My LIMITED experience with MTR

[Don Konipol]

I emphasize LIMITED because the only experience I have is five  high rise condos I owned in the Phoenix area 2012 - 2021

Phoenix is famous for rental demand Oct - March, and little demand April - Sept (120 degree heat may have something to do with it).  I was actually able to earn more income, with lower expenses as a fully furnished rental for 6, 9 or 12 month leases.  Had one tenant who paid premium of fully furnished (down to towels, sheets, silverware, etc.) and stayed 6 years! 

[Don Konipol]

I don't quite understand the first part of your question; if your asking how I would have fared if I rented the property as a MTR the answer is of course dependent on vacancy rate assumptions, assumptions concerning rents, potential damage, etc. as to gross income, I achieved the same or more than as a MTR. By having a minimum 6 month lease I assured that I wasn't getting into the short stay high turnover market and was more likely to get tenants who were "between" situations rather than the traveling professionals everyone else seemed to be targeting. The 6 year tenant just didn't want to hassle with furnishing an apartment; she wanted the "instant" lifestyle and her father was rich enough and willing enough to pay for it. Tenants in my other units were professionals new to the area, a family whose house was being totally remodeled, and a couple of "family splitups" situations where one spouse needed a place while they waited to see if the separation was going to be permanent. I should state that my units were not the minimally furnished with IKEA furniture that many, if not most STR and MTR seem to be, or the old grandmas cast away stuff. This was fully furnished with good quality modern furnishings and full silverware (8 settings), etc. The condo in question cost me $38k to fully outfit (2011 prices). The rent I obtained was $15k annually over non furnished so the result was over 6 years additional $90k in rent. Further, when I sold the condo I sold the furnishings through consignment and ended up with additional $8400.

I sold these 5 condos between 2019-2021 because prices of them had risen significantly higher than rental rates and my return on current value was low.  Further, I had obtained significantly lower than market prices at purchase because I paid cash when condos were not “loan able” in Phoenix.