Medium-Term Rentals for Financial Independence with Zeona McIntyre

Zeona McIntyre, author of Medium-Term Rentals, has been an Airbnb host since 2012. In this episode, we will discuss strategies to achieve Financial Independence through Real estate investing: Airbnb, House-Hacking, and Short and Medium-term rentals.

Listen to the podcast here:

Medium-Term Rentals for Financial Independence with Zeona McIntyre

Shannon Robnett 00:37

Hey, everybody, welcome back to another episode of The Real Estate Rundown today I’ve got the pleasure of interviewing a person who’s got a little bit different twist on things. She doesn’t think short term, she doesn’t think long term. She’s right there in the midterm. And with that Ziona McIntyre is going to help us understand what is special about midterm rentals, and how that can make you financially independent. Welcome to the show, Zeona. How are you?

Zeona McIntyre 01:11

I’m great. That was a great intro. Like it’s like…

Shannon Robnett 01:18

Yeah. So you’re talking about midterm rentals. Right? We’ve heard so much in the last little bit about short term rentals, short term rental. I mean, I just like, right, we’re done with that, not everybody in the world can do short term rental. And a lot of people will tell you that short term rental is awesome. But in my experience, and this is only my experience, you’re just buying another job because now you’re the one that takes care of making sure there’s enough soap and there’s enough dishwasher fluid and and that, you know, everything is perfect because they’re considering it to be more of a hotel stay than they are a you know long term rental where they’re responsible for their own dryer sheets, right? What is mid term rental? And what does that have? That that makes it better than long term? And not as much work is short term, I’m guessing.

Zeona McIntyre 02:08

Yeah, so better than long term because right now, prices are still high. But interest rates have climbed so much that it’s really hard to cash flow on long term. Now, there might be some kind of corner cases in the US little out of the way places where you can, but most places you can’t. And so this midterm space lets you steal cash flow. So that’s one of the things we love about it. Then on the other side, that short term rental, like you’re saying, it’s just gotten very competitive, right. So there’s a lot of designers and boutique hotels and real professionals in the space. And you are expected to keep a certain caliber, which is hard to do when it’s a home where somebody lives in. Right. So short term rentals are a lot more work. And the midterm thing is still, you could say it’s kind of hospitality, it’s less so that people are less demanding. And they’re more living there than vacationing. But I find it a lot easier.

Shannon Robnett 03:06

So when you talk about mid term rentals, what kind of timeframe are we talking about?

Zeona McIntyre 03:11

Yeah, so anything above 30 days is technically mid term, but it’s normally 90 days. And the reason for that is because traveling nurses do 13 week contracts, and they are a big bulk of the tenants.

Shannon Robnett 03:24

Okay, so now I’m dialed in, because I love the three to six month type of a stay. You know, my, my background, as most of you know is, you know, building large scale multifamily. And one of the things that we always find with multifamily is when you turn over a building, you’ve got 24 units that your tenant sizing all at once, right. And typically the way the markets been for the last five years, the minute you open the doors, you have 24 new tenants that move in, which means that you have 24 tenants that are going to renew next November, right. What we’ve done is we’ve done a lot of this with the midterm rental by offering a three to six month rental term to break up some of that. But we’ve also gotten a premium for that because there are people that only want to be somewhere for 90, 120 to 160 days, things like that they’re not there a full year. How did you kind of stumble on this magic formula that kind of took you out of short term and the demand to be you know, the hospitality professional and yet still achieve better than better than long term cashflow?

Zeona McIntyre 04:34

Yeah, it came out of necessity after COVID. For me, it’s there was a period in early March 2020, where all of my reservations just evaporated off the calendar. So I had a bunch of short term rentals and it was like two months of bookings gone in a day, then so I knew I need to pivot and find a way to get these places rented. And shortly thereafter I was seeing longer stays come in some were just like two weeks or so, but people were trying to find a bigger house, they could work from home or they could school their kids from home, emergency workers, nurses, a lot of people coming in to different areas. And yeah, I just started to see wow, you could still do automations out of state with the midterm, where it’s a little bit longer, and still make a really good return. And there’s a lot of demand in that space. So I pivoted, and I really like it, I think it’s a little bit easier.

