3 year leases, your thoughts?

Question

John Thedford · Answer

No thanks. If they are a nightmare tenant you are stuck with them for three years.

Trenton Miller · Answer

I would go this route, however I would not charge an option fee.  After the first year, based on our relationship I would do another 1 year lease or go month to month.

Deanna McCormick · Answer

NOOOOOOOOOOOOO.. way,, only protects the tenants..

Shannon Slade · Answer

M2M and they can stay as long as the checks will cash!

Account Closed · Answer

1 year with a optional renewal period if tenant performs under the lease agreement  , i would charge a fee for the option or a small rent increase 3 years is way too long and gives no flexibility if you want to sell

Jon Holdman · Answer

IMHO any lease ties the landlords hands more than the tenants.  That's just the nature of the business.  If the tenants decide to leave, they will.  Even in the unlikely event that you track them down and get something, you're talking a few grand at the outside.  OTOH, if you have a bad tenant who pays the rent, you are often completely stuck.  By that I mean a tenant who moves other people in, disturbs the neighbors or the city, has unauthorized pets or otherwise behaves in an undesirable but difficult to prove way.  With a month to month lease, you can give notice the lease is being terminated.  Then, if they don't leave, you have a clear course to eviction.

Brandon Ingegneri · Answer

I would have to go back to your screening process and and history with tenants.  If your screening process has proven to be sound for you, and you have had very little issues with tenants in your investing career, I wouldn't oppose the idea.  Generally, if I am going to do a bit of a longer lease, it is with a single family property.  The mentality is generally a bit different in a positive manner for a single family tenant. What I regularly do is a one year lease that converts to a month to month following the initial year.  Another option would be to have a staggered lease.  Do a one year lease at a bit of a higher dollar amount.  After that year, there is a 2 year extension that you can approve at a bit lower rate.  This gives an incentive to promote a good tenancy. A track record has been established, and it still leave an option for extension for the tenant, but allows you an escape clause.

3 year leases, your thoughts?

Most Popular Reply