Where to buy your next short-term rental

Plus, the end of the supply issue?

Grace Townsley
April 22, 2022

It’s about time

When we were first starting out, we used to go to all kinds of events. Not just opens, but industry events, workshops, networking gatherings, all that stuff. But now we’re really picky about how we spend our time. 

It’s all about risk vs. reward. The risk is that we’ll go to an event and end up wasting valuable time we could’ve spent helping a client, connecting with another agent, or being with our family. The reward is that we could score a significant intro that could lead to a lucrative deal.

So before we fill up our calendar, we ask ourselves: Is this worth it? Is there something else I could be doing that would bring me more financial, professional, or personal rewards? If the answer is yes to those questions, then the answer on the RSVP has to be no.

- James and David

Good sign for the housing market

Source: Unsplash

The widespread housing shortage might be starting to ease up. According to Insider, new housing starts are rising at the fastest pace we’ve seen since 2006. This is the second month in a row that we’ve seen an improvement in this critical housing metric. 

The latest data shows that new residential building permits actually beat forecasts and rose to an annual rate of 1.87 million. This metric is a strong forward indicator of how many homes will hit the market in the months to come.

Our take

This building rush shows that builders are bullish on the single-family home market. They clearly believe they can sell all these homes because, despite the rise in interest rates, the demand is absolutely there. But don’t let your buyers think they should sit around and wait for that new construction to be built. If a suitable property comes up, they should be aggressive and buy now! 

Top 10 cities for short-term rentals

Source: The Motley Fool

According to Fortune, the top 10 most promising short-term rental markets for 2023 aren’t the usual metropolitan suspects. To create their emerging opportunities list, Fortune rated 100 of the biggest US cities on eight metrics, including short-term rental demand, potential earnings, and growth of local listings.

Here’s their top 10:

  1. Santa Ana, CA
  2. Hialeah, FL
  3. Fort Wayne, IN
  4. Glendale, AZ
  5. Miami, FL
  6. Tampa, FL
  7. Riverside, CA
  8. Tulsa, OK
  9. Chandler, AZ
  10. Mesa, AZ

Our take 

Before you help your client find a property for short-term rental income, tell them to make sure rentals are legal in that area. Also make sure to find out if the property has an HOA. Once your buyer has found the right property, remind them that they can charge a premium for offering extras. Additional luxuries, like an upgraded kitchen, high-end furniture, and an entertainer’s backyard, will help your clients get top dollar for their rentals. 

Keep an eye on property taxes

Source: Unsplash

While home prices are rising fast, property taxes haven’t been increasing as quickly. The latest tax analysis from ATTOM, a real estate data analytics firm, showed just how much property tax U.S. homeowners had to pay last year. While home prices rose 16% last year, total property taxes nationwide only climbed 1.6%. 

But this won’t stay the same for too much longer. In 2022, as tax assessments slowly catch up to rising home values, homeowners could find themselves with a surprisingly high tax bill.

Our take 

We suggest you always review the closing disclosures with your buyers before they start signing papers. Help them understand which payments will change year-to-year. Make sure they're prepared, both financially and mentally, for any fluctuations. The more clear you're upfront, the less shocked your buyers will be when those surprising bills come in the mail!

Schematics 

The news that just missed the cut

Source: The Real Deal

Foundation Plans

Advice from James and David to win the day

We know realtors are always looking for advice on how to take their careers to the next level. There’s a lot of good (...and not-so-good) advice out there. If you’re looking for simple steps you can take today, we suggest doing these four things:

  1. Optimize your social media. Make sure your accounts are up-to-date, professional, and link to your website or contact page. 
  2. Co-host an open house. Ask your team if they have any opens coming up. Offer to help them host the event. You’ll pick up new leads and gain points with your team. 
  3. Check out other agencies’ open houses. The better you know what’s out there, the better you can serve your own clients. It’s also a great opportunity to connect with other local agents and build those key relationships. 
  4. Warm up your entire database. Call through your old leads, recently closed deals, and new prospects to keep your name in their minds. What should you say? Tell them about what you read in The Blueprint today! It’s valuable information buyers and sellers should know, and a great reason to keep in touch.

Q&A

You ask, James and David answer!

Q: Hello! I’m a sports agent, but I love reading your newsletter because of your advice on working with clients. How much of your day or week is spent prospecting new deals versus managing existing business?

Cejih, The Blueprint reader (Oregon)

A: We’ve always got a pipeline that needs nurturing. That could be a pipeline of upcoming listings or clients that we need to be in front of consistently. We wouldn’t say we aim for a specific ratio. We just make sure we’re constantly on top of everything, however long that takes.

James & David

Get your own real estate question answered in an upcoming Blueprint. Ask us here.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

Source: Rocket Mortgage

Thanks for reading today’s Blueprint. We started this newsletter to help agents across the country access the news and insights we wish we’d had back when we were just starting out. We love getting to share the lessons we’ve learned (some, the hard way) with readers like you. Thanks for being a part of this growing community.

Have a great weekend! 

- James and David

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