The volatile real estate market has led to a new "rent forever" trend. It's especially prevalent among young people who can't afford to buy a home.
Data suggests that 25% of millennials plan to rent their entire lives. 45% cite rising prices as the reason. Only 20% say they have enough for a down payment on a home.
Keeping a forever renter in your property is like a dream come true for a landlord because it prevents vacancies and turnovers. The keywords of that sentence, though, are "keeping them." How should you go about that?
Read on for tips on how to increase lease renewals.
Be Careful When Increasing Rent
Consider your new lease terms with care, especially rent. The average renter already must make $79,264 a year to afford a property, which is about 30% of their income.
A small increase won't cause a stir, but a massive hike will. Do market research to keep rent within the average rates for your area.
Explain the change to your tenants. Give examples of how the building's expenses are increasing and what you'll use the extra rent for, such as:
- Maintenance
- Taxes
- Insurance
- Additional amenities
Make Lease Renewals Easy
Give tenants plenty of time to prepare before renewing a lease. Send a notice at least 60-90 days before the end of the current lease.
Use digital tools to streamline the process. Send emails instead of using phone calls. Give tenants a digital lease they can e-sign instead of mailing them a hard copy.
Offer Incentives
Are there a few tenants who don't want to go through the process of renewing a lease? Put a carrot at the end of the stick, and you may just convince them.
32.7% of rental advertisements include bonuses that can be used to incentivize lease renewals. These may include:
- Lower security deposits
- Rent discounts
- Free months
- Gift cards
- Free upgrades
There are also little gestures you can do throughout the year, such as providing gifts on holidays or the tenant's birthday. It convinces them that the property is worth staying in and that you care about them.
Build Better Relationships
A positive relationship with tenants is one of the best ways to keep them happy.
Keep the communication lines open so they can contact you with any issues. Respond to their requests promptly and get to know them personally.
Nurture the relationship between the tenants themselves as well. Host events that make them feel like part of a community they won't want to leave.
Maintain the Property
Perform regular inspections of the property beyond when tenants move in and out. It lets tenants know you're looking out for any issues and protects your investment.
Attend to maintenance problems you notice as soon as possible before they get worse. This means problems in the units and common areas.
Retaining tenants and attracting tenants can also go hand in hand. Consider updates such as new landscaping or fresh paint.
Can Property Management Help Me Increase Lease Renewals?
Lease renewals decrease tenant turnovers and vacancies. Increase them by watching how much you increase rent, going digital, offering incentives, building relationships, and maintaining the property.
Hiring a property management company makes the process even easier. PMI Mile High uses state-of-the-art technology to provide comprehensive services. Contact us to see how we can maximize your investment today.
