Any good landlord or property manager will tell you, finding and renting to quality tenants is really only half the battle. It’s keeping them for the long haul that’s the most important piece of the puzzle. Getting good tenants to renew their leases keeps revenue steadily flowing in while also reducing the time and money it takes to fill vacancies. And fortunately, there are targeted measures you can take to encourage lease renewals. Below are five recommendations from our property management experts.
There’s no rule that says it must be the tenant who initiates the lease renewal process. In fact, to the contrary, there are many instances in which a tenant may not fully understand that process, or realize that it’s even an option. As a result, they may begin looking for another place and end up leaving you with another vacancy to fill. To prevent this, get the ball rolling early. Reach out to your tenant(s), inform them of your interest in re-renting to them and provide them with info on next steps.
In many cases, a landlord or property owner may use the lease renewal as an opportunity to raise the monthly rent cost. While a slight increase may not be enough to drive a good tenant away, springing it on them at the last second could put a bad taste in their mouth. If you’d like to lock in a higher rate for the upcoming leasing period, be courteous enough to provide your tenant with ample notice. Our experts recommend giving notice in writing at least 90 days prior to the end of the current lease.
Landlords aren’t the only ones who may want to modify the terms of the lease during the renewal period. Tenants often have requests for changes of their own. Unfortunately, many tenants are unaware that they are not required to automatically renew the existing agreement, which may cause them not to sign on for another year. To avoid this possibility, let your good tenants know that there is some room for negotiation and encourage them to bring up their concerns so they can be discussed and addressed.
If you have a great tenant that you don’t want to risk losing, consider incentivizing them to stay. For instance, you might agree to keep the rent status quo rather than increasing it or offer them a small discount on the first month of their renewed lease. This may cost you a little bit out of pocket, but if you think of it in terms of the time and money you’ll save by not having to re-rent the place, it becomes clear that it’s worth it in the long run.
Last, but certainly not least, if you want to increase the likelihood that your good tenants will happily renew their leases, then be a good landlord. Be friendly and helpful. Return calls and messages promptly. Handle complaints and repair requests in a timely manner. Take good care of the property, both inside and out. Not only will this keep your tenants happy, but it’ll also ensure that your real estate investments continue to produce solid returns for many years to come.