General Manager, Publishing at BiggerPockets · Denver, CO · Member since 2017 · 459 posts · 642 votes
Hello STR investors! I'm wondering how many of you invest in a tried and true short-term rental vs. a mid-term rental? If you do the mid-term thing, why? How did you first learn about it?
Real Estate Agent · Grass Valley, CA · Member since 2017 · 185 posts · 198 votes
4y
I personally love mid term rentals. They are my favorite. I would say 1/2 of my bookings are mid term. I self manage so it is way less work for me. and I'm finding many times just as lucrative. I just rented 4-5 months to 2 cal-fire pilots who are fighting wild fires in California. There are two of them, but only one at a time. 12 days on, 12 days off - They work 9am - 9pm - perfect tenant. I also rent to many people in transition - buying a house, insurance issues - where trees have fallen on their homes or fires. Traveling nurses and doctors - so forth and so on. I make them all sign a contract and collect security deposits and cleaning. I think most of them find me on airbnb and vrbo. I allow pets which gives me an advantage as many do not.
@Katie Miller Short-term and Mid-term rentals are completely different markets with people who have completely different interests. Mid-term rentals should have a focus on locations where traveling for work is the necessity. At the very least, I like this strategy a lot because people often times making money in the area they are staying in versus just spending money in the area they are staying in. For instance, near a hospital so that you can service travel nurses. Mid-term still brings in anywhere from 1.75 - 2.25 times the traditional rent comps. It can get to the higher end, if there's less supply of mid term rentals in the market.
For STR, the focus is that people are coming to your location and want somewhere fun to stay. Offering unique experiences in the city or on the beach can yield very high returns, however can be more susceptible to the economy. With that being said, true STR's that provide a phenomenal experience will not see a ton of change. However, STR's that are not quite beach front or not quite in the right location of a city may see the brunt of changes in the economy. Regardless, it's a great option because the properties are often very nice and will see a lot of cashflow, equity paydown and appreciation in the future.
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
I will never do a MTR. Any term over 30 days gives the 'guest' tenant's rights in every state. If you can stay away from that situation, all the more better...
Real Estate Agent · Grass Valley, CA · Member since 2017 · 185 posts · 198 votes
4y
I personally love mid term rentals. They are my favorite. I would say 1/2 of my bookings are mid term. I self manage so it is way less work for me. and I'm finding many times just as lucrative. I just rented 4-5 months to 2 cal-fire pilots who are fighting wild fires in California. There are two of them, but only one at a time. 12 days on, 12 days off - They work 9am - 9pm - perfect tenant. I also rent to many people in transition - buying a house, insurance issues - where trees have fallen on their homes or fires. Traveling nurses and doctors - so forth and so on. I make them all sign a contract and collect security deposits and cleaning. I think most of them find me on airbnb and vrbo. I allow pets which gives me an advantage as many do not.
I personally love mid term rentals. They are my favorite. I would say 1/2 of my bookings are mid term. I self manage so it is way less work for me. and I'm finding many times just as lucrative. I just rented 4-5 months to 2 cal-fire pilots who are fighting wild fires in California. There are two of them, but only one at a time. 12 days on, 12 days off - They work 9am - 9pm - perfect tenant. I also rent to many people in transition - buying a house, insurance issues - where trees have fallen on their homes or fires. Traveling nurses and doctors - so forth and so on. I make them all sign a contract and collect security deposits and cleaning. I think most of them find me on airbnb and vrbo. I allow pets which gives me an advantage as many do not.
How much do you charge for that a month as opposed to your daily rate and what is the cleaning situation like?
Real Estate Agent · Grass Valley, CA · Member since 2017 · 185 posts · 198 votes
4y
My new prop which I'm renting to pilots is $3750 per mo x 4 mo, which works out to be $125 per nt - I would prob rent this for $155 - 165 per night.
I have another 2bd 1ba which I rent to a guy who is getting a divorce fro $3100 per mo. That rents for $155 per nit. He's been there 6 mo now and keeps extending, which i don't mind.
