Fixed Term Agreement Or Periodic Agreement
In the case of regular leases in relation to fixed-term leases, one of the most important factors, with the exception of lessor`s insurance and seniority security, is the notice period required by both parties to terminate the lease. As we know, the landlord, with a fixed-term or even periodic lease, is required to prepare the tenants for two months, that the lease is not renewed or that the periodic lease effectively expires. Two months in writing on the corresponding form, a notice to leave the form. For a tenant with a periodic tenancy agreement, they are only required to give the landlord or property manager two weeks. One of the major drawbacks of a periodic lease is that it can endanger your owner`s insurance, so it`s really important that we, the owners, insert the positive and negative aspects for both types of leases, and as I said, we only have two properties at regular intervals. I think that is a good number, because it should be a very small percentage of the portfolio that is actually on a periodic lease, for the property of the landlord and, indeed, the tenant. A periodic lease, the difference being that, although it has a set start date such as a fixed-term lease, there is no deadline. It is only open, there is no physical end date in the rental agreement. This gives a lot of flexibility to both the tenant and the landlord. The cases where it is most popular is when a property is for sale. The landlord could choose to keep the tenants in a periodic lease so that they are not tied to a long-term lease if they have sold it to a landlord who does not have an eight- or twelve-month lease, which can only be terminated by mutual agreement. How does your property manager work when a fixed life ends? Do they proactively want a formal extension of the lease or do they simply automatically proceed with firm contracts, and yet you don`t know? Leases do not necessarily have to be entered into for a period of 6 or 12 months.
Sometimes it is best to enter a varied term (i.e. 5, 8 or 10 months` rent) to prevent the property from becoming available in the middle of winter at a quiet time of year when it may be more difficult to find a tenant. Consider your goals for your investment property before deciding which term is best for you.