All Forum Posts by: Pedro Andrade

Last week, I spoke with a client who bought his first investment property back in 2020 with plans to run it as an Airbnb. At the time, everything looked great on paper — low interest rate, hot short-term rental market, and strong demand.

Fast forward to 2024:

• Insurance premiums more than doubled

• Property taxes went up

• Bookings dropped significantly

• And the cleaning & turnover costs started to erode the already-tight margins

After running the updated numbers, he realized what many are starting to face — the short-term rental model wasn’t giving him the freedom or returns he hoped for. It was barely breaking even — and more importantly, he felt stuck.

So, he made the hard decision: Sell the property and re-deploy the equity into a more passive and predictable strategy.

Here’s the lesson: Even good investments don’t stay good forever. Markets shift, expenses rise, and if you’re not running your numbers regularly, you might be holding onto something for emotional reasons — not financial ones.

Curious to hear from others:
Have any of you pivoted from short-term rentals back to long-term holds or sold off a property because the math stopped working?
What was the trigger point for your decision?

Years ago, Warren Buffett made headlines saying buying a primary residence isn’t a good investment — and honestly, he had a point.

He wasn’t talking about rental properties or investment real estate. He was referring to your personal home. Something that feels like an asset, but for many, becomes a financial anchor — especially when they overstretch or treat it like a wealth-building vehicle.

Here’s why Buffett’s take resonates:

• A primary home generates no income.

• You pay interest, taxes, insurance, and maintenance for years.

• Liquidity? Limited.

• Appreciation? Not always guaranteed — and often barely keeps up with inflation after expenses.

But here’s the irony: I speak with property owners all the time who hesitate to rent out a home they already own, even when the numbers make sense. They hesitate to turn it into a real investment.

Instead of viewing it through the lens of cash flow, leverage, depreciation, and appreciation — the four ROI's of real estate — they see it as a burden or emotional asset.

Buffett’s quote wasn’t anti-real estate. He’s a big believer in smart investing. The takeaway is this:

👉 If your home isn’t putting money in your pocket, then it’s not an investment — it’s a liability.

I’d love to hear your take:
Do you agree with Buffett, or is your primary home part of your wealth-building strategy?

Nir — you’re definitely not alone in feeling discouraged early in your investing journey. It’s great that you’re looking at the numbers critically, and I think there’s real value in zooming out to consider the four ways real estate pays you over time, especially when the cash flow looks thin or volatile upfront:

1. Cash Flow

You mentioned $200/month before expenses — not ideal, especially with turnover. But this is only one component of ROI. Long-term cash flow tends to stabilize with better screening systems and tenant retention strategies.

2. Loan Paydown

Every month, your tenant is helping you pay down principal on the mortgage, slowly increasing your equity. It’s not “cash in hand,” but it’s wealth accumulation over time.

3. Depreciation / Tax Benefits

Real estate offers powerful tax advantages. Depreciation can often offset your rental income, reducing (or even eliminating) your tax burden on that income. For some investors, the tax savings alone can make a "low cash flow" property worthwhile.

4. Appreciation

One year is a short window. Real estate appreciates unevenly — sometimes it takes patience. If your area is projected for long-term growth, holding could lead to gains later.

That said, the stress and turnover you’ve experienced matter. If you can re-tenant with stronger screening practices or professional management, the property may still align with your original long-term goals.

If your investment feels like a poor fit for your risk tolerance or lifestyle, redeploying might make sense — but I’d base that decision on strategy, not short-term frustration.

Have you looked at how this property performs across all four ROI levers? That perspective might help clarify whether this is a hold or pivot situation.

 awesome Jay. Well, maybe one day I join you to one of these events. I used to do that but I have not find great success! 

Good afternoon Shane — you’re asking all the right questions. I can’t speak for Macon specifically, but in Broward County (South Florida), we manage a solid portfolio of Section 8 rentals and I’ll share what we’ve seen in hopes it helps.

Pros we’ve experienced:

• Consistent rent payments from the housing authority, which is a huge benefit—especially in uncertain economic times.

• Strong demand for rentals in the voucher program, reducing vacancy risk.

• Longer tenant retention when homes are well-kept and tenants are treated respectfully.

Challenges:

• Government processes can be slow: Initial inspections and approval timelines can delay move-ins.

• Inspection standards are stricter, so properties may need upfront investment to pass.

• Like any rental, tenant quality varies. We’ve learned not to rely on the voucher approval alone—screening still matters.

What works well here:

• We’ve had the most success with 3-bedroom single-family homes around 1,200–1,500 sqft.

