If you have been paying attention to the real estate investing space lately, you know that the short-term rental market has become highly saturated and heavily regulated. Investors who once relied on nightly rentals are now looking for a more stable, lucrative pivot.
Enter the midterm rental strategy—specifically, midterm corporate rentals.
Sitting perfectly between a nightly Airbnb and a standard 12-month lease, midterm corporate housing is quickly becoming the highest and best use for premium real estate. According to real estate and financial experts at BiggerPockets, midterm rentals are seeing “explosive” demand as investors pivot away from saturated short-term markets, allowing property owners to capitalize on a growing, reliable demographic.
Angela Healy, CEO and Co-Owner of AvenueWest Global, recently shared exactly why this specific niche is creating a “win-win-win” for investors, corporate tenants, and property managers alike on the Empowered Money Girl podcast. Here is a breakdown of the math, the tenants, and the exact properties you need to succeed in this space.
The Financial Breakdown: Unfurnished vs. Midterm Rentals
Why go through the effort of fully furnishing a property for a month-to-month tenant? The answer is simple: the potential for more cash flow.
While the exact numbers depend on your market, the revenue jump from traditional long-term leases to midterm corporate rentals is staggering. Take Denver, Colorado, as an example:
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Unfurnished Long-Term Rent: A standard 1-bedroom property might rent for roughly $1,800 a month.
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Fully Furnished Corporate Rent: That exact same property, elevated to corporate standards, can command $3,000 to $4,000 a month.
Even when partnering with a high-touch property management company that utilizes a 70/30 revenue split, the investor still walks away with more annual income than they would with an unfurnished property. And notably, all while doing far less.
Say Goodbye to the “Airbnb Party Nightmare”
Nightly rentals come with a notorious downside: extreme wear and tear. Bachelor parties, cramming multiple people into a home, and constant luggage scraping against walls can destroy a property quickly.
Conversely, unfurnished long-term rentals come with their own headaches. Tenants drag heavy furniture in and out, mount TVs, and put holes in the drywall.
Corporate renters are a completely different demographic. These are professionals coming into a city for a 30-to-90-day assignment (at AvenueWest, the average stay is 99 days). They are there to work, cook a meal, and lay their heads down. The wear and tear is incredibly minimal. As AvenueWest has seen over the last 25 years, an owner can walk into a property that has been in a corporate program for a decade and ask, “Did anyone even live here?”
The Ultimate Benefit of Midterm Corporate Rentals: Zero Evictions
One of the biggest fears for any real estate investor is a tenant who stops paying rent, forcing a lengthy and expensive eviction process.
With midterm corporate housing, there is far less risk of nonpayment. Because the business is footing the bill for their relocating employee, rent defaults are practically nonexistent. In fact, a specialized property manager can operate in this space for a quarter of a century and count the number of evictions or collections on a single hand.
How to Furnish Your Midterm Corporate Rental for Maximum ROI (Without Wasting Money)
To command top dollar, your property needs to look like top dollar. It needs granite or quartz countertops, stainless steel appliances, and a dedicated desk space (as hybrid work is here to stay). But when it comes to furniture, investors need to be strategic.
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Don’t overspend on luxury furniture: You do not need a $10,000 couch. You need a very nice, reasonably priced couch. If a tenant accidentally damages it, the corporation will pay to repair or replace it—but it must be a reasonable expense.
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Invest in professional photography: This is non-negotiable. Do not take dark, amateur photos on your phone. Spend the $175 to hire a professional real estate photographer. This single investment will dramatically increase your occupancy rate.
What Kind of Properties Work Best for Midterm Corporate Rentals?
Not every home is fit for a corporate rental. You cannot force a square peg into a round hole. The highest demand comes from two distinct categories:
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The City-Center Condo: Corporations often relocate individuals or small teams who want to be within walking distance of the office. They want 1-bedroom, class-A units with 24-hour doormen, secure fob access, on-site parking, a gym, and a pool.
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The Suburb Single-Family Home: When an executive relocates with their family and pets, they don’t want a downtown high-rise. They want a 3-bedroom home with a yard in a top-tier school district. Note: Corporations pay by the bedroom, so you don’t need a massive 5,000-square-foot mansion. A comfortable, highly upgraded 3-bedroom house in the right district is perfectly sufficient.
If you own an investment property—or are looking to buy one—stop settling for low-yield traditional leases or high-stress nightly rentals. By pivoting to midterm corporate housing, you can secure better cash flow, protect your property, and have more peace of mind that that steady rent check payments bring.
Reach out to us today to learn more about midterm rentals for corporate housing..
