House rental- MTM or Lease?

[JSAUNDERS]

I've been reading alot and Thanks to Dan for all of the great info. Dan I've read on here and @ landlords.com your advice.
Alot of people say a MTM is good to be able to get the tenant out if a problem arrives. Yet with good (screened/checked)tenants a 1 year lease is a good idea as well.

What is everyones thoughts on this?
We will have 3 homes for rent- 1-3000sqft, 1- 2200sqft, 1 -1500sqft. They will have new appliances/ paint/ carpet.
Thanks
Joel

[Dan Auito]

I like letting people have the good feeling of knowing they aren't going to get a 30 day notice to start packing. This is easier to do when you are absolutely sure that you have quality tenants who have a good reason for wanting to stay put.

[Debbie]

I used to do annual leases. I use "Automatic Re-Newal Month To Month" Rental Agreement.

I've found that tenants actually stay LONGER with my Rental Agreement rather than a year lease. Go figure.....

[PMCS]

I have a rental in Alabama that is managed by a real estate company. Five years ago, I approved a single dad that was a disabled navy vet to move in. He didn't meet the credit criteria the mgmt company normally used but they checked with me since I loath having the house sit empty. After a 6 month lease and then a 12 month lease (his credit impoved), he went MTM because he was looking to relocate for a job. The MTM lasted 25 months!! Over 4 years with the same tenant. :SM086:

I'm with Debbie -- "Go figure.....":SM127:

[JSAUNDERS]

Thanks guys- VERY interesting.... it just seems finding the right person in the right situation..... now on to finding those 'right' people.:D
Joel

[Dan Auito]

It's in the book Joel!

[JSAUNDERS]

It's in the book Joel!

Dan - Where do I find said book? Thanks Joel

[TommyOH]

Joel,

One thing to keep in mind. I've been following your other posts. Is this the property with the construction loan? If you are planning on refinancing, use the lease! If you have three leases, the bank will qualify them as income. That will lower your debt to income and help loads with the refinance. Just something to consider, even if just for the first year.

[JSAUNDERS]

Thanks Tom- Yes this is the property purchased with the construction loan- my local bank has already said we are all set with the equity loan to payoff the construction loan. The lease option is a good idea thanks.
I can't wait to rip into the property and bring it back into shape. Almost all of the repair work is lined up already.:SM101:
Joel

[TommyOH]

I know you know what I meant, but to clarify for other readers, I didn't mean lease options. You already have your equity loan set up, so it wouldn't make much of a difference after all, but what I meant was this. If you are showing a loan on your credit, your debt to income would appear high to a lender for refinance. If you leased the 3 units, the refinance lender would count them as income (garanteed by the lease) and it would offset the mortgage. That would set you up for a better rate and terms for refinance.

Again, you are all set Joel, this is just for the benefit of any readers who could use the advice. Are you going to post pics? Would be cool to watch the changes as some have done before. Good Luck!

[JSAUNDERS]

Yes I will be taking pics/video of the property- I will try to p0st pics, but I'm close to retarded with anything other than typing and reading on a computer:SM101:

To go along with Tom- having the properties on a yearly lease will help to buy other properties as well because even though there is a loan in your name, the lease will show that there is NOTHING (hopefully) coming out of your pocket for payment.