Midterm Rentals May Offer Alternative Real Estate Investor Opportunity

Photo by Samantha Gades on Unsplash

Investors looking to diversify their real estate portfolios may want to look at companies that promise both a seamless rental experience and a focus on the midterm rental market.

The problem is that there aren’t too many of them offering such a combination. While companies such as Airbnb Inc. ABNB and privately held Vrbo tend to focus more on short-term rentals — anything from an overnight stay to perhaps a month — the midterm rental space, offering rentals from 3 to 6 months typically, has not been such a high investor focus simply because there are so few companies offering that.

That’s where San Francisco-based Rentberry may come in. Its current focus is precisely on that midterm rental category with its proprietary Flexible Living concept.

Rentberry sees the trend of digital nomads — people able to work in different cities in a world increasingly dominated by remote working, especially since the advent of the COVID-19 pandemic — as one to exploit. All the while offering a seamless rental experience for both tenant and landlord.

Both exchange students and business professionals on extended work trips could also take advantage of this underserved sector, further increasing the potential customer base and the attractiveness of the niche market to investors.

Flexible Living To Benefit Tenant and Landlord Alike

Rentberry is looking to rent fully furnished properties in the midterm sector around the world for “quality tenants with no security deposits and no agent broker interactions,” the company says. Part of its current investment drive is aimed at acquiring such properties as well as renting existing homes out.

“Our goal is to bring one gold standard to the home rental industry that, no matter where you travel, you get the same quality home and the same level of service,” Rentberry CEO Oleksiy Lubinsky said.

Challenges with this approach arise because many landlords of existing properties are not well-versed in the midterm rental sector, according to the company.

“Many of them are not yet aware that it’s a viable business option, how to do it correctly and that it’s not as complicated as one might think,” Lubinsky said. “We need to promote midlength rental periods and create a platform suitable for landlords to manage their midterm rentals.”

Investor Interest Sparked

As both a tenant and property owner, investor Trevor Boyd can testify to the ease of experience using the Rentberry platform. The seamless approach to making the move-in process all digital is very attractive, he said.

“The Rentberry platform is quite unique; it’s a great user experience that helps the problems of both tenants and landlords,” the board member and co-chair of Harvard Business School Alumni Angels said. “I think it has a very promising future.”

Approximately $87 billion is wrapped up in rental security deposits, something the all-digital Rentberry approach to midterm and other rentals would help free up.

Currently, the company is in the midst of a Reg A+ investment campaign on Start Engine, raising funds with the goal of acquiring properties and securing partnerships with landlords worldwide for midterm rentals.

So far, Rentberry says it has raised about $13.4 million in seed capital. Its Start Engine campaign has raised almost $4 million with a minimum investment of about $300.