Any common strategies to convert m2m to long term tenants?
Hello everyone,
I'm in the process of closing escrow on a fourplex and a triplex. All tenants are currently on a month-to-month. I already have 10 tenants on my existing investments and they all started with a one-year lease.
The fourplex has 3 tenants paying $450 each and there is a vacant unit.
The triplex has 2 tenants and they're paying $600 each and there is a vacant unit.
I would like to convert all these 5 new tenants to at least a one year lease and I'm looking for advise.
A little more background about my overall plan:
My overall plan is to increase my rental income by at least $3,000/month ($36,000/year) for five years.
Once these new investments(fourplex & tripex) are fully occupied they will be bringing in $3,600/month, which is $600 more than my target of $3,000/month.
I was thinking about lowering the rent by $20/month to entice these new tenants to sign a one-year lease. If I do this, I'll be bringing in $3,460/month when fully occupied, which is still $460 over my target.
Are there any general rules/formulas to apply to the rent amount when going from month-to-month to either six months or a one year lease?