Real Estate Investor’s Guide to Mid-Term Rentals
As owners of short-term rentals have faced increased restrictions, fees, and regulations, there’s been a noticeable shift away from this class of rentals and towards mid-term rentals. There is growing demand for mid-term rentals, and the shift from short-term to mid-term is a relatively easy transition. To help you decide whether they’re a good option for your portfolio, here’s an introduction to mid-term rentals and tips to help you get the most from your mid-term rentals.
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What Are Mid-Term Rentals?
As the name suggests, mid-term rentals fall between short-term and long-term rentals. Short-term rentals – often known as vacation rentals – are generally for terms of 1-30 days, and long-term rentals are usually for one year or longer.
Rental terms that fall in that gap – anywhere from more than a month to less than a year – are mid-term rentals. That said, most mid-term rental periods are between 2 and 6 months, with 3 months being the most common length.
Like short-term rentals, mid-term rentals are usually furnished and provide Tenants with basic amenities like a fully equipped kitchen, Wifi, and televisions.
Generally, mid-term rentals have a lower nightly rate than short-term rentals but a higher monthly rate than long-term rentals. As a result, they’re a way to increase returns without having to do the constant management that comes with short-term rentals.
Who Are Target Tenants for Mid-Term Rentals
One of the appealing things about mid-term rentals is that demand is steadily increasing. Much of this demand is being driven by:
- Traveling nurses;
- Digital nomads;
- Business professionals;
- People relocating; and
- Homeowners in transition.
Landlords should think through this list to help determine whether there would be steady demand for their rental unit as a mid-term rental. For example, is it close to a medical center or university? Is it in a busy city or one with lots of seasonal work? Is it near a popular destination or nearby amenities attracting travelers and locals?
While all areas have people relocating and homeowners in transition, some rentals are better suited to mid-term rentals than others. If your rental is close to a medical center, university, or a popular city, it likely will do well as a mid-term rental.
The Pros & Cons of Mid-Term Rentals
Once you’ve decided whether your property is a good fit as a mid-term rental, it’s helpful to consider whether mid-term rentals are a good fit for you. To help you do that, here’s an overview of the key pros and cons of mid-term rentals.
Pros of Mid-Term Rentals
- More steady cash flow than short-term rentals;
- More flexibility than long-term rentals;
- Fewer management responsibilities than short-term rentals;
- Increasing demand;
- When managed well, mid-term rentals have fewer vacancies than short-term rentals; and
- Ability to attract a broader range of Tenants, many of whom are experienced with mid-term rentals.
Cons of Mid-Term Rentals
- Landlords have to turn the property over multiple times during the year, leading to more management responsibilities than long-term rentals;
- Unlike short-term rentals, you’ll need to screen Tenants before handing over possession; and
- Compared to long-term rentals, you’ll have an increased risk of Landlord headaches like noise complaints and difficult Tenants.
Tips to Get the Most Out of Your Mid-Term Rental
While mid-term rentals are less passive than long-term rentals, they offer some unique advantages that make them attractive to investors. If you’re going to give them a try, here are a few tips to maximize your return and make the management process go as smoothly as possible:
- Always screen Tenants. This is less important with short-term rentals, but a must with mid-term rentals. If you’re going to give a Tenant possession of your unit for a few months, you want to make sure that they’re going to take care of it and pay rent. You don’t want to find yourself in a situation where Tenants do damage to your unit or furniture. Nor do you want to have to evict Tenants. The best way to avoid these bad outcomes is to always screen Tenants and only rent to qualified Applicants.
- Market Your Unit on Multiple Platforms. A potential challenge of mid-term rentals is increased time spent finding Tenants and the risk of vacancies between Tenants. One way to minimize this risk is to market your unit on multiple platforms. There are lots of options when it comes to listing your rental online – for example, Furnished Finder, Kopa, Landing, and Airbnb. Explore different platforms and pick a few that are a good fit for you and your property.
- Make your rental unit stand out. Another way to minimize vacancies is to make sure your unit stands out among others on the market. You can do this by taking professional photos, making sure the unit is clean and in good condition, offering amenities that your target Tenant will enjoy, and pricing your unit competitively.
- Create management systems. Finally, you’ll want to create systems and procedures to make marketing and management as easy as possible. These should include Tenant Screening systems, a procedure for creating and signing Lease Agreements, and property management routines. The more systems you can implement, the easier it will be to manage your rental unit.
Visit ezLandlordForms.com for the Landlord Tools You Need
We’re excited about this increasingly popular type of rental unit and can help Landlords get the most out of their mid-term rentals. Our Rental Application, Tenant Screening Services, and state-specific Lease Agreements will help you screen Tenants and create a good Lease.
As you manage your mid-term rental, we have over 400 property management forms, including state-specific forms and notices. Visit ezLandlordForms.com to send a screening request, create a Lease Agreement, or chat with our experienced team.
Emily Koelsch, ezLandlordForms Contributing Writer
Emily Koelsch is a freelance writer and blogger, who primarily writes about business, real estate, and technology.