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5 Reasons Why Mid-Term Rentals Are Better Options Than The Oversaturated Short-Term Rental Market

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Paul De Mesa (29) and Jaina Pallasigui (36), founders of Premier Host Management, share the five reasons mid-term rentals are better options than the oversaturated short-term rental market.

De Mesa and Pallasigui were originally acquaintances through their church. But, their passion for real estate and desire to start their own business brought them together. Initially, they considered rental arbitrage as their business model. But, their lack of capital pushed them toward a surprisingly more profitable business model, co-hosting mid-term rentals. 

They take out the stress and guesswork for property owners trying to manage their property themselves. And they developed a system that allows them to manage multiple properties around the country.

With the surge of short-term rentals in the last few years, the term “mid-term rental” sounds unknown or unpopular to many. But, the primary difference between a short-term rental (STR) and a mid-term rental (MTR) is that the tenant stays at an MTR for at least one month. 

And Premier Host Management takes advantage of this one little difference, allowing them to succeed in an oversaturated short-term market. As a result, De Mesa and Pallasigui are excited for their clients and the future of the mid-term rental market.

Here are their five top reasons why mid-term rentals are a better option than the typical short-term rental:

Less Legislation

According to De Mesa, short-term rental regulations are getting stricter everywhere. And depending on the city, there are varying definitions of what is considered a short-term rental. For instance, if a tenant stays in a property for 15 days or below, a city may categorize that property as an STR, while other cities may count 30 days or below as the determining factor.

On the other hand, De Mesa adds that MTRs have tenants stay at least one month, which is beyond the short-term regulation policy. This difference allows property owners to avoid getting affected by local legislation. 

Better Clients

For MTRs, tenants stay longer, causing them to treat the property as their own. For this reason, De Mesa says he doesn’t have to make frequent maintenance requests. He adds, “Sometimes I forget that the tenants are in there because they’re so quiet. Their family just wants to be left alone. They just need a place to stay.

With STRs, tenants stay for a shorter period. They are typically there to celebrate or party, making it a more considerable risk of them not caring for or damaging the property.

Business-to-Business Relationships

With MTR, property owners can build a client database and focus on business-to-business contracts and relationships. For example, he works with companies that need housing for their traveling employees or insurance companies that need a place for displaced families. 

De Mesa says, “Once you create this business-to-business relationship, you’re now set apart from Airbnb. You don’t need VRBO anymore. You can do direct booking, and the reviews won’t impact you.” He adds that negative reviews on these online short-term rental platforms can influence listings and the algorithm that makes recommendations.

Easier Logistics

Pallasigui shares that mid-term rentals are more passive than short-term rentals. With STRs, guests stay for a few days up to at most two weeks. But with MTRs, their tenants have been staying on month by month, reducing the coordination they need with their cleaners and handymen. 

Higher Occupancy Rate

According to De Mesa, the goal for the occupancy rate for short-term rentals is 70% for the year. But, with the recent surplus of STRs in the market, the occupancy rate has fallen. 

On the other hand, the occupancy rate for MTRs has been stable. De Mesa adds, “If you have a tenant that stays for three months at a time…you only need four tenants to make up the entire year. Whereas you might get four guests within a month for an STR.

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