Austin Lease Extensions Depend on Timing and Season

austin lease renewalAs we head into the Spring/Summer leasing season in Austin, and I just mailed my first batch of renewal letters, I’m already fielding inquiries from tenants who have lease-end dates that don’t coincide with their future plans.  The inevitable question is “can we have a move-out date of x instead of y?

For one tenant, planning to get married, extending the lease from a March 31 end date to a May 31 end date (two months) is not a problem. The home is owned by a long-term investor, and the new May lease end date benefits both the owner and the tenant. This is a win/win. It places the home dead center of the summer leasing season cycle.

In these win/win scenarios, I have flexibility because the adjustment benefits my client, the owner. I work for the owner and must only make decisions that are in the owner/client’s best interest. Thus, if that same tenant, in that same house, asked for the same 2 month extension for a lease that ended July 31st instead of March 31st, the answer would be “no”. Timing is everything.

July is the last month in which any of the leases in our managed portfolio end. This is on purpose and for a reason, to stay in sync with the leasing and sales season. Allowing a tenant to extend from the end of July to the end of September results in the home ending up “off season”, after school has started and when the number of renters and buyers decreases drastically. Most people relocate and look for new homes during the summer. That’s when we want our managed homes to be available. Spring is the second best time, leading into summer. Fall and Winter are “off season”. Allowing homes I manage to get “off cycle” would be harmful to my owners, so I don’t do it.

Homes that we market for lease in Austin from Aug thru Feb (which we most often end up with as a result of new management accounts), generally take longer to lease and they lease for a lesser amount than obtainable in the Spring/Summer cycle. In other words, this costs the property owner money and time.

These off-season leases are also hard to get back into cycle because we have to find a new tenant willing to sign something other than a standard 12 month lease. Often we’ll try to get an 18 month lease, or shorten it to a 8 or 9 month to reset the cycle, but this gets complicated and causes additional problems in and of itself.

So, what a tenant doesn’t always realize when asking, for example, if they can have have just a 6 month renewal in May because the new house they just bought won’t be completed until Oct or Nov,  is that doing so would place the owner at financial AND logistic risk by having the turnover occur in November, during the worst, slowest time of year. So the answer is “no”, we won’t allow an extension into the slow season.

As a tenant, if you find yourself with a “timing problem” related to the end date of your lease, it’s not reasonable to expect or ask your landlord to cure your timing problem, at no cost or inconvenience to you, by assuming the problem himself. Often, when discussing this with tenants, they get very angry and upset with me and don’t understand why the request can’t be accommodated. I know it’s frustrating, but I simply can’t disadvantage my owner/client by doing favors for tenants. It would be a violation of the fiduciary duty owed to my client. Some tenants understand and accept this, other accuse me of being evil, unsympathetic, and worse. But I’m not that at all.

Every mover has this “mover’s dilemma”. Renters, Sellers and Buyers deal with this all the time. One way around it as a renter becoming a buyer is to offer your seller a “lease-back” for 30 +/- days. This could very well solve your timing problem as well as the seller’s. Inevitably, you both either have two places to live, or nowhere to live. Most want a perfect one-weekend overlap during which you move and pay the least amount of ‘double payment” for the two houses. In an ideal, perfect world, that’s possible. A “lease-back” is a common way for both sellers and buyers to cure this. But asking your property manager to let the owner’s property roll into the offf-season is not.

Be prepared for the reality that, in an imperfect world where the timing most often isn’t perfect, your landlord and his property manager may not be able or willing to cure your timing issues for you. It’s not personal, it’s business. You must factor the costs of this into your overall moving or home buying equation and not be upset if the landlord is not willing to absorb the inconvenience for you.

Posted by Steve
4 years ago
Steve

Steve is a Real Estate Blogger, Husband and Dad, UT Austin Grad, Runner, Real Estate Broker and owner of Crossland Team and Crossland Real Estate in Austin TX.

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