The ideal is to let your property to the same tenant for many years but should you jump into a long term Tenancy Agreement on day one?
Your current tenants are moving out and you need to find new tenants quickly to avoid an expensive void period.
You've advertised the property, carried out some viewings and accepted an offer. So far so good! The referencing results have come in and it's more good news - the applicants are given the green light, all successful.
You've agreed the deposit and the months rent in advance, but the tenants would like a two year fixed term tenancy, what do you do?
There were calls last year for longer tenancies which, for both landlords and tenants, can seem an attractive option.
For tenants there's the security of knowing they won’t be looking for a new home any time soon, while for landlords there's the confidence of knowing their rent is guaranteed for an extended period.
I can understand both motivations but please remember you have only just met!
Referencing may well have been successful and your ‘gut feel’ may be positive but how confident can you be that all is as it seems and that this will be a happy tenancy for both parties?
What happens if after a couple of months your single tenant meets the man of her dreams who turns out to be the man of your nightmares? Or if you're a tenant and your landlord turns out to be slightly less reasonable than he initially seemed would you want to be tied to him for another 18 months or more? Ending a tenancy during the fixed term can be expensive and difficult (if possible at all) for the party that wants out.
For this reason we recommend inserting a six month break clause into the tenancy agreement. This option shows an intention from both parties for a longer term commitment while simultaneously giving both the option to end the agreement early if necessary.
Once this initial period has been completed and a level of trust and confidence established then a longer term contract can be entered into at less risk.
For information and advice on property investment and successfully letting your property contact Belvoir!