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zlium

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Posts: 17
Reply with quote  #1 
Hi, I have rent applicants who want to rent my place until they find a home to buy.  They are willing to pay a higher rent than what I am asking.  Their offer is 3-4 month lease then month to month.  I am looking for a year's lease at $4500 per month.  Do you think it is reasonable to propose 6-month lease at $5500 (or $5000 or $6000), then month to month for the risk I take of renting the place during the winter months (this is a family home in a location with great schools, so family with school age children are ideal.)  Lease will start August 2017.  Thanks in advance for your input.
AccidentalRental

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Posts: 52
Reply with quote  #2 
You're probably better off holding out for a more long term tenant but if you really want to consider this you definitely need to cover yourself in the winter months.  Assume Jan/Feb will be vacant.

Give them 2 options.  (1) 6 months at $5250 or (2) 4 months at $6000 then $7500 MTM after that.  

Option 1 is the same as collecting $4500 for 7 months (through Feb).  Option 2 guarantees you $24,000 then they only need to stay one more month (December - nobody wants to move this month if they can avoid it) to make up the difference to cover you through Feb @ $4500.

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zlium

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Posts: 17
Reply with quote  #3 
Thanks for the advise.  I think I will hold off for a long term tenant, which I did receive another applicant.  But his lease does not terminate until August 31st, and my property will be vacant August 1.  He had proposed to start his lease August 15, to give him time to move.  Do I try to negotiate for an earlier start, i.e. August 7 to meet half way, if not, try to get him to sign on August 1?  Hate to lose the half month's rent.  Thanks in advance.
AccidentalRental

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Posts: 52
Reply with quote  #4 
If there is strong enough demand I suppose you could split the difference again and see if he goes for it.  It's already July though.  It might be hard to find anyone willing to move in much earlier.  If the new applicant looks good, I would go ahead with the 15th.  Just me though.
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Domenick | AccidentalRental - A profitable resource for new landlords

zlium

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Posts: 17
Reply with quote  #5 
Thanks for your thoughts.  I offered the property to the August 15th applicant, and tried to negotiate any earlier lease start date, but to no avail.  Not great news is he is postponing the signing to next week, so let's see if he comes through.  Told him I will continue to market the place until the lease is signed.  Don't know how else to put the pressure.  Thoughts?
LLinVA

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Posts: 216
Reply with quote  #6 
That's all you can do. Something will work out, him or not.
howardcrump52

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Posts: 5
Reply with quote  #7 
I think no
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RedLibrarian

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Posts: 24
Reply with quote  #8 
I'll just throw in that our property manager -- who manages our one unit plus about 100 more in the area -- only offers six month leases followed by month to month. Whenever I rented places myself, I never had shorter than a one-year lease, but I think times have changed. The PM explained to me that this way, it's easier to move a tenant out if it come to that. Maybe six-month will become the new norm. 
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LLinVA

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Posts: 216
Reply with quote  #9 
All of our leases are month-to-month. We want to be able to get people out as fast as possible if they are a problem. Our intention is to have them stay for a long time, so the lease is set up to automatically renew and the rent goes up 5% per year, but all of our residential leases are month-to-month.

We weren't forcing people to pay if they left early anyway, it isn't worth the hassle going to court to sue them for a broken lease just to never get the money because they left early because life happened, so this way we get the benefit of being able to get rid of them if we need to.
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