Different rents for different length of lease?

[Jordy Train]

Was kicking around this idea today and wonder if anyone does something like this....say offer a one year lease on a unit for $800/mo, or you can get a six month lease for $1000/mo....month to month lease? $1200/mo. Obviously meant to incentivize people to stay long term. Thoughts?

[Matt K.]

Why would you want a longer term at lower rent... This is how you get to a undermarket rents and or terrible tenant.

A long term lease really doesn't do you much good, or maybe I should say won't protect you like you think. If a tenant leaves what are you going to do, probably not a whole lot. You can't collect something that doesn't exsist or damage something that is already in bad shape. 

You will have a duty as the landlord to get it rented back out in a timely manner...you won't be able to double dip. As in you're not collecting lost rent for the remaining months and then leasing it back out...

At best you could get them to pay a termination fee voluntary, more likely they leave and up to you to TRY and collect, or you so worried about vacancy you fail to screen properly and have an eviction and lose more money then you would have sitting vacant.

And let's be real, no one renting at the 800 price point is going to pay 1200 month to month....and no one at 1200 mo is going to be looking at an 800 mo property.

You could do a discount for long term good tenant say like raise rent 50/mo each year but offer 25/mo discount. This way you set the expectation of annual raise BUT also reward/acknowledge the good behavior by giving a discount.

You need to figure out your property then your renters and then your lease terms. It you're looking for a stable job history,high credit history, and low turnover.... that's probably not at 800/mo for most places.