Re: SiIlly question - please help!! - Landlord Forum thread 348901

Re: SiIlly question - please help!! by MrDan on October 23, 2016 @21:22

This is not a silly question at all. Many landlords are unaware of marketing multi year leases.

Many landlords are reluctant to use a multi year lease, but there are situations where such a lease can be beneficial.

Many families with school age children are often drawn to multi year leases. That's so they have the ability to maintain their children in a certain school district. Offering multi year lease can set your rental property apart from other rentals, making it more in demand.

Landlords are confused over this issue and conjure up all kinds of 'ifs'. As, it will be harder to get rid of bad tenants. Actually, the same process applies whether the lease is month to month or multi years.

It’s not really about the length of a lease but the tenant. Landlords should be more concerned with the quality of the renter than what lease term. Good screening and rental criteria is important in selecting good tenants. Statically, longer lease helps eliminate bad tenants.

Landlords are also afraid the tenant will break the lease early, but tenants can break or move out at any time, no matter what the length of lease. There are many reasons provided by law that allows tenants to legally break a lease. Careful screening will negate that possibility.

It's long-term tenants where landlords make high returns. Turnovers are expensive, between lost rent, new paint, new carpets, advertising, screening tenants, cost of a vacancy adds up quickly. With the average landlord spending 40+ hours and over $1,000 to find new tenants, the savings of not having a vacancy is something to consider.

Most landlords only offer the options of “Pay more” or “leave” at renewal time, but that doesn't have to be the only two options.
By offering a third option that attracts good tenants and keeps the rental property occupied.
That one option is, to offer a multi-year lease agreement, and have the rent only rise by $X instead of $Y each year.

Such an offering could have contingencies requiring on time payments to be made in order for the rent to remain at a certain level during the lease term. Or if on time payments are made, the yearly rent increase will be 3% (or a fixed amount) instead of 5% (or a fixed amount). If the landlord collected the full one and one half security deposit, part of the security deposit could be offered to be returned upon compliance with the lease terms as an incentive.

Landlords need to start thinking outside the box in order to be competitive. There are many tenants who are indeed looking for long term leases.

Many leases in Europe are often for 3 years or more by law or they are indefinite.

An example lease clause might be;

'It is hereby agreed and understood by both parties that, at end of the first year of the tenancy, the tenancy shall be liable for a rental increase of x% or $x. This clause will apply for every subsequent year stayed in the property.'

A lawyer would be best to write a lease clause that fits your requirements.

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Re: SiIlly question - please help!! by Sahara (NJ) on October 23, 2016 @22:39	[ Reply ]

Thanks to all for giving your insight! Made me think about the process more seriously. MrDan, thanks much for putting things in a positive perspective. Since we are out of town time to time, we have trouble finding tenants on time for this rental property. Turned out that we lost money for a month here and there b/c we just couldn't show the house to the tenants. With this 3 year lease, we are taking 2 months sec deposit in case they break the lease. We are checking the tenants' job appointment and previous landlord history and bank account statements. The couple is here for a 3 year assignment. Seems like a good match for our situation. Will keep you guys posted if I learn bad lesson! Thanks again.

Re: SiIlly question - please help!! by TarugoKing (NJ) on October 25, 2016 @12:09	[ Reply ]

You can only collect 1.5x rent as security deposit in NJ.