While the standard lease agreement lasts for one year, several properties offer short-term leases for individuals that are only in a city for a short time, need a place to stay while they transition to a home of their own, or are looking to get a feel of the city before completing their move. If you’re curious about what a short-term lease means for an investor and a landlord in Austin, we’re here to help!
What is a short-term lease?
A short-term lease is usually defined as any lease that lasts six months or less. A month-to-month or week-to-week lease are also common short-term leases.
Advantages of a short-term lease:
- Possible rent increases: Rent is only stagnant during the time of the lease, so there’s a possibility to increase rent every time the lease renews. If you have a tenant staying for three months, you can increase the rent after that tenant leaves and find a new tenant to pay a higher rent. In the Austin market where rents continue to increase as more and more people move into the city, this could be beneficial to property owners.
- Easier to change terms of the lease: If you’re weighing your options for changing pet policies, security deposit amounts, and inspection requirements, short-term leases make it easier to change those factors, as you can simply sign a new lease with the tenant.
- Higher overall rent: It’s more common to charge a higher rent for short-term leases as they’re deemed riskier tenants.
Disadvantages of a short-term lease:
- Terminating the lease: Both the landlord and the tenant have the ability to terminate a lease quickly. This can be stressful as it would require the landlord to begin looking for a new tenant with little to no time to do so.
If you’re curious about how short-term leases may be able to benefit you and your investment property, contact Prism Realty Management. We’re more than happy to walk you through how to manage your property to the best of your ability and offer our help with anything you’re unsure about.
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