10 month lease?

Question

Has anyone ever done a odd term lease for a tenant for your own benefit? In this scenario, I am about to fill a newly purchased rental property. However, it is getting late into the year, so I thought about doing a 10 month lease so that the lease ends in July of next year. This would then set the cycle to a better time of year to fill the vacancy.

Any thoughts?

Account Closed · Answer

I've done leases that were for an odd number of months several times, so that it doesn't end in winter. I've done 9 month leases and 15 month leases, etc. People expect 12 months, but I've never had anyone have a problem with the term being different. I just explain to them that it is difficult to rent in the winter if they move out then. Works fine.

Shane H. · Answer

These are all really good ideas! Thank you. When I decide what to do, should I stick to that or feel it out depending on the propsective tenant's disposition of whatever I choose to do?

Steve Babiak · Answer

Yes, I do it all the time for the first lease, and then offer to renew for 12 months after that.  And I try to have it end on June 30 or earlier; June 30 usually works with most folks because the school year has  ended by then.

Lynn McGeein · Answer

I have done it before, but now I prefer to actually offer them an extension, for instance, because of the 12-month period ending this time next year, I'd rather offer you a 18-month lease at the same rate if you're interested.  I actually offer 2-year leases now in one unit that seems to turn over each year (great neighborhood but people there tend to buy when their lease is up, so locking them in for 2 years saves me yearly turnover).

Just wanted to add that in some areas you are required to offer a one-year lease term, at least in Annapolis where I just rented a unit, so check your landlord/tenant laws.  If you don't offer a one-year lease there, you have to have applicants sign a form stating an acceptable reason you couldn't offer them a year lease and that they acknowledge receiving it.

Marcus Curtis · Answer

How about this...

While I understand your thought process here in it being hard to fill vacancies in the winter months I think you may be approaching it in the wrong way. Allow me to explain.

You have a prospective tenant that is interested in your property. They want to lease for 12 months but because you realize this puts the lease end date at an unfavorable time for you to lease units you suggest a 10 month lease. Although the tenant accepts with little hesitation you manage escaped having to fill a unit in the slow season.

However, what you have done is shortened the life of a lease only to have them possible move out sooner which results in your costs to turn the property (likely averaging around $1500).

Here is what I think would be more beneficial to you as a landlord. Do the 12 month lease. In that lease or on a separate addendum include a clause regarding the move out. I call mine the "Winter Move Out Clause".

This clause states "Management and tenant agree that no notice to vacate will be given during the months of October, November or December by either tenant or management."

This gets you over those months that are hard to lease the apartment. If a tenant must move for whatever reason they can break their lease by paying a break lease fee which could be equal to one months rent or less. If you are real generous you can tell them they will be relieved of their lease when you find another tenant to replace them.

What are your thoughts on this route vs. the 10 month lease idea?

Shane H. · Answer

Thanks everyone, I appreciate  your responses, that really helps.

Andrew S. · Answer

Agree with others.  I have a duplex under remodel right now that will probably be ready by Oct15.  I'll definitely look for 8-9 month rents or maybe even 6-7 months (or, for that matter, if someone wants to do 18 months, that's ok too)

Kimberly H. · Answer

Yes, I've done it and will do it...having a heck of a time getting a place rented since I listed it in August since schools here start end of August, I am having the lease up June 30th then renew for a full years after that. I am not listing it as a "short term" lease because I don't want to get people who already know that they won't want to renew next year. Have seen a few others on BP who live in places that have winters do the same thing as well; make sure the lease ends in spring or summer no matter when the lease starts.

Mitch Coluzzi · Answer

Makes sense, keeps it heated over the winter.  You will see this a lot in college towns and off-seasons.  If you find a tenant agreeable, there is not any problem with it!