Rental prices across the country have increased up to 40% in some cities. Landlords who have more expenses tend to increase rent to cover them.
The problem is that not all renters are willing to stay after a rent increase. If you have a good tenant, you'll want to start the renewal agreement process in advance to ensure a tenant wants to stay with the same or new terms.
Keep reading to learn what to know about a lease renewal agreement.
Lease Renewal Benefits
Offering a lease renewal agreement means keeping good tenants that take care of your property, are easy to work with, and pay rent on time. A major benefit of a lease renewal is that you can avoid periods of vacancy.
The process of finding a new tenant requires weeks to market your rental listing, screen possible candidates, and draft a new lease agreement.
Offering current tenants a lease renewal takes less time as it only requires a new rental lease agreement. Plus, it ensures you'll have someone in your unit for at least the next rental period.
Before Offering a Lease Renewal
Before offering a lease renewal, you'll want to decide which tenants don't have lease violations.
A lease renewal won't work if the tenant skips rent payments or doesn't take care of the property. If you have to evict a tenant for these reasons, be sure to do it legally.
Once you decide which tenants to offer a lease extension to, consider if you want to increase rent. A lot of landlords choose to increase rent to offset expenses but need to do so without losing tenants.
If you decide to increase rent, you'll need to send a rent increase notice that you and the renter agree to and sign. This is sent before the lease renewal offer in case the tenant doesn't want to accept a rent increase.
How to Offer a Lease Renewal Agreement
The easiest way to offer a lease renewal agreement is via email, but letters and in-person are also options. You'll want to send this notice at least 90 days before the current lease expires.
In the agreement, include the details of the current lease and the new terms of renewal. You should also state when the current lease expires. Even if you offer the same rent amount, put this in the notice as well.
The goal is to receive a reply from the tenant within 30 days so that you have time to find a new tenant if they decline.
Draft a Lease Renewal Agreement Today!
A good tenant is not always easy to come by. If you want to keep a top-tier tenant, offer them a lease renewal agreement.
If you decide to raise the rent, you'll need to first send out a rent increase notice. After a tenant accepts the new rent price, draft a lease renewal agreement to send via email, in the mail, or person.
Too busy to handle the tasks of spotting great tenants and writing up new lease renewals? Hire property management services to help.
Contact us now to learn what we can do for you.
