Luxury Villa Market Evolution
Richard Bexon: Good afternoon, Bob. How are you doing?
Robert Brown: Very good, Richard. Thanks for having me.
Richard Bexon: No, not at all. It’s an absolute pleasure to have, I would say, such a veteran of the luxury villa world. I don’t mean that from the point of view of being, I mean, from the point of view of your experience.
Maybe that wasn’t the best word to use.
Robert Brown: Thanks for clarifying that. No, it’s OK.
Richard Bexon: You’re very welcome. I mean, you’ve been in the luxury market for many, many years, Bob. But I mean, what’s recently surprised you? And also, what trends are you seeing, if you don’t mind me asking?
From Catalogs to Global Competition
Digital Transformation of Villa Rentals
Robert Brown: No, that’s a great question.
I mean, I started out in a business where we didn’t have the Internet. We had catalogs. We had, you know, you had to describe the villa.
We didn’t have high resolution photographs. We didn’t have all that stuff. The Internet came along and it totally transformed the industry.
The big changes now are there are so many more destinations to choose from. There’s so much inventory to consider that the conversion rates of the properties I represent around the globe are so much lower than they were. It used to be that the only place you could rent was really the Caribbean or Europe.
And all of a sudden now you can go to virtually any place in the world and rent a property. So that’s made it extremely competitive because people are looking at the price for a house in Bali, looking for a house in Costa Rica, Mexico. They could do it with a click of a keyboard.
Boom, boom, boom. You know, you only have them for a few seconds. The distribution channels have changed dramatically.
Knowledge Dilution and Competition
And as you know, it’s all about distribution. So having so many much more distributors, so much more inventory, so much more content out there. And then the quality of the knowledge of the people representing the villas.
It’s so diluted because they can’t know all about these other destinations. They can’t know the villas. They don’t know.
So the consumers find it very difficult to find a very knowledgeable individual. I mean, years ago, we spent tens of thousands of dollars educating the villa rental specialists to go out, view the properties, inspect them, know them inside and out. They were drilled on and we get training every week.
Those, you know, the individuals that work for me had extreme knowledge and that gave us an extreme vote of confidence for the individual to go to that individual to rent because they wanted him to take the risk out of it. And that is not true anymore.
Travel Agent Renaissance and Commission Structure
Post-COVID Agent Rebound
Richard Bexon: It’s funny that you say that just because we’ve seen a bit of a rise with travel agents after post-COVID, you know, just because, again, because of that confusion of travel as well, on where you can go, what you can’t.
And also, you know, and also is, you know, travel agents to an extent take that risk out of it as well.
Robert Brown: Yeah, but that’s the travel agents that have just come on in the last few years. They’ve been totally out of the picture because they go, I’m selling my knowledge and the trust that you’re going to protect me from a misadventure.
And when the travel agency doesn’t know the property, they’re taking a huge risk. And if they can’t get an immediate answer of the price and the confirmation, they’re not going to bother. They’ll suggest something else.
So but the travel agency is finally discovering that a villa is a much more of a travel product now than it was ever.
Richard Bexon: So there’s more demand for it and there’s more demand for it. You know, and I mean, COVID really put, you know, luxury vacation rentals with hotel amenities on the map.
Changing Commission Models
Robert Brown: But it also changed the pricing structure because now you have to include the travel agency as part of the commission structure because you got the distributor, you got the owner, the distributor. Yeah, the travel agent now. So there is a layer.
Richard Bexon: Yes, yes, definitely. Definitely.
Robert Brown: And that changes.
Villa Design for Rental Success
Investment or Personal Use Decision
Richard Bexon: I mean, Bob, a lot of people listening to this podcast are looking to invest into rental properties, you know, and a lot of them, you know, or build them, especially luxury. I mean, what is your advice to them? Because, again, I mean, you’ve been in the industry for such a long time. You’ve seen what worked and what didn’t.
Robert Brown: I mean, what advice would you give them? If they have to really decide what their expectation is about, are they really going to rent it out or are they just going to casually rent it out? Yep. The biggest mistake they make if they want to run it as a business is the layout, floor plan and the design. And I can’t tell you, I mean, I’ve worked with multiple owners in the Caribbean, Mexico, everywhere, and they’ve come, if they come to me at the initial design development, I can really help them.
