Madeleine Raiford-Holland: What did the audit illuminate for you? And how do we fix it once so that we're not having the same conversation again in 2026? I do not wait until the very end of the year or the last week of the year to start an audit. And I don't wait until the first of the year to have a vision. I do this personally and professionally. And several folks have asked, especially in my mentorship, if I would be willing to share what I go through and look at in my short-term rental business.

Madeleine Raiford-Holland: [00:00:29] Hey there, I'm Madeleine and welcome to The Luxe and The Short of It podcast. I'm a military wife, mom, and entrepreneur that went from a stressed out nine-to-fiver to now a present-minded seven-figure business owner and investor, all through the power of short-term rentals. Here we believe the Luxe life means having the time and financial freedom to be present for the moments that matter most. And I'm here to teach you the exact mindset shifts, insider expertise, and business strategy to make that a reality for you today. So are you ready to actively create the life you want? I'm Madeleine and this is The Luxe and The Short of It podcast.

[00:01:12] Welcome back to this episode of the Luxe and The Short of It. It is so hard to believe that we are already getting close to the end of the year this year. It always seems to go by faster and faster and I know that I'm getting old because that's what I felt the old people always used to say. Like the years just start flying by and we're blinking and it's gone. And I now feel that to my core. But one of the practices that I have personally that I attribute a lot of my success to is reflection and then vision casting for the future. And I do not wait until the very end of the year or the last week of the year to start an audit. And I don't wait until the first of the year to have a vision. I do this personally and professionally. And several folks have asked, especially in my mentorship, if I would be willing to share what I go through and look at in my short-term rental business as far as an audit and then how I take what I find in that audit and look into the future.

[00:02:21] So this episode is what I'm going to call a companion episode to two free resources that I have made available to not just my mentorship clients, but to you guys who are listening here. And we have strategically pulled the questions that I ask myself for an audit as well as how I interpret that information for my vision going into next year and created two amazing documents that I'm excited to share with you. So if you are listening and you do not have those documents, pause this right now and go down to the show notes. You will see a document that is a Year-end STR Business Audit Workbook. You're going to need to sign up for that. And we'll send that right on over to you as a Canva document. And then there is the 2026 vision planner. They are two separate documents, and I do it that way on purpose because I want the audit to be focused on the reflection piece. And then after you have completed that, then you go into the 2026 vision planner. But this is a companion episode meant to go through that together. If you do have that document already pulled up. Let's go in and go for it.

[00:03:48] So these are the things that I specifically look at and the questions that I ask myself when I am reflecting back on my business. You're going to need to have some data in front of you. I recommend having a pen. I recommend printing this out. Something about putting pen to paper that really helps, but ho ahead and pull up your property management software, your Price Labs, any of these things that are going to help you pull this information in real time. Because the first thing that we're going to look at is your revenue and your occupancy. You can also pull it from your Airbnb dashboard, but the property management software for my clients is definitely going to be Hostfully. Pulling it up in that dashboard is going to be the best. And you can do this either by property or by your portfolio as a whole, but I think you're probably going to see the best results if you're doing it by property. So the first thing that we ask, we have it broken down by month. What was your revenue and what was your occupancy rate? What was your best performing months and then what was your underperforming months? Do you notice any notable shifts or patterns? And what is your average booking window and how far in advance does a guest book with you?

[00:05:03] From there, we are going to look at your pricing strategy. So we want to look at your best month, we want to look at your worst month. Your highest average daily rate and your lowest average daily rate. The highest nightly rate charged and the lowest nightly rate charged and the percentage of nights that you discounted. I want you guys to get so incredibly comfortable with these numbers. Because at the end of the day, where I see a lot of hosts lose profit is not because they don't have the right tools, but because they emotionally react to data instead of interpreting it. You might see a slowdown in bookings and suddenly you're spiraling. You drop your price without a plan, or worse, you freeze and hope it fills. This is the mindset shift that I want you guys to have, is data is just data. It is not personal. It's not emotional. It's a signal. And it's your job to read it, not fear it. When you approach the numbers as information, not a judgment, you are empowered to pivot strategically instead of reacting out of panic. Things like gaps, over nights, lead time dropping. That's just the market talking. And when you understand what it's saying, you can adjust with confidence instead of just guessing. So that is why we go through this exercise of reflecting back and looking at all of these things with reflection. Like, where did I underprice? Was I overpriced and lost bookings because the market filled up faster?

