Tenant turnover is expensive. There is the opportunity cost of a vacant unit, costs to find a new tenant, and preparation of the unit for the new tenant.
Therefore, you’ll want to do everything in your power to increase lease renewals. Fortunately, there are several ways to increase lease renewals that are both easy for you and move the needle for your tenants.
Create a Positive Experience for Each Tenant
Seems obvious, right? But it’s a more extensive undertaking than it may at first appear.
You need to focus on giving your tenants a positive experience from the apartment showing through negotiations for a new lease term if you want to maximize retention rates.
When you first show them the apartment, point out the nuances of the place. Each place has its own unique characteristics that a tenant would benefit from hearing about. This will set a positive tone for the property manager/tenant relationship.
Things will break, and issues will crop up. It must be a priority to be responsive to these problems. For example, your tenant is unlikely to want to renew if it took you three days to fix the heat in the dead of winter.
A low-effort and high-reward way to improve retention rates is to give quality tenants a gift around the holidays. You don’t need to spend much time or money on the gift. It could be as simple as spending a morning baking cookies and gifting the baked goods with a short note thanking them for taking care of your property. Your tenants would feel appreciated, and your property would feel more like a home to them. Not to mention, you’d boost the chances of them sticking around for another lease term. Win-win.
Give Breaks on Rent
We’ve established you stand to save a lot of time and money if your tenants renew their leases. So why not give them a break on the rent to entice them to stick around?
By keeping their rent the same, or increasing their rent by an amount that keeps it a little below market value, you give them additional incentive to renew.
Take the 90, 60, and 30-Day Approach
You don’t want to haphazardly email your tenant six weeks before their lease is up and find out that they have been planning to move to a new city for three months and will not renew their lease.
Instead, you want to get a heads up on whether they plan to renew their lease. The best way to do this is by taking the 90, 60, and 30-day approach.
You want to start by checking in 90 days before the lease expires to get a feel for your tenants’ plans. While this might seem overzealous, you will occasionally get tenants, as mentioned earlier, that have made up their minds on moving to a new city. In that case, there would be no chance of them staying, and you could proceed with advertising the apartment to attract the next tenant.
By following up with your tenants at the 60-day and 30-day marks, you’ll get increasingly reliable indications of their plans.
The bottom line is that filling a vacancy involves a lot of work, from preparing the apartment for the next tenant to finding and screening the next candidate. You want to give yourself as much time as possible.
Moving Forward
You’re now equipped with several easy and straightforward strategies to increase lease renewals. The key is to consider your tenant’s point of view. By giving them a positive experience, incentives, and asking about their future plans (in a non-intrusive way), you can decrease the number of lease renewals you have to deal with.
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