Analyze medium term rentals

[Martin Navarro]

How do you analyze a property for a medium term rental? Do you use any tools such as Airdna? Price labs? How do you find potential revenue, vacancy rates, etc

[Garrett Brown]

Hey Martin, welcome to the forums! I've used a mix of AirDNA, Pricelabs, and Rabbu when looking at deals, but these are not the end-all. I would also look at long-term rentals in the area with a trusted agent or even just browsing Zillow. AirDNA is good if you pinpoint a specific area where MTRs are more dominant. I would also browse Furnish Finder and see what rates pop up there. MTRs are a lot about location and proximity to businesses that bring in workers for these types of stays. 

[Garrett Brown]

Hey Martin, welcome to the forums! I've used a mix of AirDNA, Pricelabs, and Rabbu when looking at deals, but these are not the end-all. I would also look at long-term rentals in the area with a trusted agent or even just browsing Zillow. AirDNA is good if you pinpoint a specific area where MTRs are more dominant. I would also browse Furnish Finder and see what rates pop up there. MTRs are a lot about location and proximity to businesses that bring in workers for these types of stays. 

[Miguel Del Mazo]

You are asking the classic question in the MTR space: how does one evaluate what could be a good MTR.

Unfortunately, MTRs are at a point similar to where STRs where 10-12 years ago, and there really isn't a one stop shop source for great data. That's frustrating. The good news is that just like STRs used to be less professionally run back in the day, so are many MTRs. That means you can distinguish your listing by being responsive and courteous while providing a quality product.

To more directly answer your question, while there isn't a great website for MTR data, I do estimate MTR rents with either the BP rent calculator or rentometer.com's and then multiply by 1.5x as a screening tool. If the math won't work there, then the deal is probably not going to be worth a deeper investigation. Another useful estimate is to assume that a long-term property's cash flow should be $100 at a minimum after *all* expenses and saving for long-term needs ("CapEx").

I will apply the same logic to a possible MTR. If after adding the additional monthly recurring costs (electricity, gas, water, internet, insurance, lawn care, snow plowing, etc.) to the standard long-term costs (Mortgage, taxes, regular insurance, etc.) the property won't net at least $100 if I can get the average rent I see on FF for that area, then the property isn't worth more investigation. This should be a pretty low bar to overcome for a property, and any upside is appreciated, of course.

[Wes D.]

Hi Martin! Like @Miguel Del Mazo I collect LTR data from BP rent calculator and multiply by 1.5x. Then I get STR data from AirDNA to ensure it's well above 1.5x LTR data. And lastly, I search FunishedFinder listings nearby, find comparable properties, and track the listed rent for a few months (does it increase, decrease?). Of course the listed price may not be the actual rented price, but by tracking several listing for a while you can gain a better understanding of the market.

I hope this is helpful, all the best!

-Wes

[Bonnie Low]

If you haven't already read it, I'd recommend you pick up the book 30 Day Stay by Zeona McIntyre and Sarah D. Weaver. They literally wrote the book on midterm rentals and cover how to analyze markets. You also need to have a thorough understanding of who is traveling to your area and why so you can make sure your property is suitable for travelers.

[Armando Gomez]

I am also looking for a midterm or if short turn  is my area 

[Armando Gomez]

Quote from @Bonnie Low:

If you haven't already read it, I'd recommend you pick up the book 30 Day Stay by Zeona McIntyre and Sarah D. Weaver. They literally wrote the book on midterm rentals and cover how to analyze markets. You also need to have a thorough understanding of who is traveling to your area and why so you can make sure your property is suitable for travelers.

 OK, will read the book 30 stay by Zeona McIntyre and Sarah D Weaver

[Miguel Del Mazo]

Quote from @Bonnie Low:

If you haven't already read it, I'd recommend you pick up the book 30 Day Stay by Zeona McIntyre and Sarah D. Weaver. They literally wrote the book on midterm rentals and cover how to analyze markets. You also need to have a thorough understanding of who is traveling to your area and why so you can make sure your property is suitable for travelers.

I can only recommend "30-day Stay" if the book is on significant sale. Unlike a lot of BP publications, it's really more of an extended pamphlet with some good pieces of information, but if it is "the book", it's only because it's the "only book".

The chapters are approachable and reader-friendly, but you won't find any nuggets of golden information within the pages if you already listened to the authors' appearance on the BP podcast.

[Jamie Banks]

There's no one way to analyze MTRs. Unlike STRs, a platform that analyzes vacancy, pricing, etc. does not exist. 

I'm an operator who works in a few markets and one of my virtual assistants pulls data and comparable properties from Furnished Finder, Airbnb, and other sources for data. From there I look at changes over time, a lot of times the STR data can give you a lot of insight on MTRs. For example, if there's more smaller units on the OTAs then it can be a good indicator to purchase larger units for MTR since there's less inventory of larger units.

Essentially, you'll have to pick apart the STR data. Here's a screenshot of the data I pulled together on one of my markets. My business uses Monday.com to track the data which then will create graphs and other visualizations

[Bradley Buxton]

@Martin Navarro

You can analyze them as a long-term rental. If the MTR strategy does not work out you can still keep it as a LTR. The main difference is you'll have startup costs and higher vacancies. The income might not be high enough to offset the initial cost, management, and turnover. STR you can get a higher premium. It's very market-dependent. In the Reno, NV market the midterm doesn't bring in much more income than an LTR unless you're in a more tourist area but then you're paying more for the initial costs. Just like any strategy it depends on your goals and how a MTR fits into those and your other investments.

[Gabe Chase]

Quote from @Jamie Banks:

There's no one way to analyze MTRs. Unlike STRs, a platform that analyzes vacancy, pricing, etc. does not exist. 

I'm an operator who works in a few markets and one of my virtual assistants pulls data and comparable properties from Furnished Finder, Airbnb, and other sources for data. From there I look at changes over time, a lot of times the STR data can give you a lot of insight on MTRs. For example, if there's more smaller units on the OTAs then it can be a good indicator to purchase larger units for MTR since there's less inventory of larger units.

Essentially, you'll have to pick apart the STR data. Here's a screenshot of the data I pulled together on one of my markets. My business uses Monday.com to track the data which then will create graphs and other visualizations

Completely agree with Jamie. It is a bit of a bummer. We manage about 67 units in Indianapolis. Most are STR. But we have a handful of MTR and there is no data software.. It just means you have to pull numbers yourself, but they won't be as accurate as Airdna, Rabbu, etc. Most of the time you can look on FF and see what is available and also what isn't available until X date and that helps narrow it down. Also, you may sign a lease quickly, meaning there is room for a rent increase on the next lease!