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- [00:00]
Dan
Welcome back to Real Estate Without Borders. Today we're going to be talking about Airbnbs and most notably, the five best and worst places to buy Airbnbs. I actually think we expanded the list of 10 top 10, let's call it top 10 global edition of the best and worst places to Buy Airbnbs. And we were inspired to create this episode via a recent news development in Spain, which is a place that we've talked about a lot on the show. Anybody want to tell me what's going on there? I can do it.
- [00:30]
Nick
I'm not telling you. Can you, Dave, Go.
- [00:33]
Dan
Spain ordered Airbnb to remove nearly 66,000 listings from the country. Their consumer Rights ministry has reportedly ordered Airbnb to remove all of these listings due to the listings violations. So there's a big crackdown on Airbnbs going on right now. Spain is facing an affordable housing crisis fueled by rising rent prices and a surge in tourism. Again, we've talked about this a ton of times on the show here because of the Golden Visa program and, like, their efforts to attract Nomad digital nomads, Nomad Capital, whatever you call it. And so anyway, I mean, so Spain may be getting crossed off the list if you're thinking about making an Airbnb investment, because this is a really popular style of investing that we see a lot of people doing, right? Like, even in the US Or Canada, you'll see a lot of people buy, like, a cottage outside of the city that they live in, and then they'll Airbnb that cottage, right? So they get kind of. You don't get really a return, per se, but you get this lifestyle return that we'll call it. So you get to use the cottage whenever Airbnb guests aren't. A lot of people are kind of having the same philosophy with some of these more exotic locations, buying investment properties in Italy or Spain or Portugal or a bunch of other places that we're going to mention on this list here and say, hey, now I got a place that if I want to go travel every year, I don't have to get a hotel room. I can go to Dubai, which is number one on the list.
- [02:01]
Dave
Did they. Did they ban. So, okay, I'm trying to do a little bit more research. I don't know if they didn't. I don't think they banned Airbnb. It's like they blocked.
- [02:08]
Dan
They're just heavily regulating it, right?
- [02:11]
Dave
So I think what they're doing, they're banning a bunch of listings because they were missing, like, mandatory license Owner id, which I. Not to sidetrack too much, but I think this is happening in. In Mexico, too. And they're trying to. Mexico's trying to, like, eliminate Airbnb arbitrage because you're getting people rent and then Airbnb it out. And the people that are like the middle people are. Are kind of like doing a half hazard. Hap. What's the word? Haphazard. Saying.
- [02:39]
Dan
Yeah, that.
- [02:40]
Dave
Saying.
- [02:40]
Dan
Yeah.
- [02:41]
Dave
They're doing that subpar job of keeping that Airbnb up to date and up to, like, code. So I think in Mexico, they're doing the same kind of thing in the future where they're going to try to, like, make it mandatory for these STR licenses. Kind of like Toronto.
- [02:55]
Dan
Yeah. I think this is just something that's going to happen gradually over time, to be honest. I think this is just one of those things where, look, it's kind of like Uber or any technology, right. You get this innovation that disrupts the industry, it's disrupted this industry, and policymakers are very slow to act. Right. And they don't know the consequences of these things existing. They didn't know the consequences of the digital nomad stuff. And originally. Right. But now as they start to see the consequences and you know, it mentions in this article how the. It says really reached a boiling point between Spain being one of Europe's most popular destinations for digital nomads and remote workers. But the tension between locals and tourism has reached a boiling point. And over the past year, cities like Barcelona, Mallorca and the Canary Islands and Seville have seen protests and we're growing calls for reform. So they're doing something about it.
- [03:51]
Dave
Yeah.
- [03:51]
Nick
You know what's interesting, though? Sorry, go ahead.
- [03:55]
Dave
They gave 15 days to deactivate these. So on May 19, they announced this and said, you got 15 days to deactivate 65, 000 rentals. That's crazy. Imagine getting that notice.
- [04:05]
Nick
This is like, people's like, full livelihood and business. You know what I mean? That's the thing that's always scared me about Airbnb investing is that, like, you've just left so much volatility and so many uncontrollable things. But, you know, having worked with Airbnb and other capacities and having hosted on Airbnb myself for years, I think it's a really great business if done correctly, number one. Number two, Airbnb now with all of the major pushback they've gotten in these huge markets, London, England, New York, Toronto, across Canada, across the U.S. and now kind of the sweeping restrictiveness across Europe. They even actually introduced a whole bunch of like, and this is not sponsored by Airbnb or anything, but they've introduced a whole bunch of new, like, sick services where it's not just going and staying, it's like, like their whole thing was like, hey, you know, go and experience stuff with a local. Here's a tour guide, you know, here's a Nona you can go make pasta with. You can book it all through. Here's a chef that you can come in. So they've really tried to expand their, their service offering, I guess out of almost an act of desperation to try to keep their clientele because unfortunately, regulatory bodies have made it just really difficult to operate this kind of business.
- [05:14]
Dave
Yeah, I saw that new update. It's cool.
- [05:16]
Dan
Yeah, I think they have that co host network now too, right? Like, we've been running ads for that on our, on our Canadian show. And I mean, I think that they've seen like, if you look in the U.S. like, there's been this huge, huge sub industry built around Airbnb management, right. And so I think that they're trying to get in, get a piece of that while also having a greater level of control over the, like, it's, it's almost like qa, right, Quality assurance, where they're actually, you know, now that they have their own co hosts and they're, they're kind of in the loop, they're able to make sure that what's being delivered is what's promised and they're doing a good job at it, et cetera, et cetera. And so I think it makes, makes a ton of sense. Really, really good business move. From my perspective, the one thing I'll say, and then we'll hand it over to Dave here. Regulatory risk, is that, that thing that you just described there? And I think it is worth knowing, like when you're buying real estate as a real estate investor, there are a handful of different types of risk that you expose yourself to. And regulatory risk, what you just said, Nick, is the biggest one for this type of investment, right? Where you have a, you have a business that you've just created that could be taken away from you instantly. And so the easiest way to really, really look at whether or not an investment is good, if you're doing it from an perspective, because that's what we're going to be talking about today, is if I got the Airbnb taken away from me, would this still cash flow as a long term rental? And if the answer is no, Then you're exposed to regulatory risk.
