Short-Term Rental to Long-Term Rental - Dallas, TX

Dallas, Texas
General Landlording & Rental Properties
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Short-Term Rental to Long-Term Rental - Dallas, TX

Account Closed
Rental Property Investor · Dallas, TX · Member since 2020 · 155 posts · 44 votes

Good day!

I am going to make this short and sweet.

I turned my primary residence into an STR in the heart of the boom. Dallas is now severely over-saturated with endless properties underpricing each other. We have a nice place in a good location, but I am not happy with the occupancy or average daily rate anymore. Honestly, we are not profitable right now, and I don't have a magic ball to see the future. I also want to qualify for another mortgage soon, which means I need to provide evidence of legitimate long-term revenue, ie LTR lease etc. As a result, we are going to begin the pivot to a long-term rental strategy. This is the first home that I will have ever rented long-term. We will rent for a 12 month minimum. Will also likely hire an LTR property manager.

3 bedroom / 2.5 bathrooms / 1,915 sqft / Complete gut and rebuild in 2020 /  Dallas, Texas 75208

A few questions:

1.) Property is fully-furnished. Nice furniture and amenities. What kind of multiplier can I use against the standard rent if we rent full-furnished? I will have to pay for storage if not rented full-furnished. I have considered this cost, but am not exactly sure what size unit I would need.

2.) Charge for all utilities, cover some and charge the rest, or include all?

3.) What's the best web source for listing a house for rent?

4.)What have I not thought of that I need to consider?

5.) Where can I find the most legitimate fair market rent value for this home?

Thanks in advance,

Nick

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Joel Broyles
Real Estate Broker · Member since 2023 · 41 posts · 37 votes
3y

Hi Nicholas, very good questions.  That part of town is fantastic, but you're correct - saturated. 

1) Maybe 15-20% bump at most.  Fully remodeled in that part of Dallas - might be a higher % who will take it furnished.  Lots will not want that - keep it furnished for marketing and showings. 

2) Utilities - 100% to tenant. 

3) There are so many - use one that will syndicate across the spectrum. 

4) Vet prop mgmt hard - not just one that is nearby the subject property.

5) Use a broker/agent. A good prop mgmt firm will do that.  

Good luck! 

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  • Joel Broyles
    Real Estate Broker · Member since 2023 · 41 posts · 37 votes
    3y

    Hi Nicholas, very good questions.  That part of town is fantastic, but you're correct - saturated. 

    1) Maybe 15-20% bump at most.  Fully remodeled in that part of Dallas - might be a higher % who will take it furnished.  Lots will not want that - keep it furnished for marketing and showings. 

    2) Utilities - 100% to tenant. 

    3) There are so many - use one that will syndicate across the spectrum. 

    4) Vet prop mgmt hard - not just one that is nearby the subject property.

    5) Use a broker/agent. A good prop mgmt firm will do that.  

    Good luck! 

    4Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    3y

    I'd sell or store the furniture.

    Your LTR tenant will put all the utilities in their name.

    Zillow is  great place to advertise for rent.

    Zillow or rentometer can give you a rent estimate.

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    3y

    @Account Closed you aren't alone with the problem!

    1) It can be very difficult to find a LTR tenant that doesn't already have their own furnishings. So, be prepared to be flexible and put your furnishings in storage or sell.

    2) NEVER include utilities in a lease - the tenants will just abuse them.

    3) Zillow

    4) Make sure you have a fantastic lease and screening process!

    5) Zillow

    [email protected]248-209-6824
    Logical Property Management4.9469 Reviews
    WebsiteView Page
    2Reply
  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    3y

    Here's a couple of ideas.

    One is PM yourself....PM typically charges you 10% a month....often it is well worth it, but you are savvy enough to do it I expect will all your experience.  PMs do some things much better than individual owners, like collecting late charges, billing for moveout charges.   You might do a better job of picking the right tenant.   As a long term investor I think it can also give you some great experience knowing what you want and helping set better expectations with a PM later in life.

    If you do hire PM, they will help you get it rented....typically they'll charge you about 1 month rent to do this....they should take care of putting it on the major websites.   Probably helpful if you can provide them with your pictures if you have the rights to use them.

    On LTR typically most people pay their own utilities.  If you want to do some kind of hybrid model you potentially could do that and bill back utilities, but I think that puts you more at risk of holding the bag if something goes wrong....like you expect rent on the 1st, you bill them back $400-$500 for last month's utilities and then they don't pay either.  There are some pretty specific laws about cutting off utilities ...like basically you can't do it, so if you get a bad tenant you might pay a couple of month of utilities before you get them out.  That would hurt.

    Personally I think the best website to use to get the best tenants is the MLS. Plenty of people are probably going to tell you to put it on Zillow. In my experience the worst tenants come from Zillow....they're not working with a realtor. I would compare it to getting your current clients via AirBnB where hopefully they have some history and background checks vs just trying to get direct bookings where you may not have those safe guards. I'm sure a lot of people will tell you different, but that's my experience.

    You can use a realtor just to get it rented...get a lease signed and then you take over the PM.   If the house is in good shape, I would expect you won't have that many calls/issues where you're spending a lot of time on it.  I have clients who manage long distance around the world....not local and not even in the country that often.

    LTR rent rates in your area are a little tricky and you might have to try a couple of different prices.  There are just such a variety of houses, new, old, renovated, not renovated, blocks that are all renovated, blocks that are mixed, blocks where you're the only renovated house.  Some have garages, some don't.  Some have good off street parking, some don't.

    0Reply
  • Account Closed
    OP
    Rental Property Investor · Dallas, TX · Member since 2020 · 155 posts · 44 votes
    3y
    0Reply
  • Account Closed
    OP
    Rental Property Investor · Dallas, TX · Member since 2020 · 155 posts · 44 votes
    3y
    0Reply
  • Account Closed
    OP
    Rental Property Investor · Dallas, TX · Member since 2020 · 155 posts · 44 votes
    3y

    @Bruce Lynn always appreciate your insight! Very good points. Now that you mention it, I can see handling the PM myself. I've got it listed on Zillow currently and will be touring a prospective tenant this week. So fingers crossed that we can land someone soon. As far as utilizing a realtor and the MLS, I am sure there is great benefit in doing so. This might be what we do if we cannot find a tenant in a sufficient amount of time. Talk with you soon!

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