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Ryan
Veteran Member
 
Join Date: May 2004
Location: Promise Land of Trustafarians
 
2022-04-17, 17:15

Another weekend of strike-outs.

Came close to bidding on an absolutely beautiful—but expensive—old Victorian. 1888, fully restored by the previous owners and not a flip. Great location too.

Just decided that while I *could* afford it, doing so would be too risky. Would've been tough to weather a job loss or recession with a mortgage that big.
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kieran
Tweeting @kierankelly
 
Join Date: Jan 2005
 
2022-04-17, 21:39

We're starting to look at where we're going to move to next since we have to be out of our remodel in ~35 days before our first rental comes in.

We've been looking at potentially buying in NYC, but we don't really have the capital funds at the moment for a 20% down payment the most of these places required in NYC, which would be well over $100k in almost every case.

We're still approved for a mortgage, so we started branching out and looking out side of the NYC area and potentially came across a house in CT that would fit the bill for it. Not a bad spot as it's between NYC and Boston, where the companies we work for have offices and would be a fun project to do.

We planned on holding out a year so we can show the rental income on our property as actual income on our taxes next year and then refinance the rental mortgage to pull some cash out and buy something in NYC, but buying something now for 5% down and building some equity seems like a better investment, even if it does push us out a year of going back to NYC.

If everything works out properly, the rental property in NJ pays the mortgages for both the NJ and CT property and then we'd just have to cover the mortgage on a NYC property with what we're actually making, which in theory would be simple.

Of course, nothing in life is that simple...
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psmith2.0
Mr. Farmiga
 
Join Date: May 2004
Location: Tennessee
 
2022-04-18, 12:08

What's it like renting places to strangers? I know there are background checks and all that sort of stuff, but they're not going to catch/filter out everything. Have you experienced any horror stories?

I'm asking because I saw a story on the news yesterday afternoon from Pennsylvania where about 200(!) people gathered for a party at an Airbnb house and fight/gunfire broke out (yeah, I know...shocking; any time more than 6-10 people gather, the likelihood of idiocy and jerkwittery increases exponentially...proven fact ).

How do you make sure you're not renting to shitheads, thugs, the terminally immature or the 24/7 "party" types, who'll wreck things (and properly cover/pay for any damage)? People can have solid credit and pass various background checks, but still be complete bastards and wing nuts.
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kieran
Tweeting @kierankelly
 
Join Date: Jan 2005
 
2022-04-18, 20:45

I read that same story and it absolutely terrifies me, but there's not much you can really do as an AirBnB host. We have our first actual renter coming in at the end of May for Memorial Day weekend. AirBnB doesn't really give many details before accepting the reservation and actively pushes you to not discriminate for any reason.

AirBnB does an identity verification, but as far as I'm aware, they dont' do a background check or anything like that. There is a $1 million insurance policy that you're covered by AirBnB for if you do everything through the site, so that's a nice backup to have.

There is a "no party" policy on AirbnB itself, but we all know that's not really enforceable in the grand scheme of things.

It's basically just a big trust game that these people are spending a lot of money to be at these places and the trust is there to not mess them up and not have to pay for any damages (Our summer weeks cost these people over $6k for the week, which we net approximate $4500-4800 after taxes and fees)

We've rented out most weeks so hopefully ti all works out because we're counting on this as a passive income stream for a long time.

That income stream is also what helped us to put in an offer on another house today, so I'm definitely excited about the whole thing.
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Ryan
Veteran Member
 
Join Date: May 2004
Location: Promise Land of Trustafarians
 
2022-04-18, 21:05

Quote:
Originally Posted by psmith2.0 View Post
Sounds about right. I don't think it takes all that much to be a "home inspector". At least where I live, and some of the stories I've heard from friends and co-workers over the years.

Depending on their angle, they seem to either find everything wrong...or nothing. As in most things, the truth/reality resides comfortably in the middle, rarely - if ever - those wild-ass extremes.
My agent's been good about walking me through what matters and what doesn't in an inspection.
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psmith2.0
Mr. Farmiga
 
Join Date: May 2004
Location: Tennessee
 
2022-04-18, 22:17

That’s good. Like every other job/profession, the entire range exists. I’d just hate knowing I ever got tangled up with one of the goofy ones.

