Oklahoma City had the greatest year-over-year rent increase in the nation at 24.1% in November 2022. This stems from a competitive housing market and an increase in rental property investment.
If you’ve purchased a rental property and are figuring out how to rent it out, you’ll be juggling this same environment. Before you can actually rent out your real estate, you need to figure out what the terms of your agreements will be.
Here we’ll discuss the most common lengths for lease agreements in Oklahoma and how you can make the best choice for you.
Common Lease Lengths
In theory, lease agreements can be any length you want them to be. However, the most common options are one-year, six-months, and month-to-month.
One year is the most common lease length by far. This is because they offer quite a few benefits for landlords.
If you find a good tenant, a year-long lease means you have them locked in for a long time. This helps give you stability and reduces turnover costs. Plus, many tenants like the simplicity of knowing they can stay for a while.
While a strong tenant screening process is important for every lease length, it’s even more critical for one-year leases. You’ll have to stick with the tenant for a while, and evicting a troublesome tenant could be difficult. So, it’s critical you thoroughly screen potential tenants before offering a lease agreement.
Six-month leases are a good mix of the benefits of year-long and month-to-month leases. They allow you to offer flexibility that comes with the possibility for tenants to non-renew after a shorter period of time. This can save you hassle if you end up with tenants that aren’t quite a good fit, without as much hassle as an eviction.
However, it also gives you more advance notice for filling the apartment if the tenant does decide to move out.
Just keep in mind that six-month leases tend to be more affected by seasonality. Many tenants prefer to move in the summer, so timing and adjusting your lease length accordingly can be helpful. You may even want to consider a 9-month lease if the timing wouldn’t line up well.
A month-to-month lease can give you more advantages than you realize. For some tenants, it’s quite a selling point, which can be more difficult to find. You can also charge a premium for this lease length.
In addition, month-to-month leases can make it easier to not renew your lease if you end up with a bad tenant. This can be especially helpful if you have inherited tenants and aren’t sure about their quality as tenants.
Some landlords worry about the high turnover rate. While this can be difficult depending on your market, charging a higher price for rent can help make up the difference.
What Is the Best Length for Lease Agreements?
Figuring out how long you want your lease agreements is a process of weighing the pros and cons of each option. There’s no one option that will work best for everyone.
If you have difficulty choosing and managing the lease process, you may want to enlist the help of a property management company. They can walk you through this and even handle the other day-to-day and big decisions you’ll face.
Make Managing Your Leases Easier
One-year, six-month, and month-to-month lease agreements all have their benefits and downsides. Choosing which one is best for you and your property will require weighing the pros and cons.
If you need more help managing your leases and tenants, a property company can help. Contact the Homeriver Group Oklahoma to get started today!