Handy Tips on All Things Lease Renewals
Landlords in Gilbert are typically looking for recurring rental income from their tenants. While you can always use property marketing to find new tenants, it’s a lot less effort to keep the current tenants you have.
One method of doing this is by way of lease renewals. This is a renegotiation at the end of a tenant’s lease term. Some landlords choose to keep the terms the same while others may make changes, especially to keep a great tenant.
This is a handy lease renewal guide for landlords in Gilbert that offers you all there is to know about this important element of tenant retention.
Should You Offer Lease Renewals?
You may or may not want to offer lease renewals to every tenant. Renewing a lease makes the most sense when a tenant is timely with their rent payment and cares for your property.
If you are considering a lease renewal, ask yourself the following six questions:
- Has the tenant vocalized the satisfaction of your property management?
- Is the tenant frequently late on rent?
- Is the tenant causing trouble with others if you live in a multi-family property?
- Do you have the time and resources to look for a new tenant?
- Does the tenant have any written notices?
- Are you willing to allow the tenant to rent month-to-month?
An overall analysis of tenant quality can help with your decision with the lease renewal.
What’s Involved in Lease Renewals?
If you want to keep a current tenant occupied in your unit, you should send a new agreement to the tenant to notify them when the current lease expires. It helps to gauge the tenant’s interest in wanting to continue renting from you. It also offers the opportunity to provide any new terms.
Here is an example of what to say when you ask a tenant for a lease renewal:
Your current lease is expiring on MM-DD-YY. You’re a wonderful tenant and we’d like to offer you a XX/month renewal at $XX/month. Please let us know if you intend to stay with us and we will forward you a new lease. Don’t hesitate to contact us with any questions or concerns.
It’s best to ask a tenant for a lease renewal 90 days before the current lease expires. In case the tenant says no, you should still have at least 60 days to find a new tenant. This will prevent you from scrambling to fill the vacant unit.
However, if a tenant says yes, congratulations! It is time to write your new lease renewal.
Writing Lease Renewals
There are several elements involved when you’re writing a lease renewal. You will want to include components such as:
- Updated names and contact information for the tenant and landlord
- A reference copy of the original lease
- Renewal terms or changes to the existing lease
- The due date of the payment
- A new rent amount, if applicable
- A proposed lease end date
Otherwise, much of the lease will remain the same. You should be using a lease that is drafted by an attorney or professional leasing company in Gilbert such as Brewer & Stratton.
Any major changes should be reflected as necessary within the lease. This might be a change from a yearly rental agreement to a month-to-month agreement. You may even decide to change the terms when it comes to maintenance or repairs.
As you craft your lease renewal, make sure you still abide by all landlord and tenant laws. Any changes must be in accordance with the law, if applicable. Please consult a professional if you are unsure.
Furthermore, if the tenant insists on a month-to-month lease, you can ask for a higher rental rate. This is because of increased flexibility with your rental terms, given the tenant offers 30 days’ notice before moving out.
The Benefits of a Lease Renewal
When you decide to move forward with a lease renewal, this is advantageous on many levels.
Here at Brewer & Stratton, we encourage landlords to renew their leases with quality tenants for the following reasons:
Save Money on Property Marketing
Effective property marketing can be expensive. This is especially true if you are not partnered with a property management company that knows all of the tried-and-true techniques.
For example, do you know the best way to take photos of a rental property? How about where to advertise it? You will also need to consider whether you’re going to stage your property.
The average cost of staging a rental home is $300 to $600 for the initial design consultation. Then, you’ll have to pay $500 to $600 per month, per every professionally staged room. Yikes!
All of this takes money and those expenses add up quickly. If you renew a lease, you can skip each one of these actions and save money at the same time.
Finding Another Quality Tenant
As a landlord, you are well aware that not all tenants are created equal. It can be a time-consuming and also pricey endeavor to find a great tenant to live at your rental property.
Not only will you need to worry about marketing to potential new tenants, but there is also the process of background checks. Once again, you will find yourself involved in yet another time-consuming process.
An empty rental property means no income. This is essentially the worst-case scenario for any landlord, whether it is a multi-unit property or a single-family rental home.
While marketing and staging your property can be expensive, a vacant property is the most expensive of all. It means no income, which can drag on for months. Avoiding the vacancy entirely is the best approach, which is remedied by a lease renewal.
Get Professional Help with Lease Renewals
Brewer & Stratton can help you iron out the details of lease renewals so you don’t have to. We also do plenty of other things including property management, property marketing, maintenance, repairs, and much more.
When you need the assistance of a property management company in Gilbert, look no further than Brewer & Stratton. We offer a free rental analysis and have a 98% occupancy rate, receiving 100+ tenant inquiries per day to keep your rental occupied.
Contact us today to get quality tenants and cost-effective management of your property.