(
Are you looking for more flexibility than a traditional year-long lease and more stability than a short-term rental? Then a mid-term lease is a perfect fit for you, which will solve your housing problems like flexibility and stability.
Did you know that mid-term leases have risen continuously in a recent period? In this article, we will discuss what a mid-term lease is about like its benefits, challenges, and specifics on agreement and listing platforms.
What is a Mid-Term Rental?
A mid-term lease is like a bridge that connects the gap between long-term and short-term leases. It is a legal bond agreement between a landlord and tenant that lasts between 1-12 months and with an average of 3-9 months.
It is ideal for landlords in highly populated cities and prospective landlords who want to get into the rental market but aren’t ready to have a long-term commitment.
Also Read: Pros & Cons of Month-to-Month Leases
Who Uses Mid-Term Rentals?
Mid-Term Rental is increasing significantly these days, due to flexibility and stability. Surprisingly, mid-term rental returns are also high despite frequent turnover.
Here’s a list of some common renters you want to rent for a mid-term lease:
Students: College students or foreign students often need to stay near the campus zone to attend their semester classes or internships. A mid-term lease provides more flexibility to them rather than staying in the dormitory which is also quite affordable to them.
Remote Workers: As remote workers increase in demand, and can work from anywhere. Thus, these professionals often seek mid-term leases for stability and mobility without a long-term commitment.
Traveling Nurses: Traveling nurses have increased significantly in recent years. They continuously switch work and place. Thus, they often seek mid-term rental leases.
Business Professionals: These days many companies require their employees to travel related to work. Some of the companies give mid-term corporate housing to their employees, and others seek their own mid-term housing solutions.
Seasonal Workers: Working a seasonal job in new locations is common these days. A mid-term lease ensures their housing solutions align with your work schedule.
What Does a Landlord Need to Specify in Their Mid-Term Rental?
There are a lot of things to consider while signing a mid-term rental lease agreement which will help the landlord from tenants’ future arguments.
Here are the points that need to be considered:
Identity Proof of Tenant: Ask for identity proof and thoroughly check the tenant’s identity.
Property Description: Clearly specify all the details about the property such as property conditions, rent, maintenance, and so on.
Rental Terms: Always be specific on the rental terms like the duration of the rent, including start and end dates.
Rent Price: Rent prices in mid-term rentals are slightly higher compared to year-long leases. So, clearly specify on the lease agreement when and how to make a payment, and about the late payment.
Security Deposit: Always include the term of a security deposit in the rental agreement and its return terms and conditions.
Utilities/Amenities: Be specific on the clause of the lease agreement about the utilities or amenities like what will you provide and the responsibility for damages.
Maintenance and Repairs: Be specific on the responsibilities of both landlord and tenant for maintaining and repairing the property, and who will be responsible for any damage caused by the guest during their stay. Generally in mid-term rentals, all maintenance and repairs are up to the landlord.
Early Termination Clause: Be specific on the terms for early termination of the lease, including notice periods and the grounds for eviction. These clauses need to be mentioned based on local laws and regulations encircling landlord and tenant relationships.
What are the Benefits of a Mid-Term Lease?
Let’s discuss the benefits of a mid-term lease which has unique opportunities for landlords and flexibility for tenants.
Targeting Specific Renters: These renters are more understanding, and flexible, and have knowledge of medium-term rentals which will make the tenancy period smooth.
Reliable Income: A mid-term lease has a steady income compared to a short-term lease with less turnover costs which requires less cleaning.
Fill Vacancies Strategically: Compared to a long-term lease, it will help to fill the gaps with the help of mid-term rentals.
Tailored Lease Agreements: These mid-term lease agreements are tailored which is beneficial for both landlord and tenant.
Simplified Management: Mid-term housing helps in the constant turnover of short-term rentals.
What are the Challenges For Mid-Term Housing?
While mid-term leases offer some benefits to landlords, they also come with their own set of challenges and drawbacks.
Shorter Rental Duration: While the landlord seeking mid-term renters might miss the chance of long-term renters.
Potential for Higher Maintenance Costs: There is a greater chance of normal wear and tear on the property with frequent changes in tenants.
Difficult in Finding Qualified Tenants: The pool of qualified tenants for mid-term leases is smaller compared to traditional or long-term leases.
