All Forum Posts by: John Carbone

 @Greg Scott

I disagree here, I think a lot of people believe what you are saying, but it is misguided. The "equity" that has been gained over the past decade has primarily been driven by the low interest rate environment. The interest rate is the main component to housing affordability (monthly payment.) So by having 2-3% interest rates, it artificially inflates housing values. This "equity" while it appears real, is really phantom. The fed has aggressively raised rates, we are now sitting at a 7% primary home mortgage rate. A 500k mortgage in 2021 at 3% has a payment of $2,108. a 500k mortgage now at 7% is $3,327. In order to have the payment be $2,108 now at 7% rates, you need a 320k mortgage ($2,129). That is a 36% drop in value now due to rates rising to where they are now. The "equity" is being recaptured now to reflect the reality.

I’ve thought of this myself too. The only thing I can think of why I would want to do this from an owner perspective, would be to test the market area for the product, while someone else is doing the work. I could essentially let someone deal with the start up costs and promoting of it. I’d track it to see how profitable it is. Once the first lease is up, I would renew at a much higher rate to them, or I would then just rent it myself after they did all the work for me. I’ve never actually done this, but that is the only reason I could imagine someone would. 

Monthly Rents are going up higher now in general. I think this is a massive fad 

To put things in perspective here, it’s extremely hard to find new reliable cleaners/handymen right now, especially ones who will also go above and beyond and do drop ins - these people are way too busy for that. Almost everyone on here has established people doing the work for them already, and what worked really well in the past (before everyone else was doing it) is not as relevant to the situation now. It’s much easier to keep an employer if you pay and treat them well, which is what most everyone on here is doing. Trying to find someone that you are looking for with just one house, I’d advise against going to Facebook for that. Almost everybody is doing that now, and your likely to find someone very subpar, if at all. Also, being one hour from a major area your less likely to find someone on there that is super close for short notice drop ins.

It’s more competitive now. I’ve built my team on the ground with face to face interaction with people who probably never heard of facebook. I’d go there for a week, walk around the neighborhood, check with neighbors first, or go to a local store. You are looking for someone who just needs some side money. You’d be surprised what you can find if you put a little real life effort in, and you’ll have someone super close to your property that won’t put you on the back burner for another client. Just treat them well.

what a difference a day makes. Called back today and it’s up to 7.75 percent! Talk about parabolic. money is being sucked out of the housing market by a black hole! 

The window for cheap money has been closed shut. Investing overseas (primarily in Europe) is starting to get appealing to me. I don’t know anything about the market over there, but seeing the strength of the USD relative to the Euro and GBP (especially), I’m thinking there could be some great deals to be had over there this winter when their economy likely shutters from having no energy. If real estate prices drop nominally in these countries, using the strong dollar to scoop them up, it could be a once in a lifetime opportunity. Someone on here should start a short term real estate company in Europe. 

Airdna revenue projections include the cleaning fee. If you are going to be cleaning it yourself, then that's fine, but unless the profit is substantially more you may want to reconsider. you could be creating two jobs for yourself using this as a STR. A hands on property manager, and a potential STR cleaner if you do it yourself. the option of just LTR covering most of your costs seems appealing in this situation.

the drop in Air's stock has nothing to do with the company itself. They are actually reporting good numbers. It's a sell-off across the board of travel related stocks due to the industry being highly sensitive to drops in discretionary consumer spending. The markets are forecasting a decline in this, whether it happens or not remains to be seen, but the probability for that is now high. If that happens our rentals will be impacted. 

expediagroup/vrbo is also down 50% off the high as well.

 not yet it doesn't. the markets are forward looking, usually about 6 months. The price movements on wall street are pricing in a high "probability" of lower revenue, which in turn is derived from our vacation rentals. I wouldn't be very concerned about it, but at the same time I wouldn't flatly discount it as not being relevant.