Time to ditch home ownership for REITs?

Happy Monday! Let's unlock some exciting insights from the world of real estate vacation rental investing:

• REITs are outperforming private real estate, offering higher returns 📈 

• Nestment is democratizing real estate investment with a co-investing and co-ownership model 🏘️

• Denver homeowners are turning to Airbnb to supplement their income 🏠

• 🔥 Deal of the Day! 🔥: 3 bd | 2 ba | Blue Ridge, GA

REITs: The Unseen Champions of Real Estate Investing 🏆

Let's dive into the world of real estate investing, where we often find ourselves comparing the performance of Real Estate Investment Trusts (REITs) and private real estate. It's a common belief that private real estate, with its inherent risks and management demands, should yield higher returns. However, the reality is quite different. REITs have consistently outperformed private real estate, with an average annual return advantage of 2-4%.

The secret to REITs' success lies in their structure and operations. First and foremost, REITs have superior access to capital. They can leverage their equity with debt, just like private real estate, but with the added advantage of accessing a wider range of capital sources and better financing terms. This is largely due to their status as large, diversified, and professionally managed public companies.

Efficiency is another key factor. REITs can afford top-tier management talent, and their scale allows them to operate at a lower cost than private real estate. For instance, Realty Income, a prominent REIT, spends only 0.3% of its total assets on management costs annually, thanks to its vast real estate holdings.

REITs also enjoy significant economies of scale in other areas, such as property management, renovations, and legal services. Their size allows them to negotiate better deals with contractors and service providers, which translates into cost savings and higher returns.

Moreover, REITs have the capacity to develop properties from scratch, a strategy that often yields superior returns compared to buying stabilized properties. They can also launch additional businesses related to real estate, further boosting their profits.

The ability to engage in spread investing is another advantage for REITs. They can raise additional capital to buy more properties when their cost of capital is lower than their expected returns, resulting in a positive spread. This strategy enables them to grow faster and deliver higher returns.

Finally, REITs are currently trading at significant discounts to their net asset values (NAVs), making them an attractive investment option. As of late 2022, REITs were trading at an average discount of 28% to their NAVs, according to Janus Henderson. This means investors can buy real estate at a discount through REITs and still enjoy all the benefits discussed above.

So, if you're an investor looking for better risk-adjusted returns in the real estate sector, REITs might be the way to go. They offer a combination of superior capital access, efficient management, economies of scale, and growth opportunities that private real estate simply can't match.

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Nestment: The Game-Changer in Real Estate Investment 🎲

Nestment, a groundbreaking startup, is transforming the landscape of real estate investment by introducing a co-investing and co-ownership model. The platform is designed to democratize real estate investment, making it more accessible to a wider audience.

The traditional barriers to entry in real estate investment, such as high capital requirements and complex processes, are being dismantled by Nestment. The platform presents a curated selection of high-quality properties, each carefully analyzed and selected based on location, potential returns, and market trends.

Nestment's co-investing model is a game-changer. It allows investors to pool their resources with others, significantly reducing the capital required to invest in a property. This approach not only lowers the entry barriers but also enables investors to diversify their portfolio and mitigate risk.

The platform is user-friendly and intuitive. Investors can create investment groups, explore cities, and identify lucrative real estate opportunities. They can share and save listings, evaluate properties, and collaborate with their group to make informed investment decisions.

Nestment also provides a dedicated relationship manager to guide investors through the co-buying process. This professional assists with paperwork, ensures compliance with regulations, and helps navigate the pre-approval process with lenders.

The platform's co-ownership model further democratizes real estate investment. It allows investors to own a fraction of a property, opening up the possibility of investing in premium properties that would otherwise be unattainable for individual investors.

Nestment's co-ownership model offers several advantages. It provides flexibility and allows investors to diversify their real estate portfolio. It enables participation in high-value properties, such as commercial spaces or luxury residences. Moreover, the platform handles legal and administrative tasks, allowing investors to focus on the potential returns of their investments.

In essence, Nestment is revolutionizing real estate investment by making it more accessible, flexible, and profitable. It's a platform that's worth exploring for anyone interested in diversifying their investment portfolio and stepping into the world of real estate.

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Airbnb: Denver Homeowners' New Best Friend 🏡

The rising cost of housing in Denver has led many homeowners to explore alternative income streams. One such avenue is listing their primary residences as short-term rentals on platforms like Airbnb. As the summer travel season heats up, this strategy is proving to be increasingly lucrative.

Vacationers are gravitating towards locations close to nature, which has driven demand for Vrbo homes in the West up by over 30%. A recent survey from Vrbo indicates that 69% of hosts expect summer occupancy to be the same or higher than last year.

However, it's important to note that in Denver, you can only have one short-term rental property, and it must be your primary residence. You also need a short-term rental license, which allows you to rent your property for one to 29 days.

Nicole Pinto, a homeowner in Baker, Denver, shares her experience with Airbnb. She bought her home late last year and decided to list it on Airbnb to help cover her mortgage costs while she travels for work. Although it's a lot of work and she hasn't yet made enough to cover her mortgage, she's been able to cover about two-thirds of her monthly payment.

Pinto emphasizes that it's not a get-rich-quick scheme. Denver is one of the hottest short-term rental markets in the country, and there's a lot of competition. However, Airbnb has allowed her to diversify her income and offset some of her mortgage payment. Plus, she enjoys seeing guests fall in love with Denver and her neighborhood.

For those considering becoming a host, Pinto advises leveraging your network. Do you know someone who cleans? Is there someone who can help you manage bookings? While Airbnb provides some tools for homeowners, Pinto initially handled most tasks herself, including cleaning. Despite the challenges, she believes the sense of entrepreneurship and pride that comes with it is worth the effort.

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🔥 Deal of the Day! 🔥

Address: 561 Arrowhead Pass, Blue Ridge, GA 30513

With its end-of-road privacy, charming log cabin design, and picturesque location nestled between a babbling creek and a serene pond, the property at 561 Arrowhead Pass in Blue Ridge, GA, offers an idyllic setting for a vacation rental, perfect for guests seeking a tranquil mountain retreat.

Airdna data:

Estimated monthly payment: $3,200/month

Estimated monthly revenue: $5,800/month

Cashflow excludes additional operating expenses. Always confirm local regulations, HOAs and permits before purchasing a property.

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