6 month (by 6x6 [TN]) Jan 20, 2019 8:08 AM|
6 month (by Alan [CA]) Jan 20, 2019 8:15 AM
6 month (by 6x6 [TN]) Jan 20, 2019 8:21 AM
6 month (by cjl [NY]) Jan 20, 2019 8:25 AM
6 month (by 6x6 [TN]) Jan 20, 2019 8:39 AM
6 month (by myob [GA]) Jan 20, 2019 8:51 AM
6 month (by Jason [VA]) Jan 20, 2019 9:02 AM
6 month (by rentON [PA]) Jan 20, 2019 9:03 AM
6 month (by 6x6 [TN]) Jan 20, 2019 9:07 AM
6 month (by Busy [WI]) Jan 20, 2019 9:23 AM
6 month (by razorback_tim [AR]) Jan 20, 2019 9:41 AM
6 month (by Hoosier [IN]) Jan 20, 2019 11:00 AM
6 month (by Jason [VA]) Jan 20, 2019 11:05 AM
6 month (by 6x6 [TN]) Jan 20, 2019 1:54 PM
6 month (by Shelby [IA]) Jan 20, 2019 1:59 PM
6 month (by 6x6 [TN]) Jan 20, 2019 2:35 PM
6 month (by Homer [TX]) Jan 20, 2019 3:13 PM
6 month (by 6x6 [TN]) Jan 20, 2019 3:38 PM
6 month (by Busy [WI]) Jan 20, 2019 6:40 PM
6 month (by S i d [MO]) Jan 21, 2019 5:25 AM
6 month (by WMH [NC]) Jan 21, 2019 6:38 AM
6 month (by Hoosier [IN]) Jan 21, 2019 7:04 AM
6 month (by Busy [WI]) Jan 21, 2019 9:21 AM
6 month (by WMH [NC]) Jan 21, 2019 9:44 AM
6 month (by 6x6 [TN]) Jan 21, 2019 9:49 AM
6 month (by Busy [WI]) Jan 21, 2019 7:30 PM
6 month (by 6x6 [TN]) Jan 22, 2019 7:51 AM
6 month (by BRAD 20,000 [IN]) Jan 23, 2019 11:28 PM
6 month (by 6x6 [TN]) Jan 24, 2019 8:44 AM
6 month (by RentsDue [MA]) Jan 24, 2019 12:13 PM
6 month (by 6x6 [TN]) Jan 24, 2019 12:57 PM
6 month (by Busy [WI]) Jan 24, 2019 1:43 PM
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6 month (by 6x6 [TN]) Posted on: Jan 20, 2019 8:08 AM
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.
6 month (by Alan [CA]) Posted on: Jan 20, 2019 8:15 AM
Yep...been doing those for years. 6 month lease, then month to month. --73.158.xxx.xxx
6 month (by 6x6 [TN]) Posted on: Jan 20, 2019 8:21 AM
Thank you Alan for your response. Do you ask for more sd or rent? --73.120.xx.xxx
6 month (by cjl [NY]) Posted on: Jan 20, 2019 8:25 AM
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.
So why are they asking for the 6 month leases and what do they intend to do after the 6 months (leave or stay)? --69.201.xx.xxx
6 month (by 6x6 [TN]) Posted on: Jan 20, 2019 8:39 AM
One of the two prospects was relocating for a new job with the county and her intent was to look for a house to buy but needed a place to stay in the mean time. It is hard to say how that would end up but she definitely seemed like the home owner type. The other prospect I am not sure of her reason and did not meet in person. I am sure they have both found something else by now,so I was asking for future reference in case I get asked again.Thank you for replying. --73.120.xx.xxx
6 month (by myob [GA]) Posted on: Jan 20, 2019 8:51 AM
No never have. We expect turning a property to last 12 months minimum. 6 months to much stress. --99.103.xxx.xxx
6 month (by Jason [VA]) Posted on: Jan 20, 2019 9:02 AM
I’ll only consider it if it doesn’t put me with a winter vacancy. I charge no less than an additional 20% premium for short term tenancies. --73.177.xxx.xx
6 month (by rentON [PA]) Posted on: Jan 20, 2019 9:03 AM
If we have multiple units available we will do a 6 month lease and charge a premium for a shorter term. --67.165.xx.xx
6 month (by 6x6 [TN]) Posted on: Jan 20, 2019 9:07 AM
Thank you all for your responses. What do you mean by charging a premium? --73.120.xx.xxx
6 month (by Busy [WI]) Posted on: Jan 20, 2019 9:23 AM
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.)
You might be facing a good opportunity like I was. Your applicants are telling you this. Geez, now I want to partner with you on this! (Husband will never go for that, lol!) --70.92.xxx.xxx
6 month (by razorback_tim [AR]) Posted on: Jan 20, 2019 9:41 AM
I only do 12-month or longer leases. If someone asks about doing a shorter lease, I explain to them that we don't do shorter leases because of the expense of turnover, but we do offer a buy-out where they can terminate the lease on good terms at any time. This is the ELT Fee you will read about often on this site. --70.178.x.xx
6 month (by Hoosier [IN]) Posted on: Jan 20, 2019 11:00 AM
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.
