Short-Term vs Mid-Term Rentals: The REAL Winner in 2026

Welcome back to the Roots podcast. I'm Max Moore joined by my co-host Tyler Lingal. And today we're going to break down is the midterm rental strategy and short-term rental strategy still in play? Is it the only place? Is it oversaturated? Answer all the burning questions. Make sure to subscribe and stick to the end. We were at our master class last week connecting after the panel. All I heard was I have a empty unit. What should I do with it? No one wants to long-term lease it. It's August for reference. So, school just went back. A lot of people don't want to move in the month of August. That's to be expected. That sucks that all these people's leases were up, but everyone was like, should I go midterm? And part of me was sitting there kind of advocating for it because I've spent some time on Furnish Finder and I'm looking around and go, there's a lot of inventory on here and it all sucks. Every single one of them for the most part is I call my units. Yeah. Unfurnish. on midterm rental not coming after your short terms. They're just like under under performing as far as like furnishings go, photos go, advertisement goes, catering, hospitality, because I don't think that there's a service provider out there that is niched and focused on this. Mhm. I think for the midterm rental strategy to work in my opinion and through my research is to have some self-management going on, some self-management skill in the game or at least some self- furnishing in the game. What is your uh what's your inclination? Do you think that there's too many units out there? Is it oversaturated? So, I think for the right price, no. For unrealistic price points, then yes. And a lot of people think they can 2x their long-term rental with it. And they cannot not at all in Indie. It's like I'll go for you can go from 1,500 to 2,000, right? Okay, that's nice. But you still want to do the math on like your furnishing cost. Yeah, let's walk through it. Going in. Property 3949 Hoy out. It's been sitting vacant for a month. Starting to panic. Why can't I get a tenant in there? I've got it out at 1425, which we'll drop it to 1,400. Mhm. Tile in the bathroom, granite in the counter. In the counter. Granite in the kitchen, and LBP flooring throughout. It would be perfect. 21 as well. Uh kind of isolated. Hoy Hoy is in Christian Park, but it's got the steel factory behind it. Yep. So, like it's a little bit quiet. Community wouldn't be a bad drive. There's a hospital over there on uh rural in that southeast corridor. What am I thinking of right across from McDonald's? The community justice center. Is that not a hospital? It's not a hospital, dude. I don't know. India. Community justice center. I'm going to go back. It's a jail. I'm not talking about the jail. There's a hospital over there. There's some sort of urgent care. It's got an H next to it. It's got to be a hospital. Anyways, yeah, we'll just We'll just We'll just move forward. Keep going. Just keep going. Uh, anyways, locationwise, is it ideal? Probably not. But there are midterms in the the neighborhood. When I'm looking at this property and going, "How much do you think I'd have to spend on furnishings? How many bedrooms? Two." One uh at least 6,000. 6,000. 6K on furnishings. So, I'm going to spend six. How do I get that 500 back? Do you think that I could rent the place out for if I'm going to get a tenant for 1,400? I know this this rent rate because I have one on Fington which is one two three five streets over. Yeah. The most we've ever got is 2,000 two bedroom uh and the where we've had to be is like 1,600 some sometimes. So year one 1600 to 2,000. Year one it'll be a wash. Year two maybe we'll hit it so long as I don't have more than two weeks of vacancy. That's the the math between longterm and just going midterm, right? So maybe on that one it doesn't make sense. Mhm. Uh and that is where people need to be looking because you're right, a lot of people are going, "Yeah, I can get 2,800." That would be the natural impression is they would see my rental and say, "You can furnish that and get 2,800, right?" No, that'd be not what you can get, right? You can get 1,900, right? I mean, if you can pay back your furnishings in the first year, that's a great MTR. That's my If you can't, that's fine. If it takes you two years, three years payback, you wasted your behind and money, right? It's too much juice or too not worth the squeeze. So, my question then begs, why do a midterm rental? Uh, well, I'll tell you why. Because we do have one that's been fully booked since it started. Mhm. And I've fully outsourced the management to uh an employee we know. Uh, and it was at 900, now we have at 1,500. and they it's the same tenant. They're on their third go around. Great. So, and we've had inquiries between then. So, the one one uh that could rent for like 8 800 900 like they they go up to the the floor is like 1,200 or so, but for a really well furnished one, you can get 1,500 pretty easy. For some reason, that number for a single person because of what they make is like easy. They're just like 1,500, I don't care. Yep. It's good. if it's in a good neighborhood, you're going to get 1,500. And that is a large uh spread. So, for me, it's the cash flow on this unit is uh is actually strong. Like, I'm literally making good money from that. It's my only rental that I'm like, this cash flow is great, right? Cuz it has that MTR unit. It's a four-unit property. One of them's an MTR, so I'm not doing them all MTR, but I've thought about it at this point using it as a flex option. So the I think the sentiment is it is not insane cash flow boom to go MTR that I think a lot of people are expecting. You may have a stronger tenant pool and maybe uh I was wrong in the beginning. It's not about the furnishings in the photos. It's all about the price. Maybe everything I'm seeing on furniture is way overpriced. With the right combination of all of them, right? Yeah. Look, location is so important. Location is is just the wrong street. just a little off like my rook would nothing. No, no inquiries, no anything. Uh, not a single bite cuz it's too close to 38th Broadway. Crazy. People all want to be there. It's near north side. Location is incredibly important. And the pictures I do think are not as important as when you're listing a property on the market. Obviously, you know that, but yeah, they're kind of like an afterthought. Like they got to be good enough to be Yeah. I'm just looking at people coming from unf or they're coming to an unfamiliar city, right, to stay like I think that you have to have some good advertising coupled with good