Make 30% More Than Regular Rentals? One Property Sees “Explosive” Demand

Dave:
Monthly rentals have moved from a niche to a meaningful slice of the housing economy and there is finally a dataset that shows how and where it’s growing. I’m Dave Meyer and today I’m joined by Furnish Finders Jeff Hurst to unpack their new monthly rentals report with Air DNA. We’re going to start by talking about what this report is, how it’s built, because it’s pretty cool. It’s the first of its kind where we’re actually getting some new insights and data about the really profitable midterm rental market. Then we’re going to dig into specifics like where demand is rising, which markets lead and the playbook for investors who want to get into this segment. We’ll cover what you need to know and how to act on it. This is on the market. Let’s get into it. Jeff, welcome to On the Market. Thanks for being here.

Jeff:
So glad to be here again and excited to be talking to everybody.

Dave:
Yeah, we had a super popular show last year with Jeff, but for those of you who haven’t listened, Jeff, maybe you can just reintroduce yourself.

Jeff:
Absolutely. So I’m Jeff Hurst. I’m the CEO at Furnished Finder. We are a monthly furnished rental platform. The platform’s been around about 10 years. I’ve been here about two years when we partially bought out the founders with some private equity and I have been upgrading the software, upgrading the team and helping ’em provide a better experience. Before that, I spent over a decade as the president of vrbo, the chief strategy officer of HomeAway, and also the Chief Operating Officer at Expedia Group. So most of my career is short-term rentals and along with that I’m a real estate investor and so I own three short-term rentals. Previously self-managed, one of them for about a decade, and now they are all property managed, so I’ve got one on the beach, one on a lake, and a working ranch, which has been a different type of adventure.

Dave:
Well, that’s great. I mean, I feel like that’s everyone’s dream life, right? It is like you have a collection of short-term rentals, hopefully making you a little bit of money, at least. Hopefully we’ll get everyone on who’s listening to this to that 0.1 day. That’s our collective goal here, but we’re here today to talk a little bit more about longer term rentals, so not necessarily short-term rentals, but Furnish Finder work together with Air DNA to put together a report on monthly rentals. Can you just tell us a little bit about the scope and methodology of this report you put together?

Jeff:
Yeah, absolutely. I mean, first of all, for those who don’t know Air DNA, they’re without question kind of the gold standard of reporting on short-term rentals. And so for over a decade they’ve been tracking Airbnb, vrbo, booking.com. They’re constantly updating their data sets, and so I’ve known the team there for a long time from my life in short-term rentals, and I had reached out to Jamie Lane there to see about collaborating on, Hey, listen, we’ve got kind of different data sets and I think this thing’s bigger than a lot of people and my old orbit short-term rentals think it is, and so I’d love to get together and just see what we learn. As it turns out, they had already been looking at upgrading their data products, which they’ve now done to be better at understanding when 28 days or longer and when it’s not.
It’s tricky with the way they’ve built their platform, but they’ve done a great job doing that. Furnish Finder is a classified site, so we don’t have great booking data, but we have a ton of signal on where tenants are trying to go, where landlords are adding inventory and then the characteristics of what’s in demand and not. So we thought it was a great compliment, and so it kind of came about as just an idea and we were like, Hey, let’s all peek under the hood and look at each other’s data and see what the story says. And for us, it was really exciting because it was confirmatory of a lot of us kind of staking our next careers on this opportunity of that. It’s says monthly furnish rentals are growing really fast and there’s a ton of demand for ’em. Interestingly, it says it’s very different than what most short-term rental demand is. It’s not leisure based, and so it does shine a light on this thing’s growing a lot faster than short-term. It’s adding more inventory and it’s a different type of asset class.

Dave:
What are some of the differences between the short-term and midterm rental industries?

