As a property owner, there are few things more valuable to you than a good tenant. Good tenants pay their rent on time, keep your income steady, and generally make your life a complete joy because they keep complaints to a minimum.
Needless to say, when you find a good tenant, you’re also going to want to keep said tenant. That means throwing out all the stops in order to keep them renting from you – being on top of their repairs, treating them with respect and friendly service, and being willing to listen to their feedback.
But there’s one more important aspect to keeping good tenants: being on top of their lease renewals. You see, too many property owners have lost too many good tenants simply because the good tenants had to make other plans while their lease expired. For shame. That’s not how you want to run your business as a real estate investor. Here are four reasons for you to get on top of your lease renewals:
1. Renewal time is prime rent-raising time. Yes, you can raise the rent about 5% when a renter agrees to rent from you, or else you can strike another type of deal with the tenant in order to make sure they stay. One of the reasons long-term tenants are good for business is that they are often willing to pay a little bit extra if you’ve been a good landlord; additionally, the stable income they provide over the years provides you with a little more stability as well.
2. Preventing lulls between tenants. Keeping a tenant on for another lease term is valuable simply because it means you don’t have to advertise for other tenants and cover expenses while the property remains vacant. Because you don’t know how long it will be until you get to the next tenant, there’s a possibility that it will take longer than you initially imagined and therefore your business might go through a “lull.” You can prevent this by being on top of your renewals.
3. You come across as a professional. “I don’t know why my landlord hasn’t contacted me yet,” your tenant might think as their lease term is drawing to a close. Suddenly all of the work you put into being a professional throughout the lease is going to waste, and the tenant is left to wonder if you’re even thinking about them at all. Come across as a professional who’s on top of everything by actually being on top of everything.
4. Increase your tenant retention rate. Finally, this is an important one: the earlier you get to your tenants, the greater a chance you stand at ensuring that their lease is renewed. Why? Because you have the negotiating advantage when you’re not desperate for new tenants. You can offer them specials, deals, or simply remind them that their lease will be up soon enough. The more you show the tenant you’re thinking about them, the more likely they are to stay.