Why I’ll never sign a year lease again.

Some thoughts on the evolving landscape of short-term leases and residential real estate...

Since the start of the pandemic we’ve moved 5 times. We left NYC in March with only a few suitcases, to a family home in South Carolina and hunkered down. from SC we drove to Los Angeles where we spent 5 months and lived in 3 different places. After the holiday we decided Miami would be the next stop...

Since moving out of our NYC apartment we’ve been researching all of the options outside of Airbnb and traditional lease agreements and it just so happens there’s a handful of companies that have already thought about “us”.

By “us” I mean 20’s-30’s year olds, no kids, can work remotely, spends on experience, needs less space, wants to be in a major metropolitan area with good restaurants, art, and culture. It’s odd to categorize yourself but after many years in marketing I can confidently say I am the target customer for these companies.

What likely started as an alternative to business travel accommodations, these fully furnished apartments are available for longer term stays. complete with everything from daily essentials like washer & dryer, cleaning supplies, toiletries, to trendy coffee, a wine decanter, and coffee table books.

From what I can tell there are roughly 10 or so players in the space, Sonder, Landing, Domio, Zeus Living, June Homes, Lyric, to name a few. In Miami we’ve decided with Mint House who has locations in 11 cities. The place we're staying in is a 1BR, 1 BA 800 square-foot apartment in a new high rise building on the boarder of Brickell and Downtown. The building has close to 400 units and it's likely that less than 5% are Mint House units. From what I've seen many of the other companies listed above operate on a similar model. Find available inventory, buy in bulk, create a plug & play solution that appeals to those who want more freedom to pick up and go, charge a premium for the service that likely yields a 3-5X return (maybe greater) on what you'd get from a traditional 12-month lease tenant.

I thought it was interesting that many of these companies listings are on Airbnb which they're using as a discovery platform. I'm sure with the intention that after a successful experience they'll go direct to book for future trips. Which leads us back to the topic of brand. As more players enter this space, strength of brand is truly the differentiating factor. Did I appreciate the thoughtful touches? Was the customer experience frictionless? Did they speak my language and meet me at eye level? I think about my parents loyalty to Marriott or Starwood, largely in part to the rewards and point systems built. It's my belief those incentives will fail to hold the same weight they did for previous generations and that the companies being started today will be attractive acquisitions for the incumbents who lost their customer to Kayak, Expedia, and Hotel Tonight.

With that said, I'll never go back to a year long lease. My partner and I are looking at buying our first home, with the intention of spending a few months of the year there and renting it out the rest as an additional source of income. This road trip started as a way to get a taste of different places and see where we wanted to spend more time, not "settle down".

I believe that for many who have been prompted to reconsider their living and working conditions because of the impact of pandemic, they'll choose the optionality that comes with short term rentals and the ability to move freely.

All for now! You can see what the inside of our Mint House Apartment looks like on my instagram @nickdio.