The rental market is more flexible than ever, offering landlords and tenants new ways to connect. For property owners, a crucial strategy gaining popularity is the mid-term rental. But are mid-term rentals profitable, and how do they fit into your overall investment strategy?
In this guide, we'll break down exactly what is a mid-term rental, how they differ from other rental types, and the key legal considerations every property owner should know before getting started.
What Is a Mid-Term Rental?
A mid-term rental is a fully furnished property leased for one to twelve months, with the most common duration falling between three and six months. It bridges the gap between what is meant by short-term rental (under 30 days) and traditional long-term rental cost models (12 months or more). The term “medium-term rental” is also used interchangeably.
If you’ve been wondering exactly what is a mid-term rental in real estate, it’s essentially a leasing option that offers flexibility to both landlords and tenants. In some cases, landlords might even shift between a fixed-term lease and a month-to-month lease to better match market conditions and tenant needs.
For example, in Miami, Florida, a landlord leased a furnished apartment for six months to an out-of-state medical intern. Because Florida’s DBPR licensing for “vacation rentals” applies only when a unit is rented for less than 30 days (or one calendar month) more than three times per year, a six-month lease is not a vacation rental under Chapter 509.
Key Characteristics of Mid-Term Leases
Understanding the core features of this rental type is key to mastering it.
1. Lease Duration
A mid-term lease agreement typically runs for three to six months, though it can be as short as one month or as long as twelve. This “in-between” duration is attractive to both landlords and tenants.
Example: In Austin, a project engineer rented a furnished condo for four months while waiting for a newly built home to be completed (Texas Property Code § 92.001–92.201). The landlord enjoyed steady income without the high turnover of short stays—showing one practical scenario of what is a mid term rental.
2. Furnishing and Amenities
Most mid-term rentals include full furnishings, basic cookware, linens, Wi-Fi, and laundry facilities. This setup is crucial for attracting tenants who need a move-in-ready solution.
3. Pricing
Mid-term rental pricing can be a bit more complex than traditional leases. It’s often higher than a long-term rental cost on a per-night basis but more affordable than a short-term one. For example, if short-term nightly stays average $150/day (~$4,500/month) and long-term rent is $1,500/month, a mid-term rental might be priced at $2,000–$2,800/month.
4. Tenant Profile
Mid-term rentals attract a diverse mix of renters, from relocating professionals and digital nomads to graduate students and families. in the middle of home renovations. They also serve those navigating major life changes such as a job transfer, divorce, or extended medical treatment.
5. Turnover and Maintenance
Mid-term rentals typically experience fewer turnovers than short-term stays, which means less frequent deep cleaning, fewer marketing efforts to find new tenants, and reduced administrative work. However, turnover is still higher than with standard year-long leases, so landlords should plan for occasional gaps between occupants and budget for routine maintenance, minor repairs, and touch-ups such as repainting or replacing worn furnishings.
6. Lease Flexibility
A mid-term lease agreement can include early termination clauses, renewal options, or automatic extensions. This built-in flexibility benefits both parties: tenants gain security and predictability during transitional periods, and landlords enjoy consistent occupancy without locking themselves into long-term commitments.
7. Legal and Regulatory
Local laws surrounding mid-term rentals differ greatly across cities and states. For example, in San Francisco short-term rentals, typically defined as stays under 30 days—face strict regulation. Hosts must register with both the Office of Short-Term Rentals (OSTR) and the Treasurer & Tax Collector. They also pay a 14% Transient Occupancy Tax for stays shorter than 30 days. However, stays longer than 30 days are generally not considered short-term rentals and are exempt from these special regulations and taxes, offering easier operation for mid-term rentals.
Who Typically Uses Mid-Term Rentals?
Our experience shows a diverse group of tenants gravitate toward this type of housing. They often include:
- Traveling Professionals: Nurses, doctors, and tech workers on temporary assignments.
- Relocating Families: People moving to a new city who need a place to stay while they house hunt.
- Students and Interns: Those on a semester-long program or a summer internship.
- People in Life Transitions: Individuals going through home renovations or needing temporary housing due to a life event.
This specific demand makes targeting these groups a smart strategy. Mid-term rentals balance convenience (furnished, utilities included) with affordability compared to hotels.
How Mid-Term Rentals Differ From Other Lease Types
Understanding the distinctions is vital for setting up your investment correctly.
Mid-Term vs Long-Term Rentals
- Long-term rentals: Long-term rentals usually involve leases of 12 months or more, giving landlords steady income and fewer turnovers.
- Mid-term rentals: Mid-term rentals offer more flexibility with lease lengths from one to twelve months—often attracting tenants like traveling professionals, students, or people relocating.
So, what is the difference between long term and mid term? Mainly in duration, furnishings, and pricing. It’s also worth noting the distinction between a tenant vs occupant, which becomes more relevant in furnished mid-term arrangements where additional people may join mid-lease.
For example: In Chicago, a long-term lease at $1,500/month can be priced at $2,300/month for a furnished mid-term rental, still with fewer turnovers than Airbnb.
