medium term rental Goals?

Question

What are your goals with MTR’s? How many do you have/want to scale too?

What’s your avg cash flow on them?

Looking to potentially expand into this space!

Bonnie Low · Answer

We have a somewhat unique model. We buy properties that have a main house, which we LTR and a secondary living space - usually a detached garage or shop - which we convert to an ADU to use as an MTR. So far this is working really well for us. We like the diversity of long and mid-term rentals together. We pay most of our expenses for both units with the rent from the LTR and the cash flow from the MTR is bonus. Right now, this strategy yields us $800-$1000/mo cash flow, depending on the property. I'm hesitant to go all in on MTR because I don't want all my eggs in one basket and it's more work to manage the MTRs but I love that we can switch pretty easily between long and midterm if we need to. We use a PM company for our LTRs. I'm really liking this combination.

Bonnie Low · Answer

You're welcome! Say what you will about CA, but the ADU laws are one of the things our home state has done right. With such a need across the US for affordable housing (not to mention the benefit for the property owner of having a cash generating unit if they want or need to house hack) I hope to see more states embracing this model!

Brandon Elliott-Pandey · Answer

I personally want 5 MTR's.

I currently have one in CO and it's cash flowing ~$1,600/ m. It already stacks a little under 20k for me per year but with 5 of them I could go out and buy more RE and not need to use my own income for funds. Let my investments pay for more investments :-)I highly recommend looking more into it!

Luke Stewart · Answer

I have 2 MTR's in Denver and one LTR. One is a townhome that cashflows $600 a month, the other is duplex (LTR and MTR) that cashflows $1200, the duplex is set up perfect for MTR and LTR as it has 2 driveways (LTR has a garage). I have never thought about a number of how many I want, but more that I just keep wanting to add properties and will assess each as they come. The duplex I bought in February and intended it to be two MTR's but the numbers worked with half an LTR and required less work. I think it all comes down to time. I like self managing my MTR's so maybe 5 would be my limit and then keep adding LTR and one or two STR. My next property will be a vacation STR (not sure where). In the end it's all about cashflow, time required and headaches. I want to maximize cashflow, minimize time and headaches. I find each property will dictate what works best.

Nicole Heasley Beitenman · Answer

Thanks so much for the words of encouragement! We certainly aren't going to let anything stop us from trying.  I'm least confident in my decorating skills, but I know there are plenty of resources out there to help with that

Ryan Kelly · Answer

@Bobby Paquette as long as they also pencil out as LTRs, I think MTRs are a great strategy in core locations. This way if they don’t work out or the market gets over saturated, you still can hold the property with no stress to sell. Like STRs, the best operators will survive and a lot will drop out that aren’t focused on running a hospitality business.

Bonnie Low · Answer

Depending on the market, I would be worried about potential oversaturation as well, simply because I see so many people who are not making it with their properties as STRs trying to pivot to the MTR model. It's a logical move and will probably work for some. But I think the keys to success in either scenario are really the same: location absolutely matters, your pricing must be appropriate, decor and amenities absolutely matter, and you must be willing and skilled at treating it like a hospitality business. While the MTR space can be crowded, just like in the STR space it's full of poor quality properties and operators, so I wouldn't let the numbers of listings alone deter you. If you have the ability to do it right, you'll stand out. I have a feeling you'd do well ; )

Nicole Heasley Beitenman · Answer

We're worried about oversaturation and how many MTRs our market can sustain. We have 2 properties that are the right size and (hopefully) the right location for MTRs. We're going to launch one next month, see how it does, and then decide if we should pursue another.

Jamie Banks · Answer

My goal is to add at least 7 more MTRs to my portfolio between 2 different markets. From the corporate relocation and travel medical agencies I've talked to it seems like you need at least 5 in a given market to secure contracts directly with the agencies. I'd like to have at least 5 in two different markets.

My average cash flow is $1,000/month

Yue Lehman · Answer

This is a great strategy, thank you for sharing!!

medium term rental Goals?

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