I had someone ask me for a 3 month lease once and I told them yes, the rent would be double. This was a professional intern that wanted a place to rent for summer. They declined. --99.92.xxx.xxx
6 month (by Jason [VA]) Posted on: Jan 20, 2019 11:05 AM
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.
That will give you enough to cover a one moth vacancy plus $200. --73.177.xxx.xx
6 month (by 6x6 [TN]) Posted on: Jan 20, 2019 1:54 PM
Thank you all for your responses and input. I actually told the lady looking to buy a house that I did have a way for her to get out of lease early and told her about the ELT fee of two months extra rent but she never called back. Thank you Busy for the story and the great insight as I will keep this in mind. Thank you Jason for clarifying. --73.120.xx.xxx
6 month (by Shelby [IA]) Posted on: Jan 20, 2019 1:59 PM
My husband is trying to find a place to rent for his job in New Mexico and one place I found listed on Craigslist was a $200 difference doing a 6 month lease verses a year lease. --173.26.xx.xxx
6 month (by 6x6 [TN]) Posted on: Jan 20, 2019 2:35 PM
Thank you Shelby for the information. I hope your husband finds a place to rent. --73.120.xx.xxx
6 month (by Homer [TX]) Posted on: Jan 20, 2019 3:13 PM
In 16 years, I have only done two. Charged an additional $250 a month. Not really worth my thine though. Who wants another same vacancy in 6 months? Got to do everything again. Ugh. --75.141.xxx.xxx
6 month (by 6x6 [TN]) Posted on: Jan 20, 2019 3:38 PM
Thank you Homer for your reply. --73.120.xx.xxx
6 month (by Busy [WI]) Posted on: Jan 20, 2019 6:40 PM
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.
FYI- I ONLY do MTM. But, only have longer term tenants so far. (And only want longer term. Nobody wants to short-term in my area, unless they are drug dealer. ) I do NOT advertise that I only do MTM, that subject comes up when I offer application. So, I am biased. As are we all. --70.92.xxx.xxx
6 month (by S i d [MO]) Posted on: Jan 21, 2019 5:25 AM
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.
I would never do a short-term lease on a "nice" home that would require several thousand $$$ to re-prep it for the next tenant. Plus vacancy, showings, etc. The hassle factor of a turnover is something you learn to hate in this business. --173.20.xxx.xxx
6 month (by WMH [NC]) Posted on: Jan 21, 2019 6:38 AM
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.
I would NOT take a short-term tenant at any other time of year without getting a large premium on top of regular rent. --50.82.xxx.xx
6 month (by Hoosier [IN]) Posted on: Jan 21, 2019 7:04 AM
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,
And changing locks, 1 hour sending out the security deposit check, then your turnover cost is 10 hours x $25 = $225 --99.92.xxx.xxx
6 month (by Busy [WI]) Posted on: Jan 21, 2019 9:21 AM
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 month (by WMH [NC]) Posted on: Jan 21, 2019 9:44 AM
I was referring to SID's message about turnovers costs, which I took to mean rehabbing and refurbishing between tenants. I just don't think it's true you only make money on long-term tenants. --50.82.xxx.xx
6 month (by 6x6 [TN]) Posted on: Jan 21, 2019 9:49 AM
Thank you all for your responses. I have also thought I would not make money doing a short term especially with my lack of experience getting tenants. I love your insight Busy,however at this point it would require too much time for me as it already is,but I still keep it in the back of my head which is why I asked the question. --73.120.xx.xxx
6 month (by Busy [WI]) Posted on: Jan 21, 2019 7:30 PM
Nothing wrong with asking questions. Gets us all thinking. And, many lurkers reading this forum also benefit from questions. Keep ‘em coming! --70.92.xxx.xxx
6 month (by 6x6 [TN]) Posted on: Jan 22, 2019 7:51 AM
Thank you Busy. --73.120.xx.xxx
6 month (by BRAD 20,000 [IN]) Posted on: Jan 23, 2019 11:28 PM
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.
6 month (by 6x6 [TN]) Posted on: Jan 24, 2019 8:44 AM
Thank you Brad. --73.120.xx.xxx
6 month (by RentsDue [MA]) Posted on: Jan 24, 2019 12:13 PM
Am I the only one left who likes MTM? My tenants all stay long term . The only ones who are short term are the ones I booted out. --71.10.xxx.xxx
6 month (by 6x6 [TN]) Posted on: Jan 24, 2019 12:57 PM
Thank you for your input RentsDue. I just spoke with a prospect who said she has lived where she does now for four years and said she doen't even have a lease or damage deposit. She said she is moving because the owner is selling,so I drove by and there is a for sale sign there. I got her current address during prescreening. --73.120.xx.xxx
6 month (by Busy [WI]) Posted on: Jan 24, 2019 1:43 PM
RentsDue- MTM for me. Long-term tenants like you. Well, I haven’t been doing this all that many years, but I don’t foresee a need to change in my area. --70.92.xxx.xxx
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