The practice of pre-leasing a Henrico County rental property before it is suitable for move-in can be a disputed rental tactic. For some, pre-leasing is viewed as a way for property owners to avoid vacancies and to ensure that they have a new tenant lined up before the current one moves out. It sounds good, but there are certain downsides to pre-leasing that you need to be aware of before you give it a try. Let’s take a closer look at how pre-leasing works and some of the common disadvantages 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 suitable for move-in. It could be that the current tenants have yet to move out because renovations or upgrades are still being made to the home. The property owner will receive applications and probably even sign a lease with a tenant before the move-in date.
The Disadvantages of Pre-leasing for Property Owners
One of the first possible downsides to pre-leasing is that the property owner may not be able to confirm that the home will be ready for move-in on the agreed-upon date. Delays in repairs and renovations, as well as other factors, may push back the actual move-in date, leading to difficulty 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 specified date.
If there is severe damage, the new renter may be deceived about the property’s condition. This can cause dissatisfaction early on, setting a confrontational tone for the duration of their tenancy. This is especially the case if the issue is amplified by broken promises or unexpected wait times. In such scenarios, it is not unusual for a tenant to take legal action against a Henrico County property manager.
Moreover, things can become complex if the current tenant changes their mind about moving out – even after giving official notice. The property owner may have to manage 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 may be surprised to know that they will not be able to move into their new home as promised, and the current tenant may oppose any attempts to get them to depart. That could rapidly ruin a previously positive professional relationship and make future interactions with your tenant much more challenging.
Ultimately, pre-leasing can hinder a property manager’s ability to screen and vet potential tenants correctly. If you are not able 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 that the home is market-ready with your existing renters and determining the best time to see the property are also difficulties. This can result in a greater risk of property damage, late rent payments, or other rental issues down the road.
Drawbacks for Tenants
Pre-leasing has a variety of possible problems for tenants, as well. One of the biggest disadvantages 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 throughout the lease signing process. This can also result in confusion or discrepancies between what was promised and what is provided.
In addition, once a deposit is made, a pre-lease eliminates a tenant’s bargaining power and authority to change their plans. If their personal conditions change or they seek a different rental option that better suits their needs or budget, they are unable to get their deposit back and may not be able to honor the lease they signed. These circumstances might easily lead to a vacant rental property, which is the very thing you were likely seeking to avoid with the pre-lease, to begin with.
In short, pre-leasing involves some risk for both property owners and tenants. It’s critical to weigh the possible rewards against these risks before opting to pre-lease your rental property.
It also doesn’t hurt to acquire the opinion of local rental market experts, like those employed at Real Property Management Richmond Metro, on matters like these! Contact us online to learn more.
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