The Yield Didn't Disappear. It Just Changed Rooms.

If you've been watching the STR data this year, the headline numbers look fine on the surface. Occupancy is softer in most markets but not crashing. Revenue is technically up too.

Look one layer down and it reads a little differently. A lot of that revenue growth isn't coming from more guests booking. It's coming from operators raising rates on roughly the same guest count.

I don't think that means the market is broken. It might just mean it's carrying its own weight with rate increases instead of real demand growth, and that only holds up for so long. The markets that got crowded first during the run-up, the ones that saw the heaviest new supply, are the ones cooling the fastest now. Booking windows are stretching out in a lot of those same places, and a stretching booking window usually shows up before the rest of the data catches up to it.

None of this tells anyone what to do next.

What it did was push me to liquidate most of my STRs, keep only the best, and ask honestly whether the model I was running still made sense for where the market actually is, not where I remembered it being.

I rebalanced my STR portfolio toward mid-term rentals gradually, property by property.

I wasn't reacting to a report. I was tired, honestly, and curious whether there was a version of this that asked less of me without asking me to give anything up.

The part that surprised me wasn't the revenue. It was everything underneath it. Fewer turns meant fewer cleaners to coordinate, fewer same-day guest problems, fewer five-star review chases eating into a week. Wear and tear on my properties dropped, less traffic through a door means less to repair between stays.

The net income landed in about the same place, sometimes a little better, with gaps between tenants I could actually plan around instead of the constant churn nightly rentals ask of you.

What that gave back was time.

A handful of those remaining rental properties turned into something closer to base camps. I can carve out a one to three month stretch in one of them for myself, live there, and let the rest of the portfolio cover living expenses while I'm there. Nobody writes that into a pro forma. But it might be the real difference between owning properties and having a life built around them.

I'm not saying this is the move for everyone. It took years to get here, a lot of trial and error, and properties I was already willing to hold long enough to figure it out. What I can say is that it gave back more life and experiences than I thought it would.

I went looking for numbers that would either confirm or contradict what I was seeing in my own MTR operation. The direction, at least, seems to line up.

Demand for longer, furnished stays has been climbing for years now, well ahead of traditional short-term booking growth. The supply side tells the same story. The dedicated platforms built around this category have grown many times over since before the pandemic, and they keep adding owners.

The demand underneath those numbers isn't what most people picture when they hear "mid-term rental." It's not only travel nurses. Business travelers, retirees, and a growing number of digital nomads make up a big share. Healthcare professionals on standard contract lengths are close behind. The rest splits across insurance placements, relocating families, academics, and military.

That's demand tied to employment and housing disruption, the kind that tends to hold up even when a household is tightening its vacation budget.

Stay length is worth sitting with too. Average stays on the major platforms have been stretching out, now running well past three months in a lot of cases. Longer stays mean fewer turns, and fewer turns is where a lot of the margin quietly shows up. Cleaning and turnover costs run meaningfully lower than a comparable STR. On my own properties, I disclose and withhold a deep cleaning fee from each security deposit to keep them polished between MTR stays.

The 30-day minimum also tends to keep operators outside the short-term rental licensing fights currently squeezing supply in a lot of tourist-heavy metros. And the growth seems to be concentrated in markets STR investors don't usually think to look at, employment corridors, hospital systems, university towns, places where the story was never really about tourism. That's opened up my own investable market more than I expected.

Single-room co-living seems to be working through a similar idea, just further down the income curve. The largest platform in that space is PadSplit. They've grown fast enough on both revenue and rooms under management to keep landing on national fastest-growing company lists year after year.

Here's roughly how the math seems to work. A single-family lease that might rent for somewhere in the $1,800-2,200 range a month can convert into several hundred dollars a room across three to five bedrooms, often landing at a noticeably higher total monthly figure from the same walls. Seasoned properties on the leading platform report occupancy well above what a typical single-family lease sees.

