“Making It Work” is a series about small business owners trying to persevere through tough times.
When Precious Price bought her first home in Atlanta four years ago while working as a marketing consultant, she took advantage of her frequent business trips to rent it out on Airbnb while she was away. “I wanted to use it as a rental or investment property,” she said. “I started doing it and it’s been very lucrative to be honest.”
For Price, 27, and other young entrepreneurs of color, online short-term rental platforms like Airbnb and Vrbo have been a road to wealth. on their own terms. With a good credit score and minimal start-up capital (the main barriers for this demographic), professional Airbnb hosts collect stable apartments in long-term rental agreements and then rent those properties out on an overnight basis. can be rented out to customers. .
Some of these entrepreneurs see the U.S. as a fairer alternative to U.S. companies that have left institutionalized prejudices and inflexibility for caregivers and working parents. Others are motivated to cater to black travelers who claim they still face discrimination even after platforms like Airbnb promise to address issues such as documented instances of bias.
Ms. Price has become an evangelist of sorts, setting up a social media channel to teach other would-be entrepreneurs how to follow in her footsteps, and using the handle @AirbnbMoney to create a digital library of videos and tutorials. , mass-produced advice.
Price did not forget the irony that his grand real estate ambitions were fueled by the 296-square-foot “tiny house” he built in his backyard in nearly six months. Even when the coronavirus pandemic put the brakes on travel, her traveling warrior lifestyle hit the ground and her secondary income stream evaporated virtually overnight, she continued to rent out her home base thanks to her tiny home, earning a hefty sum of money. was able to continue to increase profits.
She added more to her portfolio, buying a second home in Atlanta’s popular Midtown neighborhood and renting out a few furnished apartments. She eventually left her consulting job to manage the rental business full-time.
“It was a liberating experience at the time,” she said. “I’m making more money than most of my family have seen in their entire lives.”
Price, who earns as much as $12,000 a month, found purpose in the work of helping her colleagues financially secure on social media. Initially, she said, she wasn’t interested in renting to long-term tenants. Because she had much higher profit margins on tourist bookings.
“I was adamant about renting only to vacationers,” said Price. “I was so into the rat race.”
Then I started getting the distressing messages. At first he was one or two, then there were too many to ignore. Increasingly frantic phone calls and emails from people who don’t want to use her Airbnb for a weekend getaway. They desperately needed a place to call home.
Mr. Price found himself at the forefront of the housing crisis. She and others like her exacerbated the country’s housing price problem by renting properties to tourists rather than long-term renters. related 2022 TEDx Atlanta Talk. “I started noticing conversations starting to happen across the country,” she said.
For Ms. Price, the eldest of five children and a first-generation college graduate, the pleas and stories of financial instability touched her heart. She attended business school at Indiana University. “After I started getting these calls from single mothers and students, I started to realize that it was part of my family identity,” she said. “And I feel a connection that I’m not far from.”
She reassessed her values and began to move away from the lucrative homestay business.she She stopped listing properties on short-term rental sites and deleted her rental portfolio over the next few months. “Everyone has their own ethical compass, but for me it just felt very different from what I was doing,” Price said.
Her few remaining tenants now have long-term leases, And the rent she collects will be enough to cover her living expenses, she says, possibly leaving “hundreds of dollars.” She supplements her income with freelance consulting and public speaking work. Although she earns a fraction of what she used to earn, she said she feels more fulfilled and less burned out.
The housing crisis Price witnessed in Atlanta has spread across the country. According to the newspaper, there is a shortage of about 6.5 million single-family homes in the United States. National Real Estate Agents Association. For more than a decade, housing construction has not kept pace with population growth, a trend exacerbated by the pandemic. During this time, demand for larger homes increased despite construction delays. Hampered at first by public health restrictions, then by labor shortages and supply chain problems that made everything from copper pipes to carpets scarce and more expensive.
Number of affordable homes plummeting: Only 10% of new homes under $300,000 As of Q4 2022Even though mortgage rates have nearly doubled in the past year.
These challenges have a cascading effect and are driving up rents. Discovered by Moody’s Analytics The average renter now spends more than 30% of their income on rent.
“If you look at the rental vacancy rate, it’s very low,” said Whitney Airgood Obliki, a senior fellow at Harvard’s Center for Multi-housing Studies. “It is very difficult for people to find affordable places to move in, especially for low-income renters.”
As Price experienced firsthand, a growing number of municipalities, including Atlanta, have emerged from the pandemic only to find a full-blown housing crisis looming. Lawmakers are calling for tighter regulation of short-term rentals, with many trying to block “professional hosts” rather than homeowners who rent out part or all of their primary homes.
Ingrid Gould-Ellen, professor of urban policy and planning at New York University and dean of the university’s Furman Center for Real Estate and Urban Policy, said policy was nuanced enough to distinguish between the two categories of renters. Said I had to have it.
“Airbnb is a very useful tool for many people, such as homeowners who are struggling to pay their mortgage, or renters who want to rent a room with occasional income while on vacation,” she said. rice field. she said. “These are all forms of use that don’t really limit long-term housing supply.”
Price’s experience with the tiny backyard house has inspired people to add homes and explore other ways for homeowners to generate rental income. These units are colloquially known as “tiny houses” or “granny flats” and are formally identified as attached dwellings and take the form of separate or attached tiny houses, guest cottages, or apartments. can do. A growing number of policy makers hope these units can take some of the pressure off the tight housing market.
“She is tackling the pressing problem of housing shortages across the United States,” said the tech entrepreneur who started the Emerging Founders Program, a startup incubator for Black, Latino and female founders in Atlanta. Mr Praveen Ghanta of the house said. Program participant Price is working on a start-up company he named himself. land liftIt is intended to be a resource hub to enable homeowners, especially those of color, to increase the value of their properties and generate income by building their own tiny homes. increase. “Especially in a market like Atlanta, we can make a meaningful impact,” Ganta said.
“Sometimes people stick to the concept of affordable housing and think it has to be nonprofit,” he says. “The reality is that there is a lot of both income and housing supply, even within the market rate structure.”
Price has shifted the direction of her social media platform away from managing short-term rental properties and toward facilitating smaller developments in attached units. “At this point, we would also like to start acquiring other properties,” she said. She is looking for a house with enough land to build a small house while building her second ancillary structure, a guest cottage, on her first land.
“My plan is to get a property that I can build some kind of home on, so I can build more homes than just have a home,” she said. I was. “The American dream is real estate.”
