In recent times, the trend of medium-term rentals (MTR) has gained significant traction, with many property owners receiving a surge in requests through platforms like Airbnb. If you find yourself considering this option, you're likely wondering about the best practices, potential drawbacks, and essential precautions to take. In this post, we present several key insights to help you make informed decisions about offering your property for monthly or longer-term stays.

Legally Speaking, Your Guests Are Your Tenants

Because in almost all jurisdictions, if a guest stays at your place over 30 days, they are considered tenants, and therefore have the respective rights, in the eyes of law. It is in your best interest to treat medium-term rentals as if they were long-term renters. This approach involves thorough tenant screenings, complete with credit checks and a well-documented application process. Implementing a lease agreement is considered a necessity. This ensures legal protection and clear expectations for both parties involved. Monthly cleanings are highly recommended, especially if pets are involved, to maintain the property's cleanliness and appeal.

Hospitality

Since your guests are staying over a longer period and they are not being charged for hotel-like amenities, you should aim for a respective approach when it comes to guest treatments, i.e., cleaning, towel service, foods/snacks, bathroom utilities etc.

Tax Considerations

When transitioning from Short-Term Rentals (STR) to MTR or LTR, be aware of specific tax implications. It's essential to file the necessary forms, such as the 3115 481a Change of Accounting Form, to switch depreciation schedules, which can have a significant impact on your financial obligations.

Platform Choices

Airbnb is a popular choice for STR, some hosts express concerns about high fees and potential disputes where guests are favored over hosts. It is just not made for the medium term rentals. For pretty much everything besides leads, MTR platforms like Furnished Finder, Zillow, or RentMonthly are much better and offer different dynamics, aligning tenant and landlord expectations more closely. Communicate to your guests about what amenities are provided by you in your listings, as MTR falls into a gray area between short-term stays and traditional leases.

Legal Protections and Clear Communication

Creating a simplified lease for MTR stays can streamline the process, making it easier for both parties to understand their obligations. Clear communication about what is included in the rental and what is not helps manage tenant expectations, especially regarding bills and utilities. A lot of hosts opt to pay for everything, so the guests pay only one time. However, it is not uncommon for the hosts to ask to pay the tenants specific utility such as electric based on the usage by tenant, especially if you don't have a clear idea how much they would cost.

Direct Bookings and Branding

Some MTR hosts recommend diversifying your listing strategy by promoting your MTR property across multiple platforms, from Airbnb to Zillow, which may not be exclusively dedicated for MTR. By including your brand name in photos and descriptions, you can potentially drive direct bookings, reducing dependency on third-party platforms. Be aware, however, you need to be somewhat confident that you have a steady stream of guests to opt-in for this strategy, and that you can handle payments, tax forms etc on your own.

Medium-term rentals offer a lucrative opportunity for property owners, but they come with their unique challenges. As long as you treat a medium term (monthly) rental as a unique business and make sure that you consider the above (and more that we did not cover), you can successfully navigate the world of monthly and longer-term rentals. Remember, each property and market may have unique requirements, so adapt these insights to best suit your specific situation. RentMonthly is always there to help you along the way, so reach out to us anytime if you have questions - even if you are not officially our customer. Good luck with your MTR venture!