Landlording & Rental Properties

3 Reasons I Think Medium-Term Rentals Beat Short-Term

Expertise: Landlording & Rental Properties, Real Estate News & Commentary, Real Estate Investing Basics
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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.

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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.

Related: Is Airbnb Really Ruining Rental Markets?

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.

airbnb-tips

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.

Related: Here’s Why You Need Insurance for Your Airbnb

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.

Erin Spradlin co-owns James Carlson Real Estate. She loves working with first-time home buyers or sellers because it is fun to help people real...
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    Jill Curran from Little Rock, Arkansas
    Replied 12 months ago
    After noise problems from short term renters (can you say 10 cricket players in town for a weekend tournament?), I converted the Airbnb I manage to 28 day minimums at the same rate. It's not always booked but the headaches have largely gone away, for the reasons you outline and others. In a relatively large house (3 b/2.5 ba) I stopped advertising futons for the floor, so we are limited to 6 sleepers, but being medium term tends to take care of the number of folks staying in the house. Rarely do I have more than a single person or a couple. If a family books it, they usually have just one or two children, and are, as you point out, more responsible. I'll never go back to short term renting.
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 12 months ago
    Were you having multiple bad short-term rental situations? My experience is that STR renters are usually pretty responsible, but you will have a bad situation here and there that can make flipping them to medium-term attractive. We switched ours because of Denver's laws, and while the money is not as good, the work is minimal... which is great.
    Brian Marver
    Replied 12 months ago
    Are you still marketing these via Airbnb or other methods?
    Jack Forbes
    Replied 5 months ago
    We're happy to help all property managers market their listings for medium-term stays on Kopa! Kopa.co is the marketplace for furnished, medium-term housing (1-12 months).
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 12 months ago
    We still market them on Airbnb, but just with a 30+ day rental period.
    Owen Franks Attorney from St Petersburg Fl / Cambridge UK
    Replied 12 months ago
    Good post. I’d be interested to hear how you go about finding and marketing to these medium term renters? Thanks
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 12 months ago
    We still use Airbnb for this, but we extend the dates to a 30+ rental situation and then put them on a lease once it's agreed upon. We've also used Craigslist, Facebook and a private email list to find people- but A LOT of our renters still come from Airbnb.
    Al Williamson Rental Property Investor from Sacramento, CA
    Replied 12 months ago
    Good article. I whole heartedly agree with your three points. Setting up my 20th mid-term Rental today. Hands down, they are the way to super charge a rentals income.
    Tamie Kaufman Property Manager from Gold Beach, OR
    Replied 12 months ago
    We used to do that in my former company, but the new Oregon law, SB608, you cannot force the medium person out before the busy season. So you are left gambling if the person will leave and allow you to fill your reservations, or not take any reservations until you know they are out. With the old law, there was always risk of a delayed leave, but given that we could always use a no cause notice to get them out, we never had the issue. I don't do that work anymore, but it is a conundrum as we literally have no legal basis to say, time to go.
    Lloyd Cook Rental Property Investor from Leona Valley, CA
    Replied 12 months ago
    Very interesting and timely article. We have one Airbnb in Missouri that is slow in the winter. Thank you for the idea. I will be looking into this for sure.
    Josue Cruz Flipper from Detroit, Michigan
    Replied 12 months ago
    Please make another article giving more details on how you advertise, what to do's and don'ts, etc.
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 11 months ago
    Ask and you shall receive. Here you go. https://www.biggerpockets.com/blog/landlord-advertise-medium-term-rental-property
    Jabarie Craig
    Replied 12 months ago
    Great insight. How do you market medium term rentals?
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 11 months ago
    Here you go: https://www.biggerpockets.com/blog/landlord-advertise-medium-term-rental-property
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 12 months ago
    Article coming on that. Thanks for letting me know that would be helpful.
    Mario Rosales
    Replied 12 months ago
    As many others on this thread have requested, I'd be interested to know how /where to advertise a medium term renter. Is there a company that caters to this market like Airbnb does for short term stays, or would you advertise your property through a regular property manager?
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 11 months ago
    https://www.biggerpockets.com/blog/landlord-advertise-medium-term-rental-property
    Paul Sandhu Investor from The worst town to live in, Kansas
