HOW TO RENEW LEASES WITHOUT DRIVING YOUR TENANTS AWAY
By Mohammed Rafi, Managing Director, Master Team Real Estate LLC
As a Landlord or Property Manager dealing with managing your property, one of the frequent exercise that you do from time to time is to leasing you property to potential tenants. Every Property Manager understands what it means losing great tenants once the lease period expires.
It takes a lot of effort and time to find a suitable tenant who will fit into your terms and costs as the previous one. That’s why it is always advisable to try and do everything possible to maintain your current tenants when renewing their leases without driving them away.
If you are a Landlord or a Property Manager with property leases coming up, the following are easy tips on how to renew leases without driving your tenant away.
Plan well in advance:
If you are a busy landlord or property manager, you might be shocked to realize that you have leases which are coming to an end when it’s too late. To avoid such management gaps, ensure that you plan in advance by keeping property records on lease renewal dates throughout the year. When you plan ahead, you will have an ample time to find a new tenant in the event the existing one is not willing to renew the lease agreement. In addition, when you know about the lease renewal in advance, you will be able to organize for a smooth transition for every party involved.
Offer competitive rental prices:
When sending the lease renewal letter to existing tenants, ensure that you have updated it with realistic and fair terms. Before you increase prices of your rental units, ensure that you have researched on the prevailing market prices of similar properties in your area.
Remember that tenants want to see value for their money. If you quote high prices for your properties and there are other cheaper comparable units in your neighborhoods, tenants will move out and go for the most affordable ones.
Be responsive and proactive:
Don’t be a stranger to your tenants when an issue that needs to be addressed is raised. Ensure that you are available and show your commitment in addressing complaints directly. When you show commitment, tenants will have fewer reasons to move out when time for lease renewal comes.
If you are able to address issues facing their rental units, you can manage to convince them to stay longer than they have thought. When you should that you care about your tenant’s welfare, you will be able to build strong relationships that will goes for years.
In the event that you are not available, train your staff to be tenant-friendly.
Look after your property:
Ensure that your property is clean and well maintained all the time. Tenants will always admire to live in a well maintained property and you will have less to no vacancy units. As the property manager, ensure that you take repairs and maintenance responsibilities seriously and your tenants will always be happy with your services.
You can do this by offering upgrades of the outdated appliances and fixtures, timely repairs, carrying out pest control treatments, repainting your property interior and exteriors and external glass cleaning services, etc.
Offer renewal incentives:
When tenants have so many rental units to choose from, offering a little gesture to your tenants can go a long way in retaining them for another year if not years. You can consider offering incentives such as gift cards or one month free rent to existing tenants who will agree to renew their leases.
In addition, you can also offer a free upgrade to their rental unit like offering a fresh coat of paint for free to make them feel valued and cared for.
Provide a reasonable grace period when collecting rent:
Always work towards building a relationship with your tenants. If for instance you have indicated that the rent should be due by first of every quarter, you can consider giving your tenant’s a grace period before you contact them.
When you allow your tenants to pay their rent latest by a week, they will feel appreciated and they will not worry about late payment penalties. You should also clearly indicate what constitutes a late rent payment and the penalties charged for such.
When you provide a grace period for rent payment, you will create a win-win situation for you and your tenants because they will feel valued and they will understand what is expected of them. By implementing such a policy, you will treat them fairly and this will motivate them to renew their lease for another year.
Make all the rules and regulations clear from the start:
When a tenant moves in, it’s important to let them know all the rules and regulations that govern the use of your property up front. When they are aware of all the regulations from the beginning, there will be less confusions and conflicts in future.
As the property manager or landlord, it’s your responsibility to inform all your tenants about all those regulations that you have set. Ideally, you need to have rules and regulations that address issues to do with; noise levels, pets, repairs and maintenance, garbage collection, parking, tenant-to-tenant conflict, subletting, fire and other related emergencies among others.
VERDICT
Although there are other reasons which can make tenants to move out of your property during the lease renewal period which are beyond your control such as a growing family or relocation, you can delay the moving period by making your property a great place to live in. When you offer exceptional services and build strong relationships with your tenants, you will create a win-win situation which will enable you renew leases without driving your tenants away.