Market Research - Furnished Finder

[Daniel Hajduga]

Hi BP Community! 

I'm going to dive right in - I am doing my research and due diligence on my next investment. I plan on purchasing a multifamily in Essex County here in NJ where I plan to house hack and rent out the rest as an MTR. 

Here is the question - how can I better determine vacancy rates and demand? When looking at listings on FF, most do not seem to be booked far out if at all. The ones that are booked are mostly booked via Airbnb for a week or so. When searching, I leave dates blank so I can see as many available units in the area as possible.

My suspicion is either my approach is flawed, or that the demand is not very high in this market despite the numerous hospitals nearby. 

I have also reached out to some hosts in the area as suggested in "30 Day Stay" to see if they would be willing to share any insight. If I hear back from them, I will update you guys.

Any suggestions or feedback is greatly appreciated and please feel free to ask questions. Always happy to share insight and connect with fellow BP members!

[Taylor Dasch]

This was my biggest obstacle in finding a short term / mid term rental. It is hard to analyze the vacancy rates. 

Just using my logic, in my market there is a large hospital that brings in students and nurses/doctors on contracts. So logically I would think there is a demand for STR/MTRs.

With this, I just decided to purchase a cheap property, furnish it, and give it a go then base my future investments on the performance of this specific one.  

I went live on Furnished Finder last week at well above LTR rents. From what I have seen there is much less action on it than a LTR - I have gotten 4 inquiries within a week and just got a lease signed. 

To me, the key is to put it on every single site to give it the most exposure possible - AirBnB, FB, Zillow, Realtor.com,VRBO, etc. Fortunately, I have not had to do that yet but it does make sense to get the most out of the property. 

[Trent Rogers]

Quote from @Taylor Dasch:

This was my biggest obstacle in finding a short term / mid term rental. It is hard to analyze the vacancy rates. 

Just using my logic, in my market there is a large hospital that brings in students and nurses/doctors on contracts. So logically I would think there is a demand for STR/MTRs.

With this, I just decided to purchase a cheap property, furnish it, and give it a go then base my future investments on the performance of this specific one.  

This is pretty much where I am as well. My city and the larger next closest city (15 mins) both should have decent demands for MTR but I'm having a hard time proving it. The only thing I haven't done is try reaching out to HR depts. or staffing/headhunter agency that may be able to give me some insight. 

I'm thinking I'll start with a smaller rehab in what should be a prime location for MTR as a proof of concept. The goal will be that it doesn't cost me money as an LTR if the MTR doesn't work. lol

I'm not currently using FF, does it give you any additional market metrics as a "property owner"? They provide a traveling nurse specific demand tool free on their site, just curious if the back end gives you anymore tools or data?

[Taylor Dasch]

Quote from @Trent Rogers:

Quote from @Taylor Dasch:

This was my biggest obstacle in finding a short term / mid term rental. It is hard to analyze the vacancy rates. 

Just using my logic, in my market there is a large hospital that brings in students and nurses/doctors on contracts. So logically I would think there is a demand for STR/MTRs.

With this, I just decided to purchase a cheap property, furnish it, and give it a go then base my future investments on the performance of this specific one.  

This is pretty much where I am as well. My city and the larger next closest city (15 mins) both should have decent demands for MTR but I'm having a hard time proving it. The only thing I haven't done is try reaching out to HR depts. or staffing/headhunter agency that may be able to give me some insight. 

I'm thinking I'll start with a smaller rehab in what should be a prime location for MTR as a proof of concept. The goal will be that it doesn't cost me money as an LTR if the MTR doesn't work. lol

I'm not currently using FF, does it give you any additional market metrics as a "property owner"? They provide a traveling nurse specific demand tool free on their site, just curious if the back end gives you anymore tools or data?

 I don’t remember seeing any data but when I signed up they called me with a bunch of statistics to me it seemed like they were giving me inflated numbers but I am honestly not sure 

[Daniel Hajduga]

Quote from @Taylor Dasch:

This was my biggest obstacle in finding a short term / mid term rental. It is hard to analyze the vacancy rates. 

Just using my logic, in my market there is a large hospital that brings in students and nurses/doctors on contracts. So logically I would think there is a demand for STR/MTRs.

With this, I just decided to purchase a cheap property, furnish it, and give it a go then base my future investments on the performance of this specific one.  

I went live on Furnished Finder last week at well above LTR rents. From what I have seen there is much less action on it than a LTR - I have gotten 4 inquiries within a week and just got a lease signed. 

