Updated about 6 years ago on . Most recent reply
Student rental 10 months lease issues
Hello biggerpockets, I have had this $300 a month cash flowing student rental since last August. Great tenants! The problem is all three co-signing parents insisted on a 10 months lease. I was pressed to go ahead, since it was the tail ending of July. My question is the lease ends in May, I believe 2 of them have indicated they want to renew their lease in August i.e. after two months. That means I will have vacancies for two months totaling $2,600.00 in mortgage payments etc. Does any one have any experience / suggestions on how to navigate this profitably and what to do going forward? Airbnb may be an option ( I will double check the rules in the subdivision ) Any useful suggestions are welcome and thanks for your contributions.
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I sell the 12-month lease; I'm an investor as well as a Broker and I have found that planting a few ideas about what opportunities might exist for those who remain over the summer usually overcomes the issue. I point out that most of my student tenants actually stay the summer for jobs/internships and even to attend the accelerated summer session. And, it's not unusual for those who do return home to discover that a nice long visit is better than too long of a stay. I also suggest that I would be open to them subletting their unit to a student attending summer session with my advance permission. Why pack everything up and haul the furniture off when it's just to be repeated in two months or less? Another option - but I've never done it - would be to reduce the rent over those two months. I would rather do that than reduce the lease term.
AirBnb is an option as long as the unit is furnished nicely and all the towels, sheets, kitchen ware available. That's usually not the case with student rentals.
Hope this helps with a few options for convincing parents that there is more upside in having the lease in place than not.