The way of pre-leasing a Shelby Township rental property before it is available for move-in can be a provocative rental method. Some see pre-leasing as a tactic for property owners to avoid vacancies and to guarantee that they have a new tenant lined up before the current one moves out. It sounds like a good idea, but there are some downfalls to pre-leasing that you need to be familiar with before giving it a shot. Let’s take a closer look at how pre-leasing works and some of the typical drawbacks that go with it.
How Pre-leasing Works
In the pre-leasing process, a property manager will list and advertise a rental property before it is suitable for move-in. It could be that the current tenants do not yet move out or because renovations or upgrades are still being made to the home. The property owner will welcome applications and potentially even sign a lease with a tenant before the move-in date.
The Disadvantages of Pre-leasing for Property Owners
One of the initial potential downsides to pre-leasing is that the property owner may not be able to fully ensure that the home will be ready for move-in on the agreed-upon date. Delays in repairs and renovations, as well as other issues, may push back the actual move-in date, leading to difficulty for the pre-leased tenant. This could also open the property owner to legal action from the tenant if they cannot move in on the mentioned date.
If there is huge damage, the new renter may be deceived about the property’s condition. This can lead to frustration early on, which could set an aggressive tone for the length of their tenancy. This is certainly true if the issue is worsened by broken promises or unreasonable wait times. In such instances, it’s not rare for a tenant to take legal action against a Shelby Township property manager.
Moreover, things might become complicated if the current tenant changes their mind about moving out – even after giving official notice. The property owner may have to handle the logistics of having two tenants legally contracted for the same rental home, which, as you can imagine, could quickly turn into a legal nightmare. The new tenant may be dismayed that they will not be able to move into their new home as promised, and the current tenant may also take issue with attempts to get them to move out. That could rapidly ruin a previously positive professional relationship and make future interactions with your tenant much more uncomfortable.
Lastly, pre-leasing can impede a property manager’s ability to screen and vet potential tenants properly. If you cannot show the unit and have the tenant physically present for a rental showing, it can be harder to feel confident in their trustworthiness and ability to fulfill the terms of their lease. Making sure the home is market-ready with your existing renters and determining a suitable time to go see the home also presents difficulties. This can boost the risk of property damage, late rent payments, or other rental issues later on.
Drawbacks for Tenants
Pre-leasing conveys a few potential difficulties for tenants, as well. Among the most significant of these downsides is that pre-leasing can limit an incoming tenant’s ability to negotiate terms or amenities with the property owner, as they cannot physically see and discuss the unit during the lease signing process. This can also create misunderstandings or discrepancies between what was promised and what is provided.
Additionally, once a deposit has been placed, a pre-lease diminishes a tenant’s bargaining power and capability to change their plans. If their financial situations change or they locate a different rental option that better suits their needs or budget, they may not be able to get their deposit back and may not be able to honor the lease they signed. Such factors could quickly end up with a vacant rental property, which is the very thing you were likely hoping to prevent with the pre-lease, to begin with.
In short, pre-leasing conveys a certain amount of risk for both property owners and tenants. It’s critical to weigh the potential advantages against these downsides before selecting to pre-lease your rental property.
It also doesn’t hurt to get the assistance of local rental market experts, like those working at Real Property Management Silverstone, on matters like these! Contact us online to learn more.
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