The Current State of Real Estate

[00:00:00] Calan Breckon: Today’s episode is sponsored by Castos. Castos is a podcast hosting platform trusted by thousands of brands. With Castos, you can create as many podcasts and episodes as you want, no matter which plan you choose. Full disclosure, the podcast you’re listening to right now is actually hosted on Castos, and I can say with 100% confidence that Castos is the best option. Castos has their seriously simple podcasting plugin for WordPress, making it easy to run your show through your own website. This is a must have, especially if you’re looking to grow your business and audience through SEO driven content. I’ve been using Castos for over three years and the team has always been super friendly, quick to respond, and has supported my podcasting journey since day one. You can find out more by visiting calanbreckon.com/Castos or just clicking the link in the show notes. Now let’s get into today’s episode.

[00:00:58] Calan Breckon: Welcome to the Business Gay podcast, where we talk about all things business, marketing, and entrepreneurship. I’m your host, Calan Breckon, and on today’s episode, I have real estate investor and entrepreneur Jason Muth. Jason stepped away from a corporate life after decades of working for some of the biggest media companies in the US, including Comcast, NBC Universal, and iHeartMedia, to name a few. Jason became a full time entrepreneur in 2022 when his ongoing real estate investing side hustle became more profitable than his corporate life. In 2023, he launched Pride Away Stays, a boutique, gay owned, tech driven, short term rental cohosting business for homeowners and guests in historic and magical Provincetown, or as the gays like to call it, Ptown. With a commitment to inclusivity, diversity, and supporting LGBTQ+ causes, pride away stays enhances the vacation rental experience for both homeowners and guests. I’m excited to jump into the topic of real estate today and the current economic environment that we find ourselves and what we might be expecting moving into the future. So let’s jump in.

[00:02:04] Calan Breckon: Welcome to the show, Jason. How’s it going?

[00:02:07] Jason Muth: Thank you so much. It’s great to be here. It’s really a pleasure to meet you in person, or at least virtually. As I was saying off camera, I think what you do with this podcast is fantastic. There are not enough voices in the LGBTQ plus world about entrepreneurship and business, especially in forums like this. I physically was looking for them. That’s how I found my way to you, and I think that a lot of your episodes are just SEO important for people in our community. Hopefully, you’ll inspire some other people to launch their own series of conversations about other business leaders and people that are into financial prudency in the gay world.

[00:02:45] Calan Breckon: Awesome. Well, thank you so much. That’s actually exactly why I launched this podcast, because I didn’t see really anybody else doing it. And I was like, hold on. If we represent so much of the economy and business, and I know all these amazing people, why are we not talking about it more?

[00:03:00] Jason Muth: I mean, frankly, I don’t think that our community talks about finances enough. Just period. Forget on camera, like among your friend group. Think about it. How often are your friends and you comparing salaries or comparing how much you have saved up or plans toward retirement? Let’s face it. The reality is that we’re all getting older, and we do need to save for our futures. I mean, I’m married. I have a soon to be five year old that we adopted from birth, and I have to think about this kind of stuff. And I do want to live the fabulous life that we all live and travel, like the amount of travel you’ve done based on your past. But we want to travel. We want to have fun. We want to do great things. We want to live in nice places. We want to be comfortable with our lives. But a lot of that comes with good financial planning. So I’ve kind of always have this little bit of conservative side to my finances where I’m always nervous it could all go away. And just being able to have conversations with people about these numbers, it’s a challenging conversation. We should be talking as much about this as we do about Taylor Swift and Beyonce and ruPaul’s drag race and everything.

[00:04:04] Calan Breckon: I 100% agree. I think that the whole secrecy around it has been a huge disservice. And I think it was on purpose because the less we talked about it, the less people knew about how much everybody else was getting paid, the less you had the desire or the gull to go up and say, hey, they’re getting this much, I’m not getting that much. And it works out better for the corporations and the people paying your checks, but not so much for the actual friends. And funny enough, I actually had a situation where I was with my old roommate when I had a roommate at the time, and it was during the pandemic, and we had that group of friends you were allowed to hang out with, and money came up in the conversation, and everybody got really weird about it because they were all very kind of corporate gays, I guess you could say. And I was the only one who I was like, no, we need to talk about this, because it was a mix in the group of friends. And so there was somebody who I knew who was very uneducated around money, and I grew up uneducated around money, and I had to learn. And if I didn’t have people who taught me, I never would have learned. And so I was like, this is how much I charge per hour. This is how much I make per project. This is how much you should be putting away in your RSP TFSAs. These are canadian terms. But our retirement savings accounts, like our personal retirement savings accounts, I guess like your 401 for you down there.

And so I could actually see him learning and lighting up and everybody else kind of looking around being like, are we allowed to talk about this? It’s not polite to talk about that kind of stuff, like how much everybody makes, because everybody will be resentful of who makes the most. It’s like, no, you’ll just figure out, oh, shit, I could be making way more at my job. Why am I doing what I’m doing?

[00:05:45] Jason Muth: I do think generationally, a lot of younger people right now, and I could say that because I’m in my 40s, they do speak a little bit more among themselves. I remember the last job that I had, my final w two job, hopefully, because now I’m doing entrepreneurial stuff on my own. They were very upset when the kind of entry level and mid level people would speak and compare their salaries because it was almost like there were secrets they were giving away with the individual deals they were having. And I remember another manager just, like, appalled that people would have that conversation because it does lead to strife in the office when one person is getting paid a lot more money than somebody else, and they’re doing a very similar job. But you have glass door, you have a lot more visibility and the ability for people to make these comparisons these days. So people shouldn’t be. They shouldn’t be afraid to have the conversation. And older people that are in higher level management positions should realize these conversations are happening. So it’s a matter of, in the gay community, I think that we all like to compare ourselves to each other, right? And one easy way to compare it is how many numbers are in your bank account, right? We don’t say that, but we show it based on how we look, how we present ourselves, what our Instagrams look like. But really, that shouldn’t be an arbiter of how we judge each other. I play a lot of gay sports in the Boston area, or I have over the years. I’m a little bit older now, so I kind of have different roles in those leagues, like captain or coach or I’m a referee in the flag flag football league in Boston. We just had our 25th anniversary last year, and playing on the field is the great equilibrator. Everybody is equal on the field. There are some players that are better skilled than others and worse skilled, but people with the lower skills could have the better jobs than the others. But nobody cares about that because everyone plays together. But then after we’re done with the games, the conversations never go down the finance road. They always just go down. How did you play and what are you doing this weekend? I think the finances should be involved in those conversations. I think it’s incumbent upon us, people that are older, to mentor the younger gays that are just entering the workforce as well and trying to instill some really good behaviors in them, if indeed they want that. And I could tell that there are some people, at least in my circle of friends, that do want that because they see kind of the work that I’m doing. We’re really outward with a lot of the things we talk about, talk about real estate a lot with our social media, talk about the short term rentals, which we’ll talk about later in this podcast. And people that are curious about that, they ask me those questions, which is great. So if we’re instilling that in a couple of people that also have those same gears turning, I’m really proud that I’m able to kind of share information about good finances and things with them. And I hope that more people are willing to have that conversation with the older gays, because they should be. They should ask and the older gays should be willing to have those conversations with them and bring them along.

