Mid term Rentals

[Malieka Henry]

Anyone here doing Mid term Rentals in Las Vegas ? 

[Eric Fernwood]

@Malieka Henry

Mid-term rentals (MTRs) have generated a lot of interest lately. In this document, I will share a portion of a study I conducted with some of our clients. While some statements are specific to Las Vegas, most should work anywhere. I also included a SWOT analysis for MTR in Las Vegas.

Profitability Depends On…

Mid-term rental profitability depends on four factors:

• Keeping the property filled
• The ability to charge significantly more for furnished housing
• Active support of tenants, so we get good reviews.
• The right renovation components to keep maintenance and turn cost low.

Success Factors

I believe the following are key success factors:

• Location - Not just near hospitals, MTRs must be in a safe and attractive location, with direct access to freeways, retail, and entertainment.
• Appearance - The property must be attractive, clean, and a good place to live. I recommend installing automation as one differentiator from other properties.
• The furnishings must be durable and attractive to tenants.
• Quality photos and a property-specific website that provides extensive detail about the property, the area, fun things to do, etc.
• Flexible lease terms. Apparently, nurses get 13-week assignments with potential extensions. We want to accommodate this easily.
• Promoting the furnished rental on various sites, including nurse staffing sites, the MLS, FurnishedFinders, and others.
• Cost-effective local management to ensure that service issues are handled quickly and efficiently. Especially for new guests, 24-hour support may be needed. [The property manager we work with has a $250 start-up fee, 8% of the collected rent, and a $300 tenant placement fee. They also handle maintenance, utilities, tenant turns, including cleaning and touch-up if needed, contracts, inventory, utility billing, and more.]

SWOT Analysis

When evaluating an opportunity, I utilize SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Although SWOT is typically used for analyzing a company's position, it is also effective for analyzing opportunities.

Below is my SWOT analysis of mid-term rentals.

Strengths

• We can find properties in highly desirable communities with HOAs because MTRs require a minimum 30-day rental period. Most associations have a 30-day minimum rental period. According to FurnishedFinder.com, the average stay is 92 days.

• FurnishedFinder.com appears to be a primary source for marketing furnished properties. I believe there is a $99 fee to list a property.

• There is a national shortage of nurses, which will mean increased demand for contract or traveling nurses.

• If we select properties that are also good LTRs, we have a fallback option.

• The following is from furnishedfinder.com. With most furnished properties renting for more than $2,500, MTR seems to be a way to significantly increase cash flow.

  

Weaknesses

• Ensuring that the property is continuously occupied will largely depend on factors such as the unit, its location, furnishings, and related marketing materials. I provide a more detailed description of this under the Opportunities section.

Opportunities

• If MTRs are proven to provide superior income to LTRs, we can easily replicate success.
• Based on my observations of websites, MTRs appear different from LTRs. We can differentiate our offering by providing a simplified and easy start for guests. This includes gaining access and loading the necessary applications to control the garage door and other capabilities.
• The MTRs I've seen on websites only have simple photos, without a specific location. If we create a website for each property, featuring photos, a video walk-through, a guide to local attractions, shopping, weekend activities, and other unique features, I believe it will be easy to differentiate our offering.

Threats

• Decreased demand for traveling nurses. This does not seem likely due to the national nurse shortage.
• The market is flooded with competition. If this happens, we will likely convert the property to a furnished or unfurnished LTR.
• Due to Airbnb and VRBO now requiring short-term licenses in Las Vegas for properties to be listed on their sites, unlicensed properties may turn to renting their properties out as mid-term rentals. This could significantly increase competition.

Technology Requirement

Keeping vacancy costs low and high guest satisfaction high will depend upon the proper use of technology. Below are examples.

• Access control - Install remotely programmable smart key locks on external doors, such as on the door to the garage and the front door. Ensure that there is a way to change access codes for each new guest. Additionally, provide guests with the app and access code programmatically before their arrival date so that they can access the property. This will also enable the property manager to handle remote showings. We would use a service like Rently.

• Garage control - The system must be able to programmatically change the garage access code for each guest. Additionally, it should allow the property manager to remotely open the garage door for receiving items when there are no guests on the property. The best option appears to be myQ protocol opener. May also wish to have a digital keypad for allowing access to the garage. Below is an example of such a keypad. This will enable the property manager to grant access for deliveries and tradespeople.

• Smart TV - The access point for all information will be the smart TV. The smart TV will link to the website for this specific property.
• WiFi - Enable guests to quickly log onto Wi-Fi through a QR code.
• Ring-type doorbell - This is both a security feature and a way to track individuals entering and leaving the property.
• Property-specific website - Develop software that generates a property-specific website displaying distances to nearby shopping centers, airports, freeways, entertainment, and other relevant locations. (This is something we would provide to our clients.) This website would have appropriate links to information on all devices.
• Security - External camera(s), especially at the entrance, that records and retains video (cloud) for an extended period. This is desirable/necessary for overall security.
• All the technology must be integrated and operate seamlessly in the eyes of the guest. This may require additional software development. This is something we would provide to our clients.
• CO and fire detectors that also send notifications to the property manager.
• Smart thermostat - This allows the property manager to control the temperature settings when the property is unoccupied. And, to cool the property down before a new guest arrives.

Hope this helps someone.