Bedroom Parity and Key Design Elements
For example, a lot of some of the properties have a large master bedroom and much smaller other rooms. A lot of the villas are rented by couples. The ugly pillow talk is “why, honey, why did we get the little room? Why is it that Joe and Mary get the master bedroom?”
I would say you want to have parity with every room. If you’re going to rent it out seriously, make sure the villa, the biggest question people ask for is the view. You better have a spectacular view and you better have an outrageous pool and you better have parity in the bedrooms, meaning that every bedroom has to look and feel the same.
So there’s no ugly pillow talk. Right. The beds have to be kings.
They have to point towards the view. People want kings, they don’t want queens, but the kings have to be able to be converted into twins. So the way the villa is laid out is they have to make the bedrooms have to be large enough to handle a king proportionally.
The bathrooms have to be big. The bathrooms in the bedrooms have to be good with a good view. Those ingredients are critical.
Outdoor showers are a huge plus. If every bedroom has an outdoor shower, it’s a huge plus. It saves on cleaning expenses, too.
Indoor-Outdoor Flow and Amenities
If you have that indoor-outdoor seamless transition, meaning that if I’m in the kitchen and I want to step outside to eat outside, I want that to be seamless. I want the space to be able to walk from the kitchen right up to eat outside. People like to go to Costa Rica.
They want to be outside. They do not want to be inside. All right.
OK, they want the air conditioning. They want separate zones for every bedroom. The people want to control the temperature in their room.
Blackout curtains are important. You know, if you could, ideally, it’s a U-shaped design, meaning that I could say you have a four-bedroom on each. So you shape the U and you’ve got bedroom, bedroom, kitchen, sitting area, pool in the middle.
So every bedroom’s got a view. They all have access to the pool. And then if I’m in the kitchen, I could be cooking and looking out at the pool, but I can also be talking to someone sitting in by the pool.
So I’m not out of the picture, meaning that I’m back doing all the legwork, you know. So I’m sitting there stuck in the kitchen. Everybody else is having fun and I’m stuck back there
But if you make it an easy transition for everyone to go from one room to the other, it’s ideal. The other thing is you have to have a fitness room. People today want fitness rooms, like a huge demand for fitness rooms.
If you don’t have that, it’s going to be a well-stocked fitness room. And the pool area and the deck must have space where there’s a covering to get out of the sun, to get out of the elements. If it’s raining outside, they still want to be outside.
Quality Furnishings and Details
If it’s sunny as hell and there’s sunburnt to death, they still want to be outside. So you have to have a covering for them. Ideally, you’d have a refrigerator sometime close to the pool area with plenty of deck furniture.
I’m talking about high quality deck furniture. None of this plastic stuff. You got to have wooden, no stains on the cushions.
And you have to have a refrigerator out there so people can easily access drinks or food, whatever, so they don’t go schlepping all the way back. The fewer stairs you can have, the better. People hate stairs.
They do not want to have to have that much effort to get around. So it’s like those elements are critical. But it’s like if you could and if you have the best place to invest your money is in the linens and the towels and the best mattresses you can find.
If people don’t sleep right, they’re going to be ugly.
Richard Bexon: Coffee and beds.
Luxury Villa Experience Psychology
Highest Impact Investments
Robert Brown: Seriously.
And the linens can’t be tired. I suggested to owners that they have one mattress for the guests and one mattress for themselves. So you have a storage space that’s, you know, the owners need a storage space to put their stuff when they’re not there.
And a lot of the houses don’t design for that. You’ve got to have the ability to put your stuff away. No personal stuff in the villa whatsoever.
You’ve got to keep that out of the loop. You’ve got to have it.
Richard Bexon: Nobody wants to be reminded that they’re staying in someone’s home.
Emotional Connection to Properties
Robert Brown: Yeah, they want to feel connected to this house. Yeah. If you know, the house is how that makes them feel.
They want to feel taller. They want to feel thinner. They want to feel sexier. They want to feel smarter. And they want to feel a lot more fun to be with. If the house doesn’t make them feel that way, they’ll never come back.
