Why fixed term tenancies?

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A fixed term tenancy of between 6 to 12 months should be your standard term. This gives the landlord a more secured expectation of rental income, and it has a higher loss of rent cover through landlord insurance in the case the tenants breach the term.

In lower income housing areas, there is a higher preference for periodical tenancy agreements because tenants are not as secure financially, and can be hard wearing on the property. Thus, a higher degree of flexibility is needed. I believe in these rougher areas, a fixed term tenancy of 6 months should be used more than a periodical tenancy agreement. Because the landlord still gets better cover for loss of rent, and if there is a need to evict the tenant, then simply not renewing the tenancy at the end of the 6 month term will suffice.

Contact me for further information if needed.

 

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The property manager

Find out more at www.patrickrankin.co.nz

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