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Hello and welcome to The Property Management Show podcast, your go-to destination for exploring the dynamic world of property management, entrepreneurship, and marketing. Brought to you by Fourandhalf Marketing Agency, a leader in the industry since 2012.

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Recap of Part 1: Establishing the Foundation of Mid-Term Rentals

In Part 1 – Maximizing Profits with Mid-Term Rentals: Property Management Blue Ocean Strategy, our guest speakers Jessica Schirmeister and Jason Zimmerman from Trend Property Management in Texas discussed the growing trend of mid-term rentals. These types of rentals, also known as furnished rentals, have become increasingly popular in recent years.

That episode highlighted the unique niche that mid-term rentals occupy, situated between short-term and long-term rentals. Key focus areas included the demand for these types of properties, their profitability potential, and the evolving rental market trends influenced by remote work and lifestyle changes. The episode provided foundational insights into the benefits, challenges, and operational dynamics of managing mid-term rentals.

In this episode (Part 2), we’ll delve deeper into the operational challenges and strategies for managing mid-term rentals. We’ll discuss finances and the subtle art of balancing tenant rights with property management objectives.

Evaluating Investment in Mid-Term Rentals

Part 2 starts with a discussion about the financial feasibility of investing in mid-term rentals and ensuring a reasonable return on investment (ROI). Jessica shared an example of how a month-long tenant could provide up to four times the revenue compared to a traditional annual lease. However, she also emphasized the necessity of factoring in additional costs such as furnishing, utilities, and cleaning fees when evaluating the profitability of mid-term rentals.

Jason stressed that property managers should be strategic in their investment, considering the demand and market conditions. It’s important to understand potential risks and always have a backup plan in case the rental doesn’t succeed as expected.

Financial Considerations and Return on Investment

Investing in mid-term rentals is an intriguing proposition, blending the stability of long-term rentals with the higher earning potential typical of short-term stays. For property managers and investors, understanding the financial landscape is key. This involves assessing the initial investment costs against the potential returns. Mid-term rentals often demand a higher rental rate, reflecting their furnished status and flexibility. This can be an attractive proposition for tenants looking to avoid long-term commitments.

Cost-Benefit Analysis: Investing in Furnishings and Amenities

While discussing the financial aspects of investing in mid-term rentals, Jessica and Jason also shed light on the pros and cons of furnishing a property.

Furnishings can attract more tenants:

• Mid-term renters are often looking for fully furnished properties to make their stay comfortable and convenient.


• Furnishings can add value to the rental experience and justify higher rent prices.


• In a competitive market, furnished properties may stand out and attract more tenants.

Furnishings can also come with additional costs:

• Investing in quality furniture can be expensive upfront.


• Managing and maintaining furnishings requires time and effort.


• There is always the risk of damage or wear-and-tear from tenants, which may require replacements or repairs.

To get an initial understanding of whether furnishing a rental makes sense, evaluate if the property in question can generate an additional $4,000 or more each month. Jason says that after evaluating over 50 deals, this seems to be a key threshold for justifying the investment in furnished rentals.

Here are some other key financial aspects that were discussed during the interview:

1.) Fixed Costs vs. Property Value:

It was noted that the fixed costs associated with a property do not necessarily decrease with a less expensive property. These fixed costs can erode the benefits of furnishing a property if the additional revenue generated doesn’t sufficiently cover these expenses.

2.) Revenue Threshold for Profitability:

Looking at the big picture, furnishing a property starts to make even more financial sense when it can generate significant additional revenue – in the range of $50,000 to $70,000 a year. This extra gross revenue is needed to cover all additional expenses such as utilities and other costs associated with furnished rentals.

3.) Increasing Rental Value Without Increasing Taxes or Insurance:

One of the strategic financial advantages discussed was the ability to significantly increase the rental value of a property through furnishing without correspondingly increasing the property tax base or insurance expenses. Most property improvements and upgrades can translate to higher insurance or property taxes, and this puts furnishing in a unique spot.

This aspect is particularly important as it implies that furnishing a property can lead to higher income without proportionally higher ongoing costs.

What are the Goals of the Property Owner?

In addition to financial considerations, you should also think about the long-term goals of the property owners. Key points from this part of the conversation include:

1.) Owner’s Net Profit Goals:

The decision to convert a property into a furnished rental is often influenced by the owner’s specific financial objectives. For some, an increase in net profit of around $5,000 a year is a benchmark that makes the investment worthwhile. However, this threshold can vary among different property owners, depending on their individual financial goals and circumstances.

2.) Long-Term Strategic Planning:

Another critical factor in this decision-making process is the owner’s long-term strategic plan for the property. If an owner intends to keep the property in excellent condition for an extended period, such as for inheritance purposes, they might be more inclined to furnish it. The rationale is that a furnished property can be maintained at a much higher level, ensuring its longevity and preservation over the years.

These considerations highlight the importance of aligning the decision to furnish a rental property with the owner’s long-term financial and strategic objectives. It’s not just about the immediate returns but also about how this decision fits into the broader picture of their property management and investment goals.

Having explored the financial considerations and owner’s objectives in detail, it becomes clear that the decision to venture into mid-term rentals is multifaceted. Now let’s dive into the nitty gritty of what types of furniture will and will not work for a furnished rental property.

The Art of Furnishing Rental Properties

When it comes to furnishing rental properties, it’s a delicate balancing act between expense and attractiveness. Quality furnishings and amenities can significantly increase a property’s appeal and rental value. The key is in finding the sweet spot – investing enough to make the property desirable and competitive, while ensuring that these costs are recouped through higher rental income and occupancy rates. This strategic approach to investing can lead to enhanced long-term profitability.

Can I Use Old Furniture in the Rental Property?

We know the thought of using old furniture may have crossed your mind, or at least the property owner’s mind. We don’t blame you. Jessica shared that it’s common for property owners to consider using their existing furniture to save costs. However, several important points were raised about the potential drawbacks of this approach:

1.) Quality and Aesthetics:

It was emphasized that for rentals charging higher rates (e.g., $4,000 and above), tenants expect a certain level of quality and aesthetics. Using old furniture with visible wear, like stains or damage, could lead to negative reviews and dissatisfaction among tenants.

2.) Why Does the Owner Want to Part With It?