Where to List Mid-Term Housing?
To attract the right mid-term renters and maximize occupancy rates, the best platforms for listing mid-term housing are:
- Airbnb: Due to its global reach and user-friendly interface. Airbnb has gained a lot of popularity for short-term and mid-term leases with a function to set maximum and minimum stay requirements.
- VRBO: VRBO is very similar to Airbnb and excellent in mid-term lease listings near tourist-friendly locations as well as in wide-range rental properties.
- Kopa: Kopa always focuses on move-in-ready space excellence on mid and long-term leases making ideal choices whether it’s professionals, students, or anyone with temporary needs.
- Facebook Marketplace: As Facebook is globalized, listing your rental in Facebook Marketplace will play a crucial role in minimizing your vacancy rate free of cost and allow you to reach out to vast and local users effectively.
- Nestpick: Nestpick is an accumulator of fully furnished mid-term lease rentals. It targets professionals, international students, and expats.
- Corporate Housing by Owner (CHBO): If any rental units are ideal for corporate tenants, CHBO particularizes in mid-term furnished lease rentals for business professionals, providing a targeted approach to reach specific tenant demographics.
Always ensure you have provided clear, high-quality photos, detailed specifications, and all necessary information about the lease terms of your rental property when listing it. It will help to attract the right tenant for your mid-term housing.
Current Airbnb and VRBO Trends
As mid-term rental leases are popularising in the property market, let’s look into some of the recent statistics of Airbnb and VRBO trends:
Demand: In 2023 demand has increased up to 10.4 % from 5.5 % with an unstoppable thirst for travel and it is anticipated demand growth will continue in 2024 at a rate of 8.5%.
Supply: As the occupancy and the house prices have declined since the first half of 2022, meanwhile demand growth has remained high. Airbnb and VRBO supply forecasts show that listed nights have increased up to 14 % year over year in 2023 from 9%.
Occupancy: Although in 2024 the occupancy rate will be seen in decline, as per the previous forecast it will not be that steep based on demand strength and the predicted occupancy rate is 57.7%.
Average Daily Rates (ADRs): Their forecast for 2023 shows a 2.1 % year-over-year increment from 1.7%.
RevPAR (revenue per available rental): In 2024, a small decline in occupancy will be offset by ADR gains and stabilize RevPAR previously it was -1.1 % from -1.6 %.
Will the Mid-Term Lease continue on an upward trend?
In 2022 the U.S. showed a 29 % increase in 30-day stays and in 2023 a 94 % increase year-over-year on nights sold for 30+ day booking. Thus, Mid-term rentals have great potential for investors and property hosts to gain further traction in 2024.
Manage Your Rental Properties With OKC Home Realty
Managing mid-term lease housing for landlords will be quite hectic. So, OKC Home Realty provides you a professional services like alleviating the stress of property ownership, including Tenant Screening, Rent Collection, Lease Agreement Management, Maintenance and repairs, Marketing and advertising, Tenant Relations and communication, Financial Management and reporting, Eviction Assistance, Property Inspections along with Legal Compliance to local, state and federal laws.
Call us at (405) 232-5800 for more information.
Mid-Term Rentals FAQs
Are mid-term rentals profitable?
Yes, in comparison to long-term rentals, mid-term rentals are more profitable for landlords and have less turnover cost of cleaning and so on.
What is the difference between long-term and mid-term leases?
A long-term lease is a commitment to an extended fixed-term lease of 12 months or more. Meanwhile, a mid-term lease is a legal agreement between a landlord and tenant, that lasts between 1-12 months and with an average of 3-9 months.
Is 3 months long-term or mid-term?
A 3-month lease agreement is referred to as a mid-term lease in the context of housing leases. It is not considered a long-term lease.
Can a landlord increase the rent in the middle of a mid-term lease?
No, the landlord can not increase the rent in the middle of a mid-term lease unless the lease agreement says.
Can a landlord change the lease terms mid lease?
No, a landlord can't change the lease terms without your permission in the middle of the lease. Any changes must be agreed upon by both parties and documented in writing to avoid misunderstandings.
Author
Scott Nachatilo is an investor, property manager and owner of OKC Home Realty Services – one of the best property management companies in Oklahoma City. His mission is to help landlords and real estate investors to manage their property in Oklahoma.
