Parties Agreement
14 September 2016
14 September 2016,

The Buy2Let Shop’s property investment seminars in London cover a wide range of topics for landlords. One subject that’s often hotly debated is tenant contract length. Is it better to offer a long-term contract, or a shorter-term agreement?

If you’ve recently invested in property in the UK, and you’re not sure what length of contract to offer your tenants, here’s a useful run-through to help you – outlining the advantages (and disadvantages) of each option.

Long-Term Tenant Contracts

A long-term contract is loosely defined as anything over two years; though some landlords believe it’s three years or over. There are a number of benefits to offering longer-term contracts, such as:

  • Security. You’ve got guaranteed tenants in your property for an extended period of time, which means less time (and money) spent attracting new ones.
  • Reliability. If you’ve built up a good relationship with them, you’ve also got the advantage of a reliable, trustworthy tenant; who pays their rent on time and respects your property.
  • Renewing contracts. Long-term tenants are statistically more likely to want to renew their contract.

However, there are disadvantages to long-term contracts. For example, if your tenant behaves badly, it’s trickier to evict them. Additionally, your own circumstances may change – and you might not want to be committed to renting for an extended period of time.

Short-Term Tenant Contracts

Short-term tenant contracts tend to be anything from three months to a year – though again, the exact definition varies. These types of contracts can also be beneficial; for very different reasons. For example:

  • Student market. If you want to tap into the highly lucrative student market, you’ll need to offer short-term contracts – as very few students want to commit to anything longer term.
  • Less commitment. For whatever reason, you may not want to be tied into a long-term arrangement with a tenant. A shorter tenancy agreement means you can effectively have your house back within a short time-frame.
  • It’s easier to amend terms. The rental market changes all the time; and you may want to adjust your contract accordingly (or put rent prices up!). With a shorter tenancy agreement, it’s easier to do this.

The main thing that puts landlords of short-term contracts is uncertainty. A higher turnaround of tenants means greater pressure to find new people to rent your property. It’s also harder to build good working relationships with short-term tenants, which might result in them having less respect for your property.

The Buy2Let Shop in Bromley

If you’re looking for buy-to-let property for sale, and you’re unsure about what sort of tenants you want to attract, get in touch with The Buy2Let Shop. We’re a team of property investment agents in London, with in-depth knowledge of the market. We have a large number of prime property investment opportunities, not available to the general public, which are suitable for both long- and short-term tenants.

If required, our team also offer assistance with buying a house at auction, and regularly hold property seminars, to extend your knowledge of the current market. If you’d like to find out more about The Buy2Let Shop’s services, simply visit our website today.

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