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Investing in real estate often seems straightforward: Purchase a house, lease it and receive monthly rent from the tenant.
But reality doesn’t always follow the script, as Jason Roth of Seattle can attest.
Roth rented out his home in Rainier Valley but the tenant stopped paying rent. Roth is now owed $29,000 in unpaid rent plus utilities.
Roth is living in a van with his dog Wally, KIRO 7 News reported.
“It’s frustrating, extremely frustrating. It’s something I can’t fully wrap my head around,” Roth told the station.
The delinquent tenant also has listed the downstairs unit for $434 per night on the short-term rental platform Airbnb.
“At the very least he’s generating $2,000 a month, and it’s more than likely that he’s generating close to $3,000, possibly even $4,000, depending on the month,” Roth said.
“So, not only is he not paying me, but he’s generating an income through the basement Airbnb unit, and meanwhile, I’m having to pay the utilities for that unit.”
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Roth is waiting for an eviction hearing. In King County, it takes about 12 months to go through the eviction process. According to KIRO 7 News, Roth will be looking at $50,000 in losses “before all is said and done.”
The city, which gave the tenant a short-term rental license, said that the license is not valid “because it was obtained using inaccurate information about ownership of the property.” And Airbnb has taken down the listing.
Roth’s situation shows that being a landlord is not just about collecting rent and enjoying passive income. If you don’t want to deal with the hassles of being a landlord, here are two hands-off strategies to tap into real estate.
Real Estate Investment Trusts
You can think of real estate investment trusts (REITs) as giant landlords — they own income-producing real estate and collect rent from tenants.
REITs are required by law to distribute at least 90% of their taxable income to shareholders as dividends. This requirement makes them appealing to investors looking to earn a passive income.
These days, there are plenty of REITs trading on the stock market, so it’s easy to invest in them. You can purchase shares of a REIT much like you would buy stocks of a company.
REITs can center their investment strategies around various kinds of real estate. Some may concentrate their portfolio on residential properties while others might hold assets such as shopping malls or office buildings.
Like any investment, REITs come with risks, so always conduct comprehensive research and due diligence before diving in.
Crowdfunding Platforms
Crowdfunding is the practice of funding a project by raising small amounts of money from a large number of people. It can be an excellent match for real estate investing.
Real estate crowdfunding platforms provide opportunities for people to invest in a wide array of properties across different geographical locations and property types. They typically have lower minimum investment requirements compared to traditional real estate investments. This means people can gain access to properties and portfolios that are typically off limits to retail investors.
Other than making the sector more accessible to the general public, some platforms also allow investors to select specific properties and projects to invest in.
For instance, if you are interested in single-family rentals, there are options to invest in rental properties with as little as $100 while staying completely hands-off.
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This article ‘Extremely Frustrating’: Homeowner Lives In Van While Deadbeat Tenant Lists Unit On Airbnb — Here Are 2 Hassle-Free Ways To Invest In Real Estate originally appeared on Benzinga.com
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Additionally, Airbnb is looking to leverage the power of OpenAI’s GPT-4 large language model to enhance its customer service department.
Airbnb Inc (NASDAQ: ABNB), the pioneer of short-term home-rental platforms, announced its Q2 2023 earnings, revealing a notable booking shortfall in terms of Nights and Experiences.
In its Q2 2023 earnings report, Airbnb disclosed that it had recorded approximately 115.1 million nights and experiences booked during the quarter. While this marked an impressive 11% increase compared to the same period last year, it fell short of the general market consensus of 117.6 million, as projected by StreetAccount.
This gap of 2.5 million bookings, while seemingly modest in numerical terms, has triggered a significant 6% decline in Airbnb’s share value during extended trading on Thursday. In a letter addressed to shareholders, Airbnb highlighted the challenging comparison it faced in this period. The company acknowledged that while the year-over-year Nights and Experiences booked growth was at 10% in April, it improved to 15% by June, showcasing a positive trend.
Notably, North America exhibited an encouraging acceleration in year-over-year nights throughout the quarter, and the European, Middle Eastern, and African (EMEA) regions experienced a recovery in June, rebounding from a tough comparison in May due to holiday-related challenges.
Despite the booking figure falling short of expectations, there were other positive indicators in Airbnb’s report. The company revealed that its net income reached a substantial $650 million for the quarter. This represents a significant increase compared to the same period in the previous year when the net income stood at about $379 million.
The standout metric, however, was the reported Gross Booking Value (GBV), which stood at an impressive $19.1 billion for the quarter. This figure reflects a solid 12% growth from the second quarter of the previous year.
Airbnb Shares Top Growth Despite Booking Shortfall
In its recent guidance statement, the company projected third-quarter revenue ranging from $3.3 billion to $3.4 billion, representing a substantial growth rate of 14% to 18%. This projection has surpassed analysts’ expectations of $3.22 billion, revealing Airbnb’s confidence in its ability to continue navigating the challenges of the global travel landscape.
Meanwhile, Airbnb CEO Brian Chesky envisions an array of untapped service opportunities that could further boost the company’s revenue. During an insightful conference call with analysts, Chesky highlighted his vision for expanding Airbnb’s offerings beyond its core business, potentially revolutionizing the way guests experience their stays.
One of the key opportunities Chesky highlighted is the possibility of introducing an advertising platform. This move could not only open up a new revenue stream for Airbnb but also provide hosts with a means to promote their listings more effectively.
Additionally, Airbnb is looking to leverage the power of OpenAI’s GPT-4 large language model to enhance its customer service department. Chesky expressed his interest in using this advanced technology to make customer support more efficient and effective.
During the quarter under review, Airbnb introduced “Rooms”, a new offering designed to highlight the appeal of affordable private bedrooms for rent. With an average nightly rate of $67, Rooms could become a popular choice among guests looking for a more intimate and affordable lodging experience.
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Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
Airbnb shares slid as much as 6% in extended trading Thursday after the short-term home-rental company reported a smaller sum of nights and experiences booked in the second quarter than analysts had projected.
Here’s how the company did:
- Earnings: 98 cents per share, vs. 78 cents per share as expected by analysts, according to Refinitiv
- Revenue: $2.48 billion, vs. $2.42 billion as expected by analysts, according to Refinitiv
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Airbnb’s revenue grew 18% year over year in the quarter, according to a statement. Net income reached $650 million, compared with about $379 million, or 56 cents per share, in the year-ago quarter.
The company reported $19.1 billion in gross booking value for the quarter. That was up 12% from the second quarter of last year and above the $18.99 billion consensus among analysts surveyed by StreetAccount.
Airbnb said it had 115.1 million nights and experiences booked during the quarter, up almost 11%, but less than the 117.6 million StreetAccount consensus. Nights and experiences booked increased 19% in the first quarter.
In a letter to shareholders, Airbnb said the nights and experiences booked number was up against a tough comparison.
“We saw an improvement in year-over-year Nights and Experiences Booked growth during the quarter from 10% in April to 15% in June,” the company said. “In particular, we were encouraged by the acceleration in year-over-year nights in North America throughout the quarter, and the recovery in EMEA in June following challenging holiday comparisons in May.”
Gross booking value per night, at $166.01, was up 1% year over year.
With respect to guidance, Airbnb called for $3.3 billion to $3.4 billion in third-quarter revenue, or 14% to 18% growth. Analysts polled by Refinitiv had been looking for $3.22 billion. Management called for a “modest” sequential acceleration in nights and experiences booked.
Airbnb still sees plenty of service opportunities that could add to revenue growth, CEO Brian Chesky told analysts on a conference call. He said there are plenty of services people can buy when they stay in hotels and resorts that Airbnb has yet to make available to its guests.
He said an advertising platform is “obviously” one thing Airbnb could add and that the company could also start matching available hosts with people with homes who lack the time to host.
Airbnb has said it wants to refine its service using OpenAI’s GPT-4 large language model, a form of artificial-intelligence software that can compose realistic text or summarize information in response to human input. On Thursday call Chesky said he would like to use this technology to make the company’s customer-service department more effective. It’s possible that some future support requests won’t require help from agents, he said.
During the quarter Airbnb introduced Rooms in an effort to play up the appeal of affordable private bedrooms to rent out, at $67 per night on average.
Notwithstanding the after-hours move, Airbnb shares have risen about 64% so far this year, outperforming the S&P 500 stock index, which is up 17% over the same period.
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