Medium-Term Rentals

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Peri Eryigit
  • 📚Marketing Manager, Publishing and Events
  • Salt Lake City, UT
101
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20
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Q&A with Sarah Weaver and Zeona McIntyre

Peri Eryigit
  • 📚Marketing Manager, Publishing and Events
  • Salt Lake City, UT
Posted Nov 7 2022, 14:51

What burning 🔥 questions do you have about medium-term (30+ day) rentals? Drop all your questions below and 30-Day Stay authors, Sarah Weaver and Zeona McIntyre will answer them live on:

BiggerPockets Instagram: Wednesday, 2:30PM MT

annndddd....GO! ðŸ‘‡

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33
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29
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
29
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33
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
Replied Nov 11 2022, 10:50
Quote from @Nathan R Andersen:

When you advise others entering the MTR space, what do you suggest to expect for vacancy? I know that would depend wildly on the market and specifics, but how do you go about figuring that out? 

Can I base it off of STRs in the area? What if it is more rural? Does AIRDNA have reliable stats? 

 Hi Nathan, great questions. 

When I analyze deals (before purchasing), I always analyze them at 8% vacancy. 8% equates to 1 month out of the year per unit. I find that my units are averaging 98-100% occupancy, so my estimation of 8% vacancy is typically an overestimation—which is always a good thing. That's just more cash flow later on. 

When running comps to gauge market demand, vacancy, and rent, I would advise against comparing STR stats to MTR projections simply because it's apples and oranges. I use furnishedfinder.com/stats to gauge demand, and then I look at how many units of inventory are on the market. I do this by browsing listings for comparable units on Furnished Finder. You'll want to look for a market that has decent demand (50,000+ housing searches on the stats page) but isn't over-saturated with competition. I hope this helps.

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33
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
29
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33
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
Replied Nov 11 2022, 11:01
Quote from @Tiffany Cohen:

When researching urban MTR and looking at a 1 bedroom (potentially 2 bed) in condos - how do you feel about HOA dues and possible restrictions? Are you fine with whatever the Hoa is as long as the deal numbers still work? Do you require water, trash etc be included in the HOA? With rising rates, Hoa, utilities etc even expecting more than a long term rental it seems to leave little for profit in many cases.

 Hi Tiffany, thanks for your question. 

If the deal works, the deal works! However, like all expenses, HOA dues typically go up over time. So if your cash flow is just barely positive, you'll want to consider your returns over time. Additionally, I encourage you to double-check that there are no restrictions for medium-term stays with the HOA. Every HOA is different, so you'll want to be crystal clear about what is and is not allowed for that complex.

I am responsible for all utilities on my medium-term rentals. This is certainly an added cost, but the numbers still work if it's the right deal. When analyzing an MTR deal, be sure to add the landlord-paid utilities to your expenses. The exact cost will depend on your market. You can always call local utility companies and ask for estimations for prices so you can run the numbers accurately. 

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Sarah Weaver
  • Rental Property Investor
  • KC, MO
29
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33
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
Replied Nov 11 2022, 11:04
Quote from @Jennifer McPherson:

What percentage of your mid-term renters come from Furnished Finder vs. AirBnb/VRBO?

 Hi Jennifer, thanks for your question.

It really depends. I notice that it sees-saws back and forth. For example, earlier this summer, 90% of my bookings were from Airbnb. But throughout the end of summer and into fall, most of them are coming from Furnished Finder. I do not have my units listed on VRBO at this time. I find that cross-listing them on Furnished Finder and Airbnb does a great job of exposing my listing to a variety of potential tenants for maximum occupancy.

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33
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29
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
29
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33
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
Replied Nov 11 2022, 11:20
Quote from @Melissa Robbins:

Loved your book!  

I just made an offer on a KCMO house tonight which I plan on offering MTR. How can a first time MTR investor differentiate their property from the competition? What sort of amenities or furniture type/style works best?  I love much of the mid-century style, but some of that furniture isn't all comfortable. Is it better to go with comfort over style in an MTR?

 Hi Melissa, thanks for buying the book! I love your question. 

Congratulations on your offer. I hope all goes well. You are thinking the right way—create a space with an alluring design but that's still functional and comfortable. For example, maybe you can purchase a plush sofa for comfort and pair it with a MCM TV stand. 

