It’s all about individual tenant quality, there are great and PITA long and short term tenants. The one valid reason to not want a very long term tenants is limitation on how much you can raise the rent and inability to do any major improvement if you want to capitalize more on how much you can collect, like remodel, creating extra bedroom/bath, etc. The latter (inability to do major work since people live there) can also backfire if property gets rundown and tenant cannot do proper maintenance and doesn’t alert you to things that don’t matter to them but matter in the long run.

So, 2 things: Collecting lower rent than what market pays, because it’s hard to raise rent on a good tenant and force people out. And potentially dealing with bigger issues due to neglected maintenance when long term tenant moves out. Latter is especially true for SFH rentals with landscaping/outdoor spaces that have to be maintained in proper order that tenants tend to not pay much attention to.

I wouldn’t go 5 years.
I would go 1 or 2 years (most) and then if all parties are happy, renew for another year or 2. No one benefits from such a long lease and you stand to lose so much (in addition to failure to pay rent think of possible damage - unauthorized pets / lease violations that damage the property / unauthorized sublicensees / angry neighbors /carelessness w property etc). It takes time to evict and it is crazy expensive.

Anonymous wrote:We've had our basement tenant for 20 years. We raise the rent periodically but it's still maybe 20 percent below market. But it's worth it because they make few demands, are very helpful neighbors. Even financially, it's not that much less income than having the place sit empty for a month or two every few years when you look for a new tenant. And I know neighbors who lost 4-5 months rent when their tenant stopped paying and it took a while to get them evicted.

Yep. Renting property can be a risky venture; when you get people who pay you and maintain the property well, it is generally best to keep them even if it means below market rent.

Anonymous wrote:Like signing a 5 year lease with someone? Never doing a price increase? What if taxes or expenses increase? What if they're a bad tenant? What if you lose your job and need to sell?

I get what you are saying, and these aer legit issues. But you can negotiate all of this and include it in the terms of the lease.