Compared to STR, MTR isn't a huge, expanding market

[Mitch Davidson]

I purchased a new primary residence in Asheville, NC in 2018, and the property included a 1-bedroom cottage. The cottage was an STR, in defiance of Asheville's rules, and I immediately converted it to an MTR (i.e., furnished monthly). At the time, the concept was rather unheard of, so it was an experiment. It's gone well though. After 4 and change years, one conclusion that I find myself sharing often is that even in a market like Asheville, a magnet for relocation, the number of potential tenants is rather small, and likewise that that pool is not as elastic as that of STR. Meaning, with STR, growing awareness of the concept has created more and more customers (i.e., more and more people are trying out the guest experience). With MTR, however, I don't believe the pool of potential customers can grow as dramatically, even with increased awareness. With STR, anyone with the money can be your next guest. With MTR, the next guest is only someone who is leaving their current home, for a while or more often for good; and is someone who wants a furnished place, who is okay storing personal belongings elsewhere, who wants the place for just a few months or so (and typically doesn't know how long), and who is comfortable with the risk that the landlord is likewise month-to-month in their commitment. Thus, I wouldn't be too quick to assume that MTR is a great idea for the next property in the market you're targeting, and would research the competition quite a bit before making the plunge. Many underwhelming STR's have been converted to MTR lately, after all. And in your market that trend may continue.