- [06:27]
Nick
Yeah, the one, the one last piece I'll add to that there. And just, just to clarify, because I'm sure it'll come up. And Dave, you'd mentioned it, the, the arbitrage model, right. That was really something that's been quite unique to Airbnb where essentially what that is. And I've had people approach me with, with my units that, let's just say they're not in on Dubai, Bali or Lisbon. Okay. My, my rental properties are not in any of these ultra desirable spots. But, but I've had people approach me and essentially what Airbnb arbitrage is, I like, let's say, Dave, you've got a rental property. I go and rent that off of you. And in a lot of good cases, if you're, if you're a good operator, you'll, I would say, hey, Dave, I'm going to rent your, you know, your amazing place in Bali, this, this great villa you've got, and you want 3,000 bucks a month for it. Okay, great. That's no problem. By the way, I'm going to spend some money furnishing it. I'm going to rent it out shorter term. I then go and I have to make at least $3,000 a month in order to make a profit off that. And I go and rent it out on nights and weekends and ideally I can make a lot more money than that. So the arbitrage piece is really interesting because you don't actually have to own any real estate. It's all an operations play. But I think as you were saying, Dan, or at least alluding to, that's kind of one of the reasons that we've seen all these cracks form in the Airbnb foundation and I think why the regulatory bodies have kind of come back on it so hard.
- [07:42]
Dan
Oh yeah, let's get into the list here.
- [07:44]
Dave
Yeah, yeah, let's. We'll start with the top 10 best and we'll go through. I was looking at the numbers and kind of analyzing to see if they're somewhat accurate or not. And from, I can only say from a few of them, they seem decent. So number one, top 10 best places for U S. Investors to buy Airbnb rentals. Number one, Dubai Year Round Tourism. Let's say like they say, 70 occupancy. Average daily rentals are like 169 a night. Investors benefit from high rental yields and extremely friendly environments. No property taxes, straightforward STR licensing. And I think it appeals to like a high net worth individual that maybe is okay with paying higher nightly rates. They're saying 42k annual revenue on like an average Airbnb property. Obviously that would depend on the property type. You want me to rip through this list here? You want to do it one at a time? You got some stuff.
- [08:39]
Dan
I have it up on Air DNA here as well, which I always use for analyzing Airbnb markets. And it's a 98 market score and they have the annual revenue even higher. So if you average it out, I guess there's probably a lot of luxury rentals there. So you've got an ADR of they have it at like 750, which is down 3% year over year, but it's still 750. And occupancy rate they have at 62%. I mean, seems legit, like it's a good market, right? I mean it's going to have a higher starting point, but I think you'll get, you'll get like your ROIs would probably be pretty reflective of that. Right.
- [09:13]
Dave
I feel like it's a bit seasonal there too though, from talking to people that I know that live in Dubai. They all move for the summer because the summers are like so hot, right?
- [09:22]
Dan
Yeah, that's why, like, you know, it's like, I don't know necessarily if it's super year round. Right. But 62% is pretty good. Like that's, I don't know, I mean that's better than like, you know, a Toronto or something like that.
- [09:32]
Dave
I feel like it's, it's probably more common than I'll just get to use Mexico because I lived here for a while. But then like most, more people would book a trip to Dubai than book a trip to Mexico in August. Like I think that'd be more common to be like, you know what, Dubai is an experience. Maybe it's cheaper, I just want to check it out. Whereas like Mexico, it's just death hot. But anyways, what's next Here we got.
- [09:56]
Dan
Bali, Indonesia, Bali Roi hotspot affordable, as low as 85 bucks a square foot and low acquisition costs with 65% occupancy and a 93 USD ADR on average, translating to solid annual revenue, 18 to 20k per property, year round tourism and inexpensive operations, low labor. Obviously in Dubai it's more of a luxury city, so it's not gonna be able to find somebody for cheap to do stuff. But you get to some of these more second and third world areas. The tourism industry is really like the best paying industry you can probably get all kind of a lot of your cleaner staff, et cetera, for a lot better. Remember, you're like, when you're getting into airbnb, you're actually running a business too, right? So, yeah, I think foreigners use leasehold structures to invest. Is one thing that they say in Indonesia, since freehold ownership is restricted. I think we mentioned that when we were doing our full episode on legal, where you can legally actually buy. Right.
- [11:00]
Dave
Have you been to. I've never been to Bali. I think it's on my list.
- [11:03]
Dan
I missed that. I missed that. I didn't take a gap year after.
- [11:09]
Nick
You don't have to do that. I went in my mid-20s and, oh, man, it was just an incredible. Probably one of the coolest places I've ever been. And they're not kidding. Like, Dave, the Villa style in like, Tulum or PV or any of the Mexico hotspots, man, they stole it from Bali. Bali is like the original incredib huge villa. Like, I remember we. We stayed in a villa that had like four. It was like a compound, and it was like a few hundred. It was like the price of a New York hotel. Like, it was literally crazy. This is, I don't know, eight years ago at this point, but, like, would recommend anyone go to Bali. You can do the. You can do the yoga and massage, Bali in the jungle style, or you can. You can do the. The other stuff we don't have to get into, but you can do whatever you want in Bali. It's just. It's an amazing, beautiful place. People are just extraordinarily kind, full of all over the place.
