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Updated over 1 year ago, 07/14/2023
MTR's 16 Months in: 10 things we've learned (South East, Winston Salem)
I thought I'd share some of our lessons from the past nearly year and a half of running mid-term rentals. Back in January 2022 we had an LTR turnover on one of our units. My wife and I have been super scrappy over the past couple years and have moved 5 times in that time period to house hack and primary our way to a small portfolio of 6 units (now 5, we just closed on a sale of one of our properties Monday this week). The unit was a small 1/1, 900 sqft space in a duplex. I still don't remember to this day why we thought to do this. Mid-terms weren't really talked about much back then, certainly not nearly as much as they are now, but we decided to move in to the 1/1 space, furnish it while we lived there for traveling nurses, and then move on to our next home purchase. (We buy homes as primaries and move into them to get lower rates and 5% down, we've been upfront with our lenders and we've found a few who work with us and allow us to purchase more than one house a year with this kind of strategy.)
Fast forward 14 months to April 2023 that 1/1 has stayed rented for +95% of the time and we purchased another house specifically as a MTR in August of 2022 (and we haven't had a vacancy yet on that one). Here's a few things we learned during this time period, in no particular order.
1. Nurses only make up 1/3 of our tenants. We were surprised by all the reasons people need a furnished space for a month or more. Professors or graduate students traveling in town to teach or take a semester class, people selling their home and needing a landing place before their next, grandparents in town to help out with their newborn grandkids, people coming from out of town for outpatient surgery.
2. One downside to MTRs we found is it can take a long time to get superhost on Airbnb. We just got superhost last week, 14 months in, running 2 units. Airbnb changed their policy last year so mid-term stays weigh heavier than short term stays in terms of earning superhost, but its still a long road if you exclusively run mid term rentals. Especially if you plan to list on multiple platforms. If you get a stay through furnished finder, that's a lost review on Airbnb.
3. Weird stuff broke on us we didn't think about. Our touch screen locks ran out of batteries in the middle of stays multiple times. Now we keep a backup key on site in a lock box and also lots of extra batteries in a drawer on site. We had a refrigerator lock up/shut down on one tenant because the previous tenant never opened the freezer. It turns out freezers are designed to be opened and if they aren't they can damage themselves. Now we include complimentary icecream bars to incentivize guests to open that freezer door a couple times.
4. Kids are worse than dogs. Cats are worse than both. Bunnies are OK. In any case pet friendly is what has kept us booked. A fenced in backyard is a huge asset and has help us stand out from other listings. Our 1/1 doesn't have a fenced in yard (our other listing does) but is across the street from a park and within walking distance of a dog park. We've helped other people turn on MTRs and they have been squeamish about allowing pets. Their occupancy rate suffered and eventually they all went pet friendly.
5. This isn't MTR specific but is a principle we saw proven in practice. The speed to address a problem is infinitely more important than the magnitude of a problem. We've had heat go out when it's freezing, AC go out when it's 90, flooding, sewer backup, plus a host of other smaller issues (like the previously mentioned keypad/batteries). We responded quickly (within minutes) and addressed the problem as quickly as possible. Even though in some cases it took days to fix an issue, quick and open communication kept our guests happy. A lot of the issues we faced are what most people think of as "worst case scenarios" but we still haven't received less than a 5 star review. The one aspect of this that IS MTR specific is an issue will not taint a guests whole stay. If someone is just staying for a weekend and the air goes out, that ruins their who stay. If someone is staying for 90 days and the air goes out for 2 days, that's just a fraction of their time spent there. So in a way problems aren't as big of a deal.
6. Smaller private units make more money per sqft than larger units. But both can work. We have a 1/1 and a 4/2 unit. 1/1 we charge 2200/month (bumping it up to 2400 now that we have superhost) and our 4/2 we charge 3000/month (bumping it up to 3200).
7. Amenities we found necessary: blackout curtains, noise machines (or box fans), tv's in bedrooms, desk space for working (this opens up your unit to traveling professionals who are working remotely, including someone like a traveling nurse who's partner comes with them and works), interestingly we found including streaming services are explicitly NOT preferred (people like using their own, especially for a long stay, since they have a watch history/favorites/etc.).
9. We learned not to furnish our MTRs exactly like an STR. We found our tenants prefer something more "homey" than "vacation-y". So things like a coffee pot instead of a Keurig, couches that are actually comfy and don't just photograph well. Don't skimp on the bed/bedding. As previously mentioned; desk space. Cooking amenities are more important. A nice kitchen is much more appreciated in a mid-term than an STR.
10. Getting a MTRs first tenant is the hardest. We found it can take 2-3 weeks to get your first tenant in the door (with our own and those that we've helped start MTRs in Winston), but once you get your first the ball keeps rolling. Because now you have 30 days or more people are looking at your listing, and we've found keeping a place booked is not too difficult once it gets started.
