MEDIUM-TERM RENTAL CALCULATOR
How to calculate your midterm rental
There is a formula for calculating midterm rentals.
If you would like someone to calculate your medium-term rental numbers, reach out and we can discuss consulting. If you would like to calculate your own medium-term rental numbers, read the blog post below.
Note: we use the terms "midterm rental" and "medium-term rental" interchangeably. They mean the same thing.
The first thing you need to establish when considering your medium-term rental numbers is your estimated income. While short-term renters can rely on AirDNA for this information, it is harder to predict with mid-term rentals. I have heard that Furnished Finder and Mashable are working on a project together to estimate these numbers, but until those come out, landlords in the midterm rental space have to cobble together the numbers.
Here are 6 things you need to know to calculate your medium-term rental:
Midterm rentals have seasonality like short-term rentals. The low season for short-term rentals will also be the low season for midterm rentals.
You can still rent during these low periods, but you will make approximately 20% less on these rents during low season.
For climates that have traditional winter weather, slow season is October - February. For climates that have vacation climates, your slower season will likely be during the summer and/or any time when it's oppressively hot.
You need to establish a baseline for rents. You can do this by going to www.rentometer.com and putting in your address and details (bed, bath, 12 months, radius (make the radius as tight as you can) and whether it is a condo or town home. Rentometer will return a median 12 month rent for you and this is your baseline. (My baseline was $2500/month for a 12 month stay.)
Now you are going to look at AirDNA to establish what they think your property could make as a short-term rental. I look at this seasonally and right now, AirDNA is saying that property will make between $3K and $3300 per month between November - February.
And, finally, you look on Furnished Finder or Airbnb and establish what you competition is pricing at. I usually average these out, so I'm seeing $2500, $3300 and $3300. The average is: $3033.
By this measure, a medium-term rental during this time of year only pulls in 20% more on rents and you still have to pay for utilities, landscaping, etc.
For a medium-term rental calculator, I usually tell people to assume 30-40% more/month because that is closer to what I actually get. I was pulling in $3400/month for the property 4 bed, 2 bath that I was renting out, which is 34% above long-term rentals.
So, to calculate a medium-term rental, you want to assume the rent will be 25-35% above long-term rents on the property.
However, you have to take into account your additional costs: furnishing, utilities and yard work. This will impact your bottom line.
Some people have pushed back and said "well, it's not worth it then." This depends on what your goals are. A midterm rental is worth it if you:
Want to use the property occasionally yourself
Are transitioning out of doing a short-term rental because the laws have changed
Are trying to get through the short-term rental slow season
We hope this helps. If you have questions about midterm rentals, please reach out.
how can we help with your medium-term rental model?
We've been operating multiple medium-term rentals since 2017, and many of our clients also prefer this model. Please reach out to either of us to discuss more.
We also offer consulting for Airbnb monthly stays and mid-term rentals. Learn more about mid-term rental consulting here.
BUY THE BOOK ON MEDIUM-TERM RENTALS.
That's right. There are books that can help you with your medium-term rental strategy. We wrote them.
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