How to convert LTR to mid-term

Question

I have a duplex for LTR but it's not cash-flowing well. Wondering if switching to mid-term would help and if there are platforms that would make the switch easy.

My property is in Converse near San Antonio.

Drew Sygit · Answer

Try Furnished Finder and put on Airbnb & VRBO with minimum 30 day stays.

You will have an upfront expense for furnishings.

Magenta Vaughn · Answer

Hey there, I converted 3 of my 4 ltrs into a combo of str/midterms. That way in the summer I can maximize income and pivot to mtr in slower months. I found that because I was using a property management company, although I started bringing in A LOT more money, i was KEEPING LESS. The property management collects 50/ of the first month with every new tenant. Long term you have 0-1 tenant a year for them to collect half f first months rent/placement commisison. But when you have mid term stays, its more like 3-4 tennants each year. So that means I lost 50% 3-4x a year! This one small detail I did not account for added up to huge loses. I spent SO MUCH on decorating and furnishing. So def look at your options with managers and do your research. Some markets will have a higher mid term earning potential, so I would research which markets have lowest supply vs demand. I hope you're able to learn from my mistake. <3

Vivian Yip · Answer

The fast napkin math is that your MTR rent will be about 1.5-2x LTR rent. I always advise my students to have an omni presence:  be all over the place.  Different platforms attract different kinds of guests and it just depends on the size of your place and the location.  For furnishing, I would place a priority on comfort.  I really love the Helix Luxe Midnight mattress that you can get for a reasonable price on FB marketplace. They are gently used or returned and resold. A Queen bed at re-sale price is often $550 which is a great deal for a retail priced bed of $2400! Then you can advertise that you have a high end brand for bedding!I recommend to furnished corporate style, like a Marriott Residence Inn would. -White sheets, towels-White matching dinnerware-Matching glassware-Good cookware-Blackout curtains-and more. Decorate timelessly with bold splashes of color. The photos need to be professional for the best chance of success!Good luck!

Bill B. · Answer

What do most MTR not include that STR does? Do you pay for utilities, household supplies, cleaning, I assume towels/linens and bedding? I was assuming your provided the same as STR but then wasn’t sure about utilities. I’ve seen people talk about getting $400/mo more in rent not considering that utilities might run that much. Thanks.

Keenan Cromshaw · Answer

I would talk to local property management companies and see what they say as well. I used to have an Airbnb near downtown San Antonio and would get inquiries from travel nurses and military members a decent amount, but I was also relatively close to JBSA and a few major hospitals. The healthcare traveling industry is also nowhere near its peak, so I would do some thorough research about rental rates, vacancy rates, surrounding hospitals and/or bases to see about who would potentially rent from you. (and look up comps on furnished finder and facebook marketplace).

Also you must ask, how long will the extra cash flow take to recoup the furnishing cost? It took at least $5k to furnish my 3/2.5 1500sqft home, so it would take $400 extra/month to just break even in a year. Hope that helps!

Emily B. · Answer

I just converted one unit of a quad to a MTR. It's a small unit-- 600 square feet -- and I budgeted $5k for furnishing it (roughly $8 a square foot). I fell just under budget. What I hadn't budgeted for was the repairs and cap ex needed to level it up to MTR condition (MTR renters expect STR like conditions). The previous tenant, like all tenants, had banged up the place. The painting and repairs cost another 3k. The question is, does the cash flow merit that kind of expenditure? It might not, especially if you factor in a 25 percent vacancy rate (which you should).

Allen Duan · Answer

Hi Fiona!

The answer to your first question about whether renting the property mid-term would help with cash flow is most likely yes. A lot of MTR owners are doing this strategy for that exact reason. An easy way you can quickly check is to look for comps on Airbnb and Furnished Finder to see what kind of rates they're getting as a MTR.

For your second question, by platform, if you mean somewhere to list and market the property, Airbnb and Furnished Finder will get you the most leads. But these listing platforms would not help with the switch per-say. The hardest part about going from LTR to MTR is the furnishing expense and labor if you're doing it yourself. Often, investors are comparing the additional cash flow they would get with MTR to the upfront cost of setting it up to determine how many months it would take to pay off that furnishing expense. It's up to you to decide what makes sense for you and your goals.

Let me know if I can help with any of your MTR questions. I can also help you find an MTR operator in San Antonio if you'd like to learn more about your specific market.

Nadeem Alamgir · Answer

@Fiona PrudhommeSwitching to mid term can work but you'll be more hands on unless you hire a managment team. It’s basically Airbnb with longer stays. You’ll need to furnish the unit, manage turnovers, and budget for higher expenses and vacancy. You can usually charge higher rents, especially if you target the right audience. Furnished Finder and Airbnb are the main ways platforms for MTRs.

How to convert LTR to mid-term

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