Quote from @Jonathan Greene:
Quote from @Miguel Del Mazo:
Quote from @Jonathan Greene:
Quote from @Miguel Del Mazo:
We have 3 2/1 condos in our portfolio that attract traveling professionals (medical or otherwise) and a triplex that we essentially BRRR'd down to the studs. When we built up the triplex, we set it up so that each of the 11 rooms can be rented out individually (all BR, except 2, have their own bathroom behind an electronically locked door). Each BR even has its own mailbox and key.
The triplex is much more popular with traveling work crews for specialists in the trades and insurance relocations, so if we were to do it again, I would probably worry less about making each room it's own rentable space and save a little bit of those costs.
All that to say, I really like small multifamily for MTR. It offers flexibility as a landlord to be able to offer more or less rooms as needed, protection to the landlord in that you can hedge with adding LTR or STR to the mix, and simplification to the business as your only dealing with one address. Throw in that you can dramatically increase the value of the property once you show consistent rent rolls much higher than when the space was used for LTR, and you have a big win.
All of this depends on your market having demand, of course.
You nailed it with the traveling work crews. They are the most underserved market for MTR that is out there right now. And it makes sense that you don't need so many baths, but I liked the thought of building it out like that because I think long-term, there is still value in it if someone wants to buy it and do full coliving or sober living would be ideal.
I definitely don't regret having done it that way, but for someone starting out when money is tighter, it's not necessary. The two 4-bedroom units even have two full-size washer and dryers each!
Co-living is going to grow and grow as time goes on (but maybe less so in my neck of the woods, to be honest). Sober living hasn't much of a foothold in NE GA from what I can tell, but there is a lot of need for traveling crews that work in specialized areas of the trades.
To help support that avatar, try and have on-site parking and ideally a place where a large work truck can be parked without issue (think fully decked out F-350).
I think if anyone chose to focus on inbound crews and create parking like you said, as well as crew amenities (large dining areas, etc), they would be booked year-round and in-demand. This is great information.
@Jonathan Greene I totally agree.
Parking is such a big deal and not talked about enough as an actual "amenity" or focal point in MTRs. It's not really an issue in many markets (especially most single family). But it's quite a big deal where we're located and often overlooked by newer investors getting into MTRs. When doing MTR in multifamily properties, parking is SUPER important and is actually my starting point when looking at homes. If parking is a no-go (more on this below), then I don't even look at the pictures on the MLS unless the driveway can be expanded if it's a multifamily I'd like to buy or helping a friend buy.
@Travis Boyd Here's what I look at when I'm analyzing any property as a potential MTR in a multifamily, be it a property I'm looking to buy, arbitrage, or co-host:
1. No off-street parking = not worth doing MTR unless it meets all of the following: super urban area where no parking is the norm, highly desirable area with a ton of MTR demand, super safe part of the city, and has great public transportation (think NYC, Hoboken NJ, etc.)
Unless it meets all of the criteria above, I pass on those opportunities because my MTR will be eliminating the many people that travel with their vehicles. If accepting the no parking MTR situation, then the MTR really needs to be pet-friendly (bonus if fenced-in yard) and have laundry (especially in-unit) to make up for the elimination of a key amenity. The MTR positioned for the most success and occupancy is one that does not eliminate the 3 key MTR non-negotiables among travelers - PPL: Pets, Parking, and Laundry. If you can maximize all 3, then you've also created a very wide lead funnel, which is less common in multifamily properties.
Maximizing "pets" means you're removing carpet, allowing at least 2 pets including cats and larger dogs > 50 lbs, access to a fully fenced-in yard or walking distance to a dog park, leniency on breed restrictions (depends on insurance, your risk tolerance, due diligence with pets during inquiry phase), pet friendly furniture (e.g. faux leather couch, low pile rugs if at all), etc. Maximizing "parking" means you have at least 1 parking spot for each bedroom. Minimum 2 spots for a 3 bed MTR, minimum 3 or a 4 bed (may want to find if there's an overnight parking lot nearby). Tandem parking is fine only if that entire section belongs to the unit and coordination is not needed with other units in the multi to get in and out. Maximizing "laundry" means you have dedicated in-unit laundry that is also not coin operated and not located in a scary, dimmly lit unfinished basement. Ultimately, shared laundry works just fine in our multi's - sometimes you just have no choice.
2. Single lane driveway = not good for MTR in a multifamily because tenants will not want to communicate with the other unit to move their cars. In a multi that is a combo with LTR, I'd give the single lane driveway to the MTR unit and street parking to the LTR unit. But in the end, it depends on each scenario.
3. Street parking restrictions - is overnight parking allowed? Some towns in my area do not even allow homeowners(!) to park overnight on the street. Some towns require a residential parking permit (sometimes on specific streets only within that same town) - you need to know what those requirements are and how feasible it will be. Some towns even require a driver's license showing proof of address in that town in order to park overnight (impossible with MTR). Guest parking permits - are you restricted to a number of guest permits per month/year? What's the process & requirements (e.g. copy of lease agreement) for getting one and would the MTR tenant need to arrive early enough on check-in day to get to the municipal building that probably closes at 4 or 5 PM? If it's an Airbnb booking, are you having them sign a lease agreement in order for them to get a permit? Some towns require a nightly online form to be filled out for any non-residents who are parking their cars (this is easily automated from an operational standpoint).
As the MTR market becomes saturated over time, those who have separated themselves from the rest of the "competition" will continue to perform well by having an outstanding listing and all the MTR-specific amenities. I write "competition" in quotes because I collaborate with my local "competition" instead of competing with them - common among MTR operators.