[00:08:41] Calan Breckon: Yeah, it’s definitely a generational thing that gets passed down and passed down and passed down, and it’s starting to break for sure. I personally believe that organizations should have complete transparency in regards to like, you get hired, this is the price for this specific role. Everybody starts there, and you can see how much everybody in the company is making, why they’re making that much based upon XYZ factors, because then it doesn’t need to be a big thing. You know exactly what you’re getting into when you come into the company and what you can expect, and therefore, there’s not all this secrecy and all this kind of know. Anyways, let’s jump in.

[00:09:19] Jason Muth: I know, let’s jump in.

[00:09:20] Calan Breckon: Right? So we’re talking about real estate stuff today. So I want you to kind of paint us a picture on where the real estate market is today. And I know I’m in Canada, you’re in the US. And markets are very vastly different across not only cities, but, like states and east coast, West coast, because we both live in large countries, but overall, kind of what’s going on in real estate today.

[00:09:46] Jason Muth: So, yeah, it’s a big, broad question. A couple of factors I’ll throw in. There you are right here in the United States. It kind of depends on where you live. We’re here in the northeast, so I live outside Boston in a town called Newbury Port, Massachusetts. New England, you know, tends to be pretty steady with the real estate market. Like, we don’t have these huge peaks or valleys. It just kind of continues to creep upward and upward and upward. It’s super competitive these days, even with interest rates where they are. I think that rates are pretty high across the globe these days, but not to date the episode too much. But some news came out from the fed this week that there might be a few rate reductions coming later on this year, which, in theory, could affect mortgage rates and the ability for people to afford a little bit more home than they have been able to the past couple of years. But gone are the interest rates that we are all familiar with from a couple of years ago where rates were in the 3%, 4%. There’s a lot of people sitting on property that have those types of loans. Our short term rentals are all, except for one very low interest rate loans because we locked those loans in a number of years ago. 20, 16, 20, 18, 20, 20.

So people that have those loans, they don’t want to move because the interest rates are higher, and they’re basically going to be paying more money for potentially less house if they move. What’s happening, though, is the past couple of years, life goes on. People have children, kids get older, jobs change, people split up. So all those situations create the need to change the real estate in which people are living.

Despite the fact that rates remain high and inventory remains low as a result, life continues. So people, I think, have finally figured that out and said, okay, listen, I get it. Rates are in the sixes now, but I need a place to live, so it’s going to cost a little bit more for me to do that. And then hopefully I could refinance that property down in the future. I don’t know all the rules in Canada. In the United States, you could refinance kind of whenever you want to. And if rates drop like a point, it’s recommended that you refinance that property and try to bring either your overall payments down or your monthly payment down. I refinanced one property once from a 30 year loan to a 20 year loan with just like a one point reduction in interest rate. And I was willing to take up an extra $100 a month in my payment because I cut ten years off the loan. Ten years of interest payments are just no longer for me. So I think we’re in a situation right now. We’re about to enter the spring market. We’re still hearing about really low inventory and tons of buyers there on the market. Investors are actively looking again, even though property is high. I did hear someone talking about it this week, actually, a friend of mine from college. He’s a real estate agent out in Los Angeles. Sells some really high end luxury homes. He made this great Instagram post where he was like, you know what? Real estate is expensive. But guess what? When you bought your first place, real estate was expensive for you. And then when your parents bought their first place, it was expensive for them. It’s always going to be expensive based on where we are in our lives. The very first condo that I purchased in Boston, I scraped together every penny that I had and even got a little bit of help from my parents for that condo. And it was legitimately doubling my monthly payment from the rent I was paying to the mortgage I was paying. And I was like, how am I going to do this? And I was making a good salary, but it was really tough. But you kind of find a way. You take on a roommate if you want to, you cut your expenses elsewhere, you try to do some side jobs, and you find your way into actually making that payment, and then it just becomes commonplace to make it. So my hunch is that we’re in for another crazy ride in real estate. Here in the United States, there are some markets that are not accelerating as much as others. They tend to be the markets that were way overheated during the pandemic. So a lot of people raced to second home markets that were in the Idaho’s and Montana’s. And you mentioned, you know, Scottsdale, Phoenix, a lot of these places that people were like, all right, maybe I could work remotely for a long period of time. Let me buy a second home there.

A lot of those properties, people are now having to go back to the office. So suddenly there’s a glut of properties in those specific markets, and it is affecting the property prices in those markets. Again, here in the northeast, it’s not that it’s never going to change, but we have a pretty diversified economy here with universities, with hospitals, with tech, with service industry. Having a diversified economy really does help continue pushing prices higher because more and more people want to live here. With that said, in the US, a lot of the really expensive cities, Boston, San Francisco, Chicago, New York, they are starting to see younger people that are looking for alternatives. And there’s a lot of great alternatives out there. There’s a lot of kind of second cities. I wouldn’t even say secondary or second class cities, but you could find a city that maybe has a population of a few hundred thousand people that still has a cool scene that you want to hang out in your 20s, whether it’s a straight or a gay scene. It’s got the craft breweries, it’s got the bars you want, it’s got the social opportunities, it has the recreation, athletics. And the prices are a little bit lower and the jobs pay almost as much or as much if they work remotely. So I think that there’s a little bit of a trend happening with some people in their 20s that are looking for more affordability in some of these secondary markets that are still fantastic areas.

