Why the Volcano Will Not Disrupt the Travel and Housing Industry

Trans Atlantic travel was rocked today by a massive plume of volcanic ash, spewing sporadic heat, clouds of sediment in the air and causing a melee of mechanical difficulties. The pockets of heat caused unpredictable and violent effects on airliner engines and flights unable to be diverted are being grounded with all precautions taken.

The massive plumes of smoke that will hover in the atmosphere for days is enough to cause safety concerns because of obvious issues of visual impairment and the sediment that the volcano is spewing includes so many metals that it would play havoc on mechanical systems and sensor readings.

Where our industry is concerned, the fallout from volcanic ash is likely to severely hurt the airline industry and is costing a reported 200 million dollars a day but this will not cause a significant blow to the travel and housing markets. I have a couple tenants who are stranded and were en route to us but we are rearranging the schedules around them and we will see them safely after this weekend is over. Global Economic Insight chief for UK and European Interests Howard Archer says “The overall impact should be very limited even if the problem persists for a day or more … ,” In other words, this disruption does not equate with the eradication of the dinosaurs, and it will be business as usual in another few days.

How fear controlled our business and the media devastated our country

Out of fear, many people repeat the following phrases endlessly:
“this economy sucks!”, “our economic woes…”, “with this economy…”, “in these uncertain times…”

The temporary housing market is far from devastated despite widespread news coverage to the contrary. News sources today are projections of fear that have stifled many markets they “report” to. Yes, there are many markets that were hit hard and a lot of people directly related to those markets suffered. The real estate and stock market were primarily affected and to be quite blunt, gamblers lost their money. The banking institute teaches that our houses are untapped bank accounts that we can raid anytime we want. During bull markets, the stock market evokes images that money rains from the sky and that inexperienced stock holders will do just fine because every stock eventually goes up no matter what or that someone else is going to make you a lot of money.

We as an established business pre-economic downturn, made a few cut backs but were largely focused on how to react to the ebbs and flows of the people who might become our tenants. We tried to adjust to “the new market” but there wasn’t anything “new” to do or offer. We sweetened our offerings anyway but it did not make a bit of difference and our company and large corporations like Oakwood and Bridgestreet got hit hard. We are all growing again and the housing business is back after the long pause and it did hurt. I still believe we all hurt for the wrong reasons when people second guessed everything they did because of sensationalism. We observed all of this first hand. We watched other people’s fears affect our own and we feared for ourselves.

So what happened? People that borrowed against their house lost their houses. And people who borrowed from the gambling ‘house’ lost to the house. Remember that saying “the house always wins”? Well that house now owns your house, literally. Unemployed and largely unskilled laborers are fighting for jobs with migrant workers because it’s not that easy to get a job anymore. The college educated with nonviable degrees or declining fields of study and the poorly motivated college graduates are moving back home with their parents.

Many may not realize that a lot of these fields our young studied and prepared for were on the decline anyway. The publishing business, newspapers and print journalism are all being taken over by internet sources and computer programming/software engineering jobs have long been declining because of the huge supply of workers but limited demand as programming shifts elsewhere and new markets emerge overnight. The music industry and Hollywood has been in rapid decline for at least a decade because of illegal downloading and it will only get worse as these companies raise prices to make the few who do pay, pay for the ones who don’t.

It may be rough out there for many but there is plenty of money to made. The real issue that we have come across is that people are scared. When people retreat from fear it keeps them from putting themselves out there in the market and makes them cower. When everyone reflects fear, everyone panics, with good reason and bad. This is the real problem. The ‘uncertain’ times that we are in are just that, uncertain. People have the money to spend for needed services but are hesitant to do so. Housing has always a needed service with an 8% annual growth rate but when people are stuck at home wondering if this is the financial Armageddon, nobody leaves. People stop moving and traveling becomes stagnant. When your average risk on any business venture is multiplied by sensational yellow journalism aimed at earning a buck at your expense, it makes you think twice and then thrice.

This was the real problem to us and many in the hospitality business. Fear controlled our market. I’m hoping because we are back on top that we as a people have suffered, we learned, and we overcame.

How We Started our Small Furnished Apartment Company

How We Started our Small Corporate Apartment Company
How we got started was a rewarding but painful ordeal. My father found 3 buildings with the same owner/manager. They were built in the 1970’s and were roughly new but the biggest attraction was that the location was perfect. It was in walking distance to the Grove which is a big deal here and centrally located to everything. Regrettably there was an immediate conflict between the owner’s attitudes and ours. They had a hard and old Russian-Survivor attitude and my parents have salt of the earth Minnesota “let me fix you a little-lunch” mentalities.

Being new in the corporate housing biz in 2003 and having landlords actually rent to us back then before short term rentals were recognized and understood was a goldmine. Within one year we had 30 units in all three buildings during the 2nd great bull market of my lifetime. We took all of their vacancies immediately upon offering, and we always paid on time. They must have loved us as many landlords love us now because 90% of the physical damage to units comes from moving furniture in and out but with us, once we’re in, that’s all the moving we do and they now realize the caliber of our tenants.

