When Does it Make Financial Sense to You?

[Denis Ponder]

For those who MTR, what revenue multiplier makes sense to you for the additional work and cost of an MTR over an LTR?

My condo is crossing the finish line for renovations and will be ready to rent out soon.  We are less than a mile from a hospital and less than 10 minutes from a military installation, so I'm going to MTR the condo and see how it goes.  It's a 2BR, 2.5BA with 2 covered parking spots and access to a community pool.

Thank you!

[Jamie Banks]

The way I analyze a MTR is first seeing what the market rate for other MTRs is. You can do this by pulling comps on the different OTAs the same way you would for rental comps. From there I take the cost of furniture and amortize it across 12 months. Depending on your preference you can make the timeframe shorter or longer. Then run your numbers to see the cash flow you’d get. All of our cash flow expectations will be different but I personally want to make at least 3x the cash flow I would on a LTR. My vacancy and repair and maintenance reserve numbers are higher with a LTR than a MTR to account for the increased vacancy and furniture replacement costs I’ll incur.