In general, the long time or long term tenants are precious assets for any Landlord with few exceptions! In this article, we are going to discuss all the issues related to long-term tenancy.
How is Long-term Tenancy different from Fixed or Month-to-month tenancy?
I have seen the search term long term lease agreement, long term rentals, long-term rental lease contract etc. on Google search recently.
Let me first clarify, technically, the long-term tenancy is no different than any fixed term tenancy or month-by-month tenancy. The landlord and the tenant can sign the lease with any mutually agreeable terms. And there is no separate long-term lease agreement. It’s just that tenants occupy the rental for a long period of time, that is called long-term tenancy. It may happen that your tenant kept renewing the lease for some years. Or it is also possible, your tenants continued living at your property on a month-to-month basis for a long period of time. So for the sake of calling, you may say they are your long-term or long-time tenants.
Even so, if you want to ensure, you can ask your state or provincial landlord and tenant board if there is any specific law controlling long-term tenancy. In such case, what’s the term that would be called a long term?
Why can Long Term tenants be a precious asset for you?
If you have good long-term tenants, they save you from lots of hassles. Finding a new tenant that is good, is one of the biggest puzzles of the landlord business. Over a period, you develop a good relationship with the tenants. All your interactions become easier.
Let’s say you want to sell your rental property. And you have a tenant occupying your property for the last few years. This can be a good selling feature for you. From the new buyer’s point of you, it shows stability. In addition to not having to go and find a new tenant, the prospective property buyer also sees the possibility of having no headache of finding a new tenant for foreseeable future, is it not?
How can I find long term tenants?
One thing, there is no magic formula. And 2nd thing is that it’s better to look to look for a good tenant that becomes your long term tenant. Many first time or older landlords try to get the lease term for 2 years to keep less hassle. Which may work sometimes. But usually, the tenants are also skeptics to sign a long-term lease, as they also want to test the waters. They want to know more about the landlord before they trust and renew the lease for another term.
What if, a tenant asking to sign 5 years lease?
That should immediately ring the bell in your ear. It’s a warning sign. You should be cautious and investigate thoroughly the reason behind this request. May be they don’t have good credit. Think logically. Who would want to make a long-term decision like this without any experience of the landlord?
What should be the approach to find a possible long-term and ‘good’ tenant?
The important thing to note here is that you need a good tenant that stays at your property for a long period of time. The good tenant that pays the rent regularly and keep your property maintained as per the terms of the lease. You can take cautious steps towards finding out a good tenant that stays with you on a long-term basis.
1. Good Property attracts Good Tenant
The first step towards your goal should be to have a decent property as per the location and neighbourhood. The rent should be reasonable as per the prevailing rate at that location. There should be a couple of special attractive features, if not too many, like a good school district or a Lakeview or recently renovated and freshly painted interiors.
2. To Find a Tenant with Good Credential for Potential Long-Term Occupation
Think about a tenant that is a young couple with 2 children going to primary school. They would prefer to have the children remain in the same school for a long time. Or there is a possibility of it. Could be your candidate for long term tenants. You would want to include the condition in the lease to ensure the children don’t draw on the wall in this case.
3. Quick Repairs
The good tenants would not like the landlord who would ignore the request for repairs or is slow in response. The onus lies on you as a landlord, to keep them happy if you think they are potential long term tenants.
4. Good Communications
Always have a professional approach in your communication and be quick in your response to any kind of communication. Even if you would take a bit longer to repair, timely communication would show your care for your tenants. That goes long way.
5. Follow the Guideline of Rent Increase
Most states and provinces have stipulated rules and laws for the yearly increase in rent. You have to strictly adhere to those guidelines.
6. Periodical visit Clause in the lease
It’s important to have a clause that allows the landlord to inspect the tenanted property periodically. That would ensure the tenants keeping the condition of the property in a reasonable status and complying with the conditions of the lease. This is important to gauge the tenant for potential long term tenancy.
7. Don’t do illegal or unreasonable things
To enter their apartment without the tenant’s permission is illegal. The tenants can file a complaint against you to show up without giving proper notice. Don’t call them at unreasonable hours.
8. In Case of Non-payment of Rent
This is a tricky part. A few months into tenancy, the landlord will usually get a whiff what kind of tenant he is dealing with. It depends on the landlord’s judgement what to do in case of late payment of the rent, occasionally. There is always a possibility of tenant running into temporary trouble. The prudent approach should be taken in such circumstance. However, if such circumstance gives the landlord and the tenants to build long-term rapport with each other.
Conclusion: As a landlord, you have to keep working towards converting your good tenant to the long term tenant. It’s a tedious and time-consuming process, but it’s a sure key to one of the many successes a landlord aspire to achieve in his or her landlording career.