[00:06:47] Then we want to look at the adjustments that you want to make, the minimum might stay changes, peak, shoulder, slow season, really getting clear on what the data is showing you from 2025. After this, we're going to roll into looking at your guest experience and reviews. I want you to look at the positive things that guests mention often in their review. We're not thinking about this now in the audit, but we will come back to this in the strategy piece. So positive things that guests mention often. Negatives, again, we're not looking at that emotionally. The things that they may mention a couple of times, whether that's in private feedback or publicly, what are the things that get mentioned, if anything? And I know it's really easy to say, well, this guest had a stick up their butt, whatever else, in the moment. But when we are doing an audit, we are removing ourselves as the host and we are looking at it as objectively as possible. Then I want you to think where and how are guests finding my listing? Am I relying heavily on the OTAs? Where were the majority of my bookings happening? How are they finding me? And then what can I automate or outsource? Then we're going to look at your team and your operations. You may be a team of one, but you may have multiple people. Most of you guys at least have a cleaner, you have a handyman, you have people who assist you in this business.

[00:08:14] I run my business with a team of five virtual professionals and then dozens of cleaners at this point and handy people across the different markets that I'm in. And so I like to audit and look at who were my MVP team members this year? What were problem areas? Things that I kept having to come back to and put out fires, whether that's staff, vendors, the property that kept having the same fire alarm issue, whatever that may be, we're going to look at those problem areas. And then we're going to look internally and say, what roles and responsibilities do I need to delegate to be in my zone of genius? I want you to think about this. What is my zone of genius? What do I love doing? And what do I want to outsource? And then the first process or SOP that I want to systematize in Q1. How can I automate in order to delegate? Get into that CEO mindset that we talked about a few weeks ago. Then we're going to do some strategic reflection on your tech stack and automation. I want you to write out all of the tools that you used in your business. And I mean this is down to any calendar software, anything that you use to schedule social media, any tool that you use to talk to your team with, your property management software, of course, your pricing, any AI automation.

[00:09:35] Any tool that you use in your business, write it down. What in that tech stack worked well? And what tools do you want to drop or replace? Then look at any automations that you want to implement in 2026. I would take this a step further, guys, and ask yourself when you do all of the tools that you used, how much each one of them cost? It's something that you can absolutely look at in 2026 in Q1. We audit our spending and we go back to the companies that we use that we know we want to use and see if we can negotiate a better contract. Just letting it slide, you might have missed an introductory offer, a retention offer is another one. But looking at what you used and what you spend will give you the knowledge and the game plan of how to go back out and renegotiate that in the new year. Next, guys, we are going to look at your listing. We're going to go through the listing photos, the copy, the SEO. Do I need to update any photos? I'm thinking, alright, well, we had a guest break the couch and now we have a new couch in there, but we haven't updated the photos. Or we did a little design refresh and we just haven't had time to get a photographer in there. Or maybe I have some vertically oriented photos when I know the OTAs have a preference for horizontally oriented photos. Go back and look at it with a fresh set of eyes. We get so in the weeds with running our business that we miss out on a lot of low-hanging fruit.

[00:11:15] Then we're saying, is my title optimized for bookings? Yes or no? Drop it into chat. Ideally, you guys have gone through our AI boot camp and you have a working AI bot that is a companion to you in this business. And you can say, hey, my goal is to optimize for bookings is my title there. What improvements should I make? Are captions keyword rich and helpful? Another one that I would utilize chat for. If you have no idea what I'm talking about, you need the AI boot camp, guys. Have I updated seasonal content or decor? Yes or no? Have I checked listing performance data, views, saves, conversions? I would utilize Rank Breeze typically for that, but you can absolutely pull it from the OTAs as well. And then last but certainly not least, here is the end-of-year tax preparation. Reconcile all income and expenses, collect 1099s for contractors, cleaners, handyman, VAs, review, travel, and mileage deduction. I personally work with my CFO for this, and we're actually doing it along and along throughout the year. So it makes this part not as bad. This is all things that you need to do as you're preparing to wrap up your year. Identify capital expenditures versus regular expenditures. Confirm property classification. If you are looking to use a short term rental tax loophole, we need to make sure that we have materially participated. Make sure that you guys are looking at those different things before the end of the year because we still have time to fix these things.

