Differences Between Mid-Term, Short-Term & Long-Term Rentals
What is the difference between short-term and mid-term rentals? And what about long-term rentals? The main (and most obvious difference) is the period of the lease. Short-term is often considered anything less than a month; mid-term rentals fall between a month and a year; and long-term leases usually start at a year.
The next big difference is between the customers. Short-term rentals are aimed toward vacationers almost exclusively. They’re capturing travelers looking for a weekend getaway, a stopover night, or a week or two in a beautiful Airbnb.
- Mid-term renters might be:
- Extended vacationers
- Remote employees enjoying a new city
- Contract workers
- University or college students
- New residents determining in the process of buying or building a home
- Current residents who are between homes
- And many more!
Long-term renters are your standard renters: those who live in any area for an extended period but do not own a home. These might be people who are working far from their home on a multiyear contract, students who prefer a sublet or sublease agreement instead of going for mid-term rentals, or remote workers who are looking for a longer-term, but not permanent, stay.
Short-term rentals benefits
- Higher nightly prices that can be adjusted during peak seasons and per day
- Owners can use the property themselves without sacrificing a larger portion of a season
- High turnover rate can prevent cumulative damage by a renter (wall scratches, broken appliances, cleaning needs, etc.)
- Easy to advertise on vacation rental websites
Short-term rentals downsides
- More likely to have vacancy periods in the low-seasons.
- Higher turnover rates means more frequent cleaning and upkeep
- Communication needs for every new booking
Mid-term rentals benefits
- Less turnover means less time spent finding new tenants and preparing the property for new renters.
- Longer-term guests are more likely to be booking your stay as a living situation. While there’s no guarantee, you can end up with guests that are treating your property like their home, not a party.
- Online workers are becoming more common, with people craving more flexibility and freedom after the coronavirus. Remote workers will flock to your listing if you offer an appropriate discount and a long enough stay for them to enjoy the city.
- You might not be legally able to rent out your unit for less than 30 days in states like New York. Mid-length stays open more opportunities in those states and peace of mind that you’re operating according to local regulations.
- Our data shows us that about 50% of people booking mid-length stays end up repeating the booking for another month.
Mid-term rentals downsides
- Harder to take advantage of seasonal and daily demand changes.
- Reduced access to your vacation rental
- May require specific rental agreements, contracts, and managing multiple payments
Long-term rentals benefits
- Consistent income over an extended period of time
- Reduced vacancy periods
- Less day-to-day upkeep and management needs
- Tenants are responsible for personal maintenance needs (like cleanings)
Long-term rentals downsides
- Prevents you from cashing in on the higher prices of peak seasons.
- No access to your own property
- Requires rental agreements, contracts, and managing continuous payments
- Can be challenging to find the right tenants