Shannon Robnett 05:31

So when you talk about a little bit easier, what is it about that? I mean, when I’m when I’m renting something for 90 days, you’ve got the trial size of the, you know, the shampoo and the conditioner, and the, you know, basic needs for the kitchen. And everything’s there, but you’re not doing a lot of the other things, or what is it? What is it? You mean, that makes it easier?

Zeona McIntyre 05:54

Yeah, with a short term rental, the average day is about three or four nights. So somebody has to learn your whole house every three days. So they’re gonna ask you the same annoying questions over and over again, when you’ve got these longer stays, they might ask you a question that first three nights, but if you did your job, well, they won’t. And then you won’t hear for them for three months, six months, often they renew for another term and do six months. So it that seems better, they take better care of the house, because they kind of have a pride of living there rather than just a vacation or who’s just kind of like falling out. So you just don’t have as many parties and those kind of headaches. And then as far as supplies goes, we give them a starter kit, you know, they might have one pod of the dishwasher and the laundry and stuff, but we don’t feel like we have to give them everything for 90 days. And then they often leave stuff, because they’re kind of going to the next place. So you get a lot of free supplies out of it.

Shannon Robnett 06:49

Ah, you know, I never thought of that. But that does make a lot of sense. Because you know, you’re, you’re not, I mean, if they’re a traveling nurse, they’re not going to take it to them to the next spot, they know that they’re gonna be there about four hours, they’re gonna hit Costco, they’re gonna load up, they’re gonna, you know, they’re going to be good for the 90 days that they’re there. So, you know, one of the things that people look at a lot is, you know, how did you get started on in this whole rental space? Because, you know, it was at arbitrage, did you own something, because everybody’s always trying to figure out, well, how do I get into the space to start with? And then how do I protect my space once I built something out from all the competition that we’re now seeing in short term rentals?

Zeona McIntyre 07:36

Yeah, so I got started with arbitrage. But I started 10 years ago. And the reason I got started with arbitrage is I didn’t have any money. I was 26. And I just heard about this Airbnb thing. And so I was trying it out on a place that I was renting already, I had a roommate leave, and I just said, Well, I’ll just put up her room, like I already had it furnished, it’s not going to cost me anything. So that was like a really easy entry way. But just like you said earlier, I don’t want a job. And I feel like even though short term rentals is more work than a long term rental, I feel like arbitrage and because you’re building no equity, no appreciation gains, you’re just essentially like a flipper or a wholesaler, you’re in the turn mill, and you have that active income. So I still feel like it’s a little more passive when you’re owning.

Shannon Robnett 08:25

Yeah, no, and I do agree with that. Because, you know, that’s kind of, you know, that’s kind of how a lot of people start out their real estate journey, right was with arbitrage. And then they wind up buying the underlying properties. And then next thing, you know, they’ve got, you know, 8 or 10, or 15, or whatever their portfolio becomes. And that’s, that’s really where the wealth is made is in the ownership of the asset. And this allowing you to own that asset has, has great implications. And I think that a lot of times people miss that, right, they buy the cash flow, you know, it’s great while at last, but they don’t really use that to take themselves to the financial independence level, which, you know, the financial independence level is where assets are paying for things that are paying for your future, right? You’re no longer trading your time for money. You’ve got other things that are trading their time, if you will, for the funds that fuel your life. But, you know, one of the things that a lot of people ask, and you mentioned it, that currently right now, buying a property and then trying to rent it out long term isn’t really going to cash flow because of where interest rates have taken pricing. Yeah. Where do you see that going in the future? Do you see? Do you see rents continuing to trend upward? Do you see midterm rental or medium term rentals becoming more popular because of this? What do you see happening?

