In Alberta, you cannot increase rent during the term of a fixed-term lease. You must time the leases to match the anniversary date and increase the rent for the next 1-year lease.
The only way around this is to predict what the rent will be in 5 years and set the rent in the lease to that amount. Then attach an addendum for annual discounts. For instance, if today's rent is $1000, then you could set the rent in the lease to be $2000 with a $1000 discount for this year and an $800 discount for next year and so on.
Personally, I would never agree to anything longer than a one-year lease because:
The only way around this is to predict what the rent will be in 5 years and set the rent in the lease to that amount. Then attach an addendum for annual discounts. For instance, if today's rent is $1000, then you could set the rent in the lease to be $2000 with a $1000 discount for this year and an $800 discount for next year and so on.
Personally, I would never agree to anything longer than a one-year lease because:
- I prefer to do a thorough annual inspection before agreeing to renew the lease.
- It is easier to get rid of difficult tenants with a 1-year, fixed-term lease.
The market rent could be $3000 in 5 years and then you would have lost out on a lot of potential profit.
You should never go longer than a one year lease. That way if they are bad tenants you only have to suffer one year and if they are good tenants you can renew with the appropriate rent increase.
The fact is a longer lease provides no greater security for a landlord, the tenants can leave any time, but it does protect bad tenants.
The fact is a longer lease provides no greater security for a landlord, the tenants can leave any time, but it does protect bad tenants.
I did a two year lease for a great tenant, and regret it. He moved out at the end, and I raised the rent by 350 per month. That extra cheap year cost me a few thousand dollars. Now, market rents can also go down, but if I was 350 over market I think it's not likely the average tenant would stay and keep paying without complaint. In retrospect, it was a lose lose situation and one I won't repeat again.
Regards,
Michael
Regards,
Michael