Kieran, that all sounds awesome. I know most renters/guests are fine. But you always hear those crazy tales. I didn’t know about the $1M thing. That’s good to know. That should cover most anything.
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Bryson
Rocket Surgeon
 
Join Date: Feb 2005
Location: Whitby
 
2022-04-19, 08:47

Quote:
Originally Posted by kieran View Post
That income stream is also what helped us to put in an offer on another house today, so I'm definitely excited about the whole thing.
I'm not trying to be "that guy" here, and I'm sure you have no intention of causing harm here Kieran, but: this trend, whereby you buy a property, AirBnB it, and then use the income to buy another one and so on is at least partially responsible for why the housing market is so insane, especially for first-time buyers who just need somewhere to live. It lowers housing stock, and drives up the price of remaining stock. I'm hopeful that it will become unsustainable. I think AirBnB prices have way exceeded "real" hotel prices now and the demand will drop. Again, I don't think you are personally a bad person, but I think the practice on aggregate, is a very bad thing for society.
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PB PM
Sneaky Punk
 
Join Date: Oct 2005
Location: Vancouver, BC
Send a message via Skype™ to PB PM 
2022-04-19, 09:15

^ This. A recent study showed that in a few provinces in Canada 41% of residential properties are owned by people who own at least two residential properties! No wonder it’s crazy, it’s rich people battling it out for investment properties, what hope does anyone else have? One of our clients is a house flipper, he usually has 5-6 places on the go, not including his own home.
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kscherer
The Ban Hammer
 
Join Date: Aug 2004
Location: Boyzeee
 
2022-04-19, 10:53

Quote:
Originally Posted by PB PM View Post
One of our clients is a house flipper, he usually has 5-6 places on the go, not including his own home.
That's called "having a job".

Buying and renovating homes for profit is a real thing, and has been for centuries.
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Matsu
Veteran Member
 
Join Date: May 2004
 
2022-04-19, 12:01

Ok, I have some random thoughts, and not always good or worth sharing, but here goes.

As sharing economy platforms go, you could argue that Airbnb does a much better job of letting its hosts benefit from their participation than something like Uber does with its drivers. But, you could also argue that of course it does, since it has to respect the property asset, and property rights have always more successfully granted upon the holder greater leverage than individual rights of a person have. Airbnb isn't altruistic, it simply fits a well established pattern of legal leverage accruing to the property owner.

I'm not marking this is as good or bad, just thinking out loud, and I'm not sure what I think about it yet...

I don't want to vilify land-owners either, especially not the average folks with a rental property as an investment - these are a far cry from land-"lords", when you unpack the origin of the term. The country was founded on land grabs, and you had to grab a lot of it to get "lordly". What is now a quaint colloquialism had very different dimensions, even not so long ago.

Look at the last 100 years in the US. Right around WWI the US'n'A had just about a 100 million people in it. Add birth rate and immigration, and in a 100 years the population has more than tripled, but it's also shifted a lot. Around 1920 was the last year that more people lived in the country than did in a city. Not everything is more expensive, though you tend to have to put increasing distance between yourself and the nearest strip plaza to get that low-low price.

By the end of WW2, urbanization was accelerating, and by the 1960s birth rates were in decline, so immigration was both picking up the slack of lower overall domestic baby-making and changing the complexion of cities.

All this has made urban property comparatively much more expensive, rent too.

I'd be interested to see if there's a concentration of rental ownership by conglomerate forces, or if the distribution of rental ownership has been relatively stable over time - that is a similar proportion of owners with large property portfolios vs single families with an investment property or two. It may be overall healthier (economically and socially) in the marketplace to have more of the later and less of the former.

Last edited by Matsu : 2022-04-19 at 12:43.
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Bryson
Rocket Surgeon
 
Join Date: Feb 2005
Location: Whitby
 
2022-04-19, 12:46

Quote:
Originally Posted by kscherer View Post
That's called "having a job".

Buying and renovating homes for profit is a real thing, and has been for centuries.
Yeah, I'm not too worried about flippers. Those houses are only off the market temporarily and are "adding value" to the market. But the second properties for AirBnB are off the market long-term, and (again, on aggregate) that's the problem. (Well, one of the problems. There's also the "empty house" issue, which is a huge problem in the Vancouver area.). I'm also mostly fine with those who buy and rent a second property on a long-term basis. Again, that's housing being used as housing. The issue is that houses are being used as hotels.

To be clear, I'm not saying that the individual investors that engage in this activity are "wrong" or responsible. What I am saying is that the practice is harmful, and government should strongly discourage it using the usual means at their disposal. For example, "real" hotels are subject to all sorts of additional laws and regulations that should also apply to AirBnB properties. I suspect if they did that, most AirBNBs would be uneconomical to run.
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PB PM
Sneaky Punk
 
Join Date: Oct 2005
Location: Vancouver, BC
Send a message via Skype™ to PB PM 
2022-04-19, 14:51

Quote:
Originally Posted by kscherer View Post
That's called "having a job".

