Pros and Cons of Mid-Term Rentals

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James Svetec 0:00
What's up guys, it's James here. And in today's video, I'm gonna be talking to you about the pros and the cons of mid term rentals. So we talk a lot about short term rentals, obviously, on this channel, but I get a lot of people reaching out to me and asking about mid term rentals. So people that are wondering about, you know, guests that are gonna stay for anywhere from one month, two, three months, maybe six months even. And typically, these are going to be contract workers, traveling executives, traveling nurses, maybe traveling construction crews, that kind of thing. They're just staying in town for a longer amount of time than a traditional kind of short term rental, but that aren't actually looking to sign like a 12 month lease. So there's some pros to that. There's some cons to that. And I kind of recommend a blended strategy for most people. If it makes sense. Short term rentals are fantastic. But blending into mid term rentals can make sense. But there are some really big drawbacks to it as well. So just want to talk about that more in detail in this video. Now, if you are interested in investing in short term rental properties, I highly recommend you check out the free training that is linked down below, it's going to walk you through step by step by step exactly how you can start investing successfully in short term rentals, everything from finding the right market to finding the right properties, to selling those properties up, getting them running and being able to manage everything passively, so that it's not becoming a full time job for you. So again, if you want the step by step on exactly how to do that, you want some free tools from us like our analysis spreadsheet that we're going to give to you completely free, then make sure you click the link in the description down below to check out that free training. Also, just make sure you give this video like it really helps me out. So if you do enjoy this video, if you do get value from it, then make sure you hit that like button because it does really help me with growing the channel and make sure you subscribe as well if you haven't already. So with that being said, let's start talking about some of the pros and the cons. And let's start out with some of the big pros. So the pros for mid term rentals are mainly that you're getting a really great return generally. So typically, you're going to have people paying more for a furnished midterm rental than they would for a long term rental. And then you're not putting in as much work as a short term rental. So the returns are generally going to be kind of linear as far as are kind of sequential, I should say, in terms of short term rentals are going to be the most return mid term rentals will be a little bit less. And then long term rentals will be the least. But then opposite to that is the amount of work and effort required. Short term rentals require the most work, mid term rentals require less work and then long term rentals require the least work. So it really is sort of a time for money trade off. However, obviously, if you set the right systems up, whether that's a property manager or setting up your own sort of property management Power team, then really the actual amount of work that you are doing is still the same for either one. So in my opinion, short term rentals make the most sense if you have a great team in place so that you're not actually the one managing any of the day to day because then you just get better returns. And it's fantastic. But midterm rentals are great because you can earn a better return than long term rentals. But you don't have the headache of doing multiple turnovers dealing with multiple guests doing multiple cleanings, that kind of thing. So it does reduce the workload from that standpoint, it also means that you have fewer guests going out of your property. So generally, that's a little bit lower wear and tear as long as you get the right midterm guests in there. Those are basically the main pros to midterm rentals. Now the cons, unfortunately, are pretty substantial. And this is why I tend to personally shy away from mid term rentals more. Now that's a bad strategy overall, as soon as we will execute it really, really well. But you just have to be careful because with midterm rentals, the big thing is that, legally speaking, there is no real such thing as a mid term rental. Typically, a long term rental is going to be defined as any stay over 2829 or 30 or 31 days, the exact number will vary a little bit depending on the location of the property. But generally, once you crest over that number of days, it's now technically speaking, a long term rental, whether they've signed a lease agreement or not, whether they plan on staying there for three months or three years doesn't really matter. They are technically a long term tenant now. And so as a result, they have all the rights that a long term tenant gets under whatever landlord and Tenancy Act you have in your area. And so typically, that's going to mean that if you want to get that person out of your property for any reason, you're going to need to deal with an eviction. So that's going to be a big challenge. And that's why a lot of people move from long term rentals over to short term rental is so they can have more control over their property. Because regulations are increasing more and more in the long term rental space. And with short term rentals. If someone overstayed their welcome or you want to get them out of the property, they're trespassing, you can just call the police and get them out of there. Whereas with a long term rental, if they're staying for longer than those 28 to 30 days or whatever it is in your area, they're going to be a long term tenant and you're going to need to go through a lengthy eviction process in order to get them out of there. And in doing so, you're also then gonna be forfeiting a whole bunch of potential revenue that you could have been bringing Again, because typically when you're evicting a tenant, they are not paying the rent. And so that's just a whole big kind of can of worms that you open up when you get into mid term rentals. And so if you are going to go down that path, you'll want to make sure that you're doing really diligent guest screening, you're going to make sure that you're wanting to do background checks, everything that you would do typically, with a long term tenant, you'd want to do now with this mid term tenant, because legally speaking, they are a long term tenant. And so that's the one thing to be cautious of. And to sort of avoid when it comes to mid term rentals, not saying again, that you can't do it or shouldn't do it, just saying that you want to be aware of that. So you go in with your eyes wide open. That's really the main con with midterm rentals. So it really is kind of a, a personal preference. Some people like long term rentals, because there's little effort, but obviously, the returns on those are pretty abysmal, the cash flow tends to be pretty small, and you can't get good cash flowing properties in a lot of different markets. Midterm rentals are sort of a good bridge to that gap. But ultimately, short term rentals are going to be always the best return on your investment, the strongest cash flow that you'll be getting. And so they do really, really well, you just want to make sure that you have the systems and teams and everything in place. So it's not becoming a full time job for you. Because it very easily can if you're disorganized, you don't have the right people in place, right systems, the right tools, processes all of that. And so again, if you want to start investing in short term rental properties, and you don't want to become a full time job, you want to have the right tools, the right processes, the right teams, then make sure you check out the free trainings, link down the description below, because it's gonna walk you through step by step exactly how we do it, how we're able to invest in short term rentals, so successfully, and not have it take up a whole lot of our time, I can say personally, on managing our investment properties, I spent maybe 30 minutes a month managing things because we've now got all the teams in place so that the only thing I'm really doing is just looking over the financials, and seeing if there's any room for improvement and cutting costs or increasing revenue. But even pricing isn't something that I'm doing personally, we have someone that we've hand that off to that's doing a fantastic job of it. So you really can be extremely passive. If you said the right tools and the right systems. It really is fantastic once you get it there. So if you want to learn exactly how to do that, make sure you click the link in the description down below to check out that free training, get a few free tools from us. And if you're interested, you'll also have an opportunity to set up a free one on one strategy call with a member of our team where that's myself, my business partner, Riley, or another member of our team who helps us manage our portfolio, you can set up a free one on one strategy call with them. And they're going to help to guide you and kind of understand exactly what your goals are, what your challenges are, and help to put a custom roadmap together for you. And again, that's completely free. So make sure you check that out. It's not going to be available forever. So fair warning, make sure you check it out before it's too late. All that said, I hope you enjoyed this video. If you did, make sure to hit the like button. Make sure subscribe to the channel here. I'll just give you a second do it all hit the like button. Good check now hit the subscribe button. Right? Just take me out, just do it. It doesn't cost you anything and helps me tremendously. I really appreciate if you do those two things because that just helped me to grow the channel and to reach more people and help more people. So I do really really appreciate it for those of you who took a quick second out of your day to like and subscribe. And also if you have any thoughts, comments, questions anyone share with me just let me know in the comment section down below. With all that said, my last thing is just to make sure you have a great rest of your day and I'll see you next video.