What seems to be driving it is a wage gap that isn't closing on its own. Residents on these platforms tend to earn in a bracket that clears the line for subsidized housing but can't hit the income multiple most standard apartments require. Meanwhile higher-end apartment stock in a lot of metros is sitting with real vacancy and flat rent growth, oversupply at the top of the market while the actual affordability gap underneath it keeps widening.

The honest risk here deserves its own paragraph, not a footnote. A single-tenant lease is either 0% or 100% vacant. A multi-room co-living property can sit at a meaningful chunk vacant at any given moment, and the model rewards you at high occupancy while punishing you quickly if a couple of rooms sit empty at once.

If you're running the numbers on this yourself, it's probably worth underwriting on the conservative side, not off the best-case occupancy a mature, seasoned portfolio might eventually reach.

I'm an affiliate of PadSplit. I sat down with their GM and underwrote the model myself, and I like what I found. If you're curious what listing a property as a host actually looks like, including their claim of 2.5X the income of a traditional rental, here's a link to explore their revenue model. Worth a look if you're chasing high-yield cashflow in this market, and your support of our affiliates is part of what keeps this newsletter free.

I don't think MTR or co-living replaces STR everywhere. They seem to fit a specific kind of property best, one in an employment corridor, near a hospital system, or in a workforce housing market where the rent-to-income math is already stretched. It's a domestic version of the same geo arbitrage that international pied-à-terre living runs on, finding the gap between what a place costs and what it can give back, in cashflow and in lifestyle both.

Whether that describes what you're holding or hunting is something only you can actually answer, sitting with your own numbers, your own market, your own tolerance for what operating a property day to day actually costs you.

If you're further along than that, sitting on properties that already cash flow, maybe the more useful question isn't how do I squeeze out more revenue. It might be what a lighter model would buy you back in time, and what you'd actually do with it.

For me, the answer turned into a global life of travel and experience, funded by dividends I didn't have to chase week to week. I'm not sure I would have gotten there by chasing yield alone. I got there by slowly building a framework, testing it against my own life, and letting the results tell me whether it was actually working.

That part still takes doing the work yourself. I don't think there's a shortcut around it.

I didn't set out to build a lifestyle around this. I set out to fix a portfolio that was asking too much of me. The lifestyle showed up on its own, somewhere in the middle of doing that work.

But if I'm honest, some version of this has been on my mind a long time. Back in 2005 I invested in and helped build a luxury and resort home destination club, sold my stake in 2008, and kept scouting global destination properties long after, slowly building a portfolio of my own. Nobody I knew was thinking about a global home base model back then, let alone nomadic living. It wasn't really a category yet. It was just something I kept circling.

It's strange, and a little humbling, to watch the market catch up to an instinct I couldn't fully name twenty years ago. Business, lifestyle, global living, geo arbitrage, they're all merging now in a way that finally has language for it. I don't take credit for seeing it coming. I just feel lucky to be living inside it while it happens.

I think of where I am now as a next phase, not an end point. The investing part isn't over, it just stopped being the whole point. The cashflow is diversified enough that I'm not chasing the next deal to survive the last one. What's left is figuring out how to actually live inside what I built, instead of just managing it from a distance.

Some months that means real work, meeting a developer, walking a property, sitting with a broker over coffee to hear what they won't say in an email. Other months it just means being somewhere I want to be, letting a base camp be a home for a while instead of a line item.

I don't have a clean name for that blend of working and living, traveling for the business and staying for the life. Some people call it bleisure, business meeting leisure in the same stretch of days. I just call it the way the days actually go now.

I don't think this is a retirement story, and I'm not sure it's really an investing story either anymore. It might just be what the next phase looks like once the base is actually built. I don't know that for certain yet. I'm still living my way into the answer, same as anyone would.

What I do know is that the search doesn't stop once the cashflow works. It just changes shape, from finding the next deal to finding the next place, the next market, the next stretch of time worth spending somewhere fully. That's really what this newsletter and Pied a Terre Life have become for me, a way to keep scouting that gap between what a place costs and what it gives back, in living and in investing both, and bring what I find back to you. That part of it, I don't think ever really finishes.

I'm grateful to still be out there looking.

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