Positioning Between LTR and STR

[Don Konipol]

So, the medium term 30 - 90 days rental, usually described as for “traveling nurses” or 
"educators sabbaticals" fits the criteria of something different, or at least a different rental positioning than a LTR or STR. What other residential home rental positioning have you tried?

I’ll start it off.  In 2014 I got divorced, retained ownership of our high rise 2 bedroom 2 1/2 bath condo in Tempe, AZ (bordering ASU campus) and decided to move to NYC.  My research indicated that 12 month unfurnished rental would be in the $2500 / month range, while a 10 month furnished rental might fetch $4000 / month.  I decided to rent furnished, left the furnishings in place,  and hoped for the best.

Within 3 weeks I had two tenant applications.  Both were grad students at ASU, one wanted to rent with three other grad students; the other was renting alone, with the lease co signed by her father, an MD who owned three emergency medical clinics in Michigan, and willing to pay in advance on a 9 month lease. (Guess which one I went with).  We signed a 9 month lease for $3750 and other than the tenant not knowing how to work the ac, change a lightbulb, or work the electric shades, the tenancy went off without a hitch. (Btw, the tenant’s problems with some of the operations was MYFAULT, I neglected to provide written instructions which would have negated any issues).  At the end of 9 months the tenant asks if she can stay on another year as she will attend ASU classes in the summer.  She ends up as a tenant in fully furnished rental for six years, and left the place in as good condition as when she arrived.

By my calculations the rental rate, with increases some years, averaged about $1500 over non furnished rates. Or an additional $108,000. The home was of course fully furnished anyway as I had lived there for 2 1/2 years prior. The furnishings has cost $33,000. I would probably have spent significantly less had I furnished as a rental, but then again I may not have been able to get the rental rate I did if I "skimped". So let's go with the $33,000 cost of furnishings. When she moved out I put the furnishings with a consignment shop and ended up receiving over $6000 as my share of the sales. So by renting as a fully furnished rental with a lease accommodation the school year ( although ultimately the tenant decided to rent year round, she initially was looking for a school year lease), I was able to generate income above the LTR rate of$18000 annually, or $108,000, less the net cost of furnishings of $27,000, or $81,000. My ROI on cash flow alone went from 4% to 7%.

I'd love to start a discussion of strategies, positioning, etc investors have used or currently use to offer something different that LTR or STR.

[Jay Hinrichs]

we did this with our townhouse in Summerlin.  We knew we had to be full-time on our Oregon new build project instead of snow-birding.

Not sure what my wife spent on furnishing the 3 bd  2.5 bath unit .. Plus my office had a nice desk and I left my printer and scanner etc so someone could just plug in.

We had insurance company contact us about fully furnished  and rented to them first one lasted 14 months while their home got rebuilt.

then we had a few shorter term now we have one for a full year.. market rent 2.2  our income 4k  but we do pay utls and cable. So say about 1500.00 a month positive. I suspect the house was furnished for about 20k.. and if we sold it used we would have like you just got a fraction of what we paid plus the huge hassle of doing so.  Also I get a 5k security deposit one tenant put a hot plate or something on one of the Ottomans we took 750.00 to replace that. no issues  they knew it LOL.  So first year got our sunk cost into furniture back and now its just ginning along.

you get prime tenants when you charge double going rate and 5k security deposit.  I like this model very much.. not sure it works everywhere but Vegas for sure.