Insight on Mid-Term Rental Arbitrage in the Bay Area

San Francisco, California
Medium-Term Rentals
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Insight on Mid-Term Rental Arbitrage in the Bay Area

Aaron Dixon
New to Real Estate · Bay Area, CA · Member since 2022 · 28 posts · 19 votes

Hello BP Commuittee,

I've lived in the Bay Area for about a year and a half now and am beginning to research opportunities to host MTRs along the peninsula. Primarily between from Redwood City to Sunnyvale.


It goes without saying that without a massive downpayment to purchase a unit the numbers just don't pan out. This leaves me to lean towards arbitrage for a lower entry point while gaining some experience. 


I'd greatly appreciate any thoughts and insight on those who are finding success in the area. What locations and property types are performing best? What tenets do you typically attract? What roadblocks/issues tend to pop? 


Thank you in advance for any help!

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Allen DuanPro Member
Property Manager · Los Angeles, CA · Member since 2022 · 590 posts · 463 votes
9mo

Hey Aaron! I assume you're looking at the Bay Area because you're trying to stay local to where you live right? That does make it easier when you're getting started because you'll be doing a lot of things yourself to learn.

We used to do a lot of arbitrage MTR properties in SoCal where I'm at and I'm assuming the economics are similar in your market. Long story short: because of the high long-term rents, there's very little margin with a MTR arbitrage property or business. 

We had 10+ MTR arbitrage properties a few years ago and we moved out of all of them over the past few years. Some were losing money. Some were only making a few hundred a month. It wasn't worth it for me because I do MTR property management now but maybe that's worthwhile for you depending on your goals.

My advice for your next step is:

  1. Figure out the ballpark for a typical property in your market how much it rents for as an MTR
  2. Figure out your expenses: the rent, utilities, supplies you provide for the tenants, insurance
  3. Account for 75% occupancy and see how much money you make
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  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 924 votes
    9mo

    @Aaron Dixon

    Aaron, welcome! For mid-term rentals, the Midwest offers some strong opportunities with lower entry costs, solid cash flow, and easier tenant management compared to high-cost coastal markets. Many investors are successfully running 30–90 day rentals with stable demand from traveling professionals and corporate tenants. If you want, I can share examples and market intel to help you see what works in Midwest markets for mid-term rentals.

    [email protected]614-418-6081
    0Reply
  • Alfath AhmedBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2022 · 1k+ posts · 1k+ votes
    9mo
    Quote from @Aaron Dixon:

    Hello BP Commuittee,

    I've lived in the Bay Area for about a year and a half now and am beginning to research opportunities to host MTRs along the peninsula. Primarily between from Redwood City to Sunnyvale.


    It goes without saying that without a massive downpayment to purchase a unit the numbers just don't pan out. This leaves me to lean towards arbitrage for a lower entry point while gaining some experience. 


    I'd greatly appreciate any thoughts and insight on those who are finding success in the area. What locations and property types are performing best? What tenets do you typically attract? What roadblocks/issues tend to pop? 


    Thank you in advance for any help!


     You are better off looking into the midwest. Find a better market where it is landlord friendly and has both cashflow/appreciation. I'd look at cities where large tech companies from the west coast are investing. 

    [email protected]614-802-5698
    ReafCo | Ahmed Group 530 Reviews
    WebsiteView Page
    0Reply
  • Kerlous TadresBusiness Member
    Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
    9mo

    Hey @Aaron Dixon, from my experience, MTRs work best when you're close to strong job hubs and hospitals, since most demand comes from travel nurses and short-term contractors. If you're doing arbitrage, make sure the owner is truly on board, the lease allows it, and the rent-to-MTR spread is wide enough to stay profitable even with a few slower months.

    [email protected]614-490-1163
    Kerlous Tadres | Reafco Real Estate540 Reviews
    WebsiteView Page
    0Reply
  • Allen DuanPro Member
    Property Manager · Los Angeles, CA · Member since 2022 · 590 posts · 463 votes
    9mo

    Hey Aaron! I assume you're looking at the Bay Area because you're trying to stay local to where you live right? That does make it easier when you're getting started because you'll be doing a lot of things yourself to learn.

    We used to do a lot of arbitrage MTR properties in SoCal where I'm at and I'm assuming the economics are similar in your market. Long story short: because of the high long-term rents, there's very little margin with a MTR arbitrage property or business. 

    We had 10+ MTR arbitrage properties a few years ago and we moved out of all of them over the past few years. Some were losing money. Some were only making a few hundred a month. It wasn't worth it for me because I do MTR property management now but maybe that's worthwhile for you depending on your goals.

    My advice for your next step is:

    1. Figure out the ballpark for a typical property in your market how much it rents for as an MTR
    2. Figure out your expenses: the rent, utilities, supplies you provide for the tenants, insurance
    3. Account for 75% occupancy and see how much money you make
    1Reply
  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 924 votes
    9mo

    @Aaron Dixon

    Hi Aaron, for someone starting with medium-term rentals, the Midwest can be a great alternative to high-cost markets like the Bay Area. Property prices are much lower, cash flow is stronger, and it’s easier to acquire multi-family or single-family homes that actually generate positive returns without massive down payments. Tenants are easier to find, turnover is lower, and you can scale more efficiently, especially with good property management handling operations remotely. It’s a practical way to build experience and a portfolio without the financial pressure of expensive coastal markets.

    [email protected]614-418-6081
    0Reply
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