What Are MTR and STR Units?
Before diving into how to find the right unit for you, it’s crucial to understand what MTR and STR units are and why they might be a good option depending on your investment or rental goals.
Mid-Term Rentals (MTR)
Mid-Term Rentals typically refer to leases that last between one to six months, with a common sweet spot around three months. MTRs are ideal for people who are in temporary living situations—perhaps they’re relocating for work, taking an extended vacation, or waiting for their new home to be ready. MTRs offer more flexibility than traditional long-term leases but still provide stability compared to STRs.
Popular MTR Tenants:
- Business professionals on temporary assignments
- Traveling nurses or healthcare workers
- Students on internships or co-ops
- People undergoing home renovations
- Digital nomads
Short-Term Rentals (STR)
Short-Term Rentals typically involve leases that last anywhere from a single night to a few weeks. STRs have become especially popular with tourists, vacationers, and those who need temporary accommodations for a shorter duration.
Popular STR Tenants:
- Vacationers
- Business travelers attending conferences or events
- Tourists in major cities or tourist destinations
- People attending short-term work assignments or workshops
MTR vs. STR: Key Differences
1. Lease Duration
The most obvious difference between MTR and STR is the length of the lease. MTR units offer longer stays, generally between 1-6 months, while STR units cater to people staying anywhere from one night to a few weeks.
2. Tenant Turnover
STRs tend to have a higher turnover, which means you’ll need to regularly clean and maintain the property after each guest. MTRs, on the other hand, have less frequent turnovers, reducing the need for constant property management and upkeep.
3. Income Potential
STRs, especially in tourist-heavy areas, can bring in higher income in the short term, as nightly rates are typically higher. However, because of the high turnover, you may need to factor in extra costs for cleaning, utilities, and management fees. MTRs provide more consistent, stable income over a longer period, but the rental rates may not be as high as STRs on a per-night basis.
4. Regulations
One important consideration is the legal landscape. STRs are more heavily regulated in many cities because of concerns about noise, community impact, and housing affordability. Some municipalities restrict the number of nights an STR can be rented out, or require specific licenses. MTRs are often less regulated and more akin to traditional rental agreements, making them a more viable option in cities with stringent STR laws.
5. Property Management
Managing an STR can be more labor-intensive due to the constant need for marketing, guest communication, cleaning, and check-ins. An MTR, by comparison, requires less hands-on management once the tenant moves in, as there’s less frequent turnover and a more stable tenant base.
6. Tenant Screening
With STRs, tenants typically book online through a platform, so there’s less opportunity to screen them. In contrast, MTR tenants often undergo a more traditional screening process similar to long-term renters, including background and credit checks.
Pros and Cons of MTRs and STRs
Pros of MTRs:
- Stable Income: With longer stays, you have less risk of vacancy and can expect a more stable rental income.
- Lower Management Needs: Fewer turnovers mean less work for property owners or managers in terms of cleaning, maintenance, and guest communication.
- Less Regulation: MTRs often avoid the strict regulations that apply to STRs, making them easier to manage in highly regulated areas.
- Attractive to a Broad Tenant Base: Professionals, families in transition, and students are just a few of the potential tenants who could be interested in MTRs.
Cons of MTRs:
- Lower Income Potential: MTRs generally have lower nightly rates compared to STRs, meaning the overall income may be less lucrative in certain areas.
- Longer Vacancy Periods: If you don’t find tenants quickly, you could be left with a vacant unit for extended periods.
Pros of STRs:
- High Income Potential: In high-demand areas, STRs can generate substantial income, especially if your unit is booked consistently.
- Flexible Usage: You can block out dates to use the property for yourself or friends and family when not rented out.
- Tourist Appeal: STRs are ideal in vacation hotspots, providing a lucrative revenue stream if marketed well.
Cons of STRs:
- High Turnover and Management Costs: With frequent turnovers, there are ongoing costs related to cleaning, maintenance, and guest relations.
- Regulatory Concerns: STRs often face local restrictions and regulatory hurdles, which can limit your ability to rent out your property.
- Unpredictable Income: While STRs can be lucrative during peaseasons, there may be long periods of vacancy during off-peak times.
How to Find the Right MTR or STR Unit
1. Understand Your Goals
Before diving into property hunting, determine whether MTR or STR aligns with your goals. Are you looking for a more stable, long-term income (MTR), or do you prefer maximizing your income in a high-demand area with higher turnover (STR)
2. Research Local Regulations
Especially if you’re considering an STR, it’s essential to research local laws. Cities like New York, San Francisco, and Barcelona have strict rules governing STRs, limiting where and for how long you can rent out a property. Even if MTRs are less regulated, make sure to familiarize yourself with rental property laws in your area.
3. Location, Location, Location
Location is crucial for both MTRs and STRs, but for different reasons. STRs thrive in areas with high tourist demand—think major cities, coastal areas, and ski towns. MTRs, on the other hand, do well in business hubs, near hospitals (for traveling healthcare workers), or near universities and corporations with internship programs.
4. Understand Market Demand
Whether you’re looking for MTR or STR properties, understanding the market demand is essential. For MTRs, look for areas that attract professionals, students, or relocating families. For STRs, vacation spots, entertainment districts, and areas near convention centers often have higher demand.
5. Consider Property Management
Unless you plan to manage your property yourself, consider hiring a property management company. STRs, in particular, require constant oversight, while MTRs may need occasional check-ins. Make sure to factor in the cost of property management when calculating your potential income.
6. Platforms to Use for Finding STR/MTR Units
- Airbnb: Primarily known for short-term stays but also offers options for monthly rentals.
- Furnished Finder: Ideal for MTRs and often used by traveling professionals like nurses.
- Zillow and Trulia: Traditional rental listing platforms where you can search for flexible lease terms.
- Craigslist: Another option to find MTR or STR properties, though it requires more diligence when screening listings.
Expert Tips for Finding Your Ideal Rental Unit
- Use Advanced Filters on Platforms: On sites like Airbnb, you can often filter for longer stays. This is particularly useful for finding MTRs.
- Optimize Your Listing or Search Profile: If you’re renting out your unit, make sure your listing is optimized with high-quality photos and an appealing description. If you’re looking to rent, customize your search by using filters like "furnished," "month-to-month," or "pets allowed."
- Join Local Real Estate Groups: Many investors or tenants find good deals by networking in local Facebook or Meetup groups. These communities can provide insider knowledge on both MTR and STR markets.
- Work with a Real Estate Agent: If you're serious about investing, especially in a regulated area, consider hiring a real estate agent with experience in rental properties.
Our Expertise in MTR Management
At Parkside Asset Management, we understand the unique challenges and opportunities in the mid-term rental (MTR) market. With years of experience managing MTR properties, we’re experts at identifying the right tenants, maximizing rental income, and handling the day-to-day operations so you don’t have to. Our tailored approach ensures that your property is optimally marketed and maintained to attract quality tenants while providing the reliable income stream that MTRs offer.
Whether you're a seasoned property owner or a first-time investor, we can guide you through every step of the process, from property acquisition to tenant management. Our in-depth understanding of the MTR market means you can trust us to help you make informed, strategic decisions that benefit your bottom line.
Partner with Us
If you’re ready to explore the benefits of MTRs or need help managing your rental property, we’d love to partner with you. Visit our Parkside Asset Management website to learn more about our services or reach out to speak with one of our MTR specialists.
