Long Term Renting: Inconveniences for landlord

I think it's best to do a 1 year lease w/o renewal option. If you & tenant get along, you can offer to renew & negotiate the rent about 3 months prior to lease expiration.

Agree with above. Don't accept this in the lease. It sucks big time for you. Protect yourself. At the most offer them a 2 year lease.

Agreed. You're giving them an option - which has value - and in return doesn't sound like you're getting anything....

Never heard of anyone offering a 5 year lease for an apartment. 5 year is like a retail lease. Seems ridiculous to me.

In addition to the economic risk that rents increase above your agreed upon escalation over a time frame that can't be easily forecast, it's a very bad idea from a property management perspective (assuming this is a new tenant). It's important that you "try out" the tenant for a year on a market rate lease, especially in a city with such a difficult eviction process. Depending on your circumstances (e.g. is this is a single unit property, how many do you have, etc.), the long-term lease could encumber your property in an undesirable way should you decide to (or need) to sell.

^^What s/he said. If you DID do it it should be 1+....

Especially with the way real estate taxes, insurance costs, and energy costs have been rising, you'd be nuts to lock yourself into a situation where you can't recover any of that increase.

If you're hell-bent on doing this anyway, I'd add something in that the rent increases by the greater of, e.g., (1) 5% or (2) 2.5% plus all increases in your normal operating expenses since the time of the lease renewal. That way, if real estate taxes double (again), building insurance goes through the roof (again), or utilities for which you are responsible skyrocket (again), you have a mechanism to pass along these costs.

Thanks everybody. Could RE taxes and/or charges have important unexpected increases? Has it happened in the past?

Lad, you sound like if big increases have certaily happened already...

Depends. If your building requires a min of 2 year lease and or each lease renewal requires a high fee, there is incentive to lock in. My building charges 2,000 per lease and min is 2 years. So if you only go the 2 years, someone has to foot the 2,000 cost every two years.

Proy, you can probably find statistics somewhere about average property tax and maintenance/CC increases. As a real-life anecdote, our building's property tax increased by 50% between 2008 and 2010. I'd hate to have signed a five-year fixed rate lease with a tenant right before that....

Interesting perspectives. I agree that the one-sided option to renew has value, so landlord should either get something for that value (say higher rent, or an upfront fee, or something), or not give it.

However, what if it's a true 5-year lease on both sides? That's exactly what we would want if we rented, because we are looking for a long-term place, whether buy or rent. I wouldn't have any issue with some sort of "inflation" adjuster like what lad suggests. The thing I want to avoid is the uncertainty of seeing if my landlord wants to jack rent for no reason, or kick us out and give the apartment to their niece, the leverage they have knowing we don't want to move, having the game of chicken with the landlord every year, etc. On their end, the landlord would avoid having to look for new tenants frequently, having the risk of having someone move out, paying broker fees (I guess we both avoid that), the apartment sitting empty, etc.

Any reason why a true 5-7 year lease wouldn't work?

What's with people talking about the landlord needing to "get something" in exchange for the long-term lease? How about getting the tenant, who might not otherwise be interested unless the long-term lease is offered?