Then I have a 1bd 1ba cottage next to my house which rents for $145-165 per night i currently have this rented to a woman who sold her house and is moving to South Dakota for 43 nits at $140 per night. After she checks out I have another woman moving in for 3 mo because a tree fell on her house and she is paying$150 per night (as her insurance is covering the tab) plus she has a dog and 2 cats.
I have rented my bigger properties mid term as well...one that rents for $599 per night I rent from $8500-10500 per mo - the other I rent for $499 per night I rent for $6500-9000. These properties take a bigger hit on the rate when it's mid term - and my preference is NOT to do it on these properties because the longer they stay in most cases the more wear and tear.
Real Estate Agent · NH & MA · Member since 2021 · 457 posts · 291 votes
4y
Good questions @Katie Miller! I have only done true Short Term Rentals. Larger properties (4 bedrooms) by the beach in vacation markets. Like others have mentioned these cater to very different people than the mid-term renter which the typical example I hear is traveling nurses. I'd imagine you would want a smaller property for this (1-2 bedrooms) closer to hospitals and in the downtown of cities.
I went true short term rental because of the cashflow, equity paydown and appreciation I was expecting over time being in a more expensive area that is a vacation destination, as @Andrew Street mentioned. I also wanted to avoid anything that gives a renter "Tenant's Rights" when conducting a shorter term rental and not having to deal much with these rights by staying to shorter stays has honestly been a great relief!
Cambridge, MA · Member since 2015 · 651 posts · 736 votes
4y
I do both, STR during the summer and sometimes spring, and MTR during the academic year. I have 2 properties, only one of which can be rented legally short term. The other is always MTR.
Both of my properties are within walking distance of universities so I'm renting MTR primarily to visiting scholars. For the unit that is always MTR, I'm strict about the begin and end dates. End dates must always be Dec 31, May 31 or Aug 31. Begin dates must always be Sep 1, Jan 1, Jun 1.
I am very flexible on the begin and end dates for the unit that I can throw on the STR market. Even though, January & February STR nightly rates are lower than what I could get on the MTR market, those nights can help me stay super host.
The MTR rentals provide true passive income. The STR rentals are a lot of work and restrict when I can be out of town. The only reason I am on the STR market is because I enjoy hosting visitors from around the world.
For the one bedroom apartment on both markets, I charge $210 per night on the STR market and $3150 per month on the MTR market. I list on academic sites, Sabbatical Homes & the university off-campus listings, for my MTR rentals because it is so much cheaper for both me and my tenants.
My new prop which I'm renting to pilots is $3750 per mo x 4 mo, which works out to be $125 per nt - I would prob rent this for $155 - 165 per night.
I have another 2bd 1ba which I rent to a guy who is getting a divorce fro $3100 per mo. That rents for $155 per nit. He's been there 6 mo now and keeps extending, which i don't mind.
Then I have a 1bd 1ba cottage next to my house which rents for $145-165 per night i currently have this rented to a woman who sold her house and is moving to South Dakota for 43 nits at $140 per night. After she checks out I have another woman moving in for 3 mo because a tree fell on her house and she is paying$150 per night (as her insurance is covering the tab) plus she has a dog and 2 cats.
I have rented my bigger properties mid term as well...one that rents for $599 per night I rent from $8500-10500 per mo - the other I rent for $499 per night I rent for $6500-9000. These properties take a bigger hit on the rate when it's mid term - and my preference is NOT to do it on these properties because the longer they stay in most cases the more wear and tear.
As far as advertising goes, do you list a mid term rental on all of the STR sites or the MLS? Thanks for the info!
Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
4y
We have done a mid term, furnished rental for a few years and just launched our first short term rental last month. It took about 2-3 weeks of short term bookings to decide that we want to sell our medium term rental to buy another STR. My two cents - If you're gonna take the time and money to clean up and furnish a place, maximize the cash flow even if it's a bit more work and time.
My new prop which I'm renting to pilots is $3750 per mo x 4 mo, which works out to be $125 per nt - I would prob rent this for $155 - 165 per night.
I have another 2bd 1ba which I rent to a guy who is getting a divorce fro $3100 per mo. That rents for $155 per nit. He's been there 6 mo now and keeps extending, which i don't mind.
