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This is happening in places like Toronto as well. I visited there an stayed at an Airbnb near the CN Tower. The condo itself was newer and large swathes of the

This is happening in places like Toronto as well. I visited there an stayed at an Airbnb near the CN Tower. The condo itself was newer and large swathes of the condo were occupied by Airbnbers. It was obvious, people with luggage were coming in and out at all hours of the day. The Uber driver I got also said he was maintaining 2 condos in downtown Toronto for Airbnb. The next time there's a recession, things like this will only worsen it because people will be foreclosing on large numbers of housing properties because they were used for investment.

agumonkey 8y ago
France too. The amount of locked area is quite sad and no legal solution to turn this into a useful asset for homeless and owners.
petermcneeley 8y ago
"things like this will only worsen it because people will be foreclosing on large numbers of housing properties because they were used for investment" Thats only the property was purchased with debt (mortgage). If these investments were not purchased with debt then there will be no foreclosing.
- docker_up 8y ago
  I would wager that most investment properties are bought with debt, ie. leverage. It makes more sense to purchase a property with a fraction of the cost and then use Airbnb to pay for the mortgage. Only extremely naive investors would be spending their cash to buy a property when they could instead get multiple properties using leverage/debt.
  - inscionent 8y ago
    > Only extremely naive investors would be spending their cash to buy a property Smart investors use other people's money and hope for the bailout. Galaxy brain investors use other people's money and write the bailout.
segmondy 8y ago
I'm not sure that it's Airbnb. if properties can appreciated at 10% per year. Then they are a much better investment and safer investment vehicle than most of what is out there. If I truly believe I can buy a house somewhere and get 10% year in and year out. I'm going to buy one. I might keep it vacant since I don't feel like being a landlord or dealing with rent control laws. When it's time to get my money out, I'll sell and move on. While some of us might not believe this, there are enough people who see real estate as such a safe investment. Some of them are from other countries and they're looking for a place to park their money that's not a bank or volatile like the stock market.
- yitianjian 8y ago
  Plus - housing is fairly secured and unlikely to ever go to zero, it's tied to an asset, and you can invest on loaned principal without extreme risk in case of failure.
  - inscionent 8y ago
    Going to zero has zero to do with real estate being a secure investment. Owning an underwater property and running into a situation where the investor can't continue to make the mortgage payments is just as bad as the asset going to zero for most. > you can invest on loaned principal without extreme risk in case of failure Yes, when this happens thousands upon thousands of times you have the 2008 world wide financial crisis.
  - TuringNYC 8y ago
    Assuming you purchased your house with 20% down and 80% mortgage (which is very common), housing only has to go down 20% for you to "go to zero." Further, unlike stocks, buying/selling houses incurs fees (round-trip fees can be anywhere from 5% to 12% depending on your city/state/country), so really, a house going down 15% is like you going to zero.
- sitkack 8y ago
  This is morally reprehensible.
api 8y ago
It's not just AirBnB. It's also that real estate has been backstopped by the Fed and the government. So far it's a can't-lose investment over longer time spans, so if you can afford to stack up properly it's a sure thing way to build wealth. Housing cannot simultaneously be affordable and a good investment. Affordable housing means existing homeowners lose equity.
Svoka 8y ago
In Toronto it's beneficial to buy property as investment. Condo value usually doubles in price over 5 years. https://toronto.listing.ca/condo-price-history.htm https://toronto.listing.ca/condo-price-history.htm Which means rich people end up hoarding property. You don't even have to rent it out. Just wait a little bit and make a bank.

agumonkey 8y ago

France too. The amount of locked area is quite sad and no legal solution to turn this into a useful asset for homeless and owners.

petermcneeley 8y ago

"things like this will only worsen it because people will be foreclosing on large numbers of housing properties because they were used for investment" Thats only the property was purchased with debt (mortgage). If these investments were not purchased with debt then there will be no foreclosing.

docker_up 8y ago
I would wager that most investment properties are bought with debt, ie. leverage. It makes more sense to purchase a property with a fraction of the cost and then use Airbnb to pay for the mortgage. Only extremely naive investors would be spending their cash to buy a property when they could instead get multiple properties using leverage/debt.
- inscionent 8y ago
  > Only extremely naive investors would be spending their cash to buy a property Smart investors use other people's money and hope for the bailout. Galaxy brain investors use other people's money and write the bailout.

segmondy 8y ago

I'm not sure that it's Airbnb. if properties can appreciated at 10% per year. Then they are a much better investment and safer investment vehicle than most of what is out there. If I truly believe I can buy a house somewhere and get 10% year in and year out. I'm going to buy one. I might keep it vacant since I don't feel like being a landlord or dealing with rent control laws. When it's time to get my money out, I'll sell and move on. While some of us might not believe this, there are enough people who see real estate as such a safe investment. Some of them are from other countries and they're looking for a place to park their money that's not a bank or volatile like the stock market.

yitianjian 8y ago
Plus - housing is fairly secured and unlikely to ever go to zero, it's tied to an asset, and you can invest on loaned principal without extreme risk in case of failure.
- inscionent 8y ago
  Going to zero has zero to do with real estate being a secure investment. Owning an underwater property and running into a situation where the investor can't continue to make the mortgage payments is just as bad as the asset going to zero for most. > you can invest on loaned principal without extreme risk in case of failure Yes, when this happens thousands upon thousands of times you have the 2008 world wide financial crisis.
- TuringNYC 8y ago
  Assuming you purchased your house with 20% down and 80% mortgage (which is very common), housing only has to go down 20% for you to "go to zero." Further, unlike stocks, buying/selling houses incurs fees (round-trip fees can be anywhere from 5% to 12% depending on your city/state/country), so really, a house going down 15% is like you going to zero.
sitkack 8y ago
This is morally reprehensible.

api 8y ago

It's not just AirBnB. It's also that real estate has been backstopped by the Fed and the government. So far it's a can't-lose investment over longer time spans, so if you can afford to stack up properly it's a sure thing way to build wealth. Housing cannot simultaneously be affordable and a good investment. Affordable housing means existing homeowners lose equity.

Svoka 8y ago

In Toronto it's beneficial to buy property as investment. Condo value usually doubles in price over 5 years. https://toronto.listing.ca/condo-price-history.htm https://toronto.listing.ca/condo-price-history.htm Which means rich people end up hoarding property. You don't even have to rent it out. Just wait a little bit and make a bank.