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Hey guys,

I live in Ottawa, and it seems to be a very popular place for people to emigrate to, and have noticed a lot of people in the area are looking for 1-3 month rentals fully furnished, including internet etc..., usually until they get their papers in order and find a first place.

Having done some research on the subject, I found that there are places here charging up to 2X market rent for these month to month units (and keeping a good occupancy rate).

Obviously the $$$ is good, but my concern is whether that will lead me down the path of "slumlord"dom. :D

This is my first apartment building, and I had planned on just flipping the units and looking for nice long term tenants. This plan would genenerate more revenue, but I am afraid it will take up too much time always filling vacancies and whatnot, to focus on the bigger plan.

Any input is appreciated!
 

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Though I don't own, I travel for a living to where I don't own a home or apt. I know my company pays between 2-3K a month for me to live. I am relocated every 3mths. I would imagine that this would be a large amount of money to be pocketed each month- the only downfall of course would keeping the rooms booked. Usually, you will get higher class persons because of the amount of money that it costs to live but not everyone is perfect. Its a risk but something that you can always change later down the road, or can split and have x # rooms for longterm and x # for corporate housing.
Nik
 

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Well obviously it's far more time consuming, but if the market is there... Might be a great business.

If you can hire on some help with some of that extra money it would make life alot more bearable obviously. To balance the risk of unfilled units/months you could maybe split the building up... One portion short term, one long term. Not neccessarily 50/50 either. Whatever makes sense.

My only concern would be reacting to the market if for some reason these type of renters disappear. It might be tough to convince long term renters if the quality isn't there. Really depends on the building and how these units are finished. If it was for short term renters I wouldn't sink too much $ into them for the obvious fear of them being ruined.

Are you finishing them?
 

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If it was for short term renters I wouldn't sink too much $ into them for the obvious fear of them being ruined.
My last place had furniture from the late 90s in it, white leather couches and ash wood grain tables with glass tops. :beingsick: Not my style, but if you invest in lost cost, quality items (IKEA comes to mind) could give you the justification to your buyers why they should stay with you versus another place with lower quality furnishings (my example).
Nik
 

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Actually there is a great market for that type of home and the best way to approach it is to create a corporate company and then rent units under your company name. Make sure the places have a clause that allows you to sub-lease corporate units if not then you can’t do it.

You can do the same with condos barring there are no HOA rules that prevent subleasing. Or simply buy small homes or whatever.

Then in terms of furniture you can actually find rental companies that specialize in all sorts of packaged deals. This rental route is my suggestion because these companies have really nice packages and you can get furniture switched out in a hurry in the event there is any damage or a client doesn’t like a certain theme’s and there’s no money out of your pocket.

You can also hook up with several relocation services to help you get customers. The market for these is still good but since the 90’s when it was a great way to make money the bog companies have moved in and taken over the market.

There are a lot of other details you will need to consider such as maid service, a sales and support staff and an in house gopher.
 

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I haven't had time to read the responses, but my opinion on your situation:

Flipping VS Cash flow.

Once you purchase that apartment building, renovate(or whatever you want to do) and then re-list it to sell it again, you will make X amount of cash. Once you have bought and sold this, you no longer have any income generation from that home apart from the net amount you made on the 'flip'. Since you suggested using too much time to fill vacancies, think of how much time you will spend researching the market to find more viable properties to be flipped? Lets guestimate it to be about the same amount of time.

Are you looking for short-term rather riskier high income or long term cash flow and income generation?

How many units is the building? Could you considering doing something that is the best of both worlds? Floors 1 & 2 are short-term and floors 3 & 4 are long term annual leases, etc.

I would suggest short-term rentals to be furnished with contemporary(but still fairly inexpensive) items that can appeal to your average short-term renter. When somebody is paying a premium for a short-term rental, they expect it to be clean and look good. I would also suggest being on par, if not better then your competitors.

Also, to swoop back up to the original phrase of using an excess amount of time to fill vacancies. Will you be managing this units yourself? Depending on the unit number, this can be a full time job, especially if it is your first experience managing rentals.

Tenants are demanding! Especially short-term renters. Sure, you may have the odd couple here and there that do their own maintenance, pay rent on time, etc. however that is RARE.

You will have tenants paying rent late, damaging units, calling for assistance, disturbing neighbors, the list goes on!! Again, leading back to the number of units, this could be EXTREMELY time consuming.

This is based off the market in the United States. If it is different in Canada, let me know and I am moving.

Well good luck and look forward to hearing more about it.
 

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Discussion Starter #7
I appreciate everyone's input on the subject.

As of right now I have all my units leased. I just filled my last vacancy last month so now is the easier part...

I have been managing the units myself, and have had no real problems pop up (not counting clogged sinks, breakers being tripped etc...). Its not very hard for me to handle right now (4 2Br units), but in the future I am going to stray away from the management side as I am more comfortable with the construction aspect.

VH raised some very good points regarding cleaning services etc... and I don't really want to set up all of these services for my tenants.

Thankfully there's always a demand for apartments in downtown Ottawa and I haven't had many problems finding good tenants, so I'll stick to renting unfurnished apartments and not deal with all the associated headaches so I can focus on flipping other properties.
 

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VH raised some very good points regarding cleaning services etc... and I don't really want to set up all of these services for my tenants.
.

Funny I knew a guy who operated a cleaning service and on his "corporate"units alone he was doing over 1 million dollars a year in cleaning revenue

see the corporate housing companies (like what your trying to get into) offer these additional services to get the higher end clients that companies pay the tab for.

Think outside of the box
 

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Hi everyone ! i just want to say after reading complete thread that its not actually bad if you plan to leave your property on rent for tenants for short term obviously it will be more beneficial for you so think again about it .Yes you were right at that point that you should not want to be in such condition after that where you have to search for tenants for your property but this task can be done easily with the help of property managers and if cleaning is a issue which is prompting you to do so then forget it man! just hand over your responsibilities to cleaning service companies. They will do all for you
 
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