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Updated over 1 year ago on . Most recent reply
2 year lease good or bad
I have a Good tenant in Brevard County Florida. This person pays on time and takes good care of the property. The rents in the area have been going up lately. It's possible to get $1400/month for the unit. The tenant currently pays $1000/month. I would like to keep the tenant in the unit and have informed her that the rent would be increasing at the end of the lease to $1250/month. the tenant has stated that she could stay at that rate but could not afford any further increases and requested a two-year lease at $1250/month. What are your thoughts on using the two-year lease?
Most Popular Reply
I always keep stable tenants that take good care of the property at a lower rate increase. Think about it from the perspective of a turnover, minimally you're still completing hundreds of $ worth of work + whatever vacancy factor for finding a new tenant + marketing + background check/lease signing. You'll eat close to $1,000 in cost on a good turn and more on a standard turn.
A $250 increase or 25% in a year on a $1,000 lease is already winning and the fact that a long-term good tenant is willing to stay for 2 year at that steep of an increase is a win. I'd sign the two-year lease in a heartbeat. Just my opinion but feels like a no brainer win to me.
If you've got more iron clad math on a turnover and vacancy being much cheaper, you can consider the other option but good long-term tenants aren't easy to find :).