Investor · Stevenson Ranch, CA · Member since 2015 · 21 posts · 4 votes
After a year-long lease, my tenants are asking to continue on a month-to-month basis. I offered a year long lease renewal at the same rate, which they declined. Should I charge a premium on the rent for them to go M2M? My unit had some repairs during the past year that took longer than the tenants wanted, so they are asking to continue M2M at the same rental rate. And if they are looking to leave, how concerned should I be that it's only 4 months away from the holidays when its harder to find tenants?
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
11y
Sounds like they are planning to move but haven't started the process yet. Maybe they won't and you will be fine. But maybe they will and you will be stuck with a winter vacancy. I get why some swear by the m2m lease but here in philly with our winters the way they are I always go yearly and end in June July or August. If i were you I'd stick to your plan and if they do too, give them proper notice and look for a new tenant while it's still hot out.
Investor · Chattanooga, TN · Member since 2012 · 227 posts · 114 votes
11y
I would offer them the one year leae as you have but also a premiem for a m2m of about 10-15% higher. Also inquire why, whats stopping them for committing and if they are planning on a short term (life happens) see if they will allow you to pre-market the house - good luck
Investor · Stevenson Ranch, CA · Member since 2015 · 21 posts · 4 votes
11y
Thanks for the advice! In the beginning, they were so excited to move in. They loved the area/neighborhood, and even wrote me a letter asking me to rent to them. I think the various repairs and the time it took to fix them in the past year has put a bad taste in their mouth. On the flip side, they always pay their rent on time, and according to my management company, they take care of the unit.
So, I'm thinking about compromising with them a little. Offer a 6 month lease at the same rate OR a 12 month lease with a discounted rate for the first couple months. I think it gives them a win. They feel like they've been heard and compensated. The marketing fee I would have to pay manifests itself in a couple months of discounted rent instead, and either way, I wouldn't have a vacancy to worry about during the holidays.
If they don't like either option, they have the third option to move out at the end of August, and I begin looking for a tenant immediately.