30-day rentals viability?

Question

Hi all,

We have a 4 bedroom home in Austin TX we're considering renting out as an STR. City regulations aren't allowing for any more str licenses, but we could still rent it out as a 30-day rental without needing a license.

Curious if anyone else has done 30 day rentals and what kind of traction or performance they’re seeing?

Thanks!

Chris McCormack · Answer

From a tax perspective, 30 day rentals wont qualify as STR. You eliminate the STR loophole which allows adjusted material participation qualifications

Jordan Moorhead · Answer

@Brian M. both @Conner Olsen and I are having good results with our 30+ day rentals

Greg R. · Answer

I'm assuming you're considering hosting travel nurses or maybe corporate housing that exceeds 30 days and intend to leave it fully furnished & charge nightly rates similar to STR?

I think you'd have a major vacancy problem for one. In my mind the only viable option is good ole fashioned long term rental.

Did you buy with the intention of doing STR?

KiKi Chase · Answer

This is leaning more towards MTR or LTR! MTRs do well depending on the area and how close you are to hospitals (because of travel nurses, etc). I would make sure you have a good lease, since the tenants will have rights for a stay of this duration. Best of luck!! :)

Conner Olsen · Answer

Hey James, Working with insurance companies definitely has the ability to make a lot in rental income. Look up podcasts by Jesse Vasquez and he talks about how he targets insurance companies. It's very lucrative and also requires some leg work to make the relationships.

James Enyeart · Answer

I was searching for 30 day rentals, and this old thread popped up.  Since it's in Austin where I am located I am thinking of giving it a bounce.  I am looking at buying a distressed 1/1 coondo and turning it into a 30 day rental, and am about to write my proposal.  I also am about to remodel my Father's home on Lake Belton near Temple, Tx.

The reason I have become interested in 30 day rentals is my house flooded badly during covid and the insurance company was paying $6200 a month for a barely furnished two bed apartment.  Regular rental rates would have been more like $2300.  Now this was also post freeze, so shorter term housing was at a premium.  But it got me thinking.

My Father's house flooded while I was trying to rehab him in Austin, and then his house got hit by edge of tornado, so there is a little over $50K in Insurance money. I completely remodeled my own home after the flooding (28K gallons into house). And it's not rocket science to sheetrock, floor and then re-trim.  I also bought a foreclosure and did a complete remodel also by myself, so I am familiar with the pitfalls of remodeling.  I am proposing to use the money to completely remodel. Hardwoods up and down, new 5 panel doors, and square farm style trim, granite, updated throughout.  I want to use my expertise for my father and stretch the dollars to make additional changes like new front door, adding metal awning, and generally improve the street appeal.  Basically it will look like a new build when I am done, so if my 30 day experiment fails we can sell the property next Spring. Or rent for less long term.

IF I can make this Lake Front property a successful 30 day furnished rental, it will allow help pay for my parents care in assisted living, and reduce the draw down on their savings (and preserve my inheritance).  The remodel on the 1/1 condo will also be top notch and I am willing to furnish it as well to try the 30 day market.  Heck I would turn my house into a 30 day rental and rehab a new place if I can make this work.

Anyhow seeing if this bump is the way to get info or if I should just start my own post.

Jay Hurst · Answer

@Brian M.   With rising interest rates but still high home prices people a lot of people are thinking of staying in there current house (with 3% 30 year fixed mortgage) but might need to add on or simply remodel. And they need a place to live for 2-6 months preferably furnished.   They might not pay STR rental rates (ie they wont) but they will pay more then typically long term leases for flexibility on lease terms etc.

Conner Olsen · Answer

I own 2 units (North Austin) and I manage another 2 units (East Austin) that are all MTR. You can expect a ballpark increase of 65-95% over traditional LTR. Furnishing with affordable, durable, new furniture will run you around $18,000 if you're starting from scratch. I took my duplex from $2,450/month gross to $5,800/month gross. There's absolutely a demand for 4 bedroom homes because many families are moving to Austin and need temporary housing. There's a large rental pool outside of the traditional traveling nurses that most people think of when considering MTR.

Colleen F. · Answer

@Brian M. As a 4 bedroom it isn't that attractive to traveling professionals. That group tends to look for 1 to 2 bedrooms. Also if you go rent by the room route  they don't like to share bathrooms. You could maybe find a market for those relocating by offering month to month.

Nathan Gesner · Answer

People rent on a month-to-month basis all the time. In my market, we look for one-year leases. However, I get people asking for a monthly rental all the time, so we offer it with a 25% increase to the normal rent. It's amazing how many people are willing to pay that premium to have the flexibility. I just inspected the apartment of a renter that has been on a monthly agreement, paying an extra 25% each month, for over two years.

30-day rentals viability?

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