Is the rent by the room strategy good for MTR's (Nurses)

[Christine L Wagner]

Hello everyone,  I'm very intrigued by the rent by the room strategy for the cash flow and filling a need for workers who can't afford an apartment. Has anyone tried it for nurses, nomads etc.  Do you find that nurses prefer the entire unit or are they willing to rent a room?  I've been told that they don't prefer a room, but would love advice from the experts on this forum.  

Thanks so much in advance.

[Bonnie Low]

@Nicholas LaGatta I hear you, but I think it's like everything else in real estate. At one point all we heard about was multi-family and everyone tried to jump in. At first it was single family, then syndications, then STR, now MTR. To me it just highlights the versatility of real estate. Lots of ways to go depending on your goals and interests. I do agree with you, though, that MTRs are being hyped by a lot of people right now. A lot of that had to do with the high profile of COVID related travel nursing. People saw $$ signs, but the per diems for travelers are now nowhere near the COVID highs so this market has taken a bit of a hit. Simultaneously, a lot of people who jumped on the STR bandwagon and bougt over asking in an already crowded market are panicking and trying to pivot to MTRs because they hear it will generate more than LTR but less than STR. The$X problem is, not every home is suited to the MTR strategy. Unless you've tapped into the lucrative insurance or corporate rentals, you're mostly competing for travel medical professionals and digital nomads. So that 4 bedroom luxury home you bought in a vacation market (ahem...Florida) is not going to work as an MTR because you want to rent it by the room at a high rate to cover your mortgage and there are 3 problems with that strategy at least: 1) per diem rates for travel nurses in FL are amongst the worst in the nation 2) most people prefer not to have a room in a shared home and 3) Florida considers anything less than 6 months (I believe) an STR so all the taxes and rules apply and most travel contracts are 13 weeks max. So yeah, a lot of people just don't have the right property to make it work. So even if there are a lot of new listings, it doesn't mean they're the type of listing that will work in this niche. 1/1's and 2/1's seem to be the sweet spot unless you're targeting corporate, relocations or insurance placements. The other unique aspect of the MTR niche is that most listings are still really poorly done and dated - much like VRBO was back in the day. So if you do have a nice space, it will stay well booked. I see this element of the market rapidly transforming, though, as the savvy hosts update their spaces and the bar is getting raised.