Made-To-Order: Rental Leases Done Your Way
Most landlords sign rental leases that start on the first of the month and last for one year without regard to the time of year, seasonality of prime rental periods, and the landlord’s desired lease term.
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Why follow the cookie-cutter template for your lease when you could customize it to fit your needs? Take a hint from Chris Rock and write up the lease to meet your needs.
Make sure all the adults moving into the unit include their social security numbers and sign the lease. In the event you have to evict, it is easier to prove who was living in your unit if every tenant is on the lease. This also helps deter your tenant from bringing in people like his cousin, “Squatter Steve”, to spend a couple months living in the unit without thinking it is a big deal.
Structure Your Rental Lease So It Fits Your Objectives:
Your Lease Start Date:
Most leases start on the first of the month, but there is no reason why you can’t have your tenant start occupying the vacant unit in the middle of the month. Often times, I’ll give the partial month of rent free as a sign of good will on the grounds that they pay the first month’s rent and switch the utilities into their name when they move in (they get the free partial month on the back end of the lease).
I like getting tenants moved in as soon as possible because it is a lot less likely that they will move out once the moving truck has already dropped off their stuff. I have lost tenants in the past who have signed the lease and given the security deposit but for some reason (i.e. roommate arguments, their dog died, they found a different place that had a sauna) decided against moving into the unit. I am convinced that had they moved in ASAP, they would have stayed for the entire lease term.
Seasonality of Rentals:
I’ve signed seven month leases, eighteen month leases, twenty-two month leases, and even twelve months. I sign these leases so that when the lease terminates I am in the best possible season to find my next tenant. Being a mid-west based landlord, prime rental season is May through September, so the last thing I want is a vacancy in January. However if I am signing a January lease, I will sign the lease so that when it ends, I have the greatest chance of catching one of the many renters in the summer months. Why would I force myself to enduring the agony of finding a tenant when the windchill is below zero and there is two feet of snow on the ground? Structure the lease termination date so you can find a new tenant when they are out in full force.
If you are in a college town, sign leases that encapsulate the summer months when most of the campus has gone home. Even if you have to take lower rent, the additional three to four months for occupancy will make up the difference for a eight or nine month lease.
Some landlords like short lease terms. They like raising the rents when the tenant moves out and making improvements to the property.
My ideal tenant is someone who signs a ten year lease, pays on time every month and never complains about the water temperature, burned out lightbulbs or any other non-landlord issue (I can dream , right?).
I like long term tenants so much that I will offer reduced rent if they sign a multi-year lease. You may be leaving some money on the table by doing this, but with the exception of the tenant moving out early, you will not have to exert time and energy to find a new tenant every year. For me, the multi-year tenant is worth the reduced rent.
When trying to get the tenants to sign the long-term lease, I explain that I raise rents every year and by signing a multi-year lease, they are locking in a current sub-market rental rate that will only go up in the future.
Get creative with your leasing agreements and both you and your tenants can both walk away “winning”.
Photo: Bjørn Giesenbauer