Strategic lease renewals reduces risk & optimises annual yield

28-Mar-2017

Managing your lease is a lot like running a business. When running a business you need to ensure you have adequate cash flow coming in to the business to pay your bills and finish the financial year in the black. Managing a lease is no different. It’s all about managing cash flow. A fixed term lease will always give you greater peace of mind and control in relation to your cash flow.

When it comes time to renew the lease, it’s an ideal opportunity to schedule your lease expiry date and rent reviews for peak leasing periods. These are periods of the year that typically achieve higher rents and faster leasing times.

Contrary to what many people assume, leases don’t have to be taken out for 6 or 12 months. You can request a 7, 9 or 13-month lease if you wish to avoid the slower winter months or receiving notification that your tenant is vacating just before Christmas. Being strategic at lease renewal time reduces your risk of having an extended vacancy with no income and could serve to optimise the annual yield from your investment.

Many landlords also don’t realise that a number of landlord insurance products will not cover you unless you have a current fixed term lease. To avoid getting caught out, ask your insurance company about this today and contact your property manager about reviewing your next lease term when it is due for renewal to ensure it ticks all the right boxes.