How Self Driving Cars will Change Real Estate Forever

the fundamentals of real estate investing come down to demographics and societal shifts those impact supply and demand they impact the way we live a societal shift like working from home right that really changed things up in our society well I have one other that's coming and it might not be that far away that's definitely going to have an impact on real estate and it's one you probably haven't been thinking about too much stay tuned as we jump into that on this week's episode of the short-term

rental riches podcast welcome to short-term rental riches we'll discuss investing in real estate but with a specific focus on short-term rentals quick actionable items to acquire manage and scale your portfolio I'm your host Tim Hubbard welcome back to the short-term rental riches podcast happier here again I just got back from a nice little trip to California California that's where I'm originally from although I haven't lived there in quite a long time coming to you live down here in Columbia this beautiful city behind me amazing views

if you haven't been here before uh and you get the chance I highly suggest checking it out but anywho I had a great time in California too California is a beautiful state and I know I pick on it a lot because of the regulations and the lack of landlord friendliness I still own properties there today but I've sold most of mine invested in other markets as most of you know that have listened to this podcast for a while but there's no doubt about it it is

a beautiful state and so it was a really good time I got to do some wine tasting drove around Napa my family's from Sacramento visited with family friends and while we're there we went to a wedding as well with a good friend in Tahoe which is a beautiful place if you've never been there I highly suggest you check that out as well and my friend picked us up I don't have a car there in California anymore and so I luckily got to go with him but

it was great we got to chat the whole while along and we drove up in his Tesla and he has a newer Tesla obviously we know Tesla's have some self-driving capabilities but the reality is they're basically there they can pretty much drive themselves and I know that the idea of self-driving cars is not new to us it's becoming more and more familiar I remember being in San Francisco years ago I mean this was probably a decade ago and I was driving I was working a different

job I think I was maybe building I was building my real estate portfolio at that time but I was also doing some other jobs on the side remember looking next to me on the freeway I was stuck in traffic at Old San Francisco traffic and there's this van next to me and I look a little more closely and there's no one in the driver's seat and this was actually this was probably more than 10 years ago it's probably like 15 years ago up on the roof

was a giant satellite sort of GPS system and there was someone in the passenger seat but no one driving this van and that was a really long time ago and now we're seeing all the biggest car manufacturers come out out with electric vehicles a lot of them with self-driving capabilities Tesla I think's been leading the front on this but there's a whole bunch of them now they're doing this with 18 wheeler semi trucks they're doing this with Uber experiments so that there's autonomous vehicles with no

one actually driving it and so this is coming this is definitely coming I think it's closer than a lot of us might think and it's going to have some serious impacts on our real estate so I want to talk about a few of those today the first one is is that we've always thought about real estate as location location right it's always come down to location we want to be near attractions we want to be near a beautiful lake or mountains or the ski Resort or

whatever it happens to be but a lot of that has to do with the distance to get to that place and so if we don't actually have to drive ourselves in the future and maybe we can just sit down and get some work done maybe the same work that we could do at our remote office now well then the location becomes slightly less important I'm going to go through sort of my thoughts on what I see happening to Suburban type real estate versus downtown but before

we do let's just think about this if we don't have to drive ourselves in the future and of course this isn't going to happen overnight but it's already happening in places well then we're not going to need as many parking garages are we and what takes up a lot of space and downtown markets those are parking garages so those could be used for something else a lot of mechanical Vehicles need a lot of repairs they need regular maintenance in fact I used to work with repair

shops for years selling software business management software so I saw this all the time and there's shops in all the us across the world and we're not going to need as many of those if we have all electric cars in the future right so as autonomous vehicles become more and more common we're not going to need a place to park them most the time right and that's one of the beautiful things about it all these parking garages we have in downtown areas it's really expensive real

estate we're not really going to need those anymore right if our car can just drop us off and pick us up later so this brings up the question well if there's not that much issue it's not a big challenge getting downtown then what's going to happen in the prices outside of downtown in a suburban area for example uh I think depending on the market that they're probably gonna be equaled out just a little bit more now I still think personally that people are going to want

to live in downtown areas I think people like to be next to people and if people can walk they love they love to do that too that's where a lot of my properties are a lot of my short-term rentals so I think instead of location location it's probably going to come down a little more and this is just generally speaking to access maybe access access access right because if you're living outside of downtown you're uh maybe let's say you're 20 minutes away with a little bit

of traffic driving yourself that's the other thing that's going to happen with autonomous vehicles is that they're going to drive a little better they don't get tired they're not going to fall asleep they're not going to look at accidents as they drive down the freeway and which causes congestion and traffic so theoretically traffic should be a little better too so if we're living right outside of a downtown area that now takes us 30 minutes to get to and in the future of course this is not

gonna happen overnight it's going to take quite a bit of time uh but in the future it only takes 10 minutes to get to that downtown area then I think those prices might level out just a little bit and you might be thinking well if it's easier to get downtown then the price is downtown should should go down too right there's going to be a little less demand there but not necessarily I mean what's going to happen with these parking garages what if they get turned

