In this episode, we sit down with The Karwells, two powerhouse women who’ve shattered the Airbnb glass ceiling by prioritizing guest experience over ROI. Tune in to learn how they’ve leveraged interior design and strategic planning to diversify income streams and build an empire in a male-dominated field.
Emily and Sarah have been in the short-term rental space since 2019, they’ve dabbled in it all, design, arbitrage, real estate funds, education and owned investing. Now they’re in a season of investing in Michigan Lake houses and running quarterly mentorships for their online community, teaching others to do what they do.
Welcome Emily and Sarah!
When you’re thinking about building out the short-term rental portfolio, you’ve got to be thinking, who do I want to be? Do I want to be the Super 8 or do I want to be the Ritz Carlton?– Sarah Glidewell, Vacation Rental Investor and Educator
Here’s what you can expect to hear in this episode:
- The KarWell’s story and how they got into short term rentals
- Their experience in a male dominated industry
- How they have created a human first brand
- Their thoughts on real estate as an exit plan
First of all, how did you meet and how did you get into short term rental investing?
Emily: Sarah and I actually have known each other since third grade. We’ve been best friends since third grade, played basketball together, we lived together in college, we worked together, all the things.
We even got married at the same time. Pretty much our journeys have been cohesive our entire lives. So starting a business together just seemed like the next step in our relationship.
It was back in 2019 that I graduated college and then the pandemic hit when I was looking for a job. So I was jobless from January to, I think it August. Then I was thinking, I have to get a serving job now because I’ve got to start figuring some stuff out.
And at that time, Sarah was scaling her portfolio and she’ll get into like how she got into short-term rentals and all of that, but I was looking for some income and a way to kind of use my creative juices. We started what was then known as KarWell Design.
We’ve kind of adapted from there, but we started an interior design firm that was specific for short-term rentals because a lot of hosts in the pandemic actually were scaling, even though a lot of us were scaling back our expenses. A lot of hosts were taking advantage of low rent and so we were able to help a lot of people scale.
Over the years, we’ve just kind of been learning along the way how to scale our own business and so we phased out of working for other people and decided to work for ourselves.
Now, Sarah and I together, we do mentorship and social media and the short-term rental space, and then we each personally invest in short-term rentals. So I just listed my first 100% owned property last week and our, our first guest checked out today. So very exciting stuff.
Sarah: Emily’s totally right. We have run parallel races for a very, very long time. I know people push back on us starting a business together just because of all the horror stories that you hear of people running businesses with your significant other, your best friend, kind of just crossing that threshold.
But I feel like for Emily and I, it really was a no-brainer just because we’ve partnered in so many capacities in the past and saw it worked really well. And at the end of the day I do not regret that decision at all.
I feel like the amount of trust we have in each other and just understanding how each other works and how we really are kind of polar opposites made being business partners a no-brainer and has made building a business a lot of fun.
But she is right. I got into arbitrage in 2019. For any listener who doesn’t know what arbitrage is, it’s just where you rent a property, you furnish it, and then you re-rent it on Airbnb.
So you don’t actually physically own that property yourself and you’re just making the difference between your rent and then whatever you’re making on Airbnb. I scaled my portfolio from one to four properties in March of 2020.
I launched the additional three properties and that was right when the pandemic hit. I had gone to my boss at that point in time, I put in my two weeks, I was like, I have these four properties that are going to make me the amount of money that I’m making at my nine to five.
And then travel came to a screeching halt. And so we were thinking, oh no, what did we do? So Emily and I both were kind of sitting in our own messes in 2020 and just thinking, how do we get out of this?
So that’s when we decided to start designing for investors who were waiting for a collapse like that because there is opportunity in every single market, even in COVID. And so that allowed us to really understand short-term rentals on an intimate level with investors’ money instead of ours for the entire portion of COVID.
Then after COVID when the properties were kind of eased up, our properties were performing the same way that we thought that they were going to before COVID hit. And we started investing in our own properties.
That’s when I purchased my first fully owned property in 2021. During that time, we also worked for a big real estate fund, previously known as Superost Labs, now known as TechFester.
And all that is, is just a giant pool of money from people all over the US who want to invest in short-term rentals, but don’t have the time or the team to do so. So we watched and worked alongside a lot of people investing in Airbnbs all over the nation and we just got really familiar with Airbnb at a very macro level.
