Request for Month to Month lease from tenants

[Chad Bailey]

Hey All!

We currently have a set of great tenants in our rental house which have been renting for the past 8 months. They have great credit, always pay on time and in full, and require very little from us as landlords to maintain the property. 

Their lease ends June 30th, and they are requesting to go month to month until November 1st, as his job may or may not require him to be in Houston past November. This would potentially put us leasing the property in the winter which is less than ideal, however, we also have concerns about showing the property and re-renting with the current coronavirus and are we are welcoming a new kiddo to the family in late June as well (lots going on!!). 

We see three options but would like input on what you might do in the situation. Current rent is $1650/mo. Property is probably a Class B SFR.

1. They renew for a full year at a slightly lower rent but would require 60 days notice, an early termination fee of one months rent, and forfeiture of security deposit (One months rent) 

2. They renew for a 6 month term at same rent - but then we are trying to get new tenants in middle of winter 

3. We go month to month at higher price (looking for input on how much higher we should go month to month)

Thanks!!

[Chris London]

There is an elastic period for renting and it is April 1st through August.

Let them know now that you will only do another 1-year lease and would like an answer 60 days in advance of the lease end date. This means that by April 30th you will either have a 1-year lease signed with them or you will put the property up for rent on April 30th and hopefully have a new leased signed well in advance of your late June due date.

Virtual showings are how leasing is being done now, while some properties are taking a little longer to rent and we are slightly dropping some prices, many properties are still getting multiple applications (sight unseen) at full price.

Finally, I'd say close to 25%+ of my tenants ask for a month to month option at the end of their 1-year lease because it is the best option for them. It is not, however, the best option for me (or my client/owners) based on my 1st statement above.