Pros and Cons of renting to traveling nurses?

13 Replies

Hi BP,

I've done nothing but long-term rentals up until this point, but with everything going on, I'm wondering if this is all increasing the need for traveling medical professionals?

Do any of you specifically rent to the niche? what are some of the benefits and pitfalls associated specifically with this demographic of renter vs. your standard long-term tenant? 

Where do you post your listings if specifically trying to target these renters?

Are there any additional lease considerations?

Ii haven't decided one way or the other, I'm just trying to research a bunch of different options to see what makes sense in this market.

Thanks!

Due to so many cancellations, we are renting our Airbnb to traveling nurses on a 3-month lease.  They pay a premium over typical, local 12-month tenants but not as much as if operating full Airbnb reservations.  From my limited experience, they expect fully furnished rentals as well.  Google or use the site @Bjorn Ahlblad mentioned.  Ours is located near hospitals so there is usually decent demand for temp nurse housing.  If you have hospitals and medical facilities nearby, you should expect similar demand.  Also, we just use a standard lease that we would if renting to a 12-month tenant.  Best wishes on your investment plans!

@Megan Hirlehey , great to see that you are wanting to try a new market! I currently do not own/rent out STR to travel nurses but I am a travel nurse for almost 2 years and thought I could give some insight.

-Furnished rentals are a must, lots of travel nurses bring their pet as well. 
-Google "furnished finders" for your area and that will give you an estimate of what properties are  offered and at what rate. I am currently in Cali so I am paying a premium price.
-Contracts are typically signed for 13 weeks but depending on area and season, could be extended to almost 9 months. I prefer to pay month to month but I have been at my current spot for almost 9 months now. 
-A con is that our contracts can be cancelled up to 2 weeks before start date or in the middle of the contract, which is why I prefer month to month. 


Hope some of this helps! If you have any questions regarding the renter side of it feel free to PM me. 

We cater specifically to travel nurses with three of our SFHs.  

Pros:

Quality tenants - There's a tremendous amount of vetting for a nurse and other traveling medical professionals to get their contracts.  A lot of them are homeowners themselves and take great care of the properties.

Cashflow - Much higher than our standard 12 month lease rental.  It's not as high as AirBNB in the summer high season, but it's consistent throughout the year.  

Vacancies - We rent by the room which feels a bit like multifamily in this regard.  I'm only losing 33% of my income in our 3/2 when a room goes empty.  Also, these are not considered short term rentals because they stay at a minimum 90 days on average.  In our area, most renew their contracts.  We've had tenants as long as nine months.

Cons:

Time consuming - It's not as bad as AirBNB, but it's not as quiet as our long term tenant rental. It's definitely a job.  We're responsible for all utilities, housekeeping, and yard maintenance.  This is our first year where we can hire out those functions.  Otherwise it totally sucks.

Furnishing costs - with this level of tenant, we spend the money on quality furnishings.  Quality mattresses and linens, huge TVs, solid kitchen that supports meal prep, etc.  We spend up front but feel we definitely get this back over time with a solid listing and low vacancy.

Management:

I use Cozy for tenant screening and rent collection.

I advertise on Furnished Finder.  Their website and app sucks but it's the main platform that travel nurses use.  They've also partnered up with The Gypsy Nurse ring on Facebook.  We post on there as well with a link to our listing on Furnished Finder.

Now that we've been doing this for a couple years, we get a lot of tenants by word of mouth and recommendations from previous tenants.  I offer discounts when current tenants bring in their friends.  Saves my time and they'll probably enjoy living together more.

Hit us up if you have anymore questions and good luck!

@Megan Hirlehey

Great post. Interesting discussion.

We have four medium-term furnished rentals between Denver and Colorado Springs. (One 1br, two 2br units, and one 3br unit.) 

I'll list some general thoughts below about the medium-term model, but up front I'll mention a big relevant con for anyone house hacking or doing a rent-by-the-room model like @Richard Santi : I have a buyer client who has a friend renting out three bedrooms. Two were vacant but about to be filled by tenants. The third bedroom was already occupied by a nurse. That nurse contracted coronavirus, and now the other two potential tenants pulled out. I don't know what the answer is, but it's something to consider.

That said ... 

We don't rent specifically to that demographic. Occasionally we get travel nurses, but we're interested in medium-term renters in general. We don't care if they're nurses or not. 

The pros are that: 

  • It's more money. (20-40% more than a traditional long-term rental, in our experience). 
  • You also get back into the unit more often to check on it and ensure it hasn't been ruined. 

The cons are that:

  • It's slightly more work than a long-term tenant. (Though, I've done a lot of Airbnb/STRs, so coming from that world, mid-term rentals are a breeze.)
  • Furnishing costs. (It's around $4,000-$5,000 for my 1br unit and about $6,500 each for our 2br units. Our 3br was our primary residence before furnished with our original stuff, so that cost isn't relevant.)

