What Landlords Need to Know About Mid-term Rentals

  What Is a Mid-Term Rental? You’ve probably heard of short-term and long-term rentals, but what exactly is a mid-term (or medium-term) rental? The answer is in the name: a mid-term lease agreement is a rental agreement between a property owner and tenant that lasts for less than one year but usually more than one month.  Ordinarily, short-term rentals last for less than one month (and are sometimes referred to as vacation rentals), while long-term rentals are typically year-long leases. Medium-term rentals fall into that sweet spot of at least one month but average three to nine months.  Mid-term rentals are ideal for landlords in highly populated cities or college towns. In addition to populous metropolises, medium-term rentals work well in areas where seasonal work is common, such as near agricultural centers. They’re also great for prospective landlords who want to get into the rental market but aren’t ready to have a long-term commitment.   Who Uses Mid-Term Rentals? If you’re pursuing real estate investing, it makes sense that you’d want to maximize your return on investment. Mid-term rentals can offer a surprising return on investment despite frequent turnover. Mid-term rental demand is growing, especially with the post-pandemic rise in remote work creating the profile of a “digital nomad”. And of course, prolonged business trips and vacations will always create demand for flexible lease durations.   Let’s take a look at some of the most common groups of people that use mid-term rentals: Traveling nurses: At the height of the pandemic, traveling nurses needed housing like never before, and they’re still in high demand across the country. Rather than shell out exorbitant fees to live in a trendy Airbnb, mid-term rentals allowed nurses to establish a home away from home. Students: Students often need somewhere to stay while they attend class. Mid-term rentals provide students with an affordable option that doesn’t require them to live on campus or commute long distances daily. Digital nomads: Digital nomads are people who work from home or remotely and travel frequently as a lifestyle choice. They tend to be more transient than other travelers —they may stay with friends or family before finding a new location where they can settle down for a while. Business professionals: Many industries require their employees to travel. Some companies host workers in mid-term corporate housing; others seek their own mid-term housing solutions.  Other tenants who may use medium-term rentals include families relocating to a new city and professionals heading to a new place to start an internship. While all these groups may have different reasons for moving, they generally use mid-term rentals because they have reasonably extended short-term housing needs.   What You Need in a Mid-Term Lease Agreement Mid-term rentals are unique in many ways, which means you’ll need to make sure your lease agreement reflects your specific rental. There are several things to consider when drafting a mid-term lease agreement, including but not limited to: The length of stay/occupancy (rental period of one to 12 months) The amount of rent Security deposit and other applicable fees Amenities – utilities like Wi-Fi access and whether the rental house is furnished or not Local landlord-tenant laws and regulations Tenants’ rights The responsibilities of both the tenant and landlord Generally, medium-term lease agreements may not involve a lot of legal stipulations like traditional leases. However, check your local landlord-tenant laws to make sure you’re abiding by any specific term-based lease requirements. We also recommend that you chat with your attorney or local housing authority before any documents are signed to ensure you’re doing everything by the book.   What Are the Pros of Managing a Mid-Term Rental? While long-term rentals can be great for owners looking for a steady rental income stream over several years, mid-term rentals offer unique advantages, including: You have access to new tenants who may be more willing to work with you and are less likely to default on their lease agreement than long-term tenants who have lived there for several years. Unlike short-term housing, you’ll have a more steady cash flow that is less susceptible to seasonal fluctuations. You have more flexibility since you don’t have to worry about a long-term commitment. Your business is likely to flourish over time if the demand for medium-term rental units continues to grow.

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How Homeownership Is Life Changing for Many Women

Throughout Women’s History Month, we reflect on the impact women have in our lives, and that includes impact on the housing market. In fact, since at least 1981, single women have bought more homes than single men each year, and they make up 17% of all households.Why Is Homeownership So Important to Women?The rise in women pursuing homeownership hasn’t just made an impact on the housing market. It’s also been an asset for those buyers and their households. That’s because homeownership has many benefits, both financial and personal.On the financial side, housing proves to be the key to building wealth for single women. Ksenia Potapov, Economist at First American, says:“For single women, housing has always made up a large share of total assets. Over the last 30 years, the average single woman’s wealth has increased 88% on an inflation-adjusted basis, from just over $142,000 in 1989 to $267,000 in 2019, and housing has remained the single largest component of their wealth.”The financial security and independence homeownership provides can be life changing, too. And when you factor in the personal motivations behind buying a home, that impact becomes even clearer.A recent report from the National Association of Realtors (NAR) shares the top reasons single women are buying a home right now (see chart below):

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Why Buying a Home Is a Sound Decision

If you’re thinking about buying a home, you want to know the decision will be a good one. And for many, that means thinking about what home prices are projected to do in the coming years and how that could impact your investment. This year, we aren’t seeing home prices fall dramatically. As the year goes on, however, some markets may go up in value while others may lose value. That’s why it’s helpful to keep the long-term view in mind. Experts project a return to a steadier rate of price appreciation in the years that follow.Home Price Appreciation in the Years AheadOver 100 economists, investment strategists, and housing market analysts were polled by Pulsenomics in their latest quarterly Home Price Expectation Survey (HPES). The report indicates what they believe will happen with home prices over the next five years. As the graph below shows, after mild depreciation this year, these experts forecast home prices will return to more normal levels of appreciation through 2027.The big takeaway is experts aren’t forecasting a drastic fall in home prices nationally, even though some markets will see home price appreciation while others may depreciate. And when they look further out, they see steady price appreciation in the long run. That’s a great example of why homeownership wins over time.What Does This Mean for You?Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. Here’s how a typical home’s value could change over the next few years using the expert price appreciation projections from the survey mentioned above (see graph below):In this example, if you bought a $400,000 home at the beginning of this year and factor in the forecast from the HPES, you could accumulate over $54,000 in household wealth over the next five years. So, if you’re wondering if buying a home is a sound decision, keep in mind what a strong wealth-building tool it is long term.

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