Mid-term rentals (where to start)
New to Real Estate · Benson, MN · Member since 2021 · 39 posts · 13 votes
Mid-term rentals (where to start)
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Member since 2020 · 3 posts · 9 votes
2yMy daughter and I have an MTR. Fully furnished, utilities included, close to hospitals and colleges. We rent through FurnishedFinder and that has worked great. One strategy we employ is to give preference to those who are from out of the area and here for a set period of time (and then presumably leaving back to where they are from). In that way, they appreciate everything being turnkey, with no need to buy linens, kitchen ware, and furniture nor set up utilities. Also, we can be relatively sure that they won't overstay without permission, as we tend to be fully rented for a year or more out, sequentially to 3-4 separate individuals. Lately, we've had a great deal of luck with one particular university referring us to visiting professors who are often from overseas and in to teach for a semester. It's worked great and we have had success with the strategy. I should also mention that this property is a microloft (<300 sq ft) so fits just a single individual. We are priced right and we clear about $1000 a month after expenses.
11 Replies
- 2yAllen DuanPro MemberProperty Manager · Los Angeles, CA · Member since 2022 · 590 posts · 463 votes
Hey Brady! MTRs is what I do =)
Any specific questions you have? I'm can record a Loom video response for you.
Like any business model, you have to start with identifying the customer and where the demand is. The MTR strategy can work in most urban markets, there are so many types of tenants that need a MTR. Do you have a specific market you're leaning toward? If so, do some research on the market by checking comps on Airbnb and Furnished Finder. Tools like Airdna and Pricelabs can help too, you just need to filter out STRs.
Let me know how I can help
- Member since 2020 · 3 posts · 9 votes2y
My daughter and I have an MTR. Fully furnished, utilities included, close to hospitals and colleges. We rent through FurnishedFinder and that has worked great. One strategy we employ is to give preference to those who are from out of the area and here for a set period of time (and then presumably leaving back to where they are from). In that way, they appreciate everything being turnkey, with no need to buy linens, kitchen ware, and furniture nor set up utilities. Also, we can be relatively sure that they won't overstay without permission, as we tend to be fully rented for a year or more out, sequentially to 3-4 separate individuals. Lately, we've had a great deal of luck with one particular university referring us to visiting professors who are often from overseas and in to teach for a semester. It's worked great and we have had success with the strategy. I should also mention that this property is a microloft (<300 sq ft) so fits just a single individual. We are priced right and we clear about $1000 a month after expenses.
- 2yMiguel Del MazoPro MemberNortheast Georgia · Member since 2023 · 140 posts · 170 votes
Welcome to the cool-kids club :)
I agree with Allen above. Since it doesn't sound like you have a property already, that means you can pick exactly where you want to be. Define who you want to serve, and then determine which market offers you the best chance to provide the housing they need. You then need to advertise to the avatar you've identified as your target.
For instance, a traveling professor from Europe may love the simplicity of a 300 sqft microloft, but a family displaced by a fire will not. Conversely, advertising a 4/3, beautiful single family home to single traveling nurses (a pretty price-aware demographic post-Covid) may not work as well.
When I go on ff.com to see what is out there in my area, I too often see units that are marketed to "everyone". Since you will only need to fill a unit 4-6 times a year, really focus down on who you are trying to attract. If you don't have the property yet, buy with this end in mind.
Best of luck. There's a great community here in these forums, so always feel welcome to ask questions.
- 2yWes D.Pro MemberInvestor · Northern Kentucky | Northern Virginia · Member since 2022 · 46 posts · 39 votes
Hi Brady! As you consider MTRs, I recommend reading 30-Day Stay by Zeona McIntyre and Sarah Weaver, published by BiggerPockets. They provide excellent, practical advice on every aspect of MTRs including cost metrics, location strategies, market data sources, needed furnishings, and more.
For market pricing, 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 listings for a while you can gain a better understanding of the market. For assessing demand, go to FurnishedFinder.com/stats and you can see demand data for a given city.When I was trying to determine demand for our area, I selected about 20 listings near the location I was focused on, and tracked them for several months. If it gets rented the owner will update the listing with a new available date; if this moves by 30 days or more you can reasonably assume it was rented. If it moves a few days after reaching the available date, it probably hasn't rented yet. Tracking several for a few months will give you some understanding about vacancy rates. Also note if the listed rent changes. Our actual vacancy of less than 10% has closely tracked the data I collected this way.
