Renting to Short term tenants
Situation: Rental applicant is in town on extended business. She says at least 18 mo. She and an associate would like to apply/ sign a 12mo lease. Should I add to the monthly rate since I know she is not a long term possibility. One of my criteria is always to try and find someone who has the possibility of staying 5-10years. What are the pros and cons? Suggestions please.
Your market really dictates that, but in my opinion I would add a slight premium knowing they will only stay short term. One of my properties are across the street from a college and I always receive higher rent since I am turning it over every 3 years or so.
Yes you can. Property managers charge more for a short-term lease, so renters end up paying more in the short term. Short leases are usually more expensive for renters and that's the thing that they should consider. And if they continue to renew the short-term lease over an extended time period, they'll definitely be overpaying.
However, there is no charge for breaking the owner's lease. You should be more cautious in this. One of the perks of renting month-to-month is that that will not incur any charges if he/she need to break your lease.
The rental market is strong here right now. I'm getting a lot of calls just with a sign but for some reason, I've had a difficult time getting bites on this house at $725 when it was at $700 previously. Location is really good. I've lowered my asking price to $700 but the short term expectancy may get it back to $725 for this applicant. The interior paint is in decent shape for this next lease but I know it will need it next time around. The increase will at least buy the paint. Any other ideas are appreciated. Thanks.
It really comes down to how much she wants your place. If she is only going to be there for 12-18 months, once she moves in, she is unlikely to move before she moves from the area altogether. It's quite reasonable to ask for more for a short-term lease. My standard is 12-months with 5% increase for 6 month and 10% for month to month. This time of year, I tend to be a little more flexible on shorter term just making sure that I have them sign up long enough to get me into Spring/Summer.
I would simply tell her that you are looking for an x length lease. So less than that will be x, more a month. She will either take it or leave it. It is all market dependent.