All Forum Posts by: Yitzchok Carmen
Yitzchok Carmen has started 7 posts and replied 88 times.
Post: Smokies: The juice still isn't worth the squeeze
- Posts 88
- Votes 55
Quote from @Collin Hays:
Quote from @Jules Aton:
Quote from @Yitzchok Carmen:
Quote from @Zachary Clevenger:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
I would argue those numbers.... triple value on the house is only 1.5 mil, whereas compounded interest on $500k for 30 years is nearly 4.9 mil. +/- a few hundred thousand.
But you gotta look at both capital appreciation AND dividends. When you factor the SP500 at 8% annually (which is where you are getting +-5mil) that's including everything. The 500k house is worth triple and that is besides for the net rents of 30k annually. If you take that 30k rent and put it into the market for 30 years at 8% thats another 3.7 mil.
It is very similar though long run. I guess the difference just being that with the house that is immediate income now rather then long term growth should you choose to keep it hear and there and not invest it. Also RE has some marginal tax benefits
Im not disagreeing with you though, if someone has 500k cash today and they wont use debt they are most likely better off long term in the market vs owning an STR
I've struggled with this because while it isn't apples to apples there is a beauty to VTSAX set it and forget it as opposed to having to hand deliver laundry detergent to STR because the previous guest took all the laundry pods and current guest can't make it a mile up the street to purchase their own detergent lol. I'm a bit heavier in TSM index funds than RE but tend to like both to cover all my bases.
RE is a part time job. But if you find a good deal, it's very much worth the extra effort, and will beat the pants off of market indices over the long term.
Right bc when you find a good deal your 500k is earning more than 50k gross/ 30k net:)
Post: Smokies: The juice still isn't worth the squeeze
- Posts 88
- Votes 55
Quote from @Zachary Clevenger:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
I would argue those numbers.... triple value on the house is only 1.5 mil, whereas compounded interest on $500k for 30 years is nearly 4.9 mil. +/- a few hundred thousand.
But you gotta look at both capital appreciation AND dividends. When you factor the SP500 at 8% annually (which is where you are getting +-5mil) that's including everything. The 500k house is worth triple and that is besides for the net rents of 30k annually. If you take that 30k rent and put it into the market for 30 years at 8% thats another 3.7 mil.
It is very similar though long run. I guess the difference just being that with the house that is immediate income now rather then long term growth should you choose to keep it hear and there and not invest it. Also RE has some marginal tax benefits
Im not disagreeing with you though, if someone has 500k cash today and they wont use debt they are most likely better off long term in the market vs owning an STR
Post: Smokies: The juice still isn't worth the squeeze
- Posts 88
- Votes 55
Quote from @Jules Aton:
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
Completely agree! But not really strictly from a cash flow perspective
Post: Smokies: The juice still isn't worth the squeeze
- Posts 88
- Votes 55
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
Post: Smokies: The juice still isn't worth the squeeze
- Posts 88
- Votes 55
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
500k in the smokies should get you more than 50k annually. I think 70-80k annually is more like it from what I am seeing. BUT you are forgetting cleaning, no? A 3br cabin will probably run about 200/ turn and at 6 turns monthly is 1200$ x 12 months is $14,400.
Maintenance I assume includes capex bc I generally average much less than 7500. More like 3k. Utilities depends on if you have a well but if you do its more like 4-4.5k
Post: Has anyone else noticed the host responses on reviews on VRBO are left out now?
- Posts 88
- Votes 55
Quote from @Monique P.:
Okay the saga continues. LOL. Did you guys also get this e-mail today from VRBO titled:
"Temporary Suppression of Host Review Responses"
|
Dear Partner,
This temporary measure is necessary while we update our moderation tools and processes. We are working diligently to resolve the situation as a priority and will provide updates on restoring response visibility as soon as possible. |
Its even more ridiculous. Maybe VRBO doesnt realize that they already post the guests first name and initial of last name on the review itself?
Thats aside from the absurdity of acknowledging a change like this 6 weeks after it happened.
Some things are truly uniquely VRBO
Post: Has anyone else noticed the host responses on reviews on VRBO are left out now?
- Posts 88
- Votes 55
Quote from @Monique P.:
Finally got an answer today on the case I submitted via phone 17 days ago about the host reviews missing at VRBO.
“We are currently experiencing issues displaying responses due to system updates, but are working to resolve them as quickly as possible. We apologize for the inconvenience. Thank you for your understanding and patience.”
That is a lot better than the response I got today! Here is what they sent me:
"I wanted to personally reach out regarding the visibility of (guests) review on your property page.
I understand how important guest feedback is to you and the impact it has on your property's reputation. I'm pleased to let you know that after thorough checking, (guests) review is now visible on the platform."
Uh hello?? Its my response to the review that is missing not the review! And it was always visible, and this particular review is having a bad impact on my reputation!!
Sometimes you really wonder what these folks are thinking...
Post: Latest Airbnb Changes
- Posts 88
- Votes 55
Quote from @John Underwood:
Someone recently made me aware of some changes that Airbnb is making that I wasn't aware of.
