If an applicant just up and tells you that they are planning to rent for only a year until they buy a house or some other reason which says they will only be renting for a year , how to deny based on that?

Mike Butler--author of Land lording on Autopilot--addressed this at the Mr. LL Convention several years ago. He writes his leases for 3 years. If someone is not willing to sign on for that long, he will not rent to them.

Play the odds.

Most stay longer.

The reason I want a YEARLY lease , and not m2m, is because MI's rental market is highly seasonal, it is dead between Labor Day and Memorial day.

There are a lot of practical reasons why I don't want to sign a 3 (or even 2) year lease. Mainly because I don't want to be stuck evicting based on some clause in the lease as opposed to just raising the rent.

A family wanted to rent one of my nicest homes. I did a complete remodel a few years back. They only wanted a 1 year lease. Why? Because the husband and wife went through a foreclosure and needed time to rebuild their credit. The wife's father was selling his home and was going to move in with them. From the proceeds of the sale of the fathers home, they would have around A 50% down payment.

So what happened? The couple had a second child. Prices of homes kept on going up. They purchased a couple new cars and soon their savings was going south, not up.

I have refused people simply for that reason! I tell people, "We do one year RENEWABLE leases, assuming all goes well for us both. We don't want people moving out and in every year."

If you want to deny them based on just-one-year, then go ahead and require your tenants to sign on to a 2, 3, or 5-year lease. You'd then limit yourselves to people who can commit to 2, 3, or 5 years in the future... which limits your applicant pool... but if it's what you want, that's cool.

Otherwise, I wouldn't reject just based on their plans for themselves a year from now. No one sees the future. Buying a house has a lot of moving parts to it-- you need to find a house you like, in a place you like, that you can afford, that you can get qualified for a mortgage on. Any one of those things can go askew. People get laid off, and while the area they had been considering would have been perfect for their old job, it would be very inconvenient for their new job. People get sick or injured. People have children. People think they'll qualify for $x, but now they don't, because someone's hours changed. Parents get ill or sick. All sorts of things can push a major purchase onto the back burner, while they put their resources to coping with real life.

I had a football coach and his teacher wife rent from me for their first year in town. The football team had one of their best years in the last decade, and the school district was very happy. Things looked good, so they gave me their notice and bought a house. The next year, the football team had a terrible season, as usual... and the school district decided fired the old head coach, and hired a new one. The incoming head coach then fired all the rest of the coaches to bring in his own coaching staff. So now, they were saddled with a mortgage... and only had half their income. She stayed in town for the next school year to teach and have her baby, and he got a job elsewhere. The year after, she followed him to wherever he had set up, and I lost track of them.

I can't tell you how many tenants I have had who opt for a month-to-month lease renewal (at a higher rate) rather than extend for another year...and stay for years after that! I realize that your situation is a little different since this would be a brand new lease but I think this is just another example that no one knows what the future holds, and your new tenant who says they are only staying a year are just as likely to stay much longer. If they qualify in every other way, I would take them!

David, I don't think you can have your cake and eat it too in this situation. You want them to stay longer than a year, you must write the lease to lock them in for longer than a year.

If your lease is well-written, and unless MI laws are screwy in favor of the tenant, you should be able to evict if they are in material breach of the lease.

The only reason I have ever evicted is for non-payment of rent. The rest I simply non-renew if they get silly with me. Our processes and up-front setting of expectations handle much of the drama other LLs deal with, so it is rare that I even consider evicting a tenant for any other lease violation. I have non-renewed several, though. This can work to your advantage early on in the relationship. One time, I sent a non-renewal within 2 months of signing the lease to a real PITA. That shaped them up, and they quieted down and ended up staying almost 3 years.

If up-front expectations and/or the threat of non-renewal fails you always have the Happy Clause.

I've said this here for years. WHY would anyone want a tenant-- "guaranteed" for more than 12 months? Like fish and relatives they start to stick in 12 months.

We thought we had top dollar 2 years ago and thought -- maybe we should do 2 or 3 years? thank gosh we didn't we would have missed out on 3 hugh rent increases X's 60 SFH's.

Exactly.

First-time house buyers are full of drama, from inspections that fail to closings that get delayed to contractors who don't show up to perform work, etc.

I would not give any credence to a W2 from a former jo. They can be too easily faked.

I would rent to them if they qualify otherwise. They may stay longer.

When we rent to students we expect it to be only a year. But we just had a three year move out. Probably about 50/50 whether they stay longer than a year.

David,

How are you advertising your rentals: year lease or some other period? To reduce issues lke this in the future, I recommend that if you only want people for more than 1 year, advertise that way. Otherwise they will assume you are okay with the "standard" rental period of 1 year.

Sid, you are conflating "minimum lease period" with "time tenant ends up staying at house"

My leases are one year at a time. A tenant could stay five years, but each time the renewal would only for the next year.

David MI just had an irate tenant call-- "Why is my lease 14 months'? My lease has wording 12 month minimum? We do that so we can adjust vacancies and don't have 15 in one month-- we also don't want any due June- Nov or Dec our vacation and family time.

So after her yelling for 4 minutes I read the paragraph to her and said-- well you could always do the ELT para 29? She yells "I guess I should have read the lease better" ..... YA think! That's not my problem. She then proceeds to tell me how she's not paying me any more money. ALL this over air conditioning. She refuses to leave air on while at work. She doesn't know why it takes 5 hours to cool the house back down after 100 degree days.... The air just keeps running she says..... we'll yea-- if you would just twerk it some and leave it ON!!!!