[00:15:23] Calan Breckon: Yeah. So there’s a lot that just came out of there. Canada. So for what I know I don’t have a mortgage. I’ve not been able to afford to get into the markets just because the condo I’m in right now is almost a $900,000 condo. So that’s completely out of my range, especially with these higher interest rates. But I know we have five year terms, so you have to renew every five year. Yeah. And so you can have fixed or you can have variable, but every five years you have to go through that whole process again, whereas I believe you guys down there have 30 year. And so you can kind of extend that out a lot more than we have that opportunity. And so I know that up here, that’s what’s making a lot of people nervous, is that there’s going to be a lot of mortgages coming up in the next year or two at these higher interest rates because I’m personally believing that we’re in kind of this higher for longer term. Like for the last 15 years, we’ve had really low rates. And if you look at history before that, we were never really that low. There was always some sort of a rate there. And so these higher rates to me seem more normal. And I think will actually bring in the short term a lot of volatility in the market. But in the long term, more stability, because I think it will allow not the mom and pops or the folks like yourself who have real estate investing, but the big corporatization of real estate investments, of saying the return just isn’t there for them anymore. And so that opens a lot more inventory for folks who just want to buy a proper house because for the last 15 years, they’ve looked at it and gone, oh, well, we can get a really great return here because of interest rates are so low. But now that they’re higher, corporate entities are looking at that as not the best return. They could go other places and find that. How do you think that that might play into the next five years with this longer for hire reality we might be facing?

[00:17:24] Jason Muth: Well, one of the other issues in play right now is the size of the generations that are in home buying ages, right? People that are in there, the cohort of folks that are in their 30s right now, like probably age 28 to like 41, 42 or so in the straight world. Because let’s face it, most of the world’s straight, right? They’re getting married, they’re having babies. We live in a great neighborhood here. We’re the only gays. I guess we’re everyone’s token, but it’s a super liberal neighborhood. But everyone’s having babies and babies and babies and babies. They’re all having two kids, three kids, four kids. It’s like, oh, my God, you’re overpopulating. But that’s a whole separate conversation. But there’s a lot of people that had a lot of kids who right now are in kind of like some of their prime earning years preceding the think is people’s prime earning years. But in their 30s, that’s when people are starting to really kind of get it together and say, I’m going to marry up, settle down, move out of the city, or move into a bigger space. Have that first kid, have that second kid. That’s kind of what they want to do in life now, since there’s so many people that want to do that. That’s why there’s so much competition for housing in the places where people really, really want to live. Pair that with these people that are sitting on super low interest rates and not selling their properties, and add on the fact that people are living longer and there is a move to have people, like, aging in place. That’s a thing that people talk about that. And certainly my parents are in the same house I grew up in outside New York City, and they’re in their 70s, their health isn’t amazing, but they live there. They don’t want to go anywhere else if they don’t have to. Right? So people are holding on to these properties longer, and it’s like a bottleneck in the river of life that goes on. The home builders aren’t building enough homes because it’s expensive for them to build. And the communities. Do you guys have the term nimby? Do you know what that means?

[00:19:13] Calan Breckon: Not in my backyard. Yeah, we definitely have that in Toronto.

[00:19:17] Jason Muth: NIMBYism is huge everywhere, and it’s very big in a place like the greater Boston area, where every town has its own little thing. I mean, there was one town around here, Milton, Massachusetts, just south of Boston, that basically said FU to the MBTA, which is the public transit around here, when they were supposed to be building additional housing that was transit related, where it would be a multi dwelling unit that was near a t stop, our subway around here that people can get into the city and commute. There is a big push to get these multidwelling commercial buildings that people can live in as apartments or condos that are commutable into the business centers in these areas, and they just basically are saying, we’re not going to comply with that. There’s another situation, another town here, Braintree, Mass. Which is just south of there, where there’s a massive mall, the south Shore plaza, which back in the day was probably the mall, but you know how malls are right now. They wanted to build housing there, and the people in Braintree voted that down. It was like, all right, guys, you’re not helping the cause of where we need to build more affordable housing. You need more affordable housing everywhere. And there needs to be a public, private combination of figuring out how to build this affordable housing. But when the current townspeople, who are the property owners, are the ones that keep voting it down in a lot of these municipalities, they’re like, well, don’t do it in my backyard. Do it over there.

That’s a continued problem.

That’s a bigger, bigger issue. And it certainly does not help all these people that are looking to buy that first home, because, frankly, the condo that you’re living in right now is that expensive. But ideally, at some point, if you are able to afford some real estate, that tends to be how people in the US kind of get a foothold into starting to build that generational wealth. Even if it’s not a place that they really want to live, it’s a place they can start building some equity up, and then they can eventually trade it up into that next place. And that next place.

[00:21:08] Calan Breckon: Condos are supposed to be kind of your starter spot that’s affordable, but not in the major cities in Canada because we only have three. Vancouver, Toronto, Montreal.

[00:21:18] Jason Muth: Do you guys have programs in Canada with low down payments for your first home? Like, we have something called the FHA in the US.

[00:21:26] Calan Breckon: I don’t know about that. I know that there was this article not too long ago about, you know, habitat for Humanity, and they help low income people buy housing in Toronto specifically. They’re in the hundreds of thousands that you have to make and then qualify. So low income doesn’t even qualify for Habitat for Humanity in the city of Toronto because prices are that high. So it’s these kinds of crazy things that you’re just like, what is going like, this is an investor property that I’m in. The person that has it is a baby boomer, and they’re just sitting on it because that’s where they plant all of their cash. And you were talking about kind of generationally we’re in this different space where there’s baby boomers, I think, had it really good in just terms of how everything was, in terms of the cost of living for their wage versus the cost of buying that first place was like five times their salary. Now it’s like 20 times the salary of an average person. And they’re sitting on all these properties or sitting on having their own properties and then having the vote to say, well, we’re not going to change this because it’s benefiting us. And that’s the millennials and younger generation going, well, we’re the ones who need it now, and there’s nothing available for us because you’re holding on to the NiMBY aspect of not in our backyard. And then I actually watched this journalist talk about this being like, and we’re not going to change it because we’re the ones making the laws, but we’re all the ones who are of the age who aren’t going to change it because it’s benefiting us. So we’re not going to change the laws and do all these things to benefit the younger generation because that’s not going to help us where we are now. And so it’s definitely going to be a very interesting next 20 to 30 years to see what happens in that cycle and how that actually plays out because it is wild and prices are insane in big major cities around the world, for sure.

