I`m looking for some advice from experienced homeowners. I am currently occupying my new SFH and I have a tenant who is interested in a lease of 3 years or more. I haven`t done the full background reviews on Criminal/Eviction/Credit yet, but the suggested tenants seem confident that there are no problems. Although 12-month leases are the gold standard for property management, there are tenants out there who are interested in multi-year contracts for a variety of reasons. As an owner, there are also reasons to be interested. Perhaps the most attractive thing is that you are guaranteed a guaranteed turnover for the duration of the contract and you don`t have to worry about empty spaces relieving your savings. Also, you don`t have to worry about moving old tenants and attracting new tenants (which, as we mentioned, can be a difficult process), and you don`t need to invest time or money in advertising your property. However, these benefits do not mean that you should jump on a possibility for a multi-year lease. There are a few important questions you should ask yourself before deciding to go beyond the standard one-year contract.
I am not a fan of the initial leases of more than a year. I first recommend a 6-month or 1-year lease to test your relationship with the tenant. If it works, you can extend the lease by two years. I did this to a tenant, and it worked out well. During the first rent, I discovered that the tenant likes to pay the rent at the last minute (literally) and always forgets the web link to the payment (even if it`s in his rental contract). So, at the time of renewal, I increased the rent to make up for the trouble. He`s happy. I am happy. Would anyone consider adopting a tenancy clause that would automatically extend the lease for a second year if there was no late payment in the first 12 months? Hey, Deborah, that`s a big question. If you have passed the checklist above and everything is fine for a multi-year lease, it can be extremely advantageous to block the property in the long run. But renting to a new tenant is a bit difficult. There`s not much you can do with the language of your leasing to account for what you don`t already want to use for your standard leasing.
That is the most important question you should ask yourself. For many, if not most sectors, rental or land values are only a matter of time. If the market value of your property changes or you find that neighbouring properties are increasing their rent, maintaining the traditional one-year rent is the way to go. Otherwise, pull yourself in the foot if a year of renting your property is below market value. Don`t be deprived of the convenience of a multi-year contract with thousands of dollars in rent on the street.