- [12:03]
Dave
That's the one thing I've heard, like, not saying people here in Mexico aren't as friendly, but I've heard, because a lot of my friends go down here for, like, fight camps. They're Muay Thai or boxing. And they go down to Thailand for a month and they'll do like a boxing camp, like, for the crazy training for like a month straight. And they say the food is just amazing and the people are super, super friendly. That looks crazy. How much is this per night? This one on your screen. Okay, let's book it.
- [12:31]
Dan
250 a night.
- [12:34]
Nick
Cool place, dude. Every single place in Bali has a pool. Every single place is ridiculous. That's just how things look over there, bro. That's just like how natural your eyes are.
- [12:43]
Dan
Like a little compound here. Hey, like, this person's making bank because that's just that one house. Or is that the whole thing? No, it must be the Whole thing.
- [12:50]
Dave
I think you're right. Oh, is it? We each get our own spot. Is that what we're doing here?
- [12:54]
Dan
Yeah. This is funny. They got the Internet speed on the Airbnb here.
- [13:02]
Dave
They do that here, too. They do that a lot.
- [13:04]
Dan
Digital nomads. Yeah. It's amazing. Frick. Obviously you didn't pick one of those.
- [13:09]
Dave
And I got. I got Starlink too. It doesn't reach my whole house, which is hilarious. That's why I'm down today. So I'm downstairs.
- [13:15]
Nick
You just gotta tape it to the back of the laptop.
- [13:19]
Dave
It's under my shirt right now. I can't get that far from the laptop. Oh, that's good stuff.
- [13:24]
Dan
All right, who's next?
- [13:26]
Dave
Who's want to hammer out number three?
- [13:28]
Nick
Sure. Yeah. We've got Portugal. Europe's Airbnb, darling. And that is Lisbon. And l gave.
- [13:36]
Dan
We're gonna get so much, so much hate mail now. Now we've got five negative reviews from freaking Portugal coming in.
- [13:42]
Nick
You know what I. Portugal is one of the places I have not been, but I have heard nothing but, like, incredible things.
- [13:47]
Dan
So this is a fun fact, actually. I was supposed to go to Powerlifting World Championships in Portugal, like, right. Like when I was like 25, 30 years ago. Like, no, when I was 25, I was at eight years ago and I broke my foot when I was at the hunt camp.
- [14:02]
Nick
My God.
- [14:03]
Dan
Idiot.
- [14:05]
Dave
At a hunt camp.
- [14:07]
Nick
So Portugal's become a favorite for Airbnb investors due to things like booming tourism, its beautiful cities and coastlines and its reasonably priced homes and just overall kind of lower cost of living year round. Tourism occupancies are in and around 70%, give or take, in. In prime areas. I've heard nothing but good things about. About Portugal and I will hopefully be there within the next year. They call. What else you want me to do?
- [14:43]
Dave
You don't like the gray skies in Ontario every day?
- [14:45]
Dan
Give you a lot of time off on a farmer looking for a wife reality show.
- [14:49]
Nick
Yeah, we only filmed for six weeks, so I got the rest of the year to just do absolutely nothing but travel around, do real estate research here. They call Portugal like the Florida of Europe, which I've always found interesting. I guess just a bit more. A bit more mullets and a bit more. There's. There's the Portugal man, I guess.
- [15:09]
Dan
What Florida are you going to? Where people got mullets? Dave.
- [15:12]
Nick
Like, Dave's going rural. Yeah, yeah, I'm going to St. County Brower County. Yeah, yeah, let's go.
- [15:22]
Dave
I'M thinking Dog the Bounty hunter over here. That's what I'm thinking right now.
- [15:25]
Dan
I think that's not Florida, bro. Like that's like Florida's like, like the Miami, bro. Like it's like. Yeah, it's like. It's like tan versions of you driving around in fake Lambos.
- [15:35]
Nick
The thing about Florida is I think it could be like any one of those things. Like Florida's like 40 different things. It's very divers because the next one here is Florida and this is like Disneyland Florida type stuff.
- [15:47]
Dave
Unreal.
- [15:47]
Dan
Makes sense.
- [15:48]
Nick
Someone talk about this one.
- [15:49]
Dave
Some of my favorite Orlando.
- [15:51]
Dan
I've been. Honestly, man, I got kids, right? So I've been looking at. I've resolved that I can't make it make sense of buying property in Florida at current prices because I was really looking at it. But I still think it just makes more sense to lease because you have all of these empty places that nobody's making money on that you can negotiate pretty good deals. But they have Orlando vacation capital with strong returns. It says their Disney area short term rentals average 68% occupancy and $180 a night. About 45k a year in revenue. In some of the markets around their median prices are in the low 200k range, making them pretty ROI attractive. I'll have to pull this up on air DNA and we can see if it agrees. But any thoughts on Florida, guys?
- [16:37]
Dave
One thing we missed and we skipped right over it was you said something about a hunt camp. And I just want to clarify, what is that? What do you do at like a. Yeah.
- [16:46]
Dan
Lord of the Flies. I don't know. You ever seen Lord of the Flies? You read that book? Basically.
- [16:50]
Dave
I read the book in grade six. I think they forced me.
- [16:53]
Dan
Yeah, it's kind of like that. It's like. No, no, like, yeah, no killing each other. But dudes that go and hang out in like 800 acres in the middle of nowhere, like do stuff but like, you know, jerky.
- [17:06]
Nick
Yeah, you're like you're making your jerky up there, buddy.
- [17:09]
Dave
Yeah, yeah.
- [17:10]
Dan
All kinds of stuff. You know, it's like. It's kind of like these tulum nature retreats. Right. But a little bit more.
- [17:17]
Nick
Yeah, but at the same time, not at all.
- [17:19]
Dan
Yeah, yeah.