[00:23:26] Jason Muth: Yeah, I would just encourage people to vote, basically, have your voice heard as much as you can, and if you want to vote for the current and the future, I mean, it’s incumbent upon our leaders to look to the people that are not the majority. And we certainly can relate to that in our community, where not only do we need to act up and rise up and speak for ourselves, but we need our peers who support who we are as people. And this could be the same if it’s a race issue, if it’s a religious issue. There’s a lot of oppressed groups that are out there. We want to make sure that we have people that are in leadership positions that look out for everybody instead of just look out for themselves.

[00:24:04] Calan Breckon: Definitely. I’m curious, do you have any creative ideas that you’ve learned of or doing the business that you do and being in the industry that you’re in, is there any creative ideas that you’ve come across or that you’ve thought of that could help kind of solve this housing? They’re calling it the housing crisis in North America that isn’t just build more homes like the typical build more homes answer.

[00:24:29] Jason Muth: Yeah, I know. That is kind of the typical answer when you think about the homes that are just kind of sitting vacant, second homes. And that’s certainly a business that we’re in where we.

[00:24:38] Calan Breckon: There’s 30 of them in my building right now. There’s 25 up for rent and ten for sale. And they keep bopping back and forth.

[00:24:44] Jason Muth: Are they owned by international people?

[00:24:47] Calan Breckon: You don’t know?

[00:24:49] Jason Muth: Because isn’t there, like, a moratorium in Canada about foreign ownership right now?

[00:24:54] Calan Breckon: It started coming in a number of years ago, but all of that takes so long, and there’s so many loopholes, like students are allowed to buy. And so in Vancouver, where I’m originally from, the multi million dollar mansions, like the mega McMansions, there’s been stories come out where it’s like the student who doesn’t make money, who just goes to one of the universities has, like, a $34 million house.

So there’s loopholes to get around, all that kind of stuff. But I have been watching this trend. In my building, there used to be maybe three places up for rent and maybe a couple up for sale. And just month after month, I’m seeing that number climb. And it used to be a couple of months ago, everything was for sale and there was only a couple of rentals being looked at. And now it’s switched and everybody’s trying to rent, but they keep going back and forth because they can’t rent it for the price that they want, but they can’t sell it for the price that they want, and they keep going back and forth.

And I can see this happening, and I’m like, part of me is like, okay, what part of your greed is going to win out? Do you want to rent? And how long can you actually afford to not rent this place or not sell this place before you hit your wall? And I think that that’s where a lot of these last minute investors, I won’t say, like, long term, understand the industry investors, I would say kind of more short term. I’m just going to bop around, and it’s the time to get in back in 19 and 2020, and now they’re kind of screwed and shooting themselves in the foot because those mortgages are coming up in the next year or two.

[00:26:22] Jason Muth: Yeah, I mean, you guys have an interesting situation where mortgages renew every five years or if you have to reset it, and that is kind of similar to commercial loans here in the United States. We actually have an office that hopefully by the time this comes out, it will have been sold. I just signed some paperwork for it, but we had an office in Boston that we used for a couple of years while we were there, my husband’s business ran out of there, and we decided that we didn’t want to rent space from somebody else who wanted to buy it. I’m a big proponent of buy it and pay ourselves. So we did that. And then when we moved up here a couple of years ago, we kind of stopped using it and said, do we rent this? Do we sell it? And it’s an office. It’s like a 600 square foot office in a great neighborhood. And we decided to sell it, pull our money out, and do something with the money, and we’re closing that. But I say that story because I had a commercial loan on that property that was actually coming due the end of this year. It was a loan that was amortized over, I think, 25 years. The first five years were a certain interest rate, but then it resets after five years. So I would either have to refinance it or accept that new rate, which when you’re signing the papers, you’re kind of hoping the rates go down. So in five years, when it resets, it changes. But rates did go up. So had we kept that property, which, again, by now, I’m hoping that it closes by the time this comes out. But if something weird happens, then we do have to keep the property. In theory, if we don’t find another buyer, then we’ll have to reset that loan. But going back to your question, it does require more housing and smarter housing. It doesn’t require more single family homes in places that don’t need it. It requires multi dwelling units. And that’s what we have a lot of here in the northeast, in Boston, and in all the different gateway cities. So Lowell, Massachusetts, Lawrence, Massachusetts, up our way. Quincy is just south of Boston. There’s lots of multifamily. Cambridge, Somerville, where we have this kind of worcester. Out west of us, we have this classic triple decker. These buildings have been around for 100 years, and they keep getting repurposed, right? They used to be large families that will live in this one big building, but now they’ve been divided up into apartments and condos so more people can live at them. Now, the problem in a neighborhood like we just moved out of, which is South Boston, Southie, as we call it, kind of all the Boston gangster movies that you guys see is based in Southie. Big St. Patrick’s Day parade, everything. I was there for 20 years, and the neighbors are just like, if you go on any Facebook community board about South Boston, it’s just vitriol. Everyone’s yelling about everything. It all goes down to parking, right? So people want it to be. They want fewer people there because there’s nowhere to park a car. But guess, like, there’s just more humans that want to be in this area right now. SEO developers need to figure it out. They need to build smarter housing in parcels that are not being utilized or optimized. They need to put parking spots for those apartments and condos. Like, if that’s the regulation that the city has, you need to take this low level commercial building that is a single story commercial building and nothing above it. Knock that stuff down, build a big building there, have the same commercial on the ground level, and then have apartments and condos above for a place where there’s scarcity for land like we have here in the Boston area. If you look at a clock, half of the clock is the ocean. The other half of the clock is where we could build, right? It’s not like a city like Indianapolis where you can go in any direction and you could build, okay, it’s all land here. We don’t have as much land, so you got to be smarter with how you’re building. So any parcel that is a vacant lot, a parking lot, an underutilized commercial property, those are ripe for redevelopment, and people are redeveloping them. Now, the challenge, though, is that developers these days are not looking to put property up and then make very little money. On it because the debt service is expensive. It’s expensive to hire people to build them. So the happy medium that we have here in Boston is you have to build affordable housing along with what you’re building. So, like, if you build X number of units, a number of them have to be income qualified units.

