As the owners of Key Source Properties see it, the sky’s the limit for their less than one-year-old short-term rental property management firm.
“We really see ourselves creating a brand,” said Jonathan Klunk, chief executive of Key Source Properties. “All these individual properties we manage are like mini-hotels.”
The company manages the rental, maintenance, cleaning and other services related to running a successful short-term rental.
Klunk runs Key Source with his husband, Justin Reid, who is Key Source’s chief operating officer.
The business started with the pair renting out their own property on Airbnb, Reid said. Renting the property allowed them to buy a house in Boone, N.C., which they manage from afar. From there, word got out about their success with Airbnb, and people started asking them to manage their Airbnbs.
“Some people think of it as an additional income, but we try to take it to the next level …by being hands-on,” Reid said. “It is a passion that we have to give everyone the best experience.”
In just a few short months, Key Source went from managing five properties to 30, including the Howard Hardy House. Most are properties owned by others, but a few are owned by Klunk and Reid. They are located in neighborhoods, including Plainview, Prospect, NuLu, the Highlands, Old Louisville and downtown.
The properties rent from $99 and up on a week day to about $400 on a weekend. The Howard Hardy House, which can hold 22 people, runs $6,000 for an entire weekend.
The business has performed well enough that Klunk left his job as an account executive at a telecommunications company in July. Klunk said he noticed he was giving most of his attention to Key Source.
Once Klunk left his full-time job, “that is when our growth really went up exponentially,” Reid said.
The expansion has led Key Source to revise its original goal for 2017. Klunk and Reid now hope to manage 50 properties by year-end; their previous goal was 30.
“We are going for above-market-rate properties and properties that are in fantastic locations that are cared for by their owners,” Klunk said.
Key Source is “very high touch,” he noted. For instance, the company works with a team of cleaners to make sure rentals are spotless. In some cases, they also have furnished Airbnbs for property owner clients.
While the properties they manage will remain on Airbnb, Key Source also is moving toward being a more traditional vacation rental management company. Klunk said they are creating a platform for people to view their available rentals outside of Airbnb and other home rental websites.
Key Source also plans to start a 24-hour call center this week to accommodate any emergent client or renter needs.
The company also recently affiliated itself with Gant Hill & Associates, a real estate brokerage firm that works throughout Jefferson County and the surrounding areas.
The pair liked Hill, Klunk said, because he promotes entrepreneurship within his company. “That is what really attracted us to the organization.”
Gant Hill & Associates was already delving into property management, including Airbnb management, and has a maintenance team, but up until recently, it wasn’t an organized division within the company, said founder Gant Hill.
“It’s a strategic alliance,” Hill said about the affiliation with Key Source. “Our clients really require an unconventional approach to marketing or managing their assets.”
Gant Hill & Associate is Key Source’s broker, and Key Source offers a single entity for people to reach out to when they want to rent out a property short-term or they are looking for a short-term rental themselves. For example, Key Source has worked with real estate agents to offer clients a place to stay while they are trying to find a home.
Key Source also has rented to people coming to the city for job interviews. “They want to live like locals and get a sense of the neighborhood,” Klunk said.
Under their affiliation, the companies want to find a way, with the owner’s permission, to offer houses that are for sale as short-term rentals while they linger on the market. The city currently requires conditional use permits for houses that are short-term rentals and not owner-occupied, a process that could possibly take as long as it takes to sell a house.
“If a house looks happy and not distressed, it demands a better price,” Hill said. “We are trying to be innovative with Jonathan and Justin to uplift the asset when it’s going through transition.”
Klunk noted that the homeowners would earn money to help reduce the hardship of paying two mortgages while waiting for a house to sell.
Key Source may also get into estate management with Gant Hill & Associates, ensuring that the multiple homes of the real estate firm’s wealthy clients are cleaned, maintained and ready for when the owners return.
As short-term rentals through Airbnb and other services grow in popularity, Klunk said he hopes operators are included in conversations about tourism in the city and state.
“We pay the same taxes that hotels do,” he said, adding that short-term rentals supplement the hotel business. “Whenever we are all booked up, the hotels are all booked up.”
Klunk said that operating short-term rentals has given them a good perspective on why people come to the city: bourbon, bachelor and bachelorette parties, checking out the University of Louisville and job interviews.