All Forum Posts by: Konstantin Ginzburg

@Amanda Bahil

I am an investor in the New Orleans market so I might be able to help to an extent since Metairie is right outside of the NOLA city limits. I am not very familiar though with Fat City to be honest. Metairie itself can be a good area to invest but you have to be very selective of the specific neighborhood. Just like the NOLA city limits, neighborhoods can shift very quickly as far as safety is concerned. These shifts can occur within a block or two so each potential investment property would need to be considered on a case by case basis. You are welcome to connect and reach out if you have other questions about the area. I will do my best to help. 

@Ben Gleason

As you have said, New York is not a very landlord friendly state so it might be best to consult a real estate lawyer with this to ensure you are following the letter of the law and protecting yourself from possible liability. 

@Cristin Andrews

I think it might be a good idea to find an alternate property manager. Screening tenants is a crucial part of being a property manager and if your property manager only uses the 3x multiplier rule; that is a huge red flag. If the property manager is lacking in this crucial system, it would not be surprising if they are lacking in other aspects as well. Unfortunately, one common scam that is used by PM's now is to put a poor quality tenant into the property intentionally since PM's often collect either the full months rent or half a months rent to start the lease. Placing a poor quality tenant that would need to be evicted and replaced would allow them to collect an additional full months rent during this replacement. While I am not suggesting this is what your PM is doing, placing a tenant with a clear red flag that you described is very troubling. 

@Nadia Brown

Based on just the numbers you provided; this seems like a good deal. However, when you are calculating your expenses, don't forget to factor in estimates for maintenance, capital expenditures, and vacancies. Also be sure to do a good inspection on the condition of the property. If there is a lot of work that needs to be done to the property to make it rentable, this could wind up being a large out of pocket expense that you would need to factor in. If this property is already under contract, then be sure to hire a high quality inspector to get this information for you. 

@Sharon Tabor

During the pandemic, there was a very large demand for traveling medical professionals. Due to this demand, many jumped onto the MTR bandwagon and the markets saturated. We were in a similar position. We placed our rental on furnished finder. Despite being in the middle of 3 hospitals, we do not receive many inquiries on furnished finder and the ones we get, are below market rates for a long term rental. While we still keep a listing on furnished finder, we had shifted to students instead and have gotten much more luck. Are there any colleges nearby that you could advertise too instead? Also keep in mind, that if you are doing week to week, you would be considered a short term rental so should be aware of any possible short term rental regulations that may exist in your city if you do go that route. 

It's nearly impossible to predict what interest rates will do since there are so many factors and moving parts that would affect this. In my personal opinion, I think the largest factors will be the state of the economy; primarily unemployment rates as well as GDP growth. In a simplistic metaphor, the FED needs to balance out the health of the economy with inflation. Since inflation was so severe for the last few years, they had essentially decided to raise interest rates aggressively in order to fight this high inflation even if it came at the cost of slowing the economy down. They had been able to do this for a prolonged amount of time since the economy was still proving to be relatively good based on unemployment figures. If the economy slows down further and unemployment begins to rise, I believe that their hand will be forced to an extent and the FED will need to put some attention on those figures. Depending on the severity of unemployment, I believe they could lower interest rates by a substantial amount. If unemployment remains low though, I think will will continue to at close to the current rate of borrowing throughout 2024. If the internal rate of borrowing doesn't change, I think there is still some room for mortgage rates to drop since the gap between internal rate of borrowing and the 10-year bond rates are still higher than historical averages so there is room for rates on 10 year bonds to lower. Since this correlates with mortgage rates; this should also cause mortgage rates to drop in turn. 

@Mason Green

Since you are familiar with both of these locations and plan on house hacking, I would suggest selecting the city that you personally enjoy living in more and being patient in finding a property that meets your financial requirements in that city. Deals can be found in any market given enough patience but since you will be living on the property, you should also factor in your own quality of life. A slightly higher return on investment might be offset if you wind up living in a location you do not personally enjoy as a result. 

@Sarah Moore

Welcome to BiggerPockets and best of luck in your real estate journey. Did you have a specific real estate strategy you were hoping to try out such as flips, buy and holds, or STRs? This forum is excellent at providing great tips and strategies if you let the forum know how we can help you. 

@Ryan Marble

Finding a property that will cashflow as an STR/AirBNB will be difficult right now (but not impossible). This is due to a combination of a drop in travel demand over the last year leading to vacancies in existing properties as well an increase in interest leading to higher mortgage payments. It is still possible to cash flow as an airBNB but keep in mind that many places that are ideal for airBNBs likely already have airBNBs established there. This will mean that you are starting a new business in an area and will be competing for sales and customers with established businesses. This is still very possible to do but keep in mind that it will require work and effort to do so and it is not likely that you will be able to simply open a new airBNB and watch bookings coming in non-stop from day 1. You will have to earn those bookings by providing quality service to clients consistently. Many markets are already saturated with airBNBs. It is still possible to establish your own airBNB in these markets, just keep in mind that there will be more competition.

Selecting a location is crucial. Both in selecting a general market and in selecting a specific location within that chosen market. As for selecting a specific market: there is the analytical method of selecting a market with high demand and high occupancy rates by doing market research. The other method is selecting an area you personally enjoy and set up your airBNB there. Once you have chosen your specific city, picking a location that gives you a competitive edge to other airBNBs can be a huge boost. Is your airBNB walking distance to prime attractions? Is it near public transportation that can take you to the attractions? Are there things in walking distance to see? Do you offer a nice view? 

Others in this post have offered several good books and podcasts to try out and I agree with those suggestions. Focus on the service quality systems and marketing strategies that are discussed in those books and podcasts to get ideas of ways you can set yourself apart from the competition. 

Lastly, be aware of any possible litigation that may be coming to an area that might affect STRs. More and more cities are putting out regulations meant to limit airBNBs/STRs so you should be cautious about this. One strategy I used when I picked my STR is to be patient and find a property that can cash flow or at least break event as a long term rental in case I need to pivot towards that strategy, allowing me a hedge and multiple exit strategies. 

@Logan M.

Finding a real solution is going to be very difficult since it involves so many different variables and any possible solution is likely to have addition effects that come along with it that are detrimental. At its core, there is a supply problem. The amount of homes currently on the market right now is simply far less than the amount of people actively seeking a new house. Addressing the supply side is difficult. On one hand, you can incentivize builders with additional grant programs to encourage more units being built or you can encourage them with lowering interest rates to make their borrowing costs more manageable. But lowering interest rates can trigger increased demand as more people will be able to afford to enter the market; hence triggering house prices to resume going up. There is also pressure put on the supply side from investors, foreign buyers, and short term rental owners; among other additional sources. It is not likely for a solution to be found to address this supply pressure without causing justifiable controversy with free market interference. It is also important to remember that corporate investing may be placing supply pressure on housing but they are also helping fund the creation of housing that is required for renters. Policies that are meant to force down home prices would also have a negative effect on home owners so are not ideal. 

The real solution will likely require a combination of increasing affordability through targeted interest rate decreases and insurance costs (especially in states such as Florida, California, and Louisiana where insurance is having a drastic affect on the ability to purchase a home), increased education for buyers to provide financial literacy and skills that they would need to be able to enter and gauge the home market, and a prolonged period of time where labor shortages force median pay to increase and allow more people to enter the market. As I said though, this is a very complicated problem, so will require a very complicated solution.