M2M or lease term option

[Michael Staiman]

We are house hacking a fourplex. I had a tenant that passed all my qualifications, no red flags, so we signed a one year lease. There have been lots of issues all year and we are not renewing the lease.

It’s hard to commit to a one year lease with a complete stranger, especially if you live in the same building with them. So I’m considering a different approach.

I would start leases with new tenants at M2M for the first year and at the end of the first year tenant may be offered to stay M2M or offered a lease term option at the landlord sole discretion. Also a security deposit, equal to 2 months rent, at move in and after 1 year, one month security will be returned. This is allowed in my state of PA.

What do you think of this approach? I understand most landlords like to be locked into a year lease but that’s no guarantee, if someone wants to move and break a lease, they will. I’d also add an early termination clause equal to one months rent if someone wanted to leave early.