BiggerPockets Daily

A lot has changed since New York City began strictly enforcing Local Law 18, which effectively banned short-term rentals in the city. But it’s unclear whether improved housing affordability, the goal of the crackdown, is one of those changes.

An Airbnb analysis released in January found no evidence that the new rules had impacted rent prices or rental inventory, even amid new construction completions, and the city hasn’t reported any changes in housing affordability metrics attributable to the law. 

An Airbnb analysis released in January found no evidence that the new rules had impacted rent prices or rental inventory, even amid new construction completions, and the city hasn’t reported any changes in housing affordability metrics attributable to the law. 

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After a decade of relative stability in mortgage rates, the last few years have seen unprecedented volatility and changes in mortgage rates. Interest rates are often a key concern for real estate investors, as mortgages are often the difference between a cash-flowing deal and a dud.  

Since spring 2022, when the Federal Reserve embarked on its latest rate-hiking cycle, interest rates on the most popular loans for real estate investors, DSCR loans (part of the non-QM loans category), have moved at unprecedented rates. Many months of rates moving at most a few basis points a week morphed into dramatic, massive movements—with bigger changes sometimes happening in one day than had occurred in quarters or years prior.

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The BiggerPockets Real Estate Podcast is about to hit a huge milestone—our 1,000th episode! Real estate has changed quite a bit since we started this podcast, so we’re making some changes, too. 

We’re bringing on new guests and new formats while focusing on investing tactics and strategies that work in TODAY’s housing market. Oh, and did we mention fewer ads, too?

We’re still delivering the time-tested knowledge, inspiration, and news you expect from the BiggerPockets Real Estate Podcast so YOU can work towards financial freedom, no matter the market conditions.

Join Dave Meyer, our new host, for our 1,000th episode, and tune in on Mondays, Wednesdays, and Fridays to learn how YOU can reach financial independence through real estate!

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Home prices are rising across the country, but luxury home prices are skyrocketing. According to data from Redfin, luxury home prices rose twice as fast as non-luxury homes in the first quarter of 2024.

But even as prices jumped, sales are still rising, even as prices for non-luxury homes have declined. The median-priced luxury home sold for a record $1.225 million in the first quarter of 2024, up 8.7% year over year. At the same time, sales of luxury homes were up 2%, compared to a decline of 4% in non-luxury homes, which sold at an also-record median of $345,000. 

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You’ve probably heard of the term “lipstick on a pig.” In house-flipping parlance, it means doing basic cosmetic upgrades that camouflage the underlying issues beneath the paint and Sheetrock. 

California house flippers will have to put their makeup away and bring out the heavy machinery because a new law—Assembly Bill 968 (AB-968), effective July 1—mandates a comprehensive disclosure of repairs and renovations from sellers who flip one-to-four-unit properties within 18 months of buying them. The intent is to protect buyers from undisclosed and unseen property conditions. 

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For any real estate investor, understanding current market conditions is crucial. Right now, most investors are finding themselves in an environment where great investment deals are more scarce while competition is high. In practice, this means that as a real estate investor, you will miss out on many deals on properties advertised on the open market. 

To try and mitigate the effects of tough competition, you have two options: One is to try and generate more leads and somehow react faster than your competition. The other—much more feasible—approach is to look for off-market real estate deals instead. 

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Now is a great time to be in the vacation rental business. According to short-term rental data and analytics website AirDNA, travelers are spending big on luxury vacation rentals—the more unique, the better. Recent occupancy rates for well-furnished homes increased from 49.1% to 55.9% between 2019 and 2023, with the overall STR market generating a groundbreaking $64 billion in revenue in 2023. 

While long-term rental landlords might balk at those occupancy rates, it’s worth remembering that vacation rentals often double as medium-term rentals in the off-season, which might not register on vacation rental sites.

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We identified a seemingly great target property in Sherman, Texas, which is about an hour north of Dallas in the high-growth path-of-progress area along Interstate 75 on the way up to Oklahoma. There were two structures in the deal, including 13 apartments—a mix of studios, one-, and two-bedrooms. We did the underwriting, looked at the full financials, and saw that the vacancy rate was low and that all tenants were on a year lease. 

With very little leverage, we would net about $4,000 a month from day one (with room to grow). Solid!

I knew I didn’t want to buy anything I hadn’t seen with my own eyes. (Yes, you can do this sight unseen, but we didn’t want to. This is a million-dollar investment for us and our first big apartment building.) But we had a chicken-and-egg decision next: Do we go to Sherman and see the property first? Or get an inspection done first? Each task would set us back about $2,000. 

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Want to invest in real estate but don’t want the headaches of landlords, financing, renovations, renters, permits, inspectors, direct mail campaigns, and all the other hassles that come with a real estate investing side hustle?

Me too. I’ve owned dozens of single-family rental properties, but today, I only invest in real estate passively.

Passive real estate investments include notes, funds, real estate syndications, and real estate crowdfunding investments. None is inherently better or worse than the others, or even than active real estate investments. They just come with different pros and cons. 

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Turnkey property investing can be a great option when you are just starting out on your real estate investing journey or when you want to cast a wider net with your investments beyond your local area. When done right, turnkey investment can be a part of a long-term real estate portfolio-building strategy.

However, with turnkey investing, the same things that make it an attractive investment formula are also those that can make it challenging. The most significant challenge is dealing with potential issues that can arise from investing in properties long distance. The one question most people ask when they consider turnkey property investing is: “How do I confidently invest from a distance and still make sure my property performs well if I am not there to oversee it directly?”

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