Medium-Term Rentals For Hosts and Local Law 18

[Maurice W. Evans]

Medium-Term Rentals For NYC Hosts
A Smart Move for NYC Landlords in the Wake of Local Law 18 Photo by Michael Discenza on Unsplash

Greetings, I’m Maurice, a property marketer, manager, and real estate enthusiast based in Brooklyn, New York. I work closely with my wife managing 25 units, helping landlords navigate the challenges and opportunities in the New York City rental market. Today, I’d like to share my insights into why medium-term rentals, particularly to non-resident professionals, are a winning proposition for NYC landlords.

Is NYC The Place To Be?

As we all know, New York City has a vibrant, fast-paced rental market. Yet, recent changes in local laws, particularly Local Law 18, have caused a significant shift in the short-term rental (STR) landscape. This law, enforced by the Office of Special Enforcement (OSE), has added a layer of complexity to short-term rentals that can make them less appealing for hosts. While this might initially seem like a setback, it's also opened the door to a more lucrative and less regulated opportunity: medium-term rentals.

Local Law 18

Now, let's take a moment to talk about Local Law 18. This law mandates that anyone offering an STR must register with the city, limit rentals to their primary residence, and have no more than two guests at a time. There's also a long list of other requirements and restrictions that make compliance a challenging task. Penalties for non-compliance are steep, making the risks of STRs potentially outweigh the benefits.

So where does this leave property owners who are keen to earn rental income without the hassle of compliance headaches and potential fines? Enter the world of medium-term rentals (MTR).

MTR

Medium-term rentals typically range from one to six months. They attract a different kind of renter: often professionals, such as traveling nurses, corporate employees on assignment, or folks from the entertainment industry in town for a project. These individuals value convenience, comfort, and a ‘home away from home’ experience during their temporary stay. But the benefits don’t stop at the tenants. As a landlord, there are significant advantages to this kind of arrangement.

World’s Greatest Tenants?

The medium-term rental market is less regulated than short-term rentals, meaning landlords can avoid bureaucratic red tape and potential penalties associated with Local Law 18. You’re dealing with fewer turnovers, and with companies often footing the bill for these professional tenants, payment reliability is increased. This means you can enjoy a more stable income stream and peace of mind.

But that’s not the end of it. These tenants are, by definition, transient. They’re in town for a job, not to find a permanent home. This results in less wear and tear on your property and less risk of problems that can arise with long-term tenants. These individuals are truly guests — temporary visitors who respect your property and treat it as their home during their stay.

Moreover, working with professional tenants typically results in fewer issues than with traditional long-term tenants. These folks are in town for work, not to cause trouble. Their focus is on their job, not on trying to change the lease or negotiate terms. Plus, the medium-term nature of these arrangements means there’s a natural end point in sight. These individuals will complete their work and return to their homes, making way for the next guest.

The Perfect Tenants!

Think of medium-term rentals as the ‘Goldilocks zone’ of the rental market. They’re not as transient as short-term rentals, requiring constant turnover, increased wear and tear, and stricter regulations and potential fines. On the other hand, they don’t come with the risks of long-term rentals, where a problematic tenant can become a long-term headache. Medium-term rentals strike the perfect balance: they’re just right.

One story comes to mind that illustrates this point beautifully. We spoke with a property owner who had a beautiful, fully furnished apartment in Brooklyn. She’d been running it as an Airbnb but was growing tired of the constant cleaning, maintenance, and guest communication. Then came the introduction of Local Law 18 and the added compliance requirements. She was ready to throw in the towel.

We suggested she switch to medium-term rentals. The strategy was to list the property, market it to our network of corporate contacts, and soon gain a three-month booking from a known film director in town for a project. The director would have loved the convenience and comfort of living in a home instead of a hotel, and if she’d become our client could have enjoyed a stable income, less frequent turnovers, and fewer worries about compliance with short-term rental laws.

We would have ensured a smooth experience for all involved by handling the cleaning, managing the lease, and troubleshooting any minor issues that came up during the director’s stay. Our client would have been thrilled with the outcome and could have since transitioned all her properties to medium-term rentals. Alas, some people are slower to act than others.

Due Diligence First

As with any business venture, it’s important to conduct thorough due diligence before jumping in. Make sure your property is suited for medium-term rentals — updated, furnished, and in a desirable location. And of course, always ensure that you are complying with local laws and regulations. If you’re unsure, consider reaching out to a knowledgeable property manager who can guide you through the process.

In the wake of Local Law 18, we believe medium-term rentals present a promising opportunity for NYC landlords. They allow for a steady, reliable income stream, a more hands-off management approach, and a higher-quality tenant pool. Most importantly, they provide a way for landlords to navigate the increasingly complex landscape of short-term rentals without having to bow out of the rental market entirely.

Exciting Times With Professionals

Navigating this space can be complex, and that’s where my wife and I come in. With our extensive experience in property management and intimate knowledge of NYC’s real estate market, we take the hassle out of medium-term rentals. We ensure that your property is in an excellent location, well-maintained, and attractive to top-tier professional tenants. We’ll handle the logistics, from marketing your property to vetting potential tenants and even arranging for bi-weekly cleaning services.

In essence, we offer a comprehensive property management solution, allowing you to reap the benefits of medium-term rentals without the added stress

It’s an exciting time to be part of the medium-term rental market. The trends we’re seeing suggest that this sector is poised for growth. With an increasing number of companies opting for flexible work arrangements, there’s an expanding pool of professionals in need of medium-term accommodations. For NYC landlords, this opens up a whole new world of potential tenants who are reliable, responsible, and respectful of your property.

The world of real estate is always evolving, and those who adapt will thrive. Here’s to embracing the possibilities of medium-term rentals and to a brighter, more prosperous future for NYC landlords!