Triumph Property Management customizes rent agreements to meet the exacting terms of their property owners. Either you can dictate these terms, or you can rely upon our experience and advice to help you. The first decision to be made is regarding your type of rental policy. Do you want your tenants to sign a lease (also known as a Fixed-term tenancy) or a month-to-month rental agreement (also known as a periodic-term tenancy)? There are benefits and disadvantages to both.
Month-to-Month Agreements: Tenants can be set up with a month-to-month rent agreement. The agreement and amount of rent is automatically renewed every month unless the tenant or landlord gives notice of any changes. The terms for the length time required for notice is stipulated in the rent agreement, and it is typically 30 days and in writing. This notice applies to move-outs, rent increases, and changes in the rental agreement terms.
Lease Agreements: As large rental communities were built and more sophisticated management reports became available, property managers such as Triumph changed to a lease agreement policy. A lease agreement is where the tenant agrees to remain for a set amount of time, usually 6-months, 9-months, or 12-months. During that time, management cannot change the amount of rent charged or any of the terms of the lease agreement, until such time as the lease expires. There may be some exceptions, but they have to be clearly noted in the agreement and approved and signed by the tenant.
At the end of the lease, the rent amount and lease terms can be changed. The property management company can choose whether to renew or decline a new lease for the tenant. Leases often require a 60-day notice to be given in writing by the property management company, which states if there will be any changes to the original lease, including rent increases. Tenants have to give notice as to whether they will accept any changes in the lease terms or if they will move out.
Which is better? During tight rental markets, when rental properties are scare and it is easy to find new tenants, investors with fewer units and single-family homes may choose to use month-to-month agreements. This gives them the flexibility to easily remove tenants, increase rents, change rent agreement terms, and make remodeling changes. Renters who rent month-to-month, however, usually stay for much shorter periods, requiring frequent investor “make-ready’ expenses and time off the market. It also makes it very difficult to do long term financial planning.
Leases create stable communities, the ability to plan cash flow, the option t staggering leases to keep occupancy steady, less time marketing, shorter times of rent vacancies (because there is a longer period to market the upcoming rental), and less frequent make-ready expenses. Property owners, however, who might wish to sell their property. They also might want to accommodate a good tenant who might be facing a change in job or military service.
Based on your situation, Triumph Property Management can advise you on which type of rent agreement would be better for you. This is one of the many services that we provide to help our customers achieve the optimum income from their investments. Contact us today, and we can develop a customized plan that meets your needs.