Zeona McIntyre 09:58

I definitely see Medium Term getting more popular. So that’s kind of just the new trend, you know, short term rentals had their trend up. And I think they’re going to plateau for a little while. And I think they’ll continue to be profitable as an asset class. But this mid term space is really taking hold. So I think that’s really important. And we’re in the really early days of that. So I think there’s a lot of room to carve out your space, if this is something that you’re interested in. Long term rentals, I think that rents always lag behind prices. And so we had a couple of years of huge price increases. And suddenly, people didn’t want to leave their houses, because they were like, well, you know, I’ve got this really cheap rent. And I’m like, Yeah, but your cheap rent is only going to last for you know, maybe another half a year, and then it’s going to skyrocket. So it’s a dangerous way to think that, Oh, it’s just gonna keep being like it’s always been. So yeah, I definitely think that it’s gonna be catching up because people can’t continue to buy homes where your negative cash flow, it just doesn’t work forever.

Shannon Robnett 11:04

Right? Well, and those are those that were fortunate enough to have purchased a home 12 months ago, locked in at, you know, really excellent interest rates, they’re going to continue to be in a positive spot, and they’re going to be in that spot for a long time. Because if and when they go to sell that house, they’re not going to be able to replace the payment in a similar product, right. I mean, I think that I heard somebody state that, you know, if you’re looking to go into mortgage brokerage, it’s really a thin field, because I think something like 65% of available mortgages have been refinanced at less than three and a half percent, which means that they’re not going to refinance those ever, right. So the medium term rental space can be an excellent avenue for someone that doesn’t really want to deal with the short term space, but can get into something more lucrative than just the long term, you know, and be able to make that profitability happen. You know, what do you see as your superpower that has made it something that has allowed you to excel so quickly in that mid term, medium term space?

Zeona McIntyre 12:22

I think it’s just taking action. I’m one of those people that I see a problem and I fix it, I’m just going for it. So I think a lot of time, a lot of people at that COVID moment, they just shut down their Airbnbs, they said, Oh, well, everything canceled, and now I don’t feel safe. And I’m not going to figure out the new COVID level of cleaning and blah, blah, blah, I’m just going to shut it down. And I think the real investor is the type of person that thinks creatively and goes, Okay, this doesn’t work anymore. What can I do different? How can I shift it around, find another way to keep working? So I think I’m just someone who sees things coming down the pipe maybe a little bit earlier than others and makes moves to make it happen.

Shannon Robnett 13:05

So much so that you wrote a book about it, right?

Zeona McIntyre 13:08

I did. Yeah. It’s called 30 Days Day, which you know, 30 day minimum, right. And it is called The Real Estate Investors Guide to mastering the medium term rental, we call it medium term mid term, same same.

Shannon Robnett 13:22

Yeah. Well, and and what did you you know, so I’ve, I’ve actually participated in some writing projects as well. And they’re, they’re a lot more thought provoking for authors than I had imagined they would be right. Yeah. What were some of the things that you saw in writing this book that you looked at you went? You know, what, I need to clarify my process a little bit better, or I needed… What was it the the writing of the book helped in the perfection of your craft?

Zeona McIntyre 13:50

Yeah, that’s a great question. I wrote the book with another person was Sarah Weaver. And I think even just seeing some of the ways she does things really helped me, because she’s really particular about how she’s picking an area of market. And she does a lot of the things that people do as a long term rental purchaser, and I came from the space of short term rental. So I’m looking more at demand as a short term rental and not as much of, you know, as population growth and crime rate and just job trends and things like that. And so that really helped me kind of like have a more holistic view of like, okay, this is how I should maybe look at my properties. But I think I’m just someone who, maybe, to my detriment moves really quickly. So when I’ve got like, a good idea about something, I’ll do a lot of research, but then I’ll take action and sometimes maybe that’s a little too fast. So this helped me kind of slow down a little bit and consider more angles.

Shannon Robnett 14:49

Yeah, I can identify with you. In fact, sometimes I take action and then they do the research, right? But the reality is I think that some of us, myself particularly learn better from the beatings in the readings, right? I mean, yeah, I’m bumping my head against the wall, figuring it out and doing these kinds of things. You know, I know that our first short term rental… And when you say you’ve been doing this for 10 years, did you really start on Airbnb? Or did you start on VRBO?

Zeona McIntyre 15:29

I started with Airbnb, but VRBO shortly thereafter, but yes, they were the first the I did I started with back around, they still suck.