Jeff:
You start with, it’s obvious the difference is one’s for 30 days or more, but when we look overall, so one key difference, smaller footprint, and so 70% of the inventory on furnish finders two bedrooms are smaller. When you extend that to apartments.com and Zillow, totally the same trend, smaller footprint where it is way less likely to be in a leisure destination in general, think about it as being around universities, hospitals, and commuter corridors, and that’s because the tenant types the largest is commuting for work. That could be skilled trade, but it’s also a lot of professional services. Second largest is healthcare, which is how Furnish Finder built its name. The third largest and fastest growing is relocating families. I think that’s the most interesting for investors because it really opens up where the category can go because of those things. It’s overwhelmingly unlike suburbs, small towns, it’s in major urban areas, but it’s not in the downtown corridor.
What’s exciting about that is the assets tend to be less expensive than short-term rental. For the price of a short-term rental, you might be able to buy a duplex or a quadplex and have a different type of key strategy. It’s probably typically a better cash on cash return because the entry price is lower and the cost to outfit these is way lower. Think like $7 a square foot. I was talking to Garrett at BiggerPockets routinely, a short-term rental might be more like 30 to $50 a square foot because you are investing in wow amenities because you’re trying to really help somebody have a great weekend. We’re trying to help somebody get through a tough time or maybe have a comfortable place to sleep while they’re on a work assignment.
So those are the key differences. The thing that I think surprises a lot of people, the average length of stay on furnished finders over three months and over a third of the tenants extend, and so you’re talking about doing three turns a year and if you’re doing it well, the occupancy is actually a lot higher than a short-term rental. You might only have a few days between turns, like 90% plus, and so it’s very different, but people who are great at short-term rentals can be excellent at midterm rentals because it’s actually easier. You’ve just got to do a different type of asset hunting.

Dave:
It seems easier from a property management perspective and from a design perspective as well. Totally is what you’re saying. I was kind of curious about that. If people spend as much effort into a medium term rental or there’s no ROI on that

Jeff:
They don’t, you think about when you’re designing for a short-term rental, you have to think about who’s coming, where are they coming from and what’s the wow amenity? Is it pickleball? Is it that we’re going to do foosball and ping pong? Are we going to have some sort of different visual aesthetic or fire pit? Everybody knows how to sleep comfortably. It’s like, can I stock a kitchen with basics? Can I get a reasonably good couch in TV and can I have a quiet place to sleep comfortably? You don’t need to have a designer. You need to be pragmatic and you need to know how to do these things efficiently and you need to be really good at locating where are people going to need this type of inventory?

Dave:
Totally. Yeah. Just to my own experience with midterm rentals, I moved to the Seattle area about a year ago, didn’t know where we wanted to live, stayed in a midterm rental in one area for two or three months, figured out we wanted to live on the other side of the city, moved to that area, stayed in a midterm rental for two or three months while we did some house hunting and ultimately found the place and we wanted somewhere comfortable. We wanted parking, we wanted proximity to the grocery store, stuff that you look for more in a traditional long-term rental as a tenant. Whereas yeah, if I’m taking a short-term rental, I’m like, give me a golf simulator and a view of the mountains and I’ll be pretty happy, but it’s not what I’m

Jeff:
Expecting. Interestingly, the midterm use case, because it’s not long-term, it curb appeal matters a little less. Like you don’t care as much that there’s wow curb appeal that there’s a fantastic, you need maybe a lawn for pets, but you may not need the perfect manicured front lawn and stuff like that because it’s really transitional and you need it to be comfortable. And so that gives you a different type of flexibility. Also, like what you’re describing I’d say is our fastest growing use case, we call it try before you buy, and it’s people who aren’t sure where they want to be in a new town, but it’s also people who might be priced out and so they can’t afford to make a mistake with the way housing inventory and affordability is right now,
And so they’re going to be really picky about what they buy after they figure out where they’re going to buy, and that might mean they’re in these for six to 12 months and furniture’s a bad investment, and so they’re also want to be sure they buy furniture for the place they’re going to be in for a long time and aren’t moving it and moving it. And so it’s an interesting dynamic and I’ve found it to be my kind of eat crow moment is at vrbo. I often thought that Chesky at Airbnb was kind of like, I didn’t believe his story about how people were going to live and increasing like, okay, I get it. People are going to live more flexibly. And what’s shocked me is it’s both ends of the generational curve. Yes, it’s younger people, but it’s absolutely boomers in late Gen X

Speaker 3:
Really,

Jeff:
My mom lives two to three months a year in Maine. She’s not. It’s because she’s crazy wealthy and has another home. She travels with a friend, people are grandparent traveling instead of living in the guest room of their kids, they’re getting a house nearby that’s a duplex and they can walk to their kid’s house but have the grandkids at their duplex. And there’s a lot of these use cases because of the generational wealth transfer and housing where I think the older generation’s actually catching up or exceeding this idea of flexible living.

