Understanding Mid-Term Rentals

Mid-term rentals (MTRs) present a compelling opportunity for commercial real estate investors. These rentals occupy a niche between short-term and long-term rentals, offering tenants a stay that typically spans from one to several months. Unlike short-term rentals aimed at vacationers or long-term rentals meant for permanent residents, mid-term rentals cater to those in need of temporary but stable accommodations. These properties are usually fully furnished and rented out for 30 days or more, providing flexibility without the frequent turnover of short-term rentals and stability without the long-term commitment.

The Growing Demand for Mid-Term Rentals

Several demographic groups are increasingly seeking mid-term rentals, making them an attractive investment:

• Traveling Medical Professionals: Healthcare workers, including travel nurses, often require temporary housing near hospitals or medical facilities for assignments lasting around 13 weeks.
• Business Professionals & Digital Nomads: The rise of remote work has led business professionals and digital nomads on temporary assignments to seek comfortable living spaces where they can work and live for a few months.
• Relocating Families: Families moving, buying, selling, or renovating their homes frequently need mid-term rentals.
• Academics: Professors, students, and interns may need housing for a semester or during training programs.
• Insurance Placements: Individuals displaced due to disasters or home damages are often placed in mid-term rentals by insurance companies.

Benefits of Mid-Term Rentals for Property Owners

Mid-term rentals offer a range of benefits that can be especially advantageous for commercial property investors:

• Quality Tenants: These rentals tend to attract professional and reliable tenants who respect the property, leading to less likelihood of damage compared to short-term vacationers.
• Higher Cash Flow: Typically, mid-term rentals can command 1.5 to 2 times the rent of long-term rentals. This increase in revenue comes without the high operational costs linked with short-term rentals, providing a balance of substantial cash flow and fewer turnovers.
• Reduced Management Effort: With fewer bookings—generally just four tenants per year—property owners experience sustained occupancy and income stability without the constant marketing and tenant communication required by short-term rentals.
• Property Maintenance and Access: Mid-term tenants often take better care of the property, and the more frequent tenant changeovers compared to long-term rentals allow for regular maintenance and upgrades.
• Regulatory Compliance: Many regions are tightening regulations on short-term rentals, including bans and hotel taxes. Mid-term rentals, with their longer stays and quieter, professional tenants, often avoid these restrictions and are seen more favorably by homeowners associations (HOAs) and local authorities.

Setting Rental Rates

Determining the rental rate for a mid-term rental requires careful consideration of market conditions, property size, and seasonality. While the per-night rate is generally lower than that of short-term rentals, the consistent occupancy offered by mid-term rentals can lead to higher overall profitability. Aim for rates that are 1.5 to 2 times higher than long-term rentals to balance tenant attraction and revenue maximization.

Maximizing Your Investment with Mid-Term Rentals

For commercial real estate investors, mid-term rentals represent a lucrative opportunity. They combine the best features of short-term and long-term rentals, offering flexibility, steady income, and a professional tenant base. By catering to the specific needs of traveling professionals, relocating families, and others, investors can achieve high occupancy rates and enjoy the benefits of a well-maintained property without the frequent hassles of short-term rentals.

Mid-term rentals are a strategic choice for property owners looking to diversify their portfolio, increase rental income, and reduce management complexities. By focusing on this growing rental category, investors can tap into a market of tenants seeking flexible, yet stable, housing solutions.

Are you ready to explore the benefits of mid-term rentals for your commercial properties? Contact SpaceAgent today to learn how our innovative management strategies can help you maximize your investment and achieve sustained success in the commercial real estate market. For more resources and insights, visit our website or reach out to our team of experts.