Jennifer Tessmer-Tuck got into real estate in 2020 after a pandemic-era pay cut prompted her to seek another income source. The Minnesota-based OB-GYN started with what she already knew: buying a single-family home, the same kind of property she and her husband, Paul, had bought as homeowners.
Over the last five years, the Minnesota-based couple has grown that first investment into a 16-property portfolio, which Business Insider verified by reviewing closing documents. Along the way, they stumbled on a profitable niche: furnished mid-term rentals.
The idea came about when one of the first multifamily properties they acquired — a duplex — wasn’t performing as expected. Their plan was to clean it up, raise the rent, and lease it quickly. Instead, “it kind of sat there for a while,” Tessmer-Tuck told Business Insider.
Eventually, they rented out one side. For the other, she decided to try something different: furnishing it, renting it by the room, and targeting traveling professionals.
At the time, in the wake of the pandemic, there was strong demand from healthcare workers looking for furnished housing.
The property had previously brought in about $1,800 per side in traditional rentals. After the switch, the furnished side generated roughly $3,900 to $4,000 a month, with the three rooms renting for $1,200 to $1,400 each.
Why midterm rentals are “the best of both worlds”
During the height of the pandemic, many travel nurses received housing stipends, making premium rents easier to afford. While many of those contracts started at about 13 weeks, the stays often lasted much longer.
“We ended up having people who stayed with us for like 9 to 15 months,” she said.
Tessmer-Tuck likes midterm rentals for several reasons. For one, they generate more income than long-term rentals. She said her furnished rentals now cash-flow about 1.5 to 2 times as much as her unfurnished properties. While they may not be as profitable as short-term stays, they’re less hands-on and don’t come with the constant churn or guest expectations of a vacation rental.
“We found that the midterm tenants were way easier than the short-term tenants,” she said. Those guests often expected something closer to a hotel experience, while midterm tenants tended to be more flexible and appreciative.
“It’s kind of the best of both worlds, long term and short term,” she said, “because you get a bump in rent compared to long term, but you still get a nice relationship and ease of caring for the tenant that you don’t get with the short term.”
She also found that the tenants drawn to midterm rentals were often the kind of renters she wanted: professionals temporarily relocating for work, retirees, and people who already owned homes elsewhere and needed furnished housing for a few months.
How she finds tenants and furnishes rentals on a budget
To fill units, Tessmer-Tuck initially relied on Furnished Finder, a platform that initially catered largely to travel nurses and other medical professionals. That audience has since broadened, she said, to include remote workers, retirees, and seasonal travelers. She also gets some leads through Airbnb and Vrbo, as well as word of mouth.
Her strategy for furnishing rentals has evolved, too. At first, she thought she’d have to buy everything new, which quickly added up. Then she started looking on Facebook Marketplace and found gems at a fraction of the price.
Today, she estimates that about 90% of her furniture comes from Facebook Marketplace. She still buys some basics new, mostly at Costco, including towels and sheets. If she can’t find what she needs there, she checks stores like TJ Maxx or Target, and occasionally Amazon.
Profitable, but not effortless
Today, six of Tessmer-Tuck’s properties are midterm rentals. Even though the strategy has worked well for her, she doesn’t want to convert all of her units. For example, she and Paul recently acquired five duplexes, some of which they may convert to mid-term rentals, but certainly not all.
“I think they’d outcompete each other,” she said. “I don’t think we’d be able to keep them all occupied.”
Midterm rentals also require more work than traditional long-term leases. Tessmer-Tuck’s minimum stay is 30 days, which means more turnover, more setup, and more effort upfront to furnish each space.
For her portfolio, though, the tradeoff has been worth it so far: “We’ve done really well with the midterm.”
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