The practice of pre-leasing a Tillmans Corner rental property before it is ready for move-in can be a controversial rental strategy. For some, pre-leasing is seen as a technique for property owners to avoid vacancies and to secure that they have a new tenant lined up before the current one moves out. While the concept is appealing, there are a few drawbacks to pre-leasing that you must be aware of before diving in. Let’s take a closer look at how pre-leasing works and some of the typical drawbacks 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 may be the case if the current tenants have yet to move out or because renovations or upgrades are still being made to the home. The property owner will allow 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 potential downsides to pre-leasing is that the property owner may not be capable of fully assuring that the home will be available for move-in on the agreed-upon date. Delays in repairs and renovations or other situations may push back the actual move-in date, causing interruption 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 substantial damage, the new renter may feel fooled about the property’s condition. This can lead to frustration early on, which could set an argumentative tone for their entire tenancy. This is doubly true if the issue is aggravated by broken promises or unexpected wait times. In other cases, it’s not unusual for a tenant to take legal action against a Tillmans Corner property manager.
Also, things might become very difficult if the current tenant changes their mind about moving out – even after giving official notice. The property owner may have to handle 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 will be disappointed if they find out that they will not be able to move into their new home as promised, and the current tenant may also be resistant to attempts to get them to leave. That could swiftly sour a previously positive professional relationship and make future interactions with your tenant even more complicated.
To conclude, pre-leasing can hinder a property manager’s ability to screen and vet potential tenants comprehensively. If you’re unable 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 selecting a suitable time to show the home also creates issues. This can lead to a higher risk of property damage, late rent payments, or other rental issues afterward.
Drawbacks for Tenants
Pre-leasing carries several potential disadvantages for tenants, as well. Among the most important of these drawbacks 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 during the lease signing process. This can also lead to misunderstandings or discrepancies between what was promised and what is provided.
Furthermore, once a deposit has been provided, a pre-lease excludes a tenant’s bargaining power and the chance to alter their plans. If their personal circumstances change or they discover a different rental option that better suits their needs or budget, it’s possible that they won’t be able to get their deposit back and may not be able to honor the lease they signed. If this happens, it could easily end up with a vacant rental property, which is the very thing you were likely meant to prevent with the pre-lease, to begin with.
In short, pre-leasing carries a certain amount of risk for both property owners and tenants. It’s crucial to weigh the potential benefits against these negatives before agreeing to pre-lease your rental property.
It also doesn’t hurt to seek the assistance of local rental market experts, like those employed at Real Property Management Azalea City, on matters like these! Contact us online to learn more.
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