If you're considering starting a real estate business and are drawn to the flexibility and potential for higher income that mid-term rentals offer, you're on the right track. Mid-term rentals, with lease durations ranging from one to six months, present unique opportunities in the real estate market. Let's dive into the key aspects of setting up a mid-term rental business, including identifying target markets, focusing on tenant types, and important considerations you should consider to achieve success.
The mid-term rental business is something that our guest, Catie Lawrence, has started to explore. And the reason why is simple--there's a lot of money in it! As an in-between for LTRs and STRs, MTRs offer a great opportunity for those real estate operators that want to maximize profits and minimize headache.
There is a wide range of strategies for starting your mid-term rental business. Take a look at your market and give some consideration to what kinds of businesses and tenants would have a high demand for temporary housing. The more niche you can be, easier it will be to identify future customers and build a solid business. Here are some possible markets to explore:
- Corporate Relocation: Targeting corporate professionals who require temporary housing during relocation is a lucrative market. Establish partnerships with local businesses or relocation agencies to tap into this segment.
- Education Institutions: Colleges, universities, and students often seek mid-term accommodation during semesters or internships. Locate properties near educational institutions to cater to this tenant base.
- Traveling Professionals: Business travelers, consultants, or healthcare professionals on temporary assignments often seek mid-term housing. Focus on locations near business districts or medical facilities.
After you've determined what kind of customer you're going to go after, give some thought towards how you can structure your rental and lease to offer the most value possible to your tenant. Here are some key considerations:
- Furnished Apartments: Offering fully furnished units is a significant advantage for mid-term rentals, attracting tenants who prefer convenience and a hassle-free experience.
- Amenities and Services: Consider including amenities such as high-speed internet, utilities, housekeeping, and access to fitness facilities to appeal to tenants seeking a comfortable living experience.
- Flexibility in Lease Terms: Mid-term rentals provide an opportunity to customize lease terms, offering options for tenants who require shorter or longer durations beyond the traditional six-month mark.
At the end of the day, your mid-term rental business is a business, and should be treated as such. These considerations can be explored to ensure that you build a mid-term rental business that has a solid foundation:
- Marketing and Advertising: Utilize online platforms, social media, and local advertising to reach your target audience effectively. Highlight the advantages of mid-term rentals, such as flexibility, affordability, and convenience.
- Property Management: Develop efficient property management systems to handle turnovers, maintenance, and tenant inquiries promptly. Streamline processes to ensure a seamless experience for both landlords and tenants.
- Legal Compliance: Familiarize yourself with local regulations, permits, and licensing requirements for mid-term rentals. Ensure your business adheres to all legal obligations and maintains compliance.
Setting up a mid-term rental business can be a rewarding endeavor, providing opportunities for higher income and flexibility. By identifying target markets, focusing on tenant types, and addressing key considerations such as furnished accommodations and customized lease terms, you can establish a successful mid-term rental business. Remember to prioritize effective marketing, streamlined property management, and legal compliance to ensure long-term sustainability and customer satisfaction. With careful planning and execution, your mid-term rental business can thrive in the ever-evolving real estate market.
