Lease vs Month to Month Idea possibly from a convention

We prefer to have lease extensions For us it’s easier to plan—no sudden vacancies What is your policy and/or ideas on this issue

We use this as an incentive We may have a $50.00 rent raise for the new lease but have a substantial increase if they go for another opiton

Present Rent: $1740.00

Alternative Lease Options:

If you prefer more flexibility:

A 6 or 9 month lease or a Month-to-Month option is available.

However, the rent would increase by $150.00 per month for either option

New Total Rent $1,890.00 per month

If they do nothing and roll into a month to month we are covered with the new higher rent In Portland we must give them the rent increase amounts 90 days before the lease ends

jatmer,

Good method.

Me? Turnover is my enemy. My lease automatically renews for another year with automatic 2.9% Cost Of Living Increase. Done without any time spent.

If they want MTM, my Early Lease Release Fee (calculated at 2x the rent)is their EARLY OUT. People leave when they want so they can pay this fee at any time and legally leave. My judge liked it, said it gave people the freedom to choose.

This even gives the folks who are waiting for a home to be built. I remind them it always takes longer than expected.

This ONE clause paid cash for my Porsche 911 in one year.

Gotta know YOUR laws and YOUR market. Locally I don't have to react every time someone mentions MTM.

Asking about MTM is kinda like asking 'Can I paint?". It's a common question.

BUT in today's economy and lifestyles, they might be keeping a back door escape plan handy. A recent prospect was worried about co-habitating with his girlfriend of one year and what happens if they break up. Non-Committal to a year of anything!

BRAD

PS

Don't be shy.

I want long term residents.

Sticking to our "year only" policy has helped build stability in our business

AND increased our income

AND reduced turnover which saves us $$$.

BRAD

I still use MTM.

If they don't want to be there I don't want them to be there. That is how problems get started, in my opinion.

I can rent a place out in the dead of winter, and I have. To me, if I make someone stay who doesn't want to I am inviting damages. Sure I can sue them. I get 8% interest on the damages while I wait. But I not only wait, I have to pay for the damages up front.

Rented to a young couple. I knew it was there first place together. They stayed maybe six months and decided to move back in with their prospective parents. I was lucky and got the place rented fast like. They took great care of it.

Imagine a young couple, just getting started, and they realize this was a mistake. Now imagine me saying they have to stay a year or pay a couple months extra to get out early. Would they be ok with staying together when it wasn't working? Would they be able to gather the extra funds to buy themselves out of the dilemma?

I guess for me the turnover is going to happen either way. Better to get it over with now and avoid the possible additional problems that could arise.

But again, I am not rich I am just comfortable. Still learning, but paying closer attention as I go along.

I think I may be an out layer. I renew the lease every year. I do this for the following reasons:

1. Everyone is on the same lease - I update the lease and change things. Someone on an old lease might not have the same terms.

2. I only allow the lease to end in March, April or May. Any other time there is a early lease termination fee because I don't want to fill a vacancy in the winter. If I start a lease in November it will renew in the spring and then go yearly after that. I find it easiest to fill vacancies in the spring.

3. I am reminded to raise the rent at lease renewal. Some do automatic rent increases but I like having the freedom to raise it as needed. Difficult tenants have higher rent raises.

4. I allow month to month leases if they don't sign a new year lease but the rent will go up 10%. I have one of those now as they plan to buy a house this year.

There isn't a right answer. It is what you are comfortable with and what works in your market. In those pro tenant states, I'd just do month to month for obvious reasons.

I will admit that I need to provide updated leases with my tenants.

Had considered doing this annually, but to be honest I just don't.