- [17:21]
Nick
At the same time. Almost the exact opposite actually. From everything I've ever understood about hunt camps.
- [17:26]
Dan
Yeah. But it's got a 90 market score on on air DNA, which is good. They got a 267 ADR, which is higher than what this list says 50k revenue, 60% occupancy rate. So lower occupancy they have it at, but higher adr. So I feel like that's like a decent one. I mean especially if you're a parent, you want to have a place to bring the kids. Right? That's why I was looking in Orlando.
- [17:52]
Nick
Well, the crazy thing about the Disney stuff is. Listen, Disney is like a freaking cult. Boys. There's, there's Grant.
- [18:00]
Dan
There's five more negative reviews right there.
- [18:03]
Nick
Good. I'm stacking them up there.
- [18:05]
Dan
I read this article that just implodes our score.
- [18:09]
Nick
There's a. There was this study that grandparents and parents would. Would be more likely to take out savings or even refinance a house for a trip to Disney World.
- [18:21]
Dave
Wow.
- [18:22]
Dan
Gotta do it. Might as well. Why not?
- [18:24]
Nick
That's what you're planning on doing, right Dan? That's the family vacation coming up.
- [18:27]
Dan
Yeah, I'm selling everything. We're buying a place on a ren and I'm living in a trailer up here in Canada and go to Disney every weekend.
- [18:36]
Nick
Hogwarts financial advice.
- [18:39]
Dan
That's not Disney. That's universal, which is also sick. It doesn't even happen. That's what actually makes Orlando better. Because I go to Disneyland in California. Right. Not Disney World in Florida. Even though it's better. But the cool part about Orlando is it's got that universal, which is just epic. It's even way better. It's got the Hogwarts World. There's a bunch of crazy stuff going on over there.
- [19:03]
Dave
Dude, I would go to Hogwarts. Like I want to go to there just to check out and get a wand and all this stuff.
- [19:08]
Dan
Boys trip. Boys trip. Dave's bachelor party. Hogwarts. Let's go.
- [19:13]
Dave
I mean I'll be at the house. The wife. Yeah, we can do all three tulum stop first and then we'll go to a quick hunt camp and then RIP Hogwarts.
- [19:24]
Dan
Okay. The next is actually really cool and I'm curious because I. I always wondered like you know they got dogs right? Like Newfoundlanders, right? You know where they're from? Newfoundland. Do you think that Dalmatians are from this place on the list here?
- [19:38]
Dave
Fact check that. Let me see. Dalmatian coast.
- [19:42]
Dan
The Dalmatian coast of Croatia. Has to be right? Dalmatian is Croatia.
- [19:46]
Nick
Just looks so like nice. This is where they filmed Game of Thrones and stuff like that too. Hey, Croatian like Dubrovnik and whatnot.
- [19:55]
Dave
Confirmed. Dalmatians are named after the Dalmatia region of Croatia, where they are taught to have. We have thought to have originated while the exact origins of the breed are unknown. But that's why the name is the name. Look at that.
- [20:08]
Dan
Makes sense. Good name. If they never heard it outside of that context. I thought it was a dog till I read this list.
- [20:14]
Dave
See, I would never have thought this would be on there, to be honest. But it makes sense. Croatia is looking pretty cool. Well, they got very high summer occupancy, obviously. 81 in Dubrovnik with ADRs around 140 to 150. Many hosts are grossing 30 to 50k in a season. Property is cheaper than most of western Europe. They're saying a sea view condo could be about like 250 to 300k. I'm assuming that's us. And Croatia is lenient with vacation rentals with straightforward registrations. No annual property tax on second homes. That combined with its stunning coastline makes it a top European str market. Interesting. They're saying off season occupancy dropping to less than 50, which makes sense.
- [20:56]
Dan
Yeah. DNA. So like, so so far the lowest on the list from an air DNA score perspective. Occupancy rate's high, though. 76%. Right?
- [21:09]
Dave
Yeah, that seems high, but good for them.
- [21:10]
Nick
Dave, I feel like you've got to read this next one. This is as our resident.
- [21:15]
Dan
Geez, how did we. Dave freaking infiltrated the list again.
- [21:21]
Nick
Why is that font different?
- [21:23]
Dan
Turkey hair transplant, Airbnbs. No, let's delete that and get. Put the freaking Mexico in there.
- [21:29]
Nick
Wait, is turkey. Is turkey hair transplant stuff on this list?
- [21:32]
Dan
No. It should be.
- [21:33]
Dave
No, it's got to be 10 worst, maybe.
- [21:37]
Dan
Dude, they. Those guys are fully ver. Vertically integrated, man. You can't compete with the hair transplant doctors. They literally put you up, dude. They put you in like a freaking thing. I don't. I know this from a friend, right? But.
- [21:47]
Nick
Right. You haven't done any research on this?
- [21:50]
Dan
No.
- [21:50]
Nick
Dan comes back with a bigger butt, perfect teeth, and just like a full head of hair.
- [21:55]
Dan
Come on, dude, I need to get. I need to.
- [21:56]
Nick
He's like, oh, it's just in Cancun.
- [22:00]
Dan
Turkey, you know.
- [22:01]
Dave
Oh, that's good stuff. All right. Number six, Cancun and tulum. I can confirm that these numbers are pretty accurate. Mexico's Caribbean coast offers strong yields with relatively low prices. Tulum condos average around 160 for a studio. That's accurate, which is far less than u. S. Beach towns. Tourist demand is robust. Cancun averages around 59 occupancy. PV, Puerto Vallarta 59 occupancy. The one thing that I think when I'm investing between Tulum and Cancun is the, the. My concern with an Airbnb in Cancun is that you're competing with these big, like, all inclusive resorts. When Tulum, you don't have any, and especially when it comes to a slow season.
