Midterm Rentals The New Income Strategy

Daniel St Jean: Sarah Larbi and Aisha share their new income strategies which are midterm rentals. Now, because I mentioned it earlier, Sarah is one of The REITE Club co-founders and was able to retire from her JOB after just seven years in real estate investing.

She's now a developer. She's one of the principles behind Inspire Beach Resort. A really cool project, one of many she has going at the moment. Aisha is also a successful real estate investor. You can hear Aisha' and Sarah on many media platforms sharing their expertise and inspiring others to become successful REI investors. And you're gonna talk about midterm rentals, the new income strategy.

Sarah Larbi: Thank you. Essentially we have to pivot.
I think Brooke said it, we can't be doing the same thing that we were doing two years ago, even a year ago. Things have changed. And so a lot of our rentals now, Are becoming going on the midterm strategy, especially if they're rent controlled. It's that nice fine line between short term and long term.

Aisha will start, we're gonna just go through this real quick. And then obviously if you need some more information, we're happy to provide some more. But let's talk about what midterm rentals are.

Aisha Govani: I'll go quickly. So a midterm is anything over 28 days. Usually up to 12 months, but on average it's one to six. Usually midterms are fully furnished while they are fully furnished and we're catering to guests who stay more than 30 days for a specific reason. Short term are usually recreational or seasonal? Midterm we're looking at more corporate executives. Month to month extended stays where you wanna create relationships with these corporations and you know they're gonna continue coming back.

The cash flow is a little bit less short term than long term, but you have more control over it so you're not under the rent control. And you can also keep up with inflation and appreciation as best you can. You also have control over the occupants, the fees, the pricing. You can choose your guests prior to anything else. And then you have that control over what type of guests.

Sarah Larbi: If you want kids, you can say kids, if you don't. If you want pets, you can if you like. And this is not stuff that you can really do in the long term, so you have a lot more control.

There's this whole spreadsheet that we put together. On whether it's like your region, your neighborhood, and your property type. And if you put something like a one next to it, then it helps you add the points. And if you get a certain percentage, it'll tell you if the property is good for midterm. Not everything is good for the midterm strategy if you are in an area where it predominantly renters.

It's probably not going to do this well. So we are active, not only are we on Airbnb and we're on those platforms, but if you're gonna do this strategy for the long term, you're gonna wanna build some relationships with HR professionals, with businesses, with hospitals. And you're gonna need to do a little bit of sales to get this so that you stand apart from everybody else that's going to be saturating the Airbnb market.

Cause at some point. The short term bylaws are gonna come into effect, and then we're all gonna have to pivot. So you wanna do that ahead of time and don't just focus on the one platform that everybody else is focusing on. Let's go back one slide. Let's go to the region. So I picked four of 10 things that I like to look for.

I've been doing the midterm thing probably for about three years now. I like it. I still like the short term. Long term is okay in some areas, but I like this midterm strategy cause it's that really good fine line in between. Just again, Andrew's actually my paralegal. Talk to your paralegal about how you don't, you can stay in that gray zone.

I like the gray zone. But here are some things that I look for something that could potentially be a midterm rental property. Low seasonality rating. If you guys, have you guys ever heard of AirDNA.co raise your hand if you have. It is a great tool. The free version is very basic. Pay for it for a month, get your data, and then you can cancel.

It'll give you some really interesting insights. So like your seasonality rating. So if you are somewhere like cottage country, that's probably not the greatest midterm. Doesn't mean it's not good for the short term, but, your place that's gonna get rented month in, month out for midterm.
You wanna have a good percentage of seasonality, which means that the higher the score in that case from AirDNA the less seasonal it is. That's a good thing for midterm occupancy. Okay. You wanna check your occupancy levels for your area. So essentially, like for example I did this exercise with some students that we have a course going on for.

In Burlington, it'll give you all the data on how occupied it is, the average rental per night, the seasonality rating, and it'll tell you if it's like an A or a B or C and look at that for the midterm. Unfortunately, in Canada, we're not like the states. There's not like one platform that you can go to for midterms.

You're gonna have to gather information from a lot of different places. National head office presence. There's a lot of people that stay in my midterm properties, or I should say they're Airbnbs, but they stay for 30 plus days. But build those relationships because that's going to help you. So take them off Airbnb at some point, but your head office presence is gonna be big.

Hospitals are gonna be big, but the head offices, like there's a lot of people that come and they're going through. From different offices or, for example, I have a lot of guests that stay for 30, 60, 90 days that are in between houses or waiting for one to be finished, construction. I have a lot of people that are like, don't wanna live in dust, so they're going through like a major reno on their property and they would prefer to rent a place in between.

