Inside T&H: Renewals
As we’ve discussed numerous times, vacancy is a cash flow killer.
Not only is it important to rent the property quickly, it’s equally, if not more important, to keep your Tenant in your property.
Renewals are a Landlords best friend.
And as we’ve mentioned in other blogs, renewals are a win-win-win situation, so we do our best to make as many as possible happen.
I say renewals are a win-win-win for the following reasons:
- You don’t have to put out any money for turnover costs or suffer any vacancy.
- The Tenant doesn’t have to deal with the cost and hassle of moving.
- Each member of our staff gets a year end bonus dependent on the amount of renewals we have, so the more the better!
The Renewal Fee
As you may have read on our Pricing page, we charge a $250 renewal fee for each Lease that we renew for a term of 6 months or longer.
For Leases less than 6 months, we charge a $125 renewal fee.
As you will see below, there is A LOT that goes into renewing a Lease. It’s not just sending out a new Lease and getting a signature.
So, let’s dive into the process a bit…
The Renewal Process
The renewal process starts when your Tenant’s lease is 90 days away from expiring.
At this time, our system will send both you and the Tenant an email notification informing you of this time frame.
Oftentimes, at this point, the Tenant may be uncertain of their plans, so another reminder will go out a 60 days and again at 45 days before the Lease expires.
Note: All of our auto-notifiers to Tenants contain retention-related content. We link to a website discussing the high cost of moving and encourage the Tenants to renew.
Typically, there are three scenarios that can occur at the end of the Lease:
- You and the Tenant agree to renew the lease -We try to be as proactive with renewals as possible. Our Leasing Manager will provide a new Comparative Market Analysis (CMA) of the home well in advance of the renewal.
This new rate is sent to our Clients, via a Conversation at the Owner Portal, and we provide 7 days for a response.
We will then present the new rent rate to the Tenant. As you may guess, there are oftentimes negotiations about the rent rate or length of Lease. We will be in communication with you throughout any negotiation.
Once all parties have accepted the new rent rate, we will schedule a Renewal Evaluation within 30-45 days. During this walk-through, your assigned Property Manager will ensure there are no Lease violations and that the Tenant is properly taking care of the home.
If we find any major issues or negligence, we have a couple of different options:
- We send the Tenant a Lease violation and require the violation to be cured before we renew the Lease. Examples of this could be unauthorized occupants or pets.
- We require additional Security Deposit. This may be a good move if we see the Tenant is creating damage in excess of normal wear & tear.
If, when we walk the home, everything seems to be satisfactory, our Leasing Coordinator will draft up a new Lease to send to the Tenant and a new Property Management Agreement to send to you.
2. You do not renew the lease in order to sell the home –
If you decide that you would like to sell your home once the Tenant’s lease is up, we can most certainly assist you with that as well.
We have an in-house Agent whose sole job is to help our Clients buy and sell properties.
Once you inform us that you are interested in selling, we will get you set up with our Realtor so you can further discuss your options.
Note: Keep in mind that we work with a lot of investors around the world, who LOVE occupied rental homes. In some cases, it makes sense to keep the home Tenant occupied while you place it for sale. In other cases, it may make sense to have the Tenant vacate. We’ll certainly advise you on the best method.
3. You or the Tenant do not renew the lease for other reasons –
There are other various reasons why you or the Tenant may not want to renew.
Maybe the Tenants have purchased a home, or maybe they paid rent late every month and you feel the vacancy and turnover is worth trying to find a better Tenant.
Whatever the case may be, we will take the necessary steps to get the home in rent ready condition again so we can get it on the market and re-rented as quickly as possible.
Sometimes, it makes sense for a Tenant to go Month-to-Month. For example, if the Tenant is building a home, they may need a few more months before the home is ready. In addition, you, as the Owner, may want to sell the home and want to wait until we’re in a better selling season.
In addition, although not common, Tenant’s sometimes simply fail to respond to all of our renewal requests. If they fail to respond within 15 days of the lease end date, we will automatically put them into a Month-to-Month status.
This means that their Lease will renew for 1 month, every month and we add a 10% premium onto the current rent rate until they let us know if they want to renew or give notice.
Tenants must provide notice at least 30 days in advance.
If the Tenant does end up going Month-to-Month, we will still conduct an evaluation of the home.
As our Client, you can rest assured that our staff puts a lot of time and effort into increasing renewal rates for you.