Inquiry about MTRs

[Ab Okoeguale]

I have saved $95,000 cash.What markets is best for Mid term rentals now in the USA??  I am thinking of Houston to start.

what kind of property is best for MTRs, condos, House,Duplex or Apartments??

thanks..

[Taj Akinbode]

Quote from @Ab Okoeguale:

I have saved $95,000 cash.What markets is best for Mid term rentals now in the USA??  I am thinking of Houston to start.

what kind of property is best for MTRs, condos, House,Duplex or Apartments??

thanks..

Ab,

It's great to hear that you've saved up a decent amount. 

Houston is a great choice as it offers relatively affordable property prices compared to certain markets, making it appealing for investors like yourself. For medium-term rental strategies, the Texas Medical Center area, for example, presents an attractive opportunity to target travel nurses, individuals seeking short to medium-term medical treatments, medical students in residency, other target market categories, etc. Many investors have already tapped into this market, FYI. So, do pay attention to other areas recommended by fellow contributors 

When considering MTR strategy, it's important to weigh the pros and cons of each property type. However, what is equally very important are other factors such as location, rental demand, conducting thorough due diligence and getting value add and accurate market data from an investor-friendly REALTOR® who can provide valuable insights beyond mere data presentation and guidance that is tailored to your specific need. I am an investor-Friendly REALTOR® with access to MLS and off-market opportunities and I'll be happy to share further insight with you if needed. If you'd like to delve deeper into the opportunities available in the Houston market, don't hesitate to reach out. I'll be happy to bring you some value in this area.

[Bonnie Low]

That's quite an accomplishment! I'm curious why you're focusing specifically on MTRs. I love them, personally, but what is making you want to focus there? MTRs are SO broad you could go a lot of different directions. I also know a lot of people who have that kind of down payment would be looking at higher cash flowing STR options. What is your criteria? What are you looking for your properties to do for you?

[Ab Okoeguale]

Quote from @Bonnie Low:

That's quite an accomplishment! I'm curious why you're focusing specifically on MTRs. I love them, personally, but what is making you want to focus there? MTRs are SO broad you could go a lot of different directions. I also know a lot of people who have that kind of down payment would be looking at higher cash flowing STR options. What is your criteria? What are you looking for your properties to do for you?

 Thanks for your reply, I specifically need a cash flow asset probably long term hold, this is my first real estate investment and wanted something less risky.  I have been the studying real estate business in the last five years. I don't want a personal house ,I want a cash flowing asset as investment property.

[Ab Okoeguale]

Quote from @Bonnie Low:

That's quite an accomplishment! I'm curious why you're focusing specifically on MTRs. I love them, personally, but what is making you want to focus there? MTRs are SO broad you could go a lot of different directions. I also know a lot of people who have that kind of down payment would be looking at higher cash flowing STR options. What is your criteria? What are you looking for your properties to do for you?

 Thanks for your reply, I specifically need a cash flow asset probably long term hold, this is my first real estate investment and wanted something less risky.  I have been the studying real estate business in the last five years. I don't want a personal house ,I want a cash flowing asset as investment property.

[Jennifer Volek]

Hey! Personally I invest in Arlington, I have done MTR to the travel nurses that work at multiple hospitals in the area. I see you live in Dallas, I think it would be wise of you to invest here so that you can have eyes on the property. I tend to think that a 1 or 2 bedroom condo would be a solid start for travel professionals that are looking for MTR. Most of the nurses I come across travel alone so they don't need a 3 bedroom house. Hope that helps!

[Bruce Lynn]

@AB Okeguale Why Houston vs Dallas?   I don't think they have the lockdown on MTR?   What is your target market and what is the demand for that?

For example if it is transplant patients, then you would want to be somewhere around transplant hosptials.  If it is medical personel, then I would think you want to be in an area with multiple hospitals or facilities like UTSW/Parkland/Scottish Rite/Children's area in Dallas.   If it is insurance housing, then someplace with larger more expensive homes in a good corporate area where people tend to have great insurance and a bigger budget for temporary housing.   If it is convention center business, then close to the convention center.

Have you figured out what kind of MTR rent you need to cashflow. I'm thinking at least double the normal rent and probably higher than that, when you think about ROI on your furnishings, utilities, and higher vacancy rates. What vacancy rate are you using in your model? I would think about 25% is appropriate, but that's a guess. I'm just thinking about how fast do you get the next tenant after one moves out. I just saw something that said DFW area hotels are running about 68-75% occupancy over the last year, so I would think that would be a fair number for MTR too.

I would think your lowest risk would be LTR vs STR or MTR. Occupancy rates to me are your enemy and you potentially could sit vacant for a long time on STR or MTR.

[KiKi Wood]

If you ever want to expand and explore other markets, Indianapolis, IN is a great place to start! I would love to connect, if you're open to it, to talk about the Indianapolis mid-term market. 

[Ab Okoeguale]

Quote from @Jennifer Volek:

Hey! Personally I invest in Arlington, I have done MTR to the travel nurses that work at multiple hospitals in the area. I see you live in Dallas, I think it would be wise of you to invest here so that you can have eyes on the property. I tend to think that a 1 or 2 bedroom condo would be a solid start for travel professionals that are looking for MTR. Most of the nurses I come across travel alone so they don't need a 3 bedroom house. Hope that helps!