Richard Bexon: Yeah. Yeah. I mean, I thought about it the other day, Bob.
I was like, there’s people who rent homes that they’d like to live in that they dream of. People don’t want to rent a home that’s worse than the home that they currently live in. Like it’s a vacation.
Robert Brown: Well, they don’t want a house to even come close to looking like the one they live in.
Richard Bexon: Exactly.
Robert Brown: You know, they want to be seduced by this house.
They want to take the risk of, oh, honey, I wish I could have designed my house like this, but I don’t have the courage to do it.
You know, so you kind of live vicariously for that week or so in somebody else’s house. You go, oh, my God, this is fantastic.
Art and Personal Elements
Richard Bexon: But you don’t want to be reminded it’s someone else’s house because there are photos everywhere.
Robert Brown: Correct. Correct. And the other thing the owners forget, it drives me absolutely crazy.
Richard, they built these beautiful homes and then all of a sudden they don’t put artwork up. Yep. It’s like they can’t get, they can’t just get over that.
And what I’ve often encouraged them to do is use local artists to have the local artists’ art on the wall and allow the artists to sell it, you know, have that they want to buy it. But that encourages participation of the local artists and it keeps the house connected to where it is.
Richard Bexon: Yeah, I agree.
Robert Brown: You know, so it’s like so much of them forget it. They do. They just they get to the point where they don’t want to spend any more money.
They go, oh, oh, ouch, ouch. You know, it becomes
High-End Services for Luxury Villas
Staff and Service Elements
Richard Bexon: What about ultra high end services that clients look for? I mean, we’ve talked a lot about structure.
What about services?
Robert Brown: Well, Selomar, for example, we have a live-in, like I said, a live-in cook and a live-in maintenance person. They’re a husband and wife team.
They have their separate private quarters. That gives me a real sense of comfort knowing that they’re there. Now, they will be as visible or invisible as the guess what, meaning that they’ll customize their, you know, their customers visit.
But that wasn’t enough. I added a concierge to handle all the activities for the guests before and during their stay. We added extra servers to help with preparing the meals.
We actually had extra housekeeping. And this year we actually added a butler who’s the main contact person for the house so that they go, oh, can you get me reservations here? Can you get me this activity? I’m having trouble with working the televisions, which is huge.
Richard Bexon: Yes, it is.
It is.
Technology and Comfort Assistance
Robert Brown: It’s the biggest pain in the neck. It’s like, oh, I can’t get my television to work.
How does this work? I can’t get the music to work. How do I make a phone call? All these little things that the people get confused by the butler is there to make them at ease. And that’s been well overdue.
Now, it’s interesting enough, Richard, that Barbados has that same level of service, which Americans love when they get there. But they’re reluctant about it in the beginning because they go, oh, these people are going to be invading my privacy. But once they see their laundry done from the day before folded on their bed, they go, whoa, and their meals are there.
Richard Bexon: It’s basically a vacation rental with hotel amenities and service. You’re staying in a hotel. It’s just your hotel.
Regional Service Differences
Caribbean vs. Costa Rica Models
Robert Brown: Right. But you have these wonderful people who protect you now. But on the flip side, St. Bart’s, which I’ve been working with forever.
They don’t have to serve, they do not have cooks, you can have a cook come in, you can have service come in. But the villas do not, as a rule, have services like that. Now, the reason is, honestly, is because people go to St. Bart’s, they all want to go out to eat.
Yeah, they don’t, they don’t want to eat at the property. They want great kitchens, but they don’t go out to eat. They want to go out and they want to go out and try all the restaurants because that’s what they go for, because the food’s fabulous.
Yeah. You know, whereas, you know, so there’s no need to have a cook.
Richard Bexon: Yeah. No, I mean, I think that’s a great point. I mean, especially in some areas of Costa Rica, there aren’t tons of choices of restaurants.
Back of House Design for Events
Yeah. So, right. You know, I was having a discussion with someone the other day because they were helping them do a feasibility study for a 12 bedroom beachfront home here in Costa Rica, and they were talking about weddings.
And I said, look, guys, if you’re going to do weddings, you’re probably going to need a back of house kitchen because nobody wants to watch you doing all that preparation out there in the main kitchen of the home. Like half the time, that’s just there for show. That’s right.
