Are you aware that acquiring a new tenant can be 5-25 times more expensive than retaining them? This statistic holds true for property managers and landlords across the board.
You know the rental market is highly competitive, so you have to find lease renewal strategies to find an edge. When you retain tenants you'll be making a significant difference in your property's profitability and overall success.
Just what are these strategies? In this guide, we'll explore some of the best lease renewal strategies you can implement today. Read on to get started.
The Importance of Tenant Retention
There are many ways to retain tenants. It's not all about reducing costs after all.
Some things you may consider include the following:
- Ensuring a stable income stream
- Maintaining your property's reputation
- Avoiding the hassle and risks of high tenant turnover
When you have a stable tenant base, you'll significantly improve the financial health of your property. This is because empty units typically translate to a direct loss in revenue.
Communication Is Key
One of the best lease renewal strategies we can offer is to keep your communication lines open with tenants. This means keeping them open throughout the lease term, not just when it's time for renewal.
Be sure to regularly check in with them. This can be either in person or via email or phone calls. This signals to your tenants that you care about their well-being and are responsive to their needs.
Good tenants deserve some help here and there. You can do so by offering incentives like a one-time rent discount or a month free. You could also make small upgrades to improve their unit.
This makes the tenant feel valued. It also works for you as the landlord or property manager since the value of the property will go up. Compare this to the cost of vacancy and advertising for new tenants.
Prompt Renewal Offers
It's poor practice to wait until the last minute to approach your tenants about lease renewals. Send out renewal offers well in advance, ideally 60 to 90 days before the current lease expires. This gives tenants ample time to consider their options and ensures you have enough time to market the unit if they decide to leave.
Don't underestimate your relationship with a tenant; put yourself in their shoes for a moment. One powerful tool is flexibility.
For instance, you could offer different lease term options (shorter or longer leases). Listen to your tenant's needs. A tenant who plans to buy a house in a year might appreciate a shorter lease commitment.
Implement These Lease Renewal Strategies
Tenant retention is not just a cost-saving strategy; it's an investment in the long-term success of your rental property. By implementing effective lease renewal strategies, you can create a positive living experience for your tenants, maintain a steady rental income, and ultimately boost your property's profitability.
Are you curious how much you could profit on your rental with these strategies? Contact San Antonio, TX Property Management Inc. for a free rental analysis today.