[00:30:23] Calan Breckon: So it’s helpful they try and do that here. But then sometimes those, for whatever reason, something gets finagled. And those supposedly getting built into the building, if they tear down a rental controlled unit.

I’m not fully versed in all of this, so take all of this with a grain of salt. But it’s like if there was six units in this one spot and they’re going to build a high rise there in the new building, those six units need to be put back in. Like, those people need to have the right to go back in at the rate that they were in. And they need to be the affordable housing. And that’s like the agreement to build that condo unit in that space, to tear it down and rebuild it up. But then a lot of the times that doesn’t end up happening. And so there needs to be stronger laws there. And I know one of the things they’re doing in Toronto, we just voted out, know, same old, same old. Maybe about a year ago, and Olivia Chow came in and her whole thing was built on housing. And she’s like, we need more government built housing. And I think that that’s definitely part of it, is the government needs to step in and go back to where we used to do, is that they needed to step in and kind of help build more government housing to level off the private sector so that there was an equilibrium between the two. Like I know in Vienna, in Europe, they did this really well because there’s a significant portion of government housing. I think it’s around 40%. Don’t quote me. And so it keeps the 60% of private in check because people can easily go from private to government. And so the government levels are so much cheaper and more affordable that it keeps that private in a realistic level so that everybody can afford quite well to live there. That we heavily privatized here in North America and we kind of let everybody run wild with it.

[00:32:11] Jason Muth: That is the mean. Like, most of the land in the US is owned by private individuals and not by municipalities. So it’s not like Boston is sitting on all this land that they could just repurpose. It’s all privately held and it’s titled to other people. And you could take it through eminent domain if we’re going to build a highway, but you don’t hear all that much these days, people taking land by eminent domain, and that’s going to get held up in the courts by a long shot. So the housing that you do see is, it’s usually like affordable housing, but it’s not good housing. Right.

And I will say in Boston, we’ve had some projects, is what it’s called here, the projects that they’ve been around for a long time, and they are redoing a lot of the projects, at least in south Boston, they redid a bunch of them. It does take a while to redo them. And what they’re putting up looks a lot nicer. And it’s new construction. So I’d imagine that it’s a little bit better of a place to live. And then it’s a matter of trying to keep the residents to have some pride in ownership and keep the know, maintain them. And I don’t know a ton about the Boston housing Authority and how they incent people to do. But yeah, there’s, I hear what you’re saying. I just think the challenge here in the US is that the land is not owned by the cities.

[00:33:25] Calan Breckon: I know, same. It’s one of these huge problems that everybody’s talking about, all these different ideas. And even I know that rent to own kind of ideas have cropped up as well. Because then if somebody, because a lot of the NIMBYism is like, oh, that’s cheap people, they’re going to bring down our value or they’re going to be a lower class of folk and they’re going to bring down our perceived wealth and everything. But if there’s some sort of a rent to own or a government program where you’re renting to own, maybe you don’t qualify for traditional stuff, but you can in this term, then that gives the person more value in that home. They want to take care of it more, they treat it better and it creates a better system, but it’s going to take a number of these different things.

I want to move the conversation along a little bit because we’re kind of nearing the end.

So looking at market trends, everything runs in trends, and we’ve not had the last downturn. The last big downturn was 2008. Everybody’s very aware. I was living in London and I remember watching the banking sector just completely empty out on Canary Wharf. And I was like, I think it’s a good time to move back to Canada.

So what trends do you think we might be in? Because I’m not saying we’re looking at like a 2008 kind of crisis, but that started in 2006. 2008 happened, and we didn’t really hit kind of a bottom area until 2012. Where do you think we might be in the cycle now, and what do you think that might look like over the next little while? But more specifically, if people need or want to buy, how can they safeguard against a possible downturn?

[00:35:13] Jason Muth: So, not being the economist, but being someone that is observant, I can give an opinion.

There’s been so much of an equity run up in a lot of these markets, even these past couple of years, that even if there is a 15 20% downturn, it just puts people back to where they were just a couple of years ago, which is sitting on a lot of equity. Right. So that’s where it’s different today versus 2008. And I did own my condo back in 2008. I wasn’t paying as much attention back then because I was diligently working in my w two job and kind of trying to get ahead with that.

But I do remember my neighborhood kind of didn’t have as much of a drop as another neighborhood. I had a friend that purchased a property using an interest only loan back at the wrong time. And then when the drop happened, his neighborhood was less desirable than mine. So then his property went underwater, and he had no equity in it because he did an interest only loan, because back then they were giving loans out to everybody, low credit score, people that could not afford the payments, that didn’t have a down payment. So it was a lot of irresponsible lending, and there was a lot of changes that happened in the United States to make sure that there was a much deeper underwriting of properties, and the ability for somebody to actually qualify for a loan. I’ve done a lot of mortgages.

We have a number of properties, so there’s mortgages on all these properties. Real estate investors never own 100% of everything. They own a little bit of. A lot of different things, is what I’ve learned. And they kind of keep moving their money around to leverage it and buy more property.

