Short v. Mid term?

Question

Hi all,

I am totally green, haven't even purchased a property yet. I'm looking to partner with my dad on my first property.

I'm interested in investing in short and/or mid-term rentals in my local area. I've talked to some other investors, and I believe there is a market for it here, and I've also worked in airbnb cleaning and so I am somewhat familiar with local expectations.

I'd love to hear from you guys on what are some of the key differences between short and mid-term rentals and what some of the pros/cons are of each, so I can know more about what to look out for in underwriting.

Thanks!

Carolyn Fuller · Answer

I do both STR and MTR. Since my rentals are half way between Harvard and M.I.T., I started out renting mid term to visiting scholars but there are no visiting scholars during the summer. So I did STR during the summer.

MTRs are much like LTRs in that they produce passive income. STRs are a lot more work. We never go on vacation during the time we have units on the STR market. We not only go out of town when our rentals are rented mid term, but our mid term tenants, for a small stipend, often take care of our properties when we are out of town.

Glen Hayhoe · Answer

The cleaning work is worth more than you probably think. You've already seen the part of this business that most people put in the spreadsheet as a line item and then find out is the whole operation.

The biggest difference between the two isn't revenue, it's which rulebook applies to you. There are three and they don't share a threshold. The municipal ordinance, which might define short-term as under 30 days, or under 7, or under 90, depending on the city. The HOA or condo declaration, which sets its own minimum stay and doesn't care what the city says. And tax. Mid-term often clears the first two, which is the real reason people do it. Find where each of those three lines sits in your area before you assume 30 days is a clean workaround, because sometimes it isn't.

On tax, don't assume 30 days makes you exempt. In Florida anything six months or less is a transient rental, so a 30-day stay owes state sales tax plus county tourist development tax exactly like a three-night stay. The exemption takes a bona fide written lease longer than six months. Your state will draw that line somewhere else, but go look rather than assume. Here it's roughly 10-13% of gross, and people find out during an audit.

Underwriting: compare net, not gross. Short-term gross is much higher and a lot of the gap goes straight back out in cleaning, linen, consumables, platform fees and a higher management rate if you're not doing it yourself. Mid-term is one turnover per tenant instead of fifteen. By the bottom of the page the two are closer than the top of the page suggests.

The vacancy shapes differ too, and that's the one that catches people. Short-term you lose nights. Mid-term you lose months. One six-week gap between tenants is most of your annual cushion, and you can't discount your way out of it the way you can with a nightly rate.

Mid-term demand is source-driven rather than market-driven. It comes from a specific thing: a hospital, a university, a large employer, insurance displacement housing, construction crews. If your area doesn't have one, there's no mid-term market regardless of what the numbers say. Before you buy, call a hospital housing coordinator, call a travel nurse recruiter, call a restoration contractor. Three phone calls will tell you more than the data tools will, because AirDNA is thin on mid-term and Furnished Finder is shallower than it looks.

One thing I'd push back on before you hear it somewhere else: mid-term is not a fallback that rescues a marginal short-term deal. The monthly rate usually sits well below 30 nights at a nightly rate. Switching doesn't save a bad purchase, it just makes the loss smaller.

Last thing, since you're partnering with your dad. Paper it now, while everyone's getting along. Who funds it, who does the work, what the operating partner gets paid before any profit split, and what happens if one of you wants out in year three. You'll be the one doing the labour, and the labour is what families forget to price.

And whatever anyone here tells you, me included, confirm the local rules with your own city and county before you rely on them.

— Glen, Furlow Stays

Andrew Steffens · Answer

I think you should decide what strategy you like, operating LTR, MTR, and STR are all quite different. Then evaluate properties to see what their highest and best use are. I will say most properties are not good MTR's unless you are near something like a large hospital.

Divin Kanyama · Answer

Welcome to the journey, @Natalie Theobald . One thing I'd encourage is not getting too attached to either strategy before you've underwritten a few deals. The best approach often depends on the property, the market, and your goals.

In general, short-term rentals can generate higher revenue, but they're usually more management-intensive and can be more sensitive to seasonality, regulations, and market shifts. Mid-term rentals often produce slightly lower gross income, but they can offer more stable occupancy, less turnover, and fewer operational headaches.

