6 or 12months contract

[Chilli]

Would like your views, as landlord do u prefer 6 or 12 month lease contract ?
Ta

 

[kissfan]

Hi salsa.

If new tenant, I personally prefer a 6 month lease initially, to try and get a feel for what sort of tenant they are going to be.

If tenant has been in the I/P for a while, (and behaved themself ) then a 12 month lease is fine with me.

The downside of a 12 month lease is that you cannot raise the rent until lease renewal, but at least you have SANF for a while.

Regards
Marty

 

[gerd.]

6 month lease contract as the market for rental is moving up

Gerd

 

[Chilli]

My PM suggested a 12 months lease with the option to review rent at 6 th month. Has anyone done this ? pros cons ?

 

[GoAnna!]

Whatever length lease takes me right into peak renting times. In my area I have got as much as $50 pw difference betwen summer and winter rents. I avoid the winter like the plague.

 

[Xenia]

As long as possible! Lock them in! In SA we are allowed to do rent reviews and increase rent even before a fixed term contract ends.

Can't do it in NSW! Not sure on other states!

 

[GoAnna!]

Hi Xenia

So you don't have peak times where it would be preferable for the property to become vacant?

 

[WinstonWolfe]

If I was a respectable tenant with a secure job and definite plan for the future, I'd appreciate a longer lease.

 

[Alanna]

I prefer 12 months after an initial 6 month term, but tenants seem to invariably want to get out of them before the end of the term (!!) We personally seem to have had tenants staying longer when they are on 6 months terms, the renewal seems to come around quickly and they sign off on it. That said, however, I always make sure that leases do not expire in December or January - Dec is a very poor time to find tenants and we are generally overseas in January.

 

[fisherman]

Six month leases encourage churning and owners bear the costs.

Leases much over 12 months weight the pendulum too much in the tenant's favour.

A tenant can get out of a six month lease just as easily as they can get out of a twelve month lease. Either way, tenant selection is the key to avoid problems and turnover.

We seek 12 month leases and try to avoid renewals during the autumn and winter months.

 

[Vodka]

I prefer 12 month leases, however i find that majority of the tenants prefer to renew every 6 months even if they know that they want to remain for 2 years. Just means that i up the rent every 6 months, which suits me just fine.

 

[bernly]

Whatever you decide to do, make sure that you establish whether or not your REA charges to resign an existing tenant. I recently offloaded a PM because of the $55 charged each time an existing tenant was resigned. My own fault for being ripped off as I hadn't read the fine print. I mean.... how much trouble is involved in changing the date/rent on a contract?

Cheers

 

[rabbaj]

Had a tenant who signed up for a 12 month lease. Lease expired 6 months ago and now tenant is on month to month. Rental market has been pretty good and accordingly agent advised to up the rent by $50 per week as that is what the property is worth in today's market. I considered it from the tenant's point of view and myself thought the increase was pretty harsh but still followed agent's advice and upped the rent by $50 per week. From an investors point of view, if the tenant paid it, it would be fantastic!

Tenant took the matter to the Department of Justice for review. Department decide that there should only be a $25 per week increase.

Although rent could be much more in today's market, am stuck with the department's decision. Could easily ask the tenant to vacate and get a tenant that would pay the $50 difference but agent advised not to do so as it would come across as "vengeful" and create more problems (tenant may take matter further). So I miss out on more rent

6 vs 12 months - a tricky one, but definitely should consider the trend of the rental market and whether you want to keep the tenant.