In the interest of developing income that is more "passive" as we get older, we decided to try furnished short-term rentals. We bought a four-unit of 2BR apts. in a factory town that has periodic shutdowns for retooling and a large hospital.

With the pandemic, we thought things were going to be tough for a while. We've been pleasantly surprised. We haven't been at 100%, but we've rented to guys in town for a surveying job, a traveling nurse, a doctor waiting for his house to be built, and someone doing summer sales. When the place is full, we bring in almost 4x the going rate for a vacant apt. Expenses are higher (we pay utilities), but not that much higher!

Hey Robin, I rent to students and am a strong believer in furnishing units:

1. I show my places occupied and they look way better with my furniture.

2. reduce damage move-in and out.

3. reduce chance of bedbugs.

4. students are happy to pay extra for furnished apartment/house.

Ken[NY]

I'm familiar with the short-term rental niche, particularly in a resort area.

I have a few questions on the furnished rental, particularly with the distribution center niche.

1. Does your friend provide bed linens and towels, or do they?

2. If your friend has multiple bedrooms, how does he/she handle roommate situations where one roommate swaps out for the other?

Who is responsible for damages as people move in/out?

3. I'm assuming that damages are mitigated, because someone is coming to clean weekly.

4. I'm assuming that these are workers coming in for short-term assignments, or just moving into the area, so the in-home visit may be more difficult.

5. I'm assuming that they found a contact in the distribution center to post vacancies.

Any corrections of assumptions or other details that you can give would be useful.

Thanks in advance.

Robin, Thank you for sharing. How do you advertise your furnished property to draw people in?

What is the best way to determine if there is a niche for this in your area?

How did you decide what to charge?

Does this four unit have a common area?

6x6: A guy my husband met at a local REIA meeting told him about the opportunity. There's a refinery in town that does periodic shutdowns/retooling. They bring in lots of plumbers, electricians, etc. to do it who get paid a per diem. At the time, they were doing a huge project, and guys were paying through the nose to stay at fleabag motels 30 miles away.

We charged slightly less than their per diem, which was about half what the one nice hotel in town was charging.

We started by advertising on AirBnb and taking flyers to the local union hall. We set a minimum stay of 7 days to weed out vacationers who might expect something a little nicer. One contractor found us through Airbnb and brought the others in. That initial crew stayed 5/6/7 months until the shutdown was over. Now we're getting stays ranging from 7 days to 3 months.

The property is an old Victorian house that was divided up into apartments. Each apartment has two bedrooms and an eat-in kitchen. No living room. They all open out onto the porch, so no common areas really.

When we were living in another state, the small town we were in was experiencing phenomenal growth, there was only one motel in town, people were commuting forty-sixty miles daily to work. I met someone doing just as you described. She was providing bedsheets, kitchen utensils even. Most tedious for her was counting all the items at turnover, to charge for what was missing.

One suggestion I would have to deal with counting the ‘smalls’ was to have a ‘package’ of those small items that the tenant would purchase at the start, tenant could take them with when they go, or leave extras for the next tenant. I didn’t get to discuss the business too much with this person- we were in an entrepreneur class at uni, I had suggested as our project for the class we consider renting small houses directly to the businesses that were bringing in all of these workers, found out she and her husband were doing this. She didn’t want to use this as our class project, as she didn’t want to present the idea to a class of potential entrepreneurs, in a small town.

Thanks Robin, Ken, and Busy.

Sir Walter: You are very perceptive. Originally, my husband partnered with the REIA guy. DH provided the funds, and the other guy rehabbed the property and provided the management. At least, that was the idea.

Robin, Thanks for sharing.

unless you have a trusted deputy to handle the chores with repeated turnover there's nothing passive about that plan.

With prorating rent for mid-month moves. You can really do what you and tenant agree to, subject to your state/local laws. On a short term rental (less than 6 mo), I will pro-rate because I have an upcharge on short term rentals. So tenant is already paying a higher rent. Plus in Wisconsin landlords are not allowed to collect rent from more than one person for the same period on the same unit. So if the tenant vacated on 10th and you had a new tenant on the 17th, You would have to refund the balance of the pro-rated rent to the tenant. For long term tenants, 1 yr or less, I would prorate the first mo rent to reflect the move in date but last day of lease would be end of month. Bookeeping is simpler when running month to month 1st to 1st. Simply mo to mo agreement with first mo pro-rated.

We have both short term/Airbnb furnished rentals where people stay anywhere from a 3 day weekend to 6 months and long term rentals.

The furnished rentals pay more and it’s a better class of tenant, but they are also more demanding (internet isn’t working, power went out bc of a storm, when will it be up?) and it is so much more work.

Regular rentals are easy except for at turnover. Need lots more screening and ya gotta open a lot of oysters to find a pearl with those tenants, however.

We are in an area where local populace is “rust belt” but it is close enough to NYC where there is a sizeable weekend/vacation rental crowd.

After COVID (and even before) there were a lot of people who were becoming disenchanted with city life and are trialing moving to the country. They have money and good credit. But are transient and high maintenance. Local folk will rent the same place for years and never a peep, but you aren’t getting market rent.

I’m still on the fence as to which rentals really “pay” better. I make equivalent of $250/hr in my day job so demanding tenants who suck up time with texts and phone calls are pretty expensive. If I didn’t have a day job or had a lower paying one, short term furnished all the way.

Andrew, I could share the location, but it really wouldn't do you much good. It is SO local. You might start by researching the location of oil refineries. Apparently shutdowns to retool are fairly common. Another rich avenue is line workers who follow big storms to repair damage to electrical lines.