Choosing the Right Tenancy Agreement

Gone are the days when your rental property’s tenant turnover was rapid and seemed to happen in the blink of an eye. More and more Aussie renters are choosing to stay put for longer.

Could COVID have something to do with this? Perhaps, but the numbers of renters were increasing in the years prior to the pandemic so it may not be the only reason.

For landlords and tenants, this means the demand for property is strong – a positive for landlords, a challenge for tenants trying to secure suitable housing.

Finding the right tenant for your property is a process that your property manager is there to help with.

Finding the right tenant can be a little like matchmaking. Once you’ve found that fit, determining the right lease terms is the next step.

While long-term leases may seem like the best option for all parties, it may not always be the case. It is worthwhile discussing the length and type of agreement to put in place to ensure the tenancy is suitable for all involved – tenants, landlords and property managers.

Six- and 12-month leases are commonplace, but there may be circumstances, for both landlords and tenants, where other fixed-term leases may be more suitable.

As a landlord, if you have plans to sell your investment property or complete major renovations down the track, for example, signing a 12-month lease may not be in the best interests of either you or your tenants. Your tenants, on the other hand, may be in a situation where they require a short-term lease. For example, they may be building a home and require accommodation for a shorter period of time before they can move in.

For landlords, a fixed term agreement can provide certainty of income for a period of time, but in some cases, a periodic lease where there is no determined end date may be more suitable.

If, for whatever reason you need to terminate the lease early, ending an agreement early, while in no way impossible, does involve moving through a process.

When determining the right tenancy agreement for your property, think practically, and consider if your circumstance are likely to change and if this may affect your rental property.

If you have any questions about your property’s current or any future tenancy agreement, speak with your helpful and experienced RE/MAX Extreme property manager.

SOURCE: RE/MAX Australia