Mastering Lease Renewals with Tenants
Renewing lease terms with tenants can be seamless when you take enough time to plan and communicate effectively. Making the lease renewal process stress-free does not only contribute to building stronger connections with your tenants, but also the overall well-being of your property. In this article, we will go through practical steps that landlords can follow to master the art of lease renewal smoothly from tenant communication, rental rate adjustment, and staying up-to-date with laws and regulations.
Understanding the Basics
When it comes down to renewing your lease, otherwise known as your tenancy agreement, it really is not that complicated. So long as the terms in your contract are as clear as day. This process is not that different from when you first signed your tenant to a lease, only that it is for a new term. Of course, there would be a change to monthly rates, and informing your tenant of any relevant changes such as whether pets would be allowed into the property. You would be careful to make sure that your lease renewal does not break the local law especially when it comes to notice periods and rent increases.
A tip from us: use SPEEDMANAGE to help you with property management in the palm of your hands!
Proactive Communication is Key
Remember that communication is key, that’s why it’s important to reach out to your tenants before anything else. You should reconsider talking to your current tenants before planning the renewal of your tenancy agreement. What if that tenant plans to leave by the end of the contract? It would be a surprise for you to be wasting your time for nothing.
Steps Before Lease Renewal
- Research Rental Market Rates: To justify any rental rate increases, landlords should research market rates using rental estimate calculators. This data not only supports renewal rates but also incentivizes tenants to sign longer leases.
- Provide Renewal Options: Reach out to tenants 30 to 90 days before the renewal, offering them options. Present two choices: month-to-month at current market rates or a longer lease at a rate below market rates.
- Consider Jurisdictional Regulations: Be aware of local regulations regarding notice periods and rent increase limits. Some jurisdictions may require specific timelines for notice and impose restrictions on rental rate adjustments.
A tip from us: Try SPEEDMANAGE to help you with stress-free property management.
Handling Non-Renewals
As a landlord, it’s important for your property to be occupied as every second, every minute, every hour, and every day of vacancy means NO PROFIT. That is why you should begin marketing your property as early as possible. But your current tenant is still on your property, right? You should let them know about property viewing as soon as you list it on the market again.
Lease Renewal Checklist
Before every lease renewal, it is always a great idea for you to create a checklist. Having a checklist with you on hand ensures that you get to have everything in view and you don’t miss out any important detail, no matter how small. The following list is essential for every tenant agreement:
Lease Extension Date: Clearly state the new end date for the lease.
Rent Adjustment: State new renewal term, rent percentage increase, and the new rent amount.
Other Changes to Terms: Note any additional changes to terms from the original lease.
During the renewal process, landlords should make sure to confirm:
Pet Information: Check for changes in pets, ensuring active pet insurance.
Renter’s Insurance: Confirm the extension of renter’s insurance.
Occupant Information: Verify that all occupants over 18 are listed on the renewal contract.
Property Inspection: Schedule and perform a thorough inspection of the premises.
As landlords interact with tenants proactively, this increases the efficiency of gaining a better ROI from property management. This helps mitigate risks of property turnover and guarantees a consistent rental income. Moreover, making well-informed decisions will also help in striking a balance between the need to raise the rent rate and the desire to hold onto valuable tenants. Successful property ownership does not rely on transactions alone. Rather, mastering lease renewals also results in the budding of positive landlord-tenant relationships, as would be beneficial to you in the long run.
Need help renewing your leases? We got you! Click the button below to contact us now!
