Why the Next Few Years Are the Best Time to Build and Sell Your STR Business

**Michael Sjogren** (0:00)
We did over $2.8 million in annual contract value. $3 million.

**Mike Reilly** (0:06)
Just over $3 million, we had some people update late as of July 1st.

**Michael Sjogren** (0:12)
So that's not booking revenue, that is commissions as a property manager. So over $3 million add-in in about seven weeks.
Like that's amazing. That is freaking amazing. So huge shout out to everybody in there. We also had a member go out and acquire another management company. They added, how many doors was it Mike? 105?

**Mike Reilly** (0:33)
120, 122 And then they've got 123 on the contest. So they must have added one organically, but 123 contracts in one quarter.

**Michael Sjogren** (0:43)
What is going on STR Nation? Welcome back to another episode.
This feels a little surreal, Mike, being back on the show here. It's been a minute, but excited to dive in. A little reminiscent of Tuesdays with Mike and Mike, that we did for a hot minute there. But yeah, man, how are you doing?

**Mike Reilly** (1:01)
Doing awesome, man. It's going into July 4th weekend. I think this will come out on the following Monday, but got a lot of fun stuff playing with the kids. And we had a really good Q2, really good quarter for our management company. So, some really exciting stuff we'll talk about today.

**Michael Sjogren** (1:17)
Yeah, some huge momentum going in there. We are fresh off the AI Summit. So, we'll definitely give everybody a recap on a lot of different things that we covered. Talk about where things are going in the industry with AI, and just some of the other bigger projects. It's been a while since I've jumped on here and really shared a lot of the things that we've been working on behind the scenes, at Secrets, outside of Secrets, a whole bunch of good stuff. So, where do you want to start, man?

**Mike Reilly** (1:41)
Yeah, I mean, I think starting there, we've been working on something really big the last 16 months, since last April, and we haven't been, we've shared it internally with the STR Secrets members, but we haven't really shared it too much on the podcast, or really in many public places. But I think we should start there, and then, yeah, I think just flow organically from there.

**Michael Sjogren** (2:06)
Yeah, man. So, there's been a lot of changes. I've shared this internally. If you look at the industry as a whole, I was showing some stats at the AI Summit of, if you look at 2022, 85% of all short term rentals in the US were managed by hosts with less than 20 units in their portfolio, right? So, it was very fragmented. 85% in 2022 Fast forward to 2025, that number is down to 70%. And so, at first glance, a lot of people were thinking, well, maybe a lot of hosts get out of the game. Maybe they got burnt out. It's not as easy as it was back in 2022
But if you look at the data and you really peel back what's been going on, there's been a ton of consolidation that's been quietly happening, where back in 2021, a lot of the big money, private equity groups, things like that, started to look at short term rentals as a legitimate investment asset class that has really good margins, very fragmented industry, and they started to put their money in, and they started to acquire mid to large property management companies, and that trend is starting to increase. Over the last few years, more and more of these folks are getting in. I was very curious about this, of how do market cycles work? I remember my very first mentor in real estate, he had 8,000 apartments when I met him 15 years ago. One of the first things he taught me is real estate is hyper localized and there are market cycles. So every 10 to 15 years, we go through these market cycles. And he planted the seed of like, you want to follow the trends and look at the data in real estate and also in other industries. And so I started doing a lot of research to see what's really going on with these consolidations and how does this map out to short term rentals from a macro level. And so I did a bunch of research around self storage, elder housing, even home services, HVAC, plumbing, there's been a ton of mergers and acquisitions and roll ups and all these different things. And typically what happens is a lot of this consolidation happens over a 15 year window. And I was trying to see where short term rentals in that timeline right now, because I've been seeing more and more of these activities from, you know, most folks have heard about the Vecasa and Casago deal that went down last year. That was a big acquisition from Casago.