The longest tenant we’ve ever had at Grace Property Management lived on the same property for 30 years! Not only did the tenant essentially pay the owner's mortgage off, but they saved the owner significantly on turnover and vacancy costs. Over that 30 year span, we did 30 lease renewals with the tenant. As a property management company, we handle lease renewals often and know how impactful a lease renewal can be for both tenant and owner. In this blog, we offer four helpful tips to keep in mind when it comes time to send lease renewals to your tenants.
Remember that turnover is your biggest expense - If you have a good tenant, you should do everything in your power to keep them. In the example of a 30-year tenant, contrasted with that of a tenant who moves every two years, you’re looking at 15 turnovers and probably over a year of vacancy. Not to mention more repair and turnover costs. The longer you can keep a good tenant, the better it is for your bottom line.
Always treat your residents well - Don’t be difficult to work with and then expect your tenant to want to resign at the expiry of their lease. Be prompt with their maintenance requests throughout the duration of their lease so that when it comes time to renew, the tenant will WANT to stay with you.
DID YOU KNOW?
National surveys show year after year that the number one reason tenants leave is poor quality maintenance.
Start early - You should aim to start the lease renewal process 90 days prior to the lease expiration. This is your chance to be proactive — reach out to your tenants before they know its time to leave and make sure you are doing everything you can to ensure their happiness.
Don’t be afraid to increase the rent - Train your residents to expect small but incremental lease renewals. As a rental property owner, your bills go up annually. Build in a yearly rent increase just to stay even on your income. However, never be exorbitant in the amount. You never want to lose a good tenant over rent increases. Remember that over time, a good tenant can save you a lot of money in turn costs and vacancy expenses.
Whether you self-manage or use a property manager for your rental property portfolio, your goal is always the same — keeping great tenants for as long as possible. The Grace Property Management team is here to serve as a resource to you. If you are working through a lease renewal or have questions on any other property management topics, give our team a call. 303-255-1990