Short Term Rentals versus Mid Term Rentals

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Short Term Rentals versus Mid Term Rentals

Bailey Kramer
Rental Property Investor · Denver, CO · Member since 2019 · 231 posts · 256 votes

Curious on your opinion on short term rentals versus mid-term rentals? 

While short term rentals typically provide higher cash flow, mid term rentals help to provide stability. 

What type of rental do you prefer and why?

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Ke Nan Wang
Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes
4y

In our area, the city actually has definition on the terminology. 

Transient: nightly to 30 days

Short term: 30 days to 6 month

Long term > 6 month. 

So I'm assuming when you said mid term you mean something like 30 days to 6 months. 

If you run it like long term rental then it's absolutely not worth it because higher turnover, more wear and tear, with not much benefit. But I do see a market for the mid term where you furnish the entire house and charge 50% more comparing to a long term rental rate and allow for less than 6 months lease. There are people who are in-between their houses (sold one and wait for the new one to complete) and might pay the extra because it's less hassle and cheaper than living in a hotel or vacation rental. I've never done one myself but as a realtor, I do see a demand from my clients and clients from my colleagues. 

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  • Evan B.
    Member since 2021 · 31 posts · 23 votes
    4y

    is there a specific scenario you are looking at? and this is for, for example a month long vacation rental?

    Short term rental is higher profit, but higher upkeep / attention

    Long term is lower profit, but lower upkeep / attention

    Mid term doesn't provide higher profit or lower the upkeep, tenants will "move in", but not really, so you have to clean up more sustained messes and deal with more problems, but you don't get any reward for it. Maybe this would work with a richer clientele that takes monthlong vacations

    Unless it is a specific situation that will benefit you in some way, I personally wouldn't do anything "mid term" unless it jumped out at me.

    0Reply
  • Ke Nan Wang
    Developer · St. Augustine, FL · Member since 2018 · 311 posts · 384 votes
    4y

    In our area, the city actually has definition on the terminology. 

    Transient: nightly to 30 days

    Short term: 30 days to 6 month

    Long term > 6 month. 

    So I'm assuming when you said mid term you mean something like 30 days to 6 months. 

    If you run it like long term rental then it's absolutely not worth it because higher turnover, more wear and tear, with not much benefit. But I do see a market for the mid term where you furnish the entire house and charge 50% more comparing to a long term rental rate and allow for less than 6 months lease. There are people who are in-between their houses (sold one and wait for the new one to complete) and might pay the extra because it's less hassle and cheaper than living in a hotel or vacation rental. I've never done one myself but as a realtor, I do see a demand from my clients and clients from my colleagues. 

    2Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    4y

    I'm interested in higher rent STRs in a true vacation destination or more passive LTRs that I have paid cash for and have a really good cash flow.

    I'm not interested in mid term at all.

    2Reply
  • Crisselda Clark
    Investor · Colorado Springs · Member since 2021 · 58 posts · 39 votes
    4y

    My midterm rental alone covers my living expenses, it is very profitable and my clientele have not caused me any serious headaches so far. Our location is in very high demand for MTR, so we have less than 24 hrs between tenants. We have just completed setting up our first STR and the first day out we have received two bookings. I do think it will be more work, but the way I set it up I can keep developing it for more income with low investment. It all just depends really, if you find a good deal in a great area see what would yield the best results with risk management in mind!

    1Reply
  • Leslie Anne Morris
    Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
    4y

    STR for me all the way. I want to access my property and not get into landlord / tenant laws.

    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    4y

    Ditto @John Underwood and @Leslie Anne Morris. I have had chances to do a mid term rental for traveling teachers and a pair of physical therapists but both fell through. Kinda glad I didn't.

    0Reply
  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    4y
    Quote from @Bailey Kramer:

    Curious on your opinion on short term rentals versus mid-term rentals? 

    While short term rentals typically provide higher cash flow, mid term rentals help to provide stability. 

    What type of rental do you prefer and why?

    I’ve had all three….
    with STR my daughter was the manager.  Turned out I needed someone hands on, but this was in 2015, before all the latest technology was available to allow, from what participants on this forum say, long distance self management.  I believe that they’re able to do it successfully, but I just know they’re a lot more organized, efficient and engaged than I am.  I’m out of STR because I can’t (or won’t) self manage and hiring a manager reduces the ROI to where it’s not worth it.

    I’ve also owned a couple of fully furnished rentals I’d lease out for from 90 days and up, depending on what tenant wanted.  Price adjusted accordingly, but since they were fully furnished with high end product I always obtained a large premium over LTR rates.  This I was able to do long distance, with just a part time “coordinator” paid hourly when and if needed.  Since I owned 6 rental condos in the area I did have good repair services available.  However, the key to me was the fully furnished with high end furnishings part..more so than the less than 12 month leases.  My target wasn’t the people working industrial jobs or traveling nurses; it was executive and professional level people going to be in Phoenix area short term who were willing to pay for high end accommodations. I obtained about 40-50% more rent than LTR unfurnished, with very little extra management time.  