For furnishings, we bought Sarah Weaver's MTR shopping list. It's detailed, thoughtful, and specific with links for each item making it fast and easy to find and purchase everything you'll need. We spent about $9,500 on furnishings including furniture, electronics, kitchenware, bedding, towels, etc. for our 2/2 condos.
Lastly, Furnished Finder is known for providing tenant leads for travel nurses (about 40% of their travelers are nurses), but a broad range of professionals, relocations, students, and others use it too.I hope this is helpful to you, all the best!
-Wes - Real Estate Consultant · Reston, VA · Member since 2022 · 513 posts · 521 votes2y
Hey Brady! I would suggest connecting with an operator in your intended market. As someone who has operated in close to 10 different markets, I can tell you that each market is unique in the MTR industry. A local connection will be able to tell you local regulations, pricing, the types of tenants to cater to, etc.
- Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes2y
Hey @Brady Ascheman,
Great to see you're exploring mid-term rentals! They're definitely an appealing option, especially when long-term rentals aren't cash flowing as well. Here’s a good starting point:
- Identify Your Target Market: Mid-term rentals typically cater to groups like traveling professionals, digital nomads, or people relocating for work. Research areas where there’s demand for these renters—proximity to hospitals, business hubs, or universities are great places to start.
- Furnishing the Property: Most mid-term renters expect fully furnished places, but not to the same extent as short-term rentals. You'll need to provide the essentials without going overboard on luxury items. Think practical and comfortable.
- Lease Structure: Mid-term rentals typically run anywhere from 1 to 6 months, so having flexible lease terms is key. You can charge higher rates than a traditional long-term lease, but ensure your pricing aligns with the demand in your area.
- Marketing: Platforms like Furnished Finder, Airbnb (for longer stays), and even Zillow can help you get exposure. You might also want to network with local businesses that may have relocating employees or contractors in need of housing.
- Local Regulations: Some areas have different rules for mid-term rentals than for long-term or short-term rentals, so make sure you're compliant with local laws.
If you're new to mid-term rentals, connecting with investors or property managers already working in this space can be invaluable. A good network will help you fine-tune your approach and avoid common pitfalls.
Hope this gives you a solid foundation to get started!
Best of luck!
- Pittsburgh, PA · Member since 2015 · 24 posts · 4 votes1y
Hey Brady - we are doing MTRs and I'd be happy to connect
- 1yJonathan StyerBusiness MemberReal Estate Broker · Columbus, OH · Member since 2018 · 330 posts · 396 votes
Quote from @Brady Ascheman:
Hi everyone,
I have recently found it very difficult to find any long-term rentals that will cashflow. I have been looking into trying mid-term rentals due to the increase in rent that you can charge, but I don't know where to start. Was looking to connect with anyone that is already doing mid-term rentals so I could pick there brain on the topic. Thanks!
Hi Brady,
I have built my business around this concept. I found it harder and harder to find cashflowing LTRs for my out of state investor buyer clients. Once I transitioned to an MTR model where we can be a one-stop-shop here in Columbus my clients are doing much better with cashflow.
We often see 2-2.5x in gross rent from market LTR rent and where it really works is in Multifamily. We manage a 4 unit that the owner bought for $420,000 and he is grossing over $10k per month with MTR.
One consideration is your expenses are higher and you do have the cost to furnish, so it's not all sunshine and roses, but if you buy it right you can do really well. I also help a lot of clients buy multifamily and they will split up strategies as a hedge, like 2 MTR and 2 LTR. We also sometimes do they hybrid approach with MTR/STR.
Happy to answer any questions!
Styer Real Estate Professionals4.941 Reviews - Property Manager · Indianapolis, IN · Member since 2024 · 45 posts · 24 votes1y
Hi Brady! We manage MTRs in Indianapolis. As others have mentioned, a good starting point is identifying your target tenant. Many of our tenants are traveling healthcare professionals, so it helps that a majority of our units are close to hospitals. We offer fully furnished rentals with all utilities included in the monthly rent, which allows us to charge a bit more. Our stays have a 30-day minimum, though tenants often stay 3-6 months. Each tenant also signs a lease agreement for added security.
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