Help on Several Common Questions Related to MTR

[Leon Lee]

Hey Fellow BPers! 

I'm diving into mid-term rentals and hoping to shift more of my units in that direction. I've got a few questions and I'm hoping you can shed some light on them, to help me streamline my approach to mid-term guests. Up to now, I've been focused on short-term rentals. The high fees on platforms, less recreational travelers vs. more business travelers, and the cost of cleaning are really pushing me to explore mid-term rentals more. It seems like a smoother path to profit with less hands-on management.

Here's where I'm at: I have units that attract guests, usually working-class workers sent by their companies, staying for 3-5 months. I noticed that the wear and tear for these MTRs are pretty similar to long-term rentals, especially with larger families. It feels like anything over a couple of months, and they start treating the place like their own home and start to modify everything.

First up, security deposits. My units rent for over $3,000 a month. A one-month deposit feels steep, as guests need to cough up $6,000 for the deposit and first month's rent. I'm charging $1,500 to $2,000 right now, thinking it should cover normal wear and tear and minor damages. What's your approach to security deposits?

Next, lease duration. During off-peak seasons, we've had tenants sign year-long leases at lower rates. But in peak seasons, these rates are way lower than what we may get by short-term rentals. I'm thinking of capping leases at three months, then going month-to-month afterwards. How do you handle lease lengths?

Then there's the notice period for lease termination. Mid-term tenants sometimes need to cut leases short due to project changes. I've set a seven-day notice period, which works both ways – it's also handy if we find tenants are too messy during inspections. What notice period do you work with?

Finally, cleaning costs. Short-term rentals bring in about $3,500 a month, but require 4-5 cleanings at $110 each. Mid-term rentals mean fewer cleanings, but check-out cleaning is intensive and pricey. If your guests are similar and stay for about three months, what are you paying for cleaning?

I generally paid more attention to posts about short-term rentals and less so for MTR, apologize if I asked repeated questions

Thanks for any insights you can share!

Lee

[Joey Banasihan]

Hey @Leon Lee Here are some of my thoughts:

- I think the $1500/$2000 dollar deposit a reasonable ask.

- I use furnish finder, so it just has to be 30 days or more. No caps, but you set your own price based on competition and the market. Bot sure where you are marketing this but you can certainly cap it but the question is will your pipeline become smaller?

- That notice period seems short with turning it around, cleaning, and getting new tenants in. Maybe consider longer?

- You should switch to a monthly cleaning, fixed in the rental price; this does a couple of things, keeps your place cleaned on a regular basis, sets expectations for tenants but you need specifcy in the lease they still need to maintain the space in a clean matter, and lastly you build a relationship with your cleaners to keep on eye on the space so you are aware of the overall condition. 

Just some thoughts and happy to talk more!