Hey all,
I see quite a few posts involving determining if an area is good for MTR be it the demand/supply/pricing. So, I want to add some value here. I'll use my current home city to show you the process.
1. Here's my slide deck that I share with everyone for all things MTR. It's free, no pay wall etc. If you want to donate via venmo, then be my guest. https://docs.google.com/presentation/d/1qCD_XIgmg-2BGGzsDbWq...
2. The FIRST Thing I do is a quick sniff test on Furnished Finder for a broad stroke guess:
Right away I can see a few big points:
a. Manchester is the #3 area in the state for travel professionals and high up on cities in the country. So I know the supply is there. It makes sense as a local because of the density of medical centers. I can also infer a few other items in later points, such as vacation destination, no sales tax, and a commuter state.
b. By the room rent is $1000-$1500. Whole place (be it studio/1 bed/2 bed etc.) is at minimum going to be $2K since 76% of housing as a whole place is above the 2K mark.
c. There's a lot of demand from travel professionals which i can see requests vs. views.
3. So point #2 looks good. Now to dive deeper using furnished finder. I am going to search for housing as a end user. https://www.furnishedfinder.com/housing/Manchester/New-Hamps...
This gives a really good high level overview of what I can see in terms of actual listings. It's INCREDIBLY important to get granular. I looked at a wide swath here. Now, what if I make pets welcome..
With one click - I just eliminated half the competition. I can even charge a $45 pet fee and add it to the cleaning bill. The key here is to play around with your metrics and area. Show how you're different. I will physically scan other properties similar to mine ( 2 bed/1bath) and I will compare my pricing to someone else for cross comparison.
Also, this chart shows me there is a ton available to travelers, but they aren't getting rented: WHY? I'm unsure. It could be bad pricing, terms, demand etc. If you comb through this a bit deeper - you'll find it's pricing for many.
My sniff test as I get granular is that most of these units are Grade A units and charge A LOT of money for them. That tells me opportunity exists in the Grade B / Grade C. Think about it - travel professionals aren't a one size fits all. Maybe some want to save their money and live in ok apartments/homes. Just keep digging!
Now, the process isn't done yet. I still go look on Rabbu/AIRDNA, Compare MTR rates vs. LTR rates by checking out HUD/Section 8, local news, I'll google local companies hiring etc. This is just one way to get granular. Of course, I make sure my MTR passes the LTR test first, which is that LTR rates must AT LEAST break even the monthly payment or ideally, make $200 per door in profit. If not, then you're setting yourself up for failure if you can't MTR in time.
This is not a one size fits all model, but to help others run their business!