What else have people learned? Would love to hear what your tips, tricks, and secrets are for MTRs.
@Aron Rodriguez, got it. Off Burke Mill Road?
Overall the South East has been a great place to invest in the past 5 years.
Winston in particular I like because it has a lot of forward momentum (Wake Forest being a big driver, dumping $1Billion + into downtown, money attracts money, etc)
The economics of Winston are very stable due to hospitals, wake, hanesbrands, aerospace... mostly recession proof industries. If you take a look back to 2008/2009 timeframe home prices didn't really collapse here, they just flatlined for a few years. Even now, a lot of the country housing prices are falling but in Winston prices are $10k higher on average compared to this time last year.
Winston also is right on the intersection of i40 and i85, so is very accessible to the whole state, TN, VA, and SC.
Happy to chat more if you want to send me a DM
Very close to Burke Mill Rd.
Those factors are definitely great signs and why I chose to invest in NC. Thanks for all the tips again!
My fiance' and I are healthcare travelers and we saw a lot of demand in the hospitals nearby. Also, you mentioned Wake Forest is also nearby. I love how everything is accessible within 10 to 15 minutes.
I'll send you a request. Looking forward to connect!
Quote from @Jamie Banks:
@Will Hutson Hello Landing is another site that I list on. There's mostly digital nomads on the site but I've encountered a few nurses as well.
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Quote from @Ab Okoeguale:
Quote from @Jamie Banks:
@Will Hutson Hello Landing is another site that I list on. There's mostly digital nomads on the site but I've encountered a few nurses as well.
No it is called Hello Landing
Great post...
I have a 1 BR that rents solid (wish I had more) and my 3/2's are booking well. I rent from $2,800 to $3,200 as a base, and have had great bookings from VRBO occasionally - usually about $4,000. I'm in a medical center area and military relocations are common (I give them discounts). The medical center brings patients who need to stay close by for treatment or recovering.
I work hard not to allow pets, but will if I have to with a good understanding about the rules. Never allow cats. I try to keep several homes pet allergy free.
I've had a person rent furnished and asked me to store one bed (to bring in their kids furniture) then the other bed (for their father to move in with his own mattress) and then ask me for a discount because they aren't using all my furniture...lol. No, they didn't get it. They moved along.
With MTR it's also important to realize people often need extentions to their booking. Builders never meet their closing date, and so on. I don't contract the next people until I'm sure the current is not extending.
I also contract with or with out linens (replacement costs of linens written into contract). Many people like to use their own sheets to avoid the replacement cost. I also book without lawn care and provide a mower. The lawn service is optional with an extra cost. People like the flexibility. This being said I have seen my neighbor mow my lawn because the guest did not. lol Yes, it was the same guest who requested a discount.
Great post...
I have a 1 BR that rents solid (wish I had more) and my 3/2's are booking well. I rent from $2,800 to $3,200 as a base, and have had great bookings from VRBO occasionally - usually about $4,000. I'm in a medical center area and military relocations are common (I give them discounts). The medical center brings patients who need to stay close by for treatment or recovering.
I work hard not to allow pets, but will if I have to with a good understanding about the rules. Never allow cats. I try to keep several homes pet allergy free.
I've had a person rent furnished and asked me to store one bed (to bring in their kids furniture) then the other bed (for their father to move in with his own mattress) and then ask me for a discount because they aren't using all my furniture...lol. No, they didn't get it. They moved along.
With MTR it's also important to realize people often need extentions to their booking. Builders never meet their closing date, and so on. I don't contract the next people until I'm sure the current is not extending.
I also contract with or with out linens (replacement costs of linens written into contract). Many people like to use their own sheets to avoid the replacement cost. I also book without lawn care and provide a mower. The lawn service is optional with an extra cost. People like the flexibility. This being said I have seen my neighbor mow my lawn because the guest did not. lol Yes, it was the same guest who requested a discount.
@Evan Kline This was an extremely helpful post. Thank you for sharing. Book marking.
Do you get a lot of your bookings on furnished finder? airbnb?
@Katie Buell right now about 20% furnished finder, 60% Airbnb, 20% off platforms (facebooks groups or referrals)
Can you elaborate on what the other platforms are? Thanks so much!
There are no other platforms we use. I said "off platform." So people directly hearing about our unit and contacting us directly through referrals, or specific facebook groups geared towards traveling nurses.
@Aron Rodriguez That is a beautiful area! Years ago I lived in Ashville about 6 blocks from the Blue Ridge Parkway. I only wish I had invested in RE back then!
Be sure to do cost segregation studies on all your properties as soon as possible. The tax benefits are incredible and, for many investors, cost segs allow them to leverage the extra cash-benefits in additional properties. Estimates/pre-analyses cost you nothing!
Very informative. Thank you this is helpful.