Now that you have a property, you need tenants! But what kind of tenants? Do you want short-term or long-term? Month to month or fixed-term lease? Long-term and fixed leases are the most common, then short-term for vacation rentals. In this blog, we’ll discuss the benefits of having month-to-month tenants.
What are Month-to-Month Tenants?
Month-to-month tenants are renters who pay rent monthly to stay on the property without an expiration date. This means the lease doesn’t have a fixed end date and it will automatically renew at the end of each month. Typically, the renters will pay their monthly rent until either party gives a 30-day notice.
Benefits of Month-to-Month Tenants
More control over timing and financial flexibility are the significant benefits to month-to-month tenants. Month-to-month means the landlord can end a rental agreement at any time very quickly and usually doesn’t need a reason to terminate the lease. With month-to-month tenants, landlords have more financial flexibility as the landlord can change the rent easily. This is usually why monthly leases have higher rents than long-term leases. But most renters who enter this lease understand that they’re paying higher prices for the short-term lease. It is a great option for buyers waiting for their house to be built or people testing out living in a new city. There’s flexibility for both the tenant and the landlord.
Drawbacks of Month-to-Month Tenants
We want to be fair and explain both sides before landlords decide this is the leasing option for them. There are some drawbacks to month-to-month tenants like sudden vacancies and uncertainties. When landlords offer a short-term lease like this, they have to be aware that there might be sudden vacancies since the tenant is allowed to leave at short notice. If they want to fill the vacancy, this can be stressful for the landlord (unless you have a property management company like us!). Second and tied in with sudden vacancies are uncertainties like when the landlord will receive rent and finding short-term renters. On top of spending more time and money to prepare the property, advertise the property, screen new tenants, and show the rental (did you know TALK Property Management does all those things for you?).
As a landlord or investor, it’s up to you to choose the best lease option for you and your property. There are benefits and drawbacks to a short-term lease and rental with month-to-month tenants. If you need help discussing your leasing options, contact TALK Property Management!
Like Austin home buyers, renters in the greater Austin area are increasingly using online tools like 3D tours to scope out rental properties and homes for lease, particularly in a constantly changing environment.
A recent study by Zumper, a rental marketplace, in conjunction with Matterport, a 3D virtual service, echoed that fact, with 72% of all renters expressing that they would rent a space without ever seeing the property in person if a 3D virtual tour was offered. In line with the trend, property managers are seeking more “non-traditional” ways to let potential tenants view spaces from the comfort of their laptop or mobile device.
According to ABODO, an apartment listing site, more than 60% of renters said that COVID-19 has negatively impacted their rental search. 30% of renters surveyed said that they prefer photos and floorplans to be delivered virtually or prerecorded videos of units (27%) over in-person unit tours (21%).
But it gets more interesting…according to the Zumper/Matterport study, 82% of property owners who have advertised a 3D walk-through expressed that they were able to lease their rental entirely virtually. Almost all surveyed owners acknowledged that potential tenants would likely demonstrate more interest in a rental listing if they offered a 3D virtual tour. Tenants surveyed validated that assumption with responses that showed a greater interest in rental properties that allowed virtual perusal.
The property management industry adapts as our environment evolves, and the greater Austin area is at the forefront of that movement. If you have questions about what TALK Property Management can do in locating and screening tenants for your Austin-area rental properties or how we serve our owner-investor client base, reach out to us anytime: email@example.com or (512) 721-1094.
Source: Matterport.com and “Virtual Apartment Tours: The Industry’s Ultimate Guide for Property Managers,” ABODO, May 6, 2020.
Property management in a normal market is a complex industry. There are several complicated moving parts from understanding the current real estate market to staying informed of changing leasing and fair housing laws. Now, take that complex market and add the impact of COVID-19, and property management has become a moving target.
What do you need to know regarding leasing and property management in Austin during the COVID-19 concerns?
Tenants who are having trouble paying rent or other fees due to COVID-19 complications can establish a temporary, flexible payment plan with property owners and landlords. As a Texas REALTOR®, you can access the agreement form by clicking here.
Although tenants have the right to ask for assistance in payments, they cannot refuse access to the property in fear of virus-related consequences. They must follow current agreements for entering the property, and if property owners choose to screen those viewing the home, they must follow fair housing guidelines. However, if the tenant is at a higher risk of developing an illness, they may have different rights. When considering accessing a home with a fearful tenant, property owners and managers should move slowly and carefully with respect for the safety of everyone involved.
Residents struggling with the effects of current health concerns may find themselves well underwater; however, the Texas Supreme Court has suspended all eviction hearings through May 18th, 2020, as well as put other restrictions in place such as prohibiting posting evictions through May 25th, 2020.
An owner and property manager must pay close attention to evolving guidelines in handling tenant nonpayment issues. As health concerns twist and turn current tenant rights and leasing laws, income property owners need to stay up to date on the latest legislation.
If you have questions or concerns regarding property management and rental homes, please do not hesitate to contact Dona Brown with Talk Property Management. Our years of experience make us a reliable resource in Austin. 512-721-1094.