Tiered rent increases built into the lease

[Beth L.]

Hi All!

I was wondering what your thoughts are on this.

I have a possible tenant who is currently going to nursing school and graduates in May. She is carefully watching her finances and thinks that the rental rate that I am asking ($1175) is a little too high for her right now. Since it is cold and winter is approaching, the tenant pool is really slim. I was already considering some kind of incentive, like offering $1150 if she signs an 18 month lease so that the lease ends in the summer.

I know that she wants to be closer to $1000 so I was thinking that perhaps I could build into the lease that the first six months the rent will be $1000, second six months at $1100, and last six months at $1150. This way her rent will increase when she finds a job after she graduates, I get a tenant in there really soon, and I get a longer term tenant.

I compared this scenario with waiting and perhaps finally renting the unit in March at asking price. I would be making less money if I waited.

Are there any cons to this scenario that I am missing?

Thanks guys!!!

[Travis Paez]

People often build rent increases into the renewal of the lease terms. I can't think of any reason that a lease couldn't have the increases built in to the leased term. I would be curious to hear if the tenant agreed to it. One other option is to set the lease at the original level but incorporate a discount in the first 3, 6 or nine months for paying on time. Its 6 of one or a half dozen of the other. But the alternate wording may sound more attractive to the tenant. Let us know what happens.