How PriceLabs is helping mid-term rentals revenue management

Mid-term rentals

Summary

  • Mid-term rentals offer stays longer than a few weeks but less than a year. They offer reduced operational costs, revenue risks, restrictions, and lower wear and tear.
  • Optimize your property for mid-term renters by defining your ideal guest, pricing competitively, focusing on providing desired amenities, keeping it clean, establishing ground rules, having a rental agreement, and offering clear & prompt communication.
  • Use PriceLabs to optimize mid-term rental revenue by setting weekly and monthly discounts, minimum night restrictions for 30 days, and maximum and base prices for dynamic pricing. You can also use Neighborhood Data and Market Dashboards to filter out and analyze your local competition.
  • Leverage advanced customizations like turning off seasonality factors, using Demand Factor Aggressiveness, adding Orphan day prices and Occupancy-based adjustments, enabling Last Minute Prices, Disabling Far-out premium, and using Adjacent Factors for optimized revenue.

What are mid-term rentals? 

Mid-term rentals are an in-between ground for short-term and long-term rentals. The main difference between short-term, mid-term, and long-term rentals lies in the duration of the rental period.

Short-term rentals typically refer to stays of a few days to a few weeks. They are commonly used for vacation or business travel. These rentals are usually fully furnished and include housekeeping, linens, and toiletries. Examples of short-term rental platforms include Airbnb, Booking.com, and HomeAway.

Mid-term rentals, on the other hand, typically refer to stays longer than a few weeks but less than a year. However, the most common mid-term rental stay duration is 3-9 months. These rentals are often used for temporary housing needs, such as for people relocating for work or between homes. Mid-term rentals may or may not be furnished and require tenants to sign a lease agreement. Examples of mid-term rental platforms include CorporateHousing.com, FurnishedFinder.com, and HomeSuite.

Long-term rentals typically refer to stays for a year or more and are commonly used for permanent housing needs. These rentals usually require tenants to sign a lease agreement, often including unfurnished apartments or homes. Examples of long-term rental platforms include Zillow Rentals, Apartments.com, and Rent.com.

The main differences between short-term, mid-term, and long-term rentals are the duration of the rental period and the intended use.

Benefits of mid-term rentals

  • Reduced Operational Costs: With extended rental periods, there are fewer operational costs. You don’t have to clean and prepare the property for new guests as frequently. Also, cleaning schedules can be negotiated with the guest to reduce costs further.
  • Lower Wear and Tear: Since guests with mid-term rentals have less turnover, your property experiences less wear and tear.
  • Reduced Revenue Risk: Mid-term rentals provide continuous rent, reducing the risk of inconsistent revenue from short-term rentals.
  • Reduced Restrictions and Legalities: Mid-term rentals generally have fewer restrictions and legalities than short-term rentals. Therefore, they are easier to rent out your property.
  • Higher Income than Long-Term Rentals: By offering mid-term rentals, you can earn more than long-term rentals while benefiting from a stable monthly income.

Limitations of mid-term rentals:

  • Legal Work: You must draft formal rental agreements to ensure clear communication and protection for both parties. You also need to research the legal requirements for mid-term rentals. 
  • Market Volatility: Demand for mid-term rentals may fluctuate in your market, so it’s essential to understand the market’s demand and optimize accordingly.
  • Lower Income than Short-Term Rentals: Mid-term rentals usually have lower nightly rates to attract more long-term bookings than short-term rentals. They will generate less revenue than a short-term rental but ensure more occupancy and lesser wear and tear. 

Understanding what mid-term vacation rentals are essential to managing and optimizing pricing for mid-term stays is essential. In addition, it would help to optimize your vacation rentals to attract more bookings for mid-term stays.

How to optimize your mid-term rentals for your ideal guests?

Mid-term rentals have always been around. Let’s understand how you can ensure your property is set up for success in the mid-term rental market:

Define your ideal guest

Start by identifying your target audience and understanding their needs and preferences. Your guests can be snowbirds, digital nomads, family vacationers, business travelers, etc. Consider factors such as age, income, travel purpose, and length of stay. Knowing your guests will help you tailor your rental offerings to meet the needs of your target audience.