So after we kind of learned the ins and outs of that, we still were absolutely determined to do it on our own instead of for another company because to our core, we’re entrepreneurs. For the last two years now, we have just been investing in properties that either we own 100% or we raise capital for from other investors. So we feel like we’ve dabbled in it all.
Now, outside of our own portfolio of properties, whether they’re self-funded or investor funded, we now offer mentorship for other people who are looking to do what we’ve done and that’s kind of how we landed where we’re at.
You guys are in an industry that is predominantly male. Can you tell us about your experience as a female duo and how it works within the industry overall?
Emily: Yes, so I feel like Sarah and I, because we started in design, we got this reputation that, oh, we just wanted to make things pretty and there was actually no ROI that was attached to what we were doing. Or, we’re just like trying to like spend money to spend money.
And I think that was what a lot of design had a reputation for. Because real estate investing is predominantly male, I don’t want to blanket statement all men, but a lot of them were more investment focused than maybe hospitality focused.
So we kind of had to prove that design did have an ROI attached to it, prioritizing the experience and the amenities and how all the things that you put into your property can make you more money.
So we felt like misfit investors or bad investors for a really long time because we were kind of seen as the people who are just trying to make stuff pretty and that doesn’t actually matter. And so I think that we’ve kind of started turning it around.
I think that there are a lot more people that have the mindset that we do, but traditionally it’s a lot of females that are coming to us being like, hey, I’ve got to convince my husband to like put the money into this thing in the property.
And I mean, I had to convince my husband that it was worth putting things into the property. But, that’s kind of how I’ve seen our journey is like starting out as quote unquote bad investors. We’ve been proving that it is worth putting the money into the things that we’re putting them into and we’ve been able to prove that there is a return on that investment.
Sarah: I love this question because if you would have asked Emily and I this question three years ago, we would have been like, I don’t know. We’re doing our own thing over here and we’re hoping it works out. And it’s just because we were coming from a design background, right?
So when you’re coming from a design background, all of the investment side of things, like understanding how to run numbers and understanding what would be a profitable investment and understanding how really to not only prioritize design, but make sure that design is printing you money on the backend – those were all kind of second nature to us.
It wasn’t the thing that got us into the space, but Emily and I spent a lot of time learning how to speak the investor language and understanding really how to balance that design versus investment conversation. And we’re always leaning heavier into design, right?
So on the properties that we would design before we owned the properties ourselves, before we became the investor, we always were having this battle between the investor and us being like, look, you really should invest in this pool table.
You really should invest in this hot tub. You really should invest in these nicer sheets or the cute coffee pot or the whatever the case may be. And we always got pushback.
In our gut, we’re like, we know these things will offer a better experience, which will then play into the clientele that you get, the price you can charge, the longevity of that property, so on and so forth.
So when we became the investor and we earned enough money to invest in our own properties, what we saw is that we were making nearly double what our competition was making.
And so before, when we were trying to justify it to investors without data that backed our theory the investors weren’t really listening. Now we’ve just got a line of investors who are ready to invest with us because they’re like, how are you making twice what I’m making?
For us, we know that directly correlates to design and amenities. So we started out feeling kind of, like Emily said, misfit investors just because it’s predominantly a male industry and it’s predominantly investment focused, but us coming in with kind of a fresh perspective, specifically in short-term rentals really, really paid off.
And so now we’ve got a lot of that investment side clientele that’s got their ears perked up towards us wondering why we’re making more money than they are.
Can you put into context what “hospitality comes before investment ROI” means and expand on why that is essential to your brand success?
Emily: Naturally, Sarah and I care about the experience that people are having and we base our properties off of what we want. We travel all the time and so it was really natural for us to get into this industry.
When we’re building a property, we’re building it based off of what we want to stay in. So we have this lifestyle aspect of it. I think naturally that made us prioritize the hospitality aspect of the industry.
And I think that prioritizing design and things like that just pushed us into the short-term rental niche because real estate investing you can go midterm, long-term, multifamily, all sorts of different things and our specific niche just so happened to be the most profitable niche as well.
So we were able to kind of push ourselves into this industry that I personally think that anybody who does prioritize hospitality design, you are miles above any other real estate investor and you’re already getting into the highest cash flowing real estate investing that you possibly can.
We’re creating vacations for people who maybe this is their one vacation a year that they get. They get one week off that they get to spend with their family and you want to be able to create the memories for those people.
And then they’re going to come back year after year after year. So us caring enough also benefits our business.
