Property Management Rates for MTR's

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Bonnie LowPro Member
Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
3y

Hi Micah. You're correct that management fees for an MTR can be in the 20-30% range. In my opinion, it isn't worth it because that's a lot - if not most - of the upside you're going to generate renting it as an MTR instead of an LTR. You might be able to find someone in this niche who really understands it and is willing to co-host. I have heard several people who are co-hosts offer their services for around 15%. But it's not that hard to manage an MTR, especially if you're renting for more than 30 days at a time. We average 13-week rentals so we're basically doing 4 lease ups and turns/year. It's not passive, but it's nowhere near as much work as an STR and I'd just as soon keep all my profits. If you're targeting a higher end traveler or something like insurance placements or corporate rentals you might get a larger spread and could justify using a PM for your MTR. Something else to consider is that if you ever decide to jump into STRs, it's good to have hands on experience with your lower risk MTR because many of the skills (treating it like a hospitality business, marketing, systems and turnovers) are very relevant. I would definitely recommend you give self managing a try before you consider turning your property over to a PM. At least you'll gain a lot of valuable information and decide whether or not it's or you. It's easy enough to hand it over if you decide it isn't.

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  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y

    Why would you want to do MTR rentals in Cleveland ? Why not just rent for 10% or better net cap. MTM rentals are too much work, 

    1Reply
  • Account Closed
    OP
    New to Real Estate · Cleveland, OH · Member since 2022 · 21 posts · 15 votes
    3y

    Hi Bob, the idea would be to rent for 60-90 days and not MTM. It might be more work, but the COC return would be a lot higher.

    0Reply
  • Bonnie LowPro Member
    Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
    3y

    Hi Micah. You're correct that management fees for an MTR can be in the 20-30% range. In my opinion, it isn't worth it because that's a lot - if not most - of the upside you're going to generate renting it as an MTR instead of an LTR. You might be able to find someone in this niche who really understands it and is willing to co-host. I have heard several people who are co-hosts offer their services for around 15%. But it's not that hard to manage an MTR, especially if you're renting for more than 30 days at a time. We average 13-week rentals so we're basically doing 4 lease ups and turns/year. It's not passive, but it's nowhere near as much work as an STR and I'd just as soon keep all my profits. If you're targeting a higher end traveler or something like insurance placements or corporate rentals you might get a larger spread and could justify using a PM for your MTR. Something else to consider is that if you ever decide to jump into STRs, it's good to have hands on experience with your lower risk MTR because many of the skills (treating it like a hospitality business, marketing, systems and turnovers) are very relevant. I would definitely recommend you give self managing a try before you consider turning your property over to a PM. At least you'll gain a lot of valuable information and decide whether or not it's or you. It's easy enough to hand it over if you decide it isn't.

    [email protected]
    7Reply
  • Account Closed
    OP
    New to Real Estate · Cleveland, OH · Member since 2022 · 21 posts · 15 votes
    3y

    Thanks @Bonnie Low! I appreciate the advice. Do you have a lot of MTR's yourself?

    0Reply
  • Jamie Banks
    Real Estate Consultant · Reston, VA · Member since 2022 · 513 posts · 521 votes
    3y

    Hi @Account Closed with the MTR space being new I haven’t seen a lot of MTR focused PM companies. I’m starting an MTR PM and cohosting business and plan to charge 15%. However, as previously mentioned there’s less management needed that STRs. When running MTRs you just need to set up a solid process and property management system and it’ll be easy to manage, even from afar. 

    1Reply
  • Brandon Vanderford
    Property Manager · Raleigh, NC · Member since 2022 · 117 posts · 110 votes
    3y

    I charge 20%, but many companies charge more. After all, MTRs take substantially more attention than LTRs. 

    When I have clients asking which option I would suggest, it usually comes down to whether the property is near a business hub (like RTP, in my case), or within five to seven minutes of a hospital or university. If not, you will probably be just as well off doing an LTR.

