What is a long term rental?
Long term rental, as opposed to short term rental consist of longer tenancy lease duration. Unlike a short term rental’s tenancy period of three months to an 11 months rental, tenants who rent for a lease period that is longer than a year would fall under the category of long term rental.
Another characteristic of long term rental is the amount of spontaneous inspections the landlords will do on the property and the tenants.
As the lease period is longer, the landlord would not have to worry about upkeeping the property as regularly as they have to do with a short term rental.
Regular inspections are necessary with short term rental as there are always new tenants coming in hence the property is required to be in tiptop shape.
With long term rental, the bulk of upkeeping the property falls on the tenant’s shoulder unless of course there are major repairs (such as wiring, plumbing and alike).
Do landlords prefer long term rental more?
In the point of view of the landlords, do they prefer long term rental more? The answer would depend on what the landlord is aiming towards.
If the landlords are aiming for stability then yes a long term rental is definitely preferable.
A long term rental would guarantee the landlord to always have a flow of income from the tenants as opposed to having a vacant lot that they constantly have to upkeep with their own funds.
Landlords aiming to always have an occupied lot also prefer long term rental as they are allowed a brief reprieve from having to hunt for new tenants when the previous tenant leaves. The benefit of long term rentals for landlords is definitely not having to start the process of tenant hunting every few months. They save cost on screening the tenant candidates as well as energy in looking for new occupants.
However, if the landlords are aiming to make a bigger sum of income from renting out their properties then long term rental is not for them.
No tenant would agree to stay if the amount of monthly rental is increased by a lot, and most long term rental tenancy agreements would include a clause preventing a hike in the rental cost.
It is also a disadvantage should the landlord decide to no longer want to rent out the property. In other words, in cases where the landlord comes into a financial bind, they cannot spontaneously decide to sell off their rental property without paying off the tenants a large sum as severance pay for kicking them out on short notice.
Most tenancy agreements would also have a clause preventing landlords from kicking out their tenants on short notice without penalties that could include a court case.
How long is the maximum rental term?
Now when we talk about long term rental, we know it is any tenancy period that is above 11 months, BUT what is the maximum rental term?
In terms of SPEEDHOME policy, tenants are allowed up to a maximum of 12 months rental period with lease renewal services available.
Outside of SPEEDHOME, although a 12 months tenancy duration is also the norm, there are those that extend their tenancy anywhere between two to five years.
It is however unlikely for it to extend beyond those numbers in cases of unexpected situations such as tenant’s relocation, landlord’s wanting to sell off the property or even a falling out between tenant and landlord.
Who benefits from a long term rental?
When we ask the question of who benefits from a long term rental, we expect one of the parties to have a higher advantage. However, it is safe to say that both parties have an equal amount of benefit from such an agreement.
As already elaborated above from the landlords perspective, the tenants can also benefit from not having frequent inspections, admittedly not all tenants are good tenants that care for their property 24/7.
Some do weekly house checks, others do monthly maintenance checks while some only bother to do so when something is not working properly. So having the landlord do surprise check-ins is a definite disadvantage for these types of people.
With long term rentals, tenants also need not start house-hunting after every few months, unlike short term rentals.
Tenants can take a break from scouring over rental advertisements and their bank accounts can take a break from having to make payments for new deposits (security, utility, booking) and duty stamps for new tenancy agreement to new landlords for a year at the very least.
Tenants can also benefit from the tenancy clause where landlords are only allowed to raise the monthly rent by a small margin instead of being subjected to a big price hike every time they rent a new place or attempt to do a lease renewal.
Therefore, when you are off on your next rental hunt, consider long term rental, it is not only a break from house hunting but it also only lasts a year should you have the itch to move again.
If you do want to begin searching for rentals, whether short term or long term rentals, consider hunting on SPEEDHOME as not only does it offer both types of rentals but we offer zero deposit when renting and tenants can chat with the landlords as well as view the properties prior to renting.