Having a long term tenant in your rental property is great if you’re looking for consistent returns and a low risk of vacancy. However, it may surprise you to know that, in some circumstances a short lease the best way to go…
Rapidly increasing rental prices
If your investment property is in an area in which pricing are rapidly growing, you may wish to take advantage of agreeing to a short lease for your tenants. If demand is high, you may be able to increase the rent with each new tenancy, taking advantage of high demand and rising prices. Sure, you risk having a short vacancy period in between tenants, but you may recoup these costs by the rise in rent.
Unsure of your future
If you’re in a position where you are unsure whether or not to keep your investment property, a short lease term buys you time whilst you consider your options and prepare for the sale.
If your best applicant is a little short of your ideal tenant, letting them take up a tenancy guarantees you rental income, rather than risk a long vacancy period while you search for your ideal tenant. Of course, you don’t want to risk the condition of your property with an unsuitable tenant; a short term lease may suit both parties in the interim.