We have a gentleman that owns 3 houses in our park. He has asked for a rent concession. At first I didn’t think we wanted to do that but he is saying that he can pay 3 months in advance and can possibly pay 6 months in advance after he checks on his finances. Would you be willing to discount his lot rent $10 a month for 3 months in advance payments, maybe $20 a lot for paying 6 months in advance? He has also offered to sign a 5 year lease agreement. My question is do you sign a lease agreement for $190 a month for 5 years, OR would you write it up to say $10 (or $20) below the current lot rent so when you raise it over 5 years you can still raise his?Thanks for your thoughts,Leighnae Fabian
I personally never play money games in operating my business. Every tenant is required to pay full rent every month on time and remember a signed lease is no guarantee you will continue to receive rent. What is his reasoning to justify a rent decrease. Does flashing cash allow all tenants to set their own rental rate. Would you give all tenants a rent decrease if they asked. Would you be willing to give a 50% discount for a year in advance.Stick to the business plan and tell him thanks but no thanks. Let him know you will expect his full rent monthly as required.
I’m not 100% on this, but I’m pretty sure you would have no power to non-renew his lease if you took 6 months of pre-payment from him. You may also have trouble evicting him during that time period. I tried doing this when I was a renter early in life. Basically, I had enough money to pay for a year’s worth of apartment rent. When I didn’t meet the credit qualifications, I offered to pay the full year up front. I can’t remember the full explanation, but that idea was rejected. Long story short, it had something to do with them losing some eviction power as a property owner. Ultimately, it led to me building my first house.To address your 5 year lease question, I would say absolutely not. Not only are you having to spell out your rent increases in the lease, but you are also giving up some power to enforce your rules. There are a ton of good reasons why you wouldn’t want to do either. The best thing about this business is month-to-month leases coupled with the high cost of moving. Even though he has 3 homes, you still have him over a barrel.
No money concession unless paying by the year but still have the power to evict at any time in OK!