Los Angeles state of Airbnb

The City of Los Angeles, led by alt-left progressives, has declared war on AirBnb stays by imposing an $89 per year fee for all hosts — That’s ON TOP OF the already absurd 14% tax on all revenue generated by hosts. And they imposed an $850 penalty on any host who rents out more than 120 days per year. As icing on the cake they banned anyone from hosting a stay that isn’t their primary residence. That means entrepreneurs can no longer host more than one stay by subletting apartments, or buying homes and then renting those out on Airbnb.

The thinking is that this will create more permanent housing and thus reduce skyrocketing rents in Los Angeles. First of all, is this really a ‘problem’? Not everybody can afford to live in a major metropolitan cities, just as not everyone is smart enough to get into an ivy league school. That’s just life.

If you choose to accept that high rent is a ‘problem’ then is this really an Airbnb problem or a case of not enough hotels being built? Why are we punishing hosts because the hotel industry isn’t building fast enough? More hotels are in fact being built especially in cities like Hollywood, where Airbnb stays are numerous and fully booked.

And finally will declaring war on Airbnb actually increase the supply of permanent housing? And are there other unintended consequences that will hurt the city?

Think about this — If you put the entrepreneurs with multiple Airbnb units out of business, then a void has been created for other individual hosts. You simply fragmented the business and the supply of Airbnb stays may not actually be decreased as anticipated.

Now what about putting a cap at 120 days per year before imposing an $850 fee? Same deal. This could simply fragment the business. More individual hosts pop up to take advantage of the void left by hosts who decide to close up for the year after they reach 120 days.

And what does all of this do to tourism? If I’m a host paying an extra $89 per year along with giving away 14% of all receipts in taxes, then I’m going to raise my prices! And if I decide to cap my number of rented stays at 120, then I can more comfortably raise my prices in order to increase my profits and to attract higher quality guests. My higher prices will scare off would-be guests, but I have all year to book 120 nights. No pressure. No incentive to keep prices low.

Higher Airbnb prices can only drive up hotel room rates as well.

Higher prices due to government intrusion via added taxation can only reduce tourism. In creating more affordable housing, you reduce tourism. It’s simple supply and demand. Higher prices means less people will decide to visit Los Angeles. That means less revenue coming into the City of Los Angeles.


Pacific Palisades Vacation Home Rental Market

(For homeowners looking to rent your home, CLICK HERE for Pacific Palisades vacation rental market information.)

For anyone looking to visit Los Angeles on vacation and spend some time on the West side on Malibu Beaches, the Santa Monica pier, Third Street Promenade, or Venice Beach they ought to take a look at Pacific Palisades.

This is an affluent neighborhood of about 27,000 residents. It’s one of the safest neighborhoods in all of Los Angeles county, the air is clean and traffic is sparse. The traffic issue is important if you are planning on spending some time at the beach because traffic can really jam up on the 10 freeway and along Pacific Coast Highway. By staying in Pacific Palisades you can bypass the gridlock and take a quick drive down and park at the bottom of Temescal Canyon as you visit Will Rodger’s State Beach.

Or if you like hiking you can drive to the top of Temescal Canyon and visit Temescal Gateway Park.

Los Liones Canyon Trail is another favorite hiking trail of the locals.

Besides the usual vacation rental home websites you might like this vacation rental home with 3 beds and 2 baths.  The lower priced homes in this area typically rent for about $9,000 to $10,000 per month. It sure beats staying at a hotel like Shutters, which might run you $588 per night during the Summer for a room with just 2 double beds.

As far as shopping and restaurants Pacific Palisades has 3 grocery stores and quite a few tasty restaurants.

Maybe the best thing about Pacific Palisades is the mild weather. Summers never get scorching hot and Winters never get as cold as the San Fernando Valley or inland areas. In fact most homes in Pacific Palisades don’t even have air conditioning. The residents that do have AC will tell that they only run it a few days out of the year. For the most part having a fan keeps you plenty cool.

Bull Market Rolls On….

I have never heard so much noise about an impending stock market crash.

First you have people with recency bias. The “lost decade” of the 2000’s had not one but two nasty corrections. One was about 56% from peak to bottom and the other was 49%. But corrections of 50% or more are rare. Since 1926 there have only been three! Yet I guess it’s young investors who think that 2008 is the norm, and stocks are supposed to keep going sideways forever.

And then we have the sharks who keep feeding people’s fears in order to sell whatever they have to sell… books, gold, non-traded REIT’s, annuities, market timing services, etc. And in late August 2015 it all came to a tee. This was it! This was the great crash everyone was waiting for!

Lost in all of the panic is the fact that stocks don’t crash until bullishness reaches a frenzy. When EVERYBODY is talking about the stock market crashing and the Fed raising interest rates, that’s when you know that it’s not gonna happen.

As of today stocks have already recovered 8% of that 12% loss. Everyone is scratching their heads, but did anyone tell them that stocks crash 10% or more about once every 11 months? This is business as usual.

And did anyone tell them that historically, after 10% declines in the stock market, only 1 out of 4 times has it dropped 20% or more. We’re still not out of the woods but it looks like the house is gonna win again this time. The bull ride is continuing…

Thinking about renting your residence on VRBO?

Before you take the leap here’s a few things to consider.

