The method of pre-leasing a Lancaster County rental property before it is suitable for move-in can be an arguable rental strategy. Some regard pre-leasing as a strategy for property owners to avoid vacancies and to ensure that they’ve got a new tenant lined up before the current one moves out. It seems intriguing, but there are certain points to keep in mind about pre-leasing before giving it a shot. Let’s take a closer look at how pre-leasing works and some of the usual issues 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 suitable for move-in. This could happen if the current tenants have yet to move out because renovations or upgrades are still being made to the home. The property owner will welcome applications and might even sign a lease with a tenant before the move-in date.
The Disadvantages of Pre-leasing for Property Owners
One of the possible downsides to pre-leasing is that the property owner may not be capable of guaranteeing that the home will be ready for move-in on the agreed-upon date. Delays in repairs and renovations or other occurrences may push back the actual move-in date, which is inconvenient for the pre-leased tenant. This could also subject the property owner to legal action from the tenant if they cannot move in on the mentioned date.
If there is significant damage, the new renter may feel deceived about the property’s condition. This can make them angry early on, which could set a confrontational tone for their entire tenancy. This is certainly the case if the issue is intensified by broken promises or unforeseen wait times. In these types of situations, it’s not common for a tenant to take legal action against a Lancaster County property manager.
Moreover, things can get very difficult 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 certainly won’t be glad to hear that they will not be able to move into their new home as promised, and the current tenant may also take issue with attempts to get them to move out. That could easily ruin a previously positive professional relationship and make future interactions with your tenant much more difficult.
In the end, pre-leasing can impede a property manager’s ability to screen and vet potential tenants adequately. If you can’t 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 choosing the right time to visit the house also presents challenges. This can cause a higher risk of property damage, late rent payments, or other rental issues sooner or later.
Drawbacks for Tenants
Pre-leasing has various potential downsides for tenants, as well. Among the most serious disadvantages is that pre-leasing can limit an incoming tenant’s ability to negotiate terms or amenities with the property owner, as they cannot physically see and discuss the unit throughout the lease signing process. This can also cause problems or discrepancies between what was promised and what is provided.
What’s more, once a deposit is made, a pre-lease takes away a tenant’s bargaining power and ability to change their plans. If their interest change or they seek a different rental option that better suits their needs or budget, they might not be eligible to get their deposit back and may not be able to honor the lease they signed. Such situations could easily result in a vacant rental property, which is the very thing you probably wanted to avoid with the pre-lease, to begin with.
In short, pre-leasing involves some risk for both property owners and tenants. It’s imperative to weigh the possible positives against these downsides before opting to pre-lease your rental property.
It also doesn’t hurt to get guidance from local rental market experts, such as those from Real Property Management Regions, on matters like these! Contact us online to learn more.
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