Mid-term rental pricing

New to Real Estate · Princeton, TX · Member since 2024 · 84 posts · 26 votes

I am new to investing and am about to purchase my first rental.

How do I determine the median rent for MTRs in my zipcode? All the BP calculators I've seen are based on LTRs. What I've searched so far for MTR pricing: FF, Airbnb, AirDna. Also, does anybody else get http error 404 when using FF?

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Nick ZupecPro Member

Investor · Saint Joseph, MI · Member since 2022 · 31 posts · 44 votes

Quote from @Ryan Daulton:

Wow, FF is working for me now too! Another idea I had was to ask area property managers how much they think the going rate is for MTRs. The FF rates in my zipcode are higher than I expected and their quality is less than what I'm bringing online! How could I determine how much demand there is?

Determining demand can be tricky too if you don't already have an MTR in that market. If you know a good PM that does MTRs, that's a great route to go. Take them to coffee and pick their brain. We haven't found many PMs in our area that do much with MTRs (they are all either LTR or STR focused). We didn't have any idea if there was demand in our market so we started with one property just to see how it would go and it booked in 2 days. We added a 2nd one and both were solidly booked so we added 2 more haha. We are in a small market so we were very surprised to consistently fill 4 and now we are looking to do 4 more.

That may not be the best strategy given the cost of getting an MTR set up, so here is another approach. Look on Furnished Finder at your market 8 or 9 months in advance. I wouldn't expect much to be booked yet that far out. Find a few properties that are your closest competition (similar size, location, finishes). Then reset your search to 2 weeks out and see how many of them are still available. If they are all booked, there should be plenty of demand for you. If most of them are available, I would be a little more concerned. You could do the same thing with 30+ day stays on Airbnb. While it is variable, most of our booking requests come around 4 weeks in advance.

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Ko KashiwagiPro Member
Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
2y
Are there PMs managing MTR specifically in that area? I like to compare 3 things when I do these types of research:
1. Software - plug it into AirDNA and FF
2. Comps - looks at LISTED rentals in that area for sanity check as softwares can be off
3. Talk to investors & PMs in that area
310-848-9776
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Nick ZupecPro Member
Investor · Saint Joseph, MI · Member since 2022 · 31 posts · 44 votes
2y
Hi Ryan. Because MTR is a unique hybrid somewhere between LTR and STR, I haven't found an easy way to get a rent estimate. I usually pretend that I am a traveler or renter searching in that market. I will look through all of the major platforms (Furnished Finder, Airbnb, Zillow, etc.) and see how much furnished MTR units are going for. I'll track studio, 1BR, 2BR, etc. as well as location and how nice they are finished. This may also fluctuate by season in some markets. Then you can see where your property would fall in relation to the comps (or if you are bringing a property online, you can see what you have to do to get to the higher range of the comps). Its kind of like doing a comparative market analysis. And I just checked and Furnished Finder is working for me at https://www.furnishedfinder.com/
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- Mackay OakeyPro Member
  Idaho Falls, ID · Member since 2021 · 53 posts · 38 votes
  1y
  I think that this is the answer right here. I recently put my STR up as a MTR and found that the best way to price it out was to put on my "traveler hat" and see what was available in the area. If dropping your rate $100 below others at comparable offerings in your target market kills your cashflow, you may be in too tight of a deal anyhow. That's the way I look at things personally.@Nick Zupec
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Ryan Daulton
OP
New to Real Estate · Princeton, TX · Member since 2024 · 84 posts · 26 votes
2y
Wow, FF is working for me now too! Another idea I had was to ask area property managers how much they think the going rate is for MTRs. The FF rates in my zipcode are higher than I expected and their quality is less than what I'm bringing online! How could I determine how much demand there is?
0 Reply
Matthew Metros
Investor · New York, NY · Member since 2020 · 94 posts · 29 votes
2y
Check your competition on Furnished Finder. That should give you an idea of how much you can potentially charge.
I would also suggest using Pricelabs to create a comp-set and filtering for 29+ days to see the listings in your market that require 29 or more days.
Here is a great article: https://help.pricelabs.co/portal/en/kb/articles/using-pricel...
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Ryan Daulton
OP
New to Real Estate · Princeton, TX · Member since 2024 · 84 posts · 26 votes
2y
Is a Pricelabs comp-set called the revenue estimator on their website?
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Nick ZupecPro Member
Investor · Saint Joseph, MI · Member since 2022 · 31 posts · 44 votes
2y
Quote from @Ryan Daulton:

