Why A Duplex is A Great Option For Mid-Term Rentals with Bob Wohlstrom
Bob Wohlstrom is a seasoned property owner with over two decades of experience in property management and real estate investment. His career began as a superintendent, overseeing apartment complexes, and evolved into buying, fixing, and selling houses. After retiring in 2012, Bob transitioned into the world of mid-term rentals, purchasing a duplex in Tucson and transforming it into a lucrative investment. Through strategic remodeling and a partnership with Furnished Finder, he has created a thriving mid-term rental business. This article explores Bob's successful journey, insights, and strategies, providing valuable lessons for property owners interested in mid-term rentals.
Bob's Background
Property Management Career
Bob Wohlstrom's career in property management spans over two decades. Starting as a superintendent, he quickly climbed the ranks to become an area manager, overseeing 800 apartment complexes. His hands-on experience in managing various properties, dealing with tenants, and understanding their needs gave him a unique perspective. He learned the importance of responsiveness, property maintenance, and tenant satisfaction. After nearly 20 years, he shifted gears, buying, fixing, and selling houses for eight years. This phase further honed his skills in property renovation, market analysis, and understanding the dynamics of real estate investment.
Transition to Mid-Term Rentals
Bob's retirement in 2012 marked a new chapter in his life. Moving to Tucson, he sought investment properties that could provide a steady income. He purchased a duplex in 2017, remodeled it, and began renting it out. His expertise in property management and construction guided him in making the property appealing to tenants. Bob's transition to mid-term rentals was a natural progression, leveraging his extensive background to create a successful business model. His choice of mid-term rentals allowed him to tap into a market that offers more stability than short-term rentals while still providing flexibility. This decision aligned with his desire for consistent income without the daily demands of short-term rental management.
The Duplex Strategy
Property Details
Bob's duplex consists of two units: a one-bedroom and a two-bedroom. He lives in one and rents out the other. His remodeling efforts included installing new ceramic tile, air conditioning, a furnace, a hot water heater, and solar panels on the roof. These upgrades not only enhanced the property's appeal but also increased its energy efficiency, making it more attractive to environmentally conscious tenants. The choice of a duplex allowed him to minimize expenses while maximizing rental income. By living on the property, he could also ensure timely maintenance and build a rapport with his tenants.
Solar Panels
A 25% tax credit and the potential for long-term savings were factors in Bob's decision to install solar panels. This wise investment not only adds up to 10% value to the home but also leads to free electricity from solar energy. The solar panels have become a unique selling point, attracting tenants interested in sustainable living and reducing utility costs. It's an example of how strategic investments in green technology can pay off in the rental market. The decision also reflects a broader trend towards sustainability in real estate, aligning the property with modern consumer values.
House Hacking
Bob's house hacking strategy—living in half of the duplex while renting the other half—stemmed from his previous experience with rental income properties. He initially tried Airbnb but quickly shifted to Furnished Finder, valuing the longer-term tenants and easier management. This approach allowed him to cover his living expenses while enjoying the benefits of property ownership. It also provided him with on-site access to manage the property, ensuring quick responses to tenant needs. House hacking is a strategy that can be particularly appealing to new investors or those looking to reduce their living expenses, as it provides a way to generate income from your primary residence.
Success with Furnished Finder
Quick Results
Bob's experience with Furnished Finder was immediate and positive. Within six hours of listing the property, he had a tenant for a month. He continued to attract tenants, including nurses, doctors, and interns, with stays ranging from four to 16 months. The platform's focus on mid-term rentals provided a steady stream of quality tenants, reducing vacancies and ensuring consistent income. Bob's success highlights the efficiency and effectiveness of Furnished Finder in connecting property owners with reliable tenants. It also underscores the demand for mid-term rentals, particularly among professionals in transitional phases, such as relocating for work or temporary assignments.
Rental Income
Bob charges $1475 per month for rent, covering his mortgage and all utilities for both units. This income stream has significantly eased his expenses, enhancing his retirement lifestyle. The pricing strategy reflects the property's quality, location, and convenience offered to tenants, making it a win-win situation for both parties. Bob's ability to set a competitive price while still covering all his expenses demonstrates the financial potential of mid-term rentals. It also shows how understanding the local market and positioning the property to meet specific tenant needs can lead to optimal pricing.
Tenant Experience
Bob's tenants enjoy the comforts and upgrades of the property. He accepts pets, ensures a comfortable environment, and even allows tenants to decorate the place. His current tenant, Shannon, has stayed for 13 months, truly making the place her home. Bob's attention to detail, willingness to accommodate tenants' needs, and focus on creating a homely atmosphere have fostered a positive rental experience. This approach has led to longer stays, positive reviews, and a strong reputation as a landlord. It's a testament to the importance of tenant satisfaction in building a successful rental business, particularly in the mid-term market, where tenants often seek a more personalized and home-like experience.
Remodeling Insights
Energy Efficiency
Bob's remodeling efforts prioritize energy efficiency. He replaced all windows with argon-filled, low-E glass windows and installed granite countertops and ceramic tiles, enhancing the property's appeal. These upgrades not only improve the property's aesthetics but also contribute to lower utility bills, making it more attractive to potential tenants. Bob's focus on energy efficiency aligns with a growing trend among renters seeking sustainable living options. It also reflects a broader movement in real estate towards green building practices, recognizing the long-term savings and environmental benefits of energy-efficient design.
Murphy Bed
Bob's creativity shines through in his decision to build a Murphy bed into a closet in a narrow bedroom. This innovative solution maximizes space and adds flexibility to the property. It's an example of how thoughtful design can transform a small space into a functional living area, adding value to the property. Such unique features can set a property apart in the competitive rental market. It also illustrates how understanding tenant needs and creatively addressing them can lead to innovative solutions that enhance the property's appeal.
Advice for Property Owners
Bob's advice to fellow property owners emphasizes focusing on energy efficiency, attractiveness, and comfort when considering upgrades. He also stresses the importance of upgrading to a standard that you would enjoy living in, as it helps in charging a premium rent. His insights underscore the importance of understanding the target tenant market and tailoring the property to meet their specific needs and preferences. Investing in quality materials, thoughtful design, and tenant-friendly policies can lead to higher rental income and tenant satisfaction. Bob's approach reflects a philosophy of treating rental properties not just as investments but as homes for tenants, recognizing that a happy tenant often translates to a successful rental business. His advice serves as a valuable guide for property owners looking to enhance their properties, not just for immediate returns but for long-term success and tenant satisfaction.