into more restaurants there could be lots of new use cases so I don't think that's necessarily going to affect um downtown prices as much as we might think so how's this going to affect our short-term rentals well of course it could affect the property values a little bit it really comes down to knowing our guests right we talk about this all the time is the guest coming to your property are they someone that's driving typically we need to know that right are they someone that's going

to need a parking spot we need to know that so if you have a downtown property a lot of times this is where we need parking and it's hard to come by if someone doesn't have to drive themselves around anymore or rent a car it's just much easier to get around then that's not going to be as important now I think drive to destinations like someone's probably not going to take an autonomous vehicle or an autonomous Uber for example for three hours to a destination because

it's probably going to be a little too costly so we just need to know what types of guests are visiting our properties if you're doing a lot of medium-term stays a lot of times people like to have a car when they're staying for several months at a time too so again I think this is going to come down to what the prices are to travel around an Uber to to travel around an autonomous Uber and I think those prices are actually going to come down quite

a bit too because when cars are driving themselves one of the things a lot of people are talking about is that we're gonna enter our cars into the shared economy as well just like we have with Airbnb so think about that you buy a car you only use it when you need it and the rest of time it's making you money now this might not sound too unfamiliar to you because yes this already exists except for it exists for vehicles that you rent and actually have

to drive right they're not autonomous vehicles you have to be the driver and I'm talking about turo so I actually just rented a car when we were in California too on turo it was amazing it's where someone has a car just like Airbnb where someone has a house when they're not using it they can rent it out so someone dropped off we rented a nice little fun car to do some wine tasting convertible it was a great time but they dropped off the car my parents

house for a stand and they picked it up when we were done it unlocked itself just like the automatic locks that we use on our properties now or that you should be using and so I don't think we're that that far away at least the concept of this already exists and it's something a lot of people are already accepting so it's definitely going to shape our society a little bit and when our society gets shaped differently so do the real estate prices so some of the

benefits to autonomous driving are just obvious right but I want to cover them sort of in a nutshell because I'm actually really excited about it I technically still own a car in the U.S and I used to have one down here in Columbia but I don't really like driving that much I actually prefer to take Uber because a lot of times I like to work or read or or do something on my phone while we're driving around so obviously that's one of the big reasons autonomous

vehicles are going to be a big benefit we can get our time back right we weren't meant I don't think to be doing the same thing over and over kind of like robots when we're driving that's kind of what's happening I used to drive so much although I did get a lot of good audiobook time in so for taking advantage of that time it can still be helpful but I think the majority of us would prefer to drive less if we didn't have to and I

know a lot of the people that were hiring and bringing on our team this is the same situation for them I just interviewed three people yesterday that used to work with Airbnb one of them just joined our team so really excited to have them on but their reasons they're they're out of the Philippines they worked in a call center for Airbnb and they all had to commute uh and then when covet happened they didn't have to commute and now quite a bit of time later they're

asking them to go back to the office and they just didn't want to do it and so luckily for us we picked up some great talent um but this is just the reality things are changing people don't really like these commutes if we don't have to do them so this can buy back a lot of time for us it also allows a segment of people to get around easier that can't actually do that right now I'm talking about elderly people and maybe someone that lost their

driver's license or maybe someone that's partially impaired or can't see so this allows them to use these Services as well we talked about aging before on a prior episode actually episode 150 and how the Aging demographic is also changing real estate and where demand is going so if you missed that one go back and check it out the reality is these big societal changes change the way we live and they change the prices of our real estate if we look at Amazon they've changed the way

retail works right retail is having a really hard time right now working from home has changed the way that we used to work in offices offices are getting hammered right now Across the Nation and unfortunately I don't see that I don't see an easy solution to that most of these Office Buildings are not ripe for apartment conversion like a lot of people think it actually costs more to converge some of these Office Buildings than it would to just build apartments from scratch so we just need

to be ahead of these things I know this self-driving one is kind of out there it's in the future I personally think it's going to be awesome it's going to help ease traffic it's going to help buy back our time it's going to make the value and demand of our properties change depending on where they're at could make it much easier for our short-term rental guests coming to visit us assuming that the prices to use these Services is reasonable so I'm bullish on it I think

it's great people are more mobile they're going to move around more obviously duh Tim uh and I also think that means they're going to travel more they're going to have an easier time living in short-term rentals which is a huge Trend that we're seeing and I'm excited to see it continue so I hope that gave you a little bit of insight I know this is really far down the road the good news with real estate is that we always got to live somewhere right and so

hopefully you're picking your real estate Investments wisely and until next time I hope you have a fabulous week I've dedicated years figuring out how to manage my personal portfolio remotely and it wasn't always easy and it took a long time but now my amazing team can professionally manage my properties without me and good news our team can also manage yours let us save you the stress and headaches and some money by offering you an industry low fee find out more about partnering with us head to

striches.com hit the property management button answer a couple quick questions and meet with me personally that's striches.com rest easy knowing that with my team your properties will be in excellent hands