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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Episode notes

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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.

Intro

5min

Interest Rates and Real Estate Dynamics

9min

Navigating Job Market Challenges and Generational Shifts

2min

Generational Financial Challenges and Economic Concerns

4min

Navigating Short-Term Rental Investments During Economic Uncertainty

3min

Bill Faeth and Kenny Bedwell delve into the current economic landscape affecting short term rentals, including increasing regulations, market saturation, and rising interest rates. They highlight key strategies for staying ahead of the market and discuss crucial topics such as interest rates, the phasing out of accelerated depreciation, and potential changes to capital gains taxes. The conversation also explores the impact of political influences on the economy, consumer confidence, and investment decisions. The episode underscores the importance of market and property selection to optimize profitability and mitigate risks in an evolving market.

00:00 Introduction: The Challenges Facing Short-Term Rentals

01:26 Meet the Hosts: Bill Faith and Kenny Bedwell

01:52 Current Economic Landscape and Interest Rates

06:31 Impact of Political Climate on Real Estate

08:14 Consumer Confidence and Market Predictions

19:09 The Future of Short-Term Rentals

21:22 Conclusion and Final Thoughts

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