Mid-Term vs Short-Term Rentals
- Short-term rentals (such as Airbnb stays) are booked by the night or week, targeting vacationers and business travelers. They can bring in higher nightly rates but also require more active management, frequent cleaning, and marketing.
- Mid-term rentals bridge the gap by offering longer stays (usually 3–6 months) that reduce turnover and operational costs, while still allowing landlords to adjust rental rates more often than with year-long leases.
For example: In Boston, an Airbnb might gross $4,500/month at $150/night but require weekly turnovers and 15% platform fees. A mid-term lease at $2,800/month yields less gross revenue but higher net income due to reduced expenses.
Which Lease Type Fits Your Investment Goals?
In conclusion, choosing between mid-term, long-term, and short-term rentals depends on your priorities. If you want steady, predictable income with minimal management, long-term may be best. If you aim for high potential returns and can handle constant bookings, short-term could be the way to go.
Legal Considerations for US Landlords
Navigating the legal side of mid-term rentals is just as important as finding the right tenants. From zoning rules to insurance coverage, every landlord in the US must understand these requirements to protect their property, avoid fines, and maintain a smooth rental experience:
Zoning and Local Rental Regulations
Zoning and local rental codes vary widely - and some cities restrict short-term stays while allowing longer ones. For example, many municipalities, including:
- New York City: In New York City, zoning and local rental regulations are very strict. The Multiple Dwelling Law (MDL) sets rules for buildings with three or more units, covering safety, maintenance, and occupancy standards. Landlords must follow these rules to keep apartments legal for rent. Another important rule is Local Law 18, also known as the short-term rental registration law. It requires hosts who want to rent out their apartments for fewer than 30 days to register with the city. Platforms like Airbnb cannot list rentals that are not registered. These laws, along with zoning codes, aim to protect tenants, prevent illegal conversions, and make sure housing is safe and used properly.
- San Francisco: Stays of 30 days or more are not subject to the city’s Short-Term Residential Rental Ordinance and avoid the 14% Transient Occupancy Tax.
HOA Rules and Community Guidelines
Homeowners Associations (HOAs) often set their own rules on rentals, including mid-term leases of 1–12 months. In many states, HOAs can restrict or ban rentals only if these limits are clearly written in the community’s covenants (CC&Rs).
For example, in California (Watts v. Oak Shores, 2015), a court upheld an HOA’s right to set minimum lease terms and fees for rentals. In Texas, however, courts have ruled that general phrases like “residential use only” are not enough to ban rentals—restrictions must be explicit. Some states, like California, also have laws such as Civil Code §§4740–4741, which allow HOAs to set reasonable rental rules but prevent them from applying retroactively. This means mid-term rentals may be allowed unless the HOA has properly amended its documents to restrict them.
Lease Agreement Essentials for Mid-Term Rentals
A comprehensive mid-term lease should include:
- Lease duration (e.g., 3–6 months)
- Rent amount and due dates
- Furnishings and an inventory attachment
- Utilities and maintenance responsibilities
- Security deposit – specify the amount, refund conditions, and permissible deductions for damages
- Governing law / jurisdiction – identify which laws apply and the court or forum for resolving disputes
- Right to entry – outline the landlord’s inspection rights and required notice period
- Insurance requirements – such as renter’s insurance covering personal belongings and liability
- Early termination or renewal terms
- Tenant obligations (e.g., complying with HOA rules)
These elements bring clarity and reduce disputes—especially in furnished arrangements where responsibilities may blur.
Tenant Rights and Fair Housing Compliance
US landlords are required to comply with the Fair Housing Act (42 U.S.C. §§ 3601–3619) and related laws. Discrimination based on race, religion, sex, disability, or other protected classes is prohibited. Adopting fair, standardized screening processes protects both your reputation and legal standing.
In addition, most state and local housing codes impose minimum habitability standards. These typically require that rental units have weatherproof roofs and walls, functioning plumbing, access to hot and cold water, adequate heating, safe electrical systems, proper sanitation, secure and stable stairs, pest control, and working smoke detectors. Tenants generally have the right to request timely repairs and, in some jurisdictions, may withhold rent, deduct repair costs, or pursue legal action if these conditions are not met.
Taxes and Insurance Requirements
Your rental income is taxable, and your insurance needs may change with this type of lease. Consult a professional to ensure you're fully covered. For example, some cities, such as San Francisco, charge a 14% transient occupancy tax for rentals under 30 days, but mid-term rentals over 30 days may be exempt.
Profit Potential and Risk Factors in Mid-Term Rentals
Mid-term rentals can be highly profitable, offering steady income and fewer turnovers compared to short stays. However, there are risks, such as higher vacancy between tenants if you don't market effectively. This is where solid mid-term rental property management becomes vital.
Profit Potential
- Larger monthly returns than long-term leases: Investors report that mid-term rentals frequently generate higher monthly rent than traditional year-long leases—often 10%–30% more.
- Avoidance of short-term rental red tape: In many cities, leases longer than 30 days aren’t subject to the regulations, permit requirements, or occupancy taxes that short-term rentals face. This creates real savings—and smoother operations—for landlords.
