Getting out of Mid-Term Rentals

[Matthew Masoud]

I'm considering getting out of the Mid-Term Rental Game.

I purchased 30 apartments (two 10 units, a 6-unit, and a 4-unit) for the purpose of running them as Mid-Term rentals.Currently, half of them are being run as MTRs while the remaining are still LTRs.

My MTRs average $1,600/month while the LTR rate $900/month.Now that I have some data, I wanted to compare apples to apples for MTR vs LTR revenue.After adjusting for the increase in Insurance, my VA for communicating managing, and supplies/increased repairs it's looking closer to $1,200 for MTR compared to LTRs $900.

It's a lot of extra headaches for $300 more per month.

I'm also having trouble refinancing these properties because banks hate seeing anything but LTR. So even though I bought a distressed multifamily and stabilized it, I'm unable to access the cash.

The numbers still work great as a long term rental but ever since I ran the numbers comparing the two I realized it's not as profitable as it looks on paper.

For context, im in a small tertiary market (Dayton, OH) and most of my apartments are 1 bed / 1 bath with some 2 beds.

[Tracy Ross]

Hi Matthew,

Are you managing these yourself? And if so, will it kill your cashflow to get a good property manager? That can ease a lot of the headache of multiple turnovers. Sometimes you have to see where you can actually leverage back your time. 

Otherwise I think LTR's are ALWAYS a great strategy if you're into it for the long term equity potential. Then, like you mentioned you can refinance and repeat- building your portfolio!