Mid-Term Rentals: What An Investor Needs to Know

Managing a rental property offers various avenues to explore, each with its own set of benefits and challenges. While the standard 12-month lease has been the norm, some Investor are now turning to medium-term rentals to maximize their income.

What Exactly is a Medium-Term Rental?

A medium-term rental is one where a tenant stays for more than 30 days. The duration can range from 30 days to less than 12 months, with the typical stay lasting between two to three months. These rentals are usually furnished, eliminating the need for tenants to furnish the unit themselves. While they entail less administrative work than short-term rentals, turnover is more frequent, necessitating a strategic approach to management.

Key Considerations for Medium-Term Rental Lease Agreements

If you’re considering managing a medium-term rental, there are critical elements to include in your lease agreement, such as always collecting a security deposit, essential for covering any property damage or unpaid rent. Additionally, ensure your lease agreement complies with local laws and ordinances to mitigate legal risks, especially when managing properties remotely.

Here are some additional points to consider when drafting your lease agreement:

1. Lease Duration: Medium-term rental agreements typically span three to six months, so choose a lease type that aligns with the intended duration.
2. Rent and Fees: Clearly outline the rent amount, move-in fees, security deposit, late fees, and rent payment grace periods.
3. Furnishings and Property Damage: Specify the furnishings provided and tenant responsibilities for property damage.
4. Tenant Responsibilities: Clearly define tenant responsibilities to maintain the rental property and handle tasks like rent payments and maintenance requests promptly.

Note: make sure to consult a professional for your state’s landlord-tenant laws.

Deciding on Mid-Term Rentals: How to Determine if It’s Right for You

Who Typically Rents Medium-Term Properties?

Medium-term rentals cater to various tenant demographics seeking temporary accommodations with flexibility. Common tenant profiles include:

1. Students: Seeking short-term housing solutions during academic terms or breaks.
2. Travel Nurses: Looking for temporary housing close to medical facilities for work assignments.
3. Remote Workers: Relocating temporarily to new cities for work, especially following the rise in remote work arrangements.
4. Relocating Individuals: Needing temporary housing while searching for a permanent residence in a new area.

Strategies to Differentiate Your Medium-Term Rental

As medium-term rentals gain popularity, it’s crucial to make your property stand out in a competitive market. There is a great deal of importance of furnishing rentals thoughtfully to create a welcoming environment for tenants. Consider factors such as location and tenant preferences to tailor your rental offerings accordingly.

In addition, incorporating virtual tours into your rental listings can attract more prospective tenants and enhance your property’s visibility.

Pros and Cons of Medium-Term Rentals

While medium-term rentals offer several advantages, they also present unique challenges. While increased turnover may be viewed as a disadvantage, efficient systems can streamline turnover processes. On the flip side, the benefits include reliable income, opportunities for growth, and a simplified management experience.

Here’s a breakdown of the pros and cons:

1. Experienced Tenants: Medium-term rentals often attract tenants familiar with the rental process, simplifying management.
2. Reliable Income: Less susceptible to seasonal fluctuations, offering consistent passive income.
3. Growth Opportunities: Growing demand presents opportunities for expanding your rental business and portfolio.

1. Increased Turnover: Frequent tenant turnover requires managing the rental property more frequently.

Deciding on Mid-Term Rentals: How to Determine if It’s Right for You