MTR Setting Up
Hello all, I am located in Phoenix Arizona. I am getting started in the midterm rental scene and wanted to gauge experience where anyone has started in setting up midterm rentals. I've spoken to two companies that does MTR but told me that you can only rent by the entirety of a unit and wanted to know as well if you can rent by the room if you have more than three bedrooms in the house?
You can rent by the room. If you log on to some of the popular sites like furnishedfinder or Airbnb you will see that they have "rent by the room" options. This is definitely possible unless there are some HOA restrictions that you have to work around.
@Julian Broyles I can't speak to phoenix area Property managers but if you need to have a PM manage your rental it is hard to get someone to manage rent by the room properties. Is that what you were told? they won't manage a rent by the room property? As far as I am aware you can rent by the room in phoenix, I am not aware of any unrelated persons ordinances but you can check with your municipality they are usually starting at > 3 people that is what I believe would limit rent by the room. There can also be boarding house regulations if you have alot of rooms in your property.
Renting by the room is going to be a lot more work for the ordinary PM. You're juggling personalities and people moving in and out at different times. Have you looked into the Padsplit model? They are expanding in Phoenix. I have no personal experience with them. But I see that they eliminate your living room and dining room, instead putting in more bedrooms. So they take a 4 bedroom house and make it a 6 or 7 bedroom, which will cost you money to do initially. They manage your house by renting the rooms by the week or month, with many rules that are supposed to help renters get along. One person per room, no children, no overnight visitors, etc. They claim they currently run 61 properties in Phoenix. Now I'm not saying have them to run your house, but at least research them to see how they do it, and the work and complaints involved. Here's a link to the latest AZ Real Estate Investors Assoc. newsletter, and Padsplit has been running ads every month with their latest total stats (February) in town, on page 4 here. https://azreia.org/wp-content/uploads/2024/04/AZREIA_APRIL-2...
I'm based in Scottsdale and have a MTR/STR in Tempe. I'm happy to discuss and share any knowledge that mind help you with your setup. Send me a message and I'm happy to discuss.
Hello! I agree that it's harder to manage by the room logistically (roommate dynamics, common area cleaning, etc) but it is allowed. You can check the ordinances in the city to confirm.
What makes you want to rent by the room vs the entire place? That's where I recommend you confirm - can you really make more money renting by the room vs the entire place? and is that worth the effort?
Quote from @Yiwei Cheng:
Hello! I agree that it's harder to manage by the room logistically (roommate dynamics, common area cleaning, etc) but it is allowed. You can check the ordinances in the city to confirm.
What makes you want to rent by the room vs the entire place? That's where I recommend you confirm - can you really make more money renting by the room vs the entire place? and is that worth the effort?
Rent by the room for midterm rentals. I was told by "friends" you can only do your entire home. I need new friends lol. But yes that's all I need to know, it's possible.
#1 Medium-Term Rentals Contributor
- Investor
- Cottonwood, CA
- 1,551
- Votes |
- 1,731
- Posts
#1 Medium-Term Rentals Contributor
- Investor
- Cottonwood, CA
Yes, you can rent by the room no matter how many bedrooms you have unless for some reason your local jurisdiction prohibits it. However, have you considered self- managing? For one thing, a traditional property manager is not likely to want to manage your property in a rent-by-room scenario. For another, the cost of management is going to seriously cut into or possibly eliminate any profit. Before you make any decision I'd recommend you read the 30-Day Stay book by Sarah Weaver and Zeona McIntyre to better understand the MTR niche. You want to make sure that your property type and location is suited to the type of travelers coming to your area so that you market it appropriately, price it appropriately and can be competitive.