Rental markets nationwide are beginning to lean towards a renter's market. Typically, this means tenants are more prone to negotiating lease renewals. This isn't a cause for concern because rental rates are still leveling out.
Plus, property owners have better bargaining power. They have experienced property management teams working hard to represent their interests.
It is our responsibility to meet rental demand in a constantly evolving market. Tenant retention is our priority, not finding their replacements. In reality, renters do not like relocating yearly, especially if they are satisfied with their current place.
Now more than ever, it's essential to have a strategy to encourage tenants to renew. Here are some tips on how to get tenants to renew their leases.
Schedule Lease Renewals in Advance
It may seem like a no-brainer, but sometimes property owners forget when a tenant's lease agreements are set to renew. That's why creating a system that sends a reminder well in advance, is important.
Most leases renew annually. While a tenant knows when their lease will end, most won't ask about it. It's an expectation you'll send a notice.
If you have a property management team, they can send out notices on your behalf.
The best way to start the process is to begin 90 days before your leases expire. This timeframe lets tenants know you value them and want to continue your landlord-tenant relationships.
Discuss Concerns and Requests
Often, property owners get blindsided during the lease renewal process. The tenant receives the renewal, and suddenly, everything in the rental isn't working properly.
There are two ways to prevent this and maintain good records.
One, utilize tenant portals. With the right property management tools, residents can submit rent payments online and maintenance requests. They can schedule repairs and receive updates.
Two, property inspections should take place, at a minimum, two times during the year. By conducting inspections, the property owner is made aware of maintenance issues.
Incentives Work!
You've been a great landlord, property management is top-tier, and the rental unit is in a prime location. Still, tenant retentions are not a guarantee.
Renewing a lease should never be assumed. Your tenant is your customer, and they want to know they are more than a source of income. Incentives show tenants they're valued.
Offer one month's free rent or an appliance upgrade if they sign a multi-year renewal. Give a gift card to a local Target, Walmart, or home décor store.
Another great option for property investors owning multiple properties is a drawing for a weekend cruise. Every tenant who signs their lease by a certain date is entered to win.
Are You Thinking About How to Keep Tenants?
How to keep tenants shouldn't keep you up at night. Having processes for lease renewals in place makes renewing a lease a breeze. It also doesn't hurt to have an amazing property management team working on your behalf.
If you're not already using Fairfield Property Management, you should. We'd love to offer you a FREE rent analysis for your rental property. From there, we can show you how to improve tenant retention.
