Renters account for more than 35% of all households in the United States. Despite this, the national rental vacancy rate increased to 6.4% in Q1 of 2023, up from 5.8% in Q4 of 2022. This is due in large part to the rising cost of rent over the past few years.
If you own a rental property, vacancies can have a negative impact on your bottom line. One of the best ways to keep vacancies down is by offering lease renewals to tenants in good standing.
Keep reading to learn some of the best practices for convincing tenants to stay.
Send a Renewal Letter
Be proactive and let tenants know that you want them to stay. Send a renewal letter at least 90 days before the end of their current lease. In this letter, you should include the terms of the new lease, the new rent amount, and the deadline for the tenant to respond.
Give the tenants plenty of time to respond to the letter so they don't feel pressured to make a decision right away. But make sure you also have enough time to market the property and find a new tenant should they decline the renewal offer.
Keep Rent Increases Reasonable
There are no limits to how much landlords can raise rent in Tennessee. You should keep any increases reasonable when trying to retain tenants.
Before sending a renewal letter, determine the fair market value for your rental property. This will help you figure out whether a rent increase is necessary.
If a tenant is on the fence about renewing their lease, be willing to negotiate. Being flexible when it comes to the rent amount or the terms of your lease may help convince tenants to stay.
Another good way to convince tenants to stay is by offering incentives. If tenants pay their rent on time for the full term of their lease, offer them a gift or a discount on rent if they decide to renew.
Communication is Key
Keep lines of communication with your tenants at all times. Make sure they know how to contact you for any issues that may come up during their lease.
If your tenants do come to you with any problems, like a maintenance issue, make sure to respond promptly. Tenants will be more likely to stay if they feel like they're being heard and their concerns are being addressed.
Maintain The Property
It's important to stay on top of the maintenance of individual units, but you also need to make sure that common areas are also well-maintained. Keep hallways and stairwells clean. Fix any damage to the property right away.
It's also a good idea to invest time and money in making your rental property attractive. Consider adding some nice landscaping in front of the building or in a courtyard. Paint the walls, refinish the floors, or decorate the entryway every now and then to keep everything looking fresh.
Get Help with Lease Renewals
Convincing good tenants to stay can be difficult and time-consuming. If you need help with lease renewals, consider hiring a property manager. Property managers can help with everything from tenant screening to lease enforcement, taking a lot of work off your plate.
Looking for property management in Tennessee? Contact us today to let us know how we can help.