Were you aware that the rental property industry generates $485 billion per year in America?
Making the decision to invest in a rental property is the first step toward generating lots of income, but there are plenty of other important choices you need to make to run a successful business. One factor that makes rental property owners pause is the length of the contracts that they should offer.
It's helpful to know that there are many pros and cons of both short-term and long-term lease agreements. Read on if you'd like to learn more about them so you can figure out what's best for your business.
Short-Term Lease Agreements Are More Flexible
Since life is full of surprises, some people don't like the idea of committing themselves to one home for an extended period of time. Oftentimes there are consequences that come with breaking a lease, so renters avoid long-term lease agreements altogether.
Do you want to attract the biggest pool of tenants possible? Being open to the idea of short-term lease agreements could work in your favor. It's also worth noting that property owners tend to charge more for short-term lease agreements. You could earn more money from every tenant.
Long-Term Lease Agreements Provide More Peace of Mind
Every month that a tenant lives in your rental unit is another month of promised income. Many rental property owners don't like increasing the risk of vacancies by allowing renters to come and go as they please. Short-term lease agreements often require less notice when the tenant is preparing to move out.
You'll also spend less on cleaning and maintenance fees when tenants stick around longer. It's helpful to do a cost analysis so you can see which option is more profitable.
You Can Make Different Leases for Each Tenant
A common misconception about renting is that you have to be consistent with every tenant. The truth is that you're free to make different agreements with everyone depending on their unique needs.
You can make long-term lease agreements your norm and have exceptions when the time comes. For example, some applicants may be overseas visitors, relocating for a job, renovating their homes, or more. If you keep an open mind when you accept applications, then you can enjoy the best of both worlds.
Everyone's Ideal Rental Agreement Is Different
There are no right answers when it comes to short-term and long-term lease agreements since we all have different preferences. Now that you've learned more about the pros and cons of each option, you can decide what's best for your business.
No matter which decision you make, teaming up with a property management business can take the stress out of the equation. Contact us if you own a rental property in the Fort Lauderdale, Florida area and you'd like to know more about our excellent property management services.
