2 Family Short Term Rental - Let a tenant stay?

[Jay Levy]

We just closed on a 2 family vacation property that we need to rehab prior to season starting (Memorial Day to Labor Day).  One of the units (the more lucrative one) is vacant and we plan on starting renovation work ASAP to minimize vacancy in peak season.

The second unit is currently leased thru the end of June 2017, which means by the time we get the unit back and rehab we have missed most of peak season.  

The tenant is willing to stay longer, when we run the #'s the short term rental income is almost exactly the same as extending the tenant's lease for an additional 8 months.

We see pro's and con's of both options, keeping the tenant thru February 2018 or having the tenant leave at the end of June 2017.

Any thoughts would be appreciated.

[Thomas S.]

The risk you take is extending the tenants lease and have them walk away in July. Remember a lease has no bearing on when a tenant will leave. Take the path of least risk when all other factors are the same.