Dave:
That makes sense. I guess now millennials are mostly, at least those who can afford it, trying to settle down into a home and are less having kids, they’re a little less transient, traveling less probably than these other generations, so that makes sense. Alright everyone, we got to take a quick break, but we’ll have more with Jeff Hurst from Furnish Finder right after this. Welcome back to On The Market, I’m Dave Meyer. Let’s jump back into my conversation with CEO of Furnish Finder, Jeff Hurst. So you mentioned earlier, generally it sounds like the industry, the category as a whole is growing. Is that both on the supply and the demand side?

Jeff:
It is. So in the report, air DNA has got a better view of demand, so they estimate that there’s over 6 billion of transactions on the short-term platform that are 28 days and longer. So that’s big. We have seen from 2019 to 2025, the furnish fly through platforms gone from 20,000 listings to over 300,000. Oh

Speaker 3:
My gosh.

Jeff:
So 15 times more inventory. We think we’re probably the biggest site for monthly furnished inventory just period. So like Zillow has about 50,000 monthly furnished apartments.com, about a hundred thousand. There’s not a great number out there for Airbnb. We estimate it to be about 150,000, but then of course they’ve got millions of homes that could be rented for 30 days plus, but they’ve got a three day minimum or a one day minimum. So it’s explosive growth. It used to mainly be healthcare and some niche use cases. Think about what trucks are at an extended stay America and increasingly it’s way beyond that. And that was the other interesting confirming stat, 40% of all new hotel starts are extended stay.

Speaker 3:
Really

Jeff:
The big institutional money is going into extended stay and you see that with new strategies of higher end extended stay, but it becomes, again, to your point of commercial or long-term real estate, a little bit easier to go hunt because you just look where the hotels are, who’s great at asset identification, Hilton and Marriott, they don’t screw it up a whole lot. And so if you go figure out where they are and have a duplex nearby, then your equation becomes, okay, well the Hilton extended stay property is going to be $3,000 a month. I can deliver twice the square footage and a private space for $2,000 a month. Are people going to choose that? Yeah, if they know they’re going to choose it. It feels like short-term rental in 2010, it’s just way better. It hasn’t gotten as complicated yet.

Dave:
Where’s demand for monthly stays coming from? Where are you taking it from? Right. I guess hotels is one part, but is it also, I mean long-term rentals too, it sounds

Jeff:
Like? For sure. Yeah, I mean it’s part of the long-term rental platform. I think that when you look at the big macro trends declining home ownership increasing, they’re not really caring whether you’re renting in a 12 month lease or a three month lease that renews four times, you’re just a renter.
And so the macro trend of more people renting probably plays into it the most. I do think there’s hotel share steel, but I don’t think it’s zero sum. I think the hotels realize there’s so much excess demand that they’re building supply and we’re helping augment the need for more supply. If you’re a landlord, you’re probably advertising on Furnish Finder a little over half or exclusive to Furnish Finder. You’re likely also on Airbnb or maybe also on Zillow, and it’s got more of a hustle dynamic. You’re more likely to also be telling your neighbors, you’ve got a space in the neighborhood for if somebody gets divorced or the roof catches on fire or whatever. That part’s unique of that. It’s a little bit more cottage industry that way and a lot of it is more referral or local relationships. And the asset class is unique that way because a lot of neighborhoods and even municipalities have banned short-term rentals, but this actually feels like a neighborhood asset.
You’re excited if somebody like you is moving to a neighborhood in Seattle and has a chance to live for three months and be sure they can buy something in the neighborhood, become a part of the community. You’re not excited if a family gets divorced. But it is nice that the husband and wife can both stay in the same neighborhood and have kids close to each other and maintain family consistency. And then if somebody’s plumbing burst or roof catches on fire or just wants to remodel, it’s great that your friends get to stay in the neighborhood. It just feels like an asset

Dave:
A hundred percent. I think I probably, I was on Furnish Finder the other day because starting to remodel in the next couple of months thinking about where I’m going to

Jeff:
Stay, it’s going to be over budget. So you’re looking for a way to save some money too. Yeah, exactly.

