This is a guest blog post contributed by Briana Yablonski for Kopa.co and edited by the Stessa content team.
Medium-term rentals are gaining ground in the national rental market as people continue to delay their travel plans and property owners look for alternative solutions. While this type of rental is available nationwide, some cities have emerged as medium-term rental hot spots.
What are “medium-term” rentals?
While people are familiar with short-term rentals that cater to travelers and traditional long-term rentals that come with a year lease, not everyone knows about mid-term rentals. This type of rental typically includes a fixed lease term from 1 to 12 months, with terms from 3 to 6 months being the most common.
Perhaps the biggest difference from a traditional long-term rental is that most medium-term tenants have no intention of staying beyond the agreed to expiration date. Medium-term leases generally do not roll to month-to-month arrangements unless explicitly agreed to by both parties.
Despite the global pandemic, people are still looking to rent out apartments and homes for just a few months. These mid-term rentals tend to be more popular in urban areas than in small towns due to increased work opportunities in cities.
While all sorts of people utilize medium-term rental housing, the following groups make up a large percentage of medium-term renters:
- Relocating individuals and families who are looking to learn more about the area before committing to a longer lease.
- Students looking to live near their campus, even if classes are online.
- Traveling professionals such as nurses, contractors, digital nomads, and business consultants.
- Remote workers looking for a place to ride out the pandemic.
Here are the 10 most popular medium-term rental searches since April 1, 2020…
1. San Francisco
With gorgeous landscapes and a plethora of jobs in the tech and medical fields, San Francisco and the surrounding Bay Area attracts students completing internships and companies looking for quiet places to house their traveling workers. Since San Francisco housing costs are expensive, many people want to rent somewhere for a few months before committing to a longer stay.
Major Universities: San Francisco State University, City College of San Francisco
Major Employers: Salesforce, Wells Fargo, Google, Facebook, Apple, Genentech
2. Seattle
Medical and tech companies in the Pacific Northwest’s largest city attract visiting professionals and interns, and the gorgeous scenery prompts expats to try out the city for a few months.
Major Universities: University of Washington, Seattle University, Seattle Pacific University
Major Employers: Amazon, Microsoft, Boeing, Starbucks
3. New York
As the largest city in the United States, New York offers something for just about everyone, whether they’re seeking professional opportunities or entertainment. Since NYC is huge, people often want to live in a medium-term rental to get a feel of the place before committing to a neighborhood.
Major Universities: Columbia University, NYU, Fordham University, Pratt Institute
Major Employers: JP Morgan Chase, Citigroup, Mount Sinai Medical
4. Chicago
A hub of the Midwest, Chicago provides a plethora of employment and educational opportunities. It’s also home to top medical facilities that attract both workers and patients.
Major Universities: University of Chicago, Loyola University, University of Illinois at Chicago
Major Employers: JP Morgan Chase, Walgreens, AT&T Illinois
5. Boston
Boston’s historical appearance and great walkability make it an appealing place to settle for a few months. The city is home to Massachusetts General Hospital, one of the top medical facilities in the country, which attracts both visiting professionals as well as patients and their families. While Harvard and MIT aren’t located in Boston proper, renters can live in Boston and easily commute to these top-notch universities.
Major Universities: Boston College, Boston University
Major Employers: Massachusetts General Hospital, HubSpot, MassMutual
6. Philadelphia
Home to the Ivy League University of Pennsylvania as well as Drexel and Temple, Philadelphia attracts scholars and students alike. The city also draws in people looking to settle down in a big city with a small-town feel.
Major Universities: University of Pennsylvania, Drexel University, Temple University
Major Employers: The Children’s Hospital of Philadelphia, American Airlines, Comcast
7. Washington, D.C.
As the nation’s capital, Washington, D.C. is filled with people working for various agencies of the federal government. Visitors interested in mid-term rentals include working professionals as well as students studying at the various universities in the city.
Major Universities: Georgetown University, The George Washington University, American University, Howard University
Major Employers: US Government, American Red Cross, Children’s National Medical Center
8. Nashville
With an affordable cost of living and a lively music scene, Nashville appeals to digital nomads looking for a place to call home for a few months.
Major Universities: Vanderbilt University, Belmont University
Major Employers: Nissan North America, HCA Holdings Inc., Randstad
9. Los Angeles
Top tier educational facilities attract students and visiting professors and researchers, many of whom are visiting for less than a year at a time. LA also attracts those looking to make it in the entertainment industry, but aren’t ready to commit to a year-long lease.
Major Universities: UCLA, California Institute of Technology, Cal State Los Angeles
Major Employers: Kaiser Permanente, Northrop Grumman, Target
10. San Diego
With near perfect weather and numerous beaches and parks, San Diego is popular place to settle down for people that aren’t tied to a location.
Major Universities: University of San Diego, San Diego State University
Major Employers: Qualcomm, Scripps, Kaiser Permanente
Medium-term rentals are a smart choice
Even if you don’t own property in one of these hotspots, listing an available property as a medium-term rental can still be quite rewarding.
COVID-19 has changed the rental market in numerous ways. Some short-term rentals continue to struggle as people cancel long-haul reservations and opt to vacation closer to home. Even if you’re still seeing solid demand for short-term bookings, you may not be comfortable assuming the increased risks associated with so many guests coming and going during a pandemic.
If you’re operating a long-term rental property, perhaps you have tenants that are struggling to pay rent or have moved out in order to find less expensive housing options. A medium-term rental strategy can tide you over until the pandemic eases and/or the market outlook becomes more certain.
While fewer people are indeed traveling, many people impacted by the pandemic are in fact looking to move due to unemployment or the newfound freedom that comes with working from home. However, since the future remains uncertain, many of these people want to see if they like a new area before committing. Medium-term rentals fit this need precisely.
Get started as a medium-term rental host
If you want to list your property as a medium-term rental, here are some first steps:
- Furnish your property with all the basics your guests will need.
- Settle on a monthly asking rate. Remember that medium-term rentals have lower monthly rates than short-term rentals, but are often slightly higher than a regular long-term lease.
- Get familiar with fair housing laws and tenants’ rights in your locality.
- Draft a rental agreement outlining important items.
- List your property on Kopa, the leading medium-term rental platform.
- Screen prospective tenants and choose the right ones for you.
- Set up a free account with Stessa for easy income and expense tracking.
With the future of travel and vacationing still murky, and disruption in the long-term rental market on the rise, medium-term rentals offer property owners a viable third option to preserve cash flow.
