The issue is that either the renter or the owner must in some way pay insurance and property taxes if they want a "permanent roof" with utilities like electricity, gas and water. Because of this, many people-at least in California, where I currently reside-are living in tents. No taxes, rent, mortgages, or insurance. The number of people who tell me they live in their car that I meet amazes me. Its crazy out here!
It’s getting wild by the day. The prices of homes are quite ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%). Sometimes i wonder if to just invest my spare cash into the stock market and wait for a housing crash or just go ahead to buy a home anyways.
I get such worries too. I'm 50 and retiring early. Already worried of the future and where its headed, especially in terms of financies and how to get by. I'm also considering making my first investment in the stock market, but how can I do so given that the market has been in a mess for the majority of the year?
For you to grow your portfolio in today's market, you really need to be coachable and willing to get off your high horses. I for example, have managed to grow mine from $150k to 300% of my initial deposit within the past 8 months just by copying trades from a broker that has better skillset and technical know-how than me.
Finding financial advisors like Annette Marie Holt who can help you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I agree. And owners have total control over that. I have a small unit so charge $75 and the only thing I ask is that they start the dishwasher or wash the dishes.
not completely. If you use a property management company they often set the cleaning fee and take the whole cleaning fee as well as a % of the nightly rate@@julieperrin3440
@@ShelbyChurch Your Honest thoughts on the bill section, thats Galvin Newsom for you... I agree that the brunt shouldn't be put on short term rentals.. its absurd
Just an informational correction: SB584 is not a law going into effect in California. The first committee hearing for it was cancelled at request of the author of the bill in June 2023. It’s not been voted on by our legislator and has not been signed by the governor. It was pulled.
Was going to comment the same point. I do think it has the support of the legislature but not sure about the Governor. Airbnb lobbyists throw big dollars behind killing these kinds of bills. We’ll see by votes who responds to donor dollars.
Yeah Shelby should not make videos on politics... it's clear she has no idea what she's talking about. Why make this video before talking to someone who can explain to her where the bill is in the legislative process? It's just laziness. California is also unusual in how much the taxes vary year by year because it's very dependent on income tax vs a state like Texas that depends on property taxes (where revenues are less volatile according to the economy).
@@venom5809 Yeah at this point given how quickly people corrected her, keeping this video up as-is is just spreading misinformation. It's also just a bad look to publicize how little she knows about government.
Just watched a more recent video about the changes she’s making to her AirBNB for 2024 to make more profit lol. I think she’s trying to please the young people that she’s pricing out of the market.
She and Air bnb is not pricing anyone out of the market. Its the whole system and how it works. you eliminate airbnb an you will not see any improvement if affordability. @@marieneu264
Even without this tax, it seems like a long-term rental makes a lot of sense now that you have the option to stay with your family! I am so glad to see you aren't planning to sell- I love the house too.
@@crazypasta7749 All people who own AirB&Bs are rich. By world standards these real estate owners are probably in the top 20% of the world's wealthiest people. It is good to tax the richer
New home developers also tend to want to only build high end expensive homes. Where I live, no one builds basic, inexpensive homes anymore. There seems to be no more starter homes being built, and any such homes on the market are bought up as investment property.
more housing at the high end of the market does ultimately decrease prices for the lower end of the market. pulls higher income folks from bidding up cheaper housing.
To purchase land, the carry cost to go through all the government red tape to get to the building stage, usually 1 year +/-. Then 7 - 12 months to build. You have no choice but to build high-end homes. That is the only way it's profitable. Sad fact.
I don't live nor have I ever lived in CA, but I feel the people that decide what affordable means are the people that have never had to wonder if they can afford rent/mortgage before.
Pretty much CA legislature has one renter on it and I don't even know if they're still on it. I believe in a one report the LA Times found that over 50% of them were landlords themselves so for many of them they don't really push for housing, however, it's such an issue now that if they don't come to terms with changing it they're going to not get voted in. I guess are best bet is to get rid of some of the legacy politicians and take power away from CADEM and the NIMBY's they've catered too then maybe we could reduce the regulatory issues. It shouldn't take 3 years to get a new building built with permits here, but in LA that's the average build time and many more take longer than that if they can't pass city council objections.
The fact that you and your neighbor are turning your Airbnbs into long-term rentals show SB 584 is having the desired effect - more long-term housing for the city. But I agree, it doesn't seem like a holistic solution.
Maybe you did the same research on this bill that you did when you bought that house without getting inspections. Just be honest and say you jumped in over your head and don't really know how the real estate investment game works.
And this is why millions have left California, our home is no longer the same. And why our family left. The politics and cost is so awful now. It’s just so so sad.
Looking at it from a neighborhood perspective. I don't live next to a hotel, but essentially airbnb can make your neighbor's house a hotel where people are checking in and out every day or every other day. I could see why cities and towns are trying to put an end to some of this. And this house is taking away from a family being able to buy it and make it their own and becoming part of the neighborhood. I live in a place where it makes zero sense to do airbnb, so thankfully don't have this issue. Does anyone here live next door to an airbnb house? Are the people loud and obnoxious? hahah
Living by an AirBnB sounds like a nightmare neighbor, IMO. I lived in a neighborhood where the house nextdoor was rented out all the time, it was a revolving door of tenants, it felt shady to live near by.
private property is private property ... comunism is telling or forcing you what to do what not to do with your place i pay taxes i complay with all regulation don't do the dirty work for hotels lobby .... because that's about in the end
I live in my Airbnb house and it's quiet AF. Why would it be loud? The neighbors think we have the nicest lawn they've ever seen because we actually take care of the property compared to the family we bought the house from.
Ahh its the end of an era! I've followed this airbnb process since the beginning and I always had hope it was going to work out, so it kind makes me sad it didn't! Either way, I am very happy you decided to keep it. You worked so hard and put so much into making that home so beautiful!! (also, love the shot at 5:51)
That is a huge good thing for areas that have too many short term rentals. There are at least 2 apartment buildings that are over 50% short term rentals
My old boss had 12 single family homes on airbnb in Denver. Lots of times some of those houses sat empty because they didn't book. For this one guy to have TWELVE houses in his possession so he could list them on an app is crazy to me! How many other people are hoarding homes for short term rentals?
@brucesinvestingseries8572 Agreed...anyone can invest. It's a leg up for many small time investors. My renters cannot even remotely afford a rental. For example they have a hard time affording rent that is half what their mortgage payments would be. Saludos Laura
Airbnb hosting is not for everyone, and not for every area it seems. We have done very well, but I can understand why some people would want to quit. Every situation is different. Best to do your due diligence before you invest. I hope you are doing well on UA-cam Shelby! I trust that you are, and Konnichiwa from Japan!
The other day I checked out your AirBnB to see what a typical night would cost and I was shook by the additional expenses 😳Affordable housing is a tough subject, it's also quite a problem over here. As with many problems like this, there is not a single, simple solution.
@@hearmenow909 Exactly! Not to mention when people start to sell their homes guess who's going to buy them up? It's not going to be the average Joe's who can't even afford them right now because of high interest rates; It's going to be the big investment management companies with cash gobbling up the housing market. It's not looking good for the foreseeable generations. They will be doomed to renting. It's much better to let small investors own a handful of properties. People don't realize that ultimately it's better to keep a portion of the housing market into small hands rather than large monster corporations.
I know you were discussing some serious stuff but wanted to say I liked how integrated the sponsor was. The floating 3D graphics were noticeable but didn’t interrupt the topic which allowed me to continue paying attention and didn’t lose focus
Nice! Single Family residences have absolutely been overtaken by corporate interests & AirBnB has been a massive drain on the available housing market. When most young people are expecting to never be able to own a home in their lives, we'll take any wins we can get.
I always felt like rental prices became unreasonable once you start pushing past $3k. Even for a really nice home that you can fit an entire family, I'm skeptical of the redfin/zillow estimate of $6k+. It just doesn't make financial sense to me, especially for someone signing a long term contract. It would also worry me to some degree as a landlord that my tenant(s) are able to make that rent every month.
