In the short-term rental riches will discuss investing in real estate with a specific focus on short term rentals quick actionable items to wire. Scale your portfolio I’m your host Tim Hubbard.

Welcome back to the short-term rental riches podcast another week another episode and another topic this week we’re gonna talk about whether you are using your real estate to its best use for the use of real estate changes the value of the real estate and that’s why we’ve converted a lot of properties into short term rentals but it’s not always easy to change the use of a property is not always allowed and so there’s a lot of things that will need to consider so we’re gonna talk about that today we’re gonna talk about different uses for real estate and some that you may have not thought about so give you 10 alternate uses for real estate and how we can make money off of them little bit about the process and let’s talk a little bit just about why real estate changes why why do we change the use of real estate all simply put because our environment changes society changes as it is right now in fact I would say it’s changing quicker in the real estate world right now than it ever has in my lifetime we are seeing a huge influx of people leaving downtown urban areas a lot of people are working from home 60 percent of the U. S. workforce working from home whereas before it was 15 percent we know that not all these people are going to go back to work in an office so what’s gonna happen with those office buildings we’re gonna have to find a different use so there’s this evolution in real estate it’s been happening forever it’s gonna continue to happen happens at quicker pace is that sometimes but let’s talk about a couple of these little trends small turn it uses. A retail space in Manhattan was down 25 percent but for cove in 19 happen and now it’s got to be down a lot more than that we know that wears a huge flow of people leaving dance higher cost of living areas and we’ve talked about this before like New York and San Francisco and Los Angeles. Most amount millennials that is the biggest demographics a lot of them are continuing to leave these dense urban areas and cove it has only expedited that we’re gonna have a whole bunch of property that will undoubtedly. I have a new use in the future just as you guys have seen a lot of the gentrification happen with old warehouse buildings turned into apartments well now we’re gonna see office buildings turn in something else we’ll see retail centers maybe turn into something else it all boils down to what is the best use for that property at that time now with residential real estate it doesn’t change use as often most the time because it’s not zoned commercially you know it’s zoned residential so can be harder to change in the first place one of the beautiful things about short term rentals is that we are able to in most areas you gotta check with your local regulations but were able to change the use of our property we have a long term tenants in there and then we put in the short term one so it’s it’s transient just like a hotel but we get to bypass a lot of the difficult zoning changes that we would if we were to say change that residential property into an office building with that said we convert to short term rentals because it makes us more money that of course depends on the property but that is the goal and we know that before we acquire new property so the question comes up if we’re not actually changing the use legally you know for not changing the zoning of that property from residential to commercial per se you know like a hotel has a transient occupancy zoning that allowed for that are a lot of our short term rentals do not but are we still increasing the value of that property because the revenues increasing well I would say that we are for sure in some places more commonly the areas where permits are issued and there’s a limited supply. Because if there’s a limited supply and the demand stays high as it has in as it will continue in the future than those properties will make more more money so aside from these properties that have permanence and their their value increases because of that what about a property that doesn’t have a permit to run on a short term basis what we’re seeing is more more pop up on the MLS for sale and they’ll be advertises Airbnb 2 units and they’ll show the history and I do think that it raises the value of those properties sometimes not not always but it’s becoming more and more common so is the legal issues around renting short term clear up. And someone has a successful short term real property then I think absolutely that property will be worth more than it was as a normal long term rental so that’s why we can purchase shore terminals we make more money does it increase the value of those properties depends I think sometimes it does now this is sort of the evolution of real estate outside of this where we’re changing use. That definitely changes the value of of properties so let’s go through some examples I’ve got 10 examples Fauria we will with right through these some of these will be pretty familiar T. and some might be a little bit out of the box so first one we talked about short term rentals the second we’ve got a residential assisted living facilities a lot of people across the country in the U. S. are taking single family homes and converting them into assisted living care facilities and this can be a great way to earn a ton of money it’s changing the use of the property and now I know that there are a lot of regulations and laws around this so you want to check with your adviser I and it’s a process you’re starting a new business but that’s one way that people are taking residential homes and generating more income from them and now if you create that assisted living facility and it’s running it’s a business you can definitely sell that property for more than a would have been worth as a residential home as long as you have the history and the buyer of course we always need a buyer also pretty common is to take a residential space and convert it to an office or some sort of commercial space this happens more commonly and a lot of the midtown or downtown areas because they already have this property’s already have commercial zoning but you see that quite often you know residential apartment a converted into a lawyer’s office or a dental office or a restaurant or something like that so that’s a common one and then we have going the other direction something that was already in office that becomes an apartment and this I think is gonna be a huge trend in the future just because we’re gonna have so much extra office space available and we have a shortage of housing so it kind of