Since you've already worked in Airbnb cleaning, you have an advantage that many new investors don't. You've seen firsthand what guests expect and some of the operational realities behind the numbers.

As you analyze deals, I'd focus on more than just projected revenue. Pay close attention to occupancy assumptions, turnover costs, furnishing expenses, cleaning, utilities, and local regulations. Sometimes the property with the lower projected income ends up producing the better return because it's simpler and more predictable to operate.

The good news is that you're asking the right questions before buying. That mindset alone will save you from a lot of expensive lessons.

James Irvine · Answer

Natalie, I think that there are more than enough folks sharing their opinions on LTR, MTR and STR. However, none of them shared what the Lender

thinks about them or wants from you. Since this will be your first, your partner (Parent) will be looked at with more weight than you. Make sure that you

both are wide eyed about the process and requirements. There are many things to go over. Some programs are better than others. If I may suggest, that other than having your financials in order, pay enough attention to the deal. Your first deal needs to be a winner, not a pain in the butt loser. All rentals at some point will be a pain in the butt, so get tough now. Get a good lease contract from an Attorney that likes and invests in Real Estate and does evictions or has a Company that is experienced in them. At some point, you will face someone to evict. Back to the loans. While that is my specialty, most Brokers are not great at their job. Get informed, learn the programs, including potential Gov programs, including specialty Grants for the future. If I may also suggest, you and your parents consider instead of SFR's, think seriously about 1-4 units or even if you dare, 5-9 units. Way more profitable and if one or two units are vacant longer than you want, the rest will carry you. The numbers are way better and give you greater overall appreciation and many more benefits than a SFR. Best wishes. James

Drew Sygit · Answer

We've done all of them!

LTR are the easiest, but least profitable

STR are the most demanding and profitable - we don't do them anymore as too demanding given majority of our properties are LTR.

MTR is in the middle of both effort and profit. We currently do these as they align better with our LTR abilities.

Ashish Acharya · Answer

Natalie, for a first property, I’d underwrite short-term and mid-term as two different businesses, not just two different lease lengths.

STR usually has the higher revenue ceiling, but also more moving pieces: furnishing, utilities, cleaning, guest communication, platform fees, seasonality, local rules, and much more active management. MTR usually trades some of that upside for longer stays, fewer turnovers, and more predictable occupancy.

Since you’ve already worked in Airbnb cleaning, you probably have a better feel than most beginners for how much operational work actually sits behind the nightly rate. I’d use that experience when underwriting instead of just looking at gross revenue estimates.

For STR, I’d focus on occupancy, average daily rate, seasonality, cleaning, utilities, furnishing replacement, platform fees, local regulations, and management time. For MTR, I’d focus more on monthly rent, expected length of stay, vacancy between tenants, furnishing, utilities, and whether there’s steady demand from traveling professionals, relocations, insurance stays, or similar renters.

From the tax side, the distinction can matter too. STRs can sometimes receive different passive-activity treatment depending on average guest stay and material participation, while MTRs are generally more likely to fall under traditional rental treatment. So I’d think about the operating model and the tax model together before choosing one.

And since you’re planning to partner with your dad, I’d also get the ownership and tax structure clear before closing. If you both own and operate the property together, you may end up with a partnership filing rather than just splitting the income informally.

Feel free to DM me, I’d be happy to send over a few resources that might help you compare STR versus MTR, partnership setup, and first-deal underwriting.

Carolyn Fuller · Answer

The units are in an urban setting. One of our challenges, living in this environment is rats. We monitor the yard daily for any signs of burrows. If one is found, we apply dry ice to the burrow. This kills the rats in the burrow without harming any other animals or leaving our soil toxic. It also dissuades rodents from setting up residence on our property and leaves our garden oasis a pristine location for our guests and tenants to enjoy.

We are currently on a 2 week vacation and, for a small stipend, one of our tenants is monitoring the backyard for us daily. Our home is above the rental units so he also is bringing in our mail and feeding our cat.

Last year we didn't have anyone monitoring our yard for rodents and we came home from our 2 week vacation to a well established infestation. There were 5 burrows. It took a week of applying dry ice to the burrows to drive out the rats.

Natalie Theobald · Answer

Thank you!

Natalie Theobald · Answer

Thank you so much for this thorough reply. So helpful!

Short v. Mid term?

Short v. Mid term?

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