@Jennifer Do HOA association allow Condo rental in Arlington? Would they allow me to use them for MTR/STR??? I head dealing with HOA is tough.

[Jennifer Volek]

some do, most do not allow STR but MTR shouldnt be an issue

[Ab Okoeguale]

Quote from @Jennifer Volek:

some do, most do not allow STR but MTR shouldnt be an issue

 Ok Noted..  Is Plano Okay for MTR??

[Bruce Lynn]

@Ab Okoeguale  #1 Don't buy condos in most cases.  There have only been about 5 places in DFW area where the numbers work for rentals....but there are a ton of other issues using them for rentals.  Often decent or even great places to live, but not for rental.

Even if they don't prohibit STR today, there's probably a good chance they will if you try.

MTR probably more acceptable in most places if it is addressed in the HOA CC&R. Still there can be plenty of issues, so I would normally advise against it. Same with townhomes.

Get a house to avoid a host of issues....and probably better long term appreciation.

This may be different in other areas of the country, but for sure in DFW. One issue is HOA dues and special assessments often just kill your returns.

[Ab Okoeguale]

Quote from @Bruce Lynn:

@Ab Okoeguale  #1 Don't buy condos in most cases.  There have only been about 5 places in DFW area where the numbers work for rentals....but there are a ton of other issues using them for rentals.  Often decent or even great places to live, but not for rental.

Even if they don't prohibit STR today, there's probably a good chance they will if you try.

MTR probably more acceptable in most places if it is addressed in the HOA CC&R. Still there can be plenty of issues, so I would normally advise against it. Same with townhomes.

Get a house to avoid a host of issues....and probably better long term appreciation.

This may be different in other areas of the country, but for sure in DFW. One issue is HOA dues and special assessments often just kill your returns.

@Bruce. WHAT do you advice, Houses in which area,states. The DFW market is tight now,interest rates are high .LTR hard to cash flow unless STF for sure.

[Jamie Banks]

If you want to buy a MTR specifically and are open to different locations I would do some research on Furnished Finder and other sites to see where the most demand is. I recently attended the MTR Summit and California, Florida, Washington, Arizona, and North Carolina were the states identified with the top demand.

[Bruce Lynn]

@Ab Okoeguale   Cash flow is just a function of rent vs expenses.  Put more money down like 30-40%, so use less leverage to cover higher debt service.

[Ab Okoeguale]

Quote from @Jamie Banks:

If you want to buy a MTR specifically and are open to different locations I would do some research on Furnished Finder and other sites to see where the most demand is. I recently attended the MTR Summit and California, Florida, Washington, Arizona, and North Carolina were the states identified with the top demand.

Thank you for this info ,I don't know if out 9f state will work for me as a MTR investor???  Kinda NOT sure. 

[Nick Gober-Keller]

Congratulations on your decision to invest in the Mid-Term Rental (MTR) sector. Your savings give you a great start, and Houston is indeed an attractive market due to its diversified economy and presence of numerous Fortune 500 companies.

While MTR can potentially provide higher returns, it also involves more work than Long-Term Rentals (LTR). MTRs require more hands-on management, like furnishing, managing utilities, WiFi, and prompt responses to maintenance requests. If you're ready for the additional responsibilities, MTR can be a lucrative option.

However, don't discount the potential of LTRs. With less day-to-day management and more predictable cash flow, they offer stability and ease of operation. With careful market research and negotiation, you might find LTR properties in Houston that can provide a good return.

As for the type of property, it largely depends on the demand in your chosen market and the type of tenants you want to attract. Single-family homes, duplexes, and apartments/condos each have their unique advantages and potential challenges.

Engage with local real estate professionals, do your due diligence, and consider all your options before making a decision. Ultimately, the best choice will align with your financial goals and personal commitment level.

Good luck on your real estate journey!

[Ab Okoeguale]

Quote from @Nick Gober-Keller:

Congratulations on your decision to invest in the Mid-Term Rental (MTR) sector. Your savings give you a great start, and Houston is indeed an attractive market due to its diversified economy and presence of numerous Fortune 500 companies.

While MTR can potentially provide higher returns, it also involves more work than Long-Term Rentals (LTR). MTRs require more hands-on management, like furnishing, managing utilities, WiFi, and prompt responses to maintenance requests. If you're ready for the additional responsibilities, MTR can be a lucrative option.

However, don't discount the potential of LTRs. With less day-to-day management and more predictable cash flow, they offer stability and ease of operation. With careful market research and negotiation, you might find LTR properties in Houston that can provide a good return.

As for the type of property, it largely depends on the demand in your chosen market and the type of tenants you want to attract. Single-family homes, duplexes, and apartments/condos each have their unique advantages and potential challenges.

Engage with local real estate professionals, do your due diligence, and consider all your options before making a decision. Ultimately, the best choice will align with your financial goals and personal commitment level.

Good luck on your real estate journey!

Thank you so much,.. I will do as advised. 

[Jeffrey McKee]

@Ab Okoeguale where do you live? Are you planning to invest out of state? Can you house hack?

[Ab Okoeguale]

Quote from @Jeffrey McKee:

@Ab Okoeguale where do you live? Are you planning to invest out of state? Can you house hack?

@Jeffrey McKee I live in Dallas, I can invest out of state but I can't house hack for now...