All Forum Posts by: Jon Martin

Where did you hear all of this? 

Yes, cleaning fees aren't cheap, so if you are only staying 1-2 nights it might not pencil out. Hotels can be cheaper, but you get what you pay for. You may not always save money with an AirBNB but you tend to get far more for your money. 

However if you are pooling with other people, it can be far cheaper than everyone getting separate rooms at a hotel, and you all have a common area to hang out without sitting on beds. Plus the ability to cook your own meals, outdoor space, being in unique neighborhoods, etc etc . . ... 

Not to be pedantic, but 1000 steps isn't very far ;) You're probably halfway there before you leave the house every morning. 

Otherwise great job on the deal!

I would run your numbers again to be sure you are actually profitable. $34K net for a $350K property is on the lower side for an STR and sounds borderline break even once you figure that will have to pay for water, power, cable, lawn care etc. Unless you see this as a strong appreciation market I would look elsewhere.

At those prices, there will certainly be some pain as we go into tougher times. The most expensive per night properties will get hit the hardest, which are likely to be the ones carrying the biggest notes. Whereas those who are at the less expensive end of the spectrum could even do better. i remember seeing on the news how BBB sold a lot of single cup coffee makers during the great recession because people didn't want to waste a whole pot of coffee. People still spend and indulge in "luxuries", they just do it more wisely when they have to. As for me, I am sticking with properties at the lower end of the spectrum ($150-200ish) for the next 12-18 months so I can see how the market responds to the tougher times.

@Rodney Sums I see what you are getting at. The hotel industry is notorious for being penny pinchers about everything, so I'm sure they've done the exact market research you are talking about. They know that the tiny bar will last about a day, so they aren't going to spend the extra 20-30 cents or whatever for a larger one. When you extrapolate that to scale, it is real money, especially for budget hotels. 

Another example of this is how many of what you think are the "nice" hotels with the big names have really nice lobbies and bar/restaurant areas, and then you get up to the room and they are complete garbage. Or even when they are "updated", you can tell that the doors have been painted over several times, the hardware is old, etc

 Good point. Also imagine they would assume that whatever is in the dispenser is bargain basement bulk stuff 

 I’m not sure if this is a fair view of the academic field of economics. Concepts like Supply & Demand can be observed in markets all over the world, large and small, going back thousands of years. Along with the impacts that forced manipulation of pricing can have on both supply, or what happens when you print more money. I’d say that in the social science world, Supply & Demand is arguably the equivalent of the Laws of thermodynamics in the natural world in regards to where it sits on the hierarchy and how universal it is. 

The Fed is primarily concerned with looking out for its own interest, ie the banks that fund it, not staying true to foundational economic principals. 

Interesting comment about shampoo and conditioner but it makes sense. Maybe I'll start with a set from Costco and see how long it lasts. Thanks for your input! 

If we are talking about owner occupied home owners, which that statement implies, people forget that you can't just sell your home like it's shares on your Schwab account. Even if you could, you would still need to figure out where you will be moving to next, and then move, and we all know how stressful that can be. Beyond that, when you consider where rent, current pricing, and interest rates are at, most homeowners are better off staying exactly where they are. 

If we are talking about non-owner occupied properties, there will probably be some people cashing in and I think we are starting to see that already. My guess is most of that will be in 2nd home markets and luxury properties. I'm seeing a lot more $1-2M high SF properties lately, but still very few in the affordable(lol) $750-950K range (coastal CA). 

Confirmation bias achieved (haha)- thank you all!