Pros/Cons of Medium-Term Rentals
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!
- Conner Olsen with The Moorhead Team
- 702-521-0034
- [email protected]
I would also say MTR vs STR is way easier to manage. We've found that we double our rent with MTR and barely ever hear from the people. Right now we have the next 6 months booked out also.
What's your vacancy rate on a MTR vs LTR? Have been thinking about doing MTR but just don't want 20%+ vacancy.
Backing out all utilities/wifi and adding in extra costs such as furniture, etc that are specific to MTR, what would you say your CoC return is vs standard LTR?
@Landon Bleau My vacancy has been around 13%. My CoC on my property is 15% when I move out. On any given duplex in Austin you can expect -8% to -15% CoC LTR and with MTR you can get +5% CoC.
- Conner Olsen with The Moorhead Team
- 702-521-0034
- [email protected]
I echo Ops Pros vs cons with the exception of LTRs taking care of the place.
After a LTR leaves in 2-4 yrs, the place is always trashed with more people living in the place than stated. Typically families with bunch of kids who rarely cleans the place.
MTR guests keeps the place pristine b/c they typically are professionals without many kids.
Quote from @Michael Win:
I echo Ops Pros vs cons with the exception of LTRs taking care of the place.
After a LTR leaves in 2-4 yrs, the place is always trashed with more people living in the place than stated. Typically families with bunch of kids who rarely cleans the place.
MTR guests keeps the place pristine b/c they typically are professionals without many kids.
Respectfully, saying LTR after 2-4 years always trash the place is generalizing. It has more to do with screening, selection, how well the landlord monitors/inspects the property, and chance than length of stay.
Quote from @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!
You referenced in dollars the higher rent with the MTR compared to LTR. How do your expenses compare in dollars?
Th impression from the reading is your annual cash flow and ROI is higher with the MTR. Please share how well it outperforms.
Quote from @Rodney Sums:I only generalized for my duplex with rent they is on the lower end.
Quote from @Michael Win:
I echo Ops Pros vs cons with the exception of LTRs taking care of the place.
After a LTR leaves in 2-4 yrs, the place is always trashed with more people living in the place than stated. Typically families with bunch of kids who rarely cleans the place.
MTR guests keeps the place pristine b/c they typically are professionals without many kids.Respectfully, saying LTR after 2-4 years always trash the place is generalizing. It has more to do with screening, selection, how well the landlord monitors/inspects the property, and chance than length of stay.
i will be converting #2/5 soon and I will say that after 2-3 yrs, I spend a good amount on continued maintenance, and wear/test regardless of how well I screen bc the price point is lower.
mtr takes care of the house exceptionally well bc they are paying 3k/mo vs 1200/mo which is essentially professionals that being 1-2 people per booking vs 4-8 with multiple weekend parties.
the weat/tear diff is night and day. Plus mtr allows me to do regular professional cleaning, yard upkeep, and regular pest control that does not happen we LTR.
if 2/4 works, I’m going to do #3/4.
I have done the work where turnovers between guest takes me about 2hrs.
Quote from @Rodney Sums:Extra expenses are mostly utilities, which run about $200/month for a 2/1. I've maybe had $300 in a year for furniture replacement.
Quote from @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!
You referenced in dollars the higher rent with the MTR compared to LTR. How do your expenses compare in dollars?
Th impression from the reading is your annual cash flow and ROI is higher with the MTR. Please share how well it outperforms.
- Conner Olsen with The Moorhead Team
- 702-521-0034
- [email protected]
Does anyone self manage their MTR from afar? How do you deal with in between tenants, vetting the home for damage? Do you rely on your cleaning team? If you don't self manage, how do you work with a management company for MTRs?
Thanks for the info. From your experience, would it be ideal to purchase/manage an out of state MTR? I'm in SoCal (Inland Empire) looking to purchase a home for MTR but the prices are a little out of my range. It seems the Texas housing market has a better entry for me.
Quote from @J. Warren:
Thanks for the info. From your experience, would it be ideal to purchase/manage an out of state MTR? I'm in SoCal (Inland Empire) looking to purchase a home for MTR but the prices are a little out of my range. It seems the Texas housing market has a better entry for me.
You could buy a 1/1 condo in Loma Linda or Redlands and get a good draw from nurses and others for MTR since those areas are perfect for them due to the demand. Also the prices would be lower than going out and buying a 3/2 house in those areas.
Quote from @J. Warren:
Thanks for the info. From your experience, would it be ideal to purchase/manage an out of state MTR? I'm in SoCal (Inland Empire) looking to purchase a home for MTR but the prices are a little out of my range. It seems the Texas housing market has a better entry for me.
Hey! I have a few clients that are doing this exact thing and cash flowing while in So Cal!
Quote from @J. Warren:
Thanks for the info. From your experience, would it be ideal to purchase/manage an out of state MTR? I'm in SoCal (Inland Empire) looking to purchase a home for MTR but the prices are a little out of my range. It seems the Texas housing market has a better entry for me.
Hey J, absolutely possible to manage remotely! MTR is a little more hands-on than LTR but far less than STR. If you want to be completely hands-off there's always PM companies.
