All Forum Posts by: Mike Lambert

 Thanks John the issue is the seating position. The statistics seem to show and many "experts" seem to say that you now need at least 4.8 to be in the top. Also, it depends on the competitive landscape. Given that there are many properties around that have higher ratings and aren't that less good (and don't have such comment in their reviews), I suppose that it's more of an issue in our case.

 Michael, thank you. The bed is very good for a sofabed. The issue is the seating.

Hi everyone,

After replying to hundreds of posts, I never thought I'd be the one posting and asking to the community for help but I guess everything has a first time! :)

We have a new listing on Airbnb. There is a designer sofa bed in the living room with a queen bed with a comfortable mattress in it and it was pretty expensive. Before listing the property, we were using it for ourselves and our family and friends. Once, somebody older from our family mentioned that the sofa bed wasn't that comfortable if you sit for a long period of time in it. Otherwise, no complaints and some mentioned it was actually (very) comfortable. Personally, I'm fine with it but I'm not very demanding for a sofa so it means little. I was told that, by definition, a sofa bed would be less comfortable than a sofa because of the metal in it. We then listed the property on Airbnb. We got two 5-star reviews. And then the third review came. We were hoping for another 5-star to start with an official 5-star review but we got the review that kills, a 4-star bringing us down to 4.67 below the direct competition and also with a content that I think could prevent further bookings. Here's the review:

"We had a very nice vacation. Lucky with the weather. House is well equipped with everything you need. One small point of criticism; we were there in the winter and in the evening a lot to play a game or watch TV. The couch is very bad, but fortunately many pillows and throws so we were able to make the comfort acceptable! Everything else is great!"

What should we do in your opinion:

1. Keep the sofa-bed and not reply to the review?

2. Keep the sofa bed but reply to the review? How best to do it?

3. Replace the sofa bed by a sofa and reply to the review thanking the guest for his feedback and mentioning the substitution (somebody has suggested that maybe we could change the inside of the cushions.

4. Buy a sofa and keep the sofa bed to keep the extra-capacity, at the risk of cluttering the living room too much?

5. Any other ideas?

I'm not sure if I'm making too much of this but my concern is that if I was the one looking for a property in the area:
- I would discard the property without looking at it because the competition has higher ratings.
- If I still look at it, I would discard it because why take the risk on a bad sofa when I can rent a similar property without such comment.
- Once we get more great reviews, the influence of that one will reduce but we have to make sure it doesn't prevent us to get bookings in the first place!
- Somebody else in the future could find the sofa bed not that comfortable too and "confirm" that review, which make things even worse.

Thank you so much!

Mike

@Kwanza P.

I've owned property in both countries for years.

When it comes to Mexico, I've shared my experience by replying to hundreds of posts on the topic on the forum. You might find the answers to your questions there but I know that the search function is less then optimal so feel free to send me a DM if you don't easily find what you're looking for.

I've never bothered commenting much about Canada because, until recently, it made no sense for US investors to invest in Canada: much less favorable mortgage conditions if they could even get one, much more expensive prices on average and much less profitable on average. @Josh Ball mentions, there are issues with foreign investors but, nowadays, it's not necessarily on the tax front anymore. There's actually a moratorium that doesn't allow foreigners to buy most properties. I believe they might still able to buy new properties (I have a Canadian passport so it doesn't affect me and so I haven't followed the details). That moratorium is supposed to be temporary.

Mind you, while the US used to have (some of the) lowest interest rates in the world for the last 15 years, this is no longer the case and the US actually has some of the highest interest rates in the world nowadays and that doesn't look to change any time soon. Therefore, it makes more sense for US investors to look overseas and Canadian interest rates are now significantly lower. As a result, while the US market is stuck in the lock-in effect, the Canadian market is kinda booming so it makes more sense for Americans to consider Canada nowadays, except for the fact that Canada has on average one of the if not the most unaffordable real estate in the world.

Hope this helps.

I wouldn't worry too much about this. First of all, the premise is fake news since, contrary to what they wrote in that article, the measure hasn't been adopted in Spain, as we know. Secondly, that article, while highlighting a genuine problem that exists pretty much all across the world, makes a marginal group sound like it's a large organization.

