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the MONSTER EATING HOUSING STOCK in the country’s best markets | Episode 87

There’s a MONSTER out there EATING UP HOUSING in today’s hottest housing markets, making it nearly impossible for homeowners and even investors to participate. This isn’t a rant against BIG REAL ESTATE folks, the monster is actually teeny tiny and, some say, DEADLY. I’ll tell you all about it in today’s episode. I’m Carole Ellis. This is Episode 87.

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There’s a monster out there, and it’s not under your bed. In fact, it very well could be living right out in the open next door. According to a new report, certain NEW factors in real estate are driving homeowners and even RENTERS right out of the equation. This method of investing is working SO WELL for certain investors that certain sectors of city and state governments are actually looking for ways to SHUT IT DOWN before things, according to them, get out of hand. I’ll tell you all details on both sides in just a minute, but first I want to take 30 seconds to mention something that is probably on your mind right now as you hear this scary story: OPTIONS.

In this world we live in, things are constantly changing. And even though real estate always has been and always will be the best, most reliable and effective route to lasting financial security and wealth (and that’s not my opinion, folks, that is general, educated consensus), the real estate world is always changing as well. One thing that doesn’t change, however, is the demand from a growing population for somewhere to LIVE, and you can bet that when real estate gets expensive (and it’s getting expensive, more on that in a minute) owners start looking into their own options, specifically renting. That’s why multifamily real estate is such an attractive, hot topic these days. The sector is ready to boom, and there is SO MUCH MONEY looking to get into commercial properties that simply having the ability to put these deals together can be worth WAY MORE than actually doing half a dozen single-family residential deals. If you like the sound of six-figure profits on FLIPPING commercial buildings, then you understand the value of having options. Get all the details at www.rei.today/IMPORTANT in our free training on this topic. It’s IMPORTANT to have options, so start building them out now with this free training at www.rei.today/IMPORTANT.

Now, let’s get back to that monster living next door, because THAT is a pretty important trend too…Here’s what’s going on:

According to a new report just released by the Housing Conservation Coordinators (that’s HCC to their friends, but I’m pretty sure we’re not friends), Airbnb is eating up as much as 10 percent of housing stock in popular destination cities like New York City. The study focused specifically on the Big Apple, noting that average rent increases have doubled in desirable areas of the city and that there are more than 8,000 FEWER available housing units in the area because investors are buying properties and then listing them on Airbnb instead of renting them to tenants. New York is not the only major city in which this trend is becoming “problematic” for renters; a number of West-Coast cities also are dealing with this as are hot destination spots across the country.

So what’s the big deal? Well, for investors, Airbnb is a big deal in a GOOD way. In fact, investors who own more than one housing unit on Airbnb reportedly pulled in more than $317 million in 2015, and that is with occupancy at only about a third since most Airbnb rentals only are occupied 11 days a month, meaning that there is likely a lot less strain on the facility and the maintenance budget. However, the HCC (I’m going to go ahead and call them that) and local city governments say that this is a big problem because Airbnb is making housing unaffordable to actual residents of the city, and that furthermore, more than half of the listings on Airbnb in New York, at least, violate short-term housing laws that strictly limit time of occupancy for short-term rentals.

Folks, here’s the deal: Airbnb represents HUGE opportunity for investors who can get properties in hot markets and rent and maintain them effectively, but you MUST be aware of local legislation and how friendly any given municipal government is likely to be to your activities. You’ve heard me say it before, guys, the government is NOT your friend! But…you do have to work with them, so you might as well make sure that they can’t ultimately SUE YOU FOR YOUR PROFITS or SHUT YOUR BUSINESS DOWN because it doesn’t suit THEIR NEEDS. Get all the details on where this is happening to Airbnb investors in the case files in the REI Today Vault, and start protecting yourself! Not yet a member? you can join right now by texting REITODAY no spaces no periods to 33444. When you do, I’ll provide you with fast, immediate access to the report as well as a lot of other timely, insightful, PRACTICAL information that will help make your investing safer, faster, and more profitable.

And folks, remember, when you join the Vault you join our community, which means you have the opportunity to network with me, my guests, and your fellow listeners across the country. So go ahead right now and text REITODAY no spaces no periods to 33444 or visit us online at www.rei.today/vault.

REI Nation, thanks for listening in and please always remember this:

Your best investment is your own education.

About the Author

Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.

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