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A Letter from Our Founder

From Brook Walsh...

After a very modest upbringing in rural Northern Michigan, and like many kids from a small town, I was determined to leave the area and never return. I graduated from mighty Johannesburg-Lewiston High school (class of 20) and moved onto Michigan State University (50,000 students). I didn’t have much at that time, only a strong work ethic, some past athletic success – as much as could be expected of a 5’7” 125lb athlete anyway – and a bit of self-doubt going to such a large school. Things worked out pretty well and shortly after graduating from MSU, my first career was that of an information technology professional. My fast-tracked management career was the result of my ability to speak with technical people and relay their techno speak to management. An ability to play interpreter, technology, and communication skills eventually led to my last role as that of a Senior Vice President and Chief Information Officer with a $9B financial services firm in East Lansing, MI.

Despite having a great job, I threw caution to the wind and asked my wife to let me scratch my entrepreneurial itch and quit my very stable corporate job. I had become passionate about real estate and being an entrepreneur and thus a second career was born and we moved to Colorado’s esteemed Vail Valley. We purchased a couple of hospitality-based businesses, combined them, and then sold them to our largest client. After selling our company, we were thrilled to move back home to Northern Michigan where I earned my real estate brokers license.

The past several years has seen vacation rental income climb to historic heights and to say the industry has changed in the last fifteen years would be an understatement. Moreover, its changing quickly and not everyone is poised for future success and, in fact, many homeowners could already be at a disadvantage. That’s because vacation rental sites are fine-tuning the way homes are listed to maximize profits. If you don’t have a professional team working to get your home the most exposure possible, this opportunity might pass you by. 

My Current Observations of the Players in the Industry

  • Online Travel Agencies (OTAs) like Priceline, Booking.com, etc… have strength in numbers but data shows today’s travelers rarely enjoy speaking with someone in India to book a property that the agent has never seen.
  • Vacation Rental by Owners Sites (VRBO, AirBnb, etc…), once beloved by homeowners and travelers alike, have alienated both groups as home owners aren’t allowed to directly communicate with their guests and travelers are being hit with upfront booking fees, varying from 9-12%. Then, just like the OTAs, these sites have travelers speak with agents in India to book a property they’ve never seen.
  • Most real estate companies originally got into the vacation rental business back in 2008 due to the mortgage crisis. People weren’t buying homes so vacation rentals provided cash flow. However, these firms service quality varies greatly as the peaks and valleys go with real estate and many eventually exit due to the “headaches” of their clients.
  • Boutique property management companies in Northern Michigan struggle due to the seasonal nature of their business. These companies don’t have the right combination of people, process, and technology, not to mention they lack sufficient annual revenue streams, to run a full-time business.
  • Rentals by owner: Simply put, vacation rentals have traditionally been treated as passive income for most which is what they inherently are. Surprisingly, a lot of people that self-manage their vacation rentals tend to be very successful people. However, despite their level of financial and career success, they choose to get involved in the daily operations of their vacation rental such as being a reservationist, photographer, writer, marketer, salesperson, housekeeping and maintenance supervisor/coordinator, etc… While each role is valuable, almost all of the roles pay substantially less than these homeowners full time jobs. Moreover, often times homeowners renting on their own actually work full time jobs, are raising a family, managing a household, etc… Many homeowners are reluctant to pay commission to a property management/vacation rental company which I find puzzling because people pay financial advisors all the time to manage their money and, in many cases, these vacation homes are larger than some of the more traditional investment classes. Moreover, there are real dangers in people, even the highly intelligent and accomplished ones, dabbling in self-management of their homes, besides those aforementioned, as follows:

Lost revenue. Without knowing how to write Search Engine Optimized (SEO) content, almost zero organic search traffic is created or original content and pay per click advertising (PPC) isn’t understood nor leveraged. This results in a reliance on sites like VRBO and that market is changing and consolidating quickly so they aren’t positioned well for the future. Moreover, poor photography and videography and the time it takes to collect good reviews harm revenue as do untimely responses to rental inquiries.

Risk Management. Vacation rentals are being highly scrutinized around the country and locally within Northern Michigan so one must stay abreast of the current legislation. (An example was a gentleman who bought a $749k vacation rental in a township that strictly prohibits them – bad advice from a bartender moonlighting as a realtor and a homeowner moonlighting as a vacation home investor.) Many homeowners lack sufficient liability understanding to insure themselves properly and place their personal net worth at risk. Moreover, they have a complete lack of understanding of local and state taxing and regulatory authority. For example, in Michigan, while it is legal to rent out your second home you have to be a licensed realtor to rent out more than one property. Fines for this are steep, real, and going to be enforced. Vacation rentals are required to collect and remit use tax, visitor bureau taxes, pure Michigan taxes, and in some cases, others.

Northern Michigan Escapes exists to serve others and address the aforementioned marketplace challenges in an unique, status-quo challenging, entrepreneurial, and hungry manner. Despite our fast-growing company, we remain as hungry as when we managed two properties. The team and I spend every day relentlessly trying to make our company better. To that end, we’ve created the following centers of excellence to help with the lifecycle of vacation home ownership: property management, property services, vacation rentals, real estate, interior design and remodeling services, and association management.

We’re straightforward in our intentions and committed to building mutually beneficial relationships, with travelers and homeowners alike. I encourage you to spend some time on our website and get to know us better and hope you’ll discover Northern Michigan Escapes to be something unique in today’s business environment. You have my word we will work hard to become, and equally as important, achieve our vision of becoming “Your Trusted Vacation Home Advisory Services Firm.”

Sincerely,

Brook E. Walsh

Brook Walsh
President & Founder