Only Offering Two Year Leases

[Jordan L.]

Hi BP! I’m considering switching my 3 SFR rentals over to strictly 2 year leases as turnover costs are cutting dramatically into my returns. So far I’ve yet to have any tenant stay longer than one year. All 3 properties are in the southeast and are 3 and 4 bedroom homes in good areas. Do you use two year leases? Do you find it difficult to find tenants if you don’t offer a 1 year lease? Thank you in advance! Jordan

[Bob B.]

I only offer 2-year leases to new tenants.  I have a rental increase in the second year and offer an annual lease thereafter and it's never had been a problem.  This lets them know upfront to expect annual increases.