Mid Term/ Short Term, Are Loft Studio apartments worth it?

Question

I have interest in a multi family property that is made up of loft studio apartments, all roughly 550 sqft. My initial interest would be trying to rent them out as mid term/ short term rentals. My question is this, would there be enough interest for mid term or short term guests with the sqft and having a loft for the bed? It is very close to two different hospitals, and a mile or so to downtown of a major metropolitan city. Numbers seem to be able to work, but being new to the mid/short term rentals makes me wonder. Any and all advice is greatly appreciated!

Bonnie Low · Answer

A studio or a 1/1 can be a great configuration for travel medical professionals and digital nomads. Given where you're located, it could certainly have potential. Issues to think about are shared walls (if you're renting to nurses they need QUIET in their off hours), parking and how easy it is to get to/from work in your area. In-unit washer/dryer is always a plus people are willing to pay more for, but even it's just on site and not necessarily in their unit it will perform better than a space with no access to laundry.

Zachary Ware · Answer

Great Advice Conner! It's really about how much traffic the city/area gets for MTR/STR.

Conner Olsen · Answer

The best way to determine demand is to go on FF and Airbnb to find comps. For an STR they have software to help you determine revenue like pricelabs or Airdna. For MTR numbers look at comps and when they are available. On Airbnb find MTR comps and see what their payouts would be and how far out they are booked. If they are all consistently booked 2-3 months out then their occupancy is 80%+. If they aren't booked that far then they're priced too high. I'd also factor in your market size. Are there a lot of people relocating there? Is there job growth? Is there construction? Just because there's hospitals doesn't mean there's traveling nurses. Call the HR department and find out how many nurses there are. Look on Linkedin or other job sites to see any traveling nurse positions in your town. I'd make sure the rental market is solid before buying a property.

Patrick O'Shea · Answer

Not sure if you pulled the trigger, but I was nervous to go from LTR to MTR. The question is what niches will support the MTR paradigm. I am in Pittsburgh and there are multiple large hospitals within 15 mins. I went to Vivian.com to browse the jobs to see if there is demand. If you keep your searches broad you can see which hospitals vs others in the area are seeking temp workers. I would check FurnishedFinder and their stats about what's available and prices. I think  a good rule of thumb is LTR is 1x rent, MTR is 1.5-2x rent, and STR is 3x rent.

In addition to medical professionals, we also have college/grad students. Typically those are shorter stays as they are doing something for a couple months vs staying for the entire semester or year. Finally, there are digital nomads and some theater performers who need to stay for more than 30 days. That's been my experience and I'm really glad I pivoted, but your location might have other mid-term niches you can capitalize on (construction, business, etc). Facebook has mid-term rental groups for traveling nurses, etc. You can check to see what they say about your city. YMMV

Mohammad Parwez · Answer

There is a free website that I use to find the estimated short term rent based on Airbnb data.

The same information you can get from airdna but you need to pay for that service. I check this site rabbu.com for finding out the estimated rent for STR for free.

Mohammad Parwez

NC Realtor - 341737

Zachary Ware · Answer

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Jonathan Styer · Answer

The first question to ask yourself is, "Why would someone book this place?" If that's a no brainer answer, then you know enough to keep digging. Ask yourself this for both STR and MTR strategies. Location plays a big factor into this question.

Percy N. · Answer

I would say it depends on the market.

We had converted a 88 unit hotel into MTR for corporate housing in a market with a lot of job growth. However, it was challenging to get it fully occupied due to families etc that were looking for larger units.

Peter Mckernan · Answer

Yes, jump on the STR sites and the MTR sites.. See how is renting and how much they are renting along with consistency! That is key, the consistency, and showing that for what you can get will be the indicator if they work or not. That is groundwork to getting the property geared up for making the most.

Connor Kline · Answer

@Conner Olsen Thank you for all that info! I'll defintely dig into all of those tools.

Mid Term/ Short Term, Are Loft Studio apartments worth it?

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