When it comes to property management, the most important thing you can do is to screen well. You need to make sure you are putting the right people in your properties, otherwise you will be in for a world of hurt both financially and emotionally.
After putting the right people in your properties, the next most important thing is to keep those people. This can be done through quality customer service—which is, for the most part, just quality maintenance. But it also can be done by having a lease renewal strategy and executing it effectively.
Don’t just leave things to chance. Actively pursue lease renewals with your quality tenants.
How To Keep Quality Tenants
Most property managers just sit around and wait until it’s time to renew before asking their tenant if they would like to—at a higher rent the tenant didn’t see coming. Others put in a sneaky clause that automatically renews the lease for a year if the tenant doesn’t actively opt-out within 30 days of their lease expiring.
As you might expect, this clause can lead to some very upset tenants. (And perhaps upset landlords, as you might accidentally renew a lease at under-market rent.) These clauses are weasely and bound to justifiably anger your tenants—who are your customers, after all.
And what’s the point? To trap someone in a lease who will now hate you? They will probably just try to sublease it. You may save a little vacancy time but it’s not worth it in terms of the emotional hassle and reputational dings you will likely take.
That tenant won’t be leasing from you in the future, nor will they be sending any referrals your way. Don’t use those clauses.
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