One study from the US Bureau of Labor Statistics noted that 12-month leases are the most common type of lease. However, that doesn’t mean they’re the only type of lease you can offer your tenants.
Are you a landlord looking to get more out of your rental properties? Look no further than long-term lease agreements. Sure, they may seem intimidating at first, but when considering all the added benefits that come with them, you'll find plenty of incentive to secure one.
From higher rents and fewer vacancies to better tenant relations and improved property values, it’s clear why so many landlords are reaping the rewards of signing those dotted lines. Let's take a closer look.
What Are the Benefits of Long-Term Lease Agreements?
As a landlord, it’s important to understand both the pros and cons of long-term lease agreements before deciding if they’re right for you.
For example, it’s important to weigh maintenance costs against potential rent increases. Ensure that each clause is in line with local laws and regulations. Fortunately, we’re here to help you make an informed decision.
If you’re on the fence about what to do for your property or real estate agency, here are five benefits of long-term lease agreements.
1. Easier Management
Offering a long-term lease agreement can be an effective property management tool. With a long-term lease, you can be sure that the tenant will remain responsible for rent and other payments for several months or even years in advance. This means it requires less work on your end and it makes property management much easier.
2. Income Stability
Long-term lease agreements are one of the best ways for landlords to ensure that income remains steady. Leases that span multiple years or even decades can guarantee income for months or years at a time. Overall, this reduces the stress associated with fluctuations in the real estate market and tenant turnover.
3. Longer Occupancy
Overall, a long-term lease agreement is a more profitable choice since there is less frequent turnover of tenants and consistency in monthly income streams. With longer lease agreements in place, you have the added reassurance that their rental property won't sit empty for extended periods. Whether you're a property company or a solo landlord, this is incredibly beneficial.
4. Lower Turnover Rates
Tenant turnover costs can reach up to $5,000 in some cases. This is an unnecessary expense you don't need as a real estate investor looking to grow your business. This isn't just about you, though. It's beneficial to your tenants as well.
Tenants value the security of knowing their housing is secure for a pre-determined amount of time. And, landlords benefit from having stable cash flow and fewer vacancies in the long term.
5. Less Ongoing Maintenance
When you don't have to prepare your property for a new resident every 12 months, you're able to save a lot of time and money. As a result, you'll end up focusing less on making repairs after each tenant leaves and less time on finding new tenants.
Overall, less ongoing maintenance means less money invested in improvements and a less hectic day-in, day-out lifestyle. It makes your life much simpler and allows you to focus on growing your real estate agency in other ways.
Get Help With Pittsburgh Property Management
Are you still on the fence about whether to offer long-term lease agreements or not? We can help.
Managing a property can be a full-time job when done alone and the lack of experience could cost you precious time and money. Working with HomeRiver Group Pittsburgh provides you with access to professional Pittsburgh property management services that guarantee long-term success and peace of mind.
Dedicated experts help our clients manage their properties, streamline operations, and maximize returns on long-term leases. Ready to start enjoying those same benefits? Click here to learn more about our property management services.
