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The goal of renewing your lease is to keep quality tenants who pay rent on time and take care of your property.
Even though you are continuing a lease arrangement with existing tenants, you still need to create a brand new lease. Leases are fixed contracts, and for this reason, you cannot edit your lease end date. You will need a new lease to be signed with the correct lease dates.
In this article, we’ll go over things to consider before offering a renewal and how to offer a renewal.
Before Sending a Lease Renewal Offer to Your Tenants
Before sending a renewal offer to your tenants, we recommend answering the following questions to make sure you’re ready:
1. Do you want to keep these tenants?
If your tenants take care of the property, are easy to work with, and pay rent on time every month, then it is a smart decision to keep them around. You’ll avoid the hassle of having to find new tenants and you’ll ensure you have tenants in your unit who will pay rent on time.
Find out here: Are you going to lose your best tenants this year?
2. Is your lease expiring in 90 days?
Double check your lease end date to make sure you’re asking for a renewal at the right time. It’s best to offer a renewal 90 days before your lease expires. This gives you and your tenants 30 days to figure out if you’re moving forward with the renewal or not. And if your tenants are not interested, then you have 60 days to find new tenants.
3. How long do you want to renew for?
When you offer the renewal, you should include the new renewal term. It’s common for landlords to renew for the same length as the original lease. So if you had a six-month lease, then you would likely renew for six more months. That being said, you can offer a renewal for any time period that works best. This may be something your tenants want to discuss further with you.
When you choose your new lease term, you should consider having your lease end in the summer. Summer is the peak rental season because demand for rentals is the highest during summer months. This occurs for two reasons:
- People don’t want to move during the winter when it’s cold
- Parents don’t want to move their children in the middle of the school year
You can take advantage of your lease renewal by making sure it will end during peak rental season.
4. Will you change your rent price or other rental terms?
Renewals allow you to evaluate whether you should make any changes to your lease. You can revisit your price and rental rules.
While you can opt to keep your rent price the same, you should consider updating your rent price. Another option is to lower the rent price to entice tenants to renew the lease. Check out more tips on how to get tenants to renew their lease.
Before offering a lease renewal, you should also consider if you want to change any of your rental rules.
5. Are you open to a month-to-month lease renewal?
It’s possible your tenant will ask for a month-to-month lease instead. You should consider if you’re open to a month-to-month lease in case your tenants ask for that option.
Month-to-month leases can benefit you by helping you keep great tenants, but it’s only a short-term solution. Either party can cancel the lease with proper notice (typically 30 days). It makes more sense for long-term stability to sign a long-term lease renewal for a set amount of months.
Learn more about the pros and cons of month-to-month leases here.
6. When do you need a response by?
As you’ll see in our template below, it’s best to provide tenants a date by which you need a response. This provides them a deadline for getting back to you.
After you’ve considered these aspects of the renewal, you’re ready to fill out our lease renewal template. The bold sections of the template below indicate where to input your custom information, like names, rent price, etc.
Lease Renewal Template
Dear tenant’s name,
Your current lease will expire on mm-dd-yyyy. You’ve been a great tenant and I would like to offer you a six-month, one-year, etc. renewal at $x/month. If you are interested, I will send you the new lease. If you have any questions or concerns, I’m happy to discuss them with you. Please let me know if you are interested by mm-dd-yyyy.
You can send the renewal offer as a letter, deliver it in person, or send it as an email. Whichever way you choose, make sure to have it in writing for your records.
After Sending the Renewal Offer
After offering a lease renewal, it’s time to wait for a reply. If you don’t hear back by the deadline, you should follow up with your tenants.
If your tenants don’t want to renew, then it’s time to list your rental property online.
If your tenants want to renew, the next step is to prepare your new rental lease, review it with your tenants, and sign.
Check out our Complete Guide to Rental Leases to learn exactly how to draft rental leases including:
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Also published on Medium.