Average rental per year for medium rentals

[Christine Snyder]

Am thinking of converting a long term rental to a medium rental.  Can anyone give me a estimate of how well mediums do on average?  Curious to know how often they are vacant.  Thanks!

[Jon Puente]

Hey Christine, 

This would seem like a simple answer, but it's not.  In general, you should get 1.5x-2x what you could get for LTR gross rents.  Vacancy can vary, but if you work with a good property manager, you shouldn't have your property vacant longer than 60 days out of the year. 

Great Question!

[Charlie Tunstall]

We transitioned from LT to MT 1 year ago. We’ve been full 90% of the time at 1.6X the LT rate. The main key to our success is proximity to several very large housing developments. As people transition to our area, they book our place to coincide with completing construction, sale/purchase of housing, etc…so, #1 location

#2, growth of the economy, influx of jobs, etc

#3, don’t laugh…have your house well decorated and take pro pictures to share.  It really makes a difference. You will stand out from the competition and the incremental costs will be recouped quickly in your low vacancy numbers…  

good luck

[Jamie Banks]

I've operated MTRs in several markets and have seen 75-80% occupancy on MTRs that can't be rented as STRs due to regulations (ie we don't rent them as a hybrid MTR / STR strategy). I generally rent my properties B2B so my vacancy is higher than average

[Bonnie Low]

Quote from @Christine Snyder:

Am thinking of converting a long term rental to a medium rental.  Can anyone give me a estimate of how well mediums do on average?  Curious to know how often they are vacant.  Thanks!

 I'm not sure where someone would get the "on average" across the nation data because, unfortunately, in the MTR space there is no data source focusing specifically on MTR, unlike AirDNA for instance. And sites that do have stats for your particular area, like Furnished Finder, don't show average occupancy currently. Anyway, the only thing that matters is occupancy in your particular market so I'd focus there. 

You can start by searching your area on Furnished Finder and look at the availability of units similar to yours. This is really critical. You have to compare apples to apples because while a 1/1 may do well in certain areas, it may not be what people are looking for in your area. You also have to compare location, amenities and decor. Once you narrow it down to properties like yours, look at the availability of those similar units. Are there lots and lots of properties with immediate availability? If so, that's  a red flag. Are there only a couple? That's promising. Are there a lot of units but they're not available for about 30 days out? That's an encouraging sign. It means there's demand. 

Doing this analysis in this point of time is a lot like using the "Enemy Method" that Avery Carl from the Short Term Shop talks about it. It can be tedious, but it forces you to really understand your market. The good news is that I've talked to a few software developers that are trying to develop market analysis tools for MTRs. They're just not there yet but I predict in the next 2 years we'll start to see better tools. Good luck!

[Gabe Chase]

Great question! But like everyone else mentioned, it is hard to pinpoint a national average. We manage about 10+ MTRs in Indianapolis, but we have less than 45 days vacant on most units! Some may be at about 60 days. 

[Zachary Deal]

As others have mentioned it can greatly depend on your area, strategy (D2C vs B2B), property type, level of furnishings, etc. Generally I think planning for 20% vacancy when starting out is smart as it can take some time to get traction on your property and aiming for 1.5 to 2 times the LTR rate. 

Definitely make sure to decorate your home well and get professional photos taken. It can make a big difference and help you stand out from the competition!