- Conner Olsen with The Moorhead Team
- 702-521-0034
- [email protected]
Quote from @Peter Mckernan:
Quote from @J. Warren:
Thanks for the info. From your experience, would it be ideal to purchase/manage an out of state MTR? I'm in SoCal (Inland Empire) looking to purchase a home for MTR but the prices are a little out of my range. It seems the Texas housing market has a better entry for me.
You could buy a 1/1 condo in Loma Linda or Redlands and get a good draw from nurses and others for MTR since those areas are perfect for them due to the demand. Also the prices would be lower than going out and buying a 3/2 house in those areas.
I second this. Loma Linda is an economic powerhouse of the Inland Empire. The city is basically run by the hospital, not the other way around.
Quote from @Conner Olsen:is $200 enough for all? water/gas/electricity/wifi/netflex/lawn care or snow removal , I analyze MTR deal recentlly, I try to budget $500 a month , would it too much for a 2b/1b unit in a duplex?
Quote from @Rodney Sums:Extra expenses are mostly utilities, which run about $200/month for a 2/1. I've maybe had $300 in a year for furniture replacement.
Quote from @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!
You referenced in dollars the higher rent with the MTR compared to LTR. How do your expenses compare in dollars?
Th impression from the reading is your annual cash flow and ROI is higher with the MTR. Please share how well it outperforms.
Quote from @Gaby Liu:
Quote from @Conner Olsen:is $200 enough for all? water/gas/electricity/wifi/netflex/lawn care or snow removal , I analyze MTR deal recentlly, I try to budget $500 a month , would it too much for a 2b/1b unit in a duplex?
Quote from @Rodney Sums:Extra expenses are mostly utilities, which run about $200/month for a 2/1. I've maybe had $300 in a year for furniture replacement.
Quote from @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!
You referenced in dollars the higher rent with the MTR compared to LTR. How do your expenses compare in dollars?
Th impression from the reading is your annual cash flow and ROI is higher with the MTR. Please share how well it outperforms.
$500/month is a good amount to budget for an entire 2/1 duplex here in Austin, TX.
$350/month water/gas/electricity
$100/month internet
$50/month lawn care
- Conner Olsen with The Moorhead Team
- 702-521-0034
- [email protected]
Quote from @Conner Olsen:thank you , so total I need to budget $500*2 =$1000/mo for the whole Duplex. that's alot
Quote from @Gaby Liu:
Quote from @Conner Olsen:is $200 enough for all? water/gas/electricity/wifi/netflex/lawn care or snow removal , I analyze MTR deal recentlly, I try to budget $500 a month , would it too much for a 2b/1b unit in a duplex?
Quote from @Rodney Sums:Extra expenses are mostly utilities, which run about $200/month for a 2/1. I've maybe had $300 in a year for furniture replacement.
Quote from @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!
You referenced in dollars the higher rent with the MTR compared to LTR. How do your expenses compare in dollars?
Th impression from the reading is your annual cash flow and ROI is higher with the MTR. Please share how well it outperforms.
$500/month is a good amount to budget for an entire 2/1 duplex here in Austin, TX.
$350/month water/gas/electricity
$100/month internet
$50/month lawn care
Quote from @Gaby Liu:
Quote from @Conner Olsen:thank you , so total I need to budget $500*2 =$1000/mo for the whole Duplex. that's alot
Quote from @Gaby Liu:
Quote from @Conner Olsen:is $200 enough for all? water/gas/electricity/wifi/netflex/lawn care or snow removal , I analyze MTR deal recentlly, I try to budget $500 a month , would it too much for a 2b/1b unit in a duplex?
Quote from @Rodney Sums:Extra expenses are mostly utilities, which run about $200/month for a 2/1. I've maybe had $300 in a year for furniture replacement.
Quote from @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!
You referenced in dollars the higher rent with the MTR compared to LTR. How do your expenses compare in dollars?
Th impression from the reading is your annual cash flow and ROI is higher with the MTR. Please share how well it outperforms.
$500/month is a good amount to budget for an entire 2/1 duplex here in Austin, TX.
$350/month water/gas/electricity
$100/month internet
$50/month lawn care
$500/month for the whole duplex, $500 total not each.
- Conner Olsen with The Moorhead Team
- 702-521-0034
- [email protected]
I LOOOOVE MTR model! I have 6 of them in Austin and I'm also hooking up real estate investors with super lucrative insurance contracts too. win/win and easy business!
#1 Medium-Term Rentals Contributor
- Investor
- Cottonwood, CA
- 1,536
- Votes |
- 1,708
- Posts
#1 Medium-Term Rentals Contributor
- Investor
- Cottonwood, CA
Hi, Connor. My experience with MTRs is very similar to yours, though in our area the rent is not 2x the LTR rate - more like 1.5x. I handle my own turns so I don't have the cleaning expense, except for my time, of course. I agree that our MTR tenants are very easy on the property. All have taken exceptional care of it. No hassles. No complaints. I don't mind having to go through the lease up process roughly 4 times/year. It's worth it in my opinion.
