Decline in midterm rentals bookings or rates?

Question

My condo is always booked as a MTR, however my current tenants move out in less than three weeks and I have no tenants booked after that. Getting nervous, what should I do? Lower my rate? Is there a way to see local trends in our market?

Conner Olsen · Answer

List your property on Airbnb, VRBO, FB Groups, and Furnished Finders. Make it pet friendly if possible, and drop your rate a a few dollars a twice a week.

Luke Stewart · Answer

@Micah Smith To confirm some previously stated information, its getting to the winter season and that slows things down. I was operating at being booked 3 months out and now its about 1 month out. I found my next renter on furnished finder and I did a few things. First I dropped my price on all platforms, less cash flow beats negative cash flow everyday. I then started reaching out to people searching. I went through every "possible lead" on furnished finder and messaged them all about my place and why it could work. I kept it short and sweet and said I wanted to help them find the right place even if mine didn't work out. I messaged maybe 20 people, ended up having real conversations with about 8-10 and the one I booked ended up coming back to me after these conversations.

So my biggest suggestion is to GO FIND THE TENANT. Anyone denying that STR or MTR has slowed (I am very bullish on MTR long term) is ignoring the writing on the wall. I think by being professional and having conversations with these prospective tenants they saw a landlord who was kind, respectful, communicative, and easy to work with. It's not 2021 anymore when tenants would just fall out of the sky, but they are there. A little time sending messages can go a long way. Best of luck!

Brant Jones · Answer

Thanks @Jonathan W.

The ordinance passed last October https://www.sharemorrobay.com/...

We have been visiting MB at least 3-4 times a year for the past two decades, and almost always opt to stay at a vacation rental. Summer time is always busy. I will say the neighbors tend to keep a watchful eye so I'd rather stay on the up and up with the City. I read somewhere there is a tiered fine system for STR violations that get more severe with each infraction.

Lots of options outside of STR. Just looking for the right mix that will offset carrying costs and allow us to enjoy the property once in a while.

Brant Jones · Answer

Exactly @Jonathan W.!

I am looking specifically at Morro Bay for a MTR since STRs are nearly impossible to operate thanks to the new Coastal Commission rules that went into effect. When not rented, we would use it for extended weekend getaways. It is a bit of a drive from the larger hospitals in the area (SLO, Atascadero, etc.) but I am hoping that being at the beach when not at work will be a draw for traveling professionals and digital nomads.

What trends are you seeing in the city related to MTRs?

Brant Jones · Answer

Hi @Micah Smith,Is your MTR in SLO or the surrounding area? I am selfishly asking as I am about to submit an offer this week on a property in a nearby beach city. :-)

-Brant

Conner Olsen · Answer

My lead time is typically 2-3 months and right now it is 1-2 weeks. It's a slower season but make sure your property is set up correctly.

Jon Martin · Answer

Hi @Brant Jones I haven't really asked around in person but the stats look pretty good for occupancy https://www.furnishedfinder.co...

791 out of 19K+ cities is pretty solid, around the top 5% mark. Seeing a lot of options (~30) starting the 1st of the new year, and if you allow pets it narrows significantly. Bump it up to Dec 1st and the numbers halve, and summer should be pretty easy to book.

That said after looking at some comps I'm not super impressed with the revenue compared to LTR. My 2/1 could probably rent for $2.5-3K as an LTR and the tenant would pick up the utilities. Water bills are insane here ($220+ for 2 people with minimal outdoor watering), so all in with internet, gas, trash and electricity that's roughly $500 month. Buying in at today's prices and rates doesn't seem all that lucrative.

Do you have a link for the recent ruling? Depending on the penalty you could always chance it during high season and go back to MTR as needed. From what I can tell the fine is relatively small.

Chris Vargas · Answer

Are your typical tenants travel nurses or students? You may have to use a little creativity and research your competitors and offer different amenities that they do not offer.

Jon Martin · Answer

Asking for a friend! Lol

Morro Bay resident here, happy to answer any questions about the surrounding areas.

Conner Olsen · Answer

You can also list it on Zillow and apartments.com. The bookings will come, make sure you’re priced right. Rates are seasonal!

Decline in midterm rentals bookings or rates?

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