Tony lives in Chicago, where the returns on rental properties are so-so. He’s thinking about investing in Indianapolis, where he consistently finds rental properties with cap rates that are greater than 8 percent. Should he invest locally, so that he can get a primary residence mortgage and keep a closer eye on the space? Or should he invest out-of-state, where the returns are stronger?
Dan lives in California. He’s curious: where should he look for rental properties? And when should he buy? Dan holds $150,000 in a savings account and carries a mortgage and car loan with less-than-2-percent interest rates. Should he continue saving, or is he ready to take the plunge?
Isaiah and his friends want to buy a plot of land and build two yurts, complete with internal bathrooms and kitchenettes. They estimate this will cost $120,000 and they can Airbnb the yurts for $100 per night. They’d like this to be a hybrid between an investment and a personal vacation spot. Should they do it?
Evelyn lives in Brooklyn, where she’s an Airbnb host within her primary residence. She’d like to sell her home and she expects to clear $1 million in equity. What should she do with this windfall? She holds $100,000 in a SEP-IRA and $10,000 in credit card debt, and she can’t qualify for another mortgage.
I tackle these questions on today’s episode. Enjoy!
P.S. Need software to manage your rental properties? Collect applications, screen tenants, and collect rent online with Cozy.co/Paula.
P.P.S. – Airbnb makes it easy to put your extra space to work for you. Become a host today, and you can start boosting your income!
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