You know, and I think that’s one thing that, again, it goes back to your point of are you building this as income generating or are you building this to kind of enjoy and maybe do some rentals or just to enjoy yourselves? Because the design is going to be completely different.
Robert Brown: Absolutely. If they don’t get that, you’ve got a problem.
Rental Performance and Owner Expectations
Investment vs. Lifestyle Decisions
Richard Bexon: And I think that’s the question you need to ask. Is this lifestyle or is this investment? If it’s in the middle, then like design it maybe more towards lifestyle. But if it’s about investment and generating returns, then it’s built typically with the flow of a hotel where the back office stuff does not touch the front of the house.
Right. I mean, I keep track of the data I’ve had over the years. What types of what size villas rent out, you know, two, three, four or five, six bedrooms.
Owner Meetings and Rental Realities
What are the features that one villa has that the others don’t that causes it to be more, you know, rent villa rental friendly? And often I would go down in like St. Barts, we had like, you know, 400 villas that we were working with and I had these owners meetings and they would all want to know why their villa wasn’t renting. Because that’s what everybody wants to know. You know, some of the villas we could only generate six weeks a year.
Some of them were generating 30 weeks a year. Some of the average owner was looking for around 16 weeks a year.
You know, and so you sit there and so the biggest struggle I had was how it all got started. Richard was the real estate company who originally wanted to sell a property. So then the potential buyer goes and says, looks at the villa, goes, OK, how much does it cost? Then the potential owner says, well, how much are the operating costs?
How much is the property maintenance cost? And then he goes, whoa, wow, that’s a lot of money. So the real estate guy says, well, you can rent it out and offset that.
And he goes, well, how many weeks should I get? And then the real estate guy goes, he might say, oh, you can get 20 weeks or whatever. He just throws that number.
Richard Bexon: He doesn’t need to do the work to get those weeks.
Robert Brown: Right. He just tells the guy that.
Right. So then the guy. So then my responsibility is, oh, the owner.
Yeah. OK, I’ve got your villa. And he goes, wait a minute.
I was years gone by and I only have, you know, seven weeks. What’s your problem? I was told to get 20. I go, whoa, who told you 20? You know, I said there are, you know, 75 other two bedroom homes that are like yours.
Those have to fill up before yours will get picked, because these are the shortcomings. And he’ll go, well, why don’t you tell me that? And I go, I wasn’t involved in the sale.
Inventory Size and Market Saturation
Richard Bexon: Yeah, I mean, that’s what I spend a lot of time in the sales process now.
Well, just because, again, you know, I mean, I can’t remember what the figure was, but I know that three bedrooms or less in Costa Rica is 75 percent of all inventory. So four bedrooms and more is 25 percent. And once you start getting into the six, seven, I mean, you move into rarefied air.
Robert Brown: That’s right. And the larger ones are very difficult to rent. The only real demand they have is the holiday period where you’ve got extended families all want to be under the same roof.
Comparable Properties and Market Knowledge
“Bookend” Villa Strategy
Like, for example, and the other problem you have is the problem I have with Selamar, for example, is I’ll have one family, they’ll go, oh, I want to I want to rent Selamar. But we’ve got our friends want to rent a house nearby. It’s similar to it.
Do you have one that’s right nearby? And I go, oh, oh, oh. And so they go. Oh, the other one is way away.
And I go, well, we don’t want that. You know, so I call it a bookend. I need bookends.
I need villas that are comparable because nobody wants to drive up to your villa and say, whoa, yours is so much better than mine. Yes. And that’s that’s a problem.
On St. Martin, for example, I worked for years with a developer who we had. He developed the French side very smartly. And Bay Rouge Beach, which is where all the high end villas are.
We had two bookend villas, one at each end. And they were both very contemporary. One was more traditional.
But we put them there so that the person would say, oh, I’m staying in the oasis and I’m in the other famous thing. So it’s like, OK, we’re good. But we had villas all in between that were fairly comparable.
Not quite that level, but not so much below it that you would be embarrassed. So the more villas that are like Selomar or the high end that are nearby, you’re better off.
