Most of my tenant leases end at the same time....am I in trouble?

Question

I try to make sure my leases end during peak seasons to guarantee a good pool of candidates in case my current tenant doesn't renew, or I decide not to renew their lease. I now have a good number of leases ending the same month though.

Do other landlords use this tactic and just spread them out more?

Mindy Jensen · Answer

@Victor Olowuwhen signing new leases, you can always make them shorter term, like 6 months or longer term, like 13 months, to give you a bit of stagger.

Brie Schmidt · Answer

I like all my leases to end at once.  I self manage a small part of my portfolio, so the most I had in one year was 4 tenants turn over.  So I have one crazy month, but then I'm done till next year.  I don't have to worry about not taking trips to be here to lease them out.

Pam Storm · Answer

It can happen...best way to get ahead of it is do more market research in advance.  You can probably get a good feel for market conditions and whether you are in a bit of a pinch.  This happened to me once (I have a small portfolio) and my rentals had been long-term so I was uncomfortable.  Did the research and realized the market was strong, everything rented just fine. If your research shows the market is weak, do more work to attract strong candidates proactively.

Sarah Ziehr · Answer

I think it depends where the property is located, and as Brie points out, how much of your time you wish to devote to this.

Depending on what part of Chicago your property is located in, you may be able to rent your property in 1 day, or it might take 45 days. The busiest time of the year is April -October, however having worked in leasing full time I can tell you that people move to Chicago 365 days per year. If your property is located near a school then keep in mind most students move during break. If your property is in the near north area then I don't think it matters what time of year you put the property up.

Victor Olowu · Answer

@Pam Storm@Mike Makkar

The Chicago market is pretty strong, at least in my neighborhoods.  I just wanted to crystalize my strategy as I acquire more units whether or not to spread the lease end dates out more.  When you only have 7 units like I do, 2 or 3 leases ending at a time is a huge percentage of your income.  I think I should stagger them throughout the warmer months more.

Patrick L. · Answer

Just because a lease ends doesn't mean the tenants are going to move out unless you're doing something like student housing.  Looking at the last 30 properties I've bought and rehabbed (2012-2015), 26 still have the original tenants I placed, 3 are on the second set, and 1 is on the 3rd (and I don't think they're ever planning on moving).

Mike S. · Answer

I have the potential to have leases end at the same time, but the reality has been they have not ended in the same year.  All my tenants so far have renewed at least one additional year or more.

Mike Makkar · Answer

@Victor Olowu, I stagger my lease starts across all of the months a year, except Mid-September (school starting) and first of December (right before the holidays). The primary reason being time. Leasing out a property takes time. Usually it takes me a good 1-2 weeks to find a good tenant; make-ready, advertising, fielding calls, showing the house, tenant screening, drafting lease agreements, ACH setup etc. By staggering at most two leases per month, landlording doesn't become a full-time job. I also try to maintain an equal number of long-term (2+ year) leases as well to control this. My portfolio is still under two dozen units.

In my rental market, peak markets matter less as there is enough demand besides of course the aforementioned September/December months.

But good question and thread. I'm curious to hear opinions from other landlords

Jeff B. · Answer

It's hard to control, unless your market is student housing and then that's the market you signed up for.  I use a 3-month lease and hold over with m/m, so it's rare to get two or more at the same time (with only 6-units).  As the number of units go up, so does the chance of concurrent vacancies.  Shouldn't be a risk, just a lower profit that month.

Missy H. · Answer

I do not specifically plan my leases to end at the same time.  Then again, I don't force my tenants to stay.  If they leave early and want to break the lease, as long as they give me notice, I will let them out of the lease and re-rent the unit.

My tenants have been long term although one is leaving in a few days.  If I had several ending their lease at the same time, I would be hard pressed to do a quick turn around on all of the units to get them rent ready.

Most of my tenant leases end at the same time....am I in trouble?

Most Popular Reply