To me, the key is to put it on every single site to give it the most exposure possible - AirBnB, FB, Zillow, Realtor.com,VRBO, etc. Fortunately, I have not had to do that yet but it does make sense to get the most out of the property. 

That is a good point, Taylor. Plus, I am building my criteria so that the deal would still work as an LTR worst case (I know this area has a healthy LTR demand). But it is definitely an area of uncertainty and "analysis paralysis".

[Daniel Hajduga]

Quote from @Trent Rogers:

Quote from @Taylor Dasch:

This was my biggest obstacle in finding a short term / mid term rental. It is hard to analyze the vacancy rates. 

Just using my logic, in my market there is a large hospital that brings in students and nurses/doctors on contracts. So logically I would think there is a demand for STR/MTRs.

With this, I just decided to purchase a cheap property, furnish it, and give it a go then base my future investments on the performance of this specific one.  

This is pretty much where I am as well. My city and the larger next closest city (15 mins) both should have decent demands for MTR but I'm having a hard time proving it. The only thing I haven't done is try reaching out to HR depts. or staffing/headhunter agency that may be able to give me some insight. 

I'm thinking I'll start with a smaller rehab in what should be a prime location for MTR as a proof of concept. The goal will be that it doesn't cost me money as an LTR if the MTR doesn't work. lol

I'm not currently using FF, does it give you any additional market metrics as a "property owner"? They provide a traveling nurse specific demand tool free on their site, just curious if the back end gives you anymore tools or data?

 It provides some very non-specific metrics. I believe it only provides average rents and an estimated amount of rentals within the market. I'm guessing it pulls how many were listed in the past year or so but they are not very specific on how they obtain or calculate those figures. 

When clicking on "Travel Nurse Budgetary Stats", I only see the same information as mentioned above 

[Assaf Lowenstein]

Great points. 

Also learning about market analysis for MTR, yet to buy a property. From what I learn, making sure the property will cashflow even as an LTR is important so you can pivot. 
See if there's more one industry with MTR need around - university, military, big companies, etc, so you're not depending only on TN and increasing substantially your chances to rent. 

Heard in a podcast with Sarah W that lots are posting in FF are disappointed when no one reach back. Listing in TN and mid-terms rental facebook groups is highly recommended. 

[Daniel Hajduga]

Quote from @Assaf Lowenstein:

Great points. 

Also learning about market analysis for MTR, yet to buy a property. From what I learn, making sure the property will cashflow even as an LTR is important so you can pivot. 
See if there's more one industry with MTR need around - university, military, big companies, etc, so you're not depending only on TN and increasing substantially your chances to rent. 

Heard in a podcast with Sarah W that lots are posting in FF are disappointed when no one reach back. Listing in TN and mid-terms rental facebook groups is highly recommended. 

 Definitely, I would say it's good to have a "niche" but having various pools of potential residents does not hurt. 

[Jake Handler]

I would definitely recommend running your numbers based off a long term rental's income.  If the numbers work for long term, then the asset should work as an easy pivot for mid term; even with added vacancy, furnishing, and any other unforeseen challenges that could bite into your cash flow.

[Daniel Hajduga]

Quote from @Jake Handler:

I would definitely recommend running your numbers based off a long term rental's income.  If the numbers work for long term, then the asset should work as an easy pivot for mid term; even with added vacancy, furnishing, and any other unforeseen challenges that could bite into your cash flow.

 For sure. I have been running two sets of numbers: one as long-term and one as medium-term. This is to ensure the potential deal works as an LTR and that the MTR strategy receives higher rent and is a worthwhile option. 

[Jason Livdahl]

The biggest lesson here is to have multiple strategies. Having a backup plan and backup plan to the backup plan is critical to running our businesses. I feel like I say “business” a lot and that most investors try to run their investments without any input. Investing is a business. 

[Jason Livdahl]

Quote from @Daniel Hajduga:

Hi BP Community! 

I'm going to dive right in - I am doing my research and due diligence on my next investment. I plan on purchasing a multifamily in Essex County here in NJ where I plan to house hack and rent out the rest as an MTR. 

Here is the question - how can I better determine vacancy rates and demand? When looking at listings on FF, most do not seem to be booked far out if at all. The ones that are booked are mostly booked via Airbnb for a week or so. When searching, I leave dates blank so I can see as many available units in the area as possible.

My suspicion is either my approach is flawed, or that the demand is not very high in this market despite the numerous hospitals nearby. 

I have also reached out to some hosts in the area as suggested in "30 Day Stay" to see if they would be willing to share any insight. If I hear back from them, I will update you guys.

Any suggestions or feedback is greatly appreciated and please feel free to ask questions. Always happy to share insight and connect with fellow BP members!

Your approach isn’t flawed. The most important aspect to getting bookings for an STR or MTR is to SELL the product. Too many listings have bad pictures and don’t meet the expectations of the guests. One example is an incorrect map location that might not represent the “closeness” of a unit to downtown or other attractions. As an investor we need to sell our product MORE than the hotels do. Professional pictures and top notch amenities will sell your listings for you. 

[Nicole Heasley Beitenman]

Quote from @Taylor Dasch:

Quote from @Trent Rogers:

Quote from @Taylor Dasch:

This was my biggest obstacle in finding a short term / mid term rental. It is hard to analyze the vacancy rates. 

Just using my logic, in my market there is a large hospital that brings in students and nurses/doctors on contracts. So logically I would think there is a demand for STR/MTRs.

With this, I just decided to purchase a cheap property, furnish it, and give it a go then base my future investments on the performance of this specific one.  

This is pretty much where I am as well. My city and the larger next closest city (15 mins) both should have decent demands for MTR but I'm having a hard time proving it. The only thing I haven't done is try reaching out to HR depts. or staffing/headhunter agency that may be able to give me some insight. 

I'm thinking I'll start with a smaller rehab in what should be a prime location for MTR as a proof of concept. The goal will be that it doesn't cost me money as an LTR if the MTR doesn't work. lol

I'm not currently using FF, does it give you any additional market metrics as a "property owner"? They provide a traveling nurse specific demand tool free on their site, just curious if the back end gives you anymore tools or data?

 I don’t remember seeing any data but when I signed up they called me with a bunch of statistics to me it seemed like they were giving me inflated numbers but I am honestly not sure 

 All they provide to show demand is the number of searches in a given period. But if I check the site every day for a month because I'm researching competition, that could be 30 searches. If you have multiple landlords doing that, you're going to get skewed numbers. So their data is VERY surface-level.

[Allen Duan]

Another way to think about this is the checking what the average booking lead time is. Let's say MTR rates in your market are booked 2 weeks in advance on average. If all the comps you see in FF and Airbnb are booked for the next 2 weeks, but vacant after that, that can indicate strong demand and high occupancy. On the other hand, if average booking lead time is 2 weeks but a lot of the comps are currently vacant, that can indicate weak demand and occupancy. 

In Los Angeles where we operate, average booking lead time is less than a month. When I'm looking up comps, I'm checking for how far out they are currently booked. If a lot of the comps are booked a 1-3 weeks out, I'd be comfortable setting up a new MTR in that neighborhood. Hope that helps =)

[Bonnie Low]

MTRs represent an evolving space with a lot of location-specific variables. It basically boomed during the pandemic because travel nurse per diems and hiring contracts both exploded and we saw this nationwide surge of digital nomads. It's leveling off somewhat on both of those fronts but I also see increasing demand in general for furnished rentals at people are more willing and able to be nomadic or are recognizing furnished rentals as an alternative to hotels and unfurnished rentals which used to be far and away the only options. Sites like FF established themselves by catering to travel nurses, but their user base has really expanded. We get inquiries from people traveling for school, religious sabbaticals, medical treatments, to take care of relatives, summer employment (park service and forest service), temp. construction workers, people displaced by natural disasters, even beekeepers! We also get people relocating to the area that need time to find a permanent residence. Knowing that FF's user interface is wonky and not very sophisticated, I don't know that I'd entirely trust their data if I was investing in a market I didn't already know. But ask yourself if any of the above situations apply to your area and chances are you're in a good market. This is by no means an exhaustive list - it's just a suggestion to get you thinking. I also agree that if you can make the numbers work as an LTR, you have the ability to pivot if it's not working out. Also, you'll find that a LOT - probably the majority right now - of listings on FF are one or both of the following: private room in a shared home or decorated like your grandma's house. And in this case grandma wasn't a style icon. The listings you see that are not getting booked or are the last to get booked are usually one or both of those. People do rent shared spaces, but the vast majority prefer their own space. If you want to keep your place booked, pay attention to detail. It really doesn't take much to set your listing apart at least based on where MTRs are in their evolution. Price competitively. Decorate nicely. Have great photos. And if you allow pets, you will likely have demand. Also get on some FB sites that cater to travel professionals to get an idea what interest there may be in your area.