Wow, FF is working for me now too! Another idea I had was to ask area property managers how much they think the going rate is for MTRs. The FF rates in my zipcode are higher than I expected and their quality is less than what I'm bringing online! How could I determine how much demand there is?
Determining demand can be tricky too if you don't already have an MTR in that market. If you know a good PM that does MTRs, that's a great route to go. Take them to coffee and pick their brain. We haven't found many PMs in our area that do much with MTRs (they are all either LTR or STR focused). We didn't have any idea if there was demand in our market so we started with one property just to see how it would go and it booked in 2 days. We added a 2nd one and both were solidly booked so we added 2 more haha. We are in a small market so we were very surprised to consistently fill 4 and now we are looking to do 4 more.
That may not be the best strategy given the cost of getting an MTR set up, so here is another approach. Look on Furnished Finder at your market 8 or 9 months in advance. I wouldn't expect much to be booked yet that far out. Find a few properties that are your closest competition (similar size, location, finishes). Then reset your search to 2 weeks out and see how many of them are still available. If they are all booked, there should be plenty of demand for you. If most of them are available, I would be a little more concerned. You could do the same thing with 30+ day stays on Airbnb. While it is variable, most of our booking requests come around 4 weeks in advance.
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Ryan Daulton
OP
New to Real Estate · Princeton, TX · Member since 2024 · 84 posts · 26 votes
2y
This is a marvelous idea!
0 Reply
Nicole Heasley Beitenman
Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
2y
When I was starting, I found a resource in FF that suggested pricing $300-500 above LTR rates. I started at $500 over LTR rates and bumped it up $50 in between each tenant until I felt like I hit the ceiling.
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Miguel Del MazoPro Member
Northeast Georgia · Member since 2023 · 140 posts · 170 votes
2y
Nick and Nicole are offering great advice. MTRs are not LTRs or STRs,but rather they are their own little hybrid.
My take on this is to underwrite purchases based on expected LTR rents (I like rentometer and the BP's own rental estimator), but start charging 1.5x that rent for your MTR. Go up as you are able between tenants. Our experience has been that most tenants book about two weeks out from a vacancy, so don't slash the price of your MTR too soon to your next ecpected vacancy(you will get nervous, I promise). Respond to "unmatched housing requests" as well as other tenant leads. You may learn a lot of valuable information about what people are looking for in your area. Lastly, running an MTR is partially hospitality (like STR), but it is also a sales position (like all commerce). Anyone in sales knows, you are going to have to be prepared for a lot of "Nos" to get to the "Yes".
3 Reply
Vivian Yip
Specialist · Austin TX · Member since 2018 · 82 posts · 55 votes
1y
Did you find your answer? My favorite way is is simply using Pricelabs using a comp set, OR using Airbnb itself to see what your direct competition is. You can have more upside if you allow pets!
1 Reply
Gregory SchwartzBusiness Member
Rental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes
1y
The most accurate way is to network with other investors in your market. Each strategy produces slightly different rent rates. Chat with them, and ask them where they find their guest (Airbnb, Furnished Finders, Insurance claims, etc). The software doesn't provide that level of granular detail that can mean the difference between 2k and 3k a month.
[email protected]443-812-0357
Schwartz Realty Group5117 Reviews
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Ryan Daulton
OP
New to Real Estate · Princeton, TX · Member since 2024 · 84 posts · 26 votes
1y
Quote from @Vivian Yip:

