Pros of Tenant Renewing Rental Lease
6 Benefits of a Tenant Renewing Lease
Not every tenant you sign a lease with will want to live in your rental long term. Some will only stay for one lease term, while others will stay for ten years. Having a good tenant renew their lease is a goal for many landlords. Here are six benefits of having a tenant renew their lease agreement.
6 Pros of Tenant Renewing Lease
Placing a tenant in a rental, having them stay for 20 years, paying rent on time every month and never complaining is the dream of every landlord.
While a situation this perfect may be very rare, there are many great things about having a tenant renew their rental lease. Here are six benefits.
1. Save Time of Having to Find New Tenant:
One of the most obvious things about getting a tenant to renew their lease is that you will save time from having to find a new tenant for the property. It is time-consuming and exhausting to find a new tenant.
You will have to post ads, show the property, and then screen prospective tenants to make sure you find the right one for your rental. If a current tenant decides to stay, you will avoid this hassle.
2. Avoid Vacancy Costs:
Holding costs include losing rent each month that the property sits vacant while still having to pay your mortgage, property taxes, and insurance.
3. Don’t Have to Do Apartment Turnover:
Another great thing about having a current tenant renew their lease is that you avoid having to turn over the apartment.
If you were going to be trying to impress new prospective tenants, the apartment would have to look immaculate.
This could involve a thorough cleaning, freshly painting the unit, re-staining a hardwood floor, replacing broken tiles, fixing holes in walls, or even a complete renovation if the unit is dated. If the current tenant stays, you do not have to give the apartment an overhaul, you will just have to do routine maintenance and repairs.
4. Can Increase Rent Upon Renewal:
In most states, you have to wait until a tenant’s lease is up for renewal before you can increase the tenant’s monthly rent. Again, depending on your state’s laws, you may only be allowed to increase it by a certain percentage, but as long as they sign the renewal, you will be receiving more money each month. Typically, you will have to send the tenant a notice of rent increase between 30 days and 60 days before their lease is up for renewal.
5. Current Tenants Understand Expectations:
If you can get a current tenant to renew their lease, you will avoid having to ‘break-in’ a new tenant. With a new tenant, there will be a learning curve for both landlord and tenant.
A new tenant would have to learn your rules, such as following a quiet hours’ policy or the procedure for making repair requests.
You will also have to adjust to a new tenant, for example, you may have to go to the tenant’s apartment each month to collect the rent whereas the old tenant paid their rent by direct deposit.
The current tenant will be familiar with the terms of the lease. He or she will understand the procedures for paying rent each month, will know how and when to contact you for a repair or maintenance request and will understand that if he or she violates the quiet hours’ policy a certain number of times, he or she will face eviction. Not having to deal with this learning curve is a benefit of keeping your current tenant.
6. Want Good Tenants to Stay:
While you may prefer for your problem tenants to move elsewhere, you want your good tenants to stay put. Getting a tenant who does not complain, who is clean, and who pays their rent on time to renew their lease will make your life as a landlord easier.
You never know what you’re going to get when you put a new tenant in the property, even if you screen them thoroughly.
Good tenants also make it easier to attract other good tenants to the property. Good tenants want to live in a clean, quiet property with tenants who are like them, not in a noisy, dirty one.