Midterm vs long term - Renton WA

[Eric I.]

Trying to figure out whether is it worth transitioning my 2br 1ba 1100 sqft unit to midterm rental from long term rental in Renton WA? Appreciate the feedback.

[Garrett Brown]

Hey Eric, welcome to the forums! That is a tricky question to answer without more details. Is the MTR not performing well? Do you want something even more passive? Are you in an area that MTR's do well in? What is your estimated rental revenue for LTR Vs. MTR? 

[Eric I.]

Garrett those are great questions. For the LTR, we used(took off market yesterday while trying to decide on the said topic) market it at $2050 with concession of $1000 with all utilities paid for by the tenant. Looks like the MTR rate is around $2400 -$2700. Is there a way look to appropriately price it? Not much of difference, I would say. But tax benefit of MTR if there is difference between the 2 vehicle.

[Robin Smith]

Hi Eric,

Am I understanding that you want to pivot from LTR to MTR?  If so, then find out if you are close to any hospitals (within 15-20 miles).  If it is a trauma center then even better.  Level 1 trauma center is the best. Your property might be close to large factories.  They always have admin visit for a month at a time. 

There is a stats page on furnishedfinder.com that you can use to see what midterm rentals are asking for in your area, based on bedroom count. There is not a lot of data for MTR comps so I look on FF to see how many MTRs are in my area and what the rate is, and I play around with AirBnb to see what  a monthly stay would cost.

[Eric I.]

Thank you for the reply!

[Julia Lyrberg]

It could be worth transitioning to a midterm rental if there's demand for that type of housing in your area, like traveling professionals or remote workers. Midterm rentals often offer higher returns than long-term rentals, but you'll also have to manage more frequent turnovers and potential vacancies. I’d check the local market to see if there’s a steady demand and compare the potential income with what you're making now to see if it's worth it.

[Wes D.]

Hi @Eric I. 

As @Julia Lyrberg noted, MTRs typically rent for more than LTRs, as they should for a furnished home with utilities included. 

For market pricing, I collect LTR data from BP rent calculator and multiply by 1.5x. Then I get STR data from AirDNA to ensure it's well above 1.5x LTR data. And lastly, I search FunishedFinder listings nearby, find comparable properties, and track the listed rent for a few months (does it increase, decrease?). Of course the listed price may not be the actual rented price, but by tracking several listings for a while you can gain a better understanding of the market. As @Robin Smith mentioned, for assessing demand I used FurnishedFinder.com/stats; you can see demand data for a given city and some pricing data too. And proximity to hospitals is key, within 15 minutes is what I seek.

When I was trying to determine demand for our area, I selected about 20 listings near the location I was focused on, and tracked them for several months. If it gets rented the owner will update the listing with a new available date; if this moves by 30 days or more you can reasonably assume it was rented. If it moves a few days after reaching the available date, it probably hasn't rented yet. Tracking several for a few months will give you some understanding about vacancy rates. Also note if the listed rent changes. Our actual vacancy of less than 10% has closely tracked the data I collected this way.

All the best,
Wes

[Eric I.]

Thank you @Julia Lyrberg, @Garrett Brown and @Wes D.