Impossible . Passing 3k is too much. Because in top you have to add elec, gaz, water, tax, that move you 5000 a months!!! Impossible. So if you try to rent 5000 that means 7000. Who can do that long terms ???? On top when you rent a house that means you have kids…..and you need to buy food, clothes , braces, activity. You need to make 15000 a month. Dream dream
You guys are allowing your perspective limit what others accomplish. Gotta change that mindset! There are plenty of furnished rentals going for 7k plus in that psp area. It's finding the right tenants. Just because someone wants to rent for 1 year doesn't mean they can't afford to buy. It means they are choosing to rent for a different purpose. I had a client spend 6k per month in my market for 3 months because he needed something temporary. (utah which is way cheaper)
People actually will pay $6K for a rental. You know why? Simply look up the monthly mortgage for if you were to buy that same property. In HCOL areas the mortgage is usually double what you’d pay in rent. So if $6K is bad, imagine a $12K mortgage. And of that $12K mortgage only about $1.5K of it would go towards the principle. So you’re only building equity if the house appreciates. It could actually depreciate. So now the $6K rent sounds like an obvious steal of a deal.
A $6k per month rent for this house is possible as a fully furnished rental for one or a few months here and there but at that rate in PS, you can't annualize it to a steady $72k per year in gross rental revenue. She should expect vacancies at least 1/3 of the time. Do a quick zillow search on rentals in PS and you'll find lots of LLs trying to rent out houses for $5k+ per month but the houses are sitting vacant (often times 20+ days with 0 applications). You'll see lots of rent reductions of $1k+ and still no takers).
Sadly homes have gone from a roof over your head to investment properties where the costs get jacked up to where people can't afford the homes. Everyone want to sell their home for a profit, even when it's not worth it. Sadly AirBnB have removed so many homes from the market which makes in nearly impossible to find affordable housing. And since most wages do not increase at the same amount as other expenses, people just can't afford basic housing.
For the most part areas with a high amount of AirBnB homes, even without them being rentals, would still NOT be considered affordable housing. Look at the homes in markets with a steady tourism market, desirable locations, vacation destinations, whatever you want to call them, their homes are STILL expensive. Even before vacation rentals were a thing, homes at the beach for example, have always been more expensive than the same home would cost inland, because again you're paying for LOCATION.
Having owned several rental properties, my experience leads me to this conclusion: I wouldn't do it again at gunpoint. The 2am maintenance calls. The non-paying tenants. The eviction process. Unless you're willing to give most of your profit to a "Property Manager". If you're looking for true passive income, invest in the stock market.
More than housing shortage/taxes/or anything it's the constant Nuisance/security issue created by people checking in and out every other day; especially if you have a family and young kids. It's weird to have unknown faces or groups of people/vehicles coming in and out of the neighborhood!
Chiming in on what you said about TX as a TX homeowner… while Texas has its own issues with housing availability, it was admittedly affordable to buy a home here. However, the property taxes are so high! In my new development, so many people had to SELL AND MOVE after the first year because the property value jumped up so much due to updated appraised value. There is no cap on how much property taxes can increase in a single year in Texas. This is true for all residential homes and that cost is passed onto renters too.
Texas progressively updates property taxes right? CA keeps them same from the time of purchase. That's why for some boujie buyers they actually end up paying less for their property in CA simply because of the favorable property tax rate.
@@kgal1298 any new developments in CA is pretty much guaranteed to have a mello roose tax, which is supplemental tax, of another 1-2% of the purchase price. many people forget about this
I love that you are honest about your experience with Airbnb. I tell my friends all the time understand how Airbnb works. Working as a realtor and understanding law, permits, building codes, etc. It might not benefit you depending on where you are at. You have to also think about how many bookings you could possibly get, location, management, cleaning, etc. All these fees could add up to where you are losing money instead of making money. I tell people break everything down before you just jump in listening to these "Airbnb Gurus" online selling you classes and not making their money off the Airbnb. Instead, they are making their money off the courses people are taking. Again, thanks Shelby for being honest and transparent about your experience.
Doing some quick Googling, I think this bill may have stalled. It looks to have only passed the Senate. It went to the Assembly on 6/1/23, was read then held at the desk. The last activity recorded was 6/29/23 where the first hearing that was set for June 28 was cancelled at the request of the author.
@@ShelbyChurchdid you not do any prior research before making a whole video talking about the bill influencing your decision to quit? It’s clear that the bill is no longer being pursued by legislature
Haven't watched you in about 10 months. Remember when you did a video about top rooftop bars in down town LA? Now we're talking about tax legislation. Are you getting 'old' on us? lol Love the channel. Glad to see you're doing well now, months and months after the surgery! Keep it going girl!! :0 A Supporter from the beginning.
I am currently renting a cabin in Blue Ridge, Ga with VRBO…same with me. It’s about $1000/4 nights then ADDITIONAL fees are around $900/..CRAZY FEES… NO MORE.
This mortgage amount is quite low for the beautiful house you have. Even if you break even as a rental (which I think you will get more anymore), you won't have the headache. If in the future you want to return to short term rental, you can do that. Never get rid of real estate.
CA has roughly $1.6 Trillion in debt. More people are leaving the state than moving to. $20 minimum wage state wide for fast food workers has businesses raising the cost of fast food, restaurants are decreasing hours of operation, or closing restaurants. Basic economics and the trickle-down effect have contributed greatly to the CA debt crisis. In 2022, the peak inflation rate was 9.1%, a 40-year high. The housing crisis in part is that laws now favor tennants, who squat, or are so far behind on rent from the pandemic that landlords are selling rentals at a record rate. In WA, it takes close to a year to get a hearing to remove a non paying tennants from your property. If they don't sell, they have raised the rents to help cover their losses. This is an oversimplified opinion of how big government does NOT work. In my opinion, Newsome and state legislators need to look at how to resolve the issues and NOT tax the state out of the debt hole they have created. Taxation is not working. Yes, SB584 has passed the Senate and is expected to go into effect in 2025. Maybe California's will start initiatives like WA to remove/repeal laws that just don't make sense or work. I'm just saying...
It's not just to take the tax money to build affordable housing; It's also to discourage people from buying up the properties just for the purpose of churning out more short-term rentals. So by you quitting Airbnb and turning to long-term rentals, it's already serving its purpose LOL. Others are proposing higher property taxes on 2nd or 3rd homes so that would also help. But I think places like Palm Springs which are like tourist/vacation destinations should maybe be exempt - just my personal opinion.
Yea and honestly even without the tax I’d make more money long term anyway. I think though, raising property taxes makes more sense, it’s not really fair to tax the tourists and make them pay fog our affordable housing here. Why should someone visiting from Vancouver, South Dakota, etc. be taxed extra to pay for our affordable housing? They need to just tax the actual airbnb profits more, or property taxes.
The reason you tax tourists is because they can't vote to complain. They come in, spend money, and leave. Why wouldn't you tax them over the constituents that can actually vote you out?
you can't randomly exempt "vacation destinations" - who decides what is a vacation destination? Airbnb should be taxed more - they take valuable property and turn it into a hotel ..
@@ShelbyChurch In a way they are. To stay competitive with hotels you would need to lower your nightly rate thereby shifting the burden from the purchaser to the supplier. When this cannot be absorbed the supplier has a choice to make. This sill mean more long-term rentals and houses available for sale. Which is the point.
So crazy! I see a comment saying that the bill was pulled which is great. I remember living in Palm Springs before there were so many strict vacation rental rules. At that time, property management companies were overwhelmed because they were the ones who had to respond to disruptive or destructive renters. During that time, it was introduced that the city wanted to instate the 20% rentals cap in each neighborhood. I'm not sure about the nightly rental contract cap, that may have already been a thing. I remember everyone being furious and fighting to keep nightly rental restrictions at bay because like you said, Palm Springs survives on tourism. Restricting nightly rentals ultimately screws with the local economy and the people who live there permanently. Law makers do not comprehend that when you enforce restrictions on nightly rentals in Palm Springs, you're potentially messing with the livelihood of a large group of people. Housekeepers, landscapers, property managers, personal chefs, the list goes on. I lived there on and off between 2011 and 2017, crazy to see how everything has changed and that there is now a cap on how many rentals are allowed in each neighborhood. While this bill you mentioned has been pulled, I'm sure California will find another way to overtax their residents in the name of "good".
I live in a beach vacation destination town in Florida that has restricted expansion opportunity due to Military bases surrounding the area. Housing is already limited and that is compounded by people with the money to buy a 2nd, 3rd or 4th home to turn them into Airbnb's. Flippers arrent flipping anymore but Airbnb'ing them. People with investment money are paying well over asking so they can list on Airbnb. A tax like that here would be an amazing boost for locals so they could actually buy the homes that become available. I know this isn't the situation everywhere but Airbnb is crushing families here.
