Landlords want good tenants to stay. Constant tenant turnover is a nightmare, so getting a tenant to renew their lease is an important goal for many landlords. Learn six reasons why having a current tenant stay in your rental property can be beneficial to the landlord.
6 Reasons Landlords Want Tenants to Renew Their Lease
A landlord’s perfect rental scenario would be something close to this:
- You find a quality tenant for your rental within hours of posting the For Rent ad.
- The tenant pays rent on time every month.
- The tenant never complains.
- The tenant stays in the rental property for at least 20 years.
While this perfect scenario may be rare, having a tenant renew their lease is not such a rare occurrence. Here are six of the best ways having a current tenant renew their lease can make a landlord’s life easier.
Avoid Process of Finding a New Tenant
Filing a vacancy and finding a new tenant is time consuming. Finding a great tenant takes even more work. When you are able to get a current tenant to renew their lease, you will avoid this hassle. You will save yourself from having to deal with the entire process including:
- Posting ads
- Showing the property
- Screening prospective tenants
- Signing new lease agreements
- Collecting money
- Going over building procedures, lease clauses and expectations
- Going through a new move in checklist
Avoid Vacancy Costs
In addition to the time it takes to find and interview prospective tenants, it also costs money to do so. There are holding costs and marketing costs associated with having a vacancy.
Holding costs include:
- Losing rent each month that the property sits vacant.
- Still having to pay your mortgage, property taxes, insurance and utility bills.
Marketing costs include:
- Placing ads online or in print media in order to find tenants to fill the vacancy or
- Hiring a real estate agent to find a tenant for you.
Another great thing about having a current tenant renew their lease is that you avoid having to turnover the unit. If you were going to be putting the unit back on the market and trying to impress new prospective, qualified tenants, the property would have to look immaculate. If the current tenant stays, you do not have to give the apartment a complete overhaul, you will just have to do routine maintenance and repairs.
Turning over an apartment includes things like:
- Cleaning the unit top to bottom.
- Freshly painting the unit.
- Re-staining a hardwood floor.
- Replacing broken tiles.
- Fixing holes in walls.
- A complete renovation if the unit is dated.
Can Increase Rent Upon Renewal
In most states, you have to wait until a tenant’s lease is up for renewal before you can increase the tenant’s monthly rent. Check your state’s specific landlord tenant laws because you may only be allowed to increase the rent by a certain percentage. Typically, you will have to send the tenant a notice of rent increase somewhere between 30 days and 60 days before their lease is up for renewal. As long as the tenant signs the renewal, you will be receiving more money each month and you will avoid a vacancy.
Current Tenants Understand the Rules
If you can get a current tenant to renew their lease, you will avoid having to ‘break-in’ a new tenant. With a new tenant, there will be a learning curve for both landlord and tenant.
A new tenant would have to learn your rules, such as following a quiet hours’ policy or the procedure for making repair requests. You will also have to adjust to a new tenant, for example, you may have to go to the tenant’s apartment each month to collect the rent whereas the old tenant paid their rent by direct deposit.
The current tenant will be familiar with the terms of the lease. He or she will understand the procedures for paying rent each month, will know how and when to contact you for a repair or maintenance request and will understand that if he or she violates the quiet hours’ policy a certain number of times, he or she will face eviction. Not having to deal with this learning curve is a benefit of keeping your current tenant.
Want to Keep Good Tenants
While you may prefer for your problem tenants to move elsewhere, you want your good tenants to stay put. Getting a tenant who does not complain, who is clean, and who pays their rent on time is not easy, so getting this type of tenant to renew their lease is ideal. You never know what you’re going to get when you put a new tenant in the property, even if you screen them thoroughly.
Good tenants also make it easier to attract other good tenants to the property. Good tenants want to live in a clean, quiet property with tenants who are like them, not in a noisy, dirty one.