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My husband and I are (unhappily) looking at the prospect of being long-distance landlords. We currently own a condo in a very depressed market--south Florida--but will be gone within two years. Nothing I read makes me think the market is going to turn around by then and we're underwater anyway, so if we did manage to sell it we probably wouldn't break even. So if we have to rent it, we want it to be as little trouble as possible. (I know, everyone wants that.)
My question is this: is it reasonable to try to entice a tenant to be a long-term renter by offering them an incentive? As in, sign a full-year lease and we'll knock 5% off the rent, sign a two-year lease and we'll cut 10%. Is this weird? I know everything in a contract has to be examined by a lawyer, but mostly we would just want a stable tenant so we wouldn't have to worry about tenants moving in and out and the condo standing vacant and the hassle of paying two full mortgages, and we'd be willing to offer an incentive for continued occupancy.
Why rent for less than a year anyway? Most residential leases are for a year term and I would stick with that. If you're not an experienced LL I'd strongly suggest that you find a good management company to handle the property for you as it's almost impossible to be a long-distance LL. Good luck!
I just signed a three year lease, and I asked for a discount based on the term. Unfortunately, the landlord just couldn't drop the monthly price any lower than it was (and it's pretty reasonable for the market), but I did get a lease stating there will be no rent increases for the duration of the thirty six month lease.
It can be done, and it can be enticing to the right tenant.
I would say to have a one year lease as a rule for any renter. Giving a discount for a 2 year lease is not unheard of in this day and age. Actually, people are getting more and more creative in inticing renters to stay. Putting a statement of not raising the rent for the term in a longer lease sounds like a great way to give renters incentive to stay.
You can offer this and it may help but you should get a property management company to handle everything for you. Most states require this by law, of "absentee landlords".
In Florida any lease longer than 1 yr needs to be draw up by a lawyer otherwise it is illegal! But you stated you want to consult with a lawyer so don't forget to have them make the lease.
You can offer what you stated and if a tenant agrees than that is fine. I had a 2 yr lease signed with a tenant just before the law changed and they are there for 1.5 yr now and they asked me for a 2 yr lease because they knew that way I was not going to raise the rent....so when the lease ends I will extend it with just a little increase, not much since they are great tenants but the HOA went up so I want just a little compensation for that since they are able to us all amenities.
Thanks for all the responses and good information! It's nice to know our thinking isn't totally off-base. Bentlebee, I didn't know about it being illegal to draw up a lease for more than a year without a lawyer, that's interesting.
When using a property manager, do they generally charge a flat fee or a percentage of the rent on a property?
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