Dave:
So talk to me a little bit about, we see demand seems to be going up, supply is certainly going up. One of the knocks or the question marks about short-term rentals recently has been about oversupply. Do you have concerns about that? And I’m sure it varies market to market, but do you have concerns about oversaturation in the midterm market as well?

Jeff:
No, nowhere near what I did with short term.

Dave:
Really

Jeff:
Short term obviously went through a fantastic boom period. I think the dynamic at play there is there’s a lot of what I’d call irrational buyers. It’s very often almost like the middle class version of buying a sports team. There may be someone out there who’s willing to buy it with no intention of making money. It’s not an investment, it’s actually that they just want it for usage. And so the dynamics of who’s buying those are different. It went through a boom, but the boom was very consolidated and Gulf Coast and lakes, rivers, mountains, so there’s oversupply in a small number of places. What do you have everywhere? But there under supply everywhere there’s a housing shortage and in most places it’s a pretty durable housing shortage. And so I think the estimate is we’re over 10 million units of housing short. And so when you think about where midterm rentals plays, it actually plays way more in the suburbs and in places where there aren’t any short-term rentals than it does in the places where there’s saturation. And so it’s more likely to be where there’s a new community coming up where there’s a new nearby or where there’s a new hotel, then it is where there’s a new Ritz Carlton or a new resort property

Dave:
And how can people measure or get a sense of where there’s good supply and demand dynamics. Obviously you mentioned one tip of following the hotels, which is a great tip, but are there any other ones you recommend?

Jeff:
Yeah, so there’s a tool on furnish finder called Market Insights. You can reach it from the homepage, you can put in any city in the US and it’ll tell you how many visitors have seen that map grid. So how many people are searching the area where your property could show up, it’ll show you how much inventory is there and it’ll show you by price point, bedroom type. What’s the distribution?
This is, I’d say it’s a solid B product we’ve built now, but there’s some real improvements we need to make. And so my advice to people would be check it out now, but check back on it every month because I think there’s going to be some things that we’re doing that help make it more powerful, like moving it to zip code search. We’re going to do some things that better represent that. If you’re looking at Austin and part of the map might show a smaller town outside of Austin, we may not be accurately showing you the exact demand for that small town. And so we’ve got to help better calibrate the way that works, but start on furnish finder. Second thing, use a site like Air DNA, because short term is a good indicator. And then the third thing is use the OTAs to your advantage. Go to a booking.com or an Expedia and look at where the extended stay properties. And you’re kind of think about this triangle where you’ve got furnish finder Airbnb and an OTA and you’re trying to figure out, okay, well where do things line up to where I’m getting a little bit of everything in that triangle and then you’re into something that’s pretty special.

Dave:
And then tell me a little bit more about what assets people are buying. You said it’s different, it doesn’t have to have this wow factor. Is there some sort of sweet spot that you find has a lot of demand but is also reasonable from an expense perspective?

