All Forum Posts by: Account Closed

It's a class C area. It's not an economically depressed town, it's actually going through a mild boom. A private university just announced they're moving their masters in health sciences program three miles from my complex. This will bring 200 students to the community. 

Vacancy rate has averaged 4% over the last three years. Turnover is minimal and my PM received 3-4 calls a week from prospective tenants wanting units. Only problem is I have no vacancies for them. Collections aren't an issue. 

Still curious to know the rent you're getting for $75k a door. 

@Account Closed Baltimore?  Why Baltimore?  Of all places, Baltimore?!?!  Sorry, I digress. 

This is a great post, I have learned more tonight than any other post yet. Thank you all for sharing.

HOLY OMG...this is a great thread!  One thing that hasn't been mention no matter if the locations are LA vs. Baltimore; San Diego vs. Detroit; San Francisco vs. St. Louis; or New York vs. Kansas City....the fact that you can spread your risk over more doors in the cheaper markets can be a factor that many investors could take into account.  I know it's a simple point...but an important one in my humble opinion.  Thanks for the great "what if" scenario with the numbers breakdown @Account Closed!

I guess that many Airbnb hosts will drop out of the market as the regulation becomes tougher. People will also start to realize that it's not free money. Airbnb takes a lot of work and I guess that will become clear to many current hosts over time.

As for safety concerns, I think this has to do a with a basic difference in worldview. I have hitchhiked throughout Europe, done couch surfing before that, and am an avid Airbnb user and guest. I am writing from an Airbnb in Bulgaria as we speak. My experiences have been overwhelmingly positive and by and large better and cheaper than staying in hotels during my travels. Hotels do not have to release the criminal activity occurring in their properties but my guess (and this is a guess) is that on average there is more crime happening per room in a hotel room than an Airbnb rental simply because you can have a lot more anonymity in renting a hotel than a profile and review based service like Airbnb. 

I am not here to impose my belief on anyone else and I also think there will also always be space for hotels in the market but I tend to think competition is a good think in these kinds of calcified markets to break monopolistic tendencies, encourage creativity, and ultimately bring more choice to the consumer. I also use Uber :)

This tracks some of my differences in how I also manage my rental properties and tenants. My guiding principle has been to give people the benefit of doubt and trust in the basic goodness of people. It's not so much that I think this is necessarily the most efficient way of running my business but it's the one that has worked for me so far. Of course as I scale my ideas on this may evolve.

Thank you all for your thoughts as always. 

Seb

As a side note, all that said I don't want to be too hard on Philly.  In spite of my frustrations with the city government, it's actually been a great place to invest for me.  Two of my properties that I bought in 2014 have doubled in value since I bought them, and I'm seeing a lot of cool things happening to that market.  It appears that a lot of money is moving into Philly.  It's a strong rental market, and even emerging as a minor tech hub.  A lot of people are moving there from NYC and other places.   Almost all of the neighborhoods I've invested in there are going very strong (S. Philly, Brewerytown, Germantown, Mt. Airy and Olde Kensington. are all doing fantastic with strong rents and rising values).    It would be even better if the city government would get itself together. 

Mike- Ask any landlord and they will tell you that Philly is just cracking down on everything in an over the top fashion.  But I never broke the law with regard to the lead violations and they were still sending me violation notices.  And that's just one example.  Oh and they wanted to knock down a building that I was trying to purchase through sherrif's sale, and seemed dead-set on it, even though I had just gotten legal control over the building and had contractors in place to make it safe, almost as though the demo contractor had a special relationship with the powers that be. I got notice they were going to bulldoze it one day after I bought it, even though I thought I was doing what I was supposed to do, and had been in constant communication with them.  If you couple stories like this with the fact that it's such a poorly run municipality, you get a lot of frustration on the part of landlords.   I even had a government rep tell me on the phone that yes everyone knows that Philly's government has lots of problems.  I just feel like a lot of times it's an "us -vs- them" when it comes to city authorities (with the business community being the bad guys). It's frustrating if all you are honestly trying to do is do the right thing.  It's like if a cop gives you a ticket for going 1 mph over the speed limit.  Sure - I guess they can but why would they?  Or even giving you a ticket when it was the guy in front of you speeding.  At some point it feels like harassment.   

Anyway - I respect your opinions on this - I'm sure Airbnb has some fault here too.   I honestly don't care that much about it.   With stuff going on in politics and the world at large, any concerns I have about this would take a back seat to about a million other things.  I will definitely use their service if I ever have any properties that it would make sense for.  That's my personal view.

I don't know too much about the New York market, but I'd imagine that Airbnb is experiencing a little bit of city pushback. I've definitely used Airbnb while in NYC, but more for leisure as opposed to business travel. 

Yeah - Airbnb is generating a lot of discussion as to what extent they are actually disrupting the hotel market. I think two things to consider are location and demographics. In Chicago for example, getting a license to operate an Airbnb is pretty costly. The pushback on Airbnb and home-sharing in general is a huge obstacle to a lot of Chicago operators looking to get into the Airbnb market. Despite the significant cost differences between Airbnb and hotels, it seems that the Chicago hotel market is still doing relatively well.  This is true even considering the population shift in Chicago in the last 2-3 years.

I think overall, I think hotels still have the stronghold in the corporate market - I do know that there is a huge pull for Millennials to travel using Airbnb, particularly for leisure. When companies book travel, the default is still to book at a hotel. 

From what I know, Airbnb is trying to step up their professionalization among hosts, especially with those cases that you mentioned. But at least in the foreseeable future, hotels are still pretty standard.