Differences in lease terms Mid-term rental vs Long term?

Question

Hi All!

I am setting up 2 mid-term fully furnished rental 30 day+ units in Santa Cruz, CA. I have heard on some podcasts different things landlords have added into a mid-term lease that would differ from a long term lease like available on BP's resources. I am wondering what differences you have done and what worked well or didnt work well?

Some examples I have heard were: ability to come in every 30 days to clean the unit, requiring no changes to decorations/furnishings, etc.

Also, I am wondering what you normally have found to be the percent increase rent you can charge over a long term rental? Furnished Finder doesnt provide quality data on this in my market as most if it is stated has $2500+. AirDNA doesnt do much for the 30 day rentals.

Anything else to include or remove?

Thanks,

Josh!

Ron Brady · Answer

@Josh Kolbo

We have both types of rentals and our long term rental (LTR) and mid-term rental (MTR) leases are the same. Perhaps there should be differences, but we've not yet made any.

We too have thought about having cleaners come in every 30 days, but we've not done that yet. Instead, we give MTR residents contact info for our cleaners and allow them to make the call.

Re: pricing, we see different market segments within MTRs.  For example Extended Stay Americas and Springhill Suites are at very different price points.  Similarly if you look at Furnished Finder or SabbaticalHomes.com pricing, their price points are lower than Airbnb or VRBO 30-day stays in our area. What we did was determined which at which price point we wish to try to compete and then design, furnish and price our MTRs accordingly. As an example, we can't put a basic budget dining table and chairs in a MTR and then price at Springhill Suites levels--our residents will know they are getting a basic budget product for too high a price. Best wishes to you.

Carolyn Fuller · Answer

The only thing that is different in my mid term leases is a fixed term. For instance,

Agreement Term. The term of the Agreement begins at 12:00 pm on August 31, 2022, and ends at 4:00 p.m. on December 31, 2022 (“Agreement Term”).

It is very specific about the move-in and move-out times but I allow my tenants to rearrange furnishings and decorations. I have not run into any problems that were caused by tenants personalizing their environment. The cleaning services I provide are optional so that does not appear in the lease, either. During the pandemic, my tenants requested the cleaning service be dropped. I continued to pay my cleaners half what I would have paid them but they did not enter the apartments during that time.

I'm able to price my rentals based on what I find on SabbaticalHomes.com. That is platform that provides me with most of my tenants and, therefore, is the best source of information.

Josh Kolbo · Answer

Thank you for the answers @Ron Brady @Carolyn Fuller @Luke Carl @Robert Tinker !! I have not come across sabbaticalhomes.com in my time but looks like it is decently used in my area as well now that I look at it.

Robert Tinker · Answer

Look for furnished rentals in your area and see what they are charging to get an idea. You can look in Furnished Finders, Apartments . com, Zillow etc.

Differences in lease terms Mid-term rental vs Long term?

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