Did you find your answer? My favorite way is is simply using Pricelabs using a comp set, OR using Airbnb itself to see what your direct competition is. You can have more upside if you allow pets!
Yes I found my answer. I found that it is highly dependent on location and secondarily on time of year. Right now is about the worst time to look for new tenants because there's not much demand. But during the summertime I can increase rents between tenants
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Chris Seidler
Investor · Dayton, OH · Member since 2023 · 14 posts · 13 votes
1y
Our market is relatively small and rural so I have a good idea of what is available based on looking at comps: a few minutes on Zillow, Airbnb, Furnished Finder and Realtor.com tell you what the comps are.
In our area a comparable LTR is maybe ~$800/month. We can charge about +50% in the off-season and +100%ish in the peak season. Realistically around $1200/$1600 although. Typical utility bills (which we include) are $100-300/month. The place is furnished and with 7 year deprecation (hah!) that's worth one or two hundred bucks a month too. So in reality our MTR rent -- especially in the off season -- pretty much covers the utilities, furnishings deprecation, and another hundred bucks or so, at least in the off-season. In the peak season the math is better.
We started charging MTR a bit more for the four biggest holiday weekends of the year. The tenants have paid and if someone is thinking about moving out then an extra surcharge that hits if they aren't out in time for us to turn the place for a lucrative AirBNB short term rental can help massage the move out timing.
That said with MTR we do not have the cleaning costs that eat up a lot of STR gross, and its lower hassle in some ways. And it gives us a lot more flexibility than a LTR which in our particular case is nice.
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Brad GibsonPro Member
Rental Property Investor · Midland, TX · Member since 2016 · 185 posts · 180 votes
1y
Quote from @Nicole Heasley Beitenman:

When I was starting, I found a resource in FF that suggested pricing $300-500 above LTR rates. I started at $500 over LTR rates and bumped it up $50 in between each tenant until I felt like I hit the ceiling.

This is great advice. We did exactly this and are now on our 10th MTR. Some were purchased specifically to be MTRs & others were conversions when it made sense. Start a specific amount above the going rate for LTR's. Then incrementally move up. You'll find your ceiling where people snag your unit and are happy versus it sitting empty. If you've got people fighting over your listing and competition trying to get into the unit, then you're too low.
We tend to stay just below our competition with a superior product. It allows us to be picky on who we rent to and pass on those who would seem to be PITA or a risk for not taking care of the place.
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Brad GibsonPro Member
Rental Property Investor · Midland, TX · Member since 2016 · 185 posts · 180 votes
1y
Quote from @Miguel Del Mazo:

Nick and Nicole are offering great advice. MTRs are not LTRs or STRs,but rather they are their own little hybrid.
My take on this is to underwrite purchases based on expected LTR rents (I like rentometer and the BP's own rental estimator), but start charging 1.5x that rent for your MTR. Go up as you are able between tenants. Our experience has been that most tenants book about two weeks out from a vacancy, so don't slash the price of your MTR too soon to your next ecpected vacancy(you will get nervous, I promise). Respond to "unmatched housing requests" as well as other tenant leads. You may learn a lot of valuable information about what people are looking for in your area. Lastly, running an MTR is partially hospitality (like STR), but it is also a sales position (like all commerce). Anyone in sales knows, you are going to have to be prepared for a lot of "Nos" to get to the "Yes".

I would add to the "sales" portion of the advice above that timing is key. When people are looking...they're looking. So prompt responses to inquiries generally get the bookings. When a request or even an unmatched housing request come through on FF, we jump on it like white on rice. I send a text to introduce myself and ask if we can answer any questions about the listing or to support them in finalizing their booking.
We follow up with an e-mail reiterating the same information. The longer the time between their initial request and your response, the less likely you are to get a booking.
People do not tend to really start looking for a place two weeks before their assignment begins. Some are less than that if their agency is slow in finalizing things. Hold your nerve and don't slash prices unless you're seeing some extended time without bookings.
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