Hopefully, you’re not scrambling to get a lease renewed with your tenants days before the lease term is set to end.
The lease renewal period is an important one. You want your good tenants to renew. This leads to lower turnover and vacancy costs. You won’t have to worry about an unoccupied property or repairs and improvements or marketing to find a new resident.
How can you make sure the process is efficient and easy for everyone involved?
We have some ideas. Here’s your landlord guide to lease renewals.
Provide Plenty of Notice
You don’t want to be rushed, and your tenants don’t want to be rushed either. They’re likely considering all of their options as your renewal date approaches.
Send a letter to your residents at least two months ahead of the end of your current lease. Let them know that the date is approaching and invite them to renew their lease agreement with you. Share the new terms of their lease, especially if you’re raising the rent. Ask the tenants to inform you of their decision by a specific date. Ask for that decision in writing.
Make sure you’re staying up to date on all the state laws around lease renewals. Landlords are no longer permitted to avoid renewing a lease agreement without a good reason or just cause.
Raising Rents During Renewals
Most residents will expect that their rent is going up at renewal time. You have to be strategic, however, especially when you’re trying hard to retain your residents. Don’t raise the rent by so much that they immediately decide to move out.
Check the market and see what similar homes in your area are renting for. It’s not a bad idea to price your renewal rate slightly below the market rate. This will incentivize your tenants to stay in place. They’ll do their own research and see that staying in your property would provide value and stability. You’re still earning more in rent, but you’re not risking an expensive turnover period.
Remember that you’re required to provide at least 60 days of notice before you increase the rent.
Tenant Communication During Lease Renewals
You may have tenants who want to negotiate the renewal rate you’re offering or other terms of the lease. Be willing to listen. Maybe they’re asking for a new appliance because something keeps breaking. Perhaps they want a professional carpet cleaning or permission to install a video doorbell.
If there’s something you can easily do to keep good tenants in place, do it. Show them that you’re willing to negotiate for what they need to feel good about staying in the property. If they push back against your rental increase, gather market data to show them that they’re still getting a lot of value, even at the new rental price. Having a good relationship in place with your tenants will help you navigate the renewal process.
If you have any questions about renewing your lease agreement, we’d love to help. Please contact us at Real Estate Gladiators. We serve owners and investors in Monroe, Issaquah, Bellevue, Everett, Lake Stevens, Kirkland and other cities in and around King and Snohomish counties in Washington State.