{"id":153425,"date":"2023-05-31T07:00:00","date_gmt":"2023-05-31T13:00:00","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=153425"},"modified":"2024-02-27T10:23:22","modified_gmt":"2024-02-27T17:23:22","slug":"how-to-invest-in-medium-term-rentals","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-to-invest-in-medium-term-rentals","title":{"rendered":"How to Invest in Medium-Term Rentals"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC4428379322\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p>Medium-term rentals are more profitable than long-term rentals and less stressful than their short-term counterparts. While they used to be mainly for traveling nurses and business professionals, they\u2019ve become more popular than ever due to the rise in digital nomadism and the stricter regulations enforced on short-term rentals.&nbsp;<\/p>\n\n\n\n<p>In this post, we\u2019ll explore how to invest in medium-term rentals so you can decide if they\u2019re right for you.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Are Medium-Term Rentals?<\/h2>\n\n\n\n<p>Medium-term rentals are furnished properties that tenants live in for more than 30 days but less than a year. They\u2019re also ideal for seasoned and <a href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-medium-term-rentals-first-time-investments\" target=\"_blank\" rel=\"noreferrer noopener\">first-time investors<\/a>, especially in a post-pandemic world.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">5 Steps to Invest in Medium-Term Rentals<\/h2>\n\n\n\n<p>Investing in medium-term rentals requires you to understand the needs of your tenants. Here are a few things to consider before getting started:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. Find an investor-friendly real estate agent<\/h3>\n\n\n\n<p>Investor-friendly agents have invaluable experience and know what to look for in a rental property. They\u2019re keen on the rental market\u2019s current trends and can identify undervalued areas. If they\u2019re rental property owners themselves, they can also provide first-hand insight so you can try to replicate their successes and avoid their mistakes.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Choose the right market for your future tenants<\/h3>\n\n\n\n<p>Not every property will make an ideal medium-term rental. Your tenants will likely be students, traveling nurses, business professionals, and people new to the city. With that in mind, the following markets tend to be more favorable for medium-term tenants:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Educational hubs<\/strong>: Towns and cities with colleges and universities are ideal for medium-term properties. Many properties that are within walking or short driving distances will likely be occupied by students, visiting parents, and professors who need housing for a summer or semester.&nbsp;<\/li>\n\n\n\n<li><strong>Business centers<\/strong>: Areas with a rich business community attract a lot of business travelers and project-based professionals. They\u2019ll need accommodations for a few weeks or months, depending on the projects they\u2019re working on.&nbsp;<\/li>\n\n\n\n<li><strong>Tourist destinations<\/strong>: Cities and vacation destinations that get a lot of tourism are also great for medium-term rentals. Sometimes, visitors want to spend an entire season there, such as a ski resort or a beach town.&nbsp;<\/li>\n\n\n\n<li><strong>Medical facilities<\/strong>: Traveling nurses will need to be in proximity to the hospitals and clinics they\u2019re working at, and will be looking for properties they can rent out for months at a time.&nbsp;<\/li>\n\n\n\n<li><strong>Government facilities and military bases<\/strong>: Government workers, personnel, and contractors often require temporary housing near these properties. Typically, medium-term rentals are ideal for people in these professions.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">3. Calculate the potential rental income based on average rates<\/h3>\n\n\n\n<p>Once you find a few prospective properties, it\u2019s time to run the numbers. You will have to estimate expenses like utilities, maintenance costs, insurance, and property taxes, and you\u2019ll also need to think about income. What potential rental income can you make based on the average pricing and occupancy rates?&nbsp;<\/p>\n\n\n\n<p>We recommend analyzing for <a href=\"https:\/\/www.biggerpockets.com\/blog\/2014-09-29-the-ultimate-analysis-cash-on-cash-return-vs-overall-return\" target=\"_blank\" rel=\"noreferrer noopener\">cash-on-cash return<\/a> or your <a href=\"https:\/\/www.biggerpockets.com\/blog\/internal-rate-return-irr\" target=\"_blank\" rel=\"noreferrer noopener\">internal rate of return<\/a> (IRR). Once you\u2019re up and running, you should also use pricing software.