The debate over short-term rentals has intensified as investors weigh their options between nightly Airbnb-style listings, long-term leases, and newer models such as mid-term rentals and Padsplit co-living arrangements. Dr. Connor Robertson, a Canadian-born entrepreneur and real estate leader, believes the answer is not found in a single model but in how each strategy aligns with an investor’s goals, capabilities, and appetite for involvement.
The Problem With One-Size-Fits-All Investing
Dr. Robertson, who co-founded a prominent real estate firm and has invested in everything from motels to multifamily units, argues that the traditional “pick a lane” approach in property investing is increasingly difficult to sustain. “Every real estate project has an acquisition phase, an operation phase and a disposition phase,” he explains. “If you’re not really good at the acquisition and the management phase, that disposition phase where you sell it becomes very challenging because you don’t have a good asset.” For many short-term rental owners, acquisition may come easily, but operations have become increasingly burdensome. With heightened guest expectations, regulatory shifts, and rising supply, the business model now requires an almost full-time commitment. “If you’re going to be in that vertical, you might want to get eight to ten homes,” Dr. Robertson says. “You have to be all in all the time.”
Short-Term vs Long-Term: Neither Is Perfect
Short-term rentals have historically promised the highest returns, but they tend to require more oversight and maintenance, as well as a willingness from property owners to adapt to shifting travel trends. On the other end of the spectrum, long-term rentals provide stability and minimal effort, but current interest rates often make the numbers less compelling. “No one’s buying a $500,000 home and putting down $120,000, then being happy with $500 a month in cashflow. That’s not a great cash-on-cash return.” This leaves many investors stuck between the volatility of short-term rentals and the thin margins of long-term leases.
The Case for Mid-Term Rentals and PadSplit
Dr. Robertson sees opportunity in the middle ground. By converting short-term rental units into furnished mid-term housing, or leveraging co-living models like Padsplit, investors can generate stronger returns without the daily churn of guest management. “The blend of the two is really important,” he says. “Short-term rentals probably have the highest cashflow in most models, but they take the most amount of work. Long-term rentals make the least amount of cashflow and have the least amount of work. Mid-term rentals give you a balance of both.” The “micro-family” model, where traditional multifamily units are furnished and rented mid-term, is particularly attractive. For example, a 100-unit complex renting at $1,500 a month could instead generate $2,000 to $2,500 by being converted into furnished mid-term housing. That additional $500 per unit translates into $50,000 more in monthly income, boosting asset valuation dramatically.
A Path Toward Affordability and Sustainability
Beyond returns for property owners, these evolving models intersect with an urgent need for more affordable housing. Innovative approaches such as Padsplit provide flexible, furnished solutions that serve both tenants and landlords. Ground-up construction designed with co-living and mid-term rentals in mind offers yet another pathway. “Instead of building these single-family homes and hoping that somebody can afford to buy, just build it so it can be a midterm rental with Padsplit,” advises Dr. Robertson. “And if you really want, you can always convert it back and forth.” For him, the key is adaptability. Investors who design properties with multiple exit strategies — short-term, mid-term, or long-term — can better withstand shifts in demand, regulation, and economic cycles.
Balancing Cash Flow With Lifestyle
At the heart of Robertson’s philosophy is the belief that real estate is not solely about maximizing income, but also about building a sustainable model that fits an investor’s lifestyle. “You have to ask yourself what’s important to you,” he says. “Are you trying to build something sustainably long-term? Are you trying to build something that cashflows a bunch? Or are you trying to build something where you’re going to do a bunch of work and build value out of it?” For some, the hands-on nature of Airbnb will remain attractive. For others, the stability of long-term rentals will be the right fit. But for an increasing number of investors, the balance offered by mid-term rentals and co-living models may represent the most pragmatic — and profitable — middle ground. “The new business models always crush. The trick is recognizing them early and structuring your portfolio to take advantage of them.”
Readers can follow Dr. Robertson’s work on his LinkedIn or visit his website for more insights.