Sarah: Emily and I say that we really started focusing on branding this year, but it’s always been kind of in the back of our heads of like, what are we offering to the world? What is the end product?
I think a lot of investors come at short-term rentals the same way they do long-term rentals where it is an investment and they do see it as kind of a side hustle and maybe not something that is well branded.
That’s the main clientele that’s shifting into short-term rentals. It’s not people who are in hotels that are shifting into short-term rentals. It’s people from long-term rentals shifting into short-term rentals.
But the biggest gap that they’re not understanding is that we are more closely tied to hotels than we are long-term rentals. And so when you’re thinking about building out the short-term rental portfolio, you’ve got to be thinking, who do I want to be? Do I want to be the Super8 or do I want to be the Ritz Carlton?
Both have sinks, both have bathrooms, both have beds, both have four walls, both have a check-in process and a check-out process, and all of those things are the same, but what’s the difference, right?
Really, it’s the design around the interiors and the design around the experience within those interiors. And so for us, we weren’t really looking so much at the data, like the data that existed on what other people were making versus what the property cost versus what the nightly rate is going to be.
All of that is important, but it still is such an infant market that there isn’t a surplus of data, especially in the markets that we’re in. So if you just focus on that data, then it kind of holds you to the standard that everybody else is running at.
And so you’re looking at what everybody else is making and you’re saying, okay, well, I can only spend this amount because everybody else is only making this amount. Whereas for us, we’re looking at it and we’re like, okay, everybody’s making this amount, but what if we did it way better?
What if we were more hospitality focused? What if we were more design focused? What if we had more amenities? What is that upside potential? Like just out of curiosity, out of valuing the product that we are creating.
What we found is that all of a sudden we’re making double what everybody else is. And so for us, having that focus on hospitality and design from the get-go really allows us to reap the rewards of that upside potential that maybe other investors aren’t willing to risk or pay attention to because the data doesn’t support it out the gate.
What has this been like for you building a strong brand alongside this really strong portfolio?
Emily: Branding wise, I’m not necessarily the face of our brand. I’m sure anybody who follows us on social media knows, Sarah absolutely is the face of our brand.
Sarah and I see ourselves as small town girls who happened to find this industry that we love and are trying to build it. And so for us, we’ve just been intentional about being honest about that and the fact that anybody, if they want to, could get into this if they’re willing to work for it.
So I think that honesty is the biggest thing that we try to hold behind our brand. Obviously the aesthetic of our brand and all those things are fun to play around with, but I think the baseline of it is just making sure that we’re up front and we tell people what our actual numbers are.
We tell people when we have a crappy guest or when we make a mistake. We make at least two $400 mistakes per property and that’s baseline. So, we try to just be as honest as possible.
I think that naturally just built our brand and brought in the kind of people who relate to that. And so for us, it was like, we’re just small town girls who are figuring it out and that’s what we wanted our brand to look like.
Sarah: A brand has not developed overnight, so it’s been a giant progression. We see kind of in the Airbnb space, people picking one of two things.
They’ll either make an Instagram for their property, and they’ll try and advertise their property on Instagram and drive more traffic to their property. Or they want to educate or help or design or something else in the space and they’ll create a personal brand and maybe they have a property that is related to that personal brand.
And for Emily and I, we definitely went the personal brand route first, but this is like phase one, maybe we’re in phase one and a half of a grander scheme that we kind of have at play here.
So I think when Emily and I started out and we started showing up on social media, we wanted us to represent the ability of people who did not grow up super wealthy or didn’t grow up around investors or didn’t grow up with access to the education that you might need to be good at real estate.
We wanted our brand to represent that if we can do it, you can do it. We wanted our brand to be very relatable, very hometown, very small town America.
Then it’s expanded a little bit beyond that where we’re like, okay, well, how do we develop maybe some themes on our page. How do we develop reoccurring conversations that we want to have? How do we develop, you know, a call to action to draw on people who are like-minded to us?
And now we’re kind of in a phase where we’re like, okay, how do we take the presence that we’ve developed online and expand it throughout our properties?
So maybe KarWell stands for this idea of an ideal lifestyle that you can have with being an Airbnb operator, but also incorporating properties that are quality and that are something that you can be proud of and so on and so forth.
So I think that Emily and I are right now are in a phase of working on how do we bridge the gap between our personal brand and the hospitality brand and how do we make it kind of all-encompassing as opposed to hospitality or personal. It’s just been kind of a development over time.