  1. How much demand is there in your area? You can figure this out by surveying other properties on VRBO. How many reviews do your competitors have? One or two? Or do they have 10, 20 or 50 or more?
  2. What are your start up costs? Do you just have to buy 2 sets of white sheets for each bed and 2 sets of white towels for the maximum allowable number of guests, or do you have to buy a ton of other things like beds, furniture, kitchen items, etc?
  3. If you’re still interested then it’s time to really determine what is the going rate for your home. You will need to identify the exact address of your competitors. To do this you will likely need to use Google maps, then check the value of these homes on Zillow.com. Some homes will be over priced, some under priced, but most will be just about right. You will probably want to go with the median price for your home. If you’re more desperate for income then charge less, or if you’re less thrilled with the idea of renting your home then charge more. It’s up to you.
  4. Once you get your house all ready to rent (that’s a whole ordeal for another blog post) then it’s time to think about determining your rental policies and getting a legal contract together. Policies include things like deciding how far in advance payments must be made and in what form (credit card payment via HomeAway, PayPal, personal check, etc) what your refund policy is, etc. Again you will probably want to see what others in the area are doing. Having an air tight legal contract is critical. That means you will have to shell out money for a lawyer to draft up one, which should be an inside-the-box job. Avoid lawyers who want to draft one from scratch or before you know it you’ll be billed for $1,000 or more.
  5. Another must is to change your homeowner’s insurance policy so that it covers your house while being rented. This will no doubt raise your rates. You may even lose the discount that you get while bundling your house and car insurance. Yet another thing to consider before taking the leap to renting your home on VRBO.
  6. Another consideration is income taxes. Uncle Sam is not friendly when it comes to start up costs to rent your home. Expenses can only be deducted on a prorated bases. For example if you rent for 1 month out of the year you can only deduct 1/12th of your expenses against your income.

For details on renting your home in Pacific Palisades read this article

Psycho Kid Ruins Thanksgiving?

Let’s have a look at this viral YouTube video. Some people are outraged that this entitled kid is allowed to have temper tantrums and yet his parents refuse to kick him out of the house. Well take a closer look. The girl on the right (sister?) is laughing. Wait a minute…  She’s the one who later says “grow up” to the camera man (brother). And what family serves WATER for thanksgiving dinner?

I’ll give “psycho kid” and the dad credit for good acting. They just need to tweek a few things including keeping the brother running the camera quiet. His acting is not up to par with dad and bro. And psycho kid keeps dragging the scene out too long. “And you’re filming this?!!!!” Yawn. You already dumped dinner on the floor. Just storm out of the room already!


Time Warner Cable / Internet Billing

A word of warning about Time Warner. When they did this switch over to digital in June 2014 they switched me over to what is called “Starter TV / Starter Internet”. This is NOT their lowest cost service! “Standard TV” is their lowest cost service. Under this “promotion” as they call it, you pay $19.95 per month for cable TV service and $39.95 for Internet service. On Jan 1, 2016 both services will increase by $10 each to about $80 per month.

My point is to not assume that the “good folks” at Time Warner just automatically set you up with the lowest cost service. Review your bill and bark up their tree if you didn’t want their premium “Starter TV / Starter Internet” service! It has a bottom tier sounding title but “Starter TV / Starter Internet” is not their bottom tier, lowest cost service. Knowledge is power.

Truth about the Plastic Bag Ban

The grocery stores were initially against the plastic bag ban UNTIL they were offered 10 cents per bag in a dirty backroom deal. ALL of that money goes to the grocery stores. It is rumored that the grocery employee union negotiated a slice of the pie too. It is estimated that grocery stores across California are earning 440 million per year in profit from the 10 cent per bag tax, and extra profit from selling reusable and even reusable PLASTIC bags!

Think that plastic is bad for the environment? Plastic bags are actually made from a derivative of natural gas. Plastic bags are made out of polyethylene. In the United States, ethylene is made of ethane which is a waste by-product obtained from natural gas refining. Domestically produced plastic bags are not made out of oil.

Take action bow by signing / starting a petition http://www.bagtheban.com/take-action

Another amazing Ebola health worker story so stupid that it’s true!

Now they are saying that this health worker apparently handled Duncan’s bodily fluids. So where does he / she go?

ON A CRUISE!!!! [Cue alarm bells and screams of horror!]

I see homeless people who I am certain have more common sense than health care workers with degrees.

This worker is said to have been “self-monitoring” and only since last Monday! Apparently “self-monitoring” includes getting on a ship with lots of people. Just brilliant!  And this worker is said to have handled the bodily fluids 19 days ago, yet only began self-monitoring 5 days ago! This health worker is almost as dim-witted as this Amber V who (it would appear) believed that the CDC could somehow test her for Ebola over the phone by asking her a few questions and so she got straight on a plane with that low-grade fever. I have every reason to believe that if a super virus ever emerges, it WILL take out most of the population. Our heath care system and its workers are too inept to react to anything. Time to buy a ranch out in the hills with a stockpile of food and water. This will be the only way to survive the stupidity of mankind.


Wide Open Flights from West Africa to the US!

Let’s review how the first Americans became infected with Ebola..  The Obama administration inexplicably allowed an infected man to be brought into the US. Could have been prevented.

Let’s review what the Obama administration has done to stop more Ebola patients from getting into the US? NOTHING!

Their reasoning? So that we can screen people from these countries WHEN they get here! LOL.

First of all, does anybody trust our screening process? No. It’s already been proven to be a failure. Look no further than the case of Duncan the Ebola patient and his now infected nurses. Right out of the gates we’re already 0 for 1.

Seconds of all, if we were to ban flights from West Africa, who is gonna travel to Mexico and then hire a coyote to sneak across the desert to get here from Africa? Just about nobody! 1 in a thousand maybe? This immediately stems the tide of people coming from West Africa. Now let’s assume that 1 in a hundred thousand people who want to come to the US have Ebola. It’s basic elementary math that says that by stemming the tide of travel to the US you greatly reduce the odds that an infected patient makes it in.