- So I think a lot of people know
that the Airbnb market has boomed
over the last couple years.
During the pandemic, lots of people bought Airbnbs,
deprived the housing market of listings
and now, that bubble is collapsing.
So I'm actually not surprised that there was
a lot of interest in it, especially given the cities
that were involved like Phoenix and Austin.
- Is the thinking that there were a wave of people
who bought property that they cannot afford
without this income?
- Oh, 100%, especially because a lot
of these owners use what's called DSCR loans
to purchase these properties.
These are loans that lenders will give
to Airbnb operators where they actually don't verify
the personal income of the borrower,
but it's actually based on the income of the property.
And so long as the income of the Airbnb property
is high, things are good, but if income
on the Airbnb property goes down
then these owners and operators have
some problems because their lender's not gonna like that
and it could trigger a default
on these DSCR loans. - [Host] Right.