Are 6 month min leases difficult to fill with Mid Term Rentals

Real Estate Agent · Phoenix, AZ · Member since 2022 · 28 posts · 28 votes

Hey Everyone, I have a client buying a house in Tolleson, AZ. He is looking to rent it as a furnished mid-term rental but the HOA requires a min of 6 months on any lease. Does anyone have any experience trying to get a 6 month renter and know if it was significantly more difficult than finding renters looking for a 3 month rental?

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Bonnie LowPro Member

Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes

That 6 month minimum is definitely going to limit his guest pool. It really depends on the type of property you're talking about, where it's located and what the draw is to your particular area. As someone else mentioned, travel medical professionals typically rent around 3 months at a time because that matches their contracts. Digital nomads are typically in the 1-3 month range because they like to move around - to them, the experience is just as important/more important than the property itself. Insurance placements might be an option depending on the size, configuration and location of the property. Contracts tend to be one month initially - though 3 months is possible, and they typically do extend to 6+ months but they rarely start out that way so you'll have trouble satisfying the HOA requirements. Personally, I would not buy in an HOA with that type of restriction. You're making it harder than it needs to be to execute this strategy and with today's interest rates, your buyer won't be able to afford it sitting idle to find that unicorn guest.

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Kenny Smith
Real Estate Agent · Denver, CO · Member since 2022 · 356 posts · 228 votes
3y
@Francesca Zanzucchi
great question. So we have a number of MTRs, and I will say I have never gotten a 6 month rental. I know there are plenty of people that have in their properties, but depending on who you're catering too, that may be tough. If the goal is to cater to travel nurses, their contracts are typically 13 weeks, but could vary by a few weeks give or take.
I don't know the AZ market, but you are certainly limiting your MTR pool by requiring 6 months. Travel nurses certainly aren't the only ones to market to when it comes to MTR's, but they are a very large chunk.
Best of luck!
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Andrew BoscoBusiness Member
Rental Property Investor · NH · Member since 2023 · 442 posts · 417 votes
3y
If the price is right and the demand is there - yes! It's a viable option. There could be other employers. Here are some data pools you can look at to further educate yourself;
1. Furnished Finder - General MTR Data
  1. Furnished Finder Traveler Search - manual way to see the competition
Furnished Finder Budget Tool - Good overview of market. Similar to A, but with stipend input
I also recommend calling local employers and checking the local economy to see if it's growing for futurecasts.
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Bonnie LowPro Member
Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
3y
That 6 month minimum is definitely going to limit his guest pool. It really depends on the type of property you're talking about, where it's located and what the draw is to your particular area. As someone else mentioned, travel medical professionals typically rent around 3 months at a time because that matches their contracts. Digital nomads are typically in the 1-3 month range because they like to move around - to them, the experience is just as important/more important than the property itself. Insurance placements might be an option depending on the size, configuration and location of the property. Contracts tend to be one month initially - though 3 months is possible, and they typically do extend to 6+ months but they rarely start out that way so you'll have trouble satisfying the HOA requirements. Personally, I would not buy in an HOA with that type of restriction. You're making it harder than it needs to be to execute this strategy and with today's interest rates, your buyer won't be able to afford it sitting idle to find that unicorn guest.
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Mason WeissBusiness Member
Realtor · Phoenix, AZ · Member since 2021 · 523 posts · 239 votes
3y
Hey @Francesca Zanzucchi, I would advise against trying to MTR a property that required a 6 month minimum lease. It is more common in my experience to find a long term rental tenant who wants a 6 month lease than a MTR tenant wanting a 6 month lease.
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Travis TimmonsPro Member
Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
3y
Agree with @Bonnie Low - you are going to substantially limit your tenant pool if you can't do anything less than 6 months. I would not recommend that your client buy that house if his/her intention is to use it as a furnished rental. In 4 years of operating a mid term rental all but 1 of our tenants have been traveling nurses (on 13 week contracts) or digital nomads. Neither of those categories of folks would sign on for 6 months. We have had nurses get extended for 1-3 months (totaling 4-6 months of renting), but they don't know that until they are a month or two into the job.
The only situation where I would consider this is if you were next to a major university and wanted to do furnished student rentals. Either way, I don't like that an HOA can tell me how to run my business.
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Conner Olsen
Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes
3y
Quote from @Francesca Zanzucchi:

Hey Everyone, I have a client buying a house in Tolleson, AZ. He is looking to rent it as a furnished mid-term rental but the HOA requires a min of 6 months on any lease. Does anyone have any experience trying to get a 6 month renter and know if it was significantly more difficult than finding renters looking for a 3 month rental?
6 month minimum is too much in my opinion. I've had 30+ tenants and only 2 stayed longer than 6 months. That would be very difficult to find a tenant every time.
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Allen DuanPro Member
Property Manager · Los Angeles, CA · Member since 2022 · 590 posts · 463 votes
3y
Agree with the others here. We're managing 20+ MTRs in Los Angeles and rarely have bookings over 6 months. And the ones we have had started out shorter than 6 months and they ended up extending their stay. I don't believe we've ever had a booking start out at 6+ months. We're managing one property with a HOA rule of 2 month minimum and that's already giving me problems.
I'd say that one is better off as a LTR. Or get the HOA to change the rule =)
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