- [22:44]
Dan
So when we do, the ad reads on like, like for the, for the podcast on Airbnb, like, you know, a lot of the, like, stuff that we say is like, oh, when I'm going so to wherever, I want a place where I can have an office. Because honestly, if I'm going somewhere for more than three days, if it's not a vacation where I can just chill and disappear from work for three days, I want a big house where the kids can hang out and play and there's a pool and an office and all that stuff. And you don't necessarily get that with the all inclusive. That's the thing. It doesn't work well for people who are in that digital nomad world or like, for sure, think about yourself, right? You're not staying at all inclusive for the longer time.
- [23:24]
Nick
Right.
- [23:25]
Dan
I think, like, that's just my kind of counter argument there.
- [23:29]
Dave
It's actually crazy, like when we, sometimes we fly out of Cancun, sometimes we fly to Tulum. It just depends. And like the people that are at Cancun airport versus the people that are at Tulum airport are just like so different because Tulum is all like the hippie digital nomad people that are just kind of like coming here to work. And then the Cancun is all like the families that are just doing their first, you know, they're one and only week long vacation for the year.
- [23:52]
Nick
But Dave, different Dave, I've got a question.
- [23:54]
Dan
Look at how many freaking Airbnbs are in Tulum. You're right.
- [23:58]
Nick
You're one of many people that I've known that have spent a decent amount of time in Tulum. But I hear there's this thing called the Tuluminati where if you spend too much time there, you just kind of get. You're part of the year big time, dude.
- [24:11]
Dave
Like, you see that. You see people walk around and they like, you just go up. You're like, you need to go to a big city and you need to get honked at. You need to touch some concrete. You know, you need to ground your some on some.
- [24:21]
Nick
On some asphalt here.
- [24:22]
Dave
Yeah, yeah. Oh, it's very true, man.
- [24:24]
Dan
Like blend in with the nature or something. Like what? Explain this.
- [24:28]
Dave
Yeah, like.
- [24:30]
Nick
Sand.
- [24:31]
Dave
Yeah, yeah, yeah, man. It's like the earn the pen crazy. Exactly, exactly. But those, those numbers are correct for ish. For Cancun, Tulum.
- [24:40]
Dan
Okay. 45% occupancy rate. I don't know. You wouldn't catch me. I mean maybe if you're going to be using it a lot, but I. Seems like a pretty high risk from my perspective. It's got a 70 now. That's the lowest new new record low.
- [24:52]
Dave
Yeah, the, the low season here is low, right? Like we have like super high season and super low season. Like no one's, no one's in Mexico.
- [24:59]
Dan
Only the Illuminati are left there.
- [25:01]
Dave
That's right. They're not looking for the luxury stuff.
- [25:04]
Dan
Touching any. Touching any cars getting home. Speaking of places where you kind of just get detached from the whole city world, we've got Guancaste, Costa Rica. Did I say that right? Guanacaste, luxury, moderate costs. That's what they're saying.
- [25:20]
Dave
I don't know what the moderate cost. I feel like it's expensive in Costa Rica.
- [25:23]
Dan
It is pretty exp. I would consider that to be an expensive market.
- [25:26]
Nick
Yeah. Like, I mean I remember the first time I went, I don't know, over a decade ago. And then the second time I went, I'd already noticed it had been. I mean, why not, right? It's just such an amazing spot. But I just think it really did get discovered and kind of blew up pretty quickly.
- [25:39]
Dave
See if I can find is Guanacaste province or. Because I'm thinking isn't Tamarindo the city?
- [25:45]
Dan
Yeah, Tamarindo is the city in Guanacaste. But there's like a bunch of just spots in there.
- [25:51]
Dave
I'm a big geography guy. You see that? Let's get that on the record that I got that right. That'll be a. If we can. I'm going to prompt opus. If Opus AI can remember that I'm saying this and clip this out for me. That'd be perfect. Dave the geography guy, what are the stats on Guanacaste?
- [26:09]
Dan
They give it a 67 market score overall on air DNA 3 ADR. That's crazy. That's expensive for average. For these there must be like some big billows beach condo. It's saying 300 bucks a night in high season, 30k rental a year. Here it says 60k rental on air DNA. Short term rentals are legal and common in tourist areas. And I would say the one thing that this has kind of where versus Mexico is. You're not really competing with a lot of these all inclusives. You gotta be looking for an all inclusive to find one in Costa Rica. It's not developed in that way and it's kind of been protected in that way. Sort of like deliberately. Right. Because I think they don't like, they, they have just haven't really wanted to kind of sell out, you know, be corporate. It's not like the vibe there, you know, it's more like surf.
- [26:58]
Nick
Yeah, bro.
- [27:00]
Dan
Like hip hippie, like, you know. So I think it's not, it's not that corporate vibe.
- [27:04]
Nick
Yeah. Another place with just an insane amount of like amazing villa and Airbnbs.
- [27:11]
Dan
Yeah, yeah. Doesn't score exceptionally well though. So what else we got here? We got Andalusia and Canary Island, Spain. I feel like we talked about that enough. It doesn't really matter now because they're getting smoked by regulatory risk. We got Italy. Italy. Or as our friend Tim says, Italy.
- [27:29]
Dave
Italy.
- [27:30]
Dan
Heritage tourism with solid ROI. Iconic destinations ensure high rental demand. 70% occupancy in Venice and 164% ADR. 4k annual revenue per listing is what they're saying on average. And you can buy. It says home prices 400k euro to that would be like city center. 2 bedroom in a historic city center or a countryside villa in Tuscany. Or Puglia. Is that Puglia? How do I say that? Nick, you're the resident Puglia. 200 to 300k.
- [28:04]
Nick
Freely it seems a little light, but they'd be close. I've spent a lot of time in Rome and, and that is just like you will have people there non stop and, and similar to like you'll have a slow season for sure. Gets extremely hot in the summer. So all the Italians leave and then all the tourists come. But that is just a. I mean, Rome's never going out of style, you know.
