Mid term Rentals

[Malieka Henry]

Anyone here doing Mid term Rentals in Las Vegas ? 

[Stephen DeThample]

Yes, I have 2 investors that only do mid-term. Focused on traveling nurses. It increases cash flow enough to get cash flow positive. If you have questions, let me know. 

[Malieka Henry]

Awesome ! Thank you for responding. I messaged you directly 😊

[Jacoby Atako]

Sorry just seeing your reply.  I have a couple of mid term rentals here.  

[Nicole Heasley Beitenman]

Local meetups are a great place to connect with MTR investors in your market. 

[Josh Edelman]

I do! I have a rental in centennial hills and rent it out to traveling nurses/military/professionals. I make $3000 renting it out, the mortgage is $1500 plus the utilities so I am profiting $1000/mo. Ain't bad! Let me know what questions you have. Been a learning process for sure. 

[Stephen Sokolow]

@Josh Edelman @Stephen DeThample Would you recommend any good resources to learn more about mid term rentals?

[Josh Edelman]

@Stephen Sokolow Youtube! I dont have a specific person I follow. I just gather tips and concepts and learn on my own and apply it to my market. If you are in Vegas feel free to DM me. 

[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.

[Malieka Henry]

@Eric Fernwood Thank you !

[Malieka Henry]

@Josh Edelman Are you purchasing single family homes ? 

if so, are renting out the whole house to one individual or are you renting it out by the room ?

[Malieka Henry]

@Nicole Heasley Beitenman do you know of any in Las Vegas that are coming up ?

[Malieka Henry]

@Jacoby Atako are buying single family homes ? Have you ever tried arbitraging in Las Vegas ?

[Josh Edelman]

Quote from @Malieka Henry:

@Josh Edelman Are you purchasing single family homes ? 

if so, are renting out the whole house to one individual or are you renting it out by the room ?

I am renting out the entire room but I have rented it by room when I personally lived in it aka house hacking. 

[Malieka Henry]

@Josh Edelman ohh okay. Was house hacking in a single family home challenging ? I hear more about that strategy when it comes to multi family homes.

[Jacoby Atako]

Quote from @Malieka Henry:

@Jacoby Atako are buying single family homes ? Have you ever tried arbitraging in Las Vegas ?

 I don't have any interest in arbitraging. I am not really looking for another job. I do buy single family. 

[Josh Edelman]

Quote from @Malieka Henry:

@Josh Edelman ohh okay. Was house hacking in a single family home challenging ? I hear more about that strategy when it comes to multi family homes.

 Well at the time I was a single guy/military. Any house hacking strategies involve the sacrifice of privacy and conveniency to a degree. 

[Malieka Henry]

Quote from @Josh Edelman:

Quote from @Malieka Henry:

@Josh Edelman ohh okay. Was house hacking in a single family home challenging ? I hear more about that strategy when it comes to multi family homes.

 Well at the time I was a single guy/military. Any house hacking strategies involve the sacrifice of privacy and conveniency to a degree. 

 That’s understandable

[Eric Fernwood]

Hello @Stephen Sokolow,

YouTube and other sources can provide general information. However, you will be purchasing a specific property in a particular location. The best source for mid-term rental information is a local investment realtor.

I conducted a study last year in conjunction with a few clients and produced a white paper. If you would like a copy of this free white paper, DM me.

Below are some of the results of our study:

• Short-term rentals and mid-term rentals are fundamentally different. Short-term rentals mainly cater to vacationers. During difficult economic times, fewer people tend to take vacations. This is why many short-term rentals in Las Vegas were sold during the COVID-19 pandemic. In contrast, mid-term rentals are primarily driven by business necessity. For instance, there is currently a nursing shortage across the US, and traveling nurses help to alleviate it. Our research shows that traveling nurses usually start with a 13-week contract that may be extended. They require a place to live, which is why mid-term rentals are driven by necessity.
• The primary consumers of traveling nurses are hospitals with trauma care levels one and two and neonatal intensive care hospitals. Properties should be within about 5 miles of such hospitals. However, the property must be in a safe location, which is sometimes further away than 5 miles from the hospital.
• There are two primary places to market furnished rentals, the MLS and sites like Furnished Finder. Our research showed that furnished properties rented through the MLS have a $.60/SF to $.70/SF incremental rent above non-furnished long-term rentals. On Furnished Finder, the incremental rent appears to be about $1.20/SF.
• Having a property manager handle the mid-term rental is important. We are working with a property manager who will handle midterm metals at a reasonable rate.
• Always buy a property that would also be a good long-term rental. You need the backup option in case the mid-term rental market changes.

Stephen, this above should get you started. DM me if I can help.

