View Full Version : multi year contracts
08-29-2005, 12:31 AM
does anyone try to get commercial accounts on multi-year contracts, and if so do you figure in a % increase per year or so? I started doing a property this spring and everyone is talking how much better it looks. (last company sucked) A realty co manages the prop and i do several other rental props for them. This one is big $$ so i want to try to lock it in for the next 5 years or so. My question is should i give it to them at a locked in rate for the duration or add something like a 2% increase every 2 yrs? The prop is 110 houses now, will add 40 more in about 2 months, will be 210 total next fall. any response will be greatly appreciated.
08-30-2005, 01:35 AM
Nobody does this???
08-30-2005, 01:44 AM
I lock my biggest commerical account in for two years. I give them a out if they state in writeing that they went to void the contract 30 days before it expires. I keep the same rate. I feel that if I am locking them in for two years that is two years of gurranteed income that I don't have to worry about looking else where for. The only way they get out is if I screw up and that is not happening. 5 years I don't know about all that I would say find some kind of increase after two if they would go for it. Espically if the propertyu is growing and going to involve more work for you.
08-30-2005, 09:49 AM
I do as Spin does, either a 1 year or 2 year contract, with increases built in as needed.
I do a school district where they're a 3 year contract.
If you lock them in for 5 years, and you're only increasing 2%, if it's really that large, that 2% may not cover the increase in fuel at the rate it's going, for the next 5 years.
I'd stick to a 2 year contract. If you're as much better than you're leading on than the last guys, then you'll have no problem keeping it from year to year to year to year, as long as you're priced fair.
a cost of living adjustment. Most multi-year contract include these.
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