Regarding Spain first, the measure is so stupid that I doubt it's going to be adopted and implemented. Indeed, non-EU purchasers only represent a few percent of the houses bought in the country and the properties they generally buy are not affordable properties so that tax wouldn't solve anything and would bring less capital and less jobs to Spain. Also, that idea might have been inspired by the recent jump in American purchases but we know that that was temporary in order to take advantage of the Golden Visa before it is phased out.

I doubt even more that anything like this will make its way to Portugal anytime soon. While the same comments would apply, the previous Portuguese government enacted a law in 2023 that severely restricted certain types of short-term rental in certain areas and that law has been abolished by the new government because they realized it wouldn't solve the problem. Moreover, the government has made it very clear that it wants to attract foreign investment and a measure like that would be totally counter-productive and downright dangerous and negative for the country and it's the economy. Some politicians are often demagogues and not always the smartest cookies in the jar but they're not that stupid!

The influx of foreign investments explains in large part why countries like Spain and Portugal are now economically performing better than the likes of Germany and France. Who would have thought that coule even be possible? You'd hope they won't be that stupid and kill the goose that laid the golden eggs or they'll ultimately pay the price at the ballot box, like the previous Portuguese government.

As is often the case, that kind of article sadly doesn't provide the necessary context to the uninformed reader - and I'm not talking about you, of course :). 

Hi Charles,

This is probably the fastest way to the poor house, mainly because, in Japan, houses are like cars as in their market value depreciates and goes to 0 over time. To make matters worse, the horrendous demographics mean that there's going to be a huge surplus of properties, accelerating the depreciation. This also probably ensures that they will continue to depreciate against the US dollar over time. What's the point of getting cash flow if you lose all your capital?

Of course, there is the lifestyle aspect. You might decide that you absolutely want to own your own residence there and I assume you can afford it since you already own properties elsewhere, likely in beautiful Hawaï. If you don't have to own your own residence though, why not invest the money in a profitable investment elsewhere and rent in Japan? It could even be (more) interesting from a lifestyle point of view as you'll get to stay in different cities/houses every time you go. And your net worth will thank you.

If you still want to go ahead, you'd be better off buying a house than an apartment because, while the value of the building itself will go to 0, you'll still have the value of the land, bearing in mind that the land might actually lose value too given the depopulation and the yen depreciation.

Sorry if I'm pooping a party but make sure you understand what you're getting into (which you're already doing by asking the forum) and then make the decision that's right for you according to your objectives. Hope this helps.

Hi Montse,

There's no need to defend yourself when you're not attacked. If you reread my post, you'll see that I was clear that my purpose was to avoid that what you wrote would unintentionally mislead. Also, I never question your knowledge of the region. I was just surprised that a Spaniard would make the comparison you made.

It's a fact of life that some people hate to be contradicted and can't make the difference between a discussion over a specific matter and a personal attack (I'm taking in general here). Knowing that you're new in the forum and to avoid a potential reaction of the style "Who's this idiot who thinks he knows my country better than me?", I went to extra lengths to make sure that you wouldn't take my post as a personal attack by starting by mentioning that I agree with what you wrote and concluding by mentioning that the sole purpose of my post was to make sure that yours wasn't intentionally misleading.

So, over the form, my suggestion as an elder of the forum would be for you to not take everything personally and, if you still think you're being personally attacked (it can happen to everyone), read the post again and make sure you don't misinterpreted what the author meant before publicly complaining about him/her.

Most importantly, over the content, you're correct that the Costa del Sol isn't the whole of Southern Spain. However, you forgot/didn't mention the Costa del Sol, which, from an international real estate point of view (the topic here), is what matters. The fact of the matter is that the overall majority of international investors who invest in Southern Spain justifiably only do so in the Costa del Sol. Unfortunately, such an opportunity doesn't exist in Southern Italy, whereby the comparison between Southern Spain and Southern Italy, while valid when it comes to the situation of some small villages in the back country, doesn't make sense when it comes to international real estate investments. But there's no need for you or anyone to take my word for it. Just check the facts and figures.

