your residence in order to be considered a principal resident. I think that’s something for the city to consider, especially with many people working remotely these days. If people have a home base, which is essentially a principal residency, they can still travel and work elsewhere. And while they’re away, they have the right to make a supplementary income on their property.
If your property is eligible, we would then assess your home. We want to furnish it in a way that strategically meets your goals. You want to have the most enticing property possible to maximize income and reach as large a market as possible.
For example, having a Smart TV and a work desk is very helpful. Having a theme to the home can resonate with a lot of people. We develop that in line with what the client wants their property to look like.
Does a higher budget translate to a higher ROI with short-term rentals?
We establish a budget with the client and discuss this with them. In fact, I have a full-time employee who is solely responsible for furnishing my homes. Bottom line, a higher budget does translate to a higher ROI.
Most people who list on Airbnb try to go as cheap as possible to make money. But to get out of the price-sensitive market and have people pay astronomical rates for your home, which some people will do, you have to pay for that.
If you can capture a few high rollers each month, that will give you a nice payday. And then you fill in the rest of the month with lower rates. The way we price out calendars is like fitting pieces into a puzzle.
A king bed is a big thing. People who don’t have a king bed at home are excited about staying in a place with one. Or if they do have one at home, they refuse to sleep on anything else. So if you have the space, put a king bed in and you can appeal to more people. I have experience doing this so clients can leverage my expertise.
How can clients make money with Airbnb and short-term rentals?
Once we’ve established a budget with the client, we discuss our on-boarding and fixed costs. We then get the licence, which is on the client to get. Next, we begin marketing. A part of the reason why we’re so good at what we do is our marketing. We have a great photographer and someone in the office writing web copy.
The whole goal is to provide top-percentile value in exchange for top-percentile income returns. You can’t provide a middle-ground product and expect high-end results.
Maximizing what you are comfortable spending is worthwhile. We will tell you when there’s a diminishing return to your investment. But if you pour enough in, you’ll see the return.
After marketing and capturing the demand, Artin Properties also handles all of the operations. We take care of all the scheduling, optimizing pricing, booking in advance, cleaning, etc. I coach my team on the algorithm for Airbnb all the time. For the client, it’s hassle-free. We handle all of the guest communication, garbage pick-up, and everything else.
We act in your best interest. I get a sense of who you are as a client, what your goals are with your property and what could affect the situation. We create a profile for you so we can always act in your best interest.
What are the costs for the client?
Overhead costs for Airbnb on our side are cleaning and supplies. That’s covered by the rental revenue, not my company. The client pays the utilities, since it’s their principal residence. We provide a detailed income statement for the client each month. Expenses for the client would be cleaning, supplies, utilities and maintenance, if needed.
Clients usually net 1.5-3X market rent on a consistent basis. That’s after everything, so your gross income would be 3-5X.
If the property is not your principal residence and you can’t list it for short-term rentals on Airbnb, is there anything else you can do?
We do 30-day minimum rentals and use a few different platforms to market that, like Airbnb or VRBO. There is a growing market of people looking for monthly or even longer rental terms on these sites. We use a few other channels to market these types of rentals too.
I also use my corporate network where I have relationships with insurance brokerages, the film industry, etc. They are often looking for these longer term rentals.
With this type of 30-day rental, you’d expect an average of a 140% return instead of a 200% return with the shorter stays. You can double that in the summer but the ceilings are lower in this market.
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Do units get more beat up if they’re on Airbnb? What’s the risk with Airbnb?
No, units don’t get beat up more on Airbnb. We have to keep them at a higher standard to keep attracting guests. Instead of a residential tenancy where you might bring in professional cleaners every year or more between tenancies, we have professional cleaners in every month, every week or every few days. They’re inspecting the unit and ensuring everything is well kept.
When I was growing my business, I managed a few residential tenancies but I ended up off-loading those. I saw how the properties were being treated. Oftentimes, tenants would present themselves very well when they applied but two months later, they’re treating the place horribly.
With Airbnb, people are in and out. So even if a place gets messy, it’s getting cleaned right away. You have a security deposit and their credit card on file. And if you have a company like ours who has the pressure to get you results, your home is going to be kept in much better care than if you were leasing to a long term tenant. That’s a huge misconception with Airbnb.
People assume because you’re inviting more strangers into your home with more frequency, you are taking on a higher risk. But we have standards for guests. There are more processes in place with a short-term rental.
