Renting out your property is one of the most acceptable ways to generate consistent cash flow. That is if you find the appropriate tenants for each property. After all, low turnover and vacancy rates are required for success as a landlord. There are also Brooklyn lease renewal guidelines that a landlord should follow.
Once you’ve found the right tenants, extending their leases year after year is one of the simplest methods to keep that regular cash flowing. However, there are other reasons why renters choose to leave. Marriages or divorces, the addition of a kid, or career relocations are just a few of the many reasons individuals move from one house to another.
Unfortunately, such factors cannot be avoided, and tenants are likely to relocate regardless of what you do to persuade them to extend their leases. However, as a landlord, there are things you can do to encourage tenants who do not have those life conditions to continue renting from you.
Let’s look at lease renewal guidelines to secure long-term tenants in your rental properties.
What Is the Process of Lease Renewal?
When a tenant’s lease expires, they can either move out or have the option to renew it.
In some places, you can incorporate an automatic lease renewal clause in the original lease agreement. This condition permits the lease to automatically renew for another term at the end of the initial duration of stay.
The landlord or renter must provide the other party adequate notice that a lease renewal is not requested to cancel this automatic lease renewal. Furthermore, for a lease renewal clause to be recognized as legitimate and enforceable, it must be distinct from the other lease clauses.
The tenant must sign the lease agreement to acknowledge the clause and accept the terms. You cannot enforce the renewal if you cannot produce the tenant’s signature, initials, or witnessed mark confirming the automatic lease renewal provision on the lease itself.
Some leases do not have automatic renewal clauses. If this is the case, you will need to present a new lease agreement to continue renting to that renter after the lease period.
Brooklyn Lease Renewal Guidelines: Benefits of Lease Renewals
Lease renewals can benefit both landlords and tenants. Lease renewals help tenants since they avoid having to leave a consistent, known area to reside. Renewal of a lease agreement is ideal for tenants who intend to stay in a property unit for more than one year.
The advantages for landlords are more obvious–fewer vacancy periods and continuous rental income. Similarly, landlords can raise their rental prices when a tenant renews their lease.
If you want to raise the monthly rent at lease renewal, you must notify the tenant so that they can decide whether or not to take advantage of the lease renewal at the end of their stay. Then, with the new terms, you must negotiate a new lease agreement.
Brooklyn Lease Renewal Guidelines: Steps to Increase Renewal Rates
You can do various things to convince your tenants to renew their leases at the end of their initial term. Here is a checklist of five procedures while renewing a rental property lease.
Take the initiative
Many landlords believe that renters should initiate lease renewals. However, this is not the case. A renter may not know that process, and expressing your interest in renewing the lease with your tenant might get the process started.
If a tenant believes that a lease renewal is not an alternative, regardless of whether they wish to stay or not. In that case, they may begin exploring elsewhere, leaving you with vacant rental property.
Review comparable market rates in your area; the objective is to keep your rental fee lower than what it would cost your tenant to move to a similar place.
Send out a renewal letter ahead of time. This notifies your tenant you are aware a lease renewal is approaching. Consider having your management business call the tenant directly to discuss the approaching lease renewal choices.
Notify Your Tenant
Keep your tenant informed if you want to raise their rate during lease renewal. Tenants are unlikely to depart because of a minor rent rise. Surprising them at the last minute, on the other hand, is not the ideal way to manage the matter.
You must offer notice if you wish to raise the rent for a future lease renewal. Most counties need written notice at least ninety days before the end of the current year of the tenancy.
If your tenant is hesitant to renew due to a rent raise, consider providing them with market facts. Tenants are able to stay in your rental home if comparable properties are priced similarly.
Be Aware of Tenant Options
Acknowledge that you are not the only one who may desire new lease terms at lease renewal. Anticipating your tenant’s demands for adjustments will make conversations go more smoothly. Although many tenants feel they must use the lease’s automatic renewal clause, this is not always the case.
Tenants are not required to use their automatic renewal option. Many will not, in reality, because it limits what can be bargained in renewal. If a tenant’s complaints are not addressed, they may refuse to sign a lease renewal. As a result, landlords are out of luck.
Provide Incentives
If you have the ideal renter in your rental home and want them to stay, offering incentives is an excellent method to persuade them to extend their lease with you. Keep in mind that if your tenant renews their lease, you will save money and time.
Many landlords believe that they must raise their rents every year. Instead, consider promising not to raise the rent if a lease is renewed to keep a good renter. If you increase the rent on a regular basis, a renter will likely find another place to live and depart because renting provides flexibility.
Another alternative is to offer your tenant a discount on the first month’s rent under the new contract. Your tenant can get their security deposit returned if they respect your property and pay on time (both of which are common reasons for wanting them to stay in your rental house). Again, this provides something of value to your tenant at no expense to you.
Be a Responsible Landlord
Handle problems and complaints as soon as possible, reply to phone calls and texts as quickly as possible, and be courteous. If you have limited contact with your tenants because you use a property management business, be sure you hire a company with an excellent reputation to deal with them.
Getting More Lease Renewal
Using these Brooklyn lease renewal guidelines will encourage your tenants to renew their leases and will boost your chances of attracting long-term tenants. While property management might be profitable, continuous turnover can devastate your financial flow.
Hiring an experienced property management company will increase your chances of obtaining lease renewals from your renters.
Choose Pro Realty for your rental property necessities. You can be confident that not only will original lease agreements include the necessary renewal terms for your renters, but every other part of your rental property will be taken care of.
