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Lease renewal : any advantage(s) of a longer lease?

Discussion in 'Property Management' started by chattyGoldFish, 27th Feb, 2016.

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  1. chattyGoldFish

    chattyGoldFish New Member

    Joined:
    27th Feb, 2016
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    Location:
    Adelaide
    Hello everyone!

    Is there any advantage of a longer lease eg. 2 years instead of 1 year?

    From the tenant's point of view, does having a longer lease guarantee the rent won't change?

    From the landlord's point of view, I cannot think of any advantage... maybe I don't need to pay the lease renewal fee that often?

    Thanks heaps!
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,593
    Location:
    Adelaide, SA
    Evening

    Differs a little per state, but here in SA a 2 yr lease has to be registered on title.

    Rent can be increased during a 24 month lease (subject to all the normal rent increase rules), but it will need to be specific in the lease as to how many $ its increasing by and what date etc

    Benefit for both landlord and tenant is stability. Set and forget in a way.

    Disadvantage is that things can change for either party in 2 yrs. Relationship break down or job changes and either might regret locking in.
     
  3. Chilliblue

    Chilliblue Well-Known Member

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    18th Jun, 2015
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    Location:
    Australia
    I have three properties on long term leases but they are good tenants and each lease details yearly 4% rental increases. Two have just renegotiated for a further three years and their passing rent was on par with the market.

    I personally would not do longer than one year for a new tenant.
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    Location:
    Sydney or NSW or Australia
    There's a few things that you need to consider:
    • Rent review is to be written into the lease
    • May need to be registered on title (refer to DT)
    • Lease registration fees may be applicable
    • It provides a bit more certainty for both parties
    • Depending upon the length of the lease, the residential tenancy act may no longer apply (3 years or longer in some states) - you can shift some obligations to the tenant upon agreement eg rates.