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4. Purchase the property you\u2019ll be leasing out<\/h3>\n\n\n\n<p>This step is pretty straightforward. Once you find an ideal property and the numbers look good, make an offer and negotiate the purchase price. Your investor-friendly real estate agent will be crucial for this step as well.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">5. Fully furnish your property with everything your tenants need<\/h3>\n\n\n\n<p>Your tenants will call your medium-term rental \u201chome,\u201d but to them it\u2019s temporary. They\u2019ll pack more with them than they would when staying at a short-term rental, but not much more. It won\u2019t make sense for them to buy furniture, serveware, or their own appliances. They\u2019re likely just bringing their clothes, a few personal items, and toiletries. You\u2019ve got to supply the rest.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Use Software to Streamline Your Processes<\/h2>\n\n\n\n<p>Once you\u2019re up and running, make your life easier with software that\u2019ll automate your processes.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Leasing software for all your paperwork<\/h3>\n\n\n\n<p>Medium-term renters stay longer than 30 days, meaning they are tenants and have rights that short-term guests lack. To protect yourself, you need a lease agreement. Your <a href=\"https:\/\/www.biggerpockets.com\/property-management-tools\" target=\"_blank\" rel=\"noreferrer noopener\">medium-term lease<\/a> should include the same elements you\u2019d have in a long-term lease, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Rent amount, including late fees and the rent payment grace period<\/li>\n\n\n\n<li>Security deposit to cover any losses and necessary repairs&nbsp;<\/li>\n\n\n\n<li>Length of tenancy, including move-in and move-out dates (unless renewed)<\/li>\n\n\n\n<li>House\/building amenities, such as a parking spot, pool, or gym<\/li>\n\n\n\n<li>Furnishings so that your renter knows what\u2019s included<\/li>\n\n\n\n<li>Tenant responsibilities and expectations, including where and how to pay rent and where to submit maintenance requests<\/li>\n\n\n\n<li>Local ordinances, such as zoning regulations, noise, and pet restrictions<\/li>\n<\/ul>\n\n\n\n<p>When drafting your need, ensure it abides by local laws and includes the specific address and unit number.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Pricing software helps you stay competitive<\/h3>\n\n\n\n<p>Hotel and Airbnb rates fluctuate all the time for an abundance of reasons, including season, availability, and special events. Pricing software analyzes what hotels and rentals charge per night to determine what you should charge.&nbsp;<\/p>\n\n\n\n<p>When renting by the month, you\u2019re probably not as concerned with the daily rates that short-term rentals live and die by. However, you should still use pricing software and change your rates based on the seasons. If your medium-term rental is a beachfront property, you\u2019ll want to charge more during summer than in November. If your property is next to the ski slopes, your rates should be higher during the winter months.&nbsp;<\/p>\n\n\n\n<p>Don\u2019t treat your mid-term rental like a long-term rental. Pricing software looks at what short-term rentals charge per night and calculates a monthly total. Experiment with your pricing to see what you can get. It will likely be more than if you charged the same rate all year-round.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Auto-messaging software answers your FAQs<\/h3>\n\n\n\n<p>When a potential tenant sends you a message, you must respond quickly. On Airbnb, your response time should be within an hour. Unglue yourself from your inbox by setting up auto-responders.&nbsp;<\/p>\n\n\n\n<p>Guest experience messaging software like <a href=\"https:\/\/hospitable.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Hospitable<\/a> lets you set up automated responses to many FAQs you usually get from aspiring tenants, like what amenities are included and if pets are okay. You can also set up key messages that guide your tenants through their leasing experience.&nbsp;<\/p>\n\n\n\n<p>According to <a href=\"https:\/\/store.biggerpockets.com\/products\/30-day-stay?_pos=1&amp;_sid=4315ae55f&amp;_ss=r\" target=\"_blank\" rel=\"noreferrer noopener\">30-Day Stay<\/a> co-author Zeona McIntyre, here are five messages you should include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Confirmation message<\/strong>: This should be sent almost immediately after a booking<\/li>\n\n\n\n<li><strong>House manual<\/strong>: Your house manual should be sent after the confirmation message. It includes everything the tenant needs to know about the property. It can also have restaurant recommendations and popular things to do in the neighborhood.&nbsp;<\/li>\n\n\n\n<li><strong>During your stay message<\/strong>: 24 hours after a tenant checks in, this message should include more detailed information about the property, such as where the garbage is.