- [28:27]
Dave
I feel like Tim mentioned that this was his favorite market, right, Dan?
- [28:31]
Dan
Yeah, he did, yeah. Well, because it's been like, it's the last one. He, he really presented a strong case for. He was like, you know, like number one was like the Italian brand. Right. Like, you know, everybody knows Italy. You know the history. Exactly. And then number two was, you know, they just haven't been cracking down because Italy is going through like a demographic collapse right now where basically like their population is actually in decline because it's a bunch of old people and a lot of people left. Right.
- [29:00]
Nick
And chill, dude. I feel. Why do I feel targeted right now?
- [29:04]
Dan
Okay, so. So like they're really encouraging a lot of foreign investment and a lot of repatriation of capital. And so they're not, they're not like cracking down on it like a lot of the rest of these places.
- [29:17]
Dave
Right, so that's what was the tweet that you had a little while ago that we were, we were going to do a show and get the guy on, on the pod that was about Italy, was it not? Or am I losing it about like all the capital? Like, was it Italy that's doing that, like, taking in people? It's gonna bother me now. Remember what I'm talking about?
- [29:36]
Nick
No, so it's actually some people in my family have been actively trying to get their passports. Now. Our, our thing's a little different. There was some stuff that happened after the war where like, my nona renounced her citizenship because, like, they kicked a bunch of, like she was a woman and they kicked the women out and were like, okay, you left. Like, screw you, you don't get your citizenship anymore. So it's actually not as easy to do stuff in Italy. And man, I'm telling you right now, like, if you want. Again, if you want to get anything done. And listen, I love Italians. I love going there. I, I was there for a month last year. I've been almost every year of my adult life back to the motherland. And you just got to get used to a different pace of life. Like if you're coming from like a fast paced New York or fast paced western world type city and you want to go to Italy and fire things up, well, be prepared to, to. Not because it takes a lot of time to do, to do just about anything, but regardless, one of the best places in the world for sure.
- [30:32]
Dan
Yeah, Beautiful place. I get the appeal. The Italian brand. Right?
- [30:36]
Nick
There you go.
- [30:37]
Dave
I kind of want.
- [30:38]
Nick
That's all I wanted to hear. It's all I ever wanted to hear.
- [30:40]
Dave
Dan, I almost don't get number 10. Maybe I do. I've been. No, it's not for me personally, like, why. It's okay. Number 10. BAMF Kenmore, Canada. The Rocky Mountain retreat. I've been to Banff. It's beautiful. I just, like, I don't think I would be like, super stoked to go back versus, like anywhere else on this entire list. You know, like, if I, I'd go.
- [31:03]
Dan
There, I'd go there once a year for sure. I like it.
- [31:05]
Dave
Really?
- [31:06]
Dan
Yeah.
- [31:07]
Dave
Like, if I said, okay, you got a choice.
- [31:09]
Dan
There's mountain people and there's beach people, Dave. And you might just Be a beach person.
- [31:14]
Dave
Yeah, that's.
- [31:15]
Dan
I do think that that's mountain people and like water people. Water people, right?
- [31:18]
Nick
Yeah.
- [31:19]
Dave
Like, have you said to me, hey, Dave.
- [31:21]
Dan
And you know what they say about water people?
- [31:24]
Dave
I almost just said something real inappropriate and I reeled. I reeled it back in there. All right, so banff draws about 2.5 million visitors per year, yet canmore as a small town or 14,000 people. Sorry. This means well located vacation rentals can charge premium rates and they stay booked during ski season and the summer. I'm guessing there's lots of, like, mountain biking and stuff. Banff and Whistler are ranked the two most profitable Airbnb markets in Canada.
- [31:52]
Nick
Really? Yeah. Yeah. I mean, just think like small, small markets. Literally non stop tourism. I was born and raised in bc, so I grew up in going to Whistler. My brother just spent a couple years so worldly.
- [32:03]
Dan
Like, I'm just listening to this. Guys, like, guys lived in like 50 countries.
- [32:06]
Nick
My brother was just out there as a chef for the last few years and he was like, yeah, like, it's literally nonstop summer, winter, like the shoulder season doesn't matter. People are literally always there. And. And you get a lot of Canadians doing travel. There's. Yeah, but you also get a lot of international people doing travel there. Because, Dave, you know, like, spending time in and around scenery like that, whether it be the, you know, the Rockies or whatever, it. We've seen it. But like, if you come from a lot of places in the world, you've never seen mountains like that. And it is. It is astonishing when you, when you do. You know, I don't even think Airbnbs.
- [32:40]
Dan
Are legal in Banff anyway. I think it has to be a commercial property. Like, it can't be done in a residential zone. A lot of people do it illegally.
- [32:46]
Dave
Well, that's what I mean. And we've banned Canada, banned current foreign buyers. So it's like. I. Yeah, that's the only. That was my main confusion. Okay. I like, I like mountains. All right. Sorry, guys. I don't.
- [32:57]
Dan
Well, you could technically circumvent that for this one because you would be buying it as a recreational property for yourself. And that's. That is among the exemptions for Canadian foreign buyers, like assuming that the person is actually going to use it for recreational purposes a bunch on their own.
- [33:13]
Dave
Fair.
- [33:14]
Dan
Yeah. Okay, that rounds out our list of the top 10. Let's. Should we quickly blow through the 10 worst places to invest in an Airbnb? Okay.
- [33:25]
Dave
Hammer them out, buddy.
- [33:26]
Dan
Number one, worst place to invest in a short term rental. New York City, they have a de facto ban on. They have a de facto ban on most Airbnbs. The hotel facto like functional, like I don't know, like kind of like not veto. Yeah, partially.
