Does a lease for 6 months with an option for another at the same price favor the tenant or landlord?

Question

I am the landlord. I do not like not knowing what will happen at the end of the lease.....I would prefer a one year lease.

the tenant has to let me know 60 days before the lease expires if they wish to renew..still do not like it. hard to plan ahead!

Answer 1

The tenant and here's why:

A lease protects the tenant from having his/her rent increased and from having the owner kicking them out. It protects the landlord for guaranteeing a steady flow of income over a time period. If you give them a 6 month lease with the option of renewing it at the same terms, you are only benefiting the tenant. I wouldn't be doing this unless I am making at least 10% above rental market.

Regards

Answer 2

It always benefits the landlord, depending on the area, there is usually a tenant waiting for a place to live. As long as there is a halfway decent price for what you get. You can always run an ad in the paper 1 month before the lease expires. If the current tenants and yourself are happy with the arrangements, cancel the ad and tell any new applicants that the house was already taken. If you do a few inspections and they don't keep up the property like they should or pay rent like they agreed, its easier to not renew the lease. Again, it all depends on the laws in your state and city. But on the other hand sometimes for the leasee, they may be waiting for a house to be built, or something else prohibiting them from signing a long lease.

Answer 3

6 months with option for the tenant to renew definitely favors the tenant. On a one year lease, the tenant could move after 6 months and you would get their deposit, etc but you would still have to find another tenant. Of course you would have some money in your pocket that would help to defer the vacancy.

Answer 4

ya .. that's why most initial leases are for one year. Plus, of course, advertising for a tenant, interviewing them, doing credit and background checks, and the vacant time wile you do all this really eat into your cash flow.

if there is some good reason for them asking for 6 months, that's fine ... and you need to jack up the rent over the 6 months enough to cover your likely future cost of finding another tenant and the vacant period while you do.

So I'd be upfront about that ... and then offer a reduction in rent for the following 6 months to entice them to stay if there is any way they can.

GL

Answer 5

can see your point...so why not offer a one year lease at the end of the 2nd 6-month period. just tell them that you have changed the way you are managing your properties and are requiring a one year lease from all of your tenants.

i personally think that it would be a benefit for both you and the tenant...both of you can plan financially.

good luck

Answer 6

It benefits the tenant.