Mid-Strean Lease Agreements

[OKRICHLAND]

Hi everyone, Okrichland here.
I am in the process of raising rents for several of my long term tenants.
To give them incentive, I may offer a lease agreement to
some of those tenants, starting at two years.
What benefit is there for me, besides them not having to worry about there
rent being raised for two years.
Obviously, I wouldn't ask for then to give another deposit all over again.
The only benefit that I can see is that they may take the rate hike a little easier Knowing that rent rate will be a little more secure.
With today's inflation, is two years too short?
By the way, the hike will be around $50.00.
Still within fair market housing.

[secoon]

If they are month to month now, I would just leave it that way. Locking them, and you into a two year term might be a mistake.

Just say something like "You know we work hard at keeping expenses down.. yada, yada".. Tenants expect increases, it's part of thier world. If you aren't jambing them, and the property is well maintained, and within market, moving would be even more expensive for them.

I used to manage a considerable amount of property, and it was always the rule that we increased rent EVERY year.. even if it was just $5 a month. This sets the tone for the relationship going forward.

Sean

[Dan Auito]

Big Dave, take a look at the section in the book about rents and increases. A one year lease would be about the limit for a $50 hike. I like the one year lease even if tenants will walk away or maybe even run away(to another state). Just provide better housing than your competition at fair rates and they will stay!

[OKRICHLAND]

Thanks for your input guy's,
I'll take the advice to heart. :thumbsup:

[Aldo]

While I agree with M2M agreements for long-termers, you know your tenants and your market better than I do. My word of caution relates to leases for more than one year. You may want to check local law. Here in Cheese Country, a lease for more than one year has different notice requirements, among other differences. Example: A WI lease for more than one year requires a 30-Day Notice to Quit or Pay Rent, rather than the standard 5-Day.

[OKRICHLAND]

Thanks for the imput.
I'll take that and run with it. :thumbsup: