Good tenants are gemsto a real estate investor. An experienced investor easily identifies a good tenant and starts preparing the lease renewal the day tenant moves in.
When Should I Renew the Rental Lease?
If you don’t want your property to be vacant for a long time, you shouldn’t wait for the lease termination day. But unfortunately, most landlords make this mistake and end up losing money on rent. As a rule of thumb, you should start preparing or inform the tenant 90 days before the lease termination. Here your goal should be to inform the tenant about lease expiration.If the tenant doesn’t want to continue the rental lease, you’ll have sufficient time to market the property and have a new tenant before it becomes vacant.
4 Things to Consider While Renewing the Rental Lease
1. Good Tenant, Bad Tenant
As I mentioned earlier, good tenants are the gems of any property. If your current tenant pays the bills and takes good care of the property, they definitely fall under good tenant criteria. In this situation, you must try and see if the tenant wants to extend the rental lease.
But if you have a bad tenant or having trouble with your tenant, you must think carefully before terminating the rental lease. However, you’ll have to remember that finding a new tenant may need more time than expected.
2. Rental Terms and Conditions
While renewing the rental lease, your tenant may need some changes in the contract. For example, if the rental lease expires during the mid-winter, it’ll be hard for your existing tenant to find a new home during this off-season. In this case, your existing tenant will ask you to extend the contract where it’ll terminate in the summer.
If you’re planning to extend the current rental lease contract, you should consider these small favors. This will make your tenant happy, and happy tenants mean good cash flow.
If you want to increase your property rents, rental lease renewal is the best time to do so. Before increasing the rent, you’ll have to do some market research and check your neighborhood’s rents. If your rent is too low compared to your neighbors, you should set a rent that matches the current market standard. However, you should never increase the rent too much at a time. Otherwise, your tenant may not want to extend the rental lease.
4. Tenant Respond Time
While renewing the rental lease, you’ll have to give enough time to your tenant. Also, you’ll have to schedule a meeting between you and the tenant about rental lease terms and conditions. And this will need time.
Again, if you’re planning not to extend the rental lease, you must inform the tenant 90 days before the lease termination. This will allow your tenant to find a new home. Besides, you’ll get enough time to find a new tenant as well.
Finding a new tenant may require more time than expected. That’s why before terminating the rental lease contract, give yourself extra 30 days to find a new tenant. Otherwise, you may find your property vacant for a long time.0