Hoping to avoid long vacancies in your rental property? Then you'll need to make the lease renewal process a top priority. You can keep your best tenants and avoid losing money.
Read on to learn the five best practices for lease renewal strategies!
1. Be Proactive
One of the best lease management tips is to prioritize ongoing communication. In other words, start the conversation about lease renewals early. Otherwise, your tenants might start shopping around.
Start talking about lease renewals at least a few weeks in advance. Send your tenant a message through your communication portal or the mail. Explain the details of a new lease and give them your contact information.
Doing this will help tenants feel wanted and valued. They'll also know that you're organized and professional.
2. Simplify the Renewal Process
Good tenant retention strategies should involve technology. Use software, like a tenant portal, to speed up the renewal process. That way, tenants can access the contract and review the terms on their own timetable.
They can sign and submit the lease electronically, which saves the tenant time. You may even want to use your software to send automatic renewal reminders to them. With a portal, tenants won't be bound to your availability.
3. Offer Favorable Terms
Rent increases can be necessary to keep pace with inflation. But if you're hoping to retain good tenants, you might need to consider a flat renewal. In this scenario, you won't be hiking the monthly rate.
It might seem like doing this means you won't gain income. But the upside is that you'll be able to maintain occupancy in your rental. A tenant won't back out of a renewal due to a rate hike that's beyond their budget.
4. Incentivize a Renewal
Some of the most effective leasing strategies use incentives to sweeten the deal. A covered parking spot or month without utility payments, for instance, could be enough to tip the scales in your favor.
For longstanding tenants, you may even want to offer a free month or an upgraded unit. Consider the particular tenant and match the incentive to their interests or needs.
5. Show Flexibility
Finally, don't overlook the value of flexibility. Yes, you might prefer that a good tenant renews for another 12 months, if not longer. But your tenant may be planning an upcoming move to a house or new city.
Be willing to work with good tenants and offer them shorter leases. You may even want to go month-to-month in some cases. Tenants will be more likely to stay and recommend you to friends looking for a place to live.
Pursue These Lease Renewal Strategies
The right lease renewal strategies can help you keep your best tenants. Be flexible with lease terms and rates, and throw in some perks. Start the communication process early and keep the renewal process easy.
At PMI Maryland Solutions, our property management team can help you grow and manage your real estate investments. Let us help you with anything from tenant retention to accounting and reporting. Contact us today to learn more!