    Replied 12 months ago
    I do short term rentals to refinery contractors. Minimum stay is one week. They don't know how long their job will last, or how long they will be here. Had a guy end up staying for 80 weeks. He only left because he didn't want his kid to be born in this state. Had several others stay for more than 52 weeks at the original weekly rate. Another guy who had stayed with me off and on for the last 5 years ended up buying a 2nd house here. The rent he paid me for 5 years was enough to buy a 3BR 2BR.
    Eric Hart Rental Property Investor from Indianapolis, IN
    Replied 12 months ago
    Great post, thanks for sharing! I agree and have success renting out my single family home in the fall/winter on Airbnb for a MTR period (around 4 months).
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 12 months ago
    Good to hear!
    Janet Orgill from Incline Village, NV
    Replied 12 months ago
    Here in Tahoe we call this a "ski lease"! I can see the appeal, particularly in markets where laws are now prohibiting STR.
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 12 months ago
    Very nice. Do people really want a ski lease for 30+ days? Who does that target? Just curious because it would be applicable to my mountain clients here. Thanks!
    Cheryl Vargas Rental Property Investor from Rohnert Park, CA
    Replied 11 months ago
    When you are doing your medium term renters, do you have long vacancies between guests?
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 11 months ago
    Nope. We limit the large breaks by advertising well in advance and sometimes also making the new renter absorb some of the downtime in their rent (same as a standard rental. Just because you can't show up until the 10th of the month doesn't mean the rent doesn't start on the first.) We do it on a case by case basis and always try to work with the tenants, but there are ways of splitting the difference.
    Jaideep Patil
    Replied 4 months ago
    How do you market to corporate travelers? Given that they likely get reimbursed by their company, do you market to them directly or to the company's travel manager?
    John Stephenson
    Replied about 2 months ago
    The title of this article caught my attention. I own and operate a few short term rental homes in addition to a few multi-family properties. After reading the article I'm not convinced these 3 points show that mid-term rentals "beat" short-term rentals. Point 1: Our short term renters have followed our house rules and have been fine and respectful. I don't think mid-term rentals would treat my home better than short term guests. Also, I'm able to inspect and perform maintenance on my homes between guests, so my properties are kept in superior condition. Point 2: Short Term Rentals can generate 2-4x the net profit than a traditional rental can produce, so the 1.25 - 1.5x figure does not "beat" the short-term option. For example, let's say I have a decent home valued at $280,000. Market rent is about $1,600. Sure, I could rent it mid-term for $2,000 - $2,250 per month. I may have some gaps between tenants, so I may only gross $20,000 for the year. However, I could average $4,000 per month as a short term rental property. Point 3: Converting Mid-Term to Long-Term (and therefore less profitable) renters runs contrary to the whole point of short or mid-term rentals. If you are considering getting into the short-term rental business, then focus on offering a clean, comfortable, well-stocked and decently furnished home. Have reliable cleaning and maintenance folks to help. Understand your seasonal pricing and communicate effectively with prospective and confirmed guests. Do these things in a market where people want or need to stay and you'll make great money. Plus, if you enjoy hosting then you'll have a blast.
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied about 2 months ago
    @john stephenson- well, I guess if you have one anecdote that went differently than my experience, you are definitely right.
    Ryan Robinson Real Estate Investor from Utah
    Replied 29 days ago
    What areas do you focus on when targeting MTR rental properties? I would imagine that homes near hospitals, event centers (post covid), or areas with large corporate offices would work well. Are there others? I've been in the situation where I needed a place for a couple of months in more suburban area and they are hard to find.
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied 28 days ago
    Yes, we've primarily focused on places near hospitals, colleges and downtown. Since I work with a lot of real estate investors in Colorado Springs and find properties in Colorado Springs, I also look at new industry coming in. So, Colorado Springs has an amazon plant coming, Space Force (maybe coming, we'll see who is president in the fall) and some tech filling out the region as well. I also target around those. It's interesting to know though that people have issues finding them in suburbs. Worth looking into.
    David R. Architect from Santa Monica, CA
    Replied 2 days ago
    Santa Monica, Ca just banned medium term rentals. Leases must be minimum 1 year, anything furnished not allowed, renters must use as primary residence. It seems like absurd overreach. Would like to hear others' comments and if this type of ban exists anywhere else.
    Erin Spradlin Real Estate Agent from Denver, CO
    Replied about 21 hours ago
    @david r. Wow. What was the city's justification for that?