Owning rental properties is an excellent way to set yourself up for financial success. However, success only comes with the proper management practices in place. That said, finding reliable tenants is one of the most important parts of owning and operating rental properties. Once you have good tenants, you won’t want to lose them. Instead, you’ll want to encourage them to keep renting from you. Read along as we review some incentives to increase lease renewals in your Northern Virginia rental property.
Contents of This Article:
- Why Are Lease Renewals So Important?
- What to Consider Before Offering Lease Renewals
- Incentives to Increase Lease Renewals
- How Property Management Helps Find Good Tenants
Why Are Lease Renewals So Important?
Finding tenants who are responsible and pay rent on time is crucial for any rental property. When you have a good tenant living in your rental, it can be difficult to find another one once they leave. As such, you may want to consider renewing their lease so they stay in your rental. That way, you don’t have to worry about finding another qualified, reliable tenant.
Lease renewals benefit landlords and tenants, as most tenants don’t want to leave a comfortable, familiar rental. Generally, renewing a lease agreement is great for tenants who want to live in a particular rental unit for longer than a 12-month term.
Lease renewals pose several benefits for landlords, too. After all, no rental owner wants to deal with long vacancy periods or high turnover rates. As such, renewing a lease is the perfect way for property management companies in Northern Virginia to avoid these scenarios.
It’s important to recognize when to renew a lease and when to find a new rental tenant. Next, we’ll go over some considerations and incentives to increase lease renewals in your rental properties.
What to Consider Before Offering Lease Renewals
Although lease renewals help landlords, you may not want to renew a lease for every tenant. For instance, a tenant that often pays rent late or doesn’t follow the lease terms can cost you money in the long run. As such, here are a few points to consider before offering a lease renewal.
- Is the Tenant Reliable?
- When Does Their Lease End?
- Do They Meet Your Qualifications?
Is the Tenant Reliable?
You’ll want to ensure you’re renewing a lease for a reliable tenant. They’re typically good tenants if they pay their rent on time each month, report damages or maintenance concerns immediately, and care for the property. However, if you often receive late rent payments or notice that there’s significant damage to your property, it’s best to avoid renewing your lease. After all, tenants that cause damages or don’t follow the lease agreement are a liability to landlords and their income.
When Does Their Lease End?
Another question you’ll want to ask yourself is–when does their lease end? It’s important to bring up a lease renewal with enough time for your tenants to consider. Sometimes, they’ll come to you with the request to renew their lease. However, if you want to keep them in your property, you’ll want to give them enough notice so they don’t start applying for new rentals. Generally, you’ll want to offer a lease renewal notice 90 days before the current lease expires.
Do They Meet Your Qualifications?
Finally, you don’t want to keep a tenant in your rental that doesn’t meet your qualifications. Most landlords have standards and qualifications that tenants must meet before living in their properties. During the initial screening process, you’ll want to ensure your tenants have a solid income, good credit, and a clear background check. However, before you renew their lease, you’ll want to double-check that nothing’s changed since the initial tenant screening.
Incentives to Increase Lease Renewals
If you know that a tenant wants to stay in your rental property and renew their lease, it might take little to no convincing. However, if you know they’re seeking other options, you might want to incentivize them to renew their lease with you. Here are a few common and practical incentives to increase lease renewals in your rentals.
- Rent Discounts
- Upgrades and Improvements
- Flexible Lease Terms
- Gift Cards or Coupons
- New Amenities or Services
Rent Discounts
Many tenants look for other housing arrangements due to increasing rent prices. Although you may want to increase your rental rates each year, offering a deal to a reliable tenant can save money in the long run. Instead of spending time and money finding a new tenant for your rental, offer your current tenant a discount on their first month’s rent of the new lease. For instance, you can offer a cash bonus or a free month’s rent as a reward for signing a new lease.
Upgrades and Improvements
Property upgrades and improvements can also be a great incentive for tenants to renew their leases. Tenants appreciate a comfortable and functional living space, so upgrading or improving your rental property can make it more appealing and desirable. Luckily, there are several ways to upgrade your rental to make it more attractive to tenants. For instance, you can invest in modern, energy-efficient appliances, upgrade fixtures around the rental, and improve the landscaping to make it more visually appealing.
Flexible Lease Terms
Flexible terms are another significant incentive to increase lease renewals. For instance, tenants wanting stability and security may be inclined to sign a longer lease, knowing they have a place to live for an extended period. Additionally, offering flexible lease terms can allow tenants to choose between a shorter lease or one without penalties for leaving. Ultimately, giving tenants more control over their living situation can appeal to those uncertain about their future plans.
Gift Cards or Coupons
Offering gift cards or coupons is an easy and generally cost-effective way to incentivize or increase lease renewals. By providing a small token of appreciation, like a gift card or coupon to a local business or restaurant, you can create a positive relationship with your tenants and encourage them to stay in your property for another lease term. You can also tailor your gesture to the interests of your tenants. For instance, if you know they’re an avid coffee drinker, you can give them a gift card to a local coffee shop. This type of incentive is more personalized and thoughtful, which can encourage them to keep renting from you.
New Amenities or Services
If you’re looking to keep more tenants in your rentals, adding value to your properties is a good way to do so. For instance, you may consider offering amenities like a pool, gym, or laundry facilities if you didn’t have them before. Additionally, you may offer cleaning, landscaping, or grocery delivery services to make your tenants’ lives easier. After all, in today’s competitive rental market, tenants are looking for more than just a place to live. So, offering amenities and services can be a valuable way for landlords to attract and retain great tenants.
How Property Management Helps Find Good Tenants
Finding good tenants to occupy your rentals can be challenging. So, if you find tenants that meet your qualifications and pay rent on time, consider offering incentives to increase lease renewals. That way, you’ll save precious time and money by not having to find and screen a new tenant.
The process of marketing rentals, sorting through applications, and screening prospective tenants takes time. That said, when you own several rental properties, it can be hard to keep up with tenant needs and rental management tasks. If this sounds like you, it may be time to outsource property management.
Need More Advice? contact us today!
Bay Property Management Group offers comprehensive rental property management to help you find, screen, and communicate with high-quality tenants. So, contact BMG today to learn more about our full-service management in and around Baltimore, Philadelphia, Northern Virginia, and Washington, DC.
