The act of pre-leasing a Cumberland rental property before it is prepared for move-in can be a questionable rental strategy. For some, pre-leasing is seen as a way for property owners to avoid vacancies and to guarantee that they have a new tenant lined up before the current one moves out. It appears to be an excellent choice, but there are certain drawbacks to pre-leasing that you should know before you check it out. Let’s take a closer look at how pre-leasing works and some of the common difficulties 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 prepared for move-in. This can be because the current tenants can’t seem to move out or because renovations or upgrades are still being made to the home. The property owner will acknowledge applications and possibly even sign a lease with a tenant before the move-in date.
The Disadvantages of Pre-leasing for Property Owners
One of the first expected downsides to pre-leasing is that the property owner may not be able to completely guarantee that the home will be prepared for move-in on the agreed-upon date. Delays in repairs and renovations or other conditions may push back the actual move-in date, causing bother for the pre-leased tenant. This could also open the property owner to legal action from the tenant if they cannot move in on the settled-upon date.
If there is significant damage, the new renter may feel deluded about the property’s condition. This can prompt disappointment early on, which could set a confrontational tone for their whole tenancy. This is particularly the case if the issue is intensified by broken promises or unexpected wait times. In such circumstances, it’s common for a tenant to take legal action against a Cumberland property manager.
Additionally, things can get very complicated if the current tenant changes their mind about moving out – even after giving official notice. The property owner may have to deal 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 happy to learn 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 quickly sour a previously positive professional relationship and make future interactions with your tenant much more difficult.
In conclusion, pre-leasing can lessen a property manager’s ability to screen and vet potential tenants appropriately. Without having the option 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. Guaranteeing the home is market-ready with your existing renters and finding an adequate opportunity to visit the home also presents difficulties. This can prompt a higher risk of property damage, late rent payments, or other rental issues eventually.
Drawbacks for Tenants
Pre-leasing conveys a few potential hindrances for tenants, as well. Among the most significant disadvantage 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 prompt false impressions or discrepancies between what was promised and what is provided.
Additionally, once a deposit has been made, a pre-lease takes away a tenant’s bargaining power and capacity to change their plans. If their life situations change or they find a different rental option that better suits their needs or budget, they will be unable to get their deposit back and may be unable to honor the lease they signed. Such circumstances could easily end up with a vacant rental property, which is the very thing you were likely trying to dodge with the pre-lease, to begin with.
In short, pre-leasing conveys a certain amount of risk for both property owners and tenants. It’s imperative to weigh the potential benefits against these inconveniences before choosing to pre-lease your rental property.
It also doesn’t hurt to look for the guidance of local rental market experts, like those engaging with Real Property Management Providence, on matters like these! Contact us online to learn more.
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