MTR on a Second Home?
Hey all. I'm under contract for a home near family and am considering purchasing it as a second home since I would intend to stay there for some weeks out of the year. Regarding rental strategies while I am not at the property - I understand that STR is possible with second homes, but wanted to explore MTR as there would be less turnover among other benefits. Does anyone have experience using a second home for a MTR or know of any complications against it? Many thanks in advance.
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#5 Medium-Term Rentals Contributor
- Lender
- Youngstown, OH
The most recent BP RE podcast covers MTR's: https://www.biggerpockets.com/...
They also reference a book, which I'm actually purchasing as we speak! https://store.biggerpockets.co...
@Nicole Heasley Beitenman I just listened to that episode as well! Thanks for the recommendation, I will definitely look into it!
@Cynthia Sigler I think this is a cool strategy and something I have considered. Though I have not done it, I do not see many complications outside of not doing the market/competition research to see if there is a demand/need in the area of your second home. But seems like you have been doing your research around those aspects.
Something I would consider and consult with some professionals would be a LLC and insurance. It could be worth distancing/protecting the second home from your personal assets, but I know everyone has different opinions and levels of comfortability.
Thus far, MTR's have been a great investment for me and I only need 4 tenants (13 week contracts with nurses) to take care of the entire year. A complication for you could be navigating when you desire to stay there in relation to tenants traveling dates contracts.
Please feel free to message and connect with me if you want to ever hash out ideas, talk about SOP's, or whatever, I really like talking about this strategy with others haha. Good luck with everything!
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Real Estate Agent
- Boise TurnKey Investments
@Joey Banasihan Hi Joey - thanks for the detailed info!! Would love to connect to chat more about this strategy - I will send you a PM!
Hey Cynthia - I used a second home loan and started it as a STR, but have transitioned to MTR. Been working fine for me and I personally prefer it over STR.
Like Joey said, less turnover, less wear on the property (travel nurses are hardly home and when they are they're sleeping lol), less replacing towels and pots and pans when STR guests inevitably ruin them, and still good returns if you're in a market with demand for MTRs. And you don't have to deal with STR regulations!
I'm still relatively new in the MTR space, but I'm noticing new travel nurses come in waves and it's cyclical, so depending on your market you could probably time it to where it's vacant when you want to spend time there. Happy to help if you have other questions.
Hey @Mel Adams! That's great to hear. Would love to hear more of your story getting into the MTR space - I will PM you!
Following!
I am also in the process of looking for another property as a second home with 10% down with the intention of using it as MTR. However, I have been having challenge finding a property that would cashflow considering the interest rate. >.<
Quote from @Mel Adams:
Hey Cynthia - I used a second home loan and started it as a STR, but have transitioned to MTR. Been working fine for me and I personally prefer it over STR.
Like Joey said, less turnover, less wear on the property (travel nurses are hardly home and when they are they're sleeping lol), less replacing towels and pots and pans when STR guests inevitably ruin them, and still good returns if you're in a market with demand for MTRs. And you don't have to deal with STR regulations!
I'm still relatively new in the MTR space, but I'm noticing new travel nurses come in waves and it's cyclical, so depending on your market you could probably time it to where it's vacant when you want to spend time there. Happy to help if you have other questions.
and @Cariza Abinguna You may want to know that if you change from a STR to a MTR/LTR that you must have your CPA/tax professional do a 3115 Change of Accounting form to change from either 29.5 year depreciation schedule as a MTR/LTR to or from a 39 year depreciation schedule as a MTR/LTR. The last thing you want to do is cause an IRS audit. There are also limits to how much time you can spend in your "rental" to keep it as a rental property.
