The way of pre-leasing a Norwich rental property before it is open for move-in can be a debatable rental strategy. Some people think that pre-leasing is a way for property owners to avoid vacancies and to guarantee that they have a new tenant lined up before the current one moves out. It appears to be a great concept, but there are matters you need to understand about pre-leasing before giving it a try. Let’s take a closer look at how pre-leasing works and some of the usual problems 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 open for move-in. It could be that the current tenants have yet to move out or because renovations or upgrades are still being made to the home. The property owner will get applications and possibly even sign a lease with a tenant before the move-in date.
The Disadvantages of Pre-leasing for Property Owners
One of the first possible downsides to pre-leasing is that the property owner may not be fully sure that the home will be open to move-in on the agreed-upon date. Delays in repairs and renovations, along with other factors, may push back the actual move-in date, which is bothersome for the pre-leased tenant. This could also expose the property owner to legal action from the tenant if they cannot move in on the scheduled date.
If there is significant damage, the new renter may believe they lied about the property’s condition. This can make them uncomfortable early on, which could set a harsh tone for their entire tenancy. This is certainly relevant if the issue is compounded by broken promises or unreasonable wait times. In these circumstances, it’s not surprising for a tenant to take legal action against a Norwich property manager.
Furthermore, things might become highly complicated if the current tenant changes their mind about moving out – even after giving official notice. The property owner may have to cope with 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 disappointed to discover that they will not be able to move into their new home as promised, and the current tenant may resist attempts to get them to leave. That could break a previously positive professional relationship and make future interactions with your tenant much more complicated.
In the end, pre-leasing can constrain a property manager’s ability to screen and vet potential tenants adequately. Without being 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. Making sure the home is market-ready with your existing renters and finding the right schedule to visit the property also presents challenges. This can boost the risk of property damage, late rent payments, or other rental issues in the future.
Drawbacks for Tenants
Pre-leasing carries a major issue for tenants, as well. One of the main problems is that pre-leasing can limit an incoming tenant’s ability to negotiate terms or amenities with the property owner since they can’t physically see and discuss the unit during the lease signing process. This can also cause mistakes or discrepancies between what was promised and what is provided.
Additionally, once a deposit is paid, a pre-lease reduces a tenant’s bargaining power and ability to change their plans. If changes happen or they locate a different rental option that better suits their needs or budget, they may not be entitled to get their deposit back and may not be able to honor the lease they signed. As a result, this could easily lead to a vacant rental property, which is the very thing that you were hoping to prevent with the pre-lease, to begin with.
In short, pre-leasing entails some risk for both property owners and tenants. It would be best to weigh the potential advantages against these drawbacks before choosing to pre-lease your rental property.
It also doesn’t hurt to consult with local rental market experts, such as those who work at Real Property Management Beacon, on matters like these! Contact us online to learn more.
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