The landscape of real estate investment is undergoing a significant transformation as mid-term rentals gain traction among property owners and investors. These rentals, defined as fully furnished accommodations rented for periods ranging from 30 days to nine months, were once considered niche options. However, recent insights indicate a shift, with an increasing number of investors recognizing their potential as effective solutions to combat rising vacancy rates in conventional rental markets.
A comprehensive report by Landing reveals a growing enthusiasm for mid-term rentals. An impressive 93% of surveyed investors express a strong interest in diversifying their revenue models, while 88% view mid-term rentals as a strategic method to mitigate the negative effects of vacancies.
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Challenges and opportunities in mid-term rentals
Despite the optimism, significant barriers persist for those considering a pivot to mid-term rentals. Many investors harbor concerns about demand stability in this sector, with approximately 44% expressing uncertainty. Additionally, logistical challenges and the complexities of furnishing properties deter about a third of respondents from fully embracing this model.
Investing in quality furnishings and appliances can be daunting for those accustomed to traditional rentals, which are often leased out unfurnished. Mid-term landlords must combine the skills of an Airbnb host with those of a seasoned investor, navigating the intricacies of property management.
Understanding the target market
Mid-term rentals primarily appeal to professionals and individuals in need of flexible living arrangements. This demographic typically includes remote workers, frequent travelers, visiting academics, and healthcare professionals. Such renters expect a higher standard of accommodation, which may include luxurious amenities like premium mattresses, advanced washer-dryer units, and high-end coffee makers.
Essentially, mid-term tenants seek an experience akin to that of a five-star Airbnb stay, but with the added comfort of making the space feel like home for several months. This desire for a personalized and community-oriented experience distinguishes them from hotel patrons, who often settle for generic accommodations.
Competitive landscape and profit potential
While traditional hotels, such as Marriott and Hilton, are entering the mid-term rental space, they struggle to replicate the homely atmosphere offered by multifamily units in vibrant neighborhoods. Tenants seeking mid-term stays desire a sense of belonging within their community, which is often lacking in hotel environments.
For investors, the good news is that strategic location selection and meticulous attention to detail can yield significant returns. The Landing report indicates that mid-term renters are willing to pay a premium for properties that strike the right balance between convenience, comfort, and aesthetic appeal, often resulting in monthly rent increases of $600 to $800 compared to traditional leases.
Operational considerations for mid-term landlords
In the realm of mid-term rentals, landlords are responsible for managing various operational elements, including maintenance and cleaning between guest stays. This often requires a reliable property manager nearby to ensure a seamless transition between guests. Poorly managed logistics can lead to negative reviews, resulting in prolonged vacancies that may be more detrimental than those found in traditional rental scenarios.
The demand for mid-term rentals is surging, with a staggering 94% year-over-year increase in 30+ day bookings recorded in the U.S. for, according to Key Data. This market segment remains relatively untapped, presenting opportunities for savvy investors willing to conduct thorough research on suitable locations.
Is mid-term rental investment right for you?
A comprehensive report by Landing reveals a growing enthusiasm for mid-term rentals. An impressive 93% of surveyed investors express a strong interest in diversifying their revenue models, while 88% view mid-term rentals as a strategic method to mitigate the negative effects of vacancies.0
A comprehensive report by Landing reveals a growing enthusiasm for mid-term rentals. An impressive 93% of surveyed investors express a strong interest in diversifying their revenue models, while 88% view mid-term rentals as a strategic method to mitigate the negative effects of vacancies.1
A comprehensive report by Landing reveals a growing enthusiasm for mid-term rentals. An impressive 93% of surveyed investors express a strong interest in diversifying their revenue models, while 88% view mid-term rentals as a strategic method to mitigate the negative effects of vacancies.2