Jeff:
Yeah, I mean I think what I’d start with is lemme just kind of describe the continuum. And so first of all, of our over 300,000 listings, 60,000 are rooms.
And that’s a very new product for me because at VRBO we didn’t do rooms. And so I’m kind like I’m learning about it also. It’s growing fast and it’s a really interesting strategy and I think of our partners. I think pad split’s a really interesting partner to learn more about, but, and how you rent out a room is a great strategy because America actually doesn’t have a room shortage. We have a housing shortage. My mom lives in a three bedroom home and she’s one person. There’s a lot of people like that. And increasingly as they think about are you willing to rent out a room or are you willing to add an A DU to a property, there’s kind of a starting place there. The second stop on the continuum would be there’s a ton of studio apartments and one bedrooms, apartments, condos, duplexes. But the important thing there is, unlike short-term rental, it is actually viable to where you can get into this and more of an arbitrage model.
And so you can take out a two or three year lease and most buildings and landlords are amenable to, Hey, I’m going to have four tenants in here over the course of the year as opposed to I’m going to have 54 tenants in it over here over the course of the year. And so there are people who kind of dip their toe in the water with arbitrage and then the majority is a single family and it’s two bedroom or smaller. I think the sweet spot is one bedroom with a bonus room so that you have the opportunity to play in housing a family of three or four or having a slightly bigger place for a couple or somebody who wants some office space while they’re there. That’s probably the sweet spot. The inventory class in general is moving to larger footprints because of the family dynamic, but it’s more like three bedroom is the larger part. There’s nothing here exciting for your five bedroom, your six bedroom, you’re like some of the most successful STR formats are those like sleeps 23, put four families here and you’ll save the cost of eight hotel rooms. That’s my lake house.

Speaker 3:
That’s

Jeff:
Not part of the situation here. I think it’ll cap out around three or four rooms unless, and then the co-living strategy can allow you to yield a lot more if you’ve got five different tenants and a five bedroom house and are treating it more like a monthly product. And so it’s very flexible. And I think what’s interesting as an investor, it’s a lot easier to invest in what you just kind of think about, oh, I can put one of these within half an hour of my house. Where could I look within half an hour of my house? And then self-managing is way more of an opportunity than short term. It is closer to your primary residence and you’re only dealing with it three or four times a year.

Dave:
And I imagine that it’s also a little more flexible, not just on size, but in type of asset. Just hearing you talk, Jeff, it makes me feel like you could potentially buy attached homes, condos or town homes, whereas I think for short-term rentals, in my experience, most people want to buy single family dwellings just to stand out a little bit. But I don’t know, in my experience as a midterm renter, I don’t really care. I just want a comfortable place, like

Jeff:
You said. Yeah. Is it as private as a hotel room? That’s kind of the bar. And so an A DU or an attached property for sure. Yeah. I think some of the people that have had the most financial success play in that duplex quadplex space
Because you can own the dirt. You do have more flexibility. And I think some of the best investors in the category underwrite it as like, okay, my worst case scenario is this is a successful long-term property. What does that return profile look like? Okay, well what if I can then do 40% better than that as a midterm rental? What does that return profile look like? And that kind of establishes your range and that midterm range can get really exciting and start to kick off cash really quick. Basically, what’s the return on furniture? And furniture usually pays itself back in six months on our platform because it’s five to $7 a square foot and then you’re just making more money forever the depreciation lifecycle of furniture in a mid terminal, maybe three or four years. So you’ve got three years of extra cash before you have to refresh.

Dave:
Let’s talk a little bit more about the economics here because in my mind there’s sort of this continuum where it’s like long-term rentals least amount of management on a day-to-day basis usually, but the lowest cashflow potential, if you break it down by how much revenue you’re bringing in per night, that’s going to be the lowest then in my mind, correct me if I’m wrong, midterm sits in the middle where it’s a little bit more work. You have maybe three tenants, like you said in a year instead of one, you have to furnish it. There’s maybe some more maintenance and costs there, but the daily rate you can get is higher. And then short-term rentals are sort of the highest revenue potential, but also the biggest management burden. Is that the right way to think about it?

