Rent paid up for 6 months?

3 Replies

I have a prospective tenant who says they are building a home and would like to pay me 6 months rent up front.

I have heard (through BP podcasts) that I should be cautious about doing so.  

If he is building a home, I could see how he would want to only go for 6 months...but, that means I have turning costs again in 6 months, so provided his credit and references check out...I may do it.  But I would think he would have to pay a premium for that privilege...was thinking 2 months extra rent.  

Any ideas, thoughts, caveats, straight up warnings? 

Thanks, 
Mike

Originally posted by @Mike Provencher :

I have a prospective tenant who says they are building a home and would like to pay me 6 months rent up front.

I have heard (through BP podcasts) that I should be cautious about doing so.  

If he is building a home, I could see how he would want to only go for 6 months...but, that means I have turning costs again in 6 months, so provided his credit and references check out...I may do it.  But I would think he would have to pay a premium for that privilege...was thinking 2 months extra rent.  

Any ideas, thoughts, caveats, straight up warnings? 

Thanks, 
Mike

You can check with his builder easily enough to see when they project completion and that in fact it is as portrayed. I'd give the prospective tenant a choice, 1. one month longer than projected completion and they must vacate on that date because you will be finding a new tenant 30 days before they leave or 2. two month's extra and if there are delays for any reason you will allow them to remain until the house has a certificate of occupancy.

 

Hmm, I could see how it could become a little iffy. If he’s building a home and it’s not done in those 6 months, will he want to extend? if he does, how much longer? I don’t think many people do 6 month leases anymore, usually around 9-12 months. 

If his house is done before those 6 months, is he going to want his money back and leave early? I would come up with a lease agreement that determines what you want from him.