how long should I hold a property?

7 Replies

I am a new landlord - i bought the house next door and am in the process of renting it. I've had a couple fill out an application and i have done a background check and verified information. As far as I am concerned they are 'approved'. But they just informed me that they just signed a 60 day lease on their apartment and will be out of their lease the end of May. Previously they said they would be finished with their lease May 6.

What I think happened was that they messed up and did not give their 60 day notice that they were not going to resign a lease with the apartment building they are in (?).

Anyway - I have not sent them an approval letter yet because I don't know what to do.  Can you hold a property that long? and is it really a good idea to do that? and what would be a suggestion for how to deal with that?

I just don't know how to handle this.  This is an investment property for us (we are in our 60s) and it is right next door.  I have it listed on zillow and do have other inquiries.  sooooo :-)

If you are holding the property for them for any amount of time, before they move in, they are getting the same benefits as if they were moving in during that time period.  They're just not living there during that time period.

If they're not paying rent until they move in, they're getting the property for free...and you're losing money.

Either charge them rent during those months before they move in, or keep their names on file, and tell them to call you when they're ready to sign a lease...and start paying rent.  Until then, the house is still on the market.

In other words, don't let a tenant tie up a house, unless they pay for the right to do so.

Think of it this way , you make reservations for dinner for 6 pm . Will the restaurant keep that table open till 7 pm if you are running late ?    

NO!

You would essentially throw away two months of rent and utilities to hold it for them? That makes no sense unless they are the world's greatest tenants and you'll make up for it down the road.

My policy is very clear: I will hold a rental vacant for no more than two weeks. If they need to wait two months before they move in then they will have to pay rent early or find another rental.

The only time I will deviate is if they are absolutely perfect applicants and I am desperate for a renter.

I would not, I would give them the option pay the rent for the month it is being held. If they are willing to do so then so be it, if not move on and find someone else qualified if you are getting a stream of applications. There is no sense to eat the money on YOUR investment. 

Completely agree with @Nathan G. - two week holds are a good standard to maintain. 

Another strategy to consider might be increasing the monthly rent if you elect to hold the unit vacant for a longer period. For example, your initial asking rent is $1,000 with a lease date two weeks from today. If you find the 'perfect' tenants who want to move-in 30 days from today, then ask for $1,050/month. If delivered/communicated properly, the tenants will understand and you'll increase your lease rent basis for years to come.