So What If Airbnb Is Crashing Right Now...

[Erin Spradlin]

I'll try to limit my rant here, but since the Wall Street Journal published a somewhat nasty article about Airbnb investors in late April and I represent a lot of Denver Airbnb Investors and Colorado Springs Airbnb investors, I think it's important to point out a few things, and see if my fellow BP-ers are of the same opinion or a totally different opinion. 

• Airbnbs (and short-term rentals) have classically been a good investment, with returns that were often 2-3 times that of traditional long-term investments. By that standard, even with the downturn, you have a 2-3 year pocket against a long-term investment 
  
• Yes, a lot of short-term investors leverage their properties to buy more properties (utilizing a HELOC), but that's not any different than what many standard long-term investors do

• This situation is awful for a lot of reasons, and may keep short-term rental numbers depressed for the next year- but a lot of short-term investors already know what a depressed season is like because rentals don't do as well October-March. In that case, they get converted to medium-term rentals, and that can and has been happening here as well
• We're a little vulnerable right now, but not making decisions because a once in a lifetime pandemic might show up does not seem like a wise investment strategy to me 

[Taylor L.]

Originally posted by @Erin Spradlin:

I'll try to limit my rant here, but since the Wall Street Journal published a somewhat nasty article about Airbnb investors in late April and I represent a lot of Denver Airbnb Investors and Colorado Springs Airbnb investors, I think it's important to point out a few things, and see if my fellow BP-ers are of the same opinion or a totally different opinion. 

• Airbnbs (and short-term rentals) have classically been a good investment, with returns that were often 2-3 times that of traditional long-term investments. By that standard, even with the downturn, you have a 2-3 year pocket against a long-term investment 
  
• Yes, a lot of short-term investors leverage their properties to buy more properties (utilizing a HELOC), but that's not any different than what many standard long-term investors do

• This situation is awful for a lot of reasons, and may keep short-term rental numbers depressed for the next year- but a lot of short-term investors already know what a depressed season is like because rentals don't do as well October-March. In that case, they get converted to medium-term rentals, and that can and has been happening here as well
• We're a little vulnerable right now, but not making decisions because a once in a lifetime pandemic might show up does not seem like a wise investment strategy to me 

 Disclaimer: I'm not an Airbnb investor and I probably never will be.

Remember that mainstream financial journalism is not exactly pro-real estate. Most of the Main stream news was saying it was "a bad time" to invest in real estate in the early 2010s, when in reality, that was one of the best times in the last 100 years to be a net buyer of real estate. We may not see a better time to buy real estate in the rest of our lifetimes, but they kept telling people to sit out.

You're right to push back on them, but remember that internet journalism is all about getting clicks. They get the most clicks by getting people riled up enough to share it, which gets more clicks.

I just opened WSJ's real estate section, and the top stories are all on celebrities' mansions. Great, I'm very happy for them. That has nothing to do with what most people need to know about the state of the real estate investing market. Just take articles like this one in perspective.