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Short-Term, Mid-Term or Long-Term Rentals: Which Is Right for You?

阿蓝聊民宿 · Snowball Rentals · 2024-07-12

Hello, and welcome to Snowball Rentals’ WeChat account, where you can read about recent developments in the US short-term rental market.

Homeowners, if you missed the easy-money opportunity when short-term rentals first took off ten years ago, you have even more reason to seize this mid-term rental opportunity.

Original workspace illustration; not established as the Seattle case property.

Snowball Rentals official WeChat account

This issue is long and packed with practical information. Please save it for reference and share it with friends who may need it.

First, what kinds of properties are suitable for mid-term rentals?

First, the target guest groups for mid-term rentals are usually corporate executives, insurance companies and residents of affluent neighborhoods. These people have sufficient budgets to choose better properties.

Generally, detached houses are the first choice, with the greatest demand for three- to four-bedroom homes. For many corporate executives or celebrities, rent is not an issue, but they will only stay in detached houses in the wealthiest, safest neighborhoods.

The more modern a property's exterior, the easier it is to secure a mid-term rental.

For example, a house like the one pictured below has a modern exterior, thoughtfully designed furnishings and a location in a safe, affluent neighborhood.

There is very strong mid-term demand for this kind of house.

Besides detached houses, three- to four-bedroom townhouses can also work, although demand is not as strong as for detached houses.

As for apartments, mid-term guests generally travel as families, so one- to two-bedroom apartments are too small to attract affluent mid-term guests. Unless an apartment is very upscale with at least three bedrooms, we do not recommend mid-term rentals.

Second is the property's location.

The best short-term rental locations are near tourist attractions or in busy city centers. In the United States, however, more central locations often have poorer public safety.

The strongest mid-term demand is in relatively affluent, safe neighborhoods. The wealthiest and safest US neighborhoods are usually outside city centers, in suburbs approximately 15–35 minutes away by car.

These areas overlap heavily with the residential neighborhoods in good school districts that Chinese buyers favor in the United States. We are essentially talking about the same places.

Third, mid-term rentals start at 30 days, so tenants are protected by long-term tenancy laws.

If your main guests are corporate executives, monthly rent will be at least close to US$10,000. Among guests who can afford that rent, the likelihood of encountering a tenant who refuses to pay or leave is low.

In summary, mid-term rentals are best positioned toward the high end. Properties that are too small, too old or in insufficiently safe neighborhoods are not the first choice for mid-term rentals.

How should you choose among short-term, mid-term and even long-term rentals?

First, consider rental returns.

The four “wow factors” most suitable for short-term rentals are location, views, exterior appearance and interior furnishings. If your property has at least two or three of these:

Short-term > mid-term > long-term.

Second, consider property protection and maintenance.

Short-term rentals host many guests, with a wide variation in guest behavior. With good operations, parties are rare and generally avoidable. But occasionally guests do walk indoors wearing outdoor shoes or smoke inside.

Long-term property maintenance depends heavily on the tenant's habits. A single female tenant with good cleaning habits will usually keep a property in good condition. In shared rentals or homes with children, however, the condition may be poor when tenants leave, requiring new carpets or repainting.

Mid-term rentals are maintained a little better than long-term rentals. The main reason is that long-term tenants often fail to report repairs, allowing small problems to become big ones. With four or five tenant changes a year in mid-term rentals, each turnover includes an inspection, keeping the property in good condition.

Therefore: mid-term > short-term > long-term.

Third, consider the energy and time required for operations.

Short-term rentals are unquestionably the most demanding, followed by mid-term rentals, with long-term rentals the easiest.

In fact, Snowball Rentals believes mid-term rentals offer the best rental return relative to the effort invested.

Therefore: mid-term > short-term > long-term.

Fourth, consider control over the property and flexibility.

For example, an owner may want to sell at any time, stay occasionally or host friends and family. Short-term rentals offer the most flexibility, followed by mid-term rentals. Long-term rentals offer virtually no flexibility or control over the property.

Therefore: short-term > mid-term > long-term.

In summary, find the sweet spot based on your property's characteristics. Think of a triangular pyramid: the higher up you go, the higher the rental returns.

At the top are short-term rentals with advantages in the four wow factors: location, views, exterior appearance and furnishings. They could be small apartments near tourist attractions or detached houses with lake views.

Short-term rentals are very selective about properties, so suitable homes are relatively scarce and hard to find.

In the middle are mid-term rentals: newer three- to four-bedroom detached houses in safe or affluent suburbs, 15–35 minutes from downtown by car.

These are much easier to find than ideal short-term rental properties. Their returns sit between short-term and long-term rentals, and they are maintained well. Considering the effort invested, their value can even exceed short-term rentals. These are also usually the homes Chinese buyers most eagerly pursue.

At the bottom are long-term rentals, the largest category.

If a house is older, has an unremarkable exterior, lacks views or is outside relatively affluent, safe neighborhoods, there is little choice: it can only be a long-term rental.

These properties offer lower profits, maintenance quality and control. Their advantage is that long-term rentals are less selective: there is no house that cannot rent, only a price at which it cannot rent.

As a homeowner, you may now be wondering: my home is quite good, but how much could it earn on Airbnb? Would it earn more than a long-term rental? Would it involve a lot of trouble?