    Although commercial real estate investing and lending is my business and the bulk of my portfolio, I always have at least a couple of residential properties I rent out as LTR.  The key to me as to doing it with almost no hassle is I put everything in tip top condition before I rent it out.  So, for instance I replace the AC unit (on its last legs), the water heater, washer, dryer, and refrigerator on the last property I put in service.  As a result I not only attracted a great tenant, but he agreed to pay $250 per month more to pay for the new stuff.  Biggest benefit to me is no repair problems.  But I hold these residential properties as an inflation hedge and appreciation potential, cash flow is just an extra bonus for me.
    Private Mortgage Financing Partners, LLC
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    2Reply
  • Steve Lovelace
    Property Manager · Panama City Beach · Member since 2022 · 2 posts · 0 votes
    4y

    @Bailey Kramer for Panama City Beach specifically the trend is STR during peak season, and then MTR (either furnished finder or snowbirds) during off season (around Nov-Feb). The seasonality lows for STRs here are extreme, so MTRs have provided a method for homeowners to still generate revenue during off season.

    0Reply
  • Tyler Winget
    Real Estate Consultant · Indianapolis IN + Poconos, PA · Member since 2022 · 51 posts · 39 votes
    4y

    MTR has acted as a safety net in slow seasons (depending on the market). 

    Otherwise I wouldn't suggest investing purely for MTR.

    0Reply
  • Bailey Kramer
    OP
    Rental Property Investor · Denver, CO · Member since 2019 · 231 posts · 256 votes
    4y

    @Evan B. Thanks for sharing your thoughts! I Co-Host a couple mid-term rentals now and they have definitely been the easiest to manage.The property was very cheap for the owner to buy and fix up. Converting the property to a Mid-term rental made sense for the owner in this area, because he was able to make so much more as a mid-term rental versus continuing to run it as a LTR. 

    I definitely agree that they are not going to give you the greatest amount of cashflow compared to a nightly rental. 

    I think it's nice to have a mix of nightly for the cashflow and mid-term for the stability. 

    2Reply
  • Bailey Kramer
    OP
    Rental Property Investor · Denver, CO · Member since 2019 · 231 posts · 256 votes
    4y

    Hi @Ke Nan Wang and thanks for your comment!

    Sorry for any confusion and definitely good point that each state can definite it differently. 

    I was referring to mid-term as a 30 day minimum with people staying anywhere from 30-90 days. 

    I agree that it is going to be based on the market demand and finding the right property where the numbers make sense. 

    0Reply
  • Bailey Kramer
    OP
    Rental Property Investor · Denver, CO · Member since 2019 · 231 posts · 256 votes
    4y

    @Tyler Winget Good point in using mid-term rentals as a strategy for slow seasons and doing nightly at the peak times.

    0Reply
  • Bailey Kramer
    OP
    Rental Property Investor · Denver, CO · Member since 2019 · 231 posts · 256 votes
    4y

    @Steve Lovelace Definitely makes sense for that market and to maximize your revenue by using a nightly and MTR combination. What strategies have you used to target snowbirds?

    0Reply
  • Joey BanasihanPro Member
    Investor · Boise, ID · Member since 2019 · 234 posts · 188 votes
    3y

    @Bailey Kramer, I late to this party huh?! Hahaha. Looks like folks have provided some good information and personal experience, I will try not to duplicate or be a broken radio lol.

    I believe that MTR's is currently and continue to be a strong investment strategy. I don't like to be in the "versus" mentality because there are just too many factors and personal experiences to take into consideration to determine better, worst, etc. haha. Defining what type of mid term rental tenants you are targeting is an important factor to determining and strategizing around MTR investing. Traveling nurses, traveling professional, relocation services (floods, fires, etc.), corporate housing...each demands a variety of approaches to accommodate their wants/needs.  My personal approach is that the MTR strategy is trying to provide solutions to circumstances/problems/inconveniences that 30+ tenants are having to face. 

    I hope your co-hosting with MTR continues to be smooth and profitable for you, and hope you are continuing to hit your investment goals!

    [email protected]
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  • Romy Gibson
    Realtor · Naperville, IL · Member since 2019 · 14 posts · 1 vote
    3y

    @Crisselda Clark How did you go about seeking out tenants for your MTR? My business partner and I are looking to get into a MTR, but not sure where to start.

    0Reply
  • Romy Gibson
    Realtor · Naperville, IL · Member since 2019 · 14 posts · 1 vote
    3y

    @Tyler Winget Why not?