- [33:41]
Dave
There's. Okay, okay.
- [33:44]
Dan
NYC enacted some of the world's strictest STR rules in September 2023. Rentals under 30 days are not are only allowed if you register and live on site with the guest. And even them max two guests. All hosts register with the city and unregistered listings are barred from advertising. Essentially whole apartment Airbnbs are now illegal in nyc. This combined with very high property prices makes NYC arguably the number one worst market for Airbnb today. Let's see if their DNA agrees while you guys hit me with number two.
- [34:13]
Dave
LA, Los Angeles, USA they got strict home sharing only. LA's rules as of 2019 allow short term rentals only in your primary residence with an annual cap of 120 days for unhosted rentals unless you get additional permits. So owning a dedicated Airbnb property is not permitted. Santa Monica, which is like the neighbor of la, even requires hosts to live on site during the guest days and limits to 30 days. So same as New York. These regulations along with LA's high home prices have basically vacation rent. They're essentially banned. Interesting.
- [34:50]
Nick
And Dave, you may as well take number three, just a couple short hours off the Pacific coast highway. We got another California special.
- [35:00]
Dave
Dude, you could tell me San Fran's two minutes and I would have believed you. San Francisco is number three. Heavy restrictions in Airbnb. San Fran permits STRs only in your primary home. You must reside there 275 nights per year and imposes a 90 night annual limit for renting out the entire unit. So only for 90 nights, the host must obtain a business registration and STR certificates, which is that $925 fee. Enforcement is strict and platforms automatically limit unregistered listings and the city levies hotel taxes on stay as well. Let's see. Palm Springs caps str usage at 26 days a year. Interesting. Oh, number four. Who wants that?
- [35:50]
Nick
Sure. Toronto, Canada. Actually, Canada makes up number four and five here. I guess we're in good company with New York, LA, San Francisco, Toronto.
- [36:00]
Dan
San Francisco has a 13 submarket score on every individual.
- [36:04]
Nick
Wow, that is that like, that's gotta be one of the worst in the.
- [36:08]
Dan
World outside of like the worst I've seen. Yeah, like outside of like, like maybe.
- [36:12]
Nick
Like, I don't know, some like African countries Or something like that where there's like maybe don't go maybe.
- [36:16]
Dan
Those would be fine anyway. Right? Like yeah, they could be like you might be, you might not get a great return but like you could. Yeah. LA is a 22. Let's see what Toronto comes in.
- [36:25]
Nick
Vancouver are. Yeah. So primary residence rule and high cost. That's kind of why Toronto's landed on the list. Like many other Canadian cities has cracked down on short term rentals to combat its housing crisis. You can only list your primary residents for 180 nights a year. All hosts need a license from the city and they're actually really strict on this there as well. Effectively bans properties, most properties anyways from strs. I've got a few friends operating STRS and airbnbs in Toronto that are kind of grandfathered in and they're lucky to have those licenses. And this is not even just Toronto. This is kind of spread through honestly all southern Ontario where it's just extremely hard. And a lot of the other tourist areas, like some of the wine areas, vineyard areas, they, they've really cracked down on these licenses. They're only allowing a few. So. And if you violate that, you can, depending on how you own it. I believe it's worse if it's owned in a corporate versus your, your personal name, but you can be fined up to like a hundred thousand dollars. So pretty bad. While I'm, while I'm here, I'll just jump to the next one because again, born and raised in this beautiful part of the world, Vancouver, Canada, getting stricter and stricter. Dan, both you and I know and work with some people who have Airbnbs in this side of the world and they've been through the wringer the last little while. It's really difficult because it seems like Vancouver and British Columbia in general, which is a province in Canada, has changed and consistently changed their rules. Like at one point it was towns of this amount of people and at another point it was this amount of days and you know, you have to be there and stuff. So anyway, similar stuff, you need a business license, the principal residence declaration is required. What's worse for investors, in late 2023, British Columbia passed an even tighter provincial rules, including mandatory registration with fines up to $10,000 per day for illegal listing. So if you are operating in Vancouver or Toronto, Canada, good luck.
- [38:26]
Dan
Cool.
- [38:29]
Dave
At number six.
- [38:30]
Dan
Yeah, hit me with six.
- [38:32]
Dave
Barcelona.
- [38:34]
Dan
I actually don't, I actually don't know if it's A on the C. I think that's only their z's. I think I was kind of making a joke when I did it the first time.
- [38:44]
Nick
Another entire country pissed.
- [38:47]
Dan
I know. Stacking those negative reviews.
- [38:51]
Dave
They're so that they're phasing out. We talked about this a few times. They're phasing out short term rentals entirely. Barcelona has taken one of the harshest stances in Europe. The city stopped issuing new vacation rental licenses and will not renew existing licenses. Aiming for, it says, aiming for a full citywide ban by 2029. Wow.
- [39:11]
Dan
88 on if you want to do it illegally. About an 88 on that air DNA, not financial advice.
- [39:21]
Nick
The next one here is. Sad to see this next one on here. Another incredible place that, that is very transient city that. That should allow for this kind of stuff.
- [39:29]
Dave
Yeah, I agree.
- [39:30]
Dan
Yeah, you can rent pretty much anything else there.
- [39:35]
Nick
What's the show rated again? Are we like PG 13, 14?
- [39:39]
Dan
Just got a bunch more negative reviews. Leave us a five star review with how to pronounce Barcelona, please.
- [39:44]
Nick
Or if you've ever done any illicit things in Amsterdam, rented anything other than an Airbnb, you cannot. Amsterdam allows homeowners to rent out the entire home for at most 30 nights a year. So basically like, if you're leaving for a month, rent your place. Other than that, what do you. What are you doing? You know, like it's, it's not really a market anymore. They basically destroyed the entire market, which, which sucks because such a great city. The thing about Amsterdam is no more.