Costa Rica Knowledge Gap
You are. Because right now, the biggest struggle I have with Costa Rica, Richard, is that the distributors, the travel agencies know nothing about Costa Rica. They know zero.
The last. Nine years, I spent half my time. How do I get there? What do I do when I get there? You know, what is Peninsula Papagayo? You know, what can I do? Blah, blah, blah.
You know, it’s like I spent all my time.
Richard Bexon: I mean, the good thing about the pandemic is, I mean, it really put Costa Rica on the map as well. I mean, it was busy before, but it’s really so much busier now.
Development Patterns in Costa Rica Communities
Mixed Home Quality in Developments
But it’s funny you said that you were mentioning that about like comparable homes, just because I spent the day to day driving around Hacienda Pinilla, which is just south of Tamarindo, just because I’m helping some clients build a basically three million dollar home there, you know, a couple of steps from the ocean. And we were driving around Los Golondrinos, which is a continent which is a development there and also Reserva Golf. And it’s just amazing the variety of homes.
I mean, you see homes that are three, four, five million dollars. And then next to it, something that you’d be like, wow, that thing must be worth like 300, 400,000, you know, right.
Richard Bexon: And I mean, that’s a problem.
That is a problem. That is a huge problem, you know, I mean, because people like to be around.
Destination Hierarchy and Bragging Rights
Likes. Yes. And whether we want to admit that or not, it’s the truth, you know, and a lot of destinations that I’ve been covering over the years.
It’s about bragging rights. It’s about it’s like first of all, the destination has to sell first, then the neighborhood or region within that destination has to sell second.
And then the third thing is the villa. So once the villa has been decided, it’s called bragging rights. Where are you? It’s not about going to Costa Rica.
It’s about what villa you’re going to stay in.
Richard Bexon: Correct. Correct.
Robert Brown: So so that becomes the other places that are much more mature with the villa rental business. It’s it’s really about what villa you’re renting. You know, if you take St. Bart’s, for example, or St. Martin or Anguilla, or you take Turks and Caicos has come on really strong.
It used to be basically a condo destination, and now it’s really become a villa. But the nonstop flights have made it very, very attractive. Costa Rica from New York.
JetBlue‘s been good to get service there. But most of my arrivals this past year for Selomar have all been private jets.
Costa Rica vs. Caribbean Market Positioning
Adventure Travel Positioning
Richard Bexon: What’s your viewpoint on Costa Rica comparatively to these other areas, Bob? Because I mean, it’s, you know, typically the people that I talk to are usually here in Costa Rica and very insulated here. But you have a very wide viewpoint, especially on some very developed, you know, Caribbean destinations. I mean, where do you see Costa Rica and where do you think it may potentially go?
Robert Brown: I look at Costa Rica as a destination for the adventure seeker, you know, who’s willing to take a bigger risk, who doesn’t just want to go lay on a beach and do nothing.
You know, that’s willing to explore and see, you know, a country that has not been overdeveloped and has not, you know, been disrespectful to everything, you know, that the infrastructure is getting there is better. But it’s it’s really about the guy.
Richard Bexon: t’s raw. It’s raw.
It’s a great that’s a great way. It’s raw. It’s real.
Authentic Experience Value
Yeah. You know, I mean, a lot of other decisions are really synthetic. You know, it’s you know, they they make, you know, these people I’m taking down on Saturday.
I go, look. This is not about you going to have a five star. You know, the cook itself is not a five star gourmet French cook like you’d find in Grand Castle and St. Martin’s or St. Tropez.
This this cook is going to cook you local foods that are, you know, the real, real food foods. So don’t go thinking that you’re going to have some, you know.
And so the people that are that want to engage in that type. That’s what it’s for. You know, I don’t get it like I do a lot of St. Bart’s business over the years, and I don’t get a lot of St. Bart’s people willing to go to Costa Rica.
Competition with Mexico and Peninsula Papagayo
They just don’t. Yeah, they just want to go. They’re foodies and they want to be seen and they want to be that whole crowd.
Mexico has been a really tough competition for me in terms of how I go to people. Well, I will try to push Costa Rica and Selomar and Peninsular Papagayo. And I’m up against Mexico.
