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Jake Burhans explains why year-long leases matter when buying rental property. If tenants are locked in at $800 a month while market rent is $1,600, you can't raise it for 11 months. Check lease terms and end dates before you buy.
Jake Burhans explains why year-long leases matter when buying rental property. If tenants are locked in at $800 a month while market rent is $1,600, you can't raise it for 11 months. Check lease terms and end dates before you buy.
Number 3: What are the lease terms? This is absolutely vital. Are they month-to-month or are they year-long, right? If Sally and Joe just locked in their tenants last month on a year-long lease and they're renting all of their 2-bedroom units out at $800 but the market rate is $1,600, if you buy that property, you have to wait 11 months before you can change the rent. So that could make or break a deal. If you think that they're month-to-month rents and it actually is yearly, that could be bad news bears for you. So make sure you understand, are they month-to-month leases or is it a year-long lease, right? And if it is a year-long lease, when is that lease date up?