Buying and renovating homes for profit is a real thing, and has been for centuries.
I don’t have an issue with flipping. I’m just pointing out that the numbers look bad because of things like that, at least in part.
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kscherer
The Ban Hammer
 
Join Date: Aug 2004
Location: Boyzeee
 
2022-04-19, 15:09

Here's a solution: Eliminate property taxes on primary residences. Tax the shit out of property that is not your primary residence*.

* You are allowed exactly one (1) primary residence, and there is no loophole.

- AppleNova is the best Mac-users forum on the internet. We are smart, educated, capable, and helpful. We are also loaded with smart-alecks! :)
- Blessed are the peacemakers, for they shall be called sons of God. (Mat 5:9)
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PB PM
Sneaky Punk
 
Join Date: Oct 2005
Location: Vancouver, BC
Send a message via Skype™ to PB PM 
2022-04-19, 18:07

Good luck with that.
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Matsu
Veteran Member
 
Join Date: May 2004
 
2022-04-19, 19:05

Everyone wants a market correction until they get one. Then no one will like it, because the little guys still won’t be any better off. The last people in will get upside down on their mortgages first. Prices won’t drop fast enough to make up for higher interest rates and tighter lending rules. The only people who benefit will be those already wealthy enough to use their leverage to grow their positions. If there’s job loss as a result of shifting markets, the poorest will feel it first too, so still harder to afford a home regardless of supply.
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kieran
Tweeting @kierankelly
 
Join Date: Jan 2005
 
2022-04-19, 21:21

Quote:
Originally Posted by Bryson View Post
I'm not trying to be "that guy" here, and I'm sure you have no intention of causing harm here Kieran, but: this trend, whereby you buy a property, AirBnB it, and then use the income to buy another one and so on is at least partially responsible for why the housing market is so insane, especially for first-time buyers who just need somewhere to live. It lowers housing stock, and drives up the price of remaining stock. I'm hopeful that it will become unsustainable. I think AirBnB prices have way exceeded "real" hotel prices now and the demand will drop. Again, I don't think you are personally a bad person, but I think the practice on aggregate, is a very bad thing for society.
Fair enough. I've had the same thought multiple times in my life and it's definitely made things more difficult for me to get to this position in my life. I feel a little different towards this particular instance because we did buy in an area in which it's a vacation destination and there is much more housing stock than the local population. This is strictly a vacation rental and wouldn't necessarily be taking housing stock out of place of the local population.

Your point is noted though.

Quote:
Originally Posted by kscherer View Post
Here's a solution: Eliminate property taxes on primary residences. Tax the shit out of property that is not your primary residence*.

* You are allowed exactly one (1) primary residence, and there is no loophole.
I'd be more than supportive of this. I think anything that helps the greater population by paying more taxes for the people that can afford it is a wise policy.

Related to his, the offer we put in on a primary residence was accepted and we have an inspection on Thursday. This house is in a location in which we weren't really looking at, but the house seems like it will be a fun project for us to take on. It was built in 1923, has 4 bedrooms, 1 bathroom, and definitely needs updating. We're going to take one of the bedrooms and add another bathroom, create another bedroom/office in the attic, and rip out and replace the kitchen. Hoping that it either turns into a house we rent to long term renters since the rental market in this highly rated neighborhood is slim to none or we flip it and buy something else with whatever profit we may make.
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psmith2.0
Mr. Farmiga
 
Join Date: May 2004
Location: Tennessee
 
2022-04-20, 00:38

Sounds fun. I’d love to renovate a place. I did, back in 2005, on a small backyard “granny suite” that I loved into…laminate flooring, tile kitchen and bath, new toilet and sink, new paint and trim, some drywall work, etc.

I had a lot of help/guidance, but I think of all I’ve leaned the past 16-17 years and how I’d go about some things now. I often think of that little place and would love to live there again, after doing the kitchen (the only room that didn’t get truly touched, beyond paint and tile floor. Id like to do a kitchen remodel at some point, even if it’s just grunt demo work and installing cabinets.
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Yontsey
*AD SPACE FOR SALE*
 
Join Date: Apr 2005
Location: Cleveland-ish, OH
 
2022-04-26, 18:19

We just put our deposit down with the builder to build our custom designed dream home yesterday. Beyond excited. Going to be a process but very excited to get everything going. Got the loan documents today so we should be starting very soon.

If that wasn't enough, we got a new English Bulldog puppy a week and a half ago. To say my sanity is razor thin is an understatement.

Die young and save yourself....
@yontsey
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