<\/li>\n\n\n\n<li><strong>Check-out message<\/strong>: Send this message 24 hours before a tenant checks out. It should include the check-out time and what they should do before the cleaners arrive.&nbsp;<\/li>\n\n\n\n<li><strong>Thank you message<\/strong>: Your \u201cthank you\u201d message should be sent on check-out day, thanking them for choosing to stay in your rental. It should also ask your tenant to leave a review. Reviews are great for search engine optimization (SEO), making it easier for future tenants to find you.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Build Your Power Team<\/h2>\n\n\n\n<p>As with other investment properties, you don\u2019t have to purchase a rental in the same area you live in. Investing elsewhere is often recommended because there are likely better cash-flowing markets than where you live, and you\u2019ll be less inclined to drive over to your properties every time you need to replace a key or fix a broken appliance.&nbsp;<\/p>\n\n\n\n<p>Optimize your investment by building a team of professionals to do much of the heavy lifting for you. Here are three team members you should consider, according to McIntyre:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. Investor-friendly real estate agents to help you find and lease properties<\/h3>\n\n\n\n<p>McIntyre recommends that you \u201cLook for an <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" target=\"_blank\" rel=\"noreferrer noopener\">investor-friendly agent<\/a> that has short or medium-term rental properties [that they\u2019re] either Airbnbing themselves or are co-hosting or managing for other people.\u201d&nbsp;<\/p>\n\n\n\n<p>Investor-friendly agents have invaluable experience and know what to look for in a rental property. They\u2019re keen on the rental market\u2019s current trends and can identify undervalued areas. If they\u2019re rental property owners themselves, they can also provide first-hand insight so you can try to replicate their successes and avoid their mistakes. Also, investor-friendly agents have a vast network of other people you\u2019ll want on your team.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Property cleaners to keep your rental looking spotless<\/h3>\n\n\n\n<p>Professional cleaners make for invaluable members of any rental property team. High-quality cleaners ensure that your space is wiped, scrubbed, dusted, polished, sanitized, and disinfected to look like new when your next tenants arrive. Professional cleaners make for invaluable members of any rental property team. As a result, you\u2019re more likely to receive more 5-star ratings and glowing testimonials, allowing you to charge more and make bookings easier.&nbsp;<\/p>\n\n\n\n<p>Professional cleaners can also provide you with updates anytime something needs to be fixed that\u2019s outside their expertise, which brings us to your next team member:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Handypersons to keep your rental in great condition<\/h3>\n\n\n\n<p>A handyperson (a.k.a. handyworker, handyman, maintenance worker, repair worker, etc.) takes care of minor repairs, upkeep, and general maintenance. Typically, a handyperson handles a myriad of emergency and non-emergency repairs, including but not limited to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Heating or cooling issues<\/li>\n\n\n\n<li>No hot water<\/li>\n\n\n\n<li>Clogged toilets and drains<\/li>\n\n\n\n<li>Garbage disposals<\/li>\n\n\n\n<li>Painting and minor wall repairs<\/li>\n\n\n\n<li>Repair and replacement of typical household items (i.e., outlet covers)<\/li>\n\n\n\n<li>Repair and replacement of sinks, faucets, and kitchen appliances<\/li>\n\n\n\n<li>Lockouts (during work hours)<\/li>\n\n\n\n<li>Changing locks&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>You\u2019ll want to work with a handyperson with multi-unit experience and living near your rental property. Again, ask your investor-friendly agent if they have any recommendations.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Other Potential Roles On Your Power Team<\/h2>\n\n\n\n<p>Investor-friendly real estate agents, cleaners, and handypersons are all excellent additions to your power team. Here are a few more team members to consider:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Landscaper<\/li>\n\n\n\n<li>Plumber<\/li>\n\n\n\n<li>Real estate attorney<\/li>\n\n\n\n<li>Accountant\/tax professional<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Benefits of Investing in Medium-Term Rentals<\/h2>\n\n\n\n<p>Here are a few reasons why you should consider investing in medium-term rentals.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">They\u2019re a good return on investment (ROI)<\/h3>\n\n\n\n<p>Short-term rentals typically offer the highest ROI but have increased risk and a larger time commitment. Meanwhile, long-term rentals are less risky and usually require less work on your part, but they also have the lowest ROI of the three rental types.