Focus on amenities

Offer amenities essential to your ideal guest, such as high-speed internet, a workstation, cable TV, kitchen appliances, laundry facilities, easy grocery access, and outdoor spaces. Consider offering additional perks like gym access or concierge services to make your rental more attractive to your target audience.

Price competitively

To optimize your pricing strategy, research other vacation rentals in your area similar to yours in terms of location, size, and amenities. Check their pricing strategies and adjust your rates accordingly to remain competitive. You can also offer discounts for extended stays to attract more mid-term bookings. 

Additionally, adjust your mid-term rental pricing based on seasonality. For example, peak travel seasons may warrant higher rates. In comparison, off-seasons may require lower rates to attract guests. Using a dynamic pricing tool like PriceLabs that uses machine learning algorithms to analyze market trends, seasonality, and other factors to suggest optimal rental rates will significantly help you in mid-term rental revenue management.

It is also essential to consider all your costs, such as mortgage payments, property taxes, maintenance fees, utilities, cleaning fees, and any other expenses related to your rental property. These expenses should be factored into your rental rates to ensure you generate a profit.

Establish ground rules with the guests

After securing bookings for your mid-term rental, it’s essential to establish proper ground rules with your guests to protect both parties from liability. One effective way to achieve this is by having guests sign a legally-binding rental agreement.

Your rental agreement should include essential details such as house rules, rent details, rent due dates, security deposit details, accommodation fixtures, and stay duration. Additionally, it’s crucial to maintain an open communication channel with your guests to ensure a positive guest experience.

By including these key elements in your rental agreement and maintaining good communication with your guests, you can help ensure a smooth and enjoyable stay for everyone involved.

Provide excellent customer service

Ensure that your guests have a positive experience by providing excellent customer service. Respond promptly to guest inquiries and issues, provide clear instructions and directions, and offer recommendations for local activities and services.

Keep your rental well-maintained

Maintain your rental property to a high standard of cleanliness and functionality. This will help ensure your guests have a comfortable and enjoyable stay.

By following these steps, you can optimize your mid-term rentals to attract and retain your ideal guests, maximize occupancy rates and revenue, and build a strong reputation in the market.

The revenue management strategy for mid-term rentals

1. List on OTAs where mid-term rentals are pre-dominant to attract the right guests

There are online platforms where you can list your mid-term rentals. Some of these platforms can be used to list both short-term and mid-term rentals as guests looking for both come to these platforms:

  • Airbnb: A popular platform that allows hosts to list their properties for short-term and mid-term rentals. You can set your pricing and house rules and communicate with guests through the platform.
  • Booking.com: A global platform where hosts can list their properties for mid-term rentals. The platform allows hosts to set up their pricing, availability calendar, and house rules.
  • VRBO: A vacation rental platform that allows hosts to list their properties for mid-term rentals. The platform offers a range of tools for hosts, including the ability to set pricing and availability, manage reservations, and communicate with guests.
  • Corporate Housing by Owner (CHBO): A platform specializing in corporate housing rentals for mid-term stays. The platform offers a range of tools to help hosts market and manage their properties, including the ability to set pricing, availability, and house rules.

When choosing a platform to list your mid-term rentals, it is crucial to consider each platform’s fees, policies, and audience. Additionally, listing your property on multiple platforms will increase its visibility and reach for a wider audience.

2. Analyze local market data to understand the demand for mid-term rentals in your market

  • Start by researching your local market to identify the key factors that impact the demand for mid-term rentals—research factors like seasonal trends, local events, and economic indicators. You can create a custom comp-set using the PriceLabs Market Dashboards, enabling you to compare your property with other mid-term rentals in your market.

The Market Dashboards are reports that you can create on any market globally. They show all the booking data in user-friendly charts, including revenue, occupancy, average price, cancellation policies, etc. 