This year we’ve just had like a second to breathe where we focus a little bit more on aesthetics on social media. Where we’re starting to get into the typography and the color palette and showing up consistently in a way that if people see something they can be like, that reminds me of the KarWells.
So it’s a lot of work and we just didn’t understand, I think, who we were at the very beginning. But the more we understand who we are and who we want to be going forward, that kind of solidifies what we want to show up as online.
Emily: I think that also speaks to trying to be an expert at everything in your business. I feel like a lot of us think we’re entrepreneurs and we’re building a business, but we’re also like trying to figure out the branding on our own and we’re trying to do this and that.
At the beginning of your business, you probably don’t have the funding to like have somebody do that for you or all of these other things, but you get to the point where you’re like, I’m good at what I’m good at and then let me pass this part off to somebody else because I don’t know how to do that aspect.
That’s not my wheelhouse. It’s not my, zone of genius. So let’s maybe pass that off because I’ve phased to the point where I can care about that part of my business enough to let somebody else do it.
And I think that social media now is such a unique space where it feels like to me that people still have the mentality that you have to show up perfectly online. Perfectly curated, perfectly situated, understanding exactly your voice and how you’re going to show up for other people.
I feel like the reason why people relate to us so much is the fact that we have showed up messily, imperfectly, ever changing and just kind of been transparent through all of those seasons.
That honestly feels like the most core portion of our brand over the colors or over the properties or whatever the case may be. I just feel like we have kind of taken our people along that journey with us and just been like, look, this is like reality.
It’s messy, it is imperfect. We’re figuring it out along the way. And I feel like that’s what’s really resonated with our community online is that they’ve watched us progress over time.
They’ve, firsthand gotten to experience what it’s like to start from the ground up as opposed to us showing up four years in and being saying we’ve built this awesome thing, now you can do it as well. And they’re thinking, okay, but why do we trust you?
So when Emily talks about the honesty being the core of our brand, I think it has really liberated us and showing up every single day and not actually knowing what’s going on all the time.
Just being vulnerable about that and that’s just brought so much more of a solid community around us that wears their heart on their sleeve and opens up to us.
We’ve seen that in our mentorship where we’ve really started plugging in with our community and we’re like, whoa, what we’ve been preaching online has really been resonating with the people who consume it.
What are your thoughts on real estate and short-term rentals as an exit plan?
Sarah: In a lot of cases, there are much more profitable businesses than short-term rentals. If you want to make a gazillion dollars tomorrow, investing in short-term rentals isn’t necessarily going to give you that.
If you create a product that goes viral or you buy a business and you add technology to it and you make it more modern, that could print you out a lot more cash than short-term rentals will.
And so I’m not saying that real estate is the most profitable business you could ever invest in. The beauty with short-term rentals is that it is high cash flowing. So in comparison to any other form of real estate that you can invest in, short-term rentals will give you a livable income.
But it just depends on your goals. And that kind of goes back to mine and Emily’s philosophy around valuing free time and lifestyle more than money. For us, it’s like, okay, we started out as interior designers and interior designers average like max $50 grand a year.
So that career path wasn’t gonna make us a ton of money. But we also now know that, say we develop maybe a furniture line or some sort of a product that went in a B&B that likely would create more cash than a short-term rental.
Full transparency, the mentorship side of things creates us more cash upfront than the short-term rentals do. And so the short-term rentals have kind of this nice hybrid effect of providing cashflow that gives you a livable income alongside being an incredible exit strategy.
So there is a longer, more slow growth if you want a short-term rental specifically to be the vehicle that replaces your income. But a lot of the mentees that come into our space who want this education are looking to replace a $50,000 income.
It’s not like we’re attracting the big business owners who are making a million dollars a year. We attract those if they want to invest with us. If they’re looking at real estate and they’re saying, look, I want my money in here, but I don’t want to be involved, those people will hand us their money and then we’ll go and pour it into properties like Orange Cadillac and it’s a win-win for us and them.
But they don’t want to be trained on short-term rentals.The everyday person who’s making $50,000 a year does. I mean, our lake houses, each one of them produce $50,000 a year that actually goes in our pocket after all expenses paid.
So I think we’ve just found this little niche where we really feel like we are helping the everyday average American earn back their time and freedom while maintaining their current income.
Even beyond that, if you get your current income taken care of, then let’s have the conversation about having some crazy profitable business. But right now you have the pain point of wasting 40 hours a week on your nine to five, making $50 grand a year.
