Medium Term Rental Leasing - Month to Month or Set Lease Term?
Ian I LeinwandPro Member
Property Manager · Fort Collins, CO · Member since 2018 · 89 posts · 42 votesI'm a experience property manager that is taking on a client with 10 medium term furnished properties for management. We currently manage 4 medium term rental and have some systems in place.
My question is what type of lease terms work best to minimize vacancy and minimize the need to continually ask current tenants if they are planning on extending / renewing a lease.
Currently we do 3 month minimum with an an option to renew for a set lease term - IE another 3 months or go to month to month. For month to month we require a 45 days notice to vacate
We are often contact by perspective tenants looking for specific time frame several months in advance but we typically do not know if the current occupant will be vacating or renewing.
Would love to hear some feedback from BP community managing medium term rentals and or get pointed to some medium term strategy resources. We advertise on Furnished finder, zillow and our own website.
It really just depends on what types of travelers you're attracting to your units. For example, travel nurses often sign their contracts less than a month in advance of their assignment and the typical assignment is 13 weeks. Some extend their contracts and will want to extend their leases, others may have their contracts cut short abruptly. Insurance placement guests tend to be very last minute, often will want to sign an initial 30-day contract and then the amount of time they will extend is very unpredictable but can sometimes be upwards of 9 months. For me, managing lease renewals is not a big deal. I put in my lease terms that I'll be asking the guest 30 days before their lease is due to expire whether they want to extend (IF they've been a desirable guest) and give them first dibs. But if they don't, I'll update my calendar availability and open it back up. Given the infrequency of turnover, it all feels very manageable, especially when using PMS tools that help with messaging and reminders. I typically am not accepting far future bookings. I have enough demand in my area that as soon as one opens up, I'm able to fill it. So it's all very situational and market dependent. The great thing is you get to set your own rules and experiment until you find that sweet spot for you.
Hi Ian, we have 15 units medium term in our management portfolio listed in FF and Airbnb and accept 1 month stays, but I do think that 3 months minimum with 45 days notice is a good base lease term setting to reduce the frequency of occupancy changes. We might be shifting to that soon and listing on Zillow. For prospects seeking to rent many months in advance we are typically declining those and seeking to lease up as close as possible to the next available date so as to prevent potential gap periods that will be harder to lease. We are recently seeing about raising prices for openings far in future to make it worth considering even if it creates a gap. If the potential gap will be a nice even 1-3 month time frame we might go for it. Then we see if the current tenant later decides to extend or we list the limited open period, often at a slightly discounted rate. We are using Guesty software to set our pricing adjustments for seasonal and far future vs near term, but maybe its a little overkill for MTR.
It really just depends on what types of travelers you're attracting to your units. For example, travel nurses often sign their contracts less than a month in advance of their assignment and the typical assignment is 13 weeks. Some extend their contracts and will want to extend their leases, others may have their contracts cut short abruptly. Insurance placement guests tend to be very last minute, often will want to sign an initial 30-day contract and then the amount of time they will extend is very unpredictable but can sometimes be upwards of 9 months. For me, managing lease renewals is not a big deal. I put in my lease terms that I'll be asking the guest 30 days before their lease is due to expire whether they want to extend (IF they've been a desirable guest) and give them first dibs. But if they don't, I'll update my calendar availability and open it back up. Given the infrequency of turnover, it all feels very manageable, especially when using PMS tools that help with messaging and reminders. I typically am not accepting far future bookings. I have enough demand in my area that as soon as one opens up, I'm able to fill it. So it's all very situational and market dependent. The great thing is you get to set your own rules and experiment until you find that sweet spot for you.
I completely agree—knowing your target traveler and adjusting your approach accordingly is crucial. We also see a lot of variance based on guest type, especially with travel nurses and insurance placements. The key is marketing on a wide distribution of channels to get a billboard effect and attract those mid term renters. Each renter profile comes with its own booking patterns and renewal needs, as you mentioned... but we find that a 30day rental period with option to renew and automated reminders to the renter works great!
It sounds like you have a solid system with clear communication on extensions and vacancy openings. Having a PMS with automated reminders has been a game-changer for us too, making it easy to manage renewals without much manual follow-up. Testing and tweaking over time helps us dial into the best strategies for each unique market.
It’s helpful to hear what’s working well for others in the space!
We manage several medium-term rentals as well and typically operate with a 30-day minimum stay. Most of our tenants are traveling healthcare professionals, so we’ve tailored our lease terms to meet their unique needs.
If a tenant needs to terminate the lease early due to their contract being canceled, we allow them to break the lease without a fee, as long as they can provide proof. For other situations, we charge a fee equivalent to two month’s rent if they choose to back out early.
Since most of our tenants are traveling nurses, we typically don’t receive inquiries too far in advance. However, we often have nurses requesting to extend their stays when their contracts are extended.
Agree with @Sarah Rosko
The nature of most bookings are out of towners that book before they see the place or really know the neighborhood. They are also coming in on work contracts that are subject to change. We have our lease terms but are flexible and treat people fairly. I'm not going to hold a tenant hostage or make them pay rent if they finished their work contract early and need to leave town. We can also be flexible because our mid term properties have never had any issues getting booked. Even with 2 weeks notice, we can fill our properties with less than a week of vacancy.
It's a know what you want but take what you can get situation. We ask for 30 days notice and include that in our lease agreement but understand and are flexible with tenants so long as they are respectful and cooperative.
We manage several medium-term rentals as well and typically operate with a 30-day minimum stay. Most of our tenants are traveling healthcare professionals, so we’ve tailored our lease terms to meet their unique needs.
If a tenant needs to terminate the lease early due to their contract being canceled, we allow them to break the lease without a fee, as long as they can provide proof. For other situations, we charge a fee equivalent to two month’s rent if they choose to back out early.
Since most of our tenants are traveling nurses, we typically don’t receive inquiries too far in advance. However, we often have nurses requesting to extend their stays when their contracts are extended.
I agree with Sarah. Also, since most mid-term renters are in transition I typically ask if they think they might extend. It's common for traveling medical professionals to extend their contracts. If they might stay, I pad my calendar so someone doesn't book it when I could just keep the current person. They appreciate it and the less I turn a unit the easier it is to run it.