    2Reply
  • Nicole Heasley Beitenman
    Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
    3y
    Quote from @Bob S.:

    Why would you want to do MTR rentals in Cleveland ? Why not just rent for 10% or better net cap. MTM rentals are too much work, 

    Cleveland is a great area for MTR's, assuming you're near the clinic and downtown. 

    2Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Nicole Heasley Beitenman:
    Quote from @Bob S.:

    Why would you want to do MTR rentals in Cleveland ? Why not just rent for 10% or better net cap. MTM rentals are too much work, 

    Cleveland is a great area for MTR's, assuming you're near the clinic and downtown. 


     HMM Well how about that, I learned something new today. Funny 10 years ago, no way, But ANOTHER reason Cleveland has been kicking butt the last 6, 7 years,,,,, 

    0Reply
  • Yue Lehman
    Realtor · Fresno, CA · Member since 2020 · 87 posts · 41 votes
    3y

    In CA, my experience has been LTR charges between 8% and 10% (I've heard as high as 12%), STR charges 18% to 23%. That put MTR between 12% and 18%. Consider it is so much less work than STR, I feel that up to 15% for a MTR is reasonable. But like Bonnie said, depending on your profession and time availability, proximity to your property, it might be worth it to self manage.

    1Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    3y

    My San Diego PM is 25% STR (this is going rate in this market but there are some cheaper but they usually are missing something), 15% MTR, 8% LTR (>1 year). I have been mostly happy with the PM but I only use him on our furnished rentals.

    Note 15% MTR rate in San Diego equates to more money than 15% would equate to in most other markets. 


    good luck

    0Reply
  • Brandon Caynor
    Realtor · Cleveland & Akron, OH · Member since 2016 · 13 posts · 6 votes
    3y

    Hi, Michah. Not familiar with what the local going rate is, but I wish you the best of luck. If you're investing on the east side I might have PM you could call and inquire. Not sure if they are taking on additional clients, but they have several MTRs, a PM branch, and a contractor branch of their company. 

    0Reply
  • Bonnie LowPro Member
    Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
    3y

    @Account Closed currently we just have 2. Both in CA and both are part of our LTR/MTR strategy where we use the main house as the LTR and convert a secondary structure to an Additional Dwelling Unit that we use as an MTR. We're always on the lookout for more.

    [email protected]
    0Reply
  • Michael Bandur
    Real Estate Agent · Tampa, FL · Member since 2021 · 11 posts · 8 votes
    3y
    Quote from @Account Closed:

    Can anyone tell me what the typical rates are for PM's that manage MTR's? I heard it could be as high as 25%!


    Hi Micah, I live in Florida and have investments in both STR's and MTR's. I have found that property management fees are negotiable. It is more important to find out what services the PMC provides and if they are a reputable company. Ask the right questions and location is very important. Every PMC is different and the extra percentage maybe worth the extra money in order to protect your investment. We have had to deal with it all, the good, the bad, and the ugly. We also invest long distance so it's not always easy to get up there with short notice. The PMC can make or break your business! The STR's here are typically 20%-25%, ours is 15% because we have multiple properties with the PMC. It is also in the panhandle where STR's have done very well there. I've heard MTR's here range from 12%-20%, ours is 15% in St Pete Beach. I would consider it well worth the extra money compared to the last PMC that managed the property. Hope this helps, good luck!

    0Reply
  • Todd Jones
    Member since 2023 · 243 posts · 199 votes
    3y
    Quote from @Bob S.:
    Quote from @Nicole Heasley Beitenman:
    Quote from @Bob S.:

    Why would you want to do MTR rentals in Cleveland ? Why not just rent for 10% or better net cap. MTM rentals are too much work, 

    Cleveland is a great area for MTR's, assuming you're near the clinic and downtown. 