- [40:13]
Dan
Than four guests at a time too. That eliminates a lot of the things that people get up to in Amsterdam.
- [40:21]
Nick
The great thing about Amsterdam is they do have like a ton of essentially like these are almost larger Airbnbs or like boutique hotels with like, you know, six, seven, eight rooms kind of thing. So I've stayed in a couple of those and they're, they're awesome. But yeah, sad to see. Sad to see Amsterdam on the list.
- [40:38]
Dan
Makes sense. I mean it ranks well as like a market, but the limitation obviously makes it so you just can't maximize on the. Or capitalize on the fact that there's decent demand. It's a 71 score on air DNA. Paris, France is number eight on the list. Captain aggressively enforced Paris permits short term rentals Only up to 120 days a year on your primary residence. To rent beyond that or str a second home, you must go through an onerous conversation. Sorry, conversion. Probably a conversation as well, of a commercial property. Virtually impossible for small investors. The city has a special enforcement unit that hunts down illegal Listings and levies massive fines. In one case, Airbnb itself was fined 9.6 million for allowing illegal listings. Paris's combination of high income prices, high income home prices, legal caps and active enforcement makes it an unfriendly environment for Airbnb investment. Many listings have already been wiped out since the rules tightened in 2017. There you have it.
- [41:41]
Dave
The special enforcement unit for Airbnb. This sounds just like a disaster. Good old Paris. And number nine, you got Singapore minimum rental period of three months for private homes and six months for public housing. To verify what that means, renting out any unit on Airbnb for less than three months is illegal unless it's in a serviced residence or approved hotel. Enforcement is strict in the city, State, city, state. See? And violators can face hefty fines. With one of the world's highest property purchase prices and these laws, the ROI for short term rentals is pretty much near zero. Interesting. Who wants to bring it home with number 10?
- [42:23]
Dan
Send it.
- [42:24]
Nick
Whoever does it has to do. Next. Okay. Damn.
- [42:27]
Dan
We already had an Australian guy on the show.
- [42:30]
Nick
Down under, mate. Down under. Yay. All right. Sydney, Australia. Limited to 180 rental nights per year. Not horrible, but still, still not great. Obviously you want to see as many nights of the year as possible if this is what you're building your business on. And that is for whole home short term rentals if the host is not present. Right. So that's kind of what that, that Airbnb verbo battle right now. Like, you know, verbo, you get your whole place. But I don't know how they would slot into some of these. There would be subject to all the same rules. So this is essentially cuts earning potential in half. Some local places within Sydney and other neighborhoods have complete bans in some apartment complexes, et cetera. Obviously, Sydney attracts plenty of tourists, but similar to other markets, home prices are extremely high and a bit of a housing crisis going on. So these rules have prevented that year round. Airbnb, it seems to be a common theme, right? Spain, Canada, Sydney, anywhere where there's a housing crisis, Airbnb gets the finger pointed at them. Not really sure how much of an effect it would actually have. But Melbourne and Brisbane also two other major cities down and, and they also enforce 90 to 100 day limit limitations. So, you know, Australia, not great. But by the looks of what you just put up on Air D day here, Dan, 90, I mean, that's a hell of a score. So, you know, I don't know, it seems to be one of those kind of confusing things. If you're going to operate in the gray area, obviously it looks like you can do quite well. But if you're following the rules and being a good boy, then, you know, you've just cut your cash flow in half.
- [44:10]
Dan
There we go. Yeah, I mean, I'm looking at a lot of these markets and like, it looks like there is still a huge Airbnb market, even in spite of like some of these caps. So you probably get like a lot of local residents who, you know, like, if they get a booking, they'll just leave their house or whatever, you know, or a lot of primary residence people or. I mean, a lot of people who have of. Like, you see this really commonly in some of these bigger cities. Like I'm thinking Sydney, Paris, etc, where it's like, I'm like, you know, I'm a wealthy local person. I work and live in the city for the most part, but I maybe have a place outside of the city as well. And then if somebody books my Airbnb, I just leave and go up to.
- [44:44]
Nick
The cottage or whatever, man. When, when Taylor Swift came to Toronto, I was like, do I just leave and like, I'll go rent something. I'll go rent a luxury apartment in New York and I can still pay whatever I need to. Right.
- [44:56]
Dave
My fiance's got one in. In. In Toronto and she crushed it during Taylor Swift. Crushed it like insane criminal price points.
- [45:04]
Nick
Crazy. Crazy.
- [45:07]
Dan
They do have a whole like economic study on the Taylor Swift impact on economies. She. She like was there. There was like. She basically like prevented a recession in like many countries.
- [45:18]
Dave
People helping people. It's powerful stuff, man.
- [45:23]
Dan
You got it, man. Okay.
- [45:25]
Dave
Are we good?
- [45:26]
Dan
I think we're good, right? Anything else?
- [45:27]
Dave
We're just. We're just here providing value, man. Just continuous. Just value after. That's right.
- [45:36]
Nick
Multiple pissing multiple countries and cities off at the same time.
- [45:40]
Dan
If you're offended by the show, I apologize. I feel like it's not that bad. Like, you know, some good funny jokes in there, whatever.
- [45:48]
Dave
That's it.
- [45:49]
Dan
I mean, we're from the place that has. Has done the worst job at most of these things. So, you know, and we can laugh about it. Anyway, if you enjoyed the show, if you weren't offended, please leave us. A five star review. Consider hitting the subscribe button. Consider sending this episode to the Airbnb host that you're at the next place. Send it to them.
- [46:12]
Nick
Hey, Taylor Swift.
- [46:13]
Dan
I know, I know. Send it to Taylor Swift. Anyone like that, and we'll see you next week.