Two year leases with an escalation clause?
Started by nemoid
almost 15 years ago
Posts: 1
Member since: Mar 2011
Discussion about
See subject. I want to know how many of you signed (OR WOULD) sign a 2 year lease with an escalation clause which would increase the rent $100/mo in the second year. Thanks.
nemoid:
I use lease excalations like that with my tenants. As long as the escalations are
not onerous or unfair, they have been well-received and often used.
nemoid, best thing would be to have made your offer specifically for the 2 year lease at the price in question, and then pointed to your specific language in question.
Now you are just playing a light game of chicken. Who wants it more?..Will the landlord tell you 'no lease' if you say 'no escalator'? And then can you come back to him (can't imagine a situation where you say 'no', and cant change back to 'yes' for anyone normal)? $1200 is in question. Just have slightly more balls than your landlord, without alienating him that he won't fix your dishwasher when it breaks.
I've signed a lease like that. I've also negotiated to keep rent the same during the second year. But in principle, if the increase were at or less what I'd expect to pay in a one year lease I wouldn't fundamnetally object to including such a thing.
$100 a month each month? or for the year?
negligible amount
"negligible amount"
Depends on the original rent, obviously.
negligible amount my ass.
$1200. You want it or you want someone else to have it?
If and when I grant a tenant a 2 year lease (which is not often), they will pay the same (higher) rent for the full 2 years.
I think that answered the opposite question of what nemoid asked, no?
I was giving my opposite perspective as a landlord, saying that I am hesitant to even give out a 2 year lease. That if you want one, expect to pay more (the whole time)...
If you want to really analyze it, we need to know what % $100 is...
In the dozen years I spent in my last rental, the lease renewal came every year as Mav suggests. There was a one year lease at X per month, or a two year term at Y per month, and Y was always more than X.
Sure, but there's essentially no difference* between this and having a contract where in year 1 you pay X and in year 2 you pay X + ((Y-X)*2).
* Let's just concede interest rates are low at the moment and not worry about net present value.
Maybe not that you can see now, but let me tell you the difference from experience...
If you have the rent bump up, you will get far more tenants asking for a reduction for the 2nd year. People get used to writing a check for one amount. Which also means you will reduce the number of people who "forget" to adjust the amount for the 13th, 14th month and you will have to take the time to go chase after them. Don't forget about the people who will want to break the lease after 1 year...