Four Ways to Entice Tenants to Stay
When you've found reliable tenants, you want them to stick around. Flipping your rental unit can be both a hassle and an expense; in addition to seeking out new tenants, you also need to ensure the unit is in move-in ready condition, which might require cleaning, painting, and updating. Keeping your current tenants allows you to avoid these costs and rest assured that your property is occupied by reliable people with whom you've already formed a relationship. Fortunately, there are a few things that you can do to ensure that the tenants you enjoy stick around.
1. Varied Lease Options
If you currently offer one-year lease terms, consider broadening your renewal options to entice tenants to stay longer. A landlord with flexible lease options is often appealing to tenants, as they may feel less tied down to a property but happy with your flexibility. For example, you can offer tenants a month-to-month lease with an option to terminate with two-months' notice. This way, tenants have more flexibility in their living arrangement, which is important for those looking buy a home or leave the city in the near future. If you require that tenants sign another long-term lease and do not provide any other options, tenants who are unsure about their future may seek out a property with more flexible lease terms.
2. Renewal Discount
Offering monetary rewards can certainly entice tenants to renew their lease. Decide what type of renewal discount you can afford, and present this offer to your tenants before their lease expires. For example, you can encourage tenants to renew a longer lease by offering a discount on their rent for an 18- or 24-month lease. Even if you don't want to lock your tenants into a long lease, you can still offer a renewal discount for another year.
Offering renewal incentives can allow you to retain your tenants. Incentives come in a variety of forms, so consider your tenants' needs when using this method. For instance, you can offer professional carpet cleaning to spruce up the unit or send in a cleaning service for a one-time deep clean. Offer a gift card to a major retailer or local restaurant upon lease renewal. These incentives are like investments, saving you the costs associated with finding new tenants and letting your current tenants know they are appreciated.
Upgrading your unit has a number of benefits. In addition to increasing its value and attractiveness, a few upgrades might encourage current tenants to renew their lease. Think about what value-adding upgrades will be most welcomed by your tenants. Replace dingy carpeting or appliances that have been a problem for tenants. Offer to have a handyman come in for an afternoon and address minor issues of concern in the home. These upgrades will make your tenants happy, and may encourage them to take care of your property as well.
Rewarding good tenants can benefit both parties in a lease agreement. Your tenants will appreciate your generosity and just might renew their lease as a result. However, your kindness isn't entirely selfless. When you retain your existing tenants, you don't have to deal with flipping the unit and facing the accompanying expenses. Sign those trustworthy tenants on for a few months, another year, or more, and everyone will be happy.
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