Near the end of every residency, you need to ask yourself whether or not you want to renew your resident’s lease. Today, we’re talking about what you should consider when you’re making this decision.
Is Your Resident Paying Rent on Time?
One factor to consider when you’re thinking about renewing a resident’s lease is if they pay their rent on time. If they do pay on time consistently every month and you’ve never had to send a reminder or ask where the payment is, that’s great. It’s a good reason to renew the lease.
However, if your resident doesn’t pay rent on time every month, you’ll need to decide if you’re okay with that. If they pay a few days late every month but they always pay, you might find it’s tolerable since you get to collect a late fee. The tardy payments may be inconvenient, but if you like the extra income that late fees provided, renewing with a resident who pays late might also work out well for you.
Is Your Resident Taking Care of the Property?
Another thing to consider is how well the residents keep up with property maintenance and cleaning. If you’re always getting maintenance requests because things are breaking or damaged, you might not want to keep those residents in your property.
It’s a good idea to do an inspection before you decide on a lease renewal. This will give you an opportunity to look at the condition of your property. You can also evaluate the resident’s living conditions. If you see damage or pests or indications that the resident may be violating your lease agreement, you may not want to renew. But, if everything looks like it did at the beginning of the lease term, a renewal probably makes sense.
Will You Increase your Rent?
The lease renewal is a good time to increase rent. This is another decision you’ll have to make when you’re renewing your resident’s lease. How much can you increase without chasing the resident out? You will need to do a market analysis to know what other residents are paying in rent for properties similar to yours. If they’re not paying significantly more, you might want to leave the rent where it is so you can retain your high quality residents and avoid turnover expenses.
At Arbors, we conduct a physical inspection 120 to 150 days before the lease expires. Then, we send the report to the owner through our online portal. You’ll have a chance to review the inspection report and our recommendations for how much rent should be increased.
You can review that information and decide if you agree or if you’d like to make a different rental increase or not do one at all. You can also tell us if you’d rather not renew the current resident’s lease. We are here to move forward with what you us to do.
Once we have confirmation about how to proceed, we will coordinate with the resident and send them the paperwork to successfully complete the renewal process.
If you need help deciding whether or not to renew your resident’s lease, contact us at Arbors Management. We’d be happy to help.