This can immediately replace that and then maybe we’ll look at something bigger. So I think it just depends on who you’re talking to on whether this is something that is an exit strategy or if it’s a current strategy to get you out of your job.
What is the first thing entrepreneurs should be doing if they want this to be a side business or potentially be an exit strategy?
Sarah: So when we deal with other business owners who are looking at real estate as a potential exit strategy, any type of real estate is a great investment. In theory, if you know how to buy and you know what’s gonna turn a profit, like you could do long-term rentals, mid-term rentals, commercial, short-term rentals, it doesn’t matter.
All of those are gonna appreciate, all of those have equity, all of those are going to be a decent kind of egg that you create at the end of your career to retire on. But the advantage you have with short-term rentals are a few different things.
You’ve got way higher cash flowing assets, so you get paid on them today versus 20 years from now. And you get paid on them 20 years from now, so you get the advantage of both.
But, a lot of times what we see with investors who have other businesses who want to work with us, is they want the lifestyle component attached to it. So they’re not always looking for the most profitable Airbnb investment ever.
Sometimes they’re not looking for X amount of dollars to go in their pocket every single month. Sometimes they’re looking for their dream vacation home that they want to own today, but they don’t want to pay for it today.
So for us, it’s just understanding what a win looks like for them. Is it more cash flow in their pocket every single month? Is it something that’s going to appreciate like crazy over time, but might not cash flow every single month?
Or is it a specific location that they want to invest in because they want to spend two weeks a year there, but they want other people to pay for it the rest of the year? So it just kind of depends on their goals.
The beauty is, is that every partnership that we get into with other entrepreneurs that don’t actually want to learn how to short-term rental and they just want to invest with us, is that we have the flexibility to kind of cater to whatever a win looks like for them.
Because in those deals, there is such a thing as a win-win. And so for us in guiding other entrepreneurs through partnerships like that is to kind of finding what that win looks like truly for them and cater to it.
What’s the big takeaway that you wanna leave folks with?
Emily: What we try to do is get people to understand that there’s nothing extra special about Sarah and I that got us to the place that we’re at. We just got in the right vehicle to do so, and we’re able to reach our goals because of that.
And so I want people to understand that they can get there, too, if they want to put in the work to get there. And it sounds like it’s like an insane amount of work. Don’t get me wrong, getting these properties up and running is work.
A social media job is work, but the lifestyle that has come from it is nothing like what I thought my life was gonna look like being from a small Midwest town. And so the fact that if I can get to this place, I think anybody who has goals can get to that place.
I want people to like understand that that’s possible for them. That’s what I hope our brand puts off to other people.
Sarah: Especially for the listeners of this who are entrepreneurial, I had this anxiety around being an entrepreneur that I’d get very obsessed with whatever I’m doing. And so I’m always fearful that I’m going to let it just completely overrun my life and that like the business is going to become my life and that I’m not going to have any free time.
And I think that could have been the case with a lot of other avenues that we might have selected pursuing but short-term rentals is such a beautiful thing where you can create systems on the back end where it kind of runs itself.
So I think that we’ve found our niche where we feel like we have our cake and we can eat it too. That we get to build this business that is both giving us financial freedom, but also freedom of time.
And so if you’re an entrepreneur reading to this and you’re looking at your business and you’re saying, holy cow, I feel like I’m just absolutely absorbed by hustle culture, I would encourage to maybe look into short-term rentals as another avenue.
Emily and I want our brand to be a representation of a revival of living your life not absorbed by hustle culture and not completely absorbed by the uber productivity that America’s got.
There is a healthy balance of making sure that you’re not financially stressed, but you’re having as many minutes of every single day with the people that you love. So that’s really kind of what we’re working towards.
We’re really starting to see more of that the further that we get into it. It has been a build and a grind for the last three years, but we’re really starting to reap some of those rewards.
And so we’re looking at it and we’re saying, man, we came from really nothing, no exposure, no experience, no money, whatever the case may be four years ago.
Now I only work maybe two weeks out of the month. And so that work-life balance is really starting to become a reality for us and it absolutely is replicatable. So for other people reading, if you feel that pain, this could be it for you.
the Karwells Bio
Emily and Sarah have been in the STR space since 2019. They’ve dabbled in it all – design, arbitrage, Re funds, education, and owned investing. Now they’re in a season of investing in michigan lake houses and running quarterly mentorship’s for their online community teaching others to do what they do.