Pros/Cons of Medium-Term Rentals

[Conner Olsen]

Here's a list of my pros and cons of medium-term rentals as compared to traditional LTR. This list is based on my own personal experience of running a monthly rental in Austin, TX.

Cons:
1. More turnover - My average stay is between 45-60 days so that means I need to constantly be looking for new guests/tenants to stay in my property. 
2. Furnishing maintenance - The host furnishes a property so you have more expenses as the furniture wears out. I've only had to replace a bedframe in the past 9 months.
3. Cost to get started - You must fully furnish a property as well as fully stock the kitchen. The host provides everything from silverware to cookie sheets to blenders.
4. Cleanings - The property needs to be cleaned between every guest. The host needs to have cleaners prepared and ready to go when a guest leaves. The host also needs to verify that the property is cleaned to their standards. I list my property on Airbnb so the guest pays the cleaning fee.
5. Awkward vacancy gaps - Every once in a while you'll get these awkward gaps of a few weeks between guests. These can add up and increase your overall vacancy for the property
6. Dealing with more tenants - You have to have more conversations with tenants than you would with a LTR. You have to be more responsive as a landlord than you typically would with a LTR. That being said, I probably message my guests 10 min per month.

Pros:
1. Higher rent - Market rent for a 2/1 is $1,600 in my area. I'm renting my property for $2,750.
2. Property is constantly cleaned - The property stays in better shape from a cleaning perspective since it's getting professionally deep cleaned every 2-3 months.
3. Less wear and tear on the structure - The owner sets up the MTR so they are the ones putting in furniture, hanging pictures etc. They have control over what is put where and the guest does not customize the space to their desire.
4. Higher paying tenants = higher quality tenants -  I have had great tenants so far. Everyone takes care of my property better than I would have expected. I believe that part of the reason is they can afford double the higher rent so they are less likely to damage a property. It has felt like all my tenants have been A class renters. *This could easily be just luck of the draw.*
5. MTR guests treat the property like their home (similar to LTR tenants) - They are living in a property for 2-3 months so they are less inclined to damage the property or make it dirty.

Overall I think MTR is a great strategy especially in expensive markets. In my opinion it is the best way to make cashflow in markets with high appreciation.

I'd love to hear everyone's experiences with MTR and whether they agree/disagree with my list!