Little did we know that a pandemic would convince the world to see travel like how we did. Travelers vs Relocation + Extended Travelers Many property owners and businesses that relied on STR’s lost thousands if not millions of dollars overnight. Covid-19 came in March of 2020 and wiped the city clean of any travelers. We all now obviously know the answer to that question. Why care about stability when there’s no sign of travel stopping in their city? Many investors were drawn to the higher revenue in short-term rentals and felt that demand would continue to stay the same. Hotels found a lofty competitors which resulted in regulation battles and varying cities imposing hotel taxes and various levels of permitting.Īlthough medium-term rentals provide more stability than STR’s but higher revenue than annual leases, it often wasn’t motivating enough for investors unless they were facing friction from cities with regulations and permitting. Inadvertently, short-term rentals were also increasing the cost of living for residents as supply decreased for residents and increased for travelers. Revenue from short-term rentals is much higher than annual leases so it was a no brainer for a lot of people to start increasing their real estate portfolio. As the economy caught up, people started to become more confident and by 2014, people started to buy investment properties to rent out short-term. People were struggling with paying their mortgage and the idea of renting out an extra space became more appealing. Short-term rentals increased in popularity as we recovered after The Great Recession in 2008. It’s likely obvious that for duration, STR, MTR, and annual lease increases progressively. To help you better understand, we assess these three types of real estate investments with three criteria: duration, revenue, stability. The level of involvement and risk vary amongst short-term, medium-term, and annual leases. The Differences in Short-Term Rentals (STR's) and Medium-Term Rentals (MTR's)Ī common question we get from property owners and managers is “What exactly is the difference between short-term rentals and medium-term rentals?” MTRs are a new area of real estate investing that has emerged after the advent of Airbnb.
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