Do any of you do a 6 month lease? I have been asked by a couple of prospects about doing a six month lease. I don't think I would benefit from a 6 month lease but thought some of you might have a way you do it to make it worth doing. For example,do you do one if they will give double the sd and higher rent? Thank you for your time.

I think it depends on WHY they are asking and if it WORKS for you. Here at this time of the year I would consider a 6 month lease THEN go for a one year at the end to ensure that I'm not looking for a tenant again in the middle of winter (toughest time for us to get the rentals filled).

If it was a bit later in the year then I would not necessarily consider a 6 month lease because when it ends that's when I want people getting locked in if they aren't already.

6X6,

When we were getting out of military, we moved to a new state for my husband’s job. We intended to buy a house, but needed a place to stay for now. I offered the landlord more rent to go month to month. He wouldn’t take it. I kept offering more, almost double what he was asking. Nope.

Well, husband got the bug to build a house, that took some time. We ended up staying in that place for two years!

Biggest lesson to this story- if people are that desperate for more rentals, there are real estate opportunities galore. Monetize that!

Six months lease, charge higher rent.

They may decide to build, which might keep them in your place longer. They might decide to buy a fixer, do the reno while they stay living in your unit. ( You might remind them how wise they are to get at least a refresh done on their new house while they have your place to stay, if their move-out occurs at a slow re-rent time, or, if you are busy with other units. Even if you reduced their rate at that point. )

This could be a great niche for you to fill. As you have noted, lots of incomers from other states. And snowbirds, who might love a six months lease, even at higher rates. ( If you got a place in about five-ten years, and you’ll take beagles, my husband and I keep a place clean, have good credit, money to pay, we pick up our dog poops... We’ll pay more for a six month lease. He’ll be retirement age in a couple of years, can work remote. IT professional. Do you get good internet out by you? He’ll need to log in to work.... Did I mention we’ll pay more for a six month lease?)

My plan, living in that other state with nothing available to rent was: buy modest 3 bedroom houses, fence the yard for dogs, replace dining area window with French doors that both open. (Easy move-in, easy move-out.) Rent directly to the local power company that was renting all the available rooms in the local motel to put up incoming, highly paid employees, (IT professionals.)

I have been asked, and given an offer, but no one takes me up on it. Once I tell them rent would be higher, they don't follow through. How much higher? Determine your turnover cost and divide that by 6 months...add that on.

Turnover costs include many things such as lease signing, credit check, empty house time, time to make all the phone calls to change utilities around and pay those bills later, lock changes, advertising, etc etc.

Premium=percentage over normal rental amount. For example a 20% premium on a house that normally rents for $1,000 would then be $1200 per month.

Questions you should ask yourself:

What else is filling that need in your marketplace?

Are other short-term rentals being built?

How is your area changing? Big employers moving in/out?

Does the possibility of more frequent turnovers scare you/ bother you? Would it work with your schedule?

You have asked questions in another thread about expensing vs. depreciating. A house just purchased might be able to be rented to a less fussy short-term applicant who will move in six months. (Does someone who is looking for a place to ‘land’ care if they like the floors? Probably not.) Then the house could get a refresh, when it is easier to justify these as repairs, not restorations. And, then rent to a longer term tenant.

Unless your business model is providing short term leases, I advize against making exceptions, unless you just want to experiment with this as a concept and move toward providing short-term rentals.

Some folks here whom I trust say that to actually "make" any money you have to have someone in place for AT LEAST one year, and only THEN do you start to make money....the turn over costs for a unit are simply too high for most short term tenancies unless you charge the same amount of rent as you would for a full year, and no one will be willing to pay that much. I dunno. My turnovers are not that expensive, but then I've been doing this for 14 years and my units do not require pristine make-overs every time someone move.

My turn-overs costs are usually zero these days, Sid. That said, I don't like short-term leases because of that hassle factor: even if they keep the place pristine, I still have to find the NEXT tenant too quickly and I don't want to spend all my days vetting tenants.

That said, I just took on a short-term tenant: December - April - because it was dead of winter and she isn't even moving in until February 1st even though she paid for December and January.

We need to count our “hassle” as a cost. WMH says he doesn’t want to spend hours vetting tenants but then says his turnover cost is zero? If your time is worth $25/hr and you spend 4 hours vetting, 2 hours showing, 1 hour driving to house, 1 hour signing a lease, 1 hour changing around utilities,

Definitely need to count hassle as a cost!

If I had to deal with the mass of ‘Are you kidding me? ‘ applicants my area draws every couple of months, I would tear my hair out. Doing short term rentals in my ‘farm area’ is NOT for me. In an area with better prospects, my personality, I wouldn’t have an issue.

If I were closer to Pleasant Prairie, Wi, where Foxcon is building its massive plant, Uline is exploding, Amazon has a massive plant, I would have been all over that opportunity, two years ago.

The woman I paired with in a business entrepreneur class, back in college, in that other state I mentioned, was doing exactly that! I had proposed to her as our business plan project we do short term rentals, rented directly to the companies that were bringing in all of the workers. She told me she and her husband had recently started doing almost EXACTLY that. But, she was renting to the workers directly. She didn’t want to take it on as our class project because she didn’t want to let the idea get out to the rest of the class. (Class of adults taking entrepreneurship class, in town of 20, 000, and growing very fast. Yeah, probably smart move on her part to keep it on the down-low. )

I didn’t keep up with her after class, don’t know how well it worked in the long run. She was renting the houses furnished, spent a lot of time counting silverware, bed linens. That would have driven me bonkers. This was way back in 1990s. Long before ABB.

Just before we moved back to Wisconsin, a large apartment company announced they were going to put in a large townhouse complex. Then, a month later they quadrupled the number. So, the opportunities were there.

The number of out-of-staters coming in to Tennessee, prospects inquiring about short-term says to me, there is opportunity. But, it’s up to you, 6x6, to determine if you should be the one to open the door when opportunity knocks. Is the fire in your belly? Or, just heartburn at thinking of all of it. ( hint- if you needed to be persuaded, it’s not for you.)

6,

What is your goal? Stay with your business model - long term renters who pay and keep up the property.

I'm in this for FREEDOM!!! and a turnover interrupts my FREEDOM!!!

Plenty of apt complexes WILL take MTM.

This is one danger of MTM - no control over short timers.

*Turnover is a LL's enemy.*

And each turnover is hard wear on your property - doors scratches, halls dented. paint scuffs...

National Apt Assoc says the average turnover is $3100.

When asked we rely the lease is for a full 12 months but does include an Early Lease Termination Fee which allows them to leave at any time.

We cannot chain people to the house. They leave when they want so My lease is clear: 60 day notice and ELT (a FEE based on 2 months of rent)

We've had a few stay 4-6 months and pay us the ELT to move out. Good deal for them and we're covered by the ELT.