I would only renew if it allowed me to exit at a favorable time in the year. If they want to end lease in December I wouldn't be interested. This is also far more valuable to me than any marginal increase in rent.
You don't have to renew it, only do so if it is a mutual win.
Thanks you guys for feedback
Colleen, how much you would recommend for monetary value of increase for 6 month lease if I am charging $1800 per year
@Rashad A. I've charged an increased monthly rent for short-term leases. It really depends on the strength of your market, timing, and other factors.
I had someone that wanted a month-to-month rental in August. The danger for me is that they would move out in November or December, which are notoriously difficult times to find new tenants. I told the applicant that I would only rent month-to-month with for a significant increase and they accepted it.
The unit normally rented for $1,400. I charged a 25% increase ($350) for a total rate of $1,750. They stayed for six months so I earned an extra $2,100 during that period!
If they had left after two months, I would have earned an extra $700 which is half a month's rent. The tenant would have to give 30 Days Notice so I would have 30 days to find a new tenant before they left and another two weeks on top of that before I ran out of the extra money.
I hope that makes sense and can be of some use to you.
Now, if it were January and they wanted to rent for six months, I would not typically charge extra for that because I have no problem finding a new 12-month renter during the summer months.
It's all about considering your risk and then finding a creative way to mitigate that risk.
It will make no difference how long the term of your lease is they will leave when they are ready to go. If they are forced to break the lease they will give you no heads up, or minimal.
Put them on M2M and make sure you make them understand they are to stay in contact and give you maximum lead time on when they are leaving. This should result in you being able to find a replacement tenant without a vacancy.
By doing them a favour they will be more inclined to work favourably with you.
Well noted. Thank you all. I will keep same rates for the next 6 month considering the fact of summer being relatively easy to find new tenants.
Another question around lease extension template for Texas, and if anyone can help to locate the document