Is it common for a tennant to sign a 2 year lease. Talking to a Sydney R/e agent today, they said it is not at all common, yet I would have thought better for all concerned?
Cheers
DNANZ[
][]Hi Dnanz
I presume you mean a lease of a residental property. Yes, it is uncommon for a lease to be more than 12 months. In Victoria, Tenants usually sign a lease for 12 months. Mainly to protect the landlord. If the term is longer and there is a problem with the Tenant you can’t get them out – the lease has to run its term. Majority of Agents in Victoria recommend to take a 12 months Lease and then if the Tenants want to stay on you just sign them up for another 12 months.
The other factor is the rental monies. If you sign the Tenant up now for say a 2 year lease you then lock yourself in for the rent for that period. You can of course have a rental increase clause after the first 12 months – say a CPI increase. But “what if” the rental market changes – high demand for rental properties – impact on rental money is likely to be a bigger increase than the CPI. So you are not receiving the correct market rental for your property.
Cheers
NessieDNANZ
I have a couple of investment properties and havn’t had anyone ask for a 2 year lease. Most people go for 6 or 12 months. Primarily due to lifestyle and moving around.The benefit of this for the owner is if there is an upward movement in rents you can adjust your tenants rent upwards as well. With a 2 year lease you are both locked in. Good for the tenant when the cycle is moving upward. Not so good for them if rents are dropping.
BB
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