Jeff:
Yeah, that’s exactly it. I mean, I’d say a pretty average short-term rental is probably doing something like $2,000 a week in rent. An average monthly rental is doing more like $2,000 a month in rent, and then your long-term rental is probably more like $1,500 or 1700 when you adjust for four. And so we look at furnished as your premium’s probably 30 to 50% increase in monthly rent over long-term, and you’re paying for furniture and you’re paying for flexibility to break the lease sooner, but it’s all almost a fully occupied short-term rental. Well, if you could get a fully occupied short-term rental, it wins it’s way more money. And the only other difference I’d add to it is management fees are actually pretty notably

Speaker 3:
Different

Jeff:
Because of the extra turns, the extra standard of care management fees for a short-term rental, I think minimum are going to be 20 to 25%. And when you add in lodging taxes and all that sort of stuff, it can be like 40 to 50% of what the tenant pays in a short term actually doesn’t go to the owner in a long term. It’s more like 10 to 15%, and in midterm it’s more like 15%. You can kind of get it closer to 10, but you’re way more likely to be able to self-manage it and save all that money. And so you end up with more independent landlords kind of self-managing who are really about profit percentage maximization in midterm. I think.

Dave:
And I think it’s really important for everyone listening to just think about, there’s sort of a positive efficiency here where short-term rentals, yes, I think everyone agrees most revenue potential, but the expenses scale with that revenue a bit. And what Jeff is saying here is that the expenses with midterm rentals aren’t necessarily proportionate to how much more revenue can make. So your margin can actually increase definitely over long-term rentals, but potentially you could get a similar profit margin in some respects as a short-term rental. We do have to take a quick break, but we’re going to be right back with Jeff after this quick word from our sponsors. Welcome back to On the Market. Let’s jump back into my conversation with Jeff Hurst. Jeff, do you have any data on just the average occupancy? I totally get the potential is really high, but if you’re not booking these things out, potential means nothing.

Jeff:
I don’t have great data on it because we’re a classified site,

Dave:
And

Jeff:
So we do surveys on it. The surveys would tell you that the people who are good at it are 90% plus. When you’re full-time strategy and you’re treating this a second job, not just a puzzle, but you’re out talking to insurance companies and really marketing you can be 90% plus.

Dave:
Whoa.

Jeff:
Yeah, man, you’re talking about eight vacant days a year.

Dave:
Wow.

Jeff:
And it is skewed a ton of these end up with a tenant who rents for three months and is there for two years, and then you’re at the higher rent for two years just rolling it over and rolling it over and rolling it over because they got comfortable and they can afford it and it works fine and they don’t want to change it. And so that skews the numbers a little bit. My hunch is more of the average occupancy probably feels more like 75, 80% that there is a little bit more churn because we’re in a lot of locations where I think there is seasonality. That’s something to consider. There’s basically, there’s two pure strategies here. One is I’m a midterm rental only. I’m out there trying to hustle. And the big difference you’ve got to think about is your calendar’s no longer a game of Tetris. You’re going to get the next midterm rental booking and then that’s it. And then when they give you notice, they’re moving out, you’re going to go get the next midterm booking, but there’s no forward calendar. You don’t have a booking six months out in a weekend here in July 4th, and all these things that you’re balancing, you’re just taking a booking at a time. Whereas the hybrid model would be like, I’m actually kind of willing to take a midterm booking or maybe seasonally, that’s my preference, but I’m a short-term rental.
I’m actually always going to book July 4th at max. I’m always going to book Labor Day at max. And if I’m in Michigan, yeah, that’d be great if I got a 90 day rental in the winter, but I’m also maybe not going to turn down a Christmas booking because that might be a great booking for me. And so you’re playing a different game there. The book to Stay Windows, interestingly, almost 30% of bookings for 30 day plus days happen within a week. So the book to stay window is actually shorter than short term.

Speaker 3:
Really.

Jeff:
And you think about it and it’s like, oh, well, if I’m a healthcare worker or a business worker, a lot of times you find out two to three weeks out there, Hey, you’re going to Akron, get ready, go figure it out. And so there is some of that. Or if your pipes burst and a freeze, you need a place tomorrow. And so it’s intuitive, but it surprises people just because you’re going support for 90 days and you’re figuring out on five days notice, a lot of the time

Dave:
You’re not planning it like a vacation.

Jeff:
Yeah. No one wants to screw up spring break, they plan it six months in advance at vrbo. It’s like, what do you do when you finish New Year’s? Do you plan spring break?

