Short-Term Rentals Might Be Kicking 12-Month Leases to the Curb

For a one-bedroom in a major city on the East Coast, I’ll need to fork over more than $7,000 up front. That accounts for first and last month’s rent, the security deposit, and the broker’s fee, which is often a full month’s rent. And this is all if I’m lucky enough to secure an apartment in the first place. Finding a new rental is notoriously competitive these days, thanks to many would-be buyers delaying their homebuying plans. With more competition comes higher rent prices, making finding a new place to live incredibly difficult for a huge chunk of the population.

Because it’s so hard to land an apartment right now, I’m also worried about committing to a place that I’m lukewarm about. If I’m signing a year-long lease somewhere, I want to make sure I really love where I live. That’s the other thing, aside from cost, that bothers me about this process: I’m locked in for a whole year. During a time when a pandemic and other devastating global events have made it hard to think toward the future, a year feels like quite a long time.

Daniel Mishin agrees with me. 

“Apartment rental is fundamentally broken as an experience,” he says. “It’s outdated.”

Mishin founded a short-term rental company called June Homes to try to fix the issues plaguing renters in cities across the country. 

“The transaction costs are way too high,” he continues. “It doesn’t make sense that people have to take vacations to go apartment hunting. It doesn’t make sense that people are stuck in limbo waiting for an approval from a landlord for weeks. It doesn’t make sense that people have to go and print out paper leases, scan them, and send them for signatures. It doesn’t make sense that there are certified checks.”

His goal is to remove some of these more archaic barriers to entry so today’s renters can move without the hassles, costs, and long-term commitments. To do that, June Homes partners with mom-and-pop landlords to add units to its roster of rentals. The company renovates those apartments with new fixtures and fresh paint, then rents them out at a slight markup. The tenant, in this case, pays more than what the apartment would have originally rented for, but receives lease term flexibility, the option to have the place furnished, and in shared units, consistent restocking of supplies like dish soap, sponges, toilet paper, and more.

Mishin acknowledges that the housing sector has problems so deep that no startup alone can fix them. But he thinks June Homes can still remove many of the up-front fees renters face.

Since founding June Homes in 2017, Mishin has expanded to offering one- and two-bedroom rentals in eight U.S. cities. They operate on a one to 18 month leasing period, offering virtual showings through the company’s online platform — and all without broker’s fees.

Last fall, I stayed in a June Homes apartment for a few days. The furnished room, which was in a shared two-bedroom apartment on New York’s Upper East side, went for $1,625 per month. That dollar amount, along with a $109 monthly membership fee, covers cleaning supplies, linens, and kitchen essentials like pots and pans. For a place steps from Central Park, the price tag was less astronomical than I expected.

Considering the remote work possibilities that the pandemic enabled, coupled with the struggles of renting a traditional apartment right now, short-term rental companies might be here to stay. And June Homes isn’t the only company cashing in on the popularity of short-term rentals. Startups like Zeus, Anyplace, Homesuite, and Landing are catering to young urban professionals on the move.

“Strict, long leases no longer serve renters’ needs,” Landing CEO Bill Smith told Apartment Therapy in 2020. Like June Homes, his membership-based apartment leasing platform doesn’t require long-term leases.

Natalie Seymour has been renting with Landing for almost a year. She moved out of her apartment in Raleigh, North Carolina, to spend a few months in Denver, then settled into another Landing unit in Richmond, Virginia.

“I wanted the last year to be exploratory,” Seymour says. She figured if she didn’t have to be in a particular spot for her job, why not try out a couple of cities to see where she’d like to stick around? 

“Landing made it really easy to pick up and go, knowing that if I get there and in a couple of months I don’t like it, I’m not stuck in the lease forever,” she says. “It also just makes it way easier to throw the essentials in the car and drive. You don’t have to coordinate moving furniture and all that stuff.”

I’d go as far as to say moving is a universally hellish experience — not to mention an expensive one. “When you buy a thousand dollar couch, you’re going to spend a thousand dollars each time you move,” reasons Peyton Yen, a leasing agent with Engel & Völkers Brownstone Brooklyn. So for someone who prefers to be unencumbered by stuff, a move toward short-term leases makes sense.

“I’ve seen people who want to pay just a little bit more to live in the Lower East Side or somewhere like Midtown just for the summertime, so they can be a part of that summertime craziness and fun,” Yen says. Maybe it’s not affordable for the entire year, she explains, but they can choose to move to a more affordable neighborhood in the fall. Meanwhile, some of her other clients spring for short-term rentals until they decide what neighborhood they want to commit to. So no matter which way you slice it, it’s the flexibility of short-term rentals that today’s renters are attracted to.

People are also spending time in new places in ways they’ve never done before, Mishin adds. “They’re like, ‘Hey, I’m going to spend nine months in New York and then I’m going to go travel in Latin America for two or three months.’” 

And to have the convenience of jetting off on a week’s notice? For plenty of renters, it’s worth the price tag.

“Part of [my decision to rent with Landing] was that my time is also worth the money,” Seymour says. “If you’re in the position where you can pay that premium to buy back some of your time, then that works out really well. That’s a resource you can leverage.”

I’ll admit it: this setup appeals to me, a remote worker. In theory, I could use June Homes to spend a few months in New York, then head back to live near my family in a Boston apartment during the holidays. I wouldn’t have to worry about moving furniture back and forth, and I could work from wherever I pleased. The life of a digital nomad, right?

If my apartment-hunting process continues its nightmarish trajectory, I might seriously consider opting into a rental from a company like June Homes or Landing. My guess is that other renters will, too. Short-term rentals could become more popular than 12-month leases someday soon, and the next generation of renters seems ready for it.


https://www.apartmenttherapy.com/short-term-rentals-37057930