Short term and mid term rentals

With the banning of new short term rental properties in the city of Bozeman, investors are wondering if a Bozeman property is right for their portfolio. Even though new short term rental properties aren’t allowed, we think that considering property for mid term rentals is a very viable investment strategy.

What is a mid term rental? In Bozeman, anything over 28 days is considered a mid term rental. The majority of mid term rentals are furnished. A short term rental is less than 28 days and is also furnished. See the chart below for a comparison between short term and mid term rentals in Bozeman.

Short term rental

Term 0-28 days

Licensed Yes

Inspected Yes

Furnished Yes

Lodging tax Yes

Occupancy 65% (Bozeman average)

Mid term rental

Term 28+ days

Licensed No

Inspected No

Furnished Yes

Lodging tax No

Occupancy 85+% (Based on our experience)

Many mid term rentals end up being rented for months at a time. The most frequent users of mid term rentals are travelling health care professionals, people needing transitional housing as they move to Bozeman and remote workers spending a ski season or summer in Montana. 

Mid term rentals are advertised on the same platforms as short term rentals and then a few more such as Furnished Finder and Zillow. With platforms like Zillow and Furnished Finder, fees are not paid by the owner with every reservation; there is just a minimal yearly subscription fee. However, there is a bit more upfront work as an owner or property manager will still need to do a rental agreement instead of relying on the automatic booking of a platform like Airbnb.

Our experience in Bozeman has been that mid term rentals have higher occupancy rates throughout the year compared to short term rentals. Nightly rates at the short term rentals are higher; and thus far, short term rentals are still out performing the mid term rentals in total gross revenue. But once the expenses like licensing and cleaning are added in, the net profit of a mid term rental is a lot closer to a short term rental than most people would think.

If you’d like to discuss mid term rentals and if they are fit for your portfolio, please get in contact with us!