If you follow economic news at all, you’ve taken note of the changing conditions of the American housing economy in the last few years. First, high demand, low supply, and cheap debt fueled an extraordinary (and unhealthy) price surge. In response, the Federal Reserve ratcheted up interest rates to cool an overheated economy in the wake of pandemic-related disruptions

In years prior, economic conditions supported a vast proliferation of real estate investment. Individual investors to multinational corporations scooped up properties across the country for cheap. The returns were fantastic. But in my mind, those days were decidedly over.

When my guest today, Michael Farnsworth, discussed his novel concept of real estate investment, I was all ears. Do many of the real estate investment rules-of-thumb still function in a world of 7%+ mortgage rates and all-time high prices? Is now really the time to start a real estate investment portfolio? Is this even the time to buy a personal residence? And when it comes to short-term rentals, what are the ethical considerations to local economies and community fabric? We cover all this and more in today’s episode.

 

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Topics Discussed with Michael Farnsworth

• The “Triangle of Death:” Michael’s unique form of House Hacking
• 2024 climbing goals: 100th first-try 5.12 and V10
• Stock market vs real estate investing
• Michael’s struggle with remote work and feeling grounded
• The characteristics of a real estate investor
• The viability of real estate investing in a high-interest and low-supply (e.g., expensive) market
• Michael’s ongoing landlord nightmare scenario
• Decision to leave his traditional career to pursue property management full-time
• Intellectual stimulation without a traditional job
• Financial metrics and characteristics of the ideal rental property
• Understanding costs and the importance of detailed accounting
• When and how much to raise rents
• Nontraditional means of mortgage funding
• Considerations on property managers
• Ethical considerations of short-term rentals (Airbnb, etc)
• Michael’s ideal lifestyle
• Suffering from lupus and two kidney transplants
• So much more!