A high lease renewal rate is good for any rental property business. If most of your tenants are opting not to renew the rental leases upon expiry, you need to act.
An effective way to increase tenant lease renewals is to offer incentives. A discount on rent, one or two rent-free months, free apartment upgrades, and concierge services are all ideal examples of common incentives.
You're probably already calculating the cost you'll incur to offer these incentives. Well, the return on investment is worth it.
Continue reading to learn how you will benefit!
High Occupancy Rate
Keeping a rental property occupied throughout the year is your goal as a landlord. If you put tenants on a one-year lease term, you'll need to find a new tenant if the current one decides not to renew it.
Finding a responsible tenant can take some time. If one or two months go before you fill the unit, the occupancy rate won't be as high as you'd want it to be.
Lease renewals can enable you to maintain a high occupancy rate since the majority of tenants won't be vacating the property. When you throw in some incentives, you increase the likelihood that most tenants will renew their leases.
Steady Rental Income
Landlords have recurring expenses that must be paid whether the rental is occupied or not.
With that in mind, you can see how it's crucial to ensure a steady income from the rental property. The only way to make that happen is to ensure your property always has a good tenant.
If you have a responsible tenant right now, you want to hold on to them for as long as possible. That's where lease renewal incentives come in handy. Giving such a tenant a free month might sound exorbitant, but what if they leave and the unit stays vacant for three months
Keep Good Tenants
Sometimes finding good tenants can feel like finding a needle in a haystack. That's because a good tenant isn't just one who pays rent on time. They must also use the property responsibly and not cause disturbance to neighbors.
Many landlords use tenant screening to find quality tenants, but do you know what's better than this? Retaining a good tenant!
Tenant screening takes time, and you'll incur a cost if you're using a third-party service. Incentivizing a good tenant to renew their lease is often cheaper and more convenient.
Incentives for Lease Renewals Have Big Benefits
You might not care about lease renewals until you're struggling with tenant retention. If you have the best tenants, don't leave it up to them to decide whether they'll stay on or move. Offer them incentives to renew the lease and you'll see instant results!
Managing tenants can be a challenging task, but you don't need to undergo the trouble. At PMI Heritage, we can help you find and retain high-quality tenants. Although we're part of a national property management franchise, we're locally owned, specifically focusing on the Rodgers, Arkansas market.
Contact us to learn more about what we can do for you.