They told me that as part of the Circumvention policy they are looking to catch people moving people off the Airbnb platform that have inquired there first.
Cancellation Policy
Starting on October 1, 2025, all standard cancellation policies for shorter stays (less than 28 nights) will include a 24-hour cancellation period allowing guests to cancel for a full refund including taxes for up to 24 hours after the reservation is confirmed, as long as the reservation was confirmed at least 7 days before check-in (based on the listing’s local time).
When we prohibit someone from using Airbnb, remove or suspend their listing, or take other action against them for violating our policies, they are not permitted to bypass (or “circumvent”) our enforcement. We also do not allow users to facilitate a prohibited individual’s or business’s continued access to Airbnb. We may remove accounts we suspect of engaging in these forms of circumvention or if we assess a prohibited user is likely to use another account to circumvent our enforcement. We may consider account activity and history to determine whether circumvention is occurring.
Below are examples of what is not allowed under our Terms of Service and this Circumvention Policy.
- Helping anyone who is prohibited from using Airbnb to use the platform
- A user may not help anyone who has been prohibited from using Airbnb to host or travel on the platform. This includes:
- Co-hosting or co-traveling with anyone that has been prohibited from using the platform for any reason.
- Otherwise enabling someone’s access to Airbnb after they have been prohibited from using the platform, such as booking on behalf of someone who was removed or creating an account under your name for someone that was removed.
- Making Airbnb bookings for anyone under the age of 18.
- A user may not help anyone who has been prohibited from using Airbnb to host or travel on the platform. This includes:
- Creating a duplicate account
- A user may not create a duplicate account to circumvent enforcement measures by Airbnb (for example, account removal or suspension).
- A user also may not create a duplicate account to circumvent negative consequences on their account (for example, negative ratings or reviews).
- Creating a duplicate listing
- Hosts may not create a duplicate listing of any of their properties to circumvent enforcement measures by Airbnb (for example, listing removal or suspension).
A host also may not create a duplicate listing to circumvent negative consequences for an existing listing (for example, negative ratings or reviews).
Accounts removed for suspected circumvention may appeal the decision. When we suspect that a user is circumventing Airbnb’s enforcement on another account, we try to provide on the reason for the suspension, including information about the identity of the account they are connected to.
From what I can tell, nowhere in those terms does it say that "they are looking to catch people moving people off the Airbnb platform that have inquired there first".
Seems like its just that they don't want ppl blacklisted from the platform circumventing the blacklist. The same way the government doesn't want you buying cigarettes for a teenager
Post: Has anyone else noticed the host responses on reviews on VRBO are left out now?
- Posts 88
- Votes 55
Quote from @JD Martin:
Quote from @John Underwood:
Quote from @JD Martin:
Quote from @John Underwood:
Quote from @JD Martin:
Occasionally I'll use a browser or something I'm not logged into to check my VRBO page just to make sure everything looks right and is working properly. Today I noticed that they're using AI to sum up the reviews, but even if you click "see all reviews" you can see the guest comments but not the owner comments. Has anyone else noticed that? I don't particularly care right now - all of my responses are essentially "thanks for the kind words it was great having you as a guest" or similar, but on the day when you get an unreasonable review and you want to respond it seems like no one will be able to see it.
Someone else had mentioned it, but I haven't looked.
I'm good with it. I don't have to do replies now which are much as you described!
Me too, more or less, but I had an unreasonable review that I responded to that guests who are reading reviews won't be able to see.
I wonder if this is a temporary thing during growing pains? I would think so.
I don't think so, but I hope I'm wrong. You can still post a response in the owner dashboard area, it just doesn't show up in the review synopsis. But VRBO's website is always screwed up in one fashion or another. From the phone you can't access the reservation area from the inbox correctly, from a browser tab; it always leaves the reservation details blank. The app is worse than using a browser tab.
I reached out to VRBO about this, since as you mentioned, its still possible to leave a response, and that response is visible on the back end, just not the front end. They confirmed with me that its a "known issue" that they are working on and that I will receive an email follow up when my responses are showing up again. They could not provide a time frame for when this would be. My strong gut feeling is that this is a typical VRBO glitch. I don't think they would let you post a response and then intentionally not show it, that seems ridiculous. And pretty much every website (Google, Amazon, Airbnb, etc etc ) allows an owner/company to respond to reviews
Post: Panic sales starting to pop up in the Smokies: Approved short sales
- Posts 88
- Votes 55
Quote from @Collin Hays:
I assumed we would start seeing this as the summer peak neared. I predict the market will be flooded with these types of listings by the end of August, with things getting really ugly as the end of year approaches.
This home is now an "approved short sale", which means the owner owes more than it is worth, and the bank is willing to allow them to sell it "short" (below what the loan is), and eat the rest. This sold for $850K in 2022 brand new.
I apologize f this is a dumb question but if the banks are willing to approve short sales and lose a fortune, does that mean it will be harder to get approved for a loan to start with on a new purchase? Once a bank feels pain they usually tighten up lending requirements but so far it seems like not much has changed and if anything they are even more interested in lending me now then they used to be! Business is slow for them now... Are things about to really change?