You see the same issue in Mexico City too, which doesn't have that many regulations. A lot of people saw an opportunity to get money from rich wersterners during the pandemic and for a city that already has a huge economic divide it didn't help. I think MSNBC recently did a video on it and expats moving there overally it was a pretty good report.
If your talking about Tampa, macdill Air Force base has been here way before homes were expensive. Airbnb is not the problem people. So many ignorant people out there
Actually, she didn't really share any facts. There was a bill that was never made law. It never happened. She presented it as a done deal when in actuality it was never even voted on, and was pulled by the author. She is just clickbaiting you. Its pretty shameful when you think about it. She knows this from all of the comments, but she would rather dupe people for clicks
When I was apartment hunting, I just couldn't understand why there was such a shortage of 12-month lease apartments to choose from. I was looking around in the city and seeing so many apartment buildings, but couldn't understand why that wasn't translating to availability for new people to move in. Then I eventually discovered that these places are being rented out short term on Airbnb.
Living 1/2 year in Germany and the other 1/2 here in PS, and having long term rental, I can share one piece of advice; do not go with a big agency here to rent out your house. Best is to you use an independent agent and have a trusted team you can rely one when not here...we have a trusted handyman, electrician, plumber, AC guy, roofer, a gardner who keeps us in the loop of how the property is looking, and pool guy who also keeps an eye on the property since he's there 2x a week.
BEST Decision Shelby! You should put into action now at the $5,000 price point. You will have a long term renter in there in a hot minute!!! My friend did the same with his condo a long time ago with a very affordable price point and has the most amazing family living there for years with zero issues.
My guess is it's more about getting rid of Airbnb from people's neighborhoods. I still think people would rent it. Long term rentals are better in the end, it is more stable. If you live in a nice neighborhood like I do we don't want to see new people next to us every day, that's not normal, we don't want our wives, kids, parents put in potential danger. Additionally investor buyers tend to drive up house prices and deprive people that want to be actual residents of somewhere to live.
Palm spring is already way to unaffordable without an added tax, it used to be a great place to vacation in terms of going out to eat, getting a resort day pass for a hotel pool, or even Modernism Week. We sold our vacation home this year and can honestly say we don't miss it.
the craziest takeaway for me is that someone would pay $6200 a month in rent.... Surely if you can afford that, you can afford to buy a house no? or am I just a naive European?
@@ShelbyChurch crikey. That's genuinely quite shocking. We're at around 5% or so in the UK right now. It's much harder for people obviously but it's incredible to me that a person who can afford 6k/month in rent wouldn't/couldn't buy a house.
There are so many variables that factor into the rent vs. buy decision. This includes duration of stay, convenience, location, maintenance/upkeep costs, credit worthiness, interest rates, etc. For someone committed to renting, $6,200/month is completely reasonable for that area and those amenities.
@@eddiemalvin hmmm I suppose so. I'm just trying to wrap my head around it is all. My last rent I paid was £450 and my mortgage is like £250 so I'm a little overwhelmed with these numbers 😅
The rent rate is commensurate to what the house price is. Houses out there are a million plus and what would your mortgage be if you bought a million dollar house, about $6,000 a month, the rent rate is appropriate.
Taxes are high in FL also. Humidity is terrible, it's like you're walking around in a sauna. Then hurricanes and power outages. Insurance is high that is if you can get someone to cover you. I could go on and on, if you didn't figure out, i hate FL.
I totally agree, we spend so much in taxes just to live in the state of California, plus all the over regulation that prevents new construction to go up. "no guys, this time it'll be different" just doesn't work anymore
As a California Airbnb owner, it’s so frustrating trying to do any business in this state. I always feel that just when I start to hit a stride and make a profit, California quickly intervenes to stop it.
Doing any business at all without being a giant corporation in California is impossible. The government is so messed up and pushing Californians away from being able to stay here.
I thought this video was going to be about quitting airbnb. I didn't realize she was quitting Short term rentals. Just goes to show she is a very new rookie to call this investing airbnb, that is a platform to list short term rental properties on. I was hoping per the title she was going to say she was quitting the platform and switched to direct or other platforms. Didn't know she was just confused on what airbnb is.
It’s definitely a spending/skimming problem like you said. For different reasons, CA will join Vegas in being un-AirB&B-able. Thank goodness for long-term rental options!
Taxes across most states are super ridiculous!!! It's not having enough money through taxes as the problem, It's having the WORST money managers who blow most of it away. They always want to increase taxes to blow more of it, instead of fixing the main reasons why nothing gets done nor fixed!!!
And there is the problem. This was supposed to be something on the side . People that were gone for a month and lived in a cool area would rent out their house. It was NEVER supposed to be a number one source of income or revenue. It’s greed. Same thing happened to people “flipping “ houses. All it’s doing is pricing families out of buying a home.
Such a great video! Really enjoyed your insight and agree with you, I think this will make more airbnb's choose other avenues like long term rentals. I am curious though, with this happening what does it mean for your build in Joshua Tree?
Good. Stop turning every last piece of property in that state in to a rental. People need to be able to purchase homes. If you want to make it a rental, you should pay more. You can’t simultaneously complain about homelessness and make all housing inaccessibly expensive.
she is just ranting - her Abnb is not doing well - just check their listing. They overpaid and over-improved the property. P.S. will only get stricter as actual homeowners get sick of the STR. LTR is the best option - if they sell they will never recoup their money but they will get back some of it
It seems unlikely that SB584 will get passed as it stands now. It barely got through senate but still needed a 2/3 assemble vote. Which was far from secured. Senator Limon pulled it from vote. They'll probably rework it/dwindle it down but overall feels DOA.
First time subscriber and one thing that I love most about this video was that you told the truth that CA government is not utilizing the tax money wisely! They just spent it all unwisely and keeps asking for more.
Regardless of the possibility of a new tax, I actually think a long-term rental is overall less stressful for you and is likely to still make you the same if not more money. That said, it can be risky if the tenant stops paying rent. We all have seen videos of how hard it can be to evict someone.
Less stressful? Depends on the tenant. The same if not more money? Yeah, hard stop there. You make HALF to 1/3 the money as a STR. I know, I've rented 16629 nights across four doors for almost six years. Converted one to a LTR last month and another this weekend. Two left to convert. Shame really, but it is what it is.
Tenant and squatters right are far too strong which is why many have turned to short term rentals. Someone can damage your property, squat for months and tie up the legal system for a substantial amount of time. Furthermore look how California acted during covid. Rent moratoriums even if the tenant never lost their job. Free rent at the homeowners expense. Seems fair right? Those ridiculous laws are what gave rise to short term rentals.
I agree that there are so many things that affect affordable housing and disincentivizing short-term rentals isn't the solution by itself. However, it is a part of the problem that is being solved by this taxation change. For example, you are now incentivized to provide your property as stable, long-term housing which adds to the market pool for long-term rentals and generally helps with the housing shortage. Increasing the tax revenue is not really the long-term game. It's to prevent short-term rentals from gobbling up 30% of livable dwellings in some areas. But again, eliminating short-term rentals is not THE solution by itself, but together with the things you mentioned like changing zoning laws, it's all a series of steps in the right direction. Great video Shelby!
CA doesn't get enough water consistently to support a larger population. That's why they don't build more. Therefore the state is limited in how many people can live there sustainably. I'm sorry, but prohibiting short-term rentals is a better solution than building more homes that are unsustainable.
A lot of these same issues are taking place in various cities around the world. Not just with Airbnb but also with lack of incentives for building causing a shortage of housing that drives up house prices.
We keep asking for audits because this always happens most of the money goes into administrative costs aka paper pushing and lawyers and it's honestly frustrating. In terms of the housing most of our regulations came from NIMBY policies that have been in place for a long time before many of us could vote. Now whenever we try to change anything to build more housing it's a huge struggle because the single family home owners especially do not want to rezone anything and we really need to rezone a lot of areas made for just commerce to be mixed use or multi family housing.
The virtual product placement was cool. Felt your concerns were valid not just for California but a lot of the U.S. Your location seems ideal for airbnbs since it is a vacation spot anyway, so no need to penalize it.
One of your best videos… Informative and you spoke confidently about your thoughts on the bill after doing research. Interested to see more on this as you finalize your next steps with your house
Your thoughts on affordable housing are spot on. Government doesn’t want us to understand that zoning and permitting, along with policies on how financing is accomplished are the main culprit.
You should sell and do a 1031 if you have 30-40% or more equity, buying a small four-plex building (affordable in the outlying areas of Inyo, Riverside or San Bernadino county). You return will be greater then renting the house. Discuss with your accountant.
Calif has lost 400000 people between July 1, 2022 thru June 30, 2023. So far since the peak in 2018 the state has dropped from almost 40million to less than 38.7. Over 600000 people left while 250000 moved in that 3 people leave about for 1 person moving on. The. Births minus deaths
Thank you I had to come directly to your video because there are people giving out false information that you're going broke just to clickbait smh... I wish you well in your endeavors ❤
Your affordable housing and spending of tax money in the right places is very similar to what occurs in the UK. Also be vigilant that if this is shaking up your market, Airbnb stock in Palm Springs will be declining which might naturally make your Airbnb more lucrative in 2025? LTR comes with it's own problems and second properties are never going to be truly passive. Thanks for the video!
Not to be that person, but SB 584 died in June when the author pulled it. There's a huge, critical difference between a bill and a law. State bills need to make it through both legislative chambers (often including multiple committees) before the Governor can veto or sign them into law. That's not to say a similar bill couldn't be reintroduced next legislative session, but every year, hundreds of bills that go nowhere are introduced in state legislatures.
this bill convincing you to convert your STR into a LTR means the bill is doing its job. shifting more units into long term housing & increasing housing supply which makes housing overall more affordable.
It is wonderful that the law is doing exactly as it intended. It is pushing out short-term rentals which hurt the housing market and it turns them into long-term rentals which help the homeless. More houses and rentals on the market drives home prices down. Can you imagine how inexpensive housing would be if we got rid of all the landlords? Maybe house prices would drop by 50% Housing is for people not for profit.
Don't be so sure about anything when it comes to investing. House price can fall as much as it can rise. Government can change its rules on a whim. Just look at some European countries housing prices are low because it makes house transaction taxes and property taxes very high. It only makes sense if you are super rich or a company to own property. Most people just rent. If that happens here, the housing price will drop, or stays stagnant for decades at best.
In British Columbia, Canada there will be a new regulation in 2024 that you can only short term rent out your primary residence or one unit within your primary residence, including laneway homes and ADU’s. The goal being to put more units back into the long term rental market. Investors are obviously pissed but I think policies like this will be more effective at reducing the rental housing shortage than a blanket tax like this proposed bill. I don’t know that it will necessarily make things as affordable as people need though.
I really don’t know how to say this nicely and in the most respectful way possible… I think it’s a bit hypocritical of you to say that “teachers should able to afford a house, “ when you plan on charging 6k in rent.
air bnb started in 2008, that now really new . Housing sitting empty to be rented short term is directly affecting housing. A lot of places in Canada are now making it mandatory that to have an air bnb/short term rental you must actually live on the property.
Didn't know who you was till I learned you took a massive L lol😂 listen to Scott next time maybe you'll learn that stuff like SB584 didn't actually go through. Gotta love boss babes on yt. You go girl
She mentions most of the houses in Palm Springs are second homes to rich people. Isn’t that exactly what her PS house is? She’s said she uses it as exactly that when her and her family need it, and she has an income way higher than an average American.
That's not accurate to say 'most' homes in PS are second homes. We actually have 46,000 residents here full time. People who come here to just vacation think no one actually lives here.
@@berniea.3255 That’s fair, they’re not my words though. I was referencing what she said at 7:26 where she said, “the reality of Palm Springs, and a lot of people don’t want to hear this, but this is the truth about Palm Springs, most of these homes are second houses, they’re second houses for rich people they’re used for a few months of the year, and then the people who own them go back to Canada or Chicago or wherever they came from.” So Shelby is the one saying the houses there are second homes, not me.
Make sure to set the rent as high as possible as you will only be able to increase the rent between 5-10% a year after that, so you're locked in until after the tenant chooses to moves out.
Best wishes to you, Shelby! Looking forward to see how the new venture works out! Thanks for sharing your journey :) Also, California is notorious for blocking affordable housing from being built, so this tax bill is laughable. Government has made it difficult to address the homelessness dilemma because of their policies.
I feel like most of us that are renters are insanely frustrated with the housing situation, but anyone who's been to the council meetings knows it's a ridiculous battle against NIMBY's and many NIMBY"s have a lot of money and power that they've built up over the years.
That makes sense. Some Canadian Provinces are adding additonal regulations to short term rentals. We have a housing crisis here. And the governments are trying to open up inventories
Exactly. Government doesn't care if speculative investors lose money as long as they can alleviate housing crisis for the people who actually need shelter.
@@andyspinball because it hurts people and cooperation that buy up a bunch of housing for short term rental making it harder for people to find affordable place to not only but but also to rent
@@andyspinball It's fair because you are an investor. As an investor you assume risk of total loss whether it's stocks, crypto or real estate. Just because it is real estate it doesn't mean you can't lose money. It's all fair and square in the game of investing. You only invest your excess wealth and what you can afford to lose. Problem is many people falsely assume you can't lose money in real estate. They will be surprised.
The issue is that either the renter or the owner must in some way pay insurance and property taxes if they want a "permanent roof" with utilities like electricity, gas and water. Because of this, many people-at least in California, where I currently reside-are living in tents. No taxes, rent, mortgages, or insurance. The number of people who tell me they live in their car that I meet amazes me. Its crazy out here!
It’s getting wild by the day. The prices of homes are quite ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%). Sometimes i wonder if to just invest my spare cash into the stock market and wait for a housing crash or just go ahead to buy a home anyways.
I get such worries too. I'm 50 and retiring early. Already worried of the future and where its headed, especially in terms of financies and how to get by. I'm also considering making my first investment in the stock market, but how can I do so given that the market has been in a mess for the majority of the year?
For you to grow your portfolio in today's market, you really need to be coachable and willing to get off your high horses. I for example, have managed to grow mine from $150k to 300% of my initial deposit within the past 8 months just by copying trades from a broker that has better skillset and technical know-how than me.
@@BernardFrederick-tk7un Please pardon me, who guides you on the process of it all?
Finding financial advisors like Annette Marie Holt who can help you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
The cleaning fee is what cracks me up, and that's after they require you to clean it yourself before you leave. Cleaning is what's known as overhead.
It is absurd lol
I agree. And owners have total control over that. I have a small unit so charge $75 and the only thing I ask is that they start the dishwasher or wash the dishes.
not completely. If you use a property management company they often set the cleaning fee and take the whole cleaning fee as well as a % of the nightly rate@@julieperrin3440
@@julieperrin3440stop making people do chores on their vacation
@@ShelbyChurch Your Honest thoughts on the bill section, thats Galvin Newsom for you... I agree that the brunt shouldn't be put on short term rentals.. its absurd
Just an informational correction: SB584 is not a law going into effect in California. The first committee hearing for it was cancelled at request of the author of the bill in June 2023. It’s not been voted on by our legislator and has not been signed by the governor. It was pulled.
Was going to comment the same point. I do think it has the support of the legislature but not sure about the Governor. Airbnb lobbyists throw big dollars behind killing these kinds of bills. We’ll see by votes who responds to donor dollars.
Wait so this vid is wrong then?
Yeah Shelby should not make videos on politics... it's clear she has no idea what she's talking about. Why make this video before talking to someone who can explain to her where the bill is in the legislative process? It's just laziness. California is also unusual in how much the taxes vary year by year because it's very dependent on income tax vs a state like Texas that depends on property taxes (where revenues are less volatile according to the economy).
So it was a video about nothing. Nice.
@@venom5809 Yeah at this point given how quickly people corrected her, keeping this video up as-is is just spreading misinformation. It's also just a bad look to publicize how little she knows about government.
Non click-bait title. "Why I might quit AirBnB, in 2025, depending on how things go."
Thanks, don’t have to watch the video anymore.
Mean 😊
Just watched a more recent video about the changes she’s making to her AirBNB for 2024 to make more profit lol. I think she’s trying to please the young people that she’s pricing out of the market.
She and Air bnb is not pricing anyone out of the market. Its the whole system and how it works. you eliminate airbnb an you will not see any improvement if affordability. @@marieneu264
She one of the most fakest b--s on social media?
Even without this tax, it seems like a long-term rental makes a lot of sense now that you have the option to stay with your family! I am so glad to see you aren't planning to sell- I love the house too.
Yes so Great! Renting out the townhouse in Seattle✅ Renting out the Palm Springs House✅
I think Shelby is so pissed off that she might burn those affordable house built for poor hobbo 😂😂😂
@@crazypasta7749 All people who own AirB&Bs are rich. By world standards these real estate owners are probably in the top 20% of the world's wealthiest people. It is good to tax the richer
Yes! long term is so much more secure. Especially in a place like California where you can rent out at competitive rates.
New home developers also tend to want to only build high end expensive homes. Where I live, no one builds basic, inexpensive homes anymore. There seems to be no more starter homes being built, and any such homes on the market are bought up as investment property.
more housing at the high end of the market does ultimately decrease prices for the lower end of the market. pulls higher income folks from bidding up cheaper housing.
To purchase land, the carry cost to go through all the government red tape to get to the building stage, usually 1 year +/-. Then 7 - 12 months to build. You have no choice but to build high-end homes. That is the only way it's profitable. Sad fact.
I don't live nor have I ever lived in CA, but I feel the people that decide what affordable means are the people that have never had to wonder if they can afford rent/mortgage before.
Pretty much CA legislature has one renter on it and I don't even know if they're still on it. I believe in a one report the LA Times found that over 50% of them were landlords themselves so for many of them they don't really push for housing, however, it's such an issue now that if they don't come to terms with changing it they're going to not get voted in. I guess are best bet is to get rid of some of the legacy politicians and take power away from CADEM and the NIMBY's they've catered too then maybe we could reduce the regulatory issues. It shouldn't take 3 years to get a new building built with permits here, but in LA that's the average build time and many more take longer than that if they can't pass city council objections.
The fact that you and your neighbor are turning your Airbnbs into long-term rentals show SB 584 is having the desired effect - more long-term housing for the city. But I agree, it doesn't seem like a holistic solution.
My neighbors aren’t though, they just own the houses as 2nd homes, a lot of them are empty half the year
@@ShelbyChurchyou’re my best friend I really like you ❤❤❤❤❤❤❤❤❤❤
@@ShelbyChurchyou’re very pretty
Maybe you did the same research on this bill that you did when you bought that house without getting inspections. Just be honest and say you jumped in over your head and don't really know how the real estate investment game works.
Jerk!
And this is why millions have left California, our home is no longer the same. And why our family left. The politics and cost is so awful now. It’s just so so sad.
Looking at it from a neighborhood perspective. I don't live next to a hotel, but essentially airbnb can make your neighbor's house a hotel where people are checking in and out every day or every other day. I could see why cities and towns are trying to put an end to some of this. And this house is taking away from a family being able to buy it and make it their own and becoming part of the neighborhood. I live in a place where it makes zero sense to do airbnb, so thankfully don't have this issue. Does anyone here live next door to an airbnb house? Are the people loud and obnoxious? hahah
More importantly, there's a housing crisis and people having a place to LIVE is more important. Everywhere. Stay in a hotel.
Airbnbs have ruined Scottsdale. It's not even a nice quiet place to live anymore. It seems like there is an Airbnb on every block
Living by an AirBnB sounds like a nightmare neighbor, IMO. I lived in a neighborhood where the house nextdoor was rented out all the time, it was a revolving door of tenants, it felt shady to live near by.
private property is private property ... comunism is telling or forcing you what to do what not to do with your place i pay taxes i complay with all regulation don't do the dirty work for hotels lobby .... because that's about in the end
I live in my Airbnb house and it's quiet AF. Why would it be loud? The neighbors think we have the nicest lawn they've ever seen because we actually take care of the property compared to the family we bought the house from.
Ahh its the end of an era! I've followed this airbnb process since the beginning and I always had hope it was going to work out, so it kind makes me sad it didn't! Either way, I am very happy you decided to keep it. You worked so hard and put so much into making that home so beautiful!! (also, love the shot at 5:51)
This is the death of airbnb. The fees are already insane, and this is even more ridiculous! Who is going to pay an extra $1500 in fees?!?
YUP! I’m seeing a lot of airbnb owners sell!!
@@ShelbyChurchI used to manage one here in Nashville. It is currently for sale 🙃
@@ShelbyChurchthat’s the point. Their plan is working.
That is a huge good thing for areas that have too many short term rentals. There are at least 2 apartment buildings that are over 50% short term rentals
It's not just the California tax. People in tax-friendly Texas are posting about leaving airbnb.
My old boss had 12 single family homes on airbnb in Denver. Lots of times some of those houses sat empty because they didn't book. For this one guy to have TWELVE houses in his possession so he could list them on an app is crazy to me! How many other people are hoarding homes for short term rentals?
that's WILDDD
While STRs may be a small (tiny?) % of housing, every little % is hurting the available inventory to get toward more affordability.
It's called free market.
@brucesinvestingseries8572
Agreed...anyone can invest. It's a leg up for many small time investors. My renters cannot even remotely afford a rental. For example they have a hard time affording rent that is half what their mortgage payments would be. Saludos Laura
* to buy the house we rent
Airbnb hosting is not for everyone, and not for every area it seems. We have done very well, but I can understand why some people would want to quit. Every situation is different. Best to do your due diligence before you invest. I hope you are doing well on UA-cam Shelby! I trust that you are, and Konnichiwa from Japan!
The other day I checked out your AirBnB to see what a typical night would cost and I was shook by the additional expenses 😳Affordable housing is a tough subject, it's also quite a problem over here. As with many problems like this, there is not a single, simple solution.
The affordable housing angle seems like a ruse by the government to collect taxes and force people back to hotels.
@@hearmenow909 Exactly! Not to mention when people start to sell their homes guess who's going to buy them up? It's not going to be the average Joe's who can't even afford them right now because of high interest rates; It's going to be the big investment management companies with cash gobbling up the housing market. It's not looking good for the foreseeable generations. They will be doomed to renting. It's much better to let small investors own a handful of properties. People don't realize that ultimately it's better to keep a portion of the housing market into small hands rather than large monster corporations.
I know you were discussing some serious stuff but wanted to say I liked how integrated the sponsor was. The floating 3D graphics were noticeable but didn’t interrupt the topic which allowed me to continue paying attention and didn’t lose focus
Shelby girl, your transparency is a gem!! 💎💎
Nice! Single Family residences have absolutely been overtaken by corporate interests & AirBnB has been a massive drain on the available housing market. When most young people are expecting to never be able to own a home in their lives, we'll take any wins we can get.
I always felt like rental prices became unreasonable once you start pushing past $3k. Even for a really nice home that you can fit an entire family, I'm skeptical of the redfin/zillow estimate of $6k+. It just doesn't make financial sense to me, especially for someone signing a long term contract. It would also worry me to some degree as a landlord that my tenant(s) are able to make that rent every month.
Impossible . Passing 3k is too much. Because in top you have to add elec, gaz, water, tax, that move you 5000 a months!!! Impossible. So if you try to rent 5000 that means 7000. Who can do that long terms ???? On top when you rent a house that means you have kids…..and you need to buy food, clothes , braces, activity. You need to make 15000 a month. Dream dream
You guys are allowing your perspective limit what others accomplish. Gotta change that mindset! There are plenty of furnished rentals going for 7k plus in that psp area. It's finding the right tenants. Just because someone wants to rent for 1 year doesn't mean they can't afford to buy. It means they are choosing to rent for a different purpose. I had a client spend 6k per month in my market for 3 months because he needed something temporary. (utah which is way cheaper)
People actually will pay $6K for a rental. You know why? Simply look up the monthly mortgage for if you were to buy that same property. In HCOL areas the mortgage is usually double what you’d pay in rent. So if $6K is bad, imagine a $12K mortgage. And of that $12K mortgage only about $1.5K of it would go towards the principle. So you’re only building equity if the house appreciates. It could actually depreciate. So now the $6K rent sounds like an obvious steal of a deal.
Well said man! We have to look at it from all the angles! @@DewTime
A $6k per month rent for this house is possible as a fully furnished rental for one or a few months here and there but at that rate in PS, you can't annualize it to a steady $72k per year in gross rental revenue. She should expect vacancies at least 1/3 of the time.
Do a quick zillow search on rentals in PS and you'll find lots of LLs trying to rent out houses for $5k+ per month but the houses are sitting vacant (often times 20+ days with 0 applications). You'll see lots of rent reductions of $1k+ and still no takers).
Sadly homes have gone from a roof over your head to investment properties where the costs get jacked up to where people can't afford the homes. Everyone want to sell their home for a profit, even when it's not worth it. Sadly AirBnB have removed so many homes from the market which makes in nearly impossible to find affordable housing. And since most wages do not increase at the same amount as other expenses, people just can't afford basic housing.
Absolutely true. And this is happening all over the country not just in California.
💯‼
So true…everywhere.
For the most part areas with a high amount of AirBnB homes, even without them being rentals, would still NOT be considered affordable housing. Look at the homes in markets with a steady tourism market, desirable locations, vacation destinations, whatever you want to call them, their homes are STILL expensive. Even before vacation rentals were a thing, homes at the beach for example, have always been more expensive than the same home would cost inland, because again you're paying for LOCATION.
❤you nailed it.
The government across-the-board doesn’t know how to handle our effing money. They need the audits
Airbnbs switching to long-term rentals seems like a win for pretty much everyone.
It totally is!
Not for people looking to buy a house it isn't. lol
I´ll be waiting of the reaction from Stephan Graham what he think about long term rentals.That would be funny.
Having owned several rental properties, my experience leads me to this conclusion: I wouldn't do it again at gunpoint.
The 2am maintenance calls.
The non-paying tenants.
The eviction process.
Unless you're willing to give most of your profit to a "Property Manager".
If you're looking for true passive income, invest in the stock market.
This is such a good video. Between the information you gave to the editing cuts it really captivates me! Keep it up
Thank you!! I really try on the edits so I appreciate the comment 🥹
I am glad you have come around. Long term rental is where it is at.
I heard Shelby is a boss babe, keep it up Shelbs
More than housing shortage/taxes/or anything it's the constant Nuisance/security issue created by people checking in and out every other day; especially if you have a family and young kids. It's weird to have unknown faces or groups of people/vehicles coming in and out of the neighborhood!
Chiming in on what you said about TX as a TX homeowner… while Texas has its own issues with housing availability, it was admittedly affordable to buy a home here. However, the property taxes are so high! In my new development, so many people had to SELL AND MOVE after the first year because the property value jumped up so much due to updated appraised value. There is no cap on how much property taxes can increase in a single year in Texas. This is true for all residential homes and that cost is passed onto renters too.
Texas progressively updates property taxes right? CA keeps them same from the time of purchase. That's why for some boujie buyers they actually end up paying less for their property in CA simply because of the favorable property tax rate.
@@kgal1298 yes that’s right! The tax property taxes here in Texas can be killer
@@kgal1298 any new developments in CA is pretty much guaranteed to have a mello roose tax, which is supplemental tax, of another 1-2% of the purchase price. many people forget about this
@@kgal1298 Wrong - CA does property assessments and the property taxes do go up - but they are capped at 2% per year
I love that you are honest about your experience with Airbnb. I tell my friends all the time understand how Airbnb works. Working as a realtor and understanding law, permits, building codes, etc. It might not benefit you depending on where you are at. You have to also think about how many bookings you could possibly get, location, management, cleaning, etc. All these fees could add up to where you are losing money instead of making money. I tell people break everything down before you just jump in listening to these "Airbnb Gurus" online selling you classes and not making their money off the Airbnb. Instead, they are making their money off the courses people are taking. Again, thanks Shelby for being honest and transparent about your experience.
she bought and Airbnb at the top of market - never a chance of making money. They put way too much-sunk costs in the "investment".
Ugh, well said. Totally agree with the affordable housing stuff you mentioned - it's so frustrating!!
Doing some quick Googling, I think this bill may have stalled. It looks to have only passed the Senate. It went to the Assembly on 6/1/23, was read then held at the desk. The last activity recorded was 6/29/23 where the first hearing that was set for June 28 was cancelled at the request of the author.
Interesting! So it could still pick back up or do you think it’s likely to be dropped?
@@ShelbyChurch And how do people make investments w all this turmoil? You can't plan a sustainable side-hustle like this.
@@ShelbyChurch Most bills introduced do not become law.
@@ShelbyChurchdid you not do any prior research before making a whole video talking about the bill influencing your decision to quit? It’s clear that the bill is no longer being pursued by legislature
@@jeng9364good.
Haven't watched you in about 10 months. Remember when you did a video about top rooftop bars in down town LA? Now we're talking about tax legislation. Are you getting 'old' on us? lol Love the channel. Glad to see you're doing well now, months and months after the surgery! Keep it going girl!! :0 A Supporter from the beginning.
hahahaha I am def getting "old" on you yes
Long term rental? If you thought SB 584 was bad, you should carefully evaluate the plethora of regulations on being a landlord.
I am currently renting a cabin in Blue Ridge, Ga with VRBO…same with me. It’s about $1000/4 nights then ADDITIONAL fees are around $900/..CRAZY FEES… NO MORE.
Plus a hotel does the cleaning. They don't charge a "cleaning fee" for me to clean the room. I stopped using Airbnb a long time ago
This mortgage amount is quite low for the beautiful house you have. Even if you break even as a rental (which I think you will get more anymore), you won't have the headache. If in the future you want to return to short term rental, you can do that. Never get rid of real estate.
CA has roughly $1.6 Trillion in debt. More people are leaving the state than moving to. $20 minimum wage state wide for fast food workers has businesses raising the cost of fast food, restaurants are decreasing hours of operation, or closing restaurants. Basic economics and the trickle-down effect have contributed greatly to the CA debt crisis. In 2022, the peak inflation rate was 9.1%, a 40-year high. The housing crisis in part is that laws now favor tennants, who squat, or are so far behind on rent from the pandemic that landlords are selling rentals at a record rate. In WA, it takes close to a year to get a hearing to remove a non paying tennants from your property. If they don't sell, they have raised the rents to help cover their losses. This is an oversimplified opinion of how big government does NOT work. In my opinion, Newsome and state legislators need to look at how to resolve the issues and NOT tax the state out of the debt hole they have created. Taxation is not working.
Yes, SB584 has passed the Senate and is expected to go into effect in 2025.
Maybe California's will start initiatives like WA to remove/repeal laws that just don't make sense or work. I'm just saying...
It's not just to take the tax money to build affordable housing; It's also to discourage people from buying up the properties just for the purpose of churning out more short-term rentals. So by you quitting Airbnb and turning to long-term rentals, it's already serving its purpose LOL. Others are proposing higher property taxes on 2nd or 3rd homes so that would also help. But I think places like Palm Springs which are like tourist/vacation destinations should maybe be exempt - just my personal opinion.
Yea and honestly even without the tax I’d make more money long term anyway. I think though, raising property taxes makes more sense, it’s not really fair to tax the tourists and make them pay fog our affordable housing here. Why should someone visiting from Vancouver, South Dakota, etc. be taxed extra to pay for our affordable housing? They need to just tax the actual airbnb profits more, or property taxes.
more tax more expensive housing. affordable housing is a joke.
The reason you tax tourists is because they can't vote to complain. They come in, spend money, and leave. Why wouldn't you tax them over the constituents that can actually vote you out?
you can't randomly exempt "vacation destinations" - who decides what is a vacation destination? Airbnb should be taxed more - they take valuable property and turn it into a hotel ..
@@ShelbyChurch In a way they are. To stay competitive with hotels you would need to lower your nightly rate thereby shifting the burden from the purchaser to the supplier. When this cannot be absorbed the supplier has a choice to make. This sill mean more long-term rentals and houses available for sale. Which is the point.
So crazy! I see a comment saying that the bill was pulled which is great. I remember living in Palm Springs before there were so many strict vacation rental rules. At that time, property management companies were overwhelmed because they were the ones who had to respond to disruptive or destructive renters. During that time, it was introduced that the city wanted to instate the 20% rentals cap in each neighborhood. I'm not sure about the nightly rental contract cap, that may have already been a thing. I remember everyone being furious and fighting to keep nightly rental restrictions at bay because like you said, Palm Springs survives on tourism. Restricting nightly rentals ultimately screws with the local economy and the people who live there permanently. Law makers do not comprehend that when you enforce restrictions on nightly rentals in Palm Springs, you're potentially messing with the livelihood of a large group of people. Housekeepers, landscapers, property managers, personal chefs, the list goes on. I lived there on and off between 2011 and 2017, crazy to see how everything has changed and that there is now a cap on how many rentals are allowed in each neighborhood. While this bill you mentioned has been pulled, I'm sure California will find another way to overtax their residents in the name of "good".
I live in a beach vacation destination town in Florida that has restricted expansion opportunity due to Military bases surrounding the area. Housing is already limited and that is compounded by people with the money to buy a 2nd, 3rd or 4th home to turn them into Airbnb's. Flippers arrent flipping anymore but Airbnb'ing them. People with investment money are paying well over asking so they can list on Airbnb. A tax like that here would be an amazing boost for locals so they could actually buy the homes that become available. I know this isn't the situation everywhere but Airbnb is crushing families here.
You see the same issue in Mexico City too, which doesn't have that many regulations. A lot of people saw an opportunity to get money from rich wersterners during the pandemic and for a city that already has a huge economic divide it didn't help. I think MSNBC recently did a video on it and expats moving there overally it was a pretty good report.
If your talking about Tampa, macdill Air Force base has been here way before homes were expensive. Airbnb is not the problem people. So many ignorant people out there
Thanks for digging in to find the facts and sharing your research! I found this very interesting
Actually, she didn't really share any facts. There was a bill that was never made law. It never happened. She presented it as a done deal when in actuality it was never even voted on, and was pulled by the author. She is just clickbaiting you. Its pretty shameful when you think about it. She knows this from all of the comments, but she would rather dupe people for clicks
When I was apartment hunting, I just couldn't understand why there was such a shortage of 12-month lease apartments to choose from. I was looking around in the city and seeing so many apartment buildings, but couldn't understand why that wasn't translating to availability for new people to move in. Then I eventually discovered that these places are being rented out short term on Airbnb.
Living 1/2 year in Germany and the other 1/2 here in PS, and having long term rental, I can share one piece of advice; do not go with a big agency here to rent out your house. Best is to you use an independent agent and have a trusted team you can rely one when not here...we have a trusted handyman, electrician, plumber, AC guy, roofer, a gardner who keeps us in the loop of how the property is looking, and pool guy who also keeps an eye on the property since he's there 2x a week.
BEST Decision Shelby! You should put into action now at the $5,000 price point. You will have a long term renter in there in a hot minute!!! My friend did the same with his condo a long time ago with a very affordable price point and has the most amazing family living there for years with zero issues.
As a family of 8, airbnbs make way more sense whenever we visit the desert. It’s usually about 4k-6k for a week for a 4-5 bed house
took an L on the property... just admit it
I love seeing your perspective on this!
My guess is it's more about getting rid of Airbnb from people's neighborhoods. I still think people would rent it. Long term rentals are better in the end, it is more stable. If you live in a nice neighborhood like I do we don't want to see new people next to us every day, that's not normal, we don't want our wives, kids, parents put in potential danger. Additionally investor buyers tend to drive up house prices and deprive people that want to be actual residents of somewhere to live.
your wife and kids are in danger from tourists?
I don’t rent an Airbnb because of the cleaning fee, that should be built into the price.
Didn't your sister say that she's paying $500 a month for that house? So are you actually breaking even?
Palm spring is already way to unaffordable without an added tax, it used to be a great place to vacation in terms of going out to eat, getting a resort day pass for a hotel pool, or even Modernism Week. We sold our vacation home this year and can honestly say we don't miss it.
the craziest takeaway for me is that someone would pay $6200 a month in rent.... Surely if you can afford that, you can afford to buy a house no? or am I just a naive European?
With these interest rates, a lot of people can’t right now. But in the future hopefully!
@@ShelbyChurch crikey. That's genuinely quite shocking. We're at around 5% or so in the UK right now. It's much harder for people obviously but it's incredible to me that a person who can afford 6k/month in rent wouldn't/couldn't buy a house.
There are so many variables that factor into the rent vs. buy decision. This includes duration of stay, convenience, location, maintenance/upkeep costs, credit worthiness, interest rates, etc.
For someone committed to renting, $6,200/month is completely reasonable for that area and those amenities.
@@eddiemalvin hmmm I suppose so. I'm just trying to wrap my head around it is all. My last rent I paid was £450 and my mortgage is like £250 so I'm a little overwhelmed with these numbers 😅
The rent rate is commensurate to what the house price is. Houses out there are a million plus and what would your mortgage be if you bought a million dollar house, about $6,000 a month, the rent rate is appropriate.
I really love the content you've been posting, its very helpful.
Taxes are high in FL also. Humidity is terrible, it's like you're walking around in a sauna. Then hurricanes and power outages. Insurance is high that is if you can get someone to cover you. I could go on and on, if you didn't figure out, i hate FL.
I totally agree, we spend so much in taxes just to live in the state of California, plus all the over regulation that prevents new construction to go up. "no guys, this time it'll be different" just doesn't work anymore
As a California Airbnb owner, it’s so frustrating trying to do any business in this state. I always feel that just when I start to hit a stride and make a profit, California quickly intervenes to stop it.
I feel that!
Doing any business at all without being a giant corporation in California is impossible. The government is so messed up and pushing Californians away from being able to stay here.
Vote about it!
Vote newsome out
I left in 2006 and have never looked back.
Fantastic video Shelby. I'm from Canada and love every time I come to PS. Just the perfect getaway place. Keep up the PS content.
I wonder what the data says regarding your “we’ve had an affordable housing problem long before short term rentals” statement.
I thought this video was going to be about quitting airbnb. I didn't realize she was quitting Short term rentals. Just goes to show she is a very new rookie to call this investing airbnb, that is a platform to list short term rental properties on. I was hoping per the title she was going to say she was quitting the platform and switched to direct or other platforms. Didn't know she was just confused on what airbnb is.
what are you planning to do about the Joshua Tree house you are currently building??
I’ll make a video about it! It’s such a different market, less hotels than in Palm Springs so it can still make sense
Shelby,
Loved your commentary on the tax plan and affordable housing:)
It’s definitely a spending/skimming problem like you said. For different reasons, CA will join Vegas in being un-AirB&B-able. Thank goodness for long-term rental options!
Taxes across most states are super ridiculous!!! It's not having enough money through taxes as the problem, It's having the WORST money managers who blow most of it away. They always want to increase taxes to blow more of it, instead of fixing the main reasons why nothing gets done nor fixed!!!
Mexico has an 18% tax on Airbnb's in some states, it can be upwards of $500 bucks on a month long stay in taxes alone.
And there is the problem. This was supposed to be something on the side . People that were gone for a month and lived in a cool area would rent out their house. It was NEVER supposed to be a number one source of income or revenue. It’s greed. Same thing happened to people “flipping “ houses. All it’s doing is pricing families out of buying a home.
Such a great video! Really enjoyed your insight and agree with you, I think this will make more airbnb's choose other avenues like long term rentals. I am curious though, with this happening what does it mean for your build in Joshua Tree?
Good. Stop turning every last piece of property in that state in to a rental. People need to be able to purchase homes. If you want to make it a rental, you should pay more. You can’t simultaneously complain about homelessness and make all housing inaccessibly expensive.
Literally the policies working: “I will just turn it into a rental” lol I can’t even
she is just ranting - her Abnb is not doing well - just check their listing. They overpaid and over-improved the property. P.S. will only get stricter as actual homeowners get sick of the STR. LTR is the best option - if they sell they will never recoup their money but they will get back some of it
the fact that the girl in this video has no remorse is beyond me.
I had 8 short term rentals. Started in 2006 using Craigslist vacation rentals. Airbnb ruined the short term business.
It seems unlikely that SB584 will get passed as it stands now. It barely got through senate but still needed a 2/3 assemble vote. Which was far from secured. Senator Limon pulled it from vote. They'll probably rework it/dwindle it down but overall feels DOA.
First time subscriber and one thing that I love most about this video was that you told the truth that CA government is not utilizing the tax money wisely! They just spent it all unwisely and keeps asking for more.
Regardless of the possibility of a new tax, I actually think a long-term rental is overall less stressful for you and is likely to still make you the same if not more money. That said, it can be risky if the tenant stops paying rent. We all have seen videos of how hard it can be to evict someone.
Less stressful? Depends on the tenant. The same if not more money? Yeah, hard stop there. You make HALF to 1/3 the money as a STR. I know, I've rented 16629 nights across four doors for almost six years. Converted one to a LTR last month and another this weekend. Two left to convert. Shame really, but it is what it is.
So you agree with me. LTR is the way to go because clearly, that's the way you are going and you really seem like an expert!@@andyspinball
long term rental can be good unless they completely trash the place.
Tenant and squatters right are far too strong which is why many have turned to short term rentals. Someone can damage your property, squat for months and tie up the legal system for a substantial amount of time. Furthermore look how California acted during covid. Rent moratoriums even if the tenant never lost their job. Free rent at the homeowners expense. Seems fair right? Those ridiculous laws are what gave rise to short term rentals.
