Consider Offering Month-to-Month or 6-Month Leases

Posted by Teresa on November 13, 2009 under General | icon: commentBe the First to Comment

rental agreement on tenant screening blogAre you a landlord who routinely offers year-long leases?  Are troubling times and less-than-stellar tenant credit checks making you uneasy about continuing to do so?

A flexible approach helps in an uncertain rental climate. Now is the perfect time to rethink your procedures, especially if they aren’t working for you as they once did.

Take leases, for instance. While a one-year lease might be ideal in a perfect rental world—where tenants have stellar credit, rents are where they should be, and competition is low—they may not work to your advantage now. While it’s reassuring to know a tenant is obligated to rent from you for a year, it can make you nervous to think of a sketchy client on your property for that long. Things could get complicated.

In tough economic times, incomes are lower due to job losses; evictions are more common; and credit reports are poorer. These factors, plus a one-year commitment, equal one risky situation. But you can mitigate your risk. As landlord, you get to decide how long the lease term is. If, after you’ve conducted proper tenant screening, a one year lease seems risky, consider offering a six month or month-to-month lease.

Only you can decide if it’s better to face empty rental units or offer a short-term lease to an applicant you might have passed on before. But you’re in control and you do have options, which can make it easier to weather a downturn in the rental market.