Concerns with Purchasing a Rental with a Lease to Start in Winter
I am almost ready to make an offer on my second rental property. Based on where we are in the year, the rental lease would start Dec 1st realistically. All of the numbers are strong and the property fits perfect with my strategy. The property is in Canton in Baltimore, Maryland (for any locals that may be familiar) and will attract young professionals, not necessarily families. So, my only concern with purchasing this property is the timing of the lease. I had originally wanted all of my properties to have leases starting in spring or summer. I could offer a shorter term lease for more money (6 or 9 months) to reset the lease cadence at some point in the future to mitigate the risk. Any advice is appreciated!
You could offer an 18 month lease.
if all your leases end at the same time it means probably you will be repainting and fixing all houses at the same time, plus all your sources of income can stop at the same time
what it the reason to align all of them at the same time?
people with children tend to move during the summer to avoid changing schools in the middle of the year
I assume your concern is it would be harder to find a new tenant if the lease renews in Dec. However I would think someone would be less likely to leave in Dec also.
The truth is there are trade offs and there is likely no perfect answer. Even if you were to come up with statistically the best answer, with only two properties your results are going to be so random that it will not make a difference.
#2 General Landlording & Rental Properties Contributor
Tens of thousands of tenants move every month of the year. There are certain times that may be slower but the time of year really makes very little difference when looking for only one out of thousands.
make your house nice, tenants will come. They are around at all times. Your fears are not justified.
Or just offer a M2M rental agreement from the start. All I used were M2M agreements and I liked using them. Only a couple times did someone move in and move out quickly, using us basically as a hotel. But, I liked having the ability to change rules with 30 days notice if necessary, or get rid of problem tenants easily. And really, a lease only gives power to the tenant who gets to hold you to a lease, but a tenant can break one usually without too much consequence.
I also agree that having all of your leases terminate at the same time could be a hassle.
If you like the idea of doing the 6 month lease for more money, that would work, too. Or not even for more money. Just do a 6 month lease that turns into M2M after that, to hopefully, get you through the winter anyway.
Lots of options lol. I like M2M from the get go, though, personally.
U should have made the offer already!
I wouldn't worry about it. People move all the time. It may be a little harder, but like someone said above, no one likes to leave in winter either. I've rented a house out in December before. I didn't really seem to get less interest. I still got 100 calls and a bunch of weird questions.
If your target market is young professionals, you should have less to worry.
Use craiglist, zillow rent manager, zumper etc, and worst case, list it on the mls. As long as your unit is nice, the rent is fair and you are close to public transportation, you should have very little issues.
Thanks everyone for your advice! I guess it is just as easy to be over-cautious about every detail when you are just starting out. You all have made very valid points. Offer is in!
I'm using an M2M lease for the same reason. Will start in October and tenant is aware that I will offer a 1 year in the spring/summer.