Small multi/mid term rental

[Brandon Jonker]

Personal opinion here, does anyone disagree?

Investing in a small multi-family property and turning it into mid-term rentals is the top dog strategy in small metros, like Grand Rapids, MI. Especially with the high prices and high interest rates nowadays. Here's why I think it’s awesome:

1. Steady/ Diverse Demand: Mid term rentals meet the needs of a variety of people. Some examples: students, medical professionals, insurance claims, folks waiting to buy their primary residence, and the list goes on. People always need a place to stay, and most of the smaller metros have a constant flow of mid term renters.
2. Affordable Entry: You don't need a fortune to get started in small metros, and lower property prices generally means better returns.
3. Less Competition: Mid term is on the rise but I have not seen the supply get even close to meeting the demand in my metro, Grand Rapids. Also, smaller metros mean fewer investors breathing down your neck, giving you a leg up in negotiations.
4. Cash Flow: You should be buying these to cashflow as a long term rental. And if that’s the case, as you convert the units to mid term, it should super charge your cashflow!
5. Flexibility: You can always revert back to long term, the tried and true, if mid term demand drops in your area. It’s your choice, it may be best to have 1/2 long term units and 1/2 mid term units in your small multi family property to mitigate risk. 

But remember, do your homework, know the local rules, and have a good plan. Real estate can be tricky and hyperlocal, so consider a local expert for guidance. Happy investing! 🏡💰

Feel free to reach out if you need help navigating the West Michigan market!

[Michael Smythe]

What data do you have to support #3 please?

[Brandon Jonker]

Furnished finder shows 250 total furnished rentals in Grand Rapids area. And there were around 45,000 requests for mid term rentals in the last 12 months. I also have a close community at the hospital and there are many medical students who are having a hard time finding a decent place to stay, especially close to the hospital!

[Paul DeBoer]

How do you go about getting those contracts for a mid term or do you list it on STR sites?

[Brandon Jonker]

I have a few connections at the hospital that I advertise through. But furnished finder and the STR sites (mainly Airbnb) is the best bet. Just make sure you specify only >30 days if you list on Airbnb. Facebook marketplace is the biggest hassle but I've heard some people have success with that also!

[Shane Dreffs]

Brandon, I am interested in discussing some investing options with you.

You are in an area of Michigan I would like to add to my portfolio.

[Michael Smythe]

@Brandon Jonker 45,000 "requests" are really just clicks - not worth much.

Have you analyzed what price point(s) the med students are looking for?

Not trying to rain on your parade, just cautioning you to look at the right data, correctly, before rushing in.

[Brandon Jonker]

I appreciate the insight! I do realize that the requests are not equal to number of renters. But even if 2% of those clicks convert to renter, there is still not enough inventory. Aside from that data point, there are almost zero mid terms available under $3000/month. Most medical students want a studio or one bedroom. And most of them want to stay under $2500. Market long term/unfurnished rent in the area is around $1200. So the need for smaller unit mid terms is huge! Some of the residents who stay a while and have a family are more open to the larger places for a bit more. But many of them will either long term rent or buy a house since they will be here for over a year.