IP 6 month contract 'vs' 12 months

Hi all

Just a quick general discussion on what people prefer to have for their investment properties, 6 month or 12 month contracts?

Im trying to decide on which one and just after general opinions?

:)
 
If you mean for the lease. I was a fan of 6 months but found tenants wanted longer terms. So I have instructed my PM's to lease 12 months with a rental increase at the 6 month mark.
 
It can be good to have leases expire around Jan / Feb as there are more renters then. I've signed leases for odd numbers of months for that reason.
 
Sorry, yeah Lease.

For security of income for the IP owner I guess 12 months is much better, only major downfall I suppose is if you get crappy tenants.

Maloo - I guess you had to stipulate what the rent would go up to after 6 months?

Ive done 6 months non stop, good tenants, but I think I will do 12 months now
 
Yes Brett it is included in the lease agreement. Keep a bit of fat in the figure because it usually gets knocked about before they sign.
 
12 months

I have a new IP and instructed the property manager in the contract to sign tenants up for 12 months, I like the idea to set and forget.

However, new tenant I see that they were signed up for only 6 months:mad:
no explanation why when asked.
 
However, new tenant I see that they were signed up for only 6 months:mad:
no explanation why when asked.

Check to see if they take a week's rent for re-signing them after six months :rolleyes:. If so, stand your ground and tell them that you asked for a twelve month lease and you don't want to lose a week's rent for their mistake.

(Maybe the tenant would not sign for six months?)
 
Yes Brett it is included in the lease agreement. Keep a bit of fat in the figure because it usually gets knocked about before they sign.

How does it get "knocked about" if it's written into the lease Maloo?

I have a new IP and instructed the property manager in the contract to sign tenants up for 12 months, I like the idea to set and forget.

However, new tenant I see that they were signed up for only 6 months:mad:
no explanation why when asked
.

Like Maloo said, most likely re-letting fee. check if they charge this, as if they do, then every six (6) months is most beneficial to the Property Manager

It can be good to have leases expire around Jan / Feb as there are more renters then. I've signed leases for odd numbers of months for that reason.

We have that on a couple of IP's also for the same reason, we've had a lease expire in December previously and had the property vacant/untenanted over the Christmas Break. Real Estate Agency in XMAS mode too and contactable for emergencies only
 
I like 6 months purely for flexibility. What if they are the type that are needy and are constantly causing problems? 6 months and it's *FLICK*!!!! :D
 
Depends on the property. Our executive home is twelve months because it's harder to fill, has slower rental growth, and the people who rent them tend to be businesspeople with assets. The middle-class houses in a growth area are six months because we can reasonably work in a rent rise then (and of course get rid of problem tenants).
 
How does it get "knocked about" if it's written into the lease Maloo?



Yes Brett it is included in the lease agreement. Keep a bit of fat in the figure because it usually gets knocked about before they sign.


The rental increase figure is added in at the time of the new tenants signing on. I usually try work about a 5% increase @ 6months. This doesn't always happen though. Sometimes you have a place up for lease and it goes straight away and you have some really good coin on it and knowing that you have 4 or so weeks to lease but it goes in the first day or two. I will then advise the agent to put a token increase of $5 a week @ 6 months.

Then you have the other way when you get to the lastweek before exit I have usually dropped the rent a bit to attract a bit interest. Seems I usually have a few applications to pick from . So this is where the increase @ 6 months is handy... people usually roll over or go for the nearest round number which Im happy with. But you get bottom feeders here and there that want to meet you half way or below........Im not much of a fan of them.
 
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