Because so many of our clients pursue a short-term (aka Airbnb) investment rental model, we are well aware that Airbnb’s slow season is either here or about to start. And while Airbnb is well worth it in the summertime, these properties can be quite a bit of work—a harder pill to swallow when the returns during slow season aren’t as good.
For that reason, we often encourage our clients to pursue a medium-term rental model during those months to maximize the effort-to-value ratio.
What Is a Medium-Term Rental?
A medium-term rental is usually a furnished property that rents over 30 days but shorter than a year. Medium-term rentals are often called the traveling nurse model, corporate housing, or subletting.
Because I converted all of my Denver Airbnb properties to medium-term rentals after the primary residence rule was passed here, I am going to outline three reasons why medium-term rentals are the best.
Why Medium-Term Rentals Are the Best
1. The medium-term rental demographic is responsible.
Traditionally, people tend to think of this demographic as traveling nurses or corporate employees. While they are a big part of the space, we also find this demographic includes people thinking about getting divorced (or getting divorced) and people new to the city who are trying to figure out where they want to set down roots.
Because this demographic is usually late-20s and older, as well as part of a responsible profession and/or thinking through a major life decision, they tend to be responsible. In my experience, they pay their bills on time and they are quiet.
2. People that medium-term rent pay more.
People will pay a premium for a well-furnished place. They will pay about 1.25 to 1.5X your average rent to get a place that doesn’t require any thought/moving/effort on their part.
3. People that medium-term rent often convert to long-term tenants.
Four out of five of our last medium-term renters converted to one-year or more stays, but they continued to pay us the elevated monthly price for the entire duration of their stay. Ka-ching! That’s the sound of more money without more work.
Converting to medium-term rentals during Airbnb’s slow season is a nice way to get your investment through October to March while still keeping it open for the more lucrative Airbnb season.
Do you have more questions on this model or other investor models?
Reach out in a comment below.