Airbnb & Mortgage
On our pursue to understand why and when did Airbnb took off we went on to try to find out if it had anything to do with the 2008–2009' crisis.
We all know the story about the “photographers”, the Craiglist growth hacking strategies and the door to door knocking. But we wanted to understand if there was any correlation with the economic moment the U.S. was going through.
Here are some graphs that show the incredible growth Airbnb has had. The reason we believed it had something to do with the economic crisis, was that it has an interesting correlation with the recovering of the American economy and an inverse correlation with unemployment rates. Is it just coincidence?
There are many ways that Airbnb could have helped americans during/after the crisis. The extra income was definitely needed at that times of struggle and uncertainty. The replacement of the lost salary for that income was probably one of the great benefits of it. But as everyone was hit hard by the crisis, travelling was also limited (and Airbnb was young), so the help was probably small.
But we went on to ask ourselves, what happened with all those people that were struggling to pay their mortgages?
Realty Track mentioned “From January 2007 to December 2011 there were more than four million completed foreclosures and more than 8.2 million foreclosure starts”
Core Logic reported, “Approximately 1.4 million homes, or 3.4 percent of all homes with a mortgage, were in the national foreclosure inventory as of May 2012 compared to 1.5 million, or 3.5 percent, in May 2011 and 1.4 million, or 3.4 percent, in April 2012. The foreclosure inventory is the share of all mortgaged homes in some stage of the foreclosure process.”
AS Bloomberg reported also in this great piece, “With bills mounting and foreclosure looming, Morant converted the space into a bed and breakfast. Using the San Francisco-based rental site Airbnb.com to take reservations, she was soon raking in $4,500 a month, enough to cover her mortgage. “This has been our stimulus package,” said Morant, a pastry chef, who lives with her family on the ground floor of the home. “We were going to lose our house.” For Airbnb — along with Craigslist and rival rental sites like HomeAway.com Inc. — the threat of foreclosures is bringing a surge of listings.”
“We’ve made a huge contribution to saving a whole bunch of homes,” said Airbnb’s Chesky, who’s received more than 300 e- mails from customers that were on the brink of losing their residences. “There were so many people who just couldn’t pay their mortgage and couldn’t sell their home.”
With this in mind, we went on and interviewed several independent Mortgage agents and from well known banks, what has happened in the Mortgage sector and how it relates to the use of Airbnb nowadays?
There was a common thread: most of the those clients that rent in Airbnb use their income towards paying for the Mortgage (at least those that declare it). There was a big discussion about the benefit of declaring the income and using it towards the mortgage, as a way to obtain better terms. One other thing is how to classify the home due to the fact that is residential but has commercial activities. This situation is so new, that is a grey area where Mortgage agents don’t have a clear definition or decision about it.
It is even helping our canadian neighbors, as the Financial Post reported: “Allison and Brody, a couple who want to remain anonymous for tax reasons, own a townhouse in Ottawa that they bought at $185,000, for which they pay a $1,000 monthly mortgage. For the past year and a half, they’ve been renting out the spare bedroom 90% of the time, which netted them $8,000 in 2014 — or 66% of their monthly mortgage payments.”
Even Airbnb published an excellent piece on the positive effect: “56 percent of Airbnb hosts in San Francisco said they use their Airbnb income to help pay their mortgage or rent.”
“62 percent of Airbnb hosts say Airbnb helped them stay in their homes.”
You can see that Airbnb has a positive effect on helping people stay in their home. As you can see in this popular thread in the blog AirHosts many of the hosts tend to relate their mortgage to the fact that they have Airbnb.
Why are we talking about this? Well, because we believe people can also make some extra cash by renting out their driveway/garage. What better than 2 extra incomes to pay for that mortgage?
What would happen if everyone’s driveway and garage was in the same platform creating a network of connected neighbors that can schedule and set their spaces for rent for those that work at home or go to work later?
This is our dream
At Fleck Parking are trying to build this solution so people won’t have to experience anger or frustration by seeing a ticket or their car towed away. We believe there is a better way to do it.
Come join us: www.fleckparking.com
or you can download the app: iPhone & Android
If you want to join our movement your city, list your space and get $10 cash! Refer a neighbor/friend and you both can get $10 cash!
