Short Term Rental & Mid Term Rental Strategies for Raleigh-Durham NC

[Benjamin Carver]

If you're looking at buying a rental or house hack in the Triangle, then you should consider short term rentals.  Why? because we have a strong demand for them and great str laws.

The Triangle is visited year-round by travelling professionals in the research, medical, IT, and education space. We are in the top 10 fastest growing big cities right now, so families and singles are constantly flying in to check out the area.

Raleigh allows short term rentals if you apply for a license. Anyone can get one and it's a couple hundred dollars. Durham is even looser. Can regulations change? Of course. But 1) you're likely grandfathered in if they ever do, and 2) there are no talks or indications of changing directions on their stance. 3) long term rentals don't cashflow here, but our appreciation is super high. Airbnb gives you the best bet at getting both. 

Personally, I airbnb half of my house, individual rooms, and stay nearly 100% booked. I could tell you of countless others doing the same at scale. There is risk with any investment, anywhere, but airbnb does well here - if you buy the right place.

Locations: this is important. You want to be close to RTP (our economic hub) and the airport (located right by RTP). This is where people fly in, this is where jobs and internships are, and it's central to the entire Triangle. This is also (historically) where the best appreciation is, and our growth continues to feed that well past the covid boom. So I keep my eyes on North and North West Raleigh, Cary/Morrisville, South Point Durham, and Bethesda Durham into 27703.

Size doesn't matter as much with short term rentals. But it being updated and modern does, I bought an 84 and updated it myself (and guests RAVE about it). Ultimately the pictures combined with the location are what sells it.

You want to avoid HOAs at all costs. Townhomes and condos will not fly for this reason. A single family house with a small HOA can still present a lot of risk, so tread lightly. You'll likely see diminishing returns after 3 bedrooms unless you rent out individual rooms. Raleigh only allows 2 STR listings per house, but you could easily rent the others as mid-term through airbnb's platform (I do this). This is defined as 30 days or more, and you will easily find nurses, professors, students, and more than need a 1-3 month airbnb.

Speaking of, you could rent the whole space mid-term - and I suggest through airbnb or VRBO but you don't have to use those. You'll still make a premium over long term rental rates and not have to deal with a cleaner very often.

With airbnbs, the beauty is not having to hire a Property Manager, your cleaners act as eyes on the property. Good cleaners can restock and alert you of issues. Having a few good ones up your arsenal is crucial. Guests cover the cleaning cost. Of course, renting out the room and hiring a cleaner likely will make it too expensive for people to want to book your stay. I do by the room and house hack, and for now I self-clean (takes me 10 minutes) and make way better profit than if it were a whole house rental. 

Don't forget to run your numbers multiple ways. Conservative, aggressive. If a house hack, before and after move out. If STR, what about MTR, or LTR as a fail safe?

Starting is the scariest part. The moment the first payout hits your bank account, all that goes away. At least it did for me ;)

[Michael Baum]

Well there is somethings right here and some are off mark IMHO.

[Benjamin Carver]

Curious what you think I missed on Michael

[Michael Baum]

Hey @Benjamin Carver, so there are a lot of generalities in your statement that aren't always true.

Location is cool. It is specific to the area.

Size I believe does matter. Heads in beds means more revenue. Of course it all depends on pricing and what your target demo is. We are focused on families and want to sleep 10 or more. That precludes smaller places.

Modern is all dependent on the area. We would never do a modern style as we are all rural. Lake house, cabin feel, waterfront etc.

I agree that the best way to make money is self manage your short term rental (not AirBNB, that is a platform). You do have to get a good cleaner and handy person which can take some time.

I agree with HOA's. They are the devil. But just because it is 4 or 5 bedrooms doesn't mean diminishing returns. It all depends. In the greater Orlando area, more is better in every way.

The only reason I chimed in is a lot of folks might take this as gospel for any and all areas. I do know that you focused specifically on the "Triangle" but I wanted to create a conversation.

You left out Furnished Finder as the best way to find mid term renters. Often times, if they come in through VRBO or AirBNB, they are looking to get something at below market rates or market. These 2 platforms don't focus on MTR but vacation rentals so using Furnished Finder is a better way to get those longer term folks.

I have always been a bit concerned about the area's penchant for restrictions. I would be concerned long term that STRs could go away in some of those areas.

My 2 cents as always. Thanks for the post!

[Benjamin Carver]

@Michael Baum For sure! Let me clarify. My post was location specific to Raleigh, everything in the context of that. I titled this post based on that. So this is not a generalization to every market...

Furnish finder is awesome. But airbnb is my go-to, works great for my hybrid model. Airbnb started finding rooms, and does very well for renting rooms both STR and MTR.

You're right. Bedrooms matters, of course, the more the better. But STR has restrictions here (2 bedrooms in Raleigh) (hence the hybrid option) and there is often diminishing returns when it comes to price versus number of rooms in our market in the locations I focus on. 3 bedroom numbers often are stronger and more attainable price wise than 5 in core Raleigh. When I said size doesn't matter as much I meant for STR you don't need massive rooms, larger common areas, etc.

If you went MTR you might go further away from RTP and go for higher bedroom count, for less appreciation on average.

NOTHING about this post is gospel. Just my experience. 

[Brenden Goldman]

Thanks Benjamin for your insights. I’m also in Raleigh and will be looking to invest in a property soon. 

[Benjamin Carver]

Quote from @Brenden Goldman:

Thanks Benjamin for your insights. I’m also in Raleigh and will be looking to invest in a property soon. 

 Heck yeah brother. Reach out anytime

[Brenden Goldman]

Quote from @Benjamin Carver:

Quote from @Brenden Goldman:

Thanks Benjamin for your insights. I’m also in Raleigh and will be looking to invest in a property soon. 

 Heck yeah brother. Reach out anytime

 Thanks Benjamin, just shot you a DM!

[Abdul Ali]

Great post. I purchase my 1st multi family in Durham last sept, I was debating between str and long term, I went with str and I am loving it so far. 
my dec occupancy is 

Unit one 2b1b: 82%
unit 2 studio: 79% 

So far so good and already thinking of getting another one in 2025 🤤

[Benjamin Carver]

Quote from @Abdul Ali:

Great post. I purchase my 1st multi family in Durham last sept, I was debating between str and long term, I went with str and I am loving it so far. 
my dec occupancy is 

Unit one 2b1b: 82%
unit 2 studio: 79% 

So far so good and already thinking of getting another one in 2025 🤤

 These are great numbers for this time of year! Sending you a PM would love to see your listings