Other considerations

  • I think the tenants are better. This might just be because the price point naturally pushes out lower-qualified tenants. They're more often in professional jobs, and not that that's a sure-bet that they're responsible, it is an indicator
  • Marketing channels: We have had the bet luck on Airbnb (set the minimum night stay at 30+ days), Facebook Marketplace, Zillow and Furnished Finder. Zillow offers one free rental listing and subsequent listings are $9.99/listing. Furnished Finder is $99/year. Oh, and also look for specific groups targeting sublease, rooms-to-rent on Facebook. We have a few groups like that in both Denver and Colorado Springs, and posting there have brought some good leads.
  • The lease is the same, for the most part. (In most cities, a 30-day rental is in the same category as a 1-year lease, so there no other legal considerations for the lease.) The only thing different is that we make them sign off on an inventory of the items in the place.

Hope that helps. Good luck!

@Richard Santi

Thanks for your input. The furnishings are my biggest hurdle, I’m nervous to spend all of that money upfront without a proven concept. I’m not sure what I would do with an entire house of furnishings if it didn’t work

@Megan Hirlehey did you end up using that model? Are you renting to travel nurses? I’m very new to RE investing and haven’t even bought my first property yet but I’m getting fired up to start with single family and target traveling medical professionals. There are hospitals nearby and travel nurses coming and going quite a bit. Just curious how you’re making out if you went down that road. I hear you; furnishing will certainly be a huge up front expense.

Thanks to those of you who contributed to this. Good stuff here.

Originally posted by @Brandon Vukelich :

Due to so many cancellations, we are renting our Airbnb to traveling nurses on a 3-month lease.  They pay a premium over typical, local 12-month tenants but not as much as if operating full Airbnb reservations.  From my limited experience, they expect fully furnished rentals as well.  Google or use the site @Bjorn Ahlblad mentioned.  Ours is located near hospitals so there is usually decent demand for temp nurse housing.  If you have hospitals and medical facilities nearby, you should expect similar demand.  Also, we just use a standard lease that we would if renting to a 12-month tenant.  Best wishes on your investment plans!

Good information!! Do they put the utilities in their name on such a short term lease? 

Originally posted by @James Carlson :

@Megan Hirlehey

Great post. Interesting discussion.

We have four medium-term furnished rentals between Denver and Colorado Springs. (One 1br, two 2br units, and one 3br unit.) 

I'll list some general thoughts below about the medium-term model, but up front I'll mention a big relevant con for anyone house hacking or doing a rent-by-the-room model like @Richard Santi : I have a buyer client who has a friend renting out three bedrooms. Two were vacant but about to be filled by tenants. The third bedroom was already occupied by a nurse. That nurse contracted coronavirus, and now the other two potential tenants pulled out. I don't know what the answer is, but it's something to consider.

That said ... 

We don't rent specifically to that demographic. Occasionally we get travel nurses, but we're interested in medium-term renters in general. We don't care if they're nurses or not. 

The pros are that: 

  • It's more money. (20-40% more than a traditional long-term rental, in our experience). 
  • You also get back into the unit more often to check on it and ensure it hasn't been ruined. 

The cons are that:

  • It's slightly more work than a long-term tenant. (Though, I've done a lot of Airbnb/STRs, so coming from that world, mid-term rentals are a breeze.)
  • Furnishing costs. (It's around $4,000-$5,000 for my 1br unit and about $6,500 each for our 2br units. Our 3br was our primary residence before furnished with our original stuff, so that cost isn't relevant.)

Other considerations

  • I think the tenants are better. This might just be because the price point naturally pushes out lower-qualified tenants. They're more often in professional jobs, and not that that's a sure-bet that they're responsible, it is an indicator
  • Marketing channels: We have had the bet luck on Airbnb (set the minimum night stay at 30+ days), Facebook Marketplace, Zillow and Furnished Finder. Zillow offers one free rental listing and subsequent listings are $9.99/listing. Furnished Finder is $99/year. Oh, and also look for specific groups targeting sublease, rooms-to-rent on Facebook. We have a few groups like that in both Denver and Colorado Springs, and posting there have brought some good leads.
  • The lease is the same, for the most part. (In most cities, a 30-day rental is in the same category as a 1-year lease, so there no other legal considerations for the lease.) The only thing different is that we make them sign off on an inventory of the items in the place.

Hope that helps. Good luck!

That was an awesome post did you wrote!!!! Does the tenant put utilities in their name even though they are staying such a short time? 

No, we already charge a premium rental rate so all utilities are included.  I'm sure every operator has a different idea on how to manage utilities.  We keep it simple for guests.

My fiance has been doing this for 5 years. He's in the medical field and started renting out rooms to travel nurses after his daughter went away to college. Its a good business to get into. The last two years has been very steady.  He has had a full house for a while now. I helped him completely makeover all his bedrooms last year.  Doing it DIY, the cost to redo each room ranged between $400 up to $700 each. I think the update helped along with his good reviews. He's always having to turn people away. The demand is very high in our area. We're close to 5 large hospitals.  Its a hot market for medical professionals where we live which is why we're looking at purchasing another home and repeating the process.