Why would a owner renew leases every 6 months ?

[Jeff Chapz]

Hello team, I'm interested in buying a multi building but the current owner's rent roll shows that they renew or get new people every 6 months. The owner explained that they can raise the rents faster that way. The PM said the want to test the tenant first before they sign a 12 month lease?

Does this sound normal to you?

[Max Householder]

A 12-month lease only protects the tenant. No matter what, the tenant can leave pretty much whenever they want and it's probably going to be time & cost prohibitive to attempt to enforce the lease on them vs. just re-renting the unit and moving on. Especially with a new tenant, m2m or a shorter term can be advantageous because you can boot someone relatively quickly by simply giving notice that you won't be offering a renewal the next month.

Like Kim said, the time of year for renewal is also key. We just bought our first property (4 units) and have 1 vacancy. Trying to rent it in December has been slow going so we will offer m2m hoping that we can get someone in asap and then offer a 1-year lease in like May or June when it'd be better to have a future vacancy assuming they stay the full term. 

People hate moving, so unless you're at the very low end of the market, it's highly unlikely someone will want to move every 1-6 months because of something that wouldn't have had them or you trying to get out of a 12-month lease anyways (relocation, breakup/divorce, job loss, non-payment, damage, etc.). My 2 cents anyhow.