- Less turnover than short-term: Mid-term tenants stay longer—weeks to months—meaning fewer turnovers and cleaning cycles compared to nightly or weekly rentals. Understanding how long a rental application takes can help you plan turnover timelines more accurately and reduce costly vacancies.
- Resilience during demand shifts: This model enabled many landlords, such as Colorado-based Zeona McIntyre, to maintain profitability when Airbnb bookings declined during the pandemic.
For example, a furnished one-bedroom in Denver might rent for $1,600 per month on a 12-month lease, but $2,200–$2,400 per month as a three-month corporate rental. This flexibility also makes it easier to adjust pricing between tenant terms to match market shifts.
Risk Factors
- Smaller tenant pool: Compared to well-known platforms like Zillow or Airbnb, the infrastructure and awareness for mid-term rentals—such as Furnished Finder—is still developing, sometimes making tenant sourcing more challenging.
- Furnishing and upkeep costs: Fully furnished units attract mid-term tenants but require upfront investment and ongoing maintenance.
- Vacancy risks: While turnover is less frequent, unbooked periods—especially between tenants—can still create income gaps if not managed well.
- Regulatory ambiguity: Laws for rentals falling “between the cracks” of short-term and long-term can be unclear or shifting, meaning landlords must stay vigilant to remain in compliance.
Pricing Strategies for Maximum Profit
Strategic pricing is crucial for maximizing your return on investment. It's not just about setting a price; it's about finding the sweet spot that attracts tenants while outperforming a long-term rental cost.
Analyzing Local Market Rates
Start by researching your city’s rental data from platforms like Zillow, Apartments.com, or AirDNA (for furnished rentals). Compare both unfurnished long-term rates and short-term daily/weekly rates to find a profitable midpoint. For example, in Austin, if unfurnished long-term is $1,800/month and short-term is $120/night ($3,600/month), a mid-term price around $2,400–$2,700 could be competitive while attracting longer stays.
Understanding Your Target Tenant’s Budget
Different tenant types have different spending limits.
- Travel nurses often have a fixed housing stipend (e.g., $2,000–$3,000/month).
- Corporate relocations may cover higher rents for convenience.
- Grad students might prioritize affordability over luxury.
Knowing your tenant’s budget allows you to tailor your amenities and pricing.
Factoring in Utilities, Amenities, and Services
Mid-term tenants expect an all-inclusive package—rent, Wi-Fi, and utilities (gas, water, electricity). If utilities average $250/month, build that into your rent to avoid surprises. Extras like biweekly cleaning or covered parking can justify higher rates.
Testing and Adjusting Your Rates for Seasonal Demand
Demand often rises in spring and summer for relocations, internships, and academic programs. Lower rates slightly in slower months to reduce vacancies. Keep detailed records to identify patterns and fine-tune your seasonal pricing model.
Mid-Term Rental Property Management Tips For Landlords
Effective mid-term rental property management is what separates a good investment from a great one. We've developed a few core strategies to make the process smoother and more profitable.
1. Streamlining Tenant Onboarding and Lease Signings
The process of finding and securing tenants can be a hassle. Using tools like an online rental application to simplify the process. Remember to pre-screen tenants with credit checks and reference calls before sending a lease.
2. Furnishing for Durability and Appeal
Your furnishings are a huge part of your property's appeal. Invest in high-quality, durable furniture that can withstand multiple tenants. This not only looks better but also saves you money on replacement costs in the long run.
3. Using Automation for Rent Collection and Communication
Automated systems are a game-changer. They handle everything from rent collection and payment reminders to routine communications, freeing up your time to focus on other aspects of your business.
4. Marketing on High-Quality Platforms
List your property on Furnished Finder, Zillow, Apartments.com, and corporate housing networks. Include professional photos, a detailed amenities list, and transparent pricing.
5. Building a Reputation Through Reviews and Referrals
Encourage satisfied tenants to leave reviews on listing sites or provide written references. Over time, this builds credibility and can lead to referral tenants who already trust your property.
Conclusion
The mid-term rental market offers a lucrative opportunity for landlords willing to put in the effort. By understanding what is a mid term rental, implementing smart pricing and management strategies, and staying on top of legal requirements, you can build a highly profitable portfolio. It's a fantastic middle ground that gives you the best of both worlds: stability and high returns.
If you’re ready to streamline your leasing process, from tenant screening to secure lease signing, using LeaseRunner makes it easy to manage your rentals online. Whether you’re handling a single unit or an entire portfolio, LeaseRunner helps you save time, reduce vacancies, and keep your business running smoothly.
FAQs
Are medium-term rentals profitable?
Yes, they can be very profitable, especially in markets with steady demand from traveling professionals and students.
What is a mid-term lease agreement?
A mid-term lease agreement is a legal contract for a rental period of typically 1 to 9 months. It outlines the terms of the tenancy, including rent, duration, rules, and responsibilities, specific to this type of flexible stay.
Do I pay gross rent or net rent for a mid-term rental?
You will typically pay gross rent, which includes all utilities and furnishings bundled into a single monthly fee. This is a key feature of a mid-term rental and simplifies the process for both tenants and landlords.
