Most BTR operators charge the same rent regardless of the lease duration. There are 2 reasons you should take a different approach:
- Longer leases are more valuable to you than shorter leases, all else being equal. Longer leases not only mean the initial lease term is longer, they also mean that the tenant is more likely to renew. This leads to lower vacancy and less admin in future.
- By charging different rents for different lease terms, you can nudge tenants towards your preferred lease term. In this way you can avoid having leases mature at times of the year when demand is low, and you can also avoid having large numbers of leases maturing at the same time.
As the Chart demonstrates, wide variations in the number of leases renewing each month is a strong signal that you aren’t optimizing rent correctly across different lease terms.
Would you like a more consistent occupancy profile in your Build to Rent? Schedule a demo with Price Wizard.