Then I have a 1bd 1ba cottage next to my house which rents for $145-165 per night i currently have this rented to a woman who sold her house and is moving to South Dakota for 43 nits at $140 per night. After she checks out I have another woman moving in for 3 mo because a tree fell on her house and she is paying$150 per night (as her insurance is covering the tab) plus she has a dog and 2 cats.
I have rented my bigger properties mid term as well...one that rents for $599 per night I rent from $8500-10500 per mo - the other I rent for $499 per night I rent for $6500-9000. These properties take a bigger hit on the rate when it's mid term - and my preference is NOT to do it on these properties because the longer they stay in most cases the more wear and tear.
As far as advertising goes, do you list a mid term rental on all of the STR sites or the MLS? Thanks for the info!
I list mine on Airbnb and VRBO, plus I have my own website - never use the MLS....Oh... and sometimes I list on Zillow too especially for mid term
General Manager, Publishing at BiggerPockets · Denver, CO · Member since 2017 · 459 posts · 642 votes
4y
@Trish Mccoy can you link to your site? How does that site compared to vrbo/airbnb bookings?z
@Bruce Woodruff - curious why you are afraid of tenants rights? Can't a lease agreement for just 30 days solve that problem? Or is there something else I'm missing there?
Real Estate Agent · NH & MA · Member since 2021 · 457 posts · 291 votes
4y
@Katie Miller I’m not a lawyer and this is just what’s been told to me by a few Airbnb hosts and other investors in my area, but after 30 days and tenants rights are established it becomes far more difficult and time consuming to remove someone from your property. I’m not 100% sure but I believe you may have to go through the whole eviction process.
Whereas with short term rentals, once someone is in the home longer than their checkout time they are trespassing, and you can actually have the police remove them from the property if it becomes necessary.
Just my two cents from my limited internet research, so you may want to verify these things before making a decision one way or the other!
@Bruce Woodruff - curious why you are afraid of tenants rights? Can't a lease agreement for just 30 days solve that problem? Or is there something else I'm missing there?
You're missing a lot. You need to research this carefully. When a guest becomes a legal tenant, they gain a slew of 'rights' that vary from state to state. You may have heard that during the recent pandemic, some states. like CA and NY, made it virtually impossible to evict a tenant - for almost any reason. Some states give tenants unreasonable rights that impair a landlords ability to run their business as they should. Do your homework on this...
@Bruce Woodruff - curious why you are afraid of tenants rights? Can't a lease agreement for just 30 days solve that problem? Or is there something else I'm missing there?
You're missing a lot. You need to research this carefully. When a guest becomes a legal tenant, they gain a slew of 'rights' that vary from state to state. You may have heard that during the recent pandemic, some states. like CA and NY, made it virtually impossible to evict a tenant - for almost any reason. Some states give tenants unreasonable rights that impair a landlords ability to run their business as they should. Do your homework on this...
I agree with Bruce.
You take same chance on a 30 day lease as a 1 year lease as far has having to remove a non paying tenant.
I can remove a tenant via eviction in 3 to 4 weeks worst-case.
I just evicted someone and it only took a week and a half. So no worries for me.
@Trish Mccoy can you link to your site? How does that site compared to vrbo/airbnb bookings?z
@Bruce Woodruff - curious why you are afraid of tenants rights? Can't a lease agreement for just 30 days solve that problem? Or is there something else I'm missing there?
@Katie Miller - not sure what you mean "can I link to my site" Oh... do you mean can I link my calendars? Anyway - my sites are lame - they are just informational only. You can't even book on them. It's just something I can direct people to to get more info. If anyone knows of a web designer that can create good sites of multiple properties - let me know. Below are the sites I currently have - and not all my properties are on these. I need help :)
Regarding the tenant rights - this is why it is very important you find out why they need a place...If there isn't a good reason and it's not timed bound, then I would not rent. Now I know anything can happen - but I'm one to take more risk than worry about everything ahead of time. Having said that I do vet my guest/tenant very well.
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
@Christian Ehlers is correct. A STR guest that overstays or acts up can be removed with a call to the police. Once they are there past the 30 day (or whatever it is in your state) window, you will have to go through eviction.
