The procedure of pre-leasing a Suffolk rental property before it is suitable for move-in can be a contentious rental strategy. Some people perceive pre-leasing as a means for property owners to avoid vacancies and to secure that they have a new tenant lined up before the current one moves out. Even though pre-leasing appears to be a wonderful idea, there are a few negatives to consider before doing so. Let’s take a closer look at how pre-leasing works and some of the common pitfalls 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 ready for move-in. This could happen if the current tenants have yet to move out because renovations or upgrades are still being made to the home. The property owner will take applications and may even sign a lease with a tenant before the move-in date.
The Disadvantages of Pre-leasing for Property Owners
One of the first potential downsides to pre-leasing is that the property owner may not be able to fully confirm that the home will be available for move-in on the agreed-upon date. Delays in repairs and renovations or other considerations may push back the actual move-in date, leading to inconvenience for the pre-leased tenant. This could also subject the property owner to legal action from the tenant if they cannot move in on the set date.
If there is huge damage, the new renter may feel tricked about the property’s condition. This can lead to frustration early on, which could set a confrontational tone for their remaining tenancy. This is especially true if the issue is amplified by broken promises or unreasonable wait times. In such instances, it is not uncommon for a tenant to take legal action against a Suffolk property manager.
Furthermore, problems may arise 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 to hear 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 leave. This might quickly sour a previously positive professional relationship and make future interactions with your tenant significantly more difficult.
Finally, pre-leasing can restrict a property manager’s ability to screen and vet potential tenants thoroughly. If you aren’t able to 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. Ensuring the home is market-ready with your existing renters and organizing a convenient time to visit the property are other challenges. This can increase the risk of property damage, late rent payments, or other rental issues in the future.
Drawbacks for Tenants
Pre-leasing has various potential downsides for tenants, as well. Among the most critical of these problems 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 throughout the lease signing process. This can also result in misunderstanding or discrepancies between what was promised and what is provided.
Furthermore, once a deposit is obtained, a pre-lease eliminates a tenant’s bargaining power and freedom to change their plans. If their living circumstances change or they find a different rental option that better suits their needs or budget, they may be denied to get their deposit back and may not be able to honor the lease they signed. Such situations could easily result in a vacant rental property, which is the very thing you were aiming to avoid with the pre-lease, to begin with.
In short, pre-leasing involves a degree of risk for both property owners and tenants. It’s vital to weigh the potential benefits against these drawbacks before agreeing to pre-lease your rental property.
It also doesn’t hurt to get advice from local rental market experts, such as those working at Real Property Management Hampton Roads, on matters like these! Contact us online to learn more.
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