Quote:
Originally Posted by Happydaz
Today there are some comments from Dave Ramsey on short term rentals. He thinks they are a bad idea as STR customers may cause damage to your investment as they are on vacation and only stay a few days. He says you are in effect operating a business out of your house. They annoy the neighbors and create problems that cause more and more communities to restrict these kind of rentals. In the future these STR may be curtailed. He recommended that the caller not buy a house as a short term rental.
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I'm not a Dave Ramsey fan, but he's correct on these points ... at least for the type of people who listen to his show.
STR's can be a pain in the butt to manage and the business model is self-limiting.
The biggest problem for STR "investors", is many of them are taking mortgages to buy rental property in an extremely volatile market (hospitality/vacation). They need to rent to pay the mortgage and the dynamics of that rental market are dependent on a myriad of uncontrollable factors.
Those who are buying with cash, are usually in a different financial situation (or at least were, before the recent interest rate hikes).
If you can only get 1% return on your money in the bank, why not put it into real estate that generates income + appreciation? With CD Rates now edging over 5%, the real estate market doesn't seem like such a great investment strategy this year.