The action of pre-leasing a Findlay rental property before it is ready for move-in can be a doubtful rental approach. For others, pre-leasing is considered 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 sounds great, yet there are sure downsides to pre-leasing that you must know about before you give it a try. Let’s take a closer look at how pre-leasing works and some of the common hindrances 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 ready for move-in. This is particularly the case because the current tenants have yet to move out. After all, renovations or upgrades are still being made to the home. The property owner will acknowledge applications and potentially even sign a lease with a tenant before the move-in date.
The Disadvantages of Pre-leasing for Property Owners
One of the primary downsides to pre-leasing is that the property owner will most likely be unable to completely guarantee that the home will be ready for move-in on the agreed-upon date. Delays in repairs and renovations or different conditions may push back the actual move-in date, resulting in inconvenience 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 decided date.
Assuming there is serious damage, the new renter might have a deceptive outlook on the property’s condition. This can lead to displeasure early on, which could set a confrontational tone for their whole tenancy. This is especially obvious if the issue is deepened by broken promises or unanticipated wait times. In such situations, it’s not unheard of for a tenant to take legal action against a Findlay property manager.
In addition, things can get extremely muddled if the current tenant changes their mind about moving out – even after giving official notice. The property owner may need to manage 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 surely will not be glad to hear that they will not be able to move into their new home as promised, and the current tenant may also disagree with attempts to get them to depart. That could quickly damage a previously positive professional relationship and make future interactions with your tenant considerably more troublesome.
At last, pre-leasing can reduce a property manager’s ability to screen and vet potential tenants appropriately. 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. Ensuring the home is market-ready with your existing renters and finding an acceptable opportunity to visit the property also presents complications. This can increase the risk of property damage, late rent payments, or other rental issues in the long run.
Drawbacks for Tenants
Pre-leasing has numerous potential hindrances for tenants, as well. One of the biggest drawbacks is that pre-leasing can limit an incoming tenant’s ability to negotiate terms or amenities with the property owner, as they can’t physically see and discuss the unit during the lease signing process. This can also produce misunderstandings or discrepancies between what was promised and what is provided.
Additionally, once a deposit has been submitted, a pre-lease removes a tenant’s bargaining power and ability to change their plans. If their life circumstances change or they find a different rental option that better suits their needs or budget, they may not be able to get their deposit back and may not be able to honor the lease they signed. Such situations could easily end up with a vacant rental property, which is the very thing you were likely trying to avoid with the pre-lease, to begin with.
In short, pre-leasing entails some risk for both property owners and tenants. You have to weigh the potential advantages against these disadvantages before choosing to pre-lease your rental property.
It also doesn’t hurt to get the guidance of local rental market experts, such as those employed at Real Property Management Clarity Team, on matters like these! Contact us online to learn more.
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