The End of the 1 Year Lease?

Los Angeles rental listings site RadPad has added short-term rentals as an option for tenants and landlords.Keys

Traditionally, the site focused on long-term rentals and was primarily in competition with sites like Craigslist and West Side rentals. Now, it joins sites like Airbnb, VRBO and Home Away, in offering homes and apartments for short periods of time.

But, the short-term listings on the site won’t be as short as one day. Rather they’ll list week-to-week and month-to-month stays.  It’s one of the biggest requests now a days, people want more month-to-month options. They want more flexible leasing options.

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Raphael Bostic of USC said he sees a trend in renters wanting more flexibility in leasing arrangements.

“Why do we have such a very structured lease setup? You don’t see the three month lease. You don’t see the five year lease for that matter. And part of it I think has been conventional wisdom. Part of it’s been technology challenges,” he said. “So I think what’s happening is that we’re learning about the market because of these disruptive technologies, and it’s leading to the emergence of a whole host of new relationships.”

The change at RadPad is partially in response to feedback from landlords. When they weren’t offering the short-term option, landlords were pulling some of their listings and putting them on sites like Airbnb.  More and more over the last year and a half traditional landlords are trying short-term rentals and finding they can make 30 to 40 percent more a month on short-term.moving couch

Landlords do stand to make more money, but the management of short-term units is a more labor intensive.

Another reason why you have the longer lease is because it provides certainty for the landlord that the unit is going to be occupied.  Housing advocates argue that longer leases provide security for renters too. With more and more property being taken off the traditional rental market, it means fewer options for residents who need a long-term place to live. Currently L.A.’s vacancy rate is at 2.7%.. That lack of supply continues to mean high rental prices – some of the highest in the country.

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So although units rented out for the short-term are at the mercy of price fluctuations in the marketplace. In a place like L.A., landlords don’t have to worry much about the prices going down.

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