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Updated about 11 years ago,

User Stats

11
Posts
2
Votes
Jacob G.
  • Salt Lake City, UT
2
Votes |
11
Posts

Anyone Tied CPI to Their Multi Year Lease?

Jacob G.
  • Salt Lake City, UT
Posted

From reading other posts, it seems multi year leases aren't really popular, and I understand why, but I am wondering if anyone has ever attempted to tie the CPI to their rental rates.

I have a renter, who is very interested in a three year lease, and I am thinking of putting into the contract that the monthly rent will increase each December based on the December to December CPI. This wouldn't be much, $22.78 based on a starting rent of $1,500 and September 2012-2013 numbers, but would hedge me a little against inflation, and I wouldn't have to deal with the hassle of finding new tenants for 3 years.

The house has been quick to rent. I think the normal 10% vacancy is high, so I don't think I would given them much of a discount, but even if the vacancy rate is 5% per year, That is $900 twice that I would save by having the longer lease.

Another idea I had was to base the annual increase off of the Social Security COLA, which has the risk of being politically manipulated in either direction.

Am I better to just avoid the three year lease entirely, or keep the rent the same over the three year term, based on the savings from not having the vacancy?

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