The personal objectives you defined for yourself when you began making plans to invest in rental properties are important to review. They relate to your strengths and weaknesses when it comes to working with your property and with tenants. Your personal objectives may also define the length of the lease term you want to offer.

Personal objectives
Your personal objectives for the property may influence where you market your property over the course of its ownership. Securing a tenant for a property that you’ve just acquired could help you get started in the landlording business, but it could be a tenancy of convenience. Within a couple of years, once you’ve established a cash flow for the property, you may begin thinking about renovations. A series of short-term tenancies may allow you to briefly empty the building of tenants at the end of their tenancies (as in the case of college students who may be content with less than year’s lease) and renovate the property. The students’ treatment of the building may have been a small concern prior to the full-scale reno you do, but the reno may set the stage for offering the property to a better class of tenants, or its sale to a new owner.

Alternatively, a property you intend as a long-term hold may prompt you to seek tenants who will stay for two or three years at a time. While you’ll have to factor in rent increases as a possible disincentive for those tenants to stay any longer than two or three years, you may be able to strike agreements with tenants who move to the area for education, a short- or long-term job posting or other reasons that allows you to enjoy a stable tenant, reliable rent payments (maybe even at premium rates) – and the prospect of being able to lease the unit again at the end of the tenancy for a higher rate that reflects where the market has gone in the interim.

Personal qualities
A landlord with the ability or capacity to devote significant amounts of time to a rental property may want a different sort of tenant than a landlord with little desire for hands-on management. Chances are that if you want to attract a stable tenant base, then, you’ll market the property in venues where stable tenants are likely to look. You may choose to avoid marketing on university and college campuses, for instance.

Marketing your investment
The goals established for an investment property may focus on ongoing cash flow or long-term appreciation in value. The length of time that you’ve planned on holding the property will be a factor in determining whether you seek tenants who will be willing to pay the top-market rents that assure you of a solid cash flow in the near-term, or tenants paying rents that allow you to break even on expenses.

On the other hand, retirees on fixed incomes or students may be seeking basic accommodation at basic prices – in short, value for money. A savvy landlord would tend to gradually increase rents rather than wallop such tenants with increases every year.

On the other hand, a landlord seeking to extract maximum value from a property might actively seek short-term tenants willing to pay premium rents and who are able to absorb the maximum allowable rent increase each year. This might ensure year-to-year tenants or regular turnover every two to three years. This would allow the landlord to make upgrades between tenancies, justifying rents that are perpetually top of the market while contributing to the potential resale value of the property.

Alternatively, a landlord may be happy to have a rental property meet its expenses because the real value of the investment is in the appreciation of the land on which the rental units sit. This strategy would require less care in selecting tenants, as anyone willing to pay a rent covering operating expenses for the property would suit.