Lease renewal time! What should I do?

Hi guys,

The lease is up on my unit. The tenants have been great so far, however they have now asked whether they could renew for 6 months rather than 12 months as they are looking to buy at the moment.

A 6 month lease would bring it up to the end of March. I have said ok to the PM, as PM have said that the rental market in March/April is still usually travelling ok. However, I'm wondering whether I should have suggested something else? Perhaps a shorter lease to bring it up to mid-end January and if they want to re-sign, then another 12 month lease...and if not, then we can go out and look for new tenants? :confused:

I am inclined to leave it to a 6 month lease but would appreciate your thoughts :)

Thanks
S&S
 
Or you could hedge your bets both ways. Say 12 months at (say)300pw or 6 months at 315.

I think this way is very fair to everyone.
 
Hi slow&steady

At the end of the fixed term lease, you are required to advise the tenant whether the property will be available for rent, what the rent will be, and you can offer them a fixed term lease, but they have the right to nominate to occupy the property on a periodic basis, usually month to month.

Other than that, you cannot require or compell them to enter into a lease. The original lease contract simply 'runs off' into a periodic arrangement.

In my experience, tenants intending to stay will usually negotiate another term, six months or twelve months or whatever

However, your tenants have said that they are looking to buy and want a six month term.

This implies that they want to make sure that you do not give them notice before they are ready.

Why not offer them a periodic tenancy instead? They may find a house quite soon and want to move earlier, in which case you would have the property available for the peak rental period, between Christmas and Australia Day.

But property rents all year, and depending on what type of property it is and your target market will influence how long it will be vacant.

Student Accommodation, for example, has a season all of its own, as do family homes near primary schools, and DINKS apartments near public transport.


As a landlord I never try and tie people down. If they move on, I always achieve a higher rent with the next tenant - I think only once did I have to accept slightly lower rent and that was not because of time of year, just a slump in the market.

With our most recent end-of-lease-would-you-like-to-renew, the tenants advised that they have bought and will be moving out. The property manager then suggested a $60 per week increase as the property will be going out to market rather than the $20 per week increase she had thought was fair for a continuing tenant.


You will be right whatever you decide to do

Cheers
Kristine
 
march is a better time to source new tenants than January.

Hi Xenia

No idea when is a good time to renew a lease in Adelaide.

But as Slow and Steady is posting from Melbourne I would think that there is
a good chance the IP is in Melbourne and January is a way better time to be sourcing a tenant.

Cheers

Pete
 
Hi Xenia,

march is a better time to source new tenants than January.

Really? Can you provide a reason why? Is this an Adelaide thing?

I would have thought that location made a difference to when the lease should expire; it should expire in peak times.

For rental properties near a University, make the lease expire in January or July, to coincide with semesters.
For beach side properties, make the lease expire in summer, not winter.
And so on...
 
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