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Or interest rates increasing faster than Airbnb price elasticity. A whole bunch of these Airbnb based re “investors” also don’t account for home prices going d
by kasey_junk 4y ago
Or interest rates increasing faster than Airbnb price elasticity.
A whole bunch of these Airbnb based re “investors” also don’t account for home prices going down in there models so will likely get very underwater very fast.
I’m surprised it hasn’t happened yet and think this spring real estate season will be very enlightening.
- JumpCrisscross 4y ago> don’t account for home prices going down in there models so will likely get very underwater very fast If their cash flows remain positive, that’s just an accounting curiosity. The core bet is on tourism cash flows to Airbnbs in that area exceeding the cost of financing the properties.
- kasey_junk 4y agoI suppose HELOCs can’t get margin called so that’s probably right.
- frumper 4y agoAren't HELOCs traditionally variable rates? If so, they'd also be betting on interest rates not hovering up that cash flow as rates increase.
- JumpCrisscross 4y ago> they'd also be betting on interest rates not hovering up that cash flow as rates increase Correct. Though that isn't exposure to home prices going down per se.