My tenant asked if he could possibly move out before lease is up

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My tenant asked if he could possibly move out before lease is up

Mark Berge
Rental Property Investor · NJ · Member since 2020 · 60 posts · 16 votes

Hi all, my model tenant who pays on time and takes care of the house asked if he could possibly move out before the lease is up. He said he may buy a house or move in with his girlfriend. He's been there for a few years with his father who just passed away so he said now the house is too big for him.

The lease started on 8/1/2022 and ends on 7/31/2023. It is a good 3 bd/ 2 bath with new roof and new gas boiler and new electric water heater. He said he might want to move out 6/1/2023 to buy a house or move in with his girlfriend. I said ok, just make sure you don't move out in the winter when it will be hard for me to rent the house out. He said ok. The way the housing market is here in New Jersey, I know that I could probably raise the rent maybe 3-4% and easily get a good tenant in there. Any advice on this? This is my first and only rental property although I do rent out a extra bedroom in my house to room mates.

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Jevon Shaw
Investor · DFW, TX · Member since 2022 · 198 posts · 161 votes
3y

Real estate is a people business, and there's really negligible harm in letting him move out a month early after being there for years. As the previous post stated, the key will be getting something solid and certain agreed upon by both of you, maybe even in writing.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3y

    @Mark Berge

    If it works for both of you then do it. You win by renting during prime season and get a rent bump and he gets to move on. Just be specific that it’s not a “i may”, he either is or is not that way you Can begging advertising it for rent and get it leased to avoid vacancy

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  • Jevon Shaw
    Investor · DFW, TX · Member since 2022 · 198 posts · 161 votes
    3y

    Real estate is a people business, and there's really negligible harm in letting him move out a month early after being there for years. As the previous post stated, the key will be getting something solid and certain agreed upon by both of you, maybe even in writing.

    2Reply
  • Hamp Lee IIIPro Member
    Real Estate Agent · San Antonio, TX · Member since 2019 · 1k+ posts · 832 votes
    3y

    I agree with @Chris Seveney.

    As @Jevon Shaw said, real estate is a people business.

    My father passed away in 2018 and I wanted to stop everything I was doing. I'm active duty Air Force and wanted to retire immediately. Priorities shift quickly. 

    Since he's been a great tenant, one month will not hurt in the long run and you have enough time to prepare for his department during a great time of the year.

    I believe when you take care of others, others will take care of you. It'll come back to you in ways you can't imagine.

    I wish you all the best!

    2Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    3y

    Tell him to give you at least 30 days' notice and put it in writing.

    1Reply
  • Joseph Guzzardi Jr
    Rental Property Investor · Member since 2019 · 411 posts · 148 votes
    3y

    @Mark Berge I've worked out an agreement with my tenant in the past with a similar scenario. It worked out for me because I was able to bring the unit to market rent (increase of 250/mo) and was able to help him out by going into the next chapter of his family's life. I made him ensure the unit was left in great condition (and it was). Maybe I got lucky, but if you treat the tenant right he may be a future referral for tenants, clients etc.. in the future

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  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    It's your call, I would put a clause having a new lease in place before moving the current tenant out.

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  • Josh YoungPro Member
    Rental Property Investor / REALTOR® / Property Manager · Gilbert, AZ · Member since 2023 · 384 posts · 421 votes
    3y
    Quote from @Mark Berge:

    Hi all, my model tenant who pays on time and takes care of the house asked if he could possibly move out before the lease is up. He said he may buy a house or move in with his girlfriend. He's been there for a few years with his father who just passed away so he said now the house is too big for him.

    The lease started on 8/1/2022 and ends on 7/31/2023. It is a good 3 bd/ 2 bath with new roof and new gas boiler and new electric water heater. He said he might want to move out 6/1/2023 to buy a house or move in with his girlfriend. I said ok, just make sure you don't move out in the winter when it will be hard for me to rent the house out. He said ok. The way the housing market is here in New Jersey, I know that I could probably raise the rent maybe 3-4% and easily get a good tenant in there. Any advice on this? This is my first and only rental property although I do rent out an extra bedroom in my house to room mates.

    My advice would be to get the new end date in writing so you can start marketing the property before he moves out, this will reduce your vacancy, especially if major repairs are not needed. In my leases I put in an early termination clause, this makes it clear that the tenant can do this, but it requires a 60 day written notice and a 2 month penalty if they decide to terminate the lease early.  I have one tenant who is on her third year and she anticipated buying a house this year, so at the beginning of the term she asked if she could go month to month, I didn’t want to do that, so I offered to reduce the early termination penalty to a 1 month penalty but still required the 60 day written notice. She saw this as a win for her and if she terminates the lease early I have plenty of time to market the property and I make more than I would have otherwise, this extra income helps protect me against any seasonality risk too.
    [email protected]802-274-8121
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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y

    Make sure you can show the place before he actually leaves. That way hopefully you don't lose any rent.

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  • Richard F.
    Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
    3y
    Aloha,

    I would have no problem working with the long term tenant, however I would not try to pin him down on a specific ending date. I would instead advise him that his rent will simply be pro-rated to the last day of occupancy, and the property needs to be left broom clean, with no rubbish at the curb, and all keys/remotes turned in. Just keep me in the loop on progress of the move process. In particular if he decides to buy a home, it is not prudent to rely on a specific closing date. Things Happen. Wait until it is actually vacant, and you have had the opportunity to thoroughly assess what needs repair or updating. I never commit to a new tenant before a property is actually vacant, too much opportunity for unnecessary drama.

    I do also make it clear with tenants at move in, and at interim inspections when long term plans are discussed, and also when tenants are struggling financially, that I am happy to work with them regarding moving out as long as they have a specific goal in a reasonable time frame, such as buying a new home, going away to school, transferring with their job, getting married, etc. But, I do not allow month-to-month just because they want it. My goal is always to place a tenant that plans to remain for multiple years.
    1Reply
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