It doesn’t have a full year yet under its belt, but Property Portfolio has already left a great impression with our readers. From new tips for financing your next investment property to how local and state regulations for short-term rentals are impacting your property, Inman readers took a great interest in the world of property investing. Will climate change impact where investors are looking to buy? Should property managers allows tenants to smoke weed in states where it’s legal? Learn about the top stories from Inman Property Portfolio readers in 2019.
All text below comes directly from the original stories.
The 6 hottest places for property investment right now
Published July 2
While it is not always possible to predict which place will see a surge in home values like Seattle or San Francisco in the last decade, factors like population growth and economic outlook often show which areas have the biggest potential for real estate growth.
“Affordability concerns have put external pressures on traditionally popular markets, like San Francisco and New York,” Holly Tachovsky, the CEO and co-founder of BuildFax, told Inman. “Instead we’re seeing an uptick in migration to markets in Nevada, Colorado and Arizona.”
Real estate investor accused of billion-dollar Ponzi scheme
Published April 12
In 2016, the Securities and Exchange Commission (SEC) began investigating Robert Shapiro’s company, the Woodbridge Group, for fraud that involved promising investors low risk and high returns from luxury L.A. properties and then putting their money toward their own shell companies instead.
According to federal prosecutors, Woodbridge’s representatives told investors they would give homebuyers property-secured loans while using the money to finance their own projects and paying the old investors out of money generated from new investors. In reality, the Woodbridge Group, which Shapiro, 61, founded in Boca Raton, Florida, would persuade them to finance luxury properties in California and Florida through unsecured loans.
6 economists predict what the 2020 housing market has in store
Published Dec. 10
Historically low mortgage rates, booming home price growth, inadequate inventory levels, and debates about crumbling affordability ruled the 2019 housing market. As the new year draws closer with rumors of a global recession and uncertainty generated by an impending election, one can imagine just how wild of a ride 2020 could be.
According to six economists interviewed by Inman, 2020’s housing market will be strikingly similar to 2019 — low mortgage rates will continue to bolster buyer demand, worsening affordability on the coasts will push buyers towards the South and Midwest, and the battle between millennials and Baby Boomers could intensify as inventory shortages continue.
This ‘Big Short’ investor is betting against mortgage market again
Published Nov. 4
More than a decade ago, David Burt, then an investing consultant at Cornwall Capital, was one of the few investors to bet against the exploding housing market, prior to the 2008 crash. Burt is betting on the mortgage market crashing again, only this time climate change will be at fault.
Burt was an investing consultant at Cornwall Capital in the run up to the financial crisis, one of the firms that successful bet against the housing market. Cornwall Capital was profiled in the book, The Big Short: Inside the Doomsday Machine, and his colleague from the firm was portrayed by Brad Pitt in the film adaptation.
Should you advertise vacation rentals on multiple sites?
Published Aug. 19
Investing in vacation rentals can be a lucrative business, provided you know how, when and why to market your property. With more rentals than ever competing for tourist dollars, it’s essential to maximize positive cash-flow returns when marketing a vacation property.
One relatively straightforward strategy is to advertise your rental property on multiple short-term rental sites. To make it work, you must understand the pros and cons of listing with numerous booking sites and create a strategy that works best for your property.
When will real estate investors start reacting to climate change?
Published Oct. 8
The overlap between climate change and high-demand real estate destinations is abundantly clear from numerous studies. A 2017 report from Climate Central, for example, found that of the 20 coastal cities most susceptible to flooding, 17 are in Florida. Miami took the second place spot on the list (after New York City), and its suburbs rounded out the top five.
A climate change study released in August by flat-fee brokerage Clever Real Estate additionally showed that some of the cities that are “most vulnerable to climate change hazards are also the least prepared for them.” That study looked at hazards beyond flooding, such as extreme temperatures, but still identified Miami and nearby Hialeah as among the communities most at risk.
Should you let tenants and renters smoke marijuana where it’s legal?
Published Nov. 5
The adult use of recreational marijuana is legal in a dozen states, with potentially more on the way in the coming years. It’s creating a new dynamic for many long-time property owners in those states: should tenants or renters be allowed to partake in something legal?
Brandon Scholten, the owner of Keyrenter, a Denver-based property management company, told Inman that they get the question occasionally from clients. “We explain that we’ve yet to have a home where marijuana smoke has caused damage, the smell goes away quickly, and even a heavy marijuana user is only producing a tiny fraction of what a cigarette smoker does,” Scholten said.
Airbnb to debut ‘rapid response team’ after fatal shooting
Published Nov. 7
In the wake of a shooting at an Airbnb listing that left five dead, Airbnb has announced new measures designed to improve safety and trust across its short-term rental platform. They include a rapid response team for fielding complaints from neighbors and human reviews of “high-risk” listings.
CEO Brian Chesky wrote in an email to employees that all Airbnb listings will be verified for accuracy of photos, listing details and quality standards. Every home and host will have been reviewed by Dec. 15, 2020, “with the objective of 100% verification,” he said.
As California rolls out short-term rental regulations, investors look elsewhere
Published Nov. 12
Los Angeles, which thanks to its beaches and good weather is one of the world’s most popular destinations, recently embarked on an experiment that could radically change its tourist industry: It started enforcing new short-term rental regulations.
The move is a major development in the long-running vacation rental saga, but it also highlights the growing complication for the real estate industry in California. Much as it attracts tourists, the Golden State has also attracted investors hoping to cash in on short-term rentals. And at least in some cases, the regulations now appear to be driving those investors away.
How to begin financing investment properties
Published July 15
The simplest and best-understood way to get money for smaller-scale real estate investment is via conventional financing — like the kind most people use to buy their own homes. So, loans that have fixed interest rates and typically last 15 or 30 years.
However, investors using conventional loans face a number of unique conditions. Ann Thompson, a retail sale executive at Bank of America, told Inman that buyers typically have to put at least 20 percent down on investment properties, which is not the case for primary residences. In some cases, lenders require even more. Thompson said multifamily rental properties typically require 25 percent or more, and lenders may ask for down payments closer to 40 percent for large loans.
Interest rates on these types of loans will also tend to be higher than those for primary residences, though Thompson noted that at present “rates are still unbelievably low.”
Are you ready for what the industry holds in 2020? Inman Connect New York is your key to unlocking opportunity in a changing market. At Connect you will gain insight into the future, discover new strategies and network with real estate’s best and brightest to accelerate your business. Create your 2020 success story at Inman Connect New York, January 28-31, 2019.
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