rent rate and good location. I think that that's TR. If you live in Indianapolis and you can pay back your furniture within a year and a half and you want to get into the weeds a little bit with operation, you're perfect candidate to MTR and you have a property in class B area. If you check all those boxes, go do it. Yeah. So, it sounds like everybody that was at master should go make those MTRs. A lot of people should. And I hope not all of them do because right now the supply demand is like ideal, right? Uh it's ideal. We could there's a lot of them out there. When I furnish, I'm like, how the heck are there this? But you got to think this skyscraper they're building, guess what? Those are how almost all those workers are temp workers. Lebanon bleep district. Tons of workers. temp workers, right? And they're all renting these. We had Guy Ston talking about insurance getting out into the donut counties. It's been a ripple of phone calls that I've gotten like, should I go and buy and Avon just like set this up and that strategy on mid terminal scares me more than going urban for nurses cuz you're waiting for somebody to have a bad day, right? You're going to get way more rent. That happens. You get all your cash flow one booking, right? It that except for Lebanon, which is a little more like Well, that's just going places. I agree. The the insurance, you're right. Yeah, that's that's super. You got to have two pools, I think. Right. Really pull it in. What about short terms right now? What are you seeing? Buying a H I would say the two that have been on Airbnb this year have been the highest occupancy, but the prices are not increasing. Staying concrete. Average daily rate is if anything going down. Your people in. This is gonna be like a clickbaity reel probably, but like it's the so the o we're still getting traveling but it's like the supply is so high because it's unrestricted in Indie. Mhm. Uh well, there's permitting, but there's no restrictions that it's just like the market's at equilibrium, which like it's it's a buyer, it's a guest friendly market that um but that being said, I think that uh you have to go high headcount and you tear it up, you know, five beds, high headcount, that's how you get the thousand night lease days and then you're really cranking on the good months. Yeah. every one that I've sold cuz my my I don't own any STRs. My exposure is either through your portfolio or some of our friends that have them and then also helping them sell them whenever they hit just crazy return on equity marks and want to exit to go make another one. Uh which has been a few in the past year. Every single one has been like over 70k topline. Everyone has been over four bets. Yeah. And that that seems to be the because if you look on air air DNA uh like 60% of them are three beds. Most are three beds. A surplus of three beds, but there's not that many f if you look at five beds sliver like a tiny sliver and occupancy through the roof, especially on big stays. So everybody that's doing rent by the room should go buy some furnishings and throw them up on Airbnb is what you think? Yeah. If they're close to downtown or close to Grand Park. Absolutely. Pull the lever. Yeah. Well, and the last thing I'll say is that Morris Revenue property really opened my eyes to Westfield and the north side. Yeah. Large home on the north side. If it's close to Granbark or Morris Reservoir, you probably want to be on the water if you're going to do this, which is hard. Yeah. It's HOA. Yeah. That that made on a bad year with bad photos 109,000 topline last year. Wow. This year on track for 130 uh five bed Airbnb. Yeah, I just sold one in Noblesville. Mhm. 70K, 340K purchase price. Shout out cost Nick getting the deal done. Uh owner retains management. Already has history there. Already knows the property like the back of their hand and doing it at a fantastic rate. He just got like an absolute win. We're on closing day. I'm looking at how much he has to wire to title and I text him. I said, "You're literally going to get all your money back in year one for your down payment. Like what what cash on cash rental longterm?" And I was like, "How is that? Is he buying in cash?" No, he's I'm saying he will have top line come in. Yeah. Equal to how much down payment he put in. There you go. I was like net grosser net. Okay. Right. Like still f still wild cuz that's three three or four years that he will have it all then paid out likely. Right. When I buy long-term rental, some like there's a 10k diff, you know, who should buy who should be looking for a short-term rental. Yeah. It should be somebody that's connected with a existing short-term operator if you're out of state. Yeah. And getting them to continue management. Most will. And if they won't sell manager, you're right. It has to be the manager. I I think it's funny these people are watching Rob Abasol or whatever trying to like recreate the wheel and like set up their whole STR operation when they live in Arizona. I don't know what you're doing. Go buy an Arizona short term rental. Go buy a California short terminal. Stop trying to do it in Indie. You don't know anything about the city and the underlying uh you know short-term rental market, right? You don't partner with someone. There are great operators here. You got to partner with them. More likely than not. It's just you need to park your money in turnkey, which I think is why it is buying a turnkey short-term rental. I think that's okay as long as you have the the right management team behind it. And if you are local, in my opinion, who should be buying them is somebody who is passionate about hospitality. Yes. And okay to jump into that. Yes. You you do not get into this game. Once again, just like we talked about for flipping, don't flip homes unless you love flipping homes. It's it's a job. you're you're subscribing to a part-time job where you will get texts about remote batteries at 900 p. m. Yeah. I mean, this leads into another good rule of thumb which we can cap off this episode with, which is form that relationship with the manager very early in like the education planning stage, not as an afterthought. Hey, let's toss it over to X company that we all have in our minds who who would do a bad job. Uh, we have some great referral partners. T&H Property Partners, Who's Your Homes, they sponsor our events, but they do a hell of a job. So, build that relationship. Get on a call with them. You got to get people who care about you, care about tenants, and care about properties, and have investment experience themselves. It's so bright. So, thanks for watching. Please subscribe. Come out to our next master class.