The What of Mid-Term Rentals
The real estate landscape is changing, and one of the most exciting developments is the rise of mid-term rentals. These properties, offering leases that typically range from one to twelve months, fill the gap between short-term vacation stays on platforms like Airbnb and traditional long-term leases. They cater to a growing demographic of tenants who value flexibility, convenience, and a more tailored housing experience. For property owners, mid-term rentals represent a strategic opportunity to diversify income streams and meet evolving market demands.
Mid-term rentals are a response to significant shifts in how people live and work. Research from CBRE, a commercial real estate and investment group, found that remote work arrangements have expanded the percentage of workers seeking flexible living options, increasing the demand for properties that accommodate transient lifestyles. Similarly, in Key Data’s analysis, the U.S. experienced a 29% increase in stays over 30 days in Q4 2022 compared to Q4 2021, indicating a significant rise in demand for mid-term rentals.
Denver’s reputation as a hub for business innovation, outdoor adventure, and educational excellence makes it an ideal location for mid-term rental success. Between 2010 and 2020, the city’s population increased by approximately 19%, rising from 600,158 to 717,630 residents, many of whom were drawn by job opportunities and lifestyle appeal.
These new residents, combined with an influx of digital nomads and professionals working on temporary assignments, have made Denver one of the hottest markets for mid-term rental demand.
The Who of Mid-Term Rentals
Who Are the Tenants?
The demand for mid-term rentals is fueled by an array of individuals and families seeking flexible, comfortable housing options. These tenants fall into four key categories:
1. Corporate Professionals
Engineers, consultants, healthcare workers, and other professionals frequently relocate for short-term projects, training, or assignments. These individuals require housing that feels like home but without the commitment of a long-term lease.
Stat Spotlight: For the seventh successive year, relocation was the largest reason for using corporate housing in the U.S., with project/training as the second largest reason. These two groups account for over 54% of the market. The technology sector generates the most demand for corporate housing by industry.
2. Families in Transition
Whether they’re waiting to close on a new home, completing renovations, or navigating life changes like divorce, families in transition benefit from the flexible terms of mid-term rentals. These properties offer stability during otherwise uncertain periods. It’s also common for individuals to encounter transitional periods during real estate transactions. Factors such as market conditions, financing complexities, and personal circumstances can contribute to timing discrepancies between selling an existing property and acquiring a new one.
In such situations, mid-term rentals—offering leases ranging from one to six months—serve as practical interim solutions. They provide flexibility and comfort, allowing individuals and families to secure temporary housing while navigating the complexities of buying and selling homes.
3. Digital Nomads and Remote Workers
Entrepreneurs, freelancers, and remote employees increasingly prioritize location independence, opting for cities like Denver with vibrant cultural scenes, strong Wi-Fi infrastructure, and outdoor recreation opportunities. Mid-term rentals allow them to “test-drive” a location without a long-term commitment.
Stat Spotlight: According to a 2021 report by Owl Labs and Global Workplace Analytics, 27.6 million people in the USA worked primarily from home in 2021, indicating a significant portion of the workforce engaged in remote work
4. Graduate Students and Interns
Graduate students, medical residents, and interns often have academic or professional commitments lasting several months. Mid-term rentals provide them with fully furnished, hassle-free accommodations that align with their temporary stays.
Stat Spotlight: As of fall 2023, 72% of undergraduate students at University of Denver are from out-of-state, underscoring the demand for temporary housing.
According to the Zillow Consumer Housing Trends Report 2024, among renters on a fixed-term lease, 13% reported signing leases shorter than 12 months, emphasizing the growing demand for mid-term rental solutions. Mid-term rentals cater to these diverse tenant profiles by offering move-in-ready units with utilities, Wi-Fi, and other essentials included. This “plug-and-play” approach is a significant departure from the DIY demands of traditional leasing, making mid-term rentals a top choice for convenience and flexibility.
Who Are the Owners?
The success of mid-term rentals also hinges on the motivations and needs of property owners. This service attracts three primary types of investors:
1. Accidental Investors
Life changes like a job transfer, inheritance, or inability to sell a property prompt some individuals to become landlords unexpectedly. For these owners, mid-term rentals provide a quick, profitable solution without the complexities of managing a long-term lease.
Example: Consider a Denver couple who inherited a family home. Unable to sell in the current market, they turned to mid-term rentals, generating consistent income while maintaining flexibility for future decisions.
2. Active Investors
Those pursuing real estate as a deliberate wealth-building strategy are drawn to mid-term rentals for their high ROI potential. These investors often seek properties in urban areas like Denver, where strong tenant demand ensures steady income streams.
Additionally, a comparison by 716 Realty Group indicates that properties utilized as short-term rentals can generate as much as 40% higher income than long-term rentals, which may also apply to mid-term rentals depending on market demand and property management strategies.
