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 tenants who pay rent on time, take care of the property, and are easy to work with then you will likely want to renew their lease. On the other hand, if you have bad tenants, there is nothing to consider, don’t renew the lease. Though 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 if you have a great tenant, you should always renew their lease.
What are some benefits of renewing your lease?
Besides keeping a great tenant and knowing they are taking good care of the property, there are other benefits to renewing your lease. One of them is 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 raise it too high and your current tenant might consider not renewing. If you decide to update the rent price, check local listings, Rentomer, Zillow, and MLS to compare prices. Consider what strategy you want to take—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 if they are considering renewing their lease. If they do then make the appropriate changes to the terms. Review any new rules or rental rates with the tenant and always thank them for being great tenants. Remember, renewing a lease should be easy with great tenants. To send the new lease agreement, you can utilize online resources with an e-signature software, email them the agreement to physically sign then have them fax or email it back or send the lease by mail. Some states recognize e-signatures and some states don't so be sure to research before sending the lease renewal.
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 CRM properties, we have the experience, tools, and resources to effectively manage your property and maximize the rental value of your home.