Prospective Tenant looking for a 2-4 year lease

1 Reply

I have a tenant that would like to do a 2-4 year lease.  Thoughts?

@Pat Wasson

I'm not an experienced landlord or investor so please take what I say only as my personal opinion (if that is even worth anything to you lol).  Although turnover is one of the biggest expenses investors have, signing a 2-4 year lease with someone who you haven't yet done "business" with could be a risk to you.  I always like to err on the side of caution so let's say that you realize after a few months that this tenant is just plain horrible and is an overall headache to you... chances are you'll regret signing a 2-4 year lease because you'll not want to keep them for more than a year and I would assume that it would probably be harder for you to terminate the contract.  

Remember, you can always re-new their lease after a year and at that point, you'd likely have 8-10 months worth of experiences with them to determine if they are actually good tenants or not.

My personally opinion would be to just tell them that "Company Policy" states we only sign 1 year leases and at the end of that year lease then can re-new if they should choose.  

This will also allow you to increase rent and make a little more :)

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here