&nbsp;<\/p>\n\n\n\n<p>Medium-term rentals are right in that sweet spot. They\u2019re less risky and labor-intensive than short-term rentals and deliver higher returns than their long-term counterparts because their renters are willing to pay a premium for your space. If they convert to long-term renters, they\u2019ll likely continue paying the same amount, or at least more than if they initially became long-term renters.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">You attract responsible tenants<\/h3>\n\n\n\n<p>Even though many medium-term renters are just passing through, they will stay awhile. Your property is their new home, and they\u2019re likely to treat it respectfully. Many of them also have responsible professions and are in their late 20s or older.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">They have fewer restrictions than short-term rentals<\/h3>\n\n\n\n<p>Given their recent surge in popularity and the occasional horror story, more and more homeowners associations and municipalities are cracking down on short-term rentals. Short-term rental property owners have to stay in the know about the many local and state laws they\u2019re required to follow. Medium-term rentals lack many of these limitations, making them a great alternative.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Medium-term rentals don\u2019t require a lot of time commitment<\/h3>\n\n\n\n<p>Medium-term rentals require furnishings and for you to build a list or multiple listings, but beyond that, their obligations are comparable to that of a long-term rental. You don\u2019t have to worry about new bookings every week, organize frequent cleaning schedules, or maintain constant communication with your guests. Once your tenant has moved in, your required contact with them is pretty limited.&nbsp;<\/p>\n\n\n\n<p>Now that you know the benefits of getting into the mid-term rental market, here\u2019s how to automate your processes and make the most of your investment:<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to Invest in Medium-Term Rentals with BiggerPockets<\/h2>\n\n\n\n<p>BiggerPockets is dedicated to bringing together real estate experts, newbies, and everyone in between to gain the knowledge needed to reach their full potential.&nbsp; Are you ready to become a medium-term rental investor? Check out some of our other posts, including <a href=\"https:\/\/www.biggerpockets.com\/blog\/30-day-stay-a-medium-term-strategy-for-long-term-financial-freedom\" target=\"_blank\" rel=\"noreferrer noopener\">30-Day Stay<\/a> and <a href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-medium-term-rentals-first-time-investments\" target=\"_blank\" rel=\"noreferrer noopener\">Why Medium-Term Rentals Are Good First-Time Investments<\/a>.<\/p>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:100%\">\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block py-4    has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Master the Medium Term Rental<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">The first-ever book on medium-term rentals, this guide will help you find the right markets, properties, furniture, and tenants to make you a successful medium-term rental host with maximum cash flow and minimum worries.<\/p>\n\n\n\n<div id=button-custom-event-block_64137524a9e3d class='button-custom-event'>\n      <a href=\"https:\/\/store.biggerpockets.com\/products\/30-day-stay\/utm_source=blog&#038;utm_medium=marketing_block\" x-on:click=\"window.analytics.track(&#039;Blog Block | Publishing: 30Day Stay Book&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/how-to-invest-in-medium-term-rentals&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Get Yours Now<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/09\/30DS_cover_mockup_01-e1663956408659.png\" alt=\"30 day stay\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Medium-term rentals can be more profitable than long-term rentals and less stressful than their short-term counterparts.<\/p>\n","protected":false},"author":613625,"featured_media":153429,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7376,7119],"tags":[],"class_list":["post-153425","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-medium-term-rentals","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/153425","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613625"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=153425"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/153425\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/153429"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=153425"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=153425"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=153425"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}