STRonomics
Should You Prepare For A Recession?
Jun 27, 2024
Bill Faeth and Kenny Bedwell dive into the short-term rental market, spotlighting the impact of rising interest rates and market saturation. They discuss how political changes could sway economic stability and consumer confidence. The conversation shifts to generational financial challenges, particularly for millennials facing unemployment and inflation. They share strategies for smart property selection to navigate the uncertainties ahead, underscoring the need for adaptability in today's evolving landscape.
21:44
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Quick takeaways
- Current interest rates over 7% challenge short-term rental investors, emphasizing that property revenue potential should guide purchase decisions more than rates.
- The impending expiration of accelerated depreciation and potential capital gains tax increases may discourage real estate investments and freeze market activity.
Deep dives
Navigating Interest Rates in Short-Term Rentals
Current interest rates present significant challenges for short-term rental investors, with many facing rates over 7% for loans. Despite this pressure, experienced investors maintain that the feasibility of a property should dictate purchasing decisions rather than the interest rate itself. The emphasis should be on whether the property can generate sufficient revenue to justify the investment, regardless of the interest rate. Many investors have short memories of past rates, which were often much higher, indicating that adaptability is essential in this fluctuating market.
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