I’d Like To Have Your Opinion On A Question
And then I will give you mine. A Tenant has a years’ lease, and is a good tenant as most of them are. You are the kind-hearted owner. Lease is over. Two choices; re-lease for another year or continue on under the roll-over provision in almost all leases. Drumroll: What is your answer?
My Opinion:
I have always felt that after the first year, the lease is the friend of the tenant. If I am an owner, I want to use the roll-over. Two things could happen. You do not want to raise rents now, but in six months the rent situation changes and you would like to raise the rents. Can’t do it; you have a lease.
Shortly after the re-leasing, the tenant goes bad, and you would like to evict. If you are on a month-to-month, it is much easier as you can give a notice, and you don’t have to state any reason, if not under rent control.
Sometimes a tenant will say that the reason they want the lease is that they do not want a rent raise in the near future. You can satisfy this request without signing a lease. You can give them a written statement that you will not raise the rents for a certain period of time that you two agree on. Be sure to put a time period on the statement.
Final Note For Thought
For real estate agents and owners who are thinking about having their properties managed. Normally, PM rates are set as a percentage of income with a commission for leasing. A question that should be discussed on any contract that is signed is, “If the Property Managers re-lease the property, will there be a commission due?”
Here Are Some Other Questions To Be Discussed
Should we re-lease or roll-over? How much Security Deposit should we request? If the rent is $2,000 a month, how much should a prospect be earning to qualify? Who will hold the tenant’s Security Deposits? What will be the monthly fee, lease commission, handling an eviction, cost for handling a vacant building, re-lease fee if used, necessary reserve, when proceeds are to be disbursed, how often an accounting, how many people in the unit, pets-yes or no- or max size, amount Property Manager can spend without owner approval, who pays utilities, etc. and others.
i am contend that leases are of no benefit to landlords. they grant what equates to an estate in your property with no real benefit. the law REQUIRES us to mitigate damages if the tenant breaks the lease, prevents us from using it as we see fit if unexpected events arise. ALL my tenants get ONLY month to month (MtM) rent agreements.
with the threat of prop 10 i memo’d ALL my month to month tenants that the rent was going up 20% in 60 days. if 10 fails i will rescind the raises. if it does pass i will revisit the raises based on what i see as the threat in the cities i operate in. if you think rent control is going away, think again. it will be back. MtM makes life easier.
in the past i have had owners need to move back in. i issued the 30 day termination and they did just that…moved back into their own house when they wanted to. a lease would have made the deal harder and possibly impossible.
MtM keeps the tenants in line as regards the common misconceptions about their rights. they never get chesty when they are on a MtM. they’ve been told on the way in that they can move ANYTIME they want if they become unhappy. i have tenants that have been in residence for as many as 12 years on MtM. it keeps the field level…
Agree with you about leases and other matters. One thing that I just learned after years of managing. I now do not charge a pet deposit, I make an addition to the stated rent. Then, I get to keep the money and if there is pet damage it is taken out the regular security deposit. Thank you for taking the time to write. It is appreciated when I hear that someone is actually reading my efforts. Keep in touch.
I always go from annual to monthly, no pets, no smoking. For other units I manage I have them sign that they allow me to spend up to $300 for maintenance or repairs without contacting them first. I wish I had a good answer for the times when a renter has friends or family members that ‘need’ to live with them for a ‘short time’. That is such a slippery slope. Just glad it doesn’t happen often. Utilities: always water, most of the time trash. Elec, gas, cable on their own.
Agree with you about leases and other matters. One thing that I just learned after years of managing. I now do not charge a pet deposit, I make an addition to the stated rent. Then, I get to keep the money and if there is pet damage it is taken out the regular security deposit. Thank you for taking the time to write. It is appreciated when I hear that someone is actually reading my efforts. Keep in touch.