Author Topic: Require 12 Month Lease Renewal or Go Month to Month?  (Read 1469 times)

Evie

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Require 12 Month Lease Renewal or Go Month to Month?
« on: August 24, 2017, 07:01:46 PM »
I need some advice.  We are on our second batch of tenants for our duplex (we owner occupy).  We require a 12 month lease when we rent, but this is the first batch that has intended to stay on.  I asked them a few months ago if they were planning on renewing the lease, and even offered to let them sign early to get on the academic schedule since he is a lecturer at the local University and contracts only run through July. They said he was actually looking for a new job, and would stay depending on the commute but weren't ready to sign another lease.

They are great tenants. Should we let them convert month to month and let them stay (knowing they may decide to leave in a few moths), or require another 12 month lease?  My hesitancy on month to month is that currently their lease expires right during the prime time to get new tenants in (we tend to go for post docs or academics).  We would be ok with a shorter 9 month lease because we do plan to do some work back there before the next tenant.  But I worry they will leave in November or December, which is a terrible time of year for us due to the university schedule (everyone already has housing), and because I am currently pregnant and due at the end of December.  Finding tenants over the holidays or right after I have a baby when I am the primary person who handles the rental seems like a nightmare. But I am also not sure I want to turn down certain rent and have to hassle tenants we like into signing or moving.

What would you do? Any advice?  We tried to place a tenant once in Feb/March and it was a disaster (low credit, totally crappy applicants, tons of smokers even though we said no smoking).  We can afford to keep it empty if needed, but I don't want to lose the extra income. 

I'm planning on sending them an email tonight since the lease expires in 30 days asking if they are interested in signing a new lease and if they have figured out what they want to do, but not making any ultimatums.   
« Last Edit: August 24, 2017, 07:05:12 PM by Evie »

clarkfan1979

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Re: Require 12 Month Lease Renewal or Go Month to Month?
« Reply #1 on: August 24, 2017, 07:33:23 PM »
For young professionals, I would let them do month to month after they complete a one year lease. I think you would get better tenants. Some might be possibly looking to purchase a house.

However, I rent to college students, so I only do a one-year lease that is consistent with the academic calendar. August 1st to July 31st.

If someone left during the middle of a semester, it wouldn't be good for me.

tralfamadorian

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Re: Require 12 Month Lease Renewal or Go Month to Month?
« Reply #2 on: August 24, 2017, 07:41:26 PM »
Offer them a few options that are convenient to you with different rent levels for each:
ex:
1) 9 mo lease; $1500
2) 12 mo lease; $1350
3) 21 mo lease; $1200

Evie

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Re: Require 12 Month Lease Renewal or Go Month to Month?
« Reply #3 on: August 24, 2017, 10:56:35 PM »
That's a good idea.  I hadn't thought of offering them different rates of different lease lengths.

clarkfan1979

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Re: Require 12 Month Lease Renewal or Go Month to Month?
« Reply #4 on: August 29, 2017, 08:39:10 PM »
I wouldn't ever do a lease more than 12 months. My rents go up every year, so I wouldn't want to miss out on that.

YttriumNitrate

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Re: Require 12 Month Lease Renewal or Go Month to Month?
« Reply #5 on: September 01, 2017, 07:11:44 AM »
My rental is also in a college town so filling vacancies is very much dependent on the academic calendar. I only do year long leases, but I also know people sometimes need to move so in the lease I set out how much it will cost the renter to break the lease; and that amount varies based on the time of the year.

Cwadda

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Re: Require 12 Month Lease Renewal or Go Month to Month?
« Reply #6 on: September 01, 2017, 07:30:46 AM »
My advice would be to talk to them more. Be honest with them. Say that they're great tenants and that you'd LOVE for them to stay.  Tell them that you have the baby coming and that it'd be awesome if they could stay, but say you don't want them to feel obligated to stay either.  Ask if they'd be interested in waiting it out until next spring (around April). Give them options but don't push it in their face. Ask politely to have their decision by X date, and explain why, that you need to start looking for new tenants immediately. (Actually, I would start advertising at least 5 weeks in advance). The best tenants are the ones that start looking very early.

Just be completely open with them and show that you're really interested in making something work for all parties.

maizeman

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Re: Require 12 Month Lease Renewal or Go Month to Month?
« Reply #7 on: September 01, 2017, 07:31:56 AM »
I agree, it's perfectly acceptable to offer different rental rates for different lengths of leases (and charge the highest rate for month to month).

Where I went to college folks offered 12 month and 9 month (academic year) leases. The funny thing was that if you compared the prices, the monthly rent for the 9 month leases was almost exactly 4/3s of the 12 month so you paid the same amount of money over a year either way.

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