Market Dashboards for mid-term rentals
PriceLabs Market Dashboards for mid-term rentals
  • Looking at the occupancy rates of mid-term rental properties in your area will give you an idea of the demand for these types of rentals in your market. You can compare your future prices and occupancy with competitors in your same area using Neighborhood Data on PriceLabs
PriceLabs for mid-term rentals
Market summary to analyze the competition for mid-term rentals

By default, Neighborhood data uses data from the nearest 350 listings. However, you can compare it with a custom comp-set from the Market Dashboards instead of the default nearby listings to make it more relevant to your specific needs. This enables you to compare with other mid-term rentals in your market.

3. Offer weekly and monthly discounts

Offering weekly and monthly discounts for mid-term rentals can be a great way to attract more bookings and encourage guests to stay longer. In addition, by providing a discount for extended stays, you can make your property more appealing to guests looking for a cost-effective and comfortable option for a more extended stay.

To determine the appropriate discount to offer, you should consider your expenses, such as utilities, maintenance, and cleaning fees, and then calculate a discount that would be enticing for guests but still allows you to make a profit. Research the average rates for similar mid-term rentals in your area and compare them to your pricing.

When setting up your listing, advertise your weekly and monthly rates and highlight the discount guests will receive for booking an extended stay. You can set up weekly or monthly discounts on your property management system or in PriceLabs

To set up discounts in PriceLabs, you need to go to Customizations and then go to the ‘General’ tab at the bottom of the Customizations menu. You can see the customization discounts if PriceLabs offers them for the PMS or channel you use.

PriceLabs for Mid-term rentals
Customizations to set weekly and monthly discounts for mid-term rentals

If you’re providing a monthly discount, do calculate the impact it will have on the final price and income, you can adjust your minimum, base, and maximum prices to account for this discount.

4. Set the minimum length of stay restrictions for 30 days

Setting a minimum length of stay restrictions for 30 days can be a good strategy for optimizing your mid-term rentals. This ensures that you attract renters interested in staying longer. It is because they will be the only ones eligible to book your property. 

In addition, by setting a minimum night stay of 30 days, you can offer more competitive pricing for mid-term renters, as the longer the stay, the lower the nightly rate. This can attract renters looking for a more affordable option for extended stays, especially if you offer weekly or monthly discounts on top of the already lower nightly rate.

You can set up minimum night restrictions using PriceLabs. To do so, you go to “customizations” and then stay restricted. Then, add the nights you want to set as your minimum night stays. 

PriceLabs for Mid-term Rentals
Minimum Stay Restrictions for Mid-term Rentals

You can optimize your booking calendar by setting minstay rules for orphan gaps. These will fill the gaps between reservations if fewer days are available between two reservations. 

For example, two reservations created an orphan gap of 24 nights. If you’re comfortable taking a shorter reservation in that period, you can use the minimum stay for orphan gaps to fill the gap. In the example below, the setting allows a 7-night reservation in gaps between 7 and 30 nights.

You can also use minimum stay settings for adjacent days to prevent or limit gaps from being generated in your calendar. 

5. Set minimum, maximum and base prices for monthly renters 

Setting a minimum, maximum, and base price for monthly renters can help ensure that you attract the right type of guests and earn a good income for your property.

  • The minimum price should be the lowest amount you are willing to rent your property monthly. This should cover your basic costs and expenses. Think of your monthly minimum and divide it by 30 days. Use that value as your minimum price.
  • Considering the local market demand and competition, the maximum price should be the highest amount you feel comfortable charging for your property every month. Think of your maximum monthly price and divide it by 30 days. Use the result as your maximum price.

Setting a base price primarily considers the monthly price you typically charge for your property. Using this price as a starting point for negotiations or setting discounts based on length of stay or other factors would be best. Set up your base price between the minimum and maximum price. You can also use base price help to set up your base price. 

You can set your minimum, maximum, and base price with PriceLabs Dynamic Pricing. It will automate your dynamic pricing based on real-time market data.