Just looked it up, not good...in your state of Colorado, it is defined as 'After occupying a rental for more than two weeks within six-months'
My new prop which I'm renting to pilots is $3750 per mo x 4 mo, which works out to be $125 per nt - I would prob rent this for $155 - 165 per night.
I have another 2bd 1ba which I rent to a guy who is getting a divorce fro $3100 per mo. That rents for $155 per nit. He's been there 6 mo now and keeps extending, which i don't mind.
Then I have a 1bd 1ba cottage next to my house which rents for $145-165 per night i currently have this rented to a woman who sold her house and is moving to South Dakota for 43 nits at $140 per night. After she checks out I have another woman moving in for 3 mo because a tree fell on her house and she is paying$150 per night (as her insurance is covering the tab) plus she has a dog and 2 cats.
I have rented my bigger properties mid term as well...one that rents for $599 per night I rent from $8500-10500 per mo - the other I rent for $499 per night I rent for $6500-9000. These properties take a bigger hit on the rate when it's mid term - and my preference is NOT to do it on these properties because the longer they stay in most cases the more wear and tear.
@Trish Mccoy I think a lot of us (myself included) are interested to learn more about MTRs...it seems like a somewhat less-explored strategy than STRs and LTRs, and my impression is that there's not as much info available (I've listened to countless podcasts, watched videos, read articles etc. on STRs and LTRs, but haven't seen much media focused on MTRs).
Couple questions: your MTR that is getting $3750/month (with the pilots) --roughly how much would that property rent for as a LTR?
Also, in your experience with MTRs, what have been your biggest "lessons learned"? (for instance, things that you definitely WOULD or WOULD NOT do again while operating a MTR).
Cambridge, MA · Member since 2015 · 651 posts · 736 votes
4y
Personally, I think some landlords focus on their inability to have the police remove someone from their property and less on the underlying reasons behind why they might need to ask the police to remove someone from their property.
I have had the tenant from hell experience and it didn't matter that much that a simple call to the police would not solve my problem. It makes a heck of a lot more sense to just avoid the tenant from hell in the first place.
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
4y
Over time (and with automation), the lines will continue to blur between MTR and LTR. People want flexibility and mobility, to be able to search and select their living arrangements electronically, and not sign a contract with an arbitrary twelve month commitment. They also prefer their lifestyle amenities, including shopping, dining, entertainment, and fitness, within close proximity or even on site. Homes as STR/MTR is only the beginning.
What I may offer is why wouldn't you consider doing both at the same time and have double the marketing for your listings?
We are starting to do this for our STRs in Philadelphia as there is an ordinance coming into place on January 1st, 2023 and have seen some pretty solid traction for some of our listing but no conversions thus far for MTRs. The one to highlight about doing this is that you have the increased occupancy/ANR keeping it with an MTR if need be, and if you can't get it booked as a MTR then you can rely on your income coming in from it being a STR.
I hope this helps! If you ever need anything please don't hesitate to reach out!
General Manager, Publishing at BiggerPockets · Denver, CO · Member since 2017 · 459 posts · 642 votes
4y
@Zeona McIntyre curious if you, being in Colorado, have had any issues with tenants rights in a MTR situation? How do you combat that? See @Bruce Woodruff's points above!
Real Estate Agent · Grass Valley, CA · Member since 2017 · 185 posts · 198 votes
4y
@Leo R. The unit the pilots are staying in at $3750 would typically rent for $1800-2100 LT. Hmmm my biggest lessons learned? I wouldn't allow someone to occupy unless they had a plan to leave in a specific amount of time. I'd limit the animal count if poss - I once allowed 2 Great Dane - mistake. Assuming people will be clean - another mistake - you never know. (sometimes I do required they pay to have it cleaned at least 1 x mo) - my cleaner reports everything to me :) Assuming doctors and nurses will be clean - wrong. In my contract I may put owner will do quarterly inspection of the unit. Make sure to get enough security deposit. Install a Nest thermostat and cameras on outside if poss. Collect all rents upfront if poss. Know that if people are remodeling - it will always take longer than you think. Be flexible and don't sweat the small stuff.