The 2 Year Leases to Increase Occupancy and Profits — by Alex Craig

Effective on all new homes that we market for rent, we will require a 2-year lease with a built-in rent increase between 3 to 5% in year 2. In 2007 when we started buying for our own portfolio, we used a 12-month lease that is common in the rental industry. Although the average stay with 12-month leases was around 27 months, those tenants who moved out after 12 months killed our bottom line as property owners, thus we moved to the 18-month lease, which is where we have been for the past 11 years. The 18-month lease has been successful in extending occupancy to 33 to 34 months, so why change? In the past year, operational cost have gone up due to labor and material cost; these increases have been felt on routine maintenance, but has really been felt on property turn cost. Our clients come to us to solve these problems and if cost are going up, then we need to figure out how to increase revenues.  The 2-year lease with a built-in increase in year 2 is one of the solutions to increasing revenue on your homes to cover operational cost increases such as insurance, maintenance and property tax increases. The lease renewal patters were the same on the 12 month and 18-month lease, where tenants typically renew once and then go month to month for 3 to 4 months. We see the 24-month lease being no different and will accomplish our goal for a 4 year on average occupancy.  While the 24- month lease is a critical piece towards longer occupancy, customer service and presentation of your home are equally as important. We know by presenting your vacant home as best possible and having excellent customer service, prospective tenants are willing to make a longer commitment, especially those who have experienced lousy service from other PM’s and landlords.  If you want to be entertained, read the Google reviews of other property managers; simply google “Memphis Property Managers” or “Little Rock Property Managers” and read the companies with low scores. Having good reviews as a Property Manager is not easy; just last week, our Memphis management received a 1-star review for denying an applicant with a 475 credit score. Having a score over 4 stars requires customers service to be consistently good, which our staff works daily on exceeding our tenant expectations. Overall, our scores and A+ BBB score reflect the great service we give and core values of the company. Click on the individual links below to read our Memphis and Little Rock reviews.

Memphis Property Management Reviews

Little Rock Property Management Reviews