• Having great communication with the housing authority and a consistent process for maintenance has helped tremendously.

Section 8 has been a strong strategy for many of our clients here in Broward County, but like any investment, it comes down to systems, expectations, and screening.

Curious—are you planning to self-manage or team up with a local manager who knows how to navigate the Section 8 process?

Jay, this is a great pickup — love seeing how relationships like your attorney connection can open doors to real opportunities that never hit the market. That kind of flexibility from the seller, paired with motivated timing, is rare and powerful when you have capital lined up and can execute fast.

I completely agree — off-market deals have always outperformed in terms of margins and control. Like you, we spend a small percentage of our time on MLS leads, but the best returns and lowest competition are always off-market.

Quick question — what systems or strategies have worked best for you in consistently sourcing off-market opportunities like this one? Are you leaning more into agent/attorney referrals, direct mail, or something else?

Jack, sorry to hear about the fire—glad no one was hurt and that the damage was contained.

A few thoughts based on similar situations I’ve seen as both an investor and a property manager:

1. Safety – You're already taking the right steps with a general home inspector. I’d also recommend having an electrician assess any exterior wiring that might’ve been affected by the heat (especially near the siding). Sometimes fire-related heat damage can impact electrical systems that aren’t immediately visible. Also check the HVAC intake/vents—smoke residue can travel.

2. Insurance – You're thinking about it the right way. If you're close to the $3K deductible and the total is $5K, it might not be worth filing, especially if it risks a premium hike. But if that number creeps closer to $8K–$10K, then using insurance becomes more sensible. Still, I’d get a few formal bids ASAP to help you decide. And document everything—photos, inspections, communication with your PM, etc.

3. Liability – Unfortunately, if the fire was unintentional and there’s no car insurance, you’re likely covering the cost. You could try small claims court if there’s evidence of negligence (e.g., working on the car improperly), but with Section 8 tenants that may not be worth the time or yield. Double check your landlord policy to see if it covers tenant-caused damage—even accidental.

4. General Advice – This is a good moment to revisit your lease. In our management company, we require tenants to carry renters insurance with liability coverage for exactly these reasons. Section 8 rules vary, but you can often include this in lease addenda and at recertification. Also, if you self-manage in the future or switch managers, I’d suggest having a preventive maintenance and risk checklist to minimize surprises. Fires from vehicles aren’t common, but having a plan for post-incident steps (like you're doing) really helps mitigate long-term impact.

You’re handling this well. Let us know what the inspector finds—I’m curious how far the damage actually went.

Scott, I really appreciate the level-headed and nuanced take here. Whether someone agrees or disagrees with the administration’s politics, it’s critical for investors to evaluate how policy decisions (or even just the anticipation of them) can shift fundamentals like demand, supply, and operating costs.

I’ve already started having conversations with both investors and accidental landlords in Florida who are recalibrating their expectations—not just about rent growth, but about timelines, holding strategies, and exit options. Many of them were surprised to realize how interconnected immigration, labor costs, and Fed policy are to the success of their real estate investments.

This post reinforces the importance of staying agile and informed. If these pressures continue, we might start to see more investors opting for long-term holds with conservative projections rather than banking on short-term appreciation.

Thanks again for sharing this—curious to see how others are positioning themselves given this outlook.

@Paul Azad 

Great breakdown. The big takeaway here is that the 10-year yield isn't just a reaction to inflation fears, but also GDP expectations and recession risk—which many people misunderstand.

The real question now is: Are we heading into a true recession, or is this just another market overreaction? If tariffs are the trigger for slower global trade, we could see further downside risk to GDP, but wouldn’t that also push the Fed toward rate cuts even faster? And if so, how do we balance the short-term market volatility with long-term opportunity?

The correlation (or lack thereof) between stocks and bonds is another great point—historically, investors see bonds as a ‘flight to safety,’ but recent years have shown that yields can spike even as equities dump. Makes me wonder—are we entering a market cycle where old rules just don’t apply anymore? Curious to hear your take.

Solid take, Clayton. I get where you’re coming from on inflation, but let’s zoom out for a second—if inflation isn’t the main concern, then what’s keeping banks from tightening up even more? You’re right that risk spreads are a huge factor, but if volatility stays high, wouldn’t that keep banks from easing up, even if the 10-year flatlines?

Also, if foreclosures are climbing, doesn’t that create a secondary problem? More distressed inventory should, in theory, put downward pressure on prices, but if lending stays tight, do we just see a liquidity trap where homes sit longer and price drops don’t translate to affordability?

Would love to hear others’ thoughts—are we really looking at a rate relief scenario, or are we underestimating how sticky volatility might be?