Mid Term Rentals vs Furnished Housing
Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votesMid Term Rentals vs Furnished Housing
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votesHey @Don Konipol, we only do STR, but for mid term stays, you can't really expect people to bring a full household of furniture etc when they are traveling workers.
Frankly, I would leave our vacation rental as is except for the various consumables. We do provide a ton of stuff. 40+ spices, extra easy to make shelf stable food, tissues, paper towels, soaps etc. I would not put those out.
But all linens, etc I would leave. For someone who is a traveling nurse for instance, they don't want to pack a car full of things just to stay 3 months.
I can see where you wouldn't want to have all the linens and towels out as they will get worn, but the expense isn't that much and it sure makes it attractive to workers on the move.
10 Replies
- 4yJen WhiteheadPro MemberReal Estate Agent · Southern Maine · Member since 2019 · 40 posts · 36 votes
Our rentals are in beach and lake areas of Maine so we do STR's during the summer months and switch to mid term from Sept/Oct to May. So we offer furnished but we do not provide the towels and linens during the mid-term rental. The monthly rentals are discounted but slightly greater than what local long term rentals charge in the same areas. For example, 2 bedroom apartments in Old Orchard Beach year round are about 1600-1800 month. Our mid term rentals we get $2000-2400 monthly during what is considered "off season" in Old Orchard Beach.
- 4yDave StokleyBusiness MemberProperty Manager · Cleveland, OH · Member since 2015 · 699 posts · 799 votes
If I were the guest renting for a month or more I would still expect the place to have all non-consumables, including everything you mentioned. Make my life as easy as possible.
- 4yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Hey @Don Konipol, we only do STR, but for mid term stays, you can't really expect people to bring a full household of furniture etc when they are traveling workers.
Frankly, I would leave our vacation rental as is except for the various consumables. We do provide a ton of stuff. 40+ spices, extra easy to make shelf stable food, tissues, paper towels, soaps etc. I would not put those out.
But all linens, etc I would leave. For someone who is a traveling nurse for instance, they don't want to pack a car full of things just to stay 3 months.
I can see where you wouldn't want to have all the linens and towels out as they will get worn, but the expense isn't that much and it sure makes it attractive to workers on the move.
- Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes4yWhat about someone renting because they sold their home and the new home isn’t ready yet; or they just moved to the area and are building a home. They have their furniture, storing it would be an extra expense. Do you or would you offer a choice?
Quote from @Michael Baum:
Hey @Don Konipol, we only do STR, but for mid term stays, you can't really expect people to bring a full household of furniture etc when they are traveling workers.
Frankly, I would leave our vacation rental as is except for the various consumables. We do provide a ton of stuff. 40+ spices, extra easy to make shelf stable food, tissues, paper towels, soaps etc. I would not put those out.
But all linens, etc I would leave. For someone who is a traveling nurse for instance, they don't want to pack a car full of things just to stay 3 months.
I can see where you wouldn't want to have all the linens and towels out as they will get worn, but the expense isn't that much and it sure makes it attractive to workers on the move.
- 4yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Hey @Don Konipol, that is a toughie. We did have a request once from someone moving to the area and hadn't found a house yet. They wanted our house for the majority of the winter. They were storing all their stuff and wanted the house as is. They actually found a house just after I did the full background check etc so it never came to fruition.
I guess you would have to weigh who gets to pay. If someone is moving, all their stuff is packed. The stuff in your house isn't. You would have to take the time and expense to pack it all up, move it and store it. They would have to pay to move their stuff in, unpack it, then pack and move it again. Seems like a big hassle to me and if I was in that situation, I would store my stuff and use what the house had. Maybe grab a few personal items etc, but that is it. This is assuming that the house is very complete and ready to go.
If this is something you are going to pursue, if the lot is big enough, maybe you could put up a pole building. Increase the rent, but offer it ready to store your stuff while you wait for your house to be done or whatever. It would be nice for the guests to be able to have their stuff right there that they could get to if needed.
That might also make it attractive to insurance providers who put up homeowners who suffered a loss. Offering a place and storage could be a win.
- Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes4yI actually had a luxury condo that I had been living in, and decided to rent mid term length when I moved. It was completely furnished with all my personal furnishings none of which I took with me but all of which I paid for twice - once when purchased and the second time when I compensated my soon to be ex wife for her community property share. However, the renter wanted the condo fully furnished for 8 months so I agreed. Shen then stayed 6 years paying the middle term market rates with no pushback. Left the place in better condition than when she moved in. Sometimes you get real lucky.
