Thinking of renting your home to make extra revenue? Did you know you have more options than just a long term rental? Have you considered the additional revenue you can earn from fully furnished rental properties? Did you know that in Maryland you could earn 15% to 30% more revenue, and even up to 50% more revenue in high demand areas, when you rent your property as a fully furnished rental instead of an unfurnished long term rental? Let me introduce you to short term rental (STR) and midterm rental (MTR).
STRs (think vacation rental) are defined as a property that is rented for less than 30 days. It is furnished with all of the amenities and comforts of home. Guest turn over is more frequent. Cleaning, inspections and maintenance will be required between guests. Nightly rates are higher which will boost annual income. Continue to enjoy your vacation home by blocking dates that fit your schedule best. The risk with STR is seasonality. Most vacation rentals have high demand seasons, where vacationers are.
MTRs (think temporary housing) are defined as a property that is rented for greater than 30 days but generally less than 6 months. These homes are also fully furnished and offer the comforts of everyday living. Typical guests are traveling health care professionals, graduate students and those who are displaced from their homes temporarily because of repairs. Owners can expect a more consistent stream of income. Turnovers are less frequent however mid stay cleanings are recommended to keep an eye on the condition of the home.
These definitions are based on industry standards but your local governments may have varied their definitions of these terms. For instance, the City of Baltimore defines short-term rental as any rental for less than 90 days, three times the industry standard. Mid-term rental is often not even considered in local regulations and are lumped under long term regulations.
Which Path Is Right for You?
The ideal strategy depends entirely on your personal goals:
Choose STRs if your property is in a prime tourist location, you are comfortable hiring a full-time manager, and you prioritize maximizing income during peak seasons, accepting the associated risks and volatility.
Choose MTRs if you are in an area with a strong demand from local corporations, hospitals, or universities, and you prefer a more predictable, hands-off income stream with a better quality tenant profile.
Choose Hybrid if your property is in an area that has demand for both STR and MTR rental. This approach can help offset the seasonality of STR and maximize revenue potential by renting as a vacation rental in peak demand seasons.
Both models offer valuable opportunities in the modern rental market. By understanding the unique demands and benefits of each, you can tailor your investment strategy to achieve the perfect balance of profit and peace of mind.
How PMI Old Line can help:
PMI Old Line can assist you in determining what option is best for you. We know the county regulations and the demand in the area. If the area regulations allow, PMI Old Line will rent your property as an STR and an MTR so that you can achieve the most revenue possible. We pride ourselves on our brand and will assure in-home inspections between all guests. Let us make your process stress free.