Shannon Robnett 15:38

I know. And it’s funny, you know, I get it that you were the first but you don’t have to stay there, right. You can upgrade your technology, you can make things happen. But I remember when when I did my first one, it was actually on VRBO. And I learned very quickly that nobody cares what the plates look like. But as an owner, you need to care that they don’t break. Right. Yeah. And different things like that, where, you know, the first thing you’re thinking is I can’t give you plastic plates. And then after about, you know, six months of being in the short term rental business, you realize I’m lucky, you’re lucky if I give you plates at all, you Neanderthal’s you know, because because the short term rental people are not, you know, they’re not the same as midterm rentals, just like you said, they’re not taking that pride of ownership. I broke a plate, they’ll send me a bill. It’s like a hotel, right? It’s a thought process and a different party person doing a lot of that. And so that was part of what really turned me off to that. And then as I continued to do it, I realized that I was spending the kind of time you talked about where I was stocking the soap, and I was dealing with issues and, you know, everything that you’re saying resonates with me. And now I find myself. I guess I need to read the book, because I’ve been doing midterm rentals for the last four years. Because I I liked that 90 day plus, right?

Zeona McIntyre 16:57

Yeah, but are you doing them unfurnished?

Shannon Robnett 17:00

No I’m doing them furnished.

Zeona McIntyre 17:01

Oh, yeah, well, then you should be writing the book, man. I love it.

Shannon Robnett 17:05

But you know, and this is this is exactly why I do my podcast, right? Because I get I mean, you know, I get to talk with people and learn more about the things that I’m already trying to do or trying to understand. But, you know, have trouble with and the reality is, you know, exactly right, the person that comes in, on the longer term stuff isn’t isn’t as expected. You know. And so those are the kinds of things and I love the fact that while you did start out with the arbitrage, and did do kind of the house hacking paid half your rent payment with it, you’ve really looked at and focused on the freedom that real estate provides you as an owner. What do…

Zeona McIntyre 17:49

Yeah, I’m sorry, go ahead.

Shannon Robnett 17:50

No, you first.

Zeona McIntyre 17:52

I just think that there’s like a horizon. There’s a timeline that you’re an investor and it changes over time, I think people go into something going, Oh, I’m going to be a short term rental investor forever. And it’s like, I’ve been doing this 10 years. So trends change my goals, change, how much work I want to do changes. And you have that luxury of when you’re first starting out, if you need to, like juice every dollar out of it, then yeah, maybe the short term rentals worth the work. But as you go, getting into the midterm space allows you to be a little bit lazier, but still maximize it. And then maybe one day, we’ll all just do long term rentals and not care. Right, and have a manager do it. So you kind of like, know that there’s movement in this space?

Shannon Robnett 18:36

Well, and the other reality is, you know, it’s not that it’s necessarily lazier. But if you’re managing one property, you can give it six hours, eight hours, 10 hours a week, right? If you’re managing 10 properties, you still only got 10 hours. So you’ve got to get into something that allows you to do that with an hour a piece and still come out with the profitability. And then yeah, then you’ve got enough of those that you get to a place where now you have a manager whose salary comes out of you know, the profits the bottom line very first and you know, one of the things that I’ve always seen is that people that think like that are the ones that really wind up going somewhere and there’s a lot of people that wind up… I don’t want to call them fad chasers, but they’re fad chasers, right. They’re, they’re doing short term rental. And now they’re gonna do Turo because that’s new, and then they’re gonna, who knows what’s coming next. But they’re always constantly doing something and they’re not figuring out that piece that you’re very quick to identify. It’s the ownership that leads to the wealth, right? It’s the ownership of the underlying asset. So arbitrage sure gets it doesn’t matter how you start, right? Yeah, get started once you get there. And yes, if you got to do short term to get up to cash flow, totally get it. Now you’ve been able to quit your day job because you’re able to offset that. Great, now you’re able to be full time I mean this now you can look at other ways to do it. But really get to the underlying asset of being that asset owner that will give you the ability to be flexible, because as you said, short term was all the rage 36 months ago, COVID kind of slapped it upside its head, but then energized it. And, you know, but now now people are thinking, you know, I need to be more aware of lifestyles that are coming out of this, I think that COVID accelerated everybody’s work from anywhere. And then you’ve got, you know, now that’s becoming a very acceptable practice. And, you know, did I think we got digital nomad, you know, out of COVID? I mean, you know, and those kinds of things where we never would have maybe gone there without that shock to the system. But where is this going to take the rest of us in 90 days? 120? Or, sorry? Nine months, 12 months, 16 months? Where are we going to go next? And as the owner of the underlying asset, you still have something? Right?