Like you suggested, there are various opinions, which are all valuable and it's great like that. However, as the saying goes, while everyone is entitled to their own opinion, nobody is entitled to their own facts (as there is only one set of facts). If you had the time to read the 1,000+ posts I have published, you'd see that I rarely express any opinion (unless asked) and that what I mention is more often than not based on facts and figures. This is no exception.

Hope this clarifies the matter.

Mike

@Montse C.

I was totally shocked to read your comparison between Southern Spain and Southern Italy as it makes absolutely no sense to me, especially from a real estate point of view. What you wrote is actually kinda correct and I quote: "I would say it is actually quite similar to Southern Spain in many ways. For example, Southern Spain tends to be more affordable than the north, especially if you look at rural areas or small villages. Just like in Southern Italy, where houses are sold for as little as one euro, similar initiatives exist in Spain to attract people to repopulate villages and revitalize these areas." the one part I'd disagree with is "many".

So why was I shocked then? Because your statements are extremely misleading (unintentionally I suppose). Indeed, BP is about real estate and:

1. I haven't seen any statistics to this effect and I don't think any has necessarily been compiled but I bet I wouldn't exaggerate if I state that 95% of the value of real estate in Southern Spain or at least the province of Andalucia is in the Costa del Sol. The Costa del Sol is one of the world's most successful tourism success in the world ever. It started in the 1960's or something and has gone from success to success, overcoming all crises. Nowadays, people from all over the world vacation, work temporarily, move (with or without their business) and retire in the Costa del Sol. Many billionaires and celebrities own property there, including lots of Americans.The infrastructure is top notch. And it goes well beyond that. Even the main city of Malaga, who was considered a backwater city just 10 years ago has become very popular and is now turning itself in a little Silicon Valley and banking center. The Costa del Sol has been pulling the economy of Andalucia, Southern Spain in general and the whole country for decades.

2. Nobody on here is likely interested in investing in a small village in Southern Spain as it would make no sense but there are loads of Americans investing in the Costa del Sol so it's important to focus on what matters to the community if we want to help and make sure we don't discourage them with involuntarily misleading statement.

In comparison, Southern Italy has none of that, expect for the little Amalfi Coast at a very small scale. And then, the proof is in the pudding as far as what interests us, real estate. While real estate prices have been steadily increasing in Southern Spain over the last decades, they've been steadily declining in Southern Italy.

I was even more shocked as I assumed that Montse would be your first name and you therefore would be Spanish (I found that out because somebody called Montse joined the owners' Facebook group of a community in which we own a condo in the Costa del Sol). But then, looking at your profile, I realized you live in the Netherlands now. If you have time, I'd suggest you travel through Southern Spain and then Southern Italy and then you tell us if it's similar. You might be very pleasantly surprised.

To conclude, it's great to have more new members like you from Europe contributing to the forum. Personally, I always try to avoid general statements that could be misleading. My whole point to responding to your post here is to help avoid that people who might have been considering investing in the Costa del Sol discard the opportunity because they think it's like Southern Italy.

Everybody who invests in Southeast Mexico, including myself, knows that the typical property doesn't offer ROI upwards of 10%-15% but way less. These figures are even higher than those that were used by unscrupulous local developers, master brokers and local real estate agents a few years ago to lure unsuspected foreign buyers. With the increase in prices and competition over the last few years, these figures were so divorced from reality that these people now typically advertise 8% to 10% at the most, which, unsurprisingly, is still higher than reality. Also, the average occupancy rate in Tulum is far below 70% - 80%. Anybody who wants to know the real ROI and occupancy figures can check on Airdna. There's actually a huge oversupply of properties in Tulum and none of my friends who own property there make anything close to that! There are countless short-term rentals sitting empty there. Like in many other markets, only a minority of owners can get such figures (if they have a special property that they bought at a good price years ago for example) but the average buyer/investor will be sorely disappointed if he/she hopes to reach those figures.

@Chris Magistrado

Refinancing could be done in certain countries and situations. It's a matter of case by case but I doubt that it could be done in Italy. As far as I know, it generally doesn't work in the US anymore as you describe now that interest rates have returned to a normal level.

I totally agree with @Henry Clark that, if I want to invest in Italy, I want mass tourism and STRs. A few years back, there were opportunities in the best markets (Venice, Florence and Rome) but they might have disappeared.