LLC Or Increased Liability Coverage For Rental
How many of you really hold your rentals in a LLC? I only have 1 rental and I just increased the liability coverage. I understand the protection offered from a LLC but is it really neccessary?
First, I DO NOT think it is greedy to charge a fee for all of the time required because of broken leases/leaving early. In fact, I do not understand tenant/landlord laws that are so liberal for breaking a lease. I have had too much of this lately.
You do need to read the tenant/landlord laws affecting your properties to know if you can do this. I also would look for having a longer notice so that you have more time to re-rent.
I send out renewale letter about 3 month before the lease expires. If they are moving out I know way ahead of time. However sometimes people get transfer etc. When that happens I have a clause in the lease that states they will pay for all cost for the rerenting of the unit. It also states that they will lose their deposit for breaking the lease. It works so far only one has done this and and paid all my cost and gave up deposit.
I think we place too much emphasis on leases ending at a certain time. In my opinion, if a lease ends at an inconvenient time, I ask the tenant if they are willing to go month to month till when I would prefer them to leave and make it worth their while with a slightly discounted rent or something.
Even if you have a lease that ends in March, there is very little to prevent a tenant walking out in the middle of November. I prefer to have tenants who want to stay )(or need to stay) rather than try to use a lease to make them stay. Just my 2 cents though.
JS.
Hmmmm. Very interesting dialogue. So, lets say a tenant gives you 60 days notice. If you list it right away, you will continue to disturb the tenant AND most people give 30 days notice so anyone you market to will most likely want to move before the 60 days. I think 30 days is average not liberal.
Also, when the tenant moves out you need some time to get the place ready for the next tenant. And, how can you "build this loss into the security deposits". The Security Deposits are to ensure that if they trash your place some/all of your expenses are covered. Are you saying you would increase your security deposits and then keep the $?
It sounds like you are most nervous about vacancies in Nov/Dec. If that is the case, then time the end of your leases accordingly.
I found this link helpful as a start: http://www.oag.state.md.us/Consumer/landlords.htm
It warns that Balt. city and some counties have local laws that might pertain to your particular property.
I am now dealing with 10 counties in 3 states (DE,Md,VA), which in hindsite is not efficient.
--Here is part of my lease that works well with my tenants. They like planning ahead. In this case the lease runs from 9/1/09-8/30/07 at 1200./mo. We initial so that we discuss and clarify this para.
16. Holdover by Lessee;
Should Lessee remain in possession of the demised premises with the consent of Lessor after the natural expiration of this lease, a new month-to-month tenancy at the new rental rate of $1350.00 shall be created between Lessor and Lessee which shall be subject to all the terms and conditions hereof but shall be terminated on 45 days written notice served by either Lessor or Lessee on the other party. A 45-day notice is required at expiration of lease and any time thereafter. A new 12 month lease may be entered into per request by Lessee before 8/01/07 at the rate of $1260.00 per month. ___ ___ ___
With some of my properties I require a 60 day notice.
I recently had a tenant who moved into my DE unit on 6/1, gave notice 8/5 that he was vacating because his wife gave him the house back. He was out by 8/15 and showed the property for me but it took until 10/5 to land a new good tenant. He did not pay 9/1 rent. He called about his deposit. I am surprised since if I charge him the cost to re-rent he will owe me money.
Oh, yes, I used to let my 12 mo. leases become mo-mo...no more; too much uncertainty+turnover cost. Time of year makes a huge difference in some markets.
Just be sure to check your local laws on notice. I believe in CA, a 45 day notice is not legally enforceable against the tenant - only 30 days can be used if the tenant gives notice on a lease.