[00:12:53] Consider a cost segregation, especially if you purchased or put your property into service in 2025. And then make sure you are compiling all vendor and contract receipts. I have a space here on this document for you to add notes or questions for your CPA. At the end of this audit, I have some strategic reflection questions. Where did I overcomplicate things in 2025? That's a big one. Don't skip these over, guys. What actually made me money? What just kept me busy? And what do I want to feel like running my short-term rental in 2026? That's one of my favorite questions. What do I want this to feel like in 2026? Mine is I want more fun. I want more creative challenge. And then I love this next one, is what bold move am I ready to make? I'm going into 2026 very bold with new properties, larger properties, bigger deals. And then the final question is top three priorities for Q1. That gives you your action steps moving forward into this. Alright. I hope you guys pause this episode and were going through this with me. But all of the answers from that end of your audit are going to take us into the vision planning document for 2026. So you're going to use the information and this is going to help you interpret the results.

[00:14:24] So I'm making a swap over to the 2026 Vision Planner doc. So if you've completed your audit, go ahead and do that now. We're going to start at the very beginning. Just like we did the audit, it starts with revenue and occupancy strategy. And I have some if-then statements in here for you guys. If you had strong occupancy but low profit, focus on raising your average daily rate and auditing your expenses. If you had inconsistent bookings, then investigate a seasonal strategy and booking window. What was working that I want to double down on this year? The key here, guys, is understanding where to, one, find this information and see what your market is doing. We talked about in the audit doc viewing the data as information and it's telling a story, we just have to know how to read this. So if you guys have not taken a deep dive into your pricing strategy and understanding what your tools like Price Labs are telling you, go back (especially if you're a mentorship client, because you get full access to this) to the pricing boot camp and do a refresher on it. It is two weeks, less than 10 minutes a day, where you are refreshing your knowledge on how to read the data, know the charts, what are they telling you, and how to adjust with that.

[00:15:46] It's very important to understand, okay, if I had strong occupancy but low profit, then I need to focus on raising my ADR, probably not waiting until the last minute to make adjustments on things. Those are the kinds of things that I want you guys to understand, the minutiae of how to take the data, read it, and interpret it. Again, if you're in our mentorship, we are here to help and want to train you how to go through and do that. Pricing and profit strategy. From your audit, you underprice during blank months and you over relied on discounts in other blank months. Minimum night stay target in your peak season, your shoulder season, and your slow season. Then I want you to say I want to audit my pricing tools monthly or quarterly. I will update cleaning or extra day fees by X amount. And the pricing rule I'm setting is I will blank. Take what the information is telling you. And start creating an action plan for 2026. In the audit document, we went through and made notes of what the guests loved. And now we're putting it into the vision. Guests loved this, they struggled with this. Decide after staying with me, I want a guest to feel this. One guest facing upgrade I will add is blank. And it doesn't have to be super expensive. But I want you guys to think about the things that they are telling you and then respond to the market.

