Our housing market has been FLOOOOOOODDDDDDDEDDDD with AirBnBs/STRs coming on the market for October 1st.

Beautiful homes. All inclusive. Furnished. Pets allowed in some.

Some with just a $300 deposit. FOR AN ANNUAL LEASE!

Totally upending our market: in the past these homes were always offered for "Winter Rentals" and folks moving here would grab them while they looked for more permanent housing, or bought a house, or whatever. Now there are far too many being taking out of the STR market and offered annually in direct competition to us.

We are screwed. For awhile. Next year these homes will be trashed and damaged and probably sold. But right now, those who invested in STRs during Covid are trying to recover SOMETHING as the STR market is not just cooling off, in some ways it's dead for a lot of people.

They are more expensive than us, but not by much so that's disconcerting.

And I find I am getting inquiries from the illegals: 6, 7, 8 adults asking to share a house. No pets. Sometimes with kids.

Oh lordy.

In my area of New Jersey, we are flooded with illegals all looking for a place to rent. I speak and read the language and follow many some of the larger town/cities Spanish language FB groups and see many postings for those looking. Here is the problem other than the obvious that I want to point out to ANYONE thinking about renting to illegals - Many will jump at ANY opportunity to have their own place to live be it an apartment, studio, room, or basement conversion. They will have the first month's rent and maybe a deposit, but that is all they have most likely have nothing for months to follow since many are not employed or have jobs that are here today, but gone tomorrow.

I speak from experience since this is happening to one of my non-English speaking illegal tenants NOW. My tenant was here for a year and on the third month could not pay in full, but I needed help requiring manual labor here at my rentals which he did the work for rent in addition to cash he earned at different low-end jobs he worked at. However, over the past several months he had his license revoked (yes, as an illegal he obtained a license) for weekly driving offenses for which he barely was able to keep up paying the fines. He is now behind on paying his fines and for the first time this past month could not pay the rent. I know you all would kick his butt to the street and that is exactly what I want to do, but in reality it is not that easy. Starting tomorrow (Friday) I have him scraping old on one of my rentals in preparation for new paint.

Those 6,7,8 people are going to find places, like it or not. What comes next is obvious to anyone with eyes open.

It's past time to consider what you will do when your area is dealing with this.

yeah ... a $300 deposit to move in is asking for trouble.

We have a loft I was considering renting after the tenant moved to France. Spoke to a polite young lady that I couldn't understand well and she didn't understand everything I was saying. She was from another country and had two waitress jobs. She presented herself as single, no boyfriend, non smoker, no pets. Sounded too good to be true and I decided not to show her. She had gone to my website and saw our 3 bedroom advertised and later asked me to help her find a 3 bedroom...her husband, his friend and she could move in together. Heck no, they were in Colorado and had no jobs here. I can imagine her taking the loft and trying to cram all 3 of them in there.

W,

Stay strong. You have a good properties and good methods.

You might not be able to be as discriminating as in the past.

I have a new lease manager and she keeps complaining about how rude or dumb these applicants are. I keep reminding her THESE are our renters and that's how they act.

We've had to "relax" but not "forget" a few criteria and work out issues, but that's what it takes to get our homes rented.

The talk I gave when I first met you and Hubby was

Adapt or Die".

Keep us posted. I think you will be fine.

BRAD

PS Thanks for the comment about being mortgage free. Debt is like fire - useful when controlled but then the wind blows without your consent and burns down your house!

I worry about those LLs carrying heavy debt.

BRAD

We have for almost 8 years rented "everything included" fully furnished houses to the military. It was quite profitable. We lost our last one to a B&B doing the same.

Even our usual market - tiny homes - are being challenged by the STRs.

".... too many pets."

It's incredible the amount of animals, and the types, people have these days. They are not about to give them up, but want someone to rent to them for rent prices lower than before the scamdemic now.

It would be easy to get to "too many pets: as soon as you start renting to roommates. Get three people who share a house and each one has a pet, and maybe one of them has two pets. They can't qualify on income all by themselves and once they gang up, they have too many animals included in the group.

I have a STR in a resort area. Last year the town required permitting of all STR. Pay 10 cents per sqft for the permit. The permit runs with the land NOT the owner. So it's xferable upon sale. I thought this was a PITA given that I've had the place 20 years with no problems.

I've rented an Airbnb in your area. It had 10+ bedrooms, each with its own bathroom. It's often occurred to me that a house like that would lend itself well to an upscale rooming house situation. I get a lot of people inquiring who would be fine sharing a kitchen, as long as they had their own bathroom! Maybe you could pick one up at a firesale and try it? Not that you really need more units...

I've rented an Airbnb in your area. It had 10+ bedrooms, each with its own bathroom. It's often occurred to me that a house like that would lend itself well to an upscale rooming house situation. I get a lot of people inquiring who would be fine sharing a kitchen, as long as they had their own bathroom! Maybe you could pick one up at a firesale and try it? Not that you really need more units...

Interesting that owners are dropping STR in your area. Vacation areas are perfect for STR.

There might be a few years for the cycle to correct - the investors who spent too much will realize it takes WORK to STR, then realize long term is not as profitable will sell, one by one.

BRAD

I am located in a season resort area - between the largest spring feed lake and the largest man made lake in the state. Before AirBnB, I would be able to snag an off market small home over by the lake during the off season.

Typically these were estate sales. Enter the AirBnB era and those off market homes are not only listed but list at four and five fold of what they were. So I have stopped marketing in those zip codes as the market has changed. It is important for the investor to see what the trend is and be able to change the business model to reflect the new way business occurs.