Replacing a tenant is the most expensive time for a rental property owner. In addition to marketing and placement fees, home repairs might have to be made and, every day that your property remains vacant, it’s not earning you money. That’s why renewing the right tenant can be worth its weight in gold.
From home inspection to the lease renewal notice period, here are some helpful pointers on what you can do to incentivize your tenants to renew, while keeping costs down and maintaining the value of your property.
5. Don’t underestimate the cost of tenant turnover
Your rental property is an investment and, like any other investment, you should be making decisions that lead to the largest return — but, that may not necessarily mean that you should raise the rent on your existing tenants.
The cost of tenant turnover — which can include lost rent during a vacancy, home repairs, and other expenses — can amount to more than a homeowner is able to increase the rent within a given year. In contrast, a reliable, low-maintenance tenant can help keep your expenses to a minimum, even if they aren’t paying the full market value every month.
If you have a number of rental properties that can help you absorb the potential cost of tenant turnover, it may be worthwhile to raise the rent. If you’re more sensitive to fluctuations in your return on investment, it might make more sense to increase the rent in smaller increments. Whatever your situation is, Resolute provides homeowners with recommendations based on their specific needs and risk profile.
4. Incentivize renewal with inexpensive home improvements
Good tenants are hard to come by — especially in areas with high competition over renters. One way to incentivize tenants to renew their lease is to offer inexpensive home improvements, such as installing a ceiling fan, repainting rooms or replacing flooring. These improvements not only make lease renewal a more valuable proposition for your tenants, they also increase the value of your property.
Resolute Property Management makes this a stress-free process by bidding your home improvements out to contractors, just like we do with regular maintenance services — with no additional fees on our part.
3. Regularly inspect your property
Regularly scheduled home inspections enable you to identify problems, and being proactive about repairs can help you keep maintenance costs low as well as improve your relationship with your tenants.
That’s why Resolute conducts property inspections twice annually — once during the halfway point of the lease and once more prior to renewal. During our biannual inspections, we produce a detailed report on the state of your property and every appliance within it, complete with photographs. The report is then made available to you via our homeowner’s portal.
Our biannual home inspections can prevent long-term deferred maintenance, identifies non-compliant tenants and provides more documentation in the unlikely event of a legal dispute.
2. Be proactive with your tenant renewal timeline
You should convey your intent to renew a tenant early and follow up frequently. Adhering to the renewal notice period outlined in the lease shows tenants that you’re prompt and provides you with more legal protection.
Being proactive with tenant renewal can also prevent you from having to shift to a month-to-month lease. There are temporary situations in which a month-to-month lease can work out for tenants and homeowners, but defaulting to this after a standard lease ends means that a tenant need only give 15-days notice before they move out — a very narrow timeframe to make repairs and place a new tenant.
Resolute’s property managers handle communications between the tenant and the homeowner: We reach out to the homeowner 95 days before lease expiration to determine their intent to renew. By day 65, we’ve communicated with the tenant to determine their intent to renew. In the vast majority of cases, lease renewal is completed at least 30 days prior to the current lease’s expiration.
1. Provide prompt maintenance
Over our 10+ years of property management, we’ve found that a poor maintenance experience is the number one reason why tenants opt out of renewing. Being responsive, fair and timely with your tenant’s maintenance needs fosters a positive, long-term relationship that can prevent costs associated with deferred repairs and tenant turnover.
Since maintenance is foundational to maximizing the return on your investment, Resolute has designed a system to promptly resolve repair requests: First, we attempt to troubleshoot the issue with the tenant to address the repair. If that’s not appropriate, we then assign the repair to a vendor. If a repair requires homeowner approval, we’ll seek your consent and provide reminders so that you can act swiftly, keep repair costs down and increase tenant satisfaction.
Ultimately, retaining tenants comes down to the experience they’ve had with you or your property manager. Tending to their repair requests, adhering to the renewal timeline, regularly inspecting your property and providing inexpensive improvements doesn’t just compel your tenants to stay and prevent lost rent due to a vacancy, it also means that you’re maintaining your investment so that it can provide you with value for years to come.