Why Fixed-term Tenancies Are the Best Types Of Arrangements for Rental Homes
Before you come up with a tenancy agreement for your rental homes, you have to determine if a fixed term or a periodic tenancy is appropriate for you. The former involves a predetermined period, while the latter is dependent on the frequency of rent receipts, which could be weekly, fortnightly, monthly or any other times, https://www.youtube.com/user/bhg. Here is a look at the advantages of a fixed-term tenancy agreement over its periodic alternative.
If you have mortgage payments to meet every month, a fixed-term tenancy agreement gives you an assurance that you will pay them comfortably throughout the period. This applies to other types of expenses and personal income from your investment in rental homes, as good local letting agents in Farnham will tell you. Certainty in income is, arguably, the greatest advantage of these types of arrangements.
Tenants cannot abruptly terminate their occupancies in these types of arrangements because they are bound by their contractual obligations. You will, therefore, not have to worry that you will incur losses associated with advertising your rental homes and losing income due to vacancies, at least not until the fixed term is over.
Rent increments can be incorporated in the agreement, which means that you do not have to wait for the term to expire before you increase these amounts, as you'll read at the link to letting agents in Farnham. This is important because it allows you to charge rent rates at the same level with other landlords in your neighborhood.
If you nee to obtain funds from a lending institution, you are in a better position if you have these types of predetermined agreements than when you have periodic tenancies because the former are considered secured sources of income. This will get you funds at more attractive rates and much faster when compared to when you opt for periodic agreements. The fact that rent receipt is guaranteed for a certain amount of time is a desirable feature that will help you if you intend to sell your rental property.
Fixed-term agreements are good ways to identify potential tenants who are serious and responsible. This is because any tenant who does not want to commit to a long term agreement could be financially unstable or simply indecisive. When you rent out to such tenants, you should expect to incur losses due to vacancies and advertising your rental homes.
In conclusion, fixed-term tenancy agreements are gaining popularity due to the benefits highlighted above. It is worth noting that majority of all good letting agents in your area have them in place, making it important for you to follow suit.