Renewing leases with great tenants takes much of the stress out of being a landlord. Lease renewals are excellent for cash flow to keep your landlord business profitable. However, it’s not always worth renewing a lease with a tenant. In some cases, taking the time to find a new tenant for your property is a better option.
Generally, lease renewals are essential for the success of your property management business. It is a straightforward process that can benefit both you and your tenant. To ensure there are no issues along the way, we have created the ultimate guide to lease renewals for you.
Why are lease renewals essential?
Let’s say you have had a tenant for six months or a year, and everything has gone relatively smoothly. They are quiet, pay the bills on time, and rarely trouble you for repairs. These types of tenants are longed for by all landlords, so it’s worth making an enormous effort to have them renew the rental lease agreement. Securing great tenants in your property is the best way to make your rental business a success.
When these precious tenants leave, you need to invest time and money into finding new tenants. These costs can include:
Repairs and renovations
Loss of income from an empty property
How much does your time cost? Because the above tasks will require you to invest your time to get the property ready for the next tenant. Some studies suggest that finding a new tenant and getting the unit ready could cost anywhere from $100–$2,500. This price can rise if the unit is left empty for a significant amount of time.
Some circumstances that result in vacancies are unavoidable. Changes in family or employment situations can happen, or the tenant could be looking for something different that might make renewal impossible. Nevertheless, it would be best if you continuously make efforts to renew with the best tenants.
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