Zeona McIntyre 21:06

Yeah, and, you know, we have a couple of long term rentals, like my fiance, and I, and even though it’s so great to have a manager, it’s like, the one asset I don’t deal with. It’s so frustrating when turnover comes over, because they, the managers move so slowly in that space. And you know, maybe that means get a better manager. But generally, it’s like, well, we have to wait and see what the property looks like, then we’re gonna get it cleaned up, and they want to do paint and all kinds of stuff, then we got to list it, then we’re going to see people only move in either mid month or the the end of the month. So it’s like all these things. And you end up with two to four weeks of vacancy every time. Yep. So if you have a tenant moving every year, you’re not making money, basically. So that’s, that’s just kind of shitty. But when you’ve got a medium term rental, or you know, a short term, you can have them move same day, like I’ve got people coming in at three o’clock, and the other guy left at 11, you know, and it’s like, we don’t have to worry about the walls getting damaged, because people are not moving stuff. They’re not hanging stuff. We don’t generally have carpet, so we don’t really deal with that. But there’s just barely any turnover involved, except that deep clean.

Shannon Robnett 22:17

Well, on the other side, too. I mean, correct me if I’m wrong, but if you’re only there for 90 days isn’t your attitude, maybe a little bit more, maybe you need to come touch up this or you need to come touch up that, you know this, maybe the carpet didn’t need to get cleaned. But you got me in same day. And I know I’m only here for a couple months. And you know, it’s you’re also in your property more frequently, right? I mean, you’re viewing every every 90 days, every 30 to 90 days. So you see what’s happening, you know? Yeah. So there’s a couple other interesting facts here about you that I have to talk about. Because you’re I mean, you’re not just serious about doing things differently. In how you do your short term, medium term, long term rentals. You also spend half the year traveling the world, but not as a normal traveler. Tell me tell me about this.

Zeona McIntyre 23:17

Yeah, so one of our ways of house hacking, which I think is the quickest way to wealth is find a way to house hack, whether that short, medium, whatever you got to do how to hack our way is to get out of our house so we can rent it out. And so the easiest way to do that is that we found a pet sitting app. And so with the app, people post their home and their pets, and you can see all the pictures, and you can basically just say, oh, cool, I want to stay there, and then you reach out to them. And with that membership for the year, you get a free trade essentially. And for us a way that it’s a benefit is that our house that we normally live in six months of the year, we can rent out for 250-300 a night as a short term rental and go pet sit for free. So we are currently in Estes Park, and we’re in a luxury home kind of on the top of the mountain overlooking a gorgeous valley with two dogs. And we’ve stayed at this particular house seven times, I think we just keep coming back.

Shannon Robnett 24:17

So I’m going to pay you to watch… to stay in my house. And then you’re going to rent your house. So you’re getting paid twice. Is that really what it boils down?

Zeona McIntyre 24:33

No. So normally, people pay a pet sitter, but with this app, people pay for the membership of the app, and it’s a free exchange. And so normally someone would have to board their dogs, which might be you know, 500 a week or something I don’t know. And then it’s just traumatizing for the animals so they’d rather just have them in their home. And this home if it was rented on Airbnb, I imagine it would be 1000-1500 a night something. But we just get to go stay there free and on top of it, because it’s Thanksgiving week as we record this, people are paying Yeah, like 300 and night for our house. So it’s pretty awesome.

