Common business wisdom tells us that it costs more to acquire a new customer than it is to retain an existing customer. This applies to rental housing businesses too.
As a Harrisburg rental property owner, you must acquire a new tenant whenever you have a vacancy. The cost of acquisition varies, but you might spend money on property marketing, tenant screening, and onboarding. These expenses would have been incurred had the existing tenant not moved out.
This raises the question: how can you get more lease renewals from your tenants and thus minimize the number of vacancies you have to fill every year?
Check out these lease renewal tips:
Offer Ideal Lease Conditions
Many landlords require tenants to sign rental leases before the onset of occupancy. While the lease protects the rights of both landlords and tenants, it can also either sabotage or support your renewal efforts.
Some lease terms (clauses) make it difficult for tenants to consider a renewal. For example, if the lease is short-term, such as month-to-month leases, nothing stops the tenant from moving out after one month.
On the other hand, a longer-term lease with the option to renew will motivate the tenant to want to see out the lease and possibly renew it if they want to.
Start the Lease Renewal Process Early
Don't wait until the last minute to ask a tenant to renew their lease even if there is a lease renewal clause. You cannot assume that the tenant will take up the option to renew it.
It's recommended to start the process 60-90 days before expiring of the lease. You can send a letter to the tenant informing them of the upcoming expiry and welcome them to start exploring the rental lease extension option.
Sometimes a tenant might be planning to move out not because they have to, but because there are other exciting options available in the rental market. Such tenants can be persuaded to stay beyond their current lease. An early renewal process gives you the best chance to change the tenant's mind.
Lease Renewal Incentives
In a competitive Harrisburg market, a simple lease renewal offer isn't going to persuade a tenant to stay. If there are similar properties with cheaper rents, for example, they'll have an overwhelming urge to leave.
To counter this, throw in a lease renewal incentive. For example, you can discount the rent by say 10% for the next term of the lease.
Other attractive lease renewal incentives include:
- In-unit upgrades, like replacing an old appliance
- Ease your pet policy
- Improve property energy efficiency
- Free month of rent.
Get More Lease Renewals From Your Tenants
Implementing these tenant retention strategies will likely lead to more lease renewals, but remember that above all, you have to offer excellent services to your tenants. If you're the kind of landlord who only shows up when a lease is about to expire, don't expect any positive response from your tenants.
Furthermore, working with professional Harrisburg property management can lead to improved tenant satisfaction and more lease renewals. Hometown Property Management works to improve the lives of Harrisburg landlords through innovative property management solutions.
Get in touch with us today.
