Should we or shouldn't we expand to the MTR market?

Question

Hey all! My company currently manages LTR's throughout the Denver metro area. In the last few months we have received several requests to work in the MTR market and want to vet it out. Looking for some advice on the following:

1. How do fees change when managing LTR's versus MTR's/Corporate Housing? Currently, we use a flat rate model and charge leasing and renewal fees for LTR's but that clearly won't work for a MTR. We thought maybe a straight % base per month without any other fees might be the easiest?

2. I assume we'll have to restructure our lease with the help of our attorney to include furniture damages, notice requirements, etc but if anyone else has anything that was super beneficial to their MTR lease, I'd love to hear it.

3. Does anyone have any standard lists or furniture expectations for owners who want to include furniture? I currently do a liability waiver for any LTR owners that want to leave furniture so that we are removed from dealing with any damaged or replacement furniture needed. I realize that managing furniture is important with furnished units so just seeking standards and expectations that others have implemented.

4. How do others manage utilities? Right now, we are removed from putting any utilities in our name and ask the residents to do it or the owners to manage and we can do all inclusive billing to residents, if needed. I know that with MTR's, we'll probably need to setup WiFi at a minimum, just deciding if that's on us or the owners.

Appreciate any and all insight!! Trying to really weigh this out and decide if the extra time is worth it.

David Walton

My Haven

Jamie Banks · Answer

Hi David! I own a MTR property management company and I can attest to the demand of MTR property management. I've been asked multiple times to manage MTRs in Denver myself but it's not a market we plan to operate in. With MTRs growing as an asset class there's not many managers who are equipped to handle MTRs. For context I solely manage MTRs apart from 2 MTR/STR hybrids where we STR the gaps between MTR bookings.

Here's my input on the questions you asked.

1. I charge a straight % per month on top of a set up fee to onboard properties to my software. I have friends in the space who charge a monthly tech fee to cover the PMS charges they incur.

2. I would include a utility max that outlines the max amount the owners are willing to pay for each utility.

3. My team uses AI to figure this out since it varies by property type, size, and target tenant type. For instance, our larger properties tend to be more child friendly and will include items needed for younger children while our smaller properties cater to traveling professionals and always include a desk, monitor, comfortable office chair, and desk accessories.

4. Put it on the owners. I made the mistake of putting utilities in my / my companies name when I first started out and do not recommend it. I require utilities to be in the owners name in my co-hosting agreement and I ask the owners to share the login information of the utilities incase my team needs to access it in case of emergencies. MTRs have more of a hospitality aspect then LTRs so I have a team of VAs who manages small to large maintenance requests from wifi slowing down to toilet replacements.

Andre Galaviz · Answer

Well said. MTR is definitely a hospitality centered "job." Literally five-star service to renters and guests, for sure. It is indeed the little things! We have had several relocation families over this past year - then seasonal workers, then visiting families, then remodeling locals. It's the variety that makes it fun - and you sound like the kind of host that also sent out Holiday messages, cards, or the like. :)

Bonnie Low · Answer

Good question. I think it starts with the way you set up the property in the first place. You're outfitting it like you would an STR. It's well curated with quality furnishings and decor. Pertinent amenities like blackout curtains and noise machines to improve sleep for travel nurses. Stocked with cleaning supplies so they can clean during their stay OR offer mid-stay cleanings for an additional fee. We also handle yard care and will always consider additional requests. For example, our current guests came during summer. They moved from the east coast to the west and their vehicle was packed full. They asked if we had any beach chairs since we're near some popular lakes. We were happy to buy a couple of beach chairs and a cooler to improve their experience. We provide maps to local dog parks and dog friendly trails for our guests who bring their dogs. Our welcome basket includes a gift certificate to a local coffee shop for them to try so they can get to know the community. We have some basic items in the pantry & fridge since they often come in late and start work the next day. We want them to have coffee/tea, dairy and non-dairy creamer, some fruit and instant oatmeal so they can grab a quick meal in case they don't have time to hit the grocery store. We find out what they like to do in their free time and make local suggestions. We have a guest book like most STRs do. It's these little things that lead to a more concierge-type experience.

Bonnie Low · Answer

It sounds like you're pretty certain you don't want anything to do with the hospitality side of the business. I think it's good that you're clear on what you do and don't want to provide and what your business is set up for. That being said, why try to pivot from what you already know in LTR? The reason you can charge a premium for MTR is exactly that - the concierge feeling of being in a curated space and receiving a hospitality experience. If you aren't set up to provide that, you can't expect the MTR premium. Just an observation.

David Walton · Answer

I appreciate the observation but it's less about hospitality and more about the size of the company. Our customer service is top notch for our LTR clients and residents as it stands and while the intention and expectation is to cater more to MTR clients, we don't have the scale to handle hotel type requests that might come in. I'd be curious as to what sort of services you provide to your MTR clients that lease for 6+ months outside of ensuring the maintenance, wifi requests, replacing items, arranging cleanings, etc. are needed. That might help me decide if it's worth our time.

David Walton · Answer

Appreciate it!!

Jamie Banks · Answer

@David Walton I use Poe. It's a tool that has different bots like Chat GPT. I mainly use the Chat GPT bots and the Assistant bot but there's a ton to choose from

David Walton · Answer

This is really great information, Jamie. Totally understandable about the utilities and great way to navigate it. I just don't want to deal with any utilities so having access to them when needed is a nice compromise. We have a maintenance coordination company so they would be able to take the maintenance requests and assist with any WiFi issues for us.

Question on the AI response - Do you use a certain platform for that? I know I can pull generic lists but curious how to ensure it's detailed enough.

David Walton · Answer

Totally makes sense about the hospitality portion. Hoping that by going the 6+ month route, it will pull more LTR than STR. If you have any best practices, would love to hear them!

Should we or shouldn't we expand to the MTR market?

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