Just wanted to get some feedback from other landlords on what you do when your original lease term expires.
My lease states that after the initial period, the agreement remains the same but on a month to month basis. 30 days notice for move out or implement any rent adjustments (pretty standard) The properties are located in Indiana.
So should I be pushing for another year commitment or just roll on as is until they turn in there move out notice? I don't really need to increase rents as I am collecting all rents on time and all close to market rates. I'm just not sure about letting these summer months go by and then have them move out in December making it slightly harder to fill vacancies.
Any thoughts or discussions on the subject would be great.
Not sure if you reached out to the tenant prior to the term of the lease, but I would try to contact them to find out their intentions. That way you would know if and when you could advertise for a new tenant.
I am basing this off zero knowledge of the tenants future plans so keep that in mind. If it was me I would increase rent just a little and ask them to sign a new lease. That way if they just say yes I have added to my bottom line --which is the name of the game right? If they say they plan to leave I can offer to discount the rent (back to its current rate). If they still say no after that I inform them that I will begin to show the property and that they will need to be available to show the apartment to potential renters and that if I find someone I will be giving them the required 30 days notice and they will need to find a new apartment at that time.
My lease requires a 30 day notice to vacate at the end of the lease term. 60 days prior, I send the tenants a notice stating their lease is about to be up, and give them the option to renew at 3 months, 6 months, 9 months or 1 year. They also get the option to go month-to-month. The rent increases significantly for a 3, 6 or month-to-month term as an incentive to sign a year lease. If they past the 30-day notice point with no response and no vacate notice, I bill them for the new month-to-month rate. If they respond and select one of the other lease terms, I prepare the new lease for their signature, then begin billing for the new term accordingly.
@Neal Bratton good question Neal. I think you should make it a practice to ask your tenants 30-60 days out if they are going to resign with you. Now, if they are not a good tenant you should let them know 30-60 days out that you will NOT be resigning a lease with them. There is no incentive to let the lease lapse and have them on a month to month. It's all about the net and running a tight ship.
I understand if you don't want to increase rent, but taxes go up, maintenance, HOA dues (if applicable), etc. I think you should get some kind of increase: 2% perhaps? Or whatever is normal in your area. Not enough to scare the tenant away, but just enough to keep the ship sailing smoothly. Good luck.
@Ursula Britt I think that is a good way to go about it. Give them a little financial incentive to sign another year. Thanks for your input.
@Christopher Leon Yes I think the main thing for me is getting things taken care of 30-60 days before the end of lease term. And yes you are right about taxes and such adding to operating cost each year. Good stuff, thanks for your response.
Neal, like mentioned above, I would defiantly have a signed lease [preferably 2-3 years with automatic rent increases].
You can tell the tenants that the rent is going up "$50" per month but if they sign a 2 year lease it will only go up "$25".
Also, don't forget to always try to get the lease to end around May 1. This will make it very much easier to re-rent and not be stuck trying to rent something in the winter!
So, if you have them sign a 1 year lease starting August 1, it will really be for 20 months - expire April 30, 2016.
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