fixed term tenancy vs periodic tenancy

[Jason Wiser]

We are first time landlords and just bought our first duplex. As we begin to decide what lease agreement to draft, we just want to ask others what they personally think is better and why? We have read a lot of blogs on the topic and understand the hypotheticals, but we want first hand account of what you prefer and why? 

[Will Fraser]

Hi @Jason Wiser, welcome to the BiggerPockets forums!  

If I understand your question correctly you want to know about fixed term (i.e. July 1, 2021 to June 30, 2022) versus periodic tenancies (i.e. month to month or year to year) . . . assuming this is correct . .  . I like using either a month to month lease from the beginning and offering to establish a longer term lease after the tenant and I have gotten to know one another better.  Otherwise I use a 1 year lease that converts to MTM at the end.  

In general we're all fighting two things:  vacancy loss and bad tenants.  MTM gives you the most control (in theory), but the more risk of vacancy. Longer leases give you lower control and lower risk of vacancy. The challenge is finding a sweet harmony between the two, and doing so in a way that works well for you as operators.

Go out there and get it!