I also encourage you to think about amenities that are intentional and thoughtful, like a desk or work station, a small fitness area with a yoga mat, a "library" or bookshelf with reading options, or blending outdoor/indoor living spaces where possible (of course, if your unit allows it). Anything you can do to curate your space and make it stand out will help. 

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33
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
29
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33
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
Replied Nov 11 2022, 11:26
Quote from @Cliff Benner:

Are there PMs that deal with MTRs, what are the questions you would ask them?
Do you have the unit cleaned by a company between turnovers?

Is it better to offer Utilities Included and just raise the rate or is this market specific? 

Hi Cliff, thanks for your question. 

Most property management companies will classify a medium-term rental as a short-term rental, so you can expect to pay a higher rate for the service. For this reason, I self-manage my units (and do so completely remotely!). Medium-term rentals are generally pretty low-maintenance to self-manage. You can also hire someone on your team to do most of the management for you. 

I do have the unit professionally cleaned between turnovers. I provide a cleaning checklist and request pictures upon completion for visibility. 

Utilities for medium-term rentals are typically always provided by the landlord. When running your numbers on an MTR deal, be sure to account for this.

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Sarah Weaver
  • Rental Property Investor
  • KC, MO
29
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33
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
Replied Nov 11 2022, 11:31
Quote from @Andriana Marino:

I just finished rehabbing my basement unit and of course, now is not a good time to rent. Toying with furnishing it for the holidays, and then for travel nurses or cooperate housing. 

Read that Travel Nurses hate Furnished Finders as they charge extra for cc checks and they are already have background checks and such through the hospitals, do you have a better site they prefer to look for MTR?

Haven't read your book yet, as I thought it wasn't out yet. :) 

I will though !!

Thanks Andriana (On-dree-on-uh)  :)

Hi Andriana, thanks for your question. Congratulations on finishing your rehab! 

I have not found that to be the case with Furnished Finder. Many of my tenants come from Furnished Finder leads. If someone reaches out and they want to apply, I direct them to email me with a few application materials (like identification, proof of employment, landlord references etc.) and I vet their application myself. That way, they are not paying any fees. That process has worked very well for both me and my tenants. 

However, I do cross-list my units on Airbnb as sometimes folks prefer to book directly there. It depends on what the tenant is looking for and what site they are most comfortable with. 

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Nathan R Andersen
8
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35
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Nathan R Andersen
Replied Nov 11 2022, 13:21
Quote from @Sarah Weaver:
Quote from @Nathan R Andersen:

When you advise others entering the MTR space, what do you suggest to expect for vacancy? I know that would depend wildly on the market and specifics, but how do you go about figuring that out? 

Can I base it off of STRs in the area? What if it is more rural? Does AIRDNA have reliable stats? 

 Hi Nathan, great questions. 

When I analyze deals (before purchasing), I always analyze them at 8% vacancy. 8% equates to 1 month out of the year per unit. I find that my units are averaging 98-100% occupancy, so my estimation of 8% vacancy is typically an overestimation—which is always a good thing. That's just more cash flow later on. 

When running comps to gauge market demand, vacancy, and rent, I would advise against comparing STR stats to MTR projections simply because it's apples and oranges. I use furnishedfinder.com/stats to gauge demand, and then I look at how many units of inventory are on the market. I do this by browsing listings for comparable units on Furnished Finder. You'll want to look for a market that has decent demand (50,000+ housing searches on the stats page) but isn't over-saturated with competition. I hope this helps.


 This helps a ton, thank you so much! 

One other quick question. What makes you specifically recommend the mattress that you do. My wife is hell bent on not buying that mattress because it couldn't be good because it is made of memory foam only. Help me lol 

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Cliff Benner
  • Investor
  • Denver, CO
28
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73
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Cliff Benner
  • Investor
  • Denver, CO
Replied Nov 11 2022, 14:42

@Sarah Weaver Thank you! 

Does your book talk about Self Managing remotely and any softwares that would assist you with that?

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Nathan R Andersen
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35
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Nathan R Andersen
Replied Nov 12 2022, 13:01

There are several chapters on that in the book, yes. 

