What is Property Leasing?
A property lease is a contract between two parties where a lessor (property owner) agrees to allow a lessee (tenant) live in a location for a predetermined price and period of time. These can be residential leases or commercial leases.
Many people often wonder whether they should sell their property or lease it. There are many factors which contribute to making this decision, and learning more about the process is crucial to making the best choice for yourself and your family.
These details, among many others, are why finding a trusted and reliable realtor can make this process much more manageable. With the right realtor, the anxiety and stress that this decision normally causes can fade away.
What is Typically Included in a Lease Agreement?
It?s important to understand what exactly goes into drafting a real estate lease agreement, even if you?re not responsible for drafting it yourself. Most lease agreements include the same basic information, including;
- Names of the Tenants
- Lease Term
- Payment of Rent
- Fees, Fines and Charges
- Access to Premises
- Any other rules or guidelines
By including these important sections, landlords and tenants can enter into a mutually agreeable relationship. With the documents outlining terms and conditions, most issues should already have agreed-upon solutions.
What are Some Pros and Cons of Leasing?
As with any major financial decision, the choice to sell or lease a property has both positive and negatives associated with it. With proper research and guidance, it is possible to navigate this relationship in order to capitalize on your property?s equity.
Everyone has a different reason for selling or leasing their property. Some have inherited property but have no personal use for it. Others have lived in a home for years but would like to upgrade or move out of the area.
More have obligations for work which requires them to move. According to USAA, as many as 70% of active duty military members have moved in the previous two years, twice the percentage of the general public.
For people who currently own property, leasing it out to tenants may be a way to earn extra income. This is especially true for those who have already paid off their debts and mortgages.
Many of the more stereotypically negative aspects of leasing can be avoided or lessened with adequate planning and research. Before you lease, it is important to determine details such as who will be responsible for maintenance and upkeep of the property, length of the lease and the monthly rent price. Certain circumstances call for different methods of payment, some using a month to month basis, others on alternate schedules. This should all be outlined in the lease agreement.
Some opt to hire a property manager (especially useful if the owner plans on living away from the property), while others choose to agree that the landlord is responsible. As for damage and other such issues, normally lease agreements lay out these terms in advance.
As with any market based on economic fluctuations, the housing market should be treated the same. When drafting a lease agreement and determining the rental price, it is important to anticipate changes to the property value in either direction. It is possible that the property may be less profitable at times, or may even sit vacant occasionally.
Who can help lease my property?
Making the decision to sell or lease your home might seem overwhelming at first. Regardless of which avenue you choose, the logistics, paperwork and technicalities can make you feel intimidated and anxious. By partnering with a realtor you can trust, you gain industry knowledge and guidance. Read our next article, When Does Leasing Your Home Make Sense.