Quote from @Michael Baum:
Hey @Don Konipol, that is a toughie. We did have a request once from someone moving to the area and hadn't found a house yet. They wanted our house for the majority of the winter. They were storing all their stuff and wanted the house as is. They actually found a house just after I did the full background check etc so it never came to fruition.
I guess you would have to weigh who gets to pay. If someone is moving, all their stuff is packed. The stuff in your house isn't. You would have to take the time and expense to pack it all up, move it and store it. They would have to pay to move their stuff in, unpack it, then pack and move it again. Seems like a big hassle to me and if I was in that situation, I would store my stuff and use what the house had. Maybe grab a few personal items etc, but that is it. This is assuming that the house is very complete and ready to go.
If this is something you are going to pursue, if the lot is big enough, maybe you could put up a pole building. Increase the rent, but offer it ready to store your stuff while you wait for your house to be done or whatever. It would be nice for the guests to be able to have their stuff right there that they could get to if needed.
That might also make it attractive to insurance providers who put up homeowners who suffered a loss. Offering a place and storage could be a win.
- Architect · Bay Area, CA · Member since 2022 · 37 posts · 27 votes4y
Hi @Don Konipol
The mid-term rentals strategy has been working really well for us in the Bay Area to make deals work, there's a lot of demand for it and is proving a nice little niche in the market. Our units are pretty much what you would expect from STR in terms of stuff we provide, just not quite the higher end stuff you see in some true STRs
- Real Estate Agent · New York City · Member since 2020 · 818 posts · 639 votes4y
Furnished rentals are great if you can find your niche (i.e. travelling nurses).
Think about the drivers of your local economy and who might have the best needs to a medium term furnished rental
- Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes4y
@Don Konipol, long time no see bud. I do some mid term rentals with my VRs during winter. Not a lot of tourists going to Yellowstone at 20 degrees below zero. I always leave everything in them. Furniture, linens, towels, soap for dishwasher, trash bags etc. I will let them bring a piece of furniture sometimes, but usually not. I can rent them a storage facility if needed. If they move their furniture in your work is massively more. Stuff can be broken, stolen etc. When they move out the movers will take all of your stuff and load it too. I lost a very nice table that way along with other stuff. The cost of towels is very minor, leave 4 per person, leave at least 2 sets of linens per bed. I go for at least $500 per month more than regular rent. Take out all of your $300 dollar bedspreads etc . I don't get stuff stolen, but it can get worn out or dirty. I really like traveling nurses, or government workers with a housing voucher.
- Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes4y
Ok some really quality answers. Thank you all. So, while my experience providing furnished housing is very limited, to one unit, I will provide my resulting analysis. Take it for what it’s worth
Very high end high rise condo purchased in 2011 in Tempe, Arizona across the road from ASU for personal residence with purchase price of $500,000. In 2014 I decided to move out of state and to lease the condo. Market price for unfurnished rental was $2750 monthly; I was able to obtain rent of $4000 as furnished rental. Tenant was PhD student at ASU with wealthy dad who prepaid rent each year. Tenant stayed 6 years!, rent had small increases in year 2 and 4.
So, I received $1250 more per month furnished vs unfurnished. Over 72 months that amounts to $90,000. The furniture and furnishings cost me $37,000. When the tenant moved out I was able to sell the furniture and furnishings on consignment and net $8,000. So net cost $29,000. Subtracting from $90,000 leaves net of $61,000 differential. Pretty good?My monthly costs in operating the property was a average of $1000 monthly for HOA fees, gas, and water. Insurance was part of HOA. Property taxes were about $6,000 annually. Repairs and maintenance under $500 annually. So, on an annual basis total expenses were $18,500. Subtracted from the annual rent of $48,000 leaves annual net income of $29,500. As mentioned I paid $500,000 for the condo, add $29,000 net furniture cost, total $529,000. 5.6% annual cash flow return.
If I leased it unfurnished the rent would have been $2750 monthly, or $33,000 annually. Subtracting expenses of $18,500 leaves net of $14,500. On purchase price of $500,000, return of 2.9%.
So, almost doubled my return by renting the property furnished.
As I side note I sold the condo for about 40% more than I paid in 2020 when the tenant completed her PhD and moved out.
If you’ve had experience renting mid term or long term furnished let please share your experience whether you found it profitable, or not.
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