All Forum Posts by: Toby Johnston

Lots of good comments here.  A couple more:

1) when I run the numbers for the STRs, it seems like the asking prices have not adjusted for the rise in interest rates. I believe your monthly payment is likely up around 50% from the same time a year ago but the amount you can charge for an STR night hasn't increased nearly that much. So if you buy at the current price, wouldn't you expect a much lower ROI than a year ago?

2) I think the wealth effect of the stock market should have an impact on how much out of town buyers are willing to pay for a second home or even a primary home.  If they are selling real estate to fund their purchase, then they may be willing to continue to pay high prices (since the RE market hasn't gone down).  But if they're selling stock or cashing in stock options, they now have 20% to 50% less purchasing power than they did six months ago.  I would think that might start to have an impact.

I'm in the market to purchase a short-term rental in Saint George Utah but the market there (perhaps like many places) feels very overpriced.  There are very few high paying jobs in the area (IMO) so most of the high income earners are working remotely for other places.  It's also a huge second home market for Northern Utah.  If you were me, would you be looking to buy now or waiting to see how the higher interest rates and end of the pandemic (hopefully) impact prices?

I moved from Silicon Valley to Utah last year.  It is fairly expensive here compared to some areas but far less expensive than the Bay Area was.  I think you need to balance your desire to profit from real estate with finding a great place to live with your family.

I'm looking for a property manager for my SFR in Orem, UT. Any recommendations?

I'm very curious to see what happens to property values once interest rates rise to a normal range (versus all time lows for the past 7 years). If you have fixed rate financing in place you shouldn't be impacted. Until you want to sell. Purchasing power will go down when rates rise so it's hard to imagine prices not going down too. Issue is when rates rise meaningfully. May not be for a long time.

JASON Yahner I also did not appreciate the aspect of doing short term rentals on properties you don't own without the owner knowing. You can get in a lot of legal trouble doing that and it's just a really poor idea for many reasons besides being dishonest and unethical. I think Joshua Dorkin would not have condoned that part of the conversation if he was hosting. That said, I have a new vacation rental myself and learned a lot.

Arizona property owners, how often do you expect to replace the AC unit on your rentals? HVAC company says I have a leaking condenser coil and suction line near case coil. They are telling me it's $5,800 to repair (labor intensive) or $6,800 to replace the entire unit. I'm waiting for a second opinion but wondering what your experience has been.

I like your plan. After you get in to your upgrade primary and have some more investment experience, you may consider taking on a money partner where you do legwork and renovation for your share of equity. I always think that when someone has a construction background.

I wouldn't borrow against my 401K for a down payment on a primary residence. Just put less down or buy a smaller place and move up later. Stay diversified and don't overextend yourself. As for Austin, if you can handle the payments with less rental cash flow, I like the long term investment prospects. I live in Silicon Valley and Austin looks somewhat like my area twenty years ago. Now we would kill for those prices again.

Can explain that in smaller steps? I don't understand.