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Sarah Weaver
  • Rental Property Investor
  • KC, MO
29
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33
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
Replied Nov 14 2022, 07:54
Quote from @Cliff Benner:

@Sarah Weaver Thank you! 

Does your book talk about Self Managing remotely and any softwares that would assist you with that?


 Sure does! Please let me know what you think once you dive in. I self-manage 19 units in 4 states while traveling full-time. You. Got. This. 

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Sarah Weaver
  • Rental Property Investor
  • KC, MO
29
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33
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Sarah Weaver
  • Rental Property Investor
  • KC, MO
Replied Nov 14 2022, 07:55
Quote from @Nathan R Andersen:
Quote from @Sarah Weaver:
Quote from @Nathan R Andersen:

When you advise others entering the MTR space, what do you suggest to expect for vacancy? I know that would depend wildly on the market and specifics, but how do you go about figuring that out? 

Can I base it off of STRs in the area? What if it is more rural? Does AIRDNA have reliable stats? 

 Hi Nathan, great questions. 

When I analyze deals (before purchasing), I always analyze them at 8% vacancy. 8% equates to 1 month out of the year per unit. I find that my units are averaging 98-100% occupancy, so my estimation of 8% vacancy is typically an overestimation—which is always a good thing. That's just more cash flow later on. 

When running comps to gauge market demand, vacancy, and rent, I would advise against comparing STR stats to MTR projections simply because it's apples and oranges. I use furnishedfinder.com/stats to gauge demand, and then I look at how many units of inventory are on the market. I do this by browsing listings for comparable units on Furnished Finder. You'll want to look for a market that has decent demand (50,000+ housing searches on the stats page) but isn't over-saturated with competition. I hope this helps.


 This helps a ton, thank you so much! 

One other quick question. What makes you specifically recommend the mattress that you do. My wife is hell bent on not buying that mattress because it couldn't be good because it is made of memory foam only. Help me lol 


 Haha! I can help. I buy the Zinus 12 inch green tea from Zinus on amazon. Or better yet, buy my furnished list here: https://aryadesignservices.com...

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Zeona McIntyre
  • Real Estate Agent
  • Boulder, CO
168
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211
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Zeona McIntyre
  • Real Estate Agent
  • Boulder, CO
Replied Nov 16 2022, 14:13

@Gloria C. You get a normal landlord policy just like a long term rental

@Patricia Berman Yes my rentals are fully booked. I still account for 8% vacancy when I run numbers but it ends up being around 2-3%. 

I aim for a 15% COC return, STR I want 25% but that has become really hard to get because those have been in a slump. STRs costs more to operate and is more time consuming.

I am bullish on Omaha & Indianpolis, but do not own there. 

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Replied Nov 26 2022, 16:03

This is a very interesting problem you've brought up with the reoccurring credit card fees for background checks. This is one of those business ideas that has been on my list of ideas. It would be great if we had an easier way to run credit / background checks by having a social profile with all of this information verified in advance. This could be an annual subscription service where you have a pre-approved, real-time stamped approval to share with any STR, MTR, and LTR that can be shared across all platforms. It will be interesting to see who is the first to get this to market.

I have worked in education for 17 years and I can't tell you the number of times I've been finger printed. When I asked why they don't just look at the ones from before, I was told it is to protect my privacy and the records get sent and then deleted. I thought, wait until I commit a crime. I bet those records get pulled up in a split second. So, you might be correct, but it seems as though the privacy laws about keeping this type of information are very strict.

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Jewel B.
  • New to Real Estate
  • Lehigh Valley, PA
99
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303
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Jewel B.
  • New to Real Estate
  • Lehigh Valley, PA
Replied Nov 29 2022, 13:31
Quote from @Andriana Marino:

I just finished rehabbing my basement unit and of course, now is not a good time to rent. Toying with furnishing it for the holidays, and then for travel nurses or cooperate housing. 

Read that Travel Nurses hate Furnished Finders as they charge extra for cc checks and they are already have background checks and such through the hospitals, do you have a better site they prefer to look for MTR?

Haven't read your book yet, as I thought it wasn't out yet. :) 

I will though !!

Thanks Andriana (On-dree-on-uh)  :)


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