Best Places to invest for Mid Term Rentals with cash flow and appreciation

[Rajesh Kasturi]

Hi All, 

What are the best cities to invest in midterm rentals which will cash flow and appreciating year over year? 

[Jonathan Greene]

Questions like this are too vague and subjective. You won't get good answers without a more tailored question.

What are you trying to accomplish and have you invested in MTR before? Where do you live? How do you plan to manage the properties? Are you familiar with how MTR works and the upkeep and furnishings needed and who the target renter is?

[Bradley Buxton]

@Rajesh Kasturi

You can make many markets work. What markets get you closer to your goals and harmonize with your time, energy, and resources?  Can you eliminate markets that wont work? 

[Julia Lyrberg]

As @Bradley Buxton mentioned, you can make many markets work! 
Focus on areas with strong population and job growth—that's usually a good sign of demand. Since you're interested in MTRs, look for spots near hospitals, universities, or corporate hubs to attract traveling nurses or professionals. Also, check the local rental rules to make sure MTRs are allowed.

[Miguel Del Mazo]

I agree with @Jonathan Greene that the question is vague, so my advice will have to be as well.

The short answer: MTRs are real estate, so just like all real estate, any place that can long-term-rent cash flow with increasing jobs/population can be a suitable site to purchase. 

The longer answer: Listen to the BP podcasts. Learn how to evaluate a market by either reading and listening to a lot of content or by providing some sort of value to someone who already has that knowledge. Underwrite your RE purchase to long-term rents, so that no matter what, you can cash flow. Learn how to cost-efficiently furnish everything for the space, and take a risk on MTR. Most importantly, you will make mistakes, so wake up, try your best, forgive yourself if you make mistakes, and try again tomorrow.

[Vivian Yip]

Start with your budget then think about location.

This is a really vague question.  I know people that do great with $150k homes but also $650k homes each with different strategies but I do believe in the Golden Rule, location x 3. 

You're going to have to spend a bit of time researching markets but I think picking a market you like to visit is always good. every vacation becomes a write off! 

There is also a lot of activity in my facebook group, and it's all about MTR. DM for a link!

[Tanarat Bunchom]

Quote from @Rajesh Kasturi:

Hi All, 

What are the best cities to invest in midterm rentals which will cash flow and appreciating year over year? 

Your question is pretty broad. What’s your main goal—cash flow, appreciation, or both? Have you managed midterm rentals before, or are you familiar with the setup and target renters? Adding more details can help get better advice. 

[Sylvia Santelli]

Hello!

Tip #1 - no such thing as one perfect market 

There is lots of data on Bigger Pockets and MTR experts that have released rankings of top cities for next year, but remember it's not just about the purchase-- it's also about the operation. If this is your first purchase, Remember it is also okay to pick your closest metro as a starting place. It would be the easiest to network and find all the experts that will be needed to make it happen. There are successful real estate investors in your local market too. 

I'm an investor and co-host in Dallas, TX--- and that's where I live. 

[Chris Seidler]

Ours is in a rural area with strong seasonality and lots of regional vacation travellers going out for a weekend or maybe a week. We are within a few hours drive of several metros. We do a mix of STR & MTR. MTR brought in 75% of the gross and more of the net due to lower cleaning fees for turning over the STR.

For gross numbers we brought in about 1.2% of the ARV value in monthly rent this year which is decent based on the rules of thumb at least. On paper we were slightly in the red but much of that is due to one-year expenses/repairs & allowable transportation costs to get up to the property for work days ourselves. For CY25 I realistically think we'll be somewhat in the black with about ~3-6% ROI/COC now that much of the initial rehab is settling down and we have our systems in place.

We were very pessimistic (realistic?) with our estimates for both income & expenses on this property.  Sure enough the rehab ran over budget (we had a large contingency that was used up -- some due to contractor malfeasance, some due to pulling the trigger on big repairs like a new roof) and the revenues were right around expectations, maybe slightly below.  Because we were clear eyed going in it has worked out ok.  If we had gone with more optimistic assumptions then it would have been a very disappointing year financially at least.

Every market is unique.  But I'd be shocked if people are getting significantly better numbers in similar "regional destination" type areas.  I think if you're in it for the money, location in a decent sized metro with a lot of transient work force would be key.