Mexico seems to be, you know, they’re much more knowledgeable. Oh, I’ll go to Cancun or, you know, you know, it’s like that’s your because they don’t have knowledge. And I honestly feel I told Michael at Selomar Peninsula Papagayo was not done, in my opinion, a great job of promoting Peninsula Papagayo because it is kind of that.
Does have that fluff that people are looking for.
Richard Bexon: Exclusive.
Robert Brown: You know, that that has safety. It’s got a marina.
It’s got the golf course.
Richard Bexon: It’s some of the best beaches in the country. I mean, yeah, it’s exclusive.
Robert Brown: Yeah. So it doesn’t it’s like they’re not going to go, you know, rough it with a black and white TV, you know? Yeah. But, you know, you know, so it’s like, but I’m really disappointed in Peninsula Papagayo that they haven’t really pushed it because some people, the people I talk to, where what is this Peninsula Papagayo thing?
You know, it’s and I say that because that’s how I ‘m my biggest challenge.
Well, you know.
Authenticity and Staff Training in Costa Rica
Raw, Real Costa Rica Advantages
Richard Bexon: Yeah. I mean, no, no, I completely get it.
I mean, you know, and Costa Rica is kind of somewhat of a new destination. I mean, it’s really gone on in the past 20 years. But I mean, as you said, it’s not overbuilt.
It’s real. It’s raw. It’s authentic.
And the people are amazing.
Robert Brown: Yeah. The people I’ve met have been so nice.
It’s also been a problem for me because I also because. When you have staff, Richard, the staff determines the personality and spirit of the property.
Richard Bexon: Correct.
Cultural Staff Differences
Robert Brown: And if the staff Americans that have been most of my clients, they want the staff to be more outgoing. They want to be more engaged with their family. They want them to welcome them with open arms.
How are you doing? Love you. You know, this whole thing and the Selomar staff, they’re wonderful people. I love them.
But they’ve been kind of standoffish because they don’t want to cross that line.
Richard Bexon: Yeah. I mean, and people are like that here.
I mean, you know, it’s it’s I always say Costa Ricans are very friendly, but to go very deep with Costa Ricans takes a long time. Whereas like us in the Western world, it takes a while to get kind of friendly, but you get to be good friends really quickly, you know.
Robert Brown: So it’s been a challenge for me to try to work.
And one of the reasons I’m going down to see the staff again is I give them all these things about how you greet a client. This is what you do. Be proactive.
Don’t wait for them to ask you for something. Look around and look to see whether they’ll need it rather than wait for it. You know, so it’s like and that’s a totally new thing for them.
Yeah. You know, it’s there. They don’t want to be intrusive.
You’ve got to say, oh, that glass is empty. Would you like some more? You know, don’t touch the don’t touch this. Don’t touch that.
You got to you got to be, you know, because when they when they pay the premium, what they’re paying for, some of our they expect. You know, five star service.
Richard Bexon: But with local food. Well, Bob, I mean, this has been amazing. But let me just ask you my last question for you.
How Would You Invest $500,000 Inheritance in Costa Rica?
If you inherited five hundred thousand dollars and had to invest it into a business or real estate in Costa Rica, in Costa Rica, what would you do with it?
Robert Brown: Good question.
Richard Bexon: But you don’t give it to me to invest for you, of course. But beyond that, it’s amazing the people that contact me, “hey, Rich, can I give you X amount of money and you invest it for me? I’m like, guys, that’s not what I do.
I don’t run an investment fund.”
Reality of Rental Investment Returns
Robert Brown: You know, first of all, if you say, would I buy your property as an investment to rent it out? Um, I’ve learned over the years that most people who rent out a property barely cover their operating costs. Yeah.
OK. Unless they know unless they really know what they’re doing and they’re not using a property management company. Right.
Now, my success story is a property I’ve been working with since the original design, development and build. The owners and the architects got me involved right away. Right away. It wasn’t like, oh, this is what we wanted.
They said, we want you to help us design this property so it will be run as a business. We are not going to be using it. We’re looking at investing it because what we want to do is we want to build it, rent it out.
Successful Case Study
We want to make money on it.
We wanna take the money and put it back into the villa and then we want to be able to sell it for more because we want a great track record. Ok?