If you:

Hope to increase rental income through short-term rentals;

Cannot spare a great deal of time to handle the small details;

Occasionally need to use the home yourself, making it unsuitable to empty out the furniture for a long-term rental;

Then:

Snowball Rentals’ management team is your best choice.

From pre-launch vacation-rental styling, big-data analysis and online marketing to tenant screening, dynamic pricing, customer service and sales, cleaning and repairs, Snowball Rentals provides everything as one complete service for your home.

This Week’s Booking Results

Through long-standing relationships with insurers, assignment companies and technology companies, Snowball Rentals rents homes for medium- and long-term durations at short-term rates, then gives owners a rebate of 5% in management fees to maximize their income.

Winter is the low season for Seattle’s short-term rental market, especially in 2023. Some recent large bookings, however, have been like a ray of sunshine, giving us high hopes for Airbnb’s performance this summer!

The detached house below, located in Seattle, has an estimated long-term monthly rent of approximately $6699, which can be looked up on Zillow.

Note that this is the income from renting out the whole house.

The owner placed great trust in the Snowball Rentals team, commissioning us to operate the upstairs and downstairs separately as short-term rentals. We repeatedly achieved strong results.

Upstairs: monthly short-term rental revenue of $11074!

As shown in the booking screenshot below, a guest rented through Airbnb for 71 nights.

The rental income plus cleaning fee for this booking reached $26208.43!

Converted to one month of 30 nights, the rental income is $11074.

Downstairs: monthly short-term rental revenue of $6080!

As shown in the booking screenshot below, a guest rented through Airbnb for 100 nights.

The rental income plus cleaning fee for this booking reached $20265.24!

Converted to one month of 30 nights, the rental income is $6080.

Whole house: monthly short-term rental revenue of $11074 + $6080 = $17154.

In summary, with Snowball Rentals operating this house, monthly rental revenue rose from $6699 for a long-term rental to $17154, an increase

of more than 150%.

More importantly, the owner does not have to worry about maintenance or cleaning. When something needs to be discussed with guests, we also help with communication and oversight.

After Airbnb’s downturn in 2023, we at Snowball Rentals hope to help owners regain ground in summer 2024!

Once again, heartfelt thanks to our homeowners for their trust and support. Whether the market is strong or weak, Snowball Rentals will stand with you and look for ways to increase your income!

Some homeowners will surely ask the hard question: was a large booking like this just a stroke of luck? What if the home does not rent? A long-term rental is more stable—even earning less is better than earning nothing!

Our answer is: the outcome depends on what we do.

Vacation-Rental Styling

Competition on Airbnb is becoming increasingly intense. The days of piecing together secondhand furniture, taking phone photos and earning easy money on Airbnb are over. Airbnb hosts have moved toward professional operations.

Careful design and furnishing before launch, followed by professional short-term rental operations, will be the only choice for a rental that continues to generate high income.

Here is another of Snowball Rentals’ core services: vacation-rental styling!

Let us enjoy some photos of this house, starting with the upstairs area!

Next is the downstairs basement area, which is also beautiful! Once again, thank you to the owner for trusting the Snowball Rentals team and confidently placing the furnishing and management of this house in our hands.

After Airbnb’s downturn in 2023, we at Snowball Rentals hope to help owners regain ground in summer 2024!

Once again, heartfelt thanks to our homeowners for their trust and support. Whether the market is strong or weak, Snowball Rentals will stand with you and look for ways to increase your income!

Our answer is: the outcome depends on what we do.

This Week’s Short Videos

We regularly update short videos every week.

The content you need is all here.

👇🏻 Homeowners are welcome to follow us 👇🏻

Snowball Rentals

We also share practical vacation-rental styling plans and creative ideas to help you achieve more with less spending!

Keep rental income growing!

Xiao An’s Vacation-Rental Styling

Referral Rewards

If you are already a Snowball Rentals homeowner, you receive a US$500 referral fee for each referral.

If you are not yet a Snowball Rentals homeowner, you receive a US$250 shopping voucher for each referral.

Snowball Rentals Management

1. Full service — We provide pre-launch rental design, furniture procurement, furnishing, professional photography, online marketing, copywriting, tenant service and sales, cleaning, supply purchasing and property repairs. You only need to be a hands-off owner; we handle the rest.

2. Multi-platform promotion — We promote the home on Airbnb, VRBO, HomeAway and other mainstream platforms for maximum exposure.

3. Dynamic pricing — Using big data, we adjust prices every day according to seasonal demand, holidays, last-minute vacancy offers, weekends and local activities, maximizing the owner’s income.

4. Income-improvement SOP — We follow 44 secrets for maximizing short-term rental income, optimizing each property’s online marketing, on-site operations and other aspects to work toward maximum income.

5. Flexible owner stays — Owners can flexibly choose when to stay themselves. This is especially suitable for owners with multiple residences around the world.

6. Terminate at any time — Management does not require an annual commitment. The owner can end the agreement with one month’s advance notice.

7. Corporate housing — In addition to nightly rentals, we work with insurers and assignment companies to provide executives with hotel-style managed accommodation for stays longer than 30 days.

8. Transparent fees — For rentals longer than 30 days, we charge 15% of accommodation revenue. For nightly rentals under 30 days, we charge 20% of accommodation revenue.