In July 2020, apartment retention rates were about 53%.
That percentage is higher than many years ago, but what if you want to surpass even that? Tenant turnover is expensive and time-consuming. Shouldn't you do everything in your power to keep your tenants signing lease renewals?
But how do you do it? Working with tenants can be difficult, and not knowing what to do to retain them can be overwhelming. But don't worry!
In this post, we'll go over some tips for how to manage your lease renewals.
Keep reading to learn more.
Start Early
One of the things you can do to put yourself in the best position come renewal time is to start early. Try to send out lease renewals about 90 days before the lease is set to expire.
By starting early, you give your tenants time to think it over and give yourself time to address any issues they may have. It also will help if you're planning on raising the rent because your tenants will have time to adjust to it before they have to make a hard and fast decision.
Additionally, if your tenant decides not to sign a new lease agreement, you will have more time to search for new tenants for the unit. The loss of rental income from vacancies can get expensive quickly, so having this extra time can be crucial.
Offer Lease Renewal Incentives
If your tenants are on the fence about whether they are planning to renew their lease, it can be helpful to offer them a lease renewal incentive. This is some kind of concession on your part that tips the scale for the tenant.
You can offer monetary incentives such as a discount on rent for a month or two, temporarily waiving fees such as parking or pet fees, or offering an extended lease term that will lock them in at their current rent for longer.
Some non-monetary incentives you can consider are to upgrade their appliances, get new carpeting for the unit, or upgrade their parking for free.
These things are also useful in the case that your tenant wants to try and negotiate a lease renewal. If you offer them an incentive that you've already factored into your financials, then you can both walk away happy.
Use Leasing Technology
Another way to help your lease renewals go as smoothly as possible is to use technology to help the process along. If your leases aren't already digital, now would be a good time to switch.
If all your tenant has to do is click a button from the comfort of their home, it makes it easier for them to renew. This also allows them time to look over the lease on their own, which can help to build trust.
Also, having most of your communications and documents online helps because it keeps a clear record of those communications. This record can help to protect both you and your tenants.
Sign A New Agreement
One of the biggest mistakes that you can make when renewing your tenant's leases is not to sign a new lease agreement. Even if you have a verbal agreement, it needs to be recorded on official documents as well.
Not making the lease renewal official by signing a new document will likely cause your tenant to become a tenant-at-will. This means that they could decide to move out with only 30-days' notice, and they wouldn't be held to any stipulations from the original lease.
Help Your Lease Renewals Go Smoothly
Renewing a lease can be a delicate process, but by using these tips, you will help your lease renewals to go smoothly.
If you're an owner and would rather have someone else deal with this while you enjoy the financial benefits, consider hiring a property manager to take care of it for you.
If you're looking for a property manager in the Denver Metro area, contact us today!
