Key Points:
- Turnover is your biggest expense, so it pays to treat your residents well.
- The number 1 reason tenants leave a property is due to poor quality maintenance.
- Be sure to stay current with costs and build in a rent increase regularly.
The longest tenant we’ve ever had at Grace Property Management lived on the same property for 30 years! Not only did the tenant pay off the owner's mortgage. They saved the owner significantly on turnover and vacancy costs. Every year, we handle MANY lease renewals, and we know how impactful a lease renewal can be for both tenant and owner. I want to offer four helpful tips to keep in mind when it comes time to send lease renewals to your tenants.
Turnover is your biggest expense. Do everything in your power to keep good tenants. Compare our 30-tenant to a property that has tenant turnover every 2 years. Over a course of that same 30-year period, you have 15 different tenants. You are looking at close to 15 months of vacancy as tenants come and go! Not to mention more repair and turnover costs. The longer you can keep a good tenant, the better it is for your bottom line.
Treat your residents well. Don’t be difficult to work with as a property owner or property management company. Be prompt with their maintenance requests throughout the duration of their lease so that when it comes time to renew, the tenant will WANT to stay with you.
DID YOU KNOW?
National surveys show year after year that the number one reason tenants leave is poor quality maintenance. For more information on maintenance in your property, check out this post.
Start early. You should aim to start the lease renewal process 90 days prior to the lease expiration. This is your chance to be proactive — reach out to your tenants before they know its time to leave. Make sure you are doing everything you can to ensure their happiness.
Don’t be afraid to increase the rent. Train your residents to expect small but incremental lease renewals. As a rental property owner, your bills go up annually, so you will need to build in appropriate yearly rent increase to stay current. However, we advise to never be exorbitant in the amount. You never want to lose a good tenant over rent increases. Remember that over time, a good tenant can save you a lot of money in turnover costs and vacancy expenses.
Whether you self-manage or use a property manager for your rental property portfolio, your goal is always the same — keeping great tenants for as long as possible. The Grace Property Management team is here to serve as a resource to you. If you are working through a lease renewal or have questions on any other property management topics, give our team a call. 303-255-1990