Now, for the last, I don’t know how many years it’s been. 2007 to 2021, 10 million dollars in short term.
But, that took, you know, I build a website for the homes as you know with Selomar.
I build the website, I do everything for this guy, you know.
Richard Bexon: We’ve done it with Via Buena Onda.
Attention to Property Details
Robert Brown: I told him, you need this for the bedrooms, like simple things like the gas grill. I do not like canisters for the gas grill, I want the line that’s in the kitchen to go out to the gas grill on the deck. So that we never run out of gas.
I want this, I want this, I want this, and this is what you’re gonna charge. I do a complete history of the price points of the villas he competes with and I exhaust everything Richard, to get repeat clients.
Fill the house with repeat clients all the time.
Richard Bexon: That’s a testament to how great a service and product is.
Robert Brown: Exactly. The repeat- if you have no repeat business in your villa you got a problem.
Richard Bexon: Yes.
Guest Retention and Personalization
Robert Brown: You know and I actually put a closet in for a repeat client because I left all of this- gave them a key, left all of his stuff there. So, when he would be traveling and had a little carry-on bag and he would just arrive, all of his clothes would be put in the closet, all of his leftover liquor would be put in the kitchen and he had every little thing he needed, you know, his toiletries, it was all his.
It was like he never left. And that got him back all the time but, I also made him feel that it was his house. So you see, what would I do to Costa Rica? I think one of the challenges Costa Rica has is, it’s going to be badly needed is the infrastructure for the rental programs.
High-End Property Management Infrastructure Needs
Management Services Gap
Meaning that, who is gonna manage the property, handle the plants when they are there, you know?
Who’s gonna, you know, to make sure the house has proper landscaping, the pool, everything’s working, the refrigerator, it’s painted, all this sort of stuff. Because most of the other destinations I’ve worked have had all that in place. And then the other question, so I sit there and say, if you’re going to have a bunch of villas in a particular area that you’re going to try to rent out, or you’re telling us you’re going to buy here, you better have an infrastructure in place that can support the rental program.
So if you said to me, where would I put the money? I would put the money into a support structure for those rentals.
Richard Bexon: Well, and I think it’s interesting you say that, because again, I’m constantly being asked to property manage properties here in Costa Rica, which is not really what I do. It’s just, again, I have experience doing it.
But like having a really high-end property management company here, because there aren’t that many high end ones.
They’re virtually non-existent.
Quality Control and Standards
Robert Brown: And that’s a problem for the future. Yeah. Because it takes a lot of training and staff to be able to be proactive to get to look, you know, it’s like we had 70 villas in a location and I set up a quality control program where the maintenance guy had to go in before every arrival and after departure of everyone.
And once a month he had to go in and we had a, you know, we had once a month checkoff list, a quarterly checkoff list and a checkoff list before they arrived and after they left. And the housekeeping and the maintenance guy had to both sign off on it that this is what the condition of it was. You see, Richard, there’s no quality controls on properties.
There are none out there. There’s no terms and conditions on what you should expect. There’s no minimum standards.
There’s no rating system. Every villa or every condo has its own brand. And that’s a problem.
Creating a Trusted Service Brand
The biggest problem I see is that if you’re going to be like the company I worked with for so many years, Seabarth on St. Barts, they were known as a go-to place. If you wanted a villa that was going to be well represented, well taken care of, well, it was the best of the best, you went to Sea Barth. That isn’t available in Costa Rica, okay? That if there was a, you know, I used to have, if there was a problem with the villa for whatever reason, like the electricity went down, the refrigerator had an issue and I couldn’t get it fixed, I would move them to another villa.
I would just say, okay, don’t worry. We’re going to put you in another villa of equal or better value. It’s not going to cost you anything.
We’re just going to move you. We’re not going to disrupt your rentals. So we would move them.
That’s not what we wanted to do, but if we had to, we could. A good property management company will be able to do that because you will have problems. You’re going to have them.
Some of them are going to be way beyond your control. The other thing is, if I was a property management company, I would have control of the calendars of these homes, meaning that your staff called me yesterday for Selamar for July and I control the calendar. I can give it, but if your staff had to control the calendar themselves.