Dynamic pricing tool
Minimum, base and maximum price settings for mid-term rentals

PriceLabs customizations to fine-tune mid-term rental management

PriceLabs allows you to adjust your prices based on seasonal factors and demand, with the flexibility to fine-tune these factors if you’re knowledgeable about your market. In addition to seasonal and demand factors, you can make other customizations to your pricing strategy. 

Market factors: Seasonality and demand

You can let the prices fluctuate between your minimum and maximum price based on the seasonality and demand factors. But, if you are an advanced user knowledgeable of your market, you can also fine-tune these factors. 

  • When setting seasonal minimum, base and maximum prices, you should turn OFF the PriceLabs seasonality factor. Reach out to support@pricelabs.co to request this feature enabled for your account. 
  • You can also fine-tune the Demand Factor Aggressiveness in your ‘Advanced Customizations’ to increase or reduce the price fluctuations based on the market’s demand.
Demand factor aggressiveness customization for mid-term rentals
Demand factor aggressiveness customization for mid-term rentals

Occupancy and price base customizations for mid-term rental management

  • Use orphan days prices and occupancy-based adjustments to implement pricing customizations based on occupancy levels. For instance, if you can accept shorter reservations between mid-term bookings, offer a discount for any gaps longer than the default 2-night stay. Make sure to adjust the occupancy-based adjustment customization to accommodate longer stays. You may disable these adjustments if you prefer only to accept reservations of 28/30 days or more.
  • Use the Last Minute Prices customization to increase the chances of getting last-minute bookings. Consider extending the last-minute discount to ‘within the last 30 days’ instead of ‘last 15 days’ if your booking window allows it. 
  • Disable Far-out Premium: By default, the PriceLabs algorithm has a ‘Far-Out Premium’ feature, increasing rates for dates as they get farther out. If your longer bookings are made well before check-in, disable this feature so that your monthly rates are within the desirable range for your market.  
  • Adjacent Factor: You can discount the adjacent days to a booking to encourage back-to-back reservations and ensure higher occupancy rates.  
PriceLabs dynamic pricing customizations
Customization for far-out and adjacent day booking

Sign up for PriceLabs and avail free one-month subscription to optimize your mid-term rentals revenue. 

About PriceLabs

Established in 2014 and headquartered in Chicago, PriceLabs is a leading provider of innovative and easy-to-use dynamic pricing and revenue management solutions for the rental industry. PriceLabs provides a data-driven approach, automation rules, and customizations to manage pricing and stay restrictions that help property owners and managers increase revenues efficiently and easily. With over 90 integrations and a growing list of channels and property management systems, PriceLabs’ automated revenue management solution is built to serve the needs of everyone, from large property managers to single-property owners. Learn more at www.pricelabs.co.

Frequently Asked Questions

What is a mid-term rental strategy?

A mid-term rental strategy involves renting out a property for a period ranging from several weeks to several months, typically between short-term rentals (daily or weekly) and long-term rentals (yearly or more). This type of rental can appeal to landlords and tenants as it offers more flexibility and shorter commitments than traditional long-term rentals while providing more stability and security than short-term rentals. 

How do you calculate mid-term rental? 

To calculate the rental rate for a mid-term rental, you should consider the length of the rental period, the type of property, the location, and the seasonality. Longer rental periods generally result in lower rental rates, while furnished apartments and properties in high-demand areas can command higher rental rates. Researching comparable properties can also help set a fair rental rate.

What is the difference between mid-term rentals and short-term rentals?

The main difference between mid-term and short-term rentals is the length of the rental period. Short-term rentals are typically rented out for a few days up to a few weeks, while mid-term rentals are rented out for several weeks up to several months. Mid-term rentals are used by people who need temporary housing for a longer period of time, and the rental rate is usually lower than short-term rentals but higher than long-term rentals.

How many months is a mid-term rental?

The length of time for a mid-term rental can vary, but it typically falls between short-term and long-term rentals. Generally, a mid-term rental is considered a rental period of one to six months, although this can vary depending on the specific property and rental market.

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