When the end of the lease is near, you have a decision to make, renewing the lease agreement, or finding another tenant. If you have bad tenants, there is nothing to consider, don’t renew the lease. On the other hand, if you have tenants that pay rent on time, take care of the property, and are easy to work, then have quality tenants and you will want to keep them. Finding a new tenant can be time confusing and time is money. The longer you take to find a new tenant, the more money you are losing. This is why we suggest that if you have a great tenant, you should renew their lease.
What Are Some Benefits of Renewing Your Lease?
Besides keeping a great tenant and knowing that they are taking good care of the property, there are other benefits to renewing your lease. One of them is that you will avoid several costs, like advertising, cleaning after the tenant moves out and tenant screening fees. Besides these benefits, you will also save time and reduce the risk of vacancy.
Do You Raise the Rent?
Renewals are the perfect time to evaluate whether you should make any changes to your lease as well as price and rental rules. Raising rent can be intimidating to many landlords but it doesn’t have to be that way. While you can keep the same rent price, you can also consider updating the price. You could increase the rent to the current market value but if you raise it too high then your current tenant might consider not to renew. If you do decide to update the rent price then check local listings, Rentomer, Zillow, MLS, and compare prices. What is your strategy- do you want to be top of the market at all times? or mid-range in hopes of keeping long term tenants?
How to Renew a Lease
The first step is to ask your tenant 60-90 days in advance whether they want to renew the lease. If they do then make the appropriate changes to the terms. Review any new rules with tenants, new rental rate, or thank them for being great tenants and keep the rent the same.
Renewing a lease should be easy. You can email it to the tenant and they can sign it and send it back to you or use e-signature and send the lease by email. Some states recognize these signatures and some states don’t, so make sure you do your research on that.
Checklist:
- Have you done an interior safety check? – checking smoke detectors and CO detectors for proper operation. If you have an older home, make sure you have smoke detectors in each bedroom, in addition to one in the hallway outside the bedrooms.
- Have tenants changed out the air filter? – This will save on AC repairs.
- Lease violations, extra pets, etc.
- Do you have the renter’s insurance renewal?
Hiring a property management company will give you peace of mind and reduce your stress. At Five Star Property Management, we have the experience, tools, and resources to effectively manage your property and maximize the rental value of your home.