Rents were ridiculously low in those 3 buildings. This was possibly due to mismanagement, a lack of caring, or a combination of the two. Once the neighboring buildings saw what we were doing and how much of an asset we were, they welcomed us with open arms when a year before had literally hung up on us no matter how many vacancies they had. We got our foot in the door and we started building our business across the street, down the street and up the street as well. I instituted a lower and separate tier to make up for the inadequacies of the initial buildings themselves –regardless of how nice they were inside with our furnishings. At the time, I figured we could give our tenants more of a choice with 2 price points.

During our expansion and dealing with other management companies, my parents started to realize just how poor the management was at the original 3 locations. The Russian couple had become completely reliant on our business but had not bent an inch since we had started with them. We were still paying for their repairs, we were fixing up their lobby, and we had to have our own handyman on call because they refused to fix the most basic things. Whatever poor management had been going on before ceased entirely when we picked up the slack, until we stopped that is. In the 4 years we had been with them, they were greeted in the hallway at every instance with an unreciprocated smile, and not even a ‘thank you’ for the years of presents at all the holidays. We had had enough. They had not. They continued to make my parents miserable about the most inconsequential things. So much so that when the housing bubble burst and I came on, we cut them loose, and I was happy to do it.

We lost a massive amount of money during the downturn of our economy. We went from 45 units to 14 and even had vacancies then. That was a year and a half ago. We completely eliminated the lower tier of apartments we had at that time and focused on quality and exclusivity. While we have built up in this market, we aren’t going away even though sometimes it’s a fight every step of the way. We are constantly exploring new opportunities, taking on new modern contemporary furniture and upgrading inventory like the 42” HDTV’s, Unlimited Nationwide Calling, all in beautiful buildings and of course all inclusive. We have learned a thing or 20 along the way but one of the things that we have never changed is that to be successful, your clients always come first, no matter what. Whatever nonsense was or is going on behind the scenes, we never let our tenants know it and we never let anyone see us sweat. We’re a small business that is here to stay and we’re not going anywhere.

Sports Cars and Sandpaper

How can I picture the difference between Hotels and you guys?

Imagine driving around in a two-seater sports car. Now that’s a pretty picture but put yourself behind the wheel. You feel the power obviously; you also feel the wind with th

e top down and the envious stares from all around you. What isn’t obvious in your image is how cramped the car actually is. It’s built for speed but everywhere you look there are speed limits and cops are looking for cars like yours to pull over. You may have the ability to speed but always risky opportunities. The car is aerodynamic but it’s so close to the ground that you might as well be driving the Flintstones car when you feel every jar and bump the road has. The car is small and therefore has great maneuverability but at the same time it cuts out 2 of your friends because it is lacking a backseat and even if it does, how does it feel pushing your seat forward for them to get in and out? How do you feel about spending 5x the average person’s salary on a car and then moving the gears yourself? What conveniences aside from a CD player and A/C are left out to simply focus on the raw power of the car? Oh, and you’re paying $200,000 for all this.

Now imagine you are in a luxury car. Put yourself behind the wheel again and feel the elegance. You have a powerful engine but glide forward instead of roaring ahead. You have the privacy of people staring at your tinted window wondering who you are but unable to look inside. Police are no longer waiting to pull you over but looking on enviously. The car sails so smoothly down the road that you might as well be weightless. The car has 4 doors for your friends and is fully loaded with state of the art amenities, gadgets, xm radio, gps and a host of other features. For $60,000 is there a comparison?

The hotel is the sports car. It’s a pretty picture from the outside until you are in the cramped interior. Service is at your beck and call 24 hours a day but how often do you really need that? How does it feel to be sandwiched with 500 other people and how often have you wondered how many people have the key to your room? How about wondering how many shady people have been through that room using the linens that you’re supposed to sleep on and are they really clean? How much time do you actually want to spend in the room itself and while the room is built for necessities and does this well, soon the cramped bedroom begins to take its toll. What conveniences are left out to focus on getting you in and out of the hotel to facilitate a faster turnover? Oh and you’re paying $160 a night plus having to carry a wad of cash around to tip everyone you run into.

LA Furnished Apartments is the luxury car. Spread your arms out on the couch and feel at home, which is what temporary housing is supposed to be. Have the conveniences of a home, not a hotel. Enjoy 3x the space in a fully decorated apartment. Friends over? No problem. Want to watch something on a premium channel? Can do on a 42” flat screen HDTV. Privacy? You’ve got it. High speed wifi? It’s faster than a hotels speed if they even offer it. Soap that doesn’t come wrapped in paper and then dries your skin out? Try our liquid moisturizing soap. Toilet paper that doesn’t double as sandpaper? We’ve got it and now so do you. Check our comparison page if you want some visuals. Oh, and enjoy your stay with us for $89 a night.

3 Reasons to Rent a Furnished Apartment



Furnished Apartments are a much better alternative to staying in a cramped hotel room and truly feel like you are living at home. For all those used to traveling, after the first few minutes of walking into a hotel room, the first thing you do is put your things down and sit on the bed. You then look around at a small gray room with dim lights, stiff sheets, and all the comforts of a weekend at your in-laws. [Read more…]

Slide 3 – Compare

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More than 2x the Space

Our apartment condo units average about 800 square feet of space! That is more than twice the amount of space you will find in a typical hotel room.

Less than ½ the Price!

When adding up the costs of an extended hotel stay and the living expenses associated with it, our temporary housing solutions come out to less than half the costs!

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