     HMM Well how about that, I learned something new today. Funny 10 years ago, no way, But ANOTHER reason Cleveland has been kicking butt the last 6, 7 years,,,,, 


    Jesse Vasquez was interviewed on the Bigger Pockets podcast and he helped motivate a lot of folks towards MTRs.
    Highly articulate and informative.

    On paper, Cleveland should have a booming MTR market for travel nurses. Why? Cleveland Clinic.

    They have over 60 buildings and its the 3rd biggest hospital in the United States. University Hospital has 18 hospitals and 40 health centers and its the 18th biggest.

    Also, this was a manufacturer, blue collar city. Repetitive, slightly hazardous work causes that over +60 generation to need more medical care. This translates to nursing aids being required. Over 69k of +60 year olds live in Cleveland. 

    https://www.clevelandohio.gov/....

    There are sites like stayfrontdesk with MTRs in Cleveland but they are mostly downtown. 
    https://www.stayfrontdesk.com/...

    So, why isn't it booming? My assumption is one of the biggest hospitals with 17k nurses doesn't need travel nurses to treat a city with a less than 400k population + suburbs + out of towners.
    Now, Miami, San Francisco, Chicago are different stories.

    0Reply
  • Nicole Heasley Beitenman
    Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
    3y
    Quote from @Todd Jones:
    Quote from @Bob S.:
    Quote from @Nicole Heasley Beitenman:
    Quote from @Bob S.:

    Why would you want to do MTR rentals in Cleveland ? Why not just rent for 10% or better net cap. MTM rentals are too much work, 

    Cleveland is a great area for MTR's, assuming you're near the clinic and downtown. 


     HMM Well how about that, I learned something new today. Funny 10 years ago, no way, But ANOTHER reason Cleveland has been kicking butt the last 6, 7 years,,,,, 


    Jesse Vasquez was interviewed on the Bigger Pockets podcast and he helped motivate a lot of folks towards MTRs.
    Highly articulate and informative.

    On paper, Cleveland should have a booming MTR market for travel nurses. Why? Cleveland Clinic.

    They have over 60 buildings and its the 3rd biggest hospital in the United States. University Hospital has 18 hospitals and 40 health centers and its the 18th biggest.

    Also, this was a manufacturer, blue collar city. Repetitive, slightly hazardous work causes that over +60 generation to need more medical care. This translates to nursing aids being required. Over 69k of +60 year olds live in Cleveland. 

    https://www.clevelandohio.gov/....

    There are sites like stayfrontdesk with MTRs in Cleveland but they are mostly downtown. 
    https://www.stayfrontdesk.com/...

    So, why isn't it booming? My assumption is one of the biggest hospitals with 17k nurses doesn't need travel nurses to treat a city with a less than 400k population + suburbs + out of towners.
    Now, Miami, San Francisco, Chicago are different stories.

    When I was a landlord in Cleveland, I got tons of requests for mid-term stays. But I was really young and didn't understand the MTR model (or the LTR model, really, but that's another story), and I was so afraid of winter vacancies that I didn't pursue them. Huge regret. This was 2016-2019.

    That being said, I have heard that the CC, like many other hospitals and medical systems, is experiencing a correction in the travel nurse field. With Covid ending, a reset is to be expected. Long-term, there's nothing indicating the travel nurse field isn't going to grow. We have a nation-wide nursing shortage and, as you mentioned, an aging boomer generation, not to mention a general culture shift in how people want to live and work. And the medical system isn't the only source of MTR tenants. There's also a plethora of colleges and universities, business travel, insurance displacement (got a lot of those calls, too), etc.

    I can't say if it would work out for the OP or not. But I certainly wouldn't dissuade him from trying. 

    2Reply
  • Todd Jones
    Member since 2023 · 243 posts · 199 votes
    3y

    When I was a landlord in Cleveland, I got tons of requests for mid-term stays. But I was really young and didn't understand the MTR model (or the LTR model, really, but that's another story), and I was so afraid of winter vacancies that I didn't pursue them. Huge regret. This was 2016-2019.