makes sense that might help a lot of those sort of stranded. Properties that are vacant have a good valid use again something else we see is when someone takes an apartment and converts it to a condominium so that’s again changing the use you’re able to sell if if you go through that process you create homeowners association the school quite a lot of steps that you have to do in there but that can be a really good way to make a lot of money I’m actually doing one right now kind of excited about it our the process of forming the H. away right now and for me that these properties they just make more sense there’s a lot of tied up equity in them and so that’s one way that we can get that equity out. Out of kind of like a shared space so there they already had their own tax ID so kind of scored with that deal but there’s no H. away some setting that up right now and then I’ll be able to sell each 1 of those units as its own property and it’s perfect for first time home buyer in today’s environment so that’s another thing that we see on the high end of a cycle right because the properties have appreciated quite a bit and it just makes sense you can you can capture a lot of that equity now we can roll into something else at 1031 exchange but that’s another way now here’s here’s a few other account out of the box ways that. People are changing the use of their property or adding to the use of their property cell towers if you have a property that’s in a most time isn’t going to be in a commercial area but it could be a single family home it just has a big space out back people are working out deals with cell towers to where they put the cell tower on their space that’s super easy deal if you can find someone to work with on that because there’s no management right after they put that bad boy in it’s just sitting there their pain you must time a monthly fee you know I’ve I’ve heard several different types of deals but that’s one way to add to the use of an existing property and kinda in line with that our billboards so if you’re in sort of an industrial commercial area maybe house backs up to a freeway or something like that people can put in billboards too and those or don’t take any management at all and they add extra value and by adding that extra value your property your property becomes more valuable have slightly changed its use for I guess you could just see you added to the use and all of these things require you know that you check with your local city ordinance a lot of regulation around changing uses by we change the use of a property to maximize the value of the property that’s why we do short term rentals storage lots of people are investing in store she stays us. People in the US we have a lot of stuff right a lot of staff more than most the world and we don’t really seem to be slowing down and the thing is we we put the stuff in storage. And we don’t want to get rid of it even though we may never even see it again for several years so storage can be a great investment it’s not management intensive either or doesn’t have to be I should say and you could if you have let’s say you have a apartment complex you can add storage to your apartment complex they sell those metal containers shipping container type type things that you could put on your property with a nice you know solid secure Gator door unlocked and you could rent that to existing tenants for some some extra storage space so that’s that’s another way to add value to an existing property and then one more in this this is an interesting one in this this again is probably gonna be more for a more urban area but is is parking space and you see this in a lot of high touristy areas which is where we want a lot of our short term rentals most the time is that parking can be hard to come by and if you have extra space on your property you could open up if there’s a fence in town you can get a little extra money from that now we have these huge parking garages in downtown areas all over the place it’s gonna be interesting to see what happens to all these parking spaces as the invention self driving cars continues to be more and more popular I mean if we don’t need to park your car anywhere and what’s gonna happen in the space while they use is gonna get changed again we’re gonna develop something in its place if people are still populate in that area if the group a population still growing we’re going to find a different use to real states awesome it it’s it’s unlike most other investments for you can actually change the use of it and I love short term rentals that’s why we have this podcasts and and that’s why we teach about that I think for a couple reasons because we can actually change. The use of these properties without having to go through a lot of the legal work most of the time so we can really increase the value and the revenues by changing the use but it’s so exciting to work with real estate and know that in the future if the environment changes that we can change the use of our property a lot of times to fit the new environment. So keep an eye out when you’re when you’re looking for your next deal or maybe you have some deals some properties in your portfolio all already they may be better suited for something else or you might want to consider changing their use are adding to the use of that property to me a great way to generate equity and additional income and so when you’re looking for new properties just keep that in mind if you find an apartment building for example that’s also zoned commercial that’s going to add to the value in that as your options and that adds to your backup plans so I like those commercially zoned properties anyways being in the short term rental space because if I needed to it would be a lot easier to get a hotel license a transient occupancy tax having that zoning already so just when you’re out about you know when you’re looking at new properties keep in mind the more options you have the better and that is one of the cool things about real estate is it just provides us lots of options and lots of opportunities if you guys are enjoying the podcasts please let us know send us a comment. Like subscribe and share this with someone else if you think they will find value as well we would really appreciate it so until next time stay in safe and healthy out there and I hope you have a wonderful day. Want to get on the fast track to financial freedom through short term rentals what all searching the properties you. You want to make sure that you acquire the right properties I want to give you my. Yes that there is no charge to my gift to you for being one of our subscribers just the rest methods.com R. E. S. T.. .com.

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