Has anyone signed a tenant for more than 24 months rental?

Question

I have a sfh for rent for $1550. Received an inquiry, older lady from out of state. Looking to move near her daughter and grandchildren.  She mentioned on the phone she's looking for long term. After showing her the property tomorrow. How long of a lease is acceptable?  Would you just write it for 24months and then address a new lease then?  Maybe 36months and provide a discount $50 discount from current asking amount? Are rentals ever written for longer than 36 months?

Anthony Wick · Answer

I would never do more than a 1 year lease for a new tenant. You have no idea what kind of tenant they are. I have, on one occasion, done a 2 year lease for a couple that had already lived there for 6 months. I raised the rent and let them sign a 2 year lease. It has worked out well, but I mainly did that because I knew what kind of tenants they were and I was remodeling the other side of the duplex and wanted to "guarantee" no vacancies in the other side for a while.

Jason D. · Answer

@Frank Billman what would be the advantage to YOU to dona 3 year lease? If she wants to stay long term, she'll stay long term. If you sign a one year lease, and things dont work out, you dont have to wait another 2 years to move on.

And under no circumstances would I give a discount for longer terms, that's just you paying your tenants rent for them.

Leases dont make tenants stay, good landlords and good properties do.

Terrell Garren · Answer

Just why?  Long term leases just handicap the owner. Tenants will move when tenants need to move.  If they are happy they will stay.  M2M allows an owner to deal with misbehaving tenants immediately, and most importantly, they know if.  I've had several great tenants on M2M for 5+years and gotten rid of a few bad decisions on my part in a couple months.

Account Closed · Answer

There is no possible benefit to the owner to do more than 1 or 2 years, EVER! As others have said...a lease is not going to keep a tenant in place. It's just a piece of paper - a piece of paper they likely have not thoroughly read and couldn't understand if they did.

What advantage could you have by making it 3-4-5-6-27 years long? If they want to stay after 2 years keep at it one year at a time. If they still like you, and you still like them, no problem. If they hate you or the property, or you hate them, a piece of paper will do nothing to solve that problem. I can't possibly understand why you would give somebody a discount for a multi year lease - rent goes up yearly, that's called inflation.

Additionally, both you and they do not know what their life circumstances will be in 3+ years. What income will they be making? Where will they want to live? Do they have a new boyfriend/girlfriend? Again, this lease will not even be a thought when the tenant is reevaluating whether they want to stay or not 3 years later.

Month to month leases are just as ignorant. If a tenant likes your house, they want to feel comfortable that they won't have to move for at least a year, and most leases give the option to renew if you haven't broken any rules. This makes them comfortable that they will be able to stay in your house as long as they want to so long as they follow the rules. A tenant on a month to month knows their landlord can get rid of them on a whim, with very little notice, and they don't like that. It only advantages the landlord and tenants aren't so stupid they don't know this. People who want to be comfortable in not moving their home again anytime soon will not choose yours.

Month to month again doesn't advantage the landlord much either. If they haven't done anything wrong, then why do you need to get rid of them in a hurry? If they have done something wrong, then it should be straight forward getting rid of them for breach of contract. Sounds more like an overly nit picky/slumlord type landlord strategy to me.

1 or 2 years is enough time for a new tenant to get comfortable in a house, to make it their "home", and decide whether it's time to move again at the end of their term. 30 days is not enough time to decide this, it's not enough time to get to know your tenants, and it's generally not enough for them to find another place if they have to be out within 30 days. Basically don't act like a king on his throne and tenants won't treat you like that. (And when I say that, I mean they will do the opposite of treating you like a king. Don't give them reasons to hate you from day 1!)

Bill B. · Answer

I’ve done a couple 5 year leases, a 7 year and a 10 year. You have to be really comfortable with the tenants to go long but it’s worked out well for me. What you lose out in rent increases you more than make up for in avoiding vacancy, commissions, and make ready repairs.

Maybe agree to that 3-5-7 year how ever long with the understanding that you each have the right to cancel it after a year if it’s the working out for you? or each of you is willing to pay a “cancellation fee” that goes down every month. (I’ll give you $1,000 if want you out a year from now or you pay me $1,000 to cancel in a year. $500 between 1-2 years? Dunno, I’m winging that part of it.)

Michael Lee · Answer

I will not do a more than one-year lease with a new tenant. I don’t know him/her well and he/she can leave at anytime, but I can not stop the lease if I think he/she is hard to deal with.

Pat L. · Answer

We've done 4 year leases to accommodate 'tours of duty' with a built in 6% p.a. increase. Works great...

Ray Harrell · Answer

Businesses often do leases for 10-20 years, and land leases for 100 years or more. However, people situations change more often than businesses. That lady probably doesn't want to move again so wants to be sure if she moves in all her knick-knacks, they can stay put until she dies. But what if her daughter moves? Will she then want to move? If you are comfy, go ahead and do a 5 year lease, but make sure your rules are rock solid.

Has anyone signed a tenant for more than 24 months rental?

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