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How to Get Tenants to Renew Their Leases: Tips for Landlords



As a landlord, you’re already well aware of the value of quality tenants. Your favorite tenants are the ones who pay their rent on time, keep their units maintained, and make your life easier. Unfortunately, retaining your best tenants isn’t always easy.

Once the perfect tenants are in place, renewing their leases year to year is one of the easiest ways to maintain that steady income flow. However, there are many reasons why renters choose to move out. For example, marriages or divorces, the addition of a child, or job relocations are just some of the various reasons people move from home to home.

Unfortunately, you cannot prevent such reasons, and tenants are apt to move regardless of what you do to encourage them to renew their leases. But, as a landlord, there are things that you can do to persuade tenants without those life circumstances to want to continue renting from you.


Let’s take a look at some essential tips for encouraging your renters to renew their leases and secure long-term tenants in your rental homes.

How Do Lease Renewals Work?

Once a tenant’s lease is up, they can move out, or sometimes, they have the chance to renew the lease. Typically, property management services in Northern Virginia will help by sending out a lease renewal offer around 90 days before the current lease is up.

In some areas, there is the option to include an automatic lease renewal clause within the original lease agreement. This clause allows the lease to renew for another term automatically (or on a month-to-month basis, should the tenant choose) at the end of the original duration of stay.

To terminate this automatic lease renewal, the landlord or tenant must give proper notice to the other party indicating a lease renewal is not desired. Additionally, for a lease renewal clause to be considered valid and enforceable, the clause must be distinctly separate from the other lease provisions on the lease.

The tenant must acknowledge the clause and accept the terms with a signature on the actual lease agreement. You cannot enforce the renewal if you cannot show the tenant’s signature, initials, or witnessed mark acknowledging the automatic lease renewal provision on the lease itself.

Some leases do not have automatic renewal provisions. If this is the case, you must provide a new lease agreement to continue renting to that particular tenant at the end of the lease term.

Benefits of Lease Renewals

Both landlords and tenants can benefit from lease renewals. Tenants benefit from lease renewals because they don’t have to leave a steady, familiar place to live. Renewing a lease agreement is great for tenants who want to stay in a property unit for longer than one year.

For landlords, the benefits are more obvious–fewer vacancy periods and continuous rental income. Similarly, landlords can increase rental rates when a tenant renews their agreements.

If you want to increase the monthly rent upon lease renewal, it is your responsibility to notify the tenant so they can decide whether to take advantage of the lease renewal at the end of their stay. Then, you must then negotiate a new lease agreement with the new terms.


How to get more lease renewals

Now that you know the benefits of retaining residents, you’re probably wondering how you can increase your retention rate.

Here are the top ways to get more lease renewals:

Address Complaints Quickly

At some point, your rental property may have some issues. You must handle these problems quickly. Then, the action you take will be remembered when it's time for lease renewal. Whether it's a noisy neighbor or a malfunctioning appliance, how you handle these issues says a lot about the type of landlord you are to your tenants.

Make sure to add in contact times and days for non-emergencies in your lease so they know how and when to reach you.



Maintain the Property

Many people rent because they have no patience to take care of the property on their own. For that reason, it's essential that you properly maintain the property. Whether that's hiring a crew for lawncare each week or you do it for yourself, don't let it wait.


Offer a Grace Period for Rent

As a landlord, having a grace period for paying rent offers flexibility. Tenants will appreciate that, and it can lead to lease renewals. Clearly state the grace period in your lease agreement and explain when they'll have to pay rent before a late fee.

At the same time, you want to clarify that while you're flexible, it doesn't mean you're willing to go past the grace period without a late fee. So be sure to include that any days after the grace period will incur a late fee.


Adhere to your state’s lease renewal period

The most important first step is to familiarize yourself with your state or city’s lease renewal period policies. In most cases, the period is anywhere from 30 to 60 days. But failing to adhere to local laws can create a lot of work, so it’s worth taking the time to understand the laws governing your building.

If you don’t start the renewal process within the legal time frame, you might miss out on the chance to renew the lease altogether. This could really hurt your bottom line and cost you both time and money.

But even if your state only requires a 30-day notice, it may be worth sending a notice 90 days before the lease expires. That way, you give your resident plenty of time to consider the renewal offer and respond. Additionally, if the resident declines to renew their lease, you’ll have plenty of time to start searching for a new resident to fill the vacancy.

Be smart about rent increases

One of the top factors that dissuade renters from renewing a lease is price. If you intend to increase your resident’s monthly rent upon renewal, be thoughtful about it.

Raising the rent too much could make or break your chance of getting a renewal. Generally, a 3 to 5% increase doesn’t cause much backlash, and won’t be enough to prevent a resident from renewing. However, if your rental rate is currently above market average, raising the rent could potentially be the tipping point to dissuade a resident from staying.

You should also be prepared to address why you’re raising the rent. There’s a good chance your tenant will ask! Explain that your building’s expenses are increasing, and cite specific examples (maintenance, taxes, insurance costs, etc.). You can also point to any amenities you’ve added or are planning to add.

Make the renewal process seamless

Your residents don’t want to jump through hoops. Moving is a pain, but so is a difficult lease renewal process.

So, make sure you’re not creating work for your residents. Send them a notice 60-90 days in advance to give them ample time to consider. Be helpful and courteous — offer to answer any questions they may have or meet in person to discuss.

Handling the process digitally is often the simplest and most preferred way, especially by young millennial and Gen Z renters. So, send emails rather than make phone calls, and provide a digital lease for residents to e-sign instead of having them mail in a hard copy.

Hire a Property Management Company

Hiring a property management company to handle all tenant issues and objections will save you a lot of time and energy. In addition, they have experience working with tenants and providing a service that helps you properly screen tenants that are most likely to renew their lease.

Not only that, they have built-in services to help tenants and landlords get the best experience.


Make Issues With Lease Renewals a Thing of the Past

Make your issues with lease renewals a thing of the past. Instead, hire a property management company to help you care for your listings and your tenants.

If you're looking for property management services, please contact Overland Management today!


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