Shannon Robnett 25:12

So the, the thing that that lets you do is you just have to get there, and you have free accommodations for the time that I’m wanting the pet sit done. And I’ve got a brother in law that needs this in February in Florida, so I will definitely let you know. He’s right there in Daytona. But you know, I mean, it’s in this is the funny thing, right? And I’m sure that you consider this as you work in an industry that didn’t really even exist 10 years ago, right. I mean, the medium, short term rental, that space wasn’t, it wasn’t there, that would be impossible to do without an app, right. And they’ve not been around that long. So now you’ve got that set up. And now you look at where you’re going to be in terms of all of this stuff in another 10 years. But on top of that, you’ve gone. I mean, you’ve just gone down the street in Colorado, but you’ve been over, am I understanding this correctly, over 47 countries as an international pet sitter,

Zeona McIntyre 26:15

I’ve been over 48 countries, I haven’t pet sat in all of them. But the frequent places that we pet sat I go to Mexico, Hawaii a lot. I’ve done it in St. Thomas, all over the US. We did a lot in Colorado during COVID. And what we figured out that we live in Colorado is that we get like a snowboard pass. And that pass lets us go to all these different mountains. But normally people drive so they’re driving, you know, two hours coming home the same day sitting in traffic, it’s all a mess. But for us, we’ll just go stay in all these places on the paths for two weeks. And we’ll just go stay locally. And then we can do a half day and go work on that same day. So it works out really well for us. We love it.

Shannon Robnett 26:59

Yeah. Well, that’s just that’s great. And that that that comes from the financial freedom that you’ve created. The other things, and I’m sure that what you’re doing with this would be much more difficult if you were the short term space, because you’d need to be closer to your assets and the things that you’re doing for your short term turnover.

Zeona McIntyre 27:20

Not necessarily. I mean, I was doing this stuff. When I had mostly short term rentals.

Shannon Robnett 27:25

You had great system.

Zeona McIntyre 27:27

Yeah, I had really good systems. And I’ve always been really into automation. And very quickly. I mean, I bought my first place in Colorado, but after that I couldn’t really afford Colorado. So I was out of state and out of state, you just got to figure it out. I’m not gonna go there.

Shannon Robnett 27:43

Right, right. Well, this has been a very insightful interview. And once again, I have figured out that I’ve been doing something with a name, and just calling it what I do, right. So how can we get people in touch with your book? How can I get your book?

Zeona McIntyre 28:02

Yeah, so it was published through bigger pockets. So biggerpockets.com/thirtydaystay. And if you use my name, Zeona you get 10% off. So just look for the spelling in the show notes.

Shannon Robnett 28:14

Yep. It’s all there. So guys, we want to thank you for tuning into our episode today on midterm rentals and want to say thank you to Zeona for showing up. I appreciate you and all your insight. And thanks again guys for tuning into the Real Estate Rundown. Don’t forget to like, share and subscribe to the Real Estate Rundown wherever you get your podcasts. Leave us a review. I read all of them. I love to give the feedback. And if you want to chat with me get on my calendar go to [email protected]. Send me an email right there. And we will definitely get back with you. Thanks again guys for tuning into the real estate rundown. And thanks again, Zeona.

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About Zeona McIntyre:

Zeona McIntyre has been an Airbnb host since 2012. After 10 years of managing short-term rentals across the globe, she has transitioned to selling Real Estate to investors looking to house hack or live for free. She is an avid Real Estate Investor owning a double-digit portfolio of short and medium-term rentals. In the fall of 2022, she will be releasing the book: “30 Day Stay. An Investor’s guide to Mastering the Medium-term Rental” coauthored with Sarah Weaver. She teaches listeners how to achieve Financial Freedom through Real Estate on her Podcast: Invest2FI, cohosted with Craig Curelop. She has been featured on BiggerPockets, Mr. Money Mustache, NPR, Business Insider, and more than 50 podcasts. Zeona has been to 47 countries, she spends half the year in Boulder, Colorado and the other half traveling the world as an international pet and house sitter. Learn more here: https://www.zeonamcintyre.com/.

Featured on the following podcasts: BiggerPockets Real Estate Podcast, Joe Fairless Best Deal Ever

Speaking At in 2022