But I say that because basically we’re in a situation where I’ve had to go through underwriting a lot, through different banks, credit unions, local credit unions, whatever. And it gets more and more difficult to qualify for a loan, not just with the more loans you have, but the paperwork that they make you fill out. The process is not simple, and whether you’re going to sell the loan on the open market as a bank, or you’re going to keep it in house and service it in house. That is a different strategy that they have when they’re bringing loans on. So it’s more difficult to qualify for financing today than it used to be back in the day. So I say those two things, because if there is going to be a drop, people are sitting in a lot of equity and there aren’t a lot of bad loans out there. There’s not a lot of people that are going to face foreclosures. So I don’t think, and this is me hearing a lot of the same chatter out there in the real estate space that I see on the news, I read and I hear on podcasts. There doesn’t seem like there’s a prevailing wisdom that there’s a huge risk there. There is a risk in the commercial sector, right. Commercial space in the cities is at all time lows. There was just a building that just closed in Boston that was sold for a third of the price that they bought it for just a couple of years ago because of the changes in how we’re all working. I think the pandemic has really alarmed a lot of folks as to what’s going to happen with these urban cores that have these big commercial buildings that are really difficult to repurpose. For residential, although they should do everything they can to figure out how to do it. The buildings are just not really set.

[00:38:15] Calan Breckon: Up for residential living with plumbing and stuff. I’ve watched. There’s a lot that goes into it. It’s not as easy as people think.

[00:38:23] Jason Muth: It seems like that’s the answer right there. But everything that I see and you see it is not the answer. But it’s tough to get these commercial buildings filled these days. Not just retail, but like offices. We’re seeing layoffs happening, right? So people need less space. They’re downsizing their workforces. There is remote work, there’s hybrid work. But on the flip side, you got these businesses that are saying, get back to the office. Dell just put something stupid out this week. Did you see this? Like Dell computers, they basically said, if you can work in an office and you’re not working the office three days a week, that you will not be considered for promotions in the company. I read that and I was like, do you really want to exclude a young, ambitious workforce from wanting to work for your company? Because this is an easy way to do that. People want to work the way they want to work these days. That is not going to change unless you want to have a really draconian way to operate your workforce and say you have to be in here and then you’re going to be dedicated to working here or else you’re going to be off not working anywhere. You want people that are proud to work for you, that want to apply for those jobs, that want to get ahead in the companies, and the companies that don’t see that, those are the ones that are going to falter. And unfortunately, that means hybrid work for those companies.

I have a feeling that we live where we do because of where we work. And since that trend is changing, there is going to be a shift a little bit to maybe the periphery around the city. If people can get a little bit more affordability outside the city, they might do that. But just a couple of years ago, during the pandemic, everyone thought the cities were done. And then everyone sat at home and they did videos online and they started knitting and baking bread and then they got bored and wanted to see people again. Right?

[00:40:15] Calan Breckon: Yeah.

[00:40:16] Jason Muth: What do people in their twenty s and thirty s want to do? What do seniors want to do? They want to connect with each other. We want to meet people and you can’t do that if you’re just isolated by yourself at home. It leads to depression, loneliness, it’s bad for mental health. So we need these places that people can congregate. And that’s why I think cities actually kind of came roaring back really quickly after everyone was like, up, cities are done. No, they’re not done. People still want.

[00:40:41] Calan Breckon: Yeah, it’s. It’s old guard in terms of like the Dell stuff, that’s old guard to me. I’m like, if that’s how you think you are, not moving and evolving with the times, and if you don’t evolve with the times, your company’s doomed. That’s just plain and simple to me. How exactly it looks moving into the future, we don’t know. I definitely believe in a hybrid. I believe especially young people, because they’ve grown up in this phone in my hand world. They actually have done a lot of studies. They prefer to just stay at home. Being on TikTok instead of going out and meeting people now, I think that that’s a disservice that our generations and older have done to kind of just let it happen. But I believe that that is a learning and maturing with technology that we’re going through and we can’t know it until we go through it, but we’re going to have to take it upon ourselves to teach these younger generations that being in an office, at least sometimes, is really important, especially a young person who’s ambitious, who wants to move forward to meet mentors and get that kind of on the spot information or on the spot advice or in person experience that you’re not going to get at home. But that doesn’t have to look like a nine to five at an office building. That could look like we’re a digital company. And once a week, or however many times makes sense for you and your organization, there’s a rental building kind of like, I don’t want to say WeWork style, but I think that will be a little bit more popular in different terms. Not necessarily how they put it, but you rent the space for your company and like once a week or once every other week you get together and you rent this big space and everybody comes together and it’s more of a socializing aspect of it that is focused around the work, if that makes sense. I think that that’s definitely going to become a lot more popular. But to wrap up the go back to the question of safeguarding against people who need to buy now or want to buy now. How can they kind of safeguard against if things drop? But I do agree commercial is going to be the thing. That’s the issue, not necessarily residential.

[00:42:47] Jason Muth: I’ll also say I wouldn’t be super worried about where prices are right now because just the gentle hand of inflation and real estate tends to drive things up. As I mentioned earlier, there are population trends right now where the demand is going to remain high unless it’s a mass extinction event of a certain percentage of the population just disappearing like that HBO show. But God willing, we’re not going to have that. We just went through COVID and it didn’t fully happen to younger people that are in home buying ages. The people that were passing away were either the antivaxxers or the old people, right? Or combination of them both. And still here we are with lots of people that need housing. So if you’re looking for that first place, I would first of all get yourself a really good real estate agent. And I know things have changed in the US just this week with the NAR passing some new regulations about what commissions are going to have to get paid out. It doesn’t mean that agents aren’t going to want to work with buyers anymore. You just need to negotiate that in advance as to how much you’re going to pay your agent to show you properties. And the agents work hard, I know they do. It seems like they’re just opening the door and then collecting a commission. But hey, when you got to submit an offer 30 different times, because there’s 40 offers in every property, the agent is working. So you should probably work with a good agent who you trust, who can get you properties in advance and really hustle. Look for low interest, low down payment programs. In the US, I mentioned the FHA program through the Federal Housing Authority where you could put down as low as 3.5% on a property. And yes, you’re going to pay personal mortgage insurance, PMI, because you have less than 20% equity in the property. But if you trust the gentle hand that it’s going to push upward the property value, that property that you put 3.5% into, in a couple of years, you’ll have 20% equity, you’ll have 25% equity. And that’s a great way to leverage your money and start building your wealth. Because it’s not new that people are building wealth on real estate. Like the titans of our economy, like the people that we, all the buildings that have people’s names on them, they built it all through real know, that’s really how it’s been done over generations.