Richard Bexon: Oh yeah, it’d be a nightmare. I mean with us, like it’s going to one person to have access to that calendar to be like, okay, like what’s available and what’s not is great.
But when it’s all very confusing and you don’t have that, it’s a nightmare.
Centralized Calendar Management
Robert Brown: Right. So what I’m saying is if you ran a property management company, you’d say to the owners, look, I’m going to control your calendar.
Okay. So I’ve got this property management company. I control the maintenance, I control everything about it.
And then when people want to know, is the house available or not? I know yes or no like that. I mean, at St. Bart’s, we controlled 175 calendars.
And the bookings went up tenfold for those because the agents could go, yep, it’s available. I can confirm it right now.
Richard Bexon: Instant.
Business Model vs. Property Investment
Robert Brown: So if you say to me, if I had $500,000, would I invest in a property? You’d start a high end property management company. That’s right. But I would need to have those properties within close proximity of each other. Yeah. Because I can’t send maintenance guys driving 20 million miles.
Richard Bexon: Of course.
Robert Brown: I want them no more than 15 minutes away. So I don’t care whether it’s five villas or four or whatever, you start off that way.
And if it’s successful, you run it smoothly, people will beg you to manage the villa on all aspects.
Richard Bexon: Well, Bob, this has been an amazing conversation. I really, really appreciate you coming on here and really sharing your experience.
I’m going to put all your contact details and also CLMR’s website details in the description here. So, I mean, it really is a very unique location in Costa Rica, but a very unique property that is very, very high end and high touch that, again, not a lot of properties do here. So I’ll put all that in there.
But Bob, thank you very, very much for your time.
New Development and Owner Consulting
Robert Brown: Oh, yeah. Well, he’s building another one by the way.
Richard Bexon: Oh, wow. Well, then if you have friends, they can live next door.
Robert Brown: No, but I mean, seriously, if you come across owners that want some feedback from my… If I can help you with owners before they start making the investment, either buying one or building one, the two of us would be… That’s a great formula.
Because I had a guy who bought a villa and it did very poorly. And he wanted to chew my ear off because he goes, the sales guy told me, blah, blah, blah, blah, blah. And all last year, you gave me nothing.
You gave me like two bookings. And I went to him, I said, I looked at the property. I said, I wish you had talked to me before you bought it.
And he goes, why is that? I said, your villa is not for short-term, it’s a long-term property. It’s not short-term, it’s vertical. And he goes, what? I go, it’s not.
And I gave him all the reasons in the world, laid it out for him. He says, so what should I do? I said, you have two choices. You rent it out long-term or sell it.
So he goes, I’m going to sell it. I’m going to come after you to go buy the one that we really want. And that’s what we did.
Richard Bexon: Good for you.
Robert Brown: But I mean, because I’d rather have you be mad at me in the beginning by telling you something than mad at me later.
Richard Bexon: A hundred percent.
Robert Brown: Because then I have no value. If I just kiss up to you and make all these false promises, you’re going to be furious with me.
Richard Bexon: I agree. I agree.
Case Study: Design Intervention
Virgin Gorda Architectural Redirection
Robert Brown: I mean, I did a project on Virgin Gorder where these guys were designing 37 properties there, and they already had them designed.
And the developer said, can you talk to these architects to make sure we’re okay with rentals? I looked at the drawing and I went, you’re screwed. These houses are not even close to being rental-friendly. So these architects were from Denver, Colorado, designing villas for the island of Virgin Gorder with the British.
Richard Bexon: Hire locals for that stuff. You need local knowledge. I go, no.
And so the architects were ready to kill me. Seriously.
They were. I go, no, this doesn’t work. I said, you want me to tell you? I’ll tell you the truth.
What comes of it? He’d say, yeah, yeah, yeah. So they had to totally redesign all of them. But I go, you’re better off doing that now than trying to overcome those sales challenges later.
Richard Bexon: Definitely. Well, Bob, as I said, this has been amazing. I really appreciate you taking the time.
I know you’re a busy man. And maybe again, in another podcast, we’ll get you back on.
Robert Brown: I’m here to help you, Richard.
Richard Bexon: Sounds good, Bob. I really appreciate it. Yeah.
Robert Brown: See you.