I have a lot of that. A lot of people are moving right now. I have a nurse paying $5,000 a month for a two bedroom small unit in Burlington, $5,000 a month. I would not get that on the long term market. And they're great clients. But look for those types of things. Again, there's like 10 things, but we just pick the top four.

If you're in an area where the hotels don't have those kitchens. So a lot of hotels don't have the ability for people to stay long term. That's also a good thing. So you'll have to make some phone calls, like there is a little bit of work involved, but it's definitely a great opportunity. Call the hotel, see where their occupancy rates are, see if they have kitchens available, and they're promoting that longer term stay.

If not, that could be a niche area for you as well. Next, the neighborhood. Okay. Again, there's a bunch of things we just picked for here. If you're close to highly rated schools, that is a good thing because a lot of my clients want to stay and wanna keep their kids in the same school zone. And so if they're moving or like they're in the middle of work for the renovations as an example, they're gonna wanna keep the kids nearby.

Having a good school zone is definitely important. If you're in an area where there are mostly homeowners versus renters, again, that's good. I'm not catering, so my bedroom rentals, and this is where everyone's gonna be a little bit different, but I don't want to cater to a long-term renter, just looking for a place in between two rentals.

I would prefer to cater to a homeowner that's not gonna be there forever. And it eliminates some of the risks as well, of them staying for extra long. So you wanna look for a place where predominantly homeowners 10 or less drive to a hospital.

If you're nearby, you'll likely get like I have in Burlington. I've had it for a while, I think probably since 2018. And that place gets a lot of families from people visiting the hospital. You can also get some healthcare professionals, maybe not doctors, but like you might get some people that are doing your residency, potentially some nurses, etc.

Then close to head offices. Close to post-secondary schools. Close to private schools. Think about all of those things where people might stay for a month at a time. Those are the types of executive types of corporate clients that you want. Okay? So this midterm strategy is not so much to cater to renters that are in between rentals. These are more homeowners that are in different situations for whatever reason it could be immigration.

Aisha Govani: People coming in. Immigration.

Sarah Larbi: That's exactly it as well, right? So figure out who your immigration lawyers are and have connections with them. I'm telling you this, half of you will probably never do this, so that's okay.

We are actively doing this and I think this is where you're gonna stand apart from the rest that are just relying on the Airbnb platform. Because as soon as the bylaws come into effect, believe it or not, Airbnb will be saturated, probably with a ton of midterms. So start building those relationships early.

Lastly, properties, units. Can you go to the next one? Perfect. Again, there's a bunch of different data here, but in unit laundry is one of the most requested and asked things from a lot of my midterm rentals. If there's a workspace desk area, easy parking they don't like the basements as much.

These are people that are used to living in homes, so above ground units are usually ideal. And if it's newly decorated, newly renovated, newly furnished that will help a lot more. So again, there's a criteria of probably 10 different things there where we pick the top five. So essentially, guys, I think for me anyways, for Isha, for many people, it is time to pivot is time to try to grab some of that control back some of that cash flow back.

This may or may not be your strategy, but think about potentially, doing something different than just always the long-term rental, especially as the RTA and the LTB have a lot of backlogs right now with the LTB. There's, a whole lot of lack of control, I should say work with a good paralegal because it is definitely a fine line of what you need to do to ensure that if somebody does extend and choose not to leave, that you have done as much as possible of the right things, like even putting a plaque with your business or your Airbnb plaque in front. It helps a lot using case law helps a lot if ever you have to call the cops.

Work with a good paralegal. Actually, Andrew, he's not here right now, but Andrew from Caveat and his team have been instrumental in ensuring that we're setting this up, right? So you don't want to be going and doing this strategy, and then all of a sudden you realize that you're now in the RTA piece.

Working with a paralegal as you do this, but I'll tell you to me anyways, this is the next forward strategy from a rental standpoint. And if you guys have any questions, our booth is right over there. We do have a course that is five weeks long. I'm not here to sell anything, but this is just a little tiny snippet.

It is a five-week plus bonus class. So if you are interested in some information, let us know. And then we also started the management piece as well, so if you're looking to have somebody manage it for you we're not everywhere yet. We're mostly in the GTA, like the west area, but if you're looking for some property management help, we do have a team.

We've hired, actually today we hired another person for our team as well. I'll leave it with that. But just guys thinking outside the boxes is why we're doing all of this training. This is why we're forward-thinking. Don't wait until everyone else is doing it, but get on the bandwagon and start creating those opportunities early.

Aisha Govani: That's the thing, it is a strategy where you have to pre-plan and you have to create, and you have to be forward-thinking and you have to create the guests for yourself and do that research and make those relationships.

Sarah Larbi: Thank you.