Dave:
One thing, Jeff, I’m curious if you can give some advice to our audience here is I buy rental properties and every time I walk into one these days, they’re like, it could be a midterm rental. And I’m like, yeah, sure it could. But I don’t know if that means it should be a midterm rental. So do you have maybe thoughts on what you should talk to your agent about if you want to look for these or if someone’s telling you you should make this a midterm rental. How do you gut check if that’s really the best strategy for the given asset?

Jeff:
Yeah, a very cheap way to gut check it, especially once you own the place, say, a common scenario for us is people get married and they’re trying to figure out what’s to do with the other house. Do they turn it into a long-term rental? Do they sell it? Do they make it a midterm rental? And so lemme take that use case and then I’ll get to your how do you decide what to buy And that use case, my biggest advice is one, if it’s already furnished, furnished finds $200 a year, just buy it and see what happens. Go put up an advertisement, and if no one’s bit in a month, then it’s probably not your right strategy. If you’ve got an unfurnished place, put it up unfurnished finder, unfurnished with a picture that says, I’m going to furnish it for the first tenant, and you’ve got an $8,000 budget to pick out what you want.

Dave:
Whoa.

Jeff:
And so then you may end up with like, oh, well, I actually do want three twin beds in my two bedroom because I’m a single mom who’s going to be with three kids. This is huge. Now I can get three twin beds in there. That’s great. And then you end up not having to invest in the furniture until you have the tenant. And the tenant actually often likes it because all the stuff’s new and they get to have some input into what you put there.

Dave:
Wow.

Jeff:
Now, if you’re earlier funnel, I’m looking for an investment property and thinking about buying, the first thing is you go back to that first principles conversation. We had Airbnb, furnish finder, OTAs calibrate on what have the realtor explain why they say that. But if they’re not calibrating with one of those three data sets, there’s not another data set out there except they want to tell you that or someone else told them that.
But I’d say you’re still in a very safe space with a thesis of if that investment works as a long term, it’s all upside. You can’t say the same about, well, hey, this investment as a short term is supposed to do $110,000 a year. Well, the midterms probably not going to do $110,000 a year. And so if you underwrite as a short term and end up in a midterm, you may end up underwater. And we do see a lot of that with regulatory pressure. Somebody comes in and they’re like, I can’t rent this out for less than 30 days in most major cities. Now what do I do? I’ll make it a midterm. Great, you’re going to have some bookings, but it’s actually not going to be as much money as you had thought you were going to make as a short term. And there’s some fundamental disconnect there, which is a little bit of a market clearing problem.

Dave:
Jeff, this has been super helpful and I think our audience is going to really be interested in this. Any last pieces of advice for people who are interested in the midterm rental market?

Jeff:
I think all investing, find something that you feel like you’ve got a personal attachment to and something you’re curious about. And then just get started. So what does your neighborhood need? What do people in your area need? And start there. It’s way more approachable than, I had a great trip to Telluride. I wonder what it would be like to try and buy something in Telluride and find out who else lives there.

Speaker 3:
It’s

Jeff:
Actually pretty hard compared to, I know a traveling nurse nearby. I wonder where she stays and what she does, and can I provide that service better? So just start really first principles and then use data from Air DNA or Furnish Finder and otherwise, and go see if it works. But you can do this in a way that’s not a financial future risking type of model. Like start with a room, start with an adu, start with something small, and go try and make your first $500. And I hope it turns into 5,000 and 50,000 in financial independence.

Dave:
Yeah, I love that. I mean, that’s a really cool approach because in real estate, you don’t often get to do that. A lot of times you have to take a really big bite before a big

Jeff:
Swing.

Dave:
Yeah. And this is an opportunity where you can learn a little bit and maybe take a page out of the tech approach and just be a little bit more iterative about how you’re going to build and learn and go and improve all the time. Well, Jeff, thanks so much for being here. We really appreciate it. A link to the report will be in the notes. You should check that out if you want to learn more. There’s all sorts of great information maps about where demand is growing, all sorts of good stuff. So check that out. Thank you all so much for listening to this episode of On The Market. We’ll see you next time.