If you hire a company to handle your short-term rental operations, you can leverage their experience. Sure, it costs more, but you don’t have to do any of the work yourself and with the company’s experience, you may be able to make more than you could on your own. That’s the win-win situation we’re trying to create for our clients.
Is it difficult to get short-term rental insurance?
I’m not an insurance broker, but I do have contacts in the insurance industry who I refer my clients to. Short-term rental insurance is expensive due to the high frequency of strangers. But you’re also insured by Airbnb up to $1 USD million. If you’re really worried, you can get short-term rental insurance on top of that.
It depends on your situation but you can’t get away from the risk premium. However, a lot of my clients are game for the risk!If you want to make money, you have to be willing to accept risk. I’m highly transparent about that with my clients. There will be bumps along the road but my job is to smooth them. I’m good at what I do but life happens.
It seems like the City of Vancouver doesn’t like Airbnb. Where is the place to buy a short-term rental property?
It depends on your budget. If you have a middle-ground budget with a mortgage up to $2 million, it would be best to buy a property for short-term rental in Yaletown. It’s the most happening place in Vancouver. You can only do so much within the parameters of the city and the building, but there are buildings that allow Airbnb and scenarios you can work to your advantage.
You have to look at it from the guests’ perspective. Yaletown is a great place to eat and drink with the Seawall right there. But it’s not like Coal Harbour or the West End are so much worse. For the most part, people visiting Vancouver want to be downtown. If they have more insight into Vancouver, they know the name “Yaletown” and want to be there.
What is the easiest property type to rent out on Airbnb?
Two bedrooms are the easiest to rent – one bedrooms aren’t bad either. People can book these smaller units last minute if they’re looking for deals, whereas larger properties are usually booked months in advance. So there’s a constant turnover with people just coming into Vancouver for a couple of nights. You can cater to a larger market because most people travel in small groups.
That being said, you can do great things with big homes because now you have a couple of families splitting the budget. If you have a large home in East Vancouver, that’s a good play. West Vancouver real estate has come down the most so that could be a very smart play.
What is the biggest mistake you see people make when listing their properties on Airbnb?
Going with a company other than mine – I’m kidding! The biggest mistake people make on Airbnb is not investing in their property because there are great returns to be had.
If you start out really tight and get bad reviews, that’s very discouraging. Those first three reviews are so important. Not only for SEO and future bookings but also for your own momentum.
It really sucks to ruin someone’s vacation. People booking your place feel they are entitled to a very high standard of accommodation. So you have to take everything seriously.
For your clients’ properties, are you listing them on Airbnb under your name?
Yes, everything is under my name on Airbnb. I have it under my name, and not Artin Properties, as personability is a big sell on Airbnb. I’m not the guy who replies to all of the messages anymore, but an employee I trust is doing it. It’s not just some bot.
But for liability’s sake, I may change it to the company’s name. I want to provide the personability and comfort, but also ensure everything is safe.
The 5 Wire: Getting to Know Founder and CEO of Artin Properties, Jordan Deyrmenjian
What is one book you recommend?
12 Rules for Life by Jordan Peterson. Rule #8 is “Don’t lie to yourself, don’t lie to other people.” That changed my life.
In the last five years, what is one belief, behaviour or habit that has most improved your life?
Honestly, it’s probably Rule #8 from 12 Rules for Life (above). Everyone lives in their own reality – it’s just what you perceive and your own manipulation of what you perceive. If you can keep your reality as close to what you’re perceiving as possible, you can live a much more rational life. That rule actually messed me up for a couple of months but then it got better.
What have you been binge watching lately?
I don’t watch too much TV but I did start watching the Dahmer show on Netflix. That is messed up. The way they filmed it is even crazier. That guy is a good actor! Other than that, I watch a lot of YouTube.
Favourite band or style of music?
I like rap music, like Migos and Future.
What is something you’ve purchased for under $1500 in the last few years that has changed your life?
My iPad. That thing is like an extension of my brain.
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Episode Host
Adam Scalena
Adam is a full-service realtor, specializing in Vancouver’s best areas. His systematic approach to real estate and dedication to his clients has consistently placed him within the top 10% of realtors operating within Greater Vancouver.
Matt Scalena
Matt is real estate obsessed and considers himself a lifelong student of the Vancouver real estate market. As a co-manager of the Scalena Real Estate team, Matt prides himself on expertly advising buyers and sellers on all aspects of the fast-paced, dynamic Vancouver real estate market. He is present at every stage of the process, from that first phone call or email right through to when keys are exchanged between sellers and buyers.
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