    0Reply
  • Joey BanasihanPro Member
    Investor · Boise, ID · Member since 2019 · 234 posts · 188 votes
    3y

    @Romy Gibson you should look at Furnish Finder, that is a great place to start. That is where I find my tenants for my MTRs. Hope that helps!

    [email protected]
    0Reply
  • Alexandra Garcia
    Member since 2022 · 6 posts · 4 votes
    3y

    @Joey Banasihan Hey Joey. I'm looking for some advice about self-managing an MTR from another state. Do you self-manage yours and if so, do you do it locally or from afar? Would love to hear how you deal with checking out the property in between tenants. Would you rely on a cleaning team to keep you updated? Thanks in advance!

    0Reply
  • Amanda Laney
    Investor · IN · Member since 2022 · 3 posts · 1 vote
    3y

    @Bailey Kramer I am considering purchasing a new property for a hybrid model. When looking at calculations for starting a STR and using MTR as an additional option for local professionals, how would you best discern projected cash flow from a hybrid model??. I am struggling with a vacancy number to use in my estimates since its not just a STR calculation. Any suggestions would be extremely helpful. TIA

    0Reply
  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    3y
    Quote from @Amanda Laney:

    @Bailey Kramer I am considering purchasing a new property for a hybrid model. When looking at calculations for starting a STR and using MTR as an additional option for local professionals, how would you best discern projected cash flow from a hybrid model??. I am struggling with a vacancy number to use in my estimates since its not just a STR calculation. Any suggestions would be extremely helpful. TIA


     You've got analysis paralysis.  Take advice from Steve Miller.  Take the Money and Run.

    0Reply
  • Joey BanasihanPro Member
    Investor · Boise, ID · Member since 2019 · 234 posts · 188 votes
    3y
    Quote from @Alexandra Garcia:

    @Joey Banasihan Hey Joey. I'm looking for some advice about self-managing an MTR from another state. Do you self-manage yours and if so, do you do it locally or from afar? Would love to hear how you deal with checking out the property in between tenants. Would you rely on a cleaning team to keep you updated? Thanks in advance!

     Hey @Alexandra Garcia, great questions! I self manage locally and I wanted to that for the learning process. Because MTR's are a combination of STR & LTR, I have pieced together management strategies from both.

    - So yes, cleaners are your ALL-STARS and they ensure my property is being kept in great shape. I choose to have a cleaning service once a month (paid by tenant) to ensure the property is being checked on regularly and helps reduce the wear/tear of the space. The tenants have really appreciated this thus far. The important part here is making clear of your expectations for the cleaners and giving them some type of walkthrough inspection/list that they can use to ensure everything is being expected the way you would like. 

    - Currently, I meet in-person for inspecting the property with leaving tenant and new tenant to ensure we are on the same page around condition of property. If I was doing this afar, I would look for a handyman, vet them thoroughly, and hire them via their hourly rate (or double it to make it enticing) to walk through with tenants to fill out the inspection condition report.

    - I have set up my property with an STR mindset of utilizing technology to provide an ease for tenants to check in and monitoring cleaners/maintenance folks to gain access as well. Primarily installing Shlage Encode Smart Locks, Ring Door Bells with subscription for security, and external cameras. This helps the process of checking out and in tenants smoother and easier.

    I hope this was helpful! Feel free to connect with me and message me with other questions if you have any!

    [email protected]
    0Reply
  • Alexandra Garcia
    Member since 2022 · 6 posts · 4 votes
    3y

    @Joey Banasihan Thank you so much, super helpful information! I know it's possible to self-manage and it's great seeing examples of people doing it successfully. Thanks again!

    0Reply
  • Crisselda Clark
    Investor · Colorado Springs · Member since 2021 · 58 posts · 39 votes
    3y
    Quote from @Romy Gibson:

    @Crisselda Clark How did you go about seeking out tenants for your MTR? My business partner and I are looking to get into a MTR, but not sure where to start.


     I got setup with Furnished Finder, they provide a steady flow of tenant leads so luckily I havent had to go after alternative leads. However, some people post monthly rentals on Airbnb too. 

    0Reply
  • KiKi ChaseBusiness Member
    Real Estate Agent · Indianapolis, IN · Member since 2022 · 184 posts · 75 votes
    3y

    Honestly, I would choose hybrid! Indianapolis is known for having "seasonality", so a lot of our properties are STRs in the summer, and MTRs in the winter! It has made a unique experience for us, but we like it! 

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  • Zach Edelman
    Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
    3y

    MTR Pros - Less turnover, less likelihood of running into regulations issues.

    MTR Cons - Less cashflow than STRs (certainly an important con), tenant laws.

    0Reply
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