[00:44:59] Calan Breckon: McDonald’s is a real estate company, not a fast food company.

[00:45:02] Jason Muth: Right? It literally starts with one property. And I was speaking yesterday at a local real estate meetup in Portsmouth, New Hampshire, just up the street from us. And I was showing them the short term rental properties that we have, the first one that we bought in 2016. And I said, all of these properties, there’s five short term rentals that we have in kind of classic vacation type areas. I said, that first property cost me $192,000. I still have the same loan to this day. I pay $691 a month on that property. It made $74,000 last year with short term rentals. That property allowed us to feed our family, leverage it to the other properties that we have. And the job that I worked, the w two job that I worked for so long, I was in the media business for over 25 years. Variety of different capacities. That job allowed me to invest in real estate, and then real estate allowed me to not have to work that job anymore. When they called me up and said, there’s no more job, I said, okay, that’s fine, because I’m also doing this other stuff. So all it takes is the first property. If you can get into that first property, however you can.

I know it’s a fabulous gay thing to be living downtown in the hottest neighborhood, but you probably aren’t going to buy that as your first property. If you are looking for anything. Go find a different area that is up and coming or a different city that you can tolerate, or for whatever reason, buy a multifamily property. If you can buy a duplex where you’re going to collect rent from somebody else, they’re going to help subsidize your mortgage. These duplexes and multifamily properties that exist today have existed for decades and decades and decades. It means that people have been building wealth of real estate for so long. So all it takes is that first property is really what I tell people. You just kind of have to get in and it stinks because it’s more expensive, and then you have to deal with maintenance. And it’s probably not exactly the fabulous big place that you want to live, but you just do it and you’re basically planning for the future by being able to do that. That’s just a recommendation that I make.

[00:47:04] Calan Breckon: Gotcha. So let’s wrap up the show with what you do with pride away and all the fabulous stuff that you’re doing to shine some light on the gay aspect.

[00:47:16] Jason Muth: Yeah. As I mentioned, we operate short term rental properties.

[00:47:19] Calan Breckon: Okay.

[00:47:20] Jason Muth: And I know there’s a lot of controversy about short term rentals in a lot of markets about how it affects the housing stock. We have five. One of my markets has literally twelve short term rentals in it, and we own three of them. And it’s across the street from a lake. And a lot of the houses on that lake are second homes for people in the greater Boston area that either go vacant or they use a couple of weeks out of the year. Combined with people in the community that live there full time.

We have a property in Provincetown, which is my opinion is the gayest place in the US. It’s a fabulous city. If you’re listening to this and have not been to Peetown, I strongly encourage you to go there if you want to go there. During the high season, there are four really massive theme weeks. There’s Bear Week, there’s carnival.

Bear week.

[00:48:05] Calan Breckon: I’ve never been, but if I go, it’s going to be during Bear week.

[00:48:07] Jason Muth: Seeing the photos, I’m sure. Yeah. So there’s Bear Week, there’s carnival, there’s circuit week, and then there’s family week. Those are the kind of the four big ones. And then the other weeks are just kind of classic summer weeks on Cape Cod. I think I mentioned off camera that Provincetown has been a come as you are, you are welcome to be whoever you want. And it’s been that way for a know, poets and writers and artists came there many, many decades ago. It’s a portuguese fishing village, is kind of how it kind of got started. The Pilgrims landed in Provincetown first before they went over to Plymouth. So the big monument we have in town, which is right on our logo right here, that is the pilgrim monument.

And I encourage people to go up and get a beautiful view of town. And it’s a great place. You can come for kind of a mini or theme weekend. Like you can come for baby Dyke Weekend, for Memorial Day weekend. There’s person of color weekends, there’s trans weeks and weekends. There’s like a gay pilot weekend or something. There’s just a lot going on in P Town throughout the year. Summer is most expensive and it’s really busy. If you want to get the essence of Provincetown and not pay those prices, I would recommend coming in June or September or even October because the weather is still fantastic. The flowers, the gardens in P town are like to die for. There’s nothing like I’ve ever seen. Everyone, they’re very manicured. The plant life is beautiful there. And with global warming, things are still warm in October, right? So they’re still kind of around there. If you want solitude, come in February or March. You are going to get a lot of solitude. At the very tip of Cape Cod. You could take a ferry there from Boston, you could fly in there. You could drive like we normally do. Because when we go down there, we’re either bringing stuff for our property or working with some of our clients. We just launched Pride away stays last year. So our thesis with this is that there’s about 1000 and short term rentals in Provincetown. And the only companies that are managing properties for people are national companies like Vicasa or Evolve or there’s a regional company that does it. But nobody is serving just that town. Nobody is speaking to the people in Provincetown in the way that they should be talked to, which is like fabulous and gay and short term rental. It’s just another zip code for a lot of those other people. And there are some agents that live in town that also manage properties, but they’re more selling real estate. They’re not deep in the short term rental space where they understand guest communication, customer service, setting up interactive guides, troubleshooting, conflict resolution, pricing your property correctly, great photography, fabulous decor, all that stuff. So that’s where we come in. We want to kind of manage everything from soup to nuts for people. And what we’ve learned is that there’s a lot of folks that want to do this themselves. And I applaud the entrepreneurial gay people that finally bought that second home in P town. Because it’s a lifelong aspiration for a lot of people in our community to buy that second home, especially in that community. And they want to go about managing it themselves. Maybe they’re type A or they want to get their fingers dirty with understanding the software and all that. And a lot of people do it great. A bunch of people are busy and they are just like, this is too much for me, I don’t want to deal with it. And they kind of let their property sit there unrented or not. Optimized property is very expensive in Provincetown. So when people buy properties there, unless you are very independently wealthy and have done great with your career that you could be putting down. You could buy a million and a half dollar home which is 1200 sqft or so. And then not have to have anyone subsidizing it then all the power to you. But a lot of people that have purchased property in Provincetown, they will rent it out to folks so they could also enjoy ptown. And that will help pay the bills. So then they could enjoy it during the off season or during select weeks during the summer. That’s kind of been a pattern for a long, long time. Right? So it’s not new that this is another not. It’s a classic short term rental market. People have just been renting there for.

[00:52:12] Calan Breckon: A long cottage, cottage country. Like there’s always been the spaces that people go for those holiday seasons. They’re not year round living spaces necessarily. They’re kind of like that’s where you holiday.

[00:52:26] Jason Muth: We are members of the Provincetown Business Guild and we’re members of the taxpayers association. We want to be good members of the community and understand what’s happening.

And we’ve learned a lot about affordable housing in Provincetown and kind of what they’re looking to do. There was just a study done last year about the impact of short term rentals on long term housing in Provincetown. Because it’s very difficult to find housing for all the people that have J one visas and who are working in all the places throughout town. And for residents that live there full time, it’s 4000 people live there full time. And interestingly enough, they determined that short term rentals actually were not impacting the availability of long term housing stock. In fact, there were fewer short term rentals today than there were five years ago. The reason being people are using their properties more. Because if you’re a property owner in Ptown, and you finally bought that second home, but then you let somebody live there twelve months out of the year, then you can’t even enjoy it yourself. And these are kind of nontraditional. It’s not like an investor market like Pittsburgh, Cleveland, you name a rust Belt City, and there’s the big companies. You talked about the real estate investment trusts and everything that are buying up all the housing, and they’re making it much more less affordable for a lot of people there. In Peetown, you don’t have that because housing is so expensive as it is that when people buy in there, they’re usually going to be the one that joys themselves. There actually is a rule that a private person can only own two short term rentals in P town, and the majority of people only own one. So it’s not like you have these big investment companies come in there to do it. So we’re really looking to serve our community, and we want to be the ones that are giving really great best practices on how to operate your property to keep your visitors super happy, keep your property safe, keep it. Make sure that it’s not damaged and allow you to be able to use it as an owner, have your bills subsidized. You get to enjoy Provincetown also. We get to talk gay to the guests. I mean, I have a lot of straight people that come also, but 75% of the people that have been guests of mine at our properties are part of LGBTQ plus community. We want to make sure that we’re talking both those languages because I know the national companies are not doing.

[00:54:34] Calan Breckon: I mean, it’s the queer community. We need to keep supporting ourselves.

Our community is still constantly under attack. We have gay marriage. We’ve had a long time in Canada, but it never quite goes away. And we need to continue to carve out the spaces and continue to. No, no, we’re here. Our flag is in the ground. We’re going to continue to do that no matter what you say. And folks like yourself who are protecting these kind of historically queer friendly queer spaces need to continue to do.

[00:55:09] Jason Muth: Yeah. Yeah. Well, thank you. I mean, like, P Town is a special place for a lot of people that have any kind of connection to know.

[00:55:15] Calan Breckon: I’ve wanted to go for a long time.

[00:55:17] Jason Muth: I strongly encourage you to know Bear Week might be over the top. If you go for Bear week as your first time going, maybe you need to dip your toe in the water and come during a less wild weekend. I’ve actually never been on a bear week myself. That’s a fun fact of mine, we usually go during family week. I’ve been during the circuit week before, but not as one of the circuit people.

[00:55:40] Calan Breckon: Yeah, I’m not a circuit. I’m not a circuit. I think I’d have a blast during bear week. I mean, I’ve lived in London, I’ve lived in New York. I’ve done the busyness. I’m sure I can handle bear week. And bears are just more fun.

[00:55:51] Jason Muth: No, they’re great. Back when I first started playing in the gay softball league, people were talking about bear Week, and my friend, who really loved bear week loved really large men. He was a feeder. Like, he fed people to make him big.

[00:56:04] Calan Breckon: Okay, it’s time to end the episode. No.

[00:56:06] Jason Muth: Anyway, nice guy. Super nice guy. But it was very different. Now bear Week is like everybody. It’s not just like the big, big bears. There’s all different types of bears. And whenever I have this conversation with my straight friends about Bear Week, I kind of run through the different categories of bears, and they’re like, wait, what’s that? What kind of bear is that? But anyway, that’s a whole different episode. And I don’t go because I let my friend use my place during Bear week. I mean, I charge him for it, but I don’t charge him what he’d have to pay on the open market he gets from me. And just every, like, I can’t go now. I’m not allowed to go to my own place during Bear week because he’s claimed it, right?

[00:56:45] Calan Breckon: I love that. So if people want to go, not necessarily during Bear week because it’s claimed, but, like, other weeks, or find out more about you, where can people do?

[00:56:55] Jason Muth: Mean? The Provincetown Business guild actually has amazing information about what’s happening in p town right there. So I don’t know the exact website, but you can google it. To find out about prideawaystays, just go to prideawaystays.com. You can learn everything about us, see the properties that we manage. Learn more about me and my business partner and my husband. And if you want to go to ptown again, the darkest months are usually kind of February and March. Once the clocks change, it’s off to the races. I was just there, like, last weekend. The buds are coming up. There’s daffodils already coming out, crocuses everything. So we’re super excited that the flowers are coming back. And I would encourage you to go if you want to go. Like, the shoulder seasons tend to be kind of the best of both worlds. You’re probably still getting the warm weather. It’s still busy, but it’s not over the top overrun like some of the summer weeks are.

[00:57:44] Calan Breckon: Nice. Awesome. I’ll make sure to have all those links in the show notes for everybody. It has been an absolute pleasure having you on the show. Jason, thank you so much.

[00:57:53] Jason Muth: Yeah, thank you Calan, we appreciate it. Thank you.

[00:57:56] Calan Breckon: I could have gone on for hours and hours and hours about this topic. I know that there’s so much to talk about in regards to real estate. By no means am I any expert at all, but I do enjoy talking about it and seeing kind of what’s going on and what we can expect in the future. I know it’s a bit of a hot button topic right now, and I’m really curious to see what’s going to happen over the next couple of years. Thank you so much for tuning today. Don’t forget to hit that like and subscribe button. And if you really enjoyed this episode. Please consider giving it a star rating. The business gay podcast is written, produced and edited by me, Calan Breckon. So that’s it for today. Peace, love, Rainbow.