How long should a 1st rental contract be?

Question

Hi, I am about to rent my 1st property and my tenant wants a 2 yr contract, but I was thinking to do a 1yr. Would you suggest going with a 2 year contract with a new tenant?

Julie Hartman · Answer

I think some of it depends on your market. Here, a longer contract prohibits rent increases and we've had rent consistently increasing for the past decade. Some of our owners like 2-3 year lease terms and others like 12 months so they can do rent bumps every year. With the eviction moratorium, we are encouraging our owners to do shorter terms until we get through this thing. Like @John Underwood said, if someone is well qualified and seems low risk for taking advantage, then a 24 month lease is a good move.

John Underwood · Answer

I would have no problem giving a qualified tenant a 2 year lease if they asked for it. Ultimately you want them to stay for a long time anyway as long as they take care of your property and pay the rent on time.

Have a strong lease. Make sure it says they have to keep the house clean and tidy. If they break your rules you can still evict for lease violations.

Adam Martin · Answer

I used to strongly prefer longer contracts thinking it would lock a renter in for a longer time but as time went on I realized I’m the only one really locked in.  I stick with 1 year and go m2m from there now that way if either of us want to end the relationship we can.  That said I do ask up front how long people would like the contract to last and give preference to those who want to stretch it out but they still get a year up front.  I have denied applicants before who only needed a year and had plans on moving out of state, turnover is a killer.  I have also considered during COVID if I have a vacancy screening for a year but signing for a m2m with a rate lock since you can evict still for holdover in ky but not non payment for now.