[Allen Duan]

We're setting up a MTR in Las Vegas this month and I'd love to connect with other MTR operators in the area. We're in Spring Valley close to two hospitals so I'm anticipating we'll have good demand from medical professionals.

[Sandra Kraus]

MTR's with insurance are better payouts compared to traveling nurses or corporate. Insurance mtr's are harder to get. I"m currently doing 2 at the moment. 

[Kathryn Harouni]

For those doing MTR what have you found to be the estimated average annual operating costs?

[Bonnie Low]

Quote from @Stephen Sokolow:

@Josh Edelman @Stephen DeThample Would you recommend any good resources to learn more about mid term rentals?

 Hi, Stephen - not sure if you ever pursued learning more about midterm rentals, but I'm noticing from the conversation thread that there's some incorrect or misinformed information in some of the comments. First and foremost, I don't believe your best source of information is from an investor-friendly Realtor or a long term rental property manager. Your best source of information is always from others who are doing what you want to do. When I see things like "our research shows" it's a red flag for me that the information is theoretical which may or may not be helpful. There MUCH to learn about this space. Earlier this year, Bigger Pockets published 30-Day Stay by Zeona McIntyre and Sarah D. Weaver. Both of these ladies know the market extremeley well and have years of experience tailored around midterm rentals. There are other well known investors doing the same, albeit in very different midterm niches such as Grace and Amelia from Women Investing In Real Estate (WIIRE) and Dr. Rachel Gainsbrugh who focuses on the insurance placement strategy with MTR. Look into their various podcasts, books, interviews, blogs, etc. if yo'ure still researching. While some commenters have suggested you need to hire a property management company to be successful, nothing could be further from the truth. It's actually very feasible to manage your own MTRs if you're inclined to do so and, thankfully, there are now loads of resources to help you do just that from PMS software to leasing, background check and payment integrations. Lastly, the guest pool for MTRs is very wide and is not just limited to travel nurses. I am constantly surprised by all the reasons people seek out midterm stays and, really, you're only limited by your creativity. Don't limit yourself to listing only on Furnished Finder or the MLS (I've never actually seen one posted on the MLS but someone suggested this as one of the two sources to list), although FF is the OG of furnished sites for travel nurses. There are many social media groups dedicated to travelers seeking furnished properties, you can list on sources like Zillow and apartments.com, Crashpad, corporatehousingbyowner, etc etc.

Hope this is helpful!

[Michael Thach]

I live in Las Vegas and operate close to 30 MTRs in town. 

I build one out of a single family house and turned this into 5 units. Each is making around 1600-1800 after airbnb fees. Considering this is just a 2400 sqft house the cashflow is quite good but downside is it will cost you around 100k in renovation and around 15k in furnishing for each unit. So is very cash intensive. 

Another play I did is a multifamily unit with investors. Is a 5plex. We spent half a year renovating and furnishing. As a 5plex the NOI is about 45k. We have 58k this year with the renovations and vagancy and will have about 90-100k NOI this year. In commercial real estate terms speaking, we are doubling property values here. Downside is very cash intensive. We pulled around 500k together to make this play happen.

Many of our clients/investors bought 4plexes and do the same plays. We designed some, furnished and manage them. For investors they can expect 1.5 to 1.75 more money vs long-term rental. Downside is initial investment per Unit ( 1-2 bedroom apartments ) will need about 30-40k renovation, 10-15k furnishing and if you hire people like me, it will cost you another 20k from getting the long-term tenant/vacant  and unrenovated apartment out to your first MTR tenant in your dream MTR property. Is a very cash intensive play but for big earners this is a good investment because with the investment into their properties they are reducing their taxes. I have high cash generating investors who need to save taxes. This way they have a good cashflow, a lot of credit for capital gain due to capital improvement and a forced appreciation of your asset. 

You will get some travel nurses but those are not in the amount you think you will get. It's a little overrated in this forum that the main clients are travel nurses. 

I strongly discourage MTRs built in a single family house. The cost to income ratio doesn't make sense. Using a 350k house to produce 3500-4500 income before all the fees is not an good investment. You either room hack the heck out of it or you buy multifamily. As said is cash intensive and it make sense to team up. Better have 50k invested and making around 6-8% cash on cash the first year and after running that business for 3-4 years sell or refinance the property and collect your initial investment of 50k + 40-70k in forced appreciation. This would be wiser than saving up 300-400k to run your own MTRs.

[Elysa Lueras]

Yes I own Sorrento properties in one of the rental properties that I have I'm interested in renting it out as midterm rental to traveling professionals as well as traveling nurses since this unit is right next door to sunrise and medical offices all throughout the surrounding area.

[Elysa Lueras]

There is a typo in my post. I own rental properties. Not Sorrento properties. Type o