I agree that there are so many things that affect affordable housing and disincentivizing short-term rentals isn't the solution by itself. However, it is a part of the problem that is being solved by this taxation change. For example, you are now incentivized to provide your property as stable, long-term housing which adds to the market pool for long-term rentals and generally helps with the housing shortage. Increasing the tax revenue is not really the long-term game. It's to prevent short-term rentals from gobbling up 30% of livable dwellings in some areas. But again, eliminating short-term rentals is not THE solution by itself, but together with the things you mentioned like changing zoning laws, it's all a series of steps in the right direction. Great video Shelby!
CA doesn't get enough water consistently to support a larger population. That's why they don't build more. Therefore the state is limited in how many people can live there sustainably. I'm sorry, but prohibiting short-term rentals is a better solution than building more homes that are unsustainable.
WOAH okay interesting I didn’t even consider this I’m def going to research it more
A lot of these same issues are taking place in various cities around the world. Not just with Airbnb but also with lack of incentives for building causing a shortage of housing that drives up house prices.
Well done video! You're right. The state of CA mismanages their funding and that is the real reason why more affordable housing does not exist.
We keep asking for audits because this always happens most of the money goes into administrative costs aka paper pushing and lawyers and it's honestly frustrating. In terms of the housing most of our regulations came from NIMBY policies that have been in place for a long time before many of us could vote. Now whenever we try to change anything to build more housing it's a huge struggle because the single family home owners especially do not want to rezone anything and we really need to rezone a lot of areas made for just commerce to be mixed use or multi family housing.
The virtual product placement was cool.
Felt your concerns were valid not just for California but a lot of the U.S.
Your location seems ideal for airbnbs since it is a vacation spot anyway, so no need to penalize it.
One of your best videos… Informative and you spoke confidently about your thoughts on the bill after doing research. Interested to see more on this as you finalize your next steps with your house
Your thoughts on affordable housing are spot on. Government doesn’t want us to understand that zoning and permitting, along with policies on how financing is accomplished are the main culprit.
You should sell and do a 1031 if you have 30-40% or more equity, buying a small four-plex building (affordable in the outlying areas of Inyo, Riverside or San Bernadino county). You return will be greater then renting the house. Discuss with your accountant.
All at 8% interest. Sounds fantastic. (that was sarcasm)
Calif has lost 400000 people between July 1, 2022 thru June 30, 2023. So far since the peak in 2018 the state has dropped from almost 40million to less than 38.7. Over 600000 people left while 250000 moved in that 3 people leave about for 1 person moving on. The. Births minus deaths
Better to buy in Nevada, Arizona lower insurance and taxes. Utility rates
pass on that idea - trade a 3% for 8% not smart
Thank you I had to come directly to your video because there are people giving out false information that you're going broke just to clickbait smh... I wish you well in your endeavors ❤
Shelby, the direction you are moving toward makes sense. Does this mean you will not be developing the Joshua Tree property also?
Understood. Always so money-smart! Thanks for uploading. :)
Wow! A streetside tent is looking more tax-affordable than ever now in CA. :/
Your affordable housing and spending of tax money in the right places is very similar to what occurs in the UK. Also be vigilant that if this is shaking up your market, Airbnb stock in Palm Springs will be declining which might naturally make your Airbnb more lucrative in 2025? LTR comes with it's own problems and second properties are never going to be truly passive. Thanks for the video!
Not to be that person, but SB 584 died in June when the author pulled it. There's a huge, critical difference between a bill and a law. State bills need to make it through both legislative chambers (often including multiple committees) before the Governor can veto or sign them into law. That's not to say a similar bill couldn't be reintroduced next legislative session, but every year, hundreds of bills that go nowhere are introduced in state legislatures.
The first hearing was canceled.
this bill convincing you to convert your STR into a LTR means the bill is doing its job. shifting more units into long term housing & increasing housing supply which makes housing overall more affordable.
Very insightful, thanks for sharing! I think a long term rental makes so much more sense, and in the long term, that house will appreciate so much!
It is wonderful that the law is doing exactly as it intended. It is pushing out short-term rentals which hurt the housing market and it turns them into long-term rentals which help the homeless. More houses and rentals on the market drives home prices down.
Can you imagine how inexpensive housing would be if we got rid of all the landlords? Maybe house prices would drop by 50%
Housing is for people not for profit.
@@ashlyknapp1798 Totally agree with you. When did a house become a business? That is what STR's are. They are a business in residential communities.
Don't be so sure about anything when it comes to investing. House price can fall as much as it can rise. Government can change its rules on a whim. Just look at some European countries housing prices are low because it makes house transaction taxes and property taxes very high. It only makes sense if you are super rich or a company to own property. Most people just rent. If that happens here, the housing price will drop, or stays stagnant for decades at best.
There should be a similar tax for single family home that are used for long term rentals.
you are hitting on her lol you like her and you want her to notice you 😂
In British Columbia, Canada there will be a new regulation in 2024 that you can only short term rent out your primary residence or one unit within your primary residence, including laneway homes and ADU’s. The goal being to put more units back into the long term rental market. Investors are obviously pissed but I think policies like this will be more effective at reducing the rental housing shortage than a blanket tax like this proposed bill. I don’t know that it will necessarily make things as affordable as people need though.
I really don’t know how to say this nicely and in the most respectful way possible… I think it’s a bit hypocritical of you to say that “teachers should able to afford a house, “ when you plan on charging 6k in rent.
air bnb started in 2008, that now really new . Housing sitting empty to be rented short term is directly affecting housing. A lot of places in Canada are now making it mandatory that to have an air bnb/short term rental you must actually live on the property.
NY just enacted that law
Didn't know who you was till I learned you took a massive L lol😂 listen to Scott next time maybe you'll learn that stuff like SB584 didn't actually go through. Gotta love boss babes on yt. You go girl
I love this video, planning on investing here in Cali but having second thoughts about it.
Hey I believe you have a typo at 1:46. It says 205 and I believe it should say 2025. Just wanted to let you know!
Oh oops! Can’t fix it now lol but thanks for letting me know 🫶🏻
She mentions most of the houses in Palm Springs are second homes to rich people. Isn’t that exactly what her PS house is? She’s said she uses it as exactly that when her and her family need it, and she has an income way higher than an average American.
That's not accurate to say 'most' homes in PS are second homes. We actually have 46,000 residents here full time. People who come here to just vacation think no one actually lives here.
@@berniea.3255 That’s fair, they’re not my words though. I was referencing what she said at 7:26 where she said, “the reality of Palm Springs, and a lot of people don’t want to hear this, but this is the truth about Palm Springs, most of these homes are second houses, they’re second houses for rich people they’re used for a few months of the year, and then the people who own them go back to Canada or Chicago or wherever they came from.” So Shelby is the one saying the houses there are second homes, not me.
@@InternetGirl1093 yes I know she said it. Wasn’t blaming you! 😁
@@berniea.3255 Gotcha! Thanks for adding your input as a Palm Springs resident!
Here from Scott Shafer's channel. It's fine. You live & learn. Also, happy about the new AirBnb tax. They need to pay their fair share.
Make sure to set the rent as high as possible as you will only be able to increase the rent between 5-10% a year after that, so you're locked in until after the tenant chooses to moves out.
Best wishes to you, Shelby! Looking forward to see how the new venture works out! Thanks for sharing your journey :)
Also, California is notorious for blocking affordable housing from being built, so this tax bill is laughable. Government has made it difficult to address the homelessness dilemma because of their policies.
I feel like most of us that are renters are insanely frustrated with the housing situation, but anyone who's been to the council meetings knows it's a ridiculous battle against NIMBY's and many NIMBY"s have a lot of money and power that they've built up over the years.
She couldn't hang
She'll win in the end, and people who don't try never will@@AngelValdovinos
Thanks for this awesome video. Really good stuff.
That makes sense. Some Canadian Provinces are adding additonal regulations to short term rentals. We have a housing crisis here. And the governments are trying to open up inventories
Exactly. Government doesn't care if speculative investors lose money as long as they can alleviate housing crisis for the people who actually need shelter.
@@i6power30 which is fair how exactly? Take from me to give it to someone else. No thanks.
@@andyspinball because it hurts people and cooperation that buy up a bunch of housing for short term rental making it harder for people to find affordable place to not only but but also to rent
@@andyspinball It's fair because you are an investor. As an investor you assume risk of total loss whether it's stocks, crypto or real estate. Just because it is real estate it doesn't mean you can't lose money. It's all fair and square in the game of investing. You only invest your excess wealth and what you can afford to lose. Problem is many people falsely assume you can't lose money in real estate. They will be surprised.