[00:17:13] When you're thinking about your team and your time freedom, we have the MVPs listed, but I want you to think of making sure that you have all of the right people on the bus that you are driving and that the right people are in the right seats. So if you have an MVP who is absolutely excelling at one thing, ask them if they are happy in that role, if they want to take on additional responsibilities. Do you have room to increase their hours or maybe optimize their position even more to make sure that they are sitting in the right seat? Do you have gaps or bottlenecks? If every process lives in your brain, you will always be the bottleneck. So where can you turn messy notes or call recordings into clean SOPs and then hand those over to your MVPs, your cleaner, your VA, your local person, your boots on the ground without needing to explain everything 10 times. This is another thing where I use AI to help us create onboarding docs, role responsibilities, training materials in minutes, especially if we're planning to expand. And that is how we protect our time and our standards. So this is saying, hey, I recognize that I'm the bottleneck in this part of my business. And this is the first SOP I'm going to build. I want you guys to use tools like Loom and Scribe a lot of times in conjunction to when you are doing a task, you are documenting that process. So even if you're not ready to delegate that out to a team member right now, you have already done the legwork of documenting the process. If you can automate it, great, but eventually we're going to delegate that out. And so it does not hurt to start building out those SPs now.

[00:18:56] Tech and automation. We went through and listed them out. What the best tools are, any frustrations that you have, which tech and automation will you keep, which will you drop? What automation will you build? And how can you reduce expenses on the ones that you already have? Our listing optimization. We listed some of those things out, but your listing either you can check boxes here, outdated photos, weak title captions are not strategic. Make sure that all of your photos have captions and then create the plan to move forward with those action items in 2026. Marketing and visibility. The current top booking source, was it Airbnb, Vrbo, direct social media or referrals? It's a great question. What was your least effective method? What channel do you want to focus on going into next year? What is a visibility habit? Ours it's making sure that we post on social media. What are you going to say no to? Whether that's the last minute person who is asking for a discount and they tell you exactly what their budget is, but you're not booked yet, and you're kind of wondering if it's worth taking it at the crazy reduced rate? Whatever it may be, what are you going to say no to?

[00:20:11] And then your tax and financial strategy. Do you need to set up or review a bookkeeping system? Did this part of your audit reveal some weaknesses in your tax and financial strategy? Were you not able to go and find all of your receipts in a really easy way? Were you saying, I don't know what the heck she is talking about with this? What did the audit illuminate for you? And how do we fix it once so that we're not having the same conversation again in 2026? Are you going to check the box review all revenue and expenses monthly, not just in April? Confirm how your short-term rental is classified with your CPA, whether it's passive income or do you have enough for material participation? Are you real estate professional status? Then schedule a tax planning call, not just tax prep panic. I can't urge this enough. We are meeting with our tax strategist quarterly in the beginning and monthly at the end of the year. Those who plan to succeed with this are the ones who do. If you do not have a plan, you are planning to fail and owe the government a crap ton of money. We have some clarity questions to ask your CPA. Guys in our mentorship, you know you have access to my tax strategist, my bookkeeper. My person who does cost segregation studies, you guys have access to all of that. So make sure that you're utilizing it, that you're showing up to the office hours and getting your questions answered ahead of time, not waiting until the last minute.

[00:21:43] And then here in the vision planner document, I have a negotiation script for you for reducing your cost. Hey, I've been reviewing my annual expenses and notice the subscription fee. I'd like to keep your service, but the current rate isn't sustainable. Are there any current promotions or loyalty discounts you can apply to my account? Fan-stinking-tastic. Try it. What do you have to lose? There's also a tool called Rocket Money that I love to help negotiate. They take a percentage of what they save you, but it is kind of the easy button in regard to this. But a lot of places don't have it. But those who do, it does make it easy for us. Guys, I hope that having these guided questions to audit your 2025 and then the direction of how to apply the answers to those questions in our vision planner has been super helpful for you. Our goal is to give you the tools to be successful in the short term rental space. And if going through this exercise revealed things about your business that you realize that you need help with, we'd love to help. Do not hesitate to book a call with my team down below. We are the first to say, yes, we think we can help. Or no, we think that this would actually be a better resource for you. We have a ton of free resources that are available to you guys that I want to make sure that you have access to as not just our paid courses or mentorship, but I want to see you guys be successful and I want to see you win in 2026. Thanks so much for going along with us and we'll see you next week.

[00:23:29] Hey y'all, if you're loving the show, be sure to hit the follow button or the plus sign on your podcast app to subscribe. This will ensure you don't miss a single episode and I'll see you next week.