    That being said, I have heard that the CC, like many other hospitals and medical systems, is experiencing a correction in the travel nurse field. With Covid ending, a reset is to be expected. Long-term, there's nothing indicating the travel nurse field isn't going to grow. We have a nation-wide nursing shortage and, as you mentioned, an aging boomer generation, not to mention a general culture shift in how people want to live and work. And the medical system isn't the only source of MTR tenants. There's also a plethora of colleges and universities, business travel, insurance displacement (got a lot of those calls, too), etc.

    I can't say if it would work out for the OP or not. But I certainly wouldn't dissuade him from trying. 


    Based on your feedback, my vote to OP is to give it a try. There is also construction workers who travel/stay at sites.
    Renting a home for college vs. a dorm is more tempting to parents if the cost is right. 

    In summary, there's opportunity in MTR in Cleveland.

    1Reply
  • Allen DuanPro Member
    Property Manager · Los Angeles, CA · Member since 2022 · 590 posts · 463 votes
    3y

    Our company manages MTRs in Los Angeles and we charge 15%.

    0Reply
  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    3y

    @Account Closed think about how many more touch points there are in managing these things versus long term rentals. We often time get tenants who stay for three or more years. The single most stressful, and dangerous, part of managing a building is when you have vacancy. I have not seen much data here in Chicago to support the extra risk for MTRs. I would personally need to be making double to do it. 

    1Reply
  • Yael Fuerst
    Hallandale, FL · Member since 2016 · 45 posts · 9 votes
    3y

    @Bonnie Low do you think MTR management is possible to do if I don't live in the USA? obviously I'd need to manage a handyman and cleaner as I understand but anything else I'm not taking into account?

    0Reply
  • Yael Fuerst
    Hallandale, FL · Member since 2016 · 45 posts · 9 votes
    3y

    @Nicole Heasley Beitenman I'm looking to set up an MTR in Cleveland but am worried it's oversaturated market for this kind of property, would love some insight into how you're finding it, how long did it take to get a tenant, what's vacancy like there? Thanks!

    0Reply
  • Nicole Heasley Beitenman
    Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
    3y
    Quote from @Todd Jones:

    Renting a home for college vs. a dorm is more tempting to parents if the cost is right. 

    In summary, there's opportunity in MTR in Cleveland.

     I agree. You risk some money on furniture (which you can resell if it doesn't work out) and vacancy time. I think that's a small risk to take for the potential additional profits.

    0Reply
  • Nicole Heasley Beitenman
    Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
    3y
    Quote from @Yael Fuerst:

    @Nicole Heasley Beitenman I'm looking to set up an MTR in Cleveland but am worried it's oversaturated market for this kind of property, would love some insight into how you're finding it, how long did it take to get a tenant, what's vacancy like there? Thanks!


    I sold my Cleveland property in 2021. I'd attend a local meetup to get the best feedback. 

    1Reply
  • Yael Fuerst
    Hallandale, FL · Member since 2016 · 45 posts · 9 votes
    3y

    Thanks for the suggestion @Nicole Heasley Beitenman

    0Reply
  • Bonnie LowPro Member
    Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
    3y
    Quote from @Yael Fuerst:

    @Bonnie Low do you think MTR management is possible to do if I don't live in the USA? obviously I'd need to manage a handyman and cleaner as I understand but anything else I'm not taking into account?


     While I don't have first hand knowledge of out of country management, I can say with confidence that it IS possible because Sarah D. Weaver - one of the authors of 30 Day Stay has pretty much perfected it. She'd be a great resource for you to reach out to.

    [email protected]
    1Reply
  • Twana RasoulBusiness Member
    Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
    3y

    In the San Diego area I've seen MTR rates be around 15% with short term (STR) rates around 25% and long term between 5% to 10% depending on size of property and a few other factors.

    Compass5122 Reviews
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