3. Passive Investors
For individuals who value time over hands-on management, mid-term rentals offer an ideal solution. These owners often partner with professional management companies like Keyrenter Denver to handle tenant placement, maintenance, and property care, ensuring a stress-free experience.
As the mid-term rental market grows—driven by trends like remote work, relocation, and economic mobility—it’s clear that understanding “The Who” is critical to capitalizing on its potential. Whether you’re a tenant seeking a tailored housing solution or an owner exploring new investment opportunities, mid-term rentals are a dynamic, innovative option that meets modern demands.
The Where of Mid-Term Rentals
Where Do They Work Best?
1. Strong Business Hubs
Cities with a robust corporate presence naturally draw professionals on temporary assignments. Major financial districts, tech centers, and industrial hubs see constant traffic from consultants, engineers, and executives in need of comfortable, short-term housing.
2. Universities and Training Facilities
Educational institutions, particularly those hosting medical residents, visiting professors, and graduate students, create a consistent flow of tenants seeking mid-term rentals. Training facilities that offer short courses or certifications also generate similar demand.
Example: During the 2011–2012 academic year, 50% of undergraduates lived off-campus independently showcasing the importance of nearby flexible housing options.
3. Tourism Hotspots with Seasonal Demand
Popular tourist destinations with seasonal attractions often see extended stays from families and digital nomads. Locations offering outdoor recreation, cultural festivals, or seasonal jobs attract visitors who need temporary housing for several months at a time.
Why Denver?
Denver exemplifies all three characteristics, making it a prime market for mid-term rentals. The city’s diverse economy, vibrant culture, and unmatched outdoor offerings create a constant influx of tenants seeking temporary housing.
1. Proximity to Business and Tech Hubs
Denver’s growing tech and healthcare industries position it as a leading destination for professionals. The Denver Tech Center, coupled with major corporations headquartered in the city, creates significant demand for mid-term rentals catering to traveling employees and contractors.
2. Educational and Research Institutions
Denver is home to renowned institutions like the University of Denver and Anschutz Medical Campus. These schools attract students, medical residents, and visiting scholars who need housing for semesters or rotations, aligning perfectly with the mid-term rental model.
3. Tourist Appeal
Denver boasts year-round appeal, from ski enthusiasts flocking in the winter to outdoor adventurers exploring Rocky Mountain National Park in the summer. Many of these visitors extend their stays, contributing to the city’s growing demand for flexible housing options.
The When of Mid-Term Rentals
The timing of when to implement mid-term rentals can significantly impact an owner’s success. These flexible leases are not only responsive to tenant needs but also provide property owners with an adaptable strategy to navigate various market conditions. Understanding the best times to consider mid-term rentals can help property owners maximize profitability and reduce downtime.
When Should Owners Consider Mid-Term Rentals?
1. During Market Fluctuations
Real estate markets naturally experience peaks and valleys. When demand for traditional long-term leases declines—perhaps due to economic shifts or increased supply—mid-term rentals can provide a flexible solution. They attract tenants who might be unwilling or unable to commit to a full-year lease, such as relocating professionals or families in transition.
2. For Seasonal Demand
Some markets have strong seasonal trends that impact rental demand. For instance, Denver’s tourism, construction, and healthcare industries often bring temporary workers to the area for several months at a time. Mid-term rentals can serve these tenants, filling the gap between vacation rentals and long-term leases.
Case in Context: In winter, Denver attracts ski instructors and seasonal tourism staff, while summer brings families and outdoor enthusiasts seeking temporary stays. Mid-term rentals would allow owners to cater to these waves without locking properties into long-term commitments.
3. Extended Travel and Sabbaticals
Individuals embarking on extended travel or sabbaticals, such as retirees exploring new destinations or “snowbirds” seeking warmer climates during winter months, often find mid-term rentals an attractive option. The low barrier to entry, with furnished homes and flexible lease terms, allows them to generate income from their primary residence while they’re away. This rental income can cover mortgage payments and other expenses, or even fund their travel adventures.
Mid-term rentals excel when owners align their strategies with current market conditions. Whether filling gaps during low long-term demand, capitalizing on seasonal trends, or bridging periods between renovations and sales, these flexible leases offer a smart, adaptable solution.
The Future of Mid-Term Rentals
The future of mid-term rentals is promising, with evolving housing preferences and market dynamics indicating a growing demand for flexible lease options. The rise of remote work and the gig economy has led to an increase in individuals seeking temporary accommodations that align with their flexible lifestyles.
Keyrenter Denver is at the forefront of this shift, offering property owners turnkey solutions to capitalize on the mid-term rental market while ensuring tenants receive a superior living experience. By bridging the gap between short-term and long-term rentals, we are helping to shape the next era of housing in the Greater Denver Area.
Ready to maximize your property’s potential? Contact Keyrenter Denver today to explore how mid-term rental management can transform your investment!