Making your pool pay off
Here are three of the week's top pieces of financial insight, gathered from around the web:
Making your pool pay off
The "Airbnb of swimming pools" lets homeowners rent out their backyard oasis, said Megan Sauer at CNBC. Jim Battan in West Linn, Oregon, says he has earned $177,000 in revenue in less than two years through a platform called Swimply, which connects more than 25,000 privately owned pools in all 50 states with renters looking for somewhere to take a dip. Battan says he "books about 26 visits per week" to his luxury pool and spa, charging $70 per hour in the summer, "a rate that rises with additional people and longer durations." He even keeps the pool heated for off-season bookings. Swimply takes a 15 percent cut. It extends hosts a $1 million liability insurance policy and "up to $10,000 to cover costs of damages."
Are P/E ratios deceptively low?
Stocks are cheaper than they were a few months ago, but they're still not cheap, said James Mackintosh in The Wall Street Journal. The overall U.S. stock market is now trading at 16 times forward earnings — a price/earnings ratio "only a little more expensive than the average since 1985." This swift decline of valuations has happened "faster than in the aftermath of the dot-com crash." A big caveat is needed, however, before endorsing the moment as a good entry point for investors. Shares could be much less attractive if there is a downturn in the economy and profits fall. To this point, companies' expected earnings have remained "very elevated." This earnings season, when estimates come down, stocks could "look more expensive again."
Renting still cheaper than owning
Though rents are rising, they're still low compared with the price of buying a home today, said Anna Bahney at CNN. The national median rent hit another record in June of $1,876 per month, up 14 percent from a year ago, according to Realtor.com. Nonetheless, renters don't have to contend with soaring mortgage rates. "June's median rental rate was $561 a month less, or 30 percent lower, than the typical monthly starter homeownership costs." The gap was just $78 in January, when the average mortgage rate was 3.22 percent. Borrowing to buy a home today is about $416 a month more expensive than it was a year ago. In Austin, the cost of